Exhibit 10.2

 

 

 

MOHEGAN TRIBAL GAMING AUTHORITY

$100,000,000

Floating Rate Senior Notes due December 15, 2017

 

 

NOTE PURCHASE AGREEMENT

 

 

Dated November 20, 2015

 

 

 

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TABLE OF CONTENTS

 

         Page  

SECTION 1.

 

AUTHORIZATION OF NOTES

     1   

SECTION 2.

 

SALE AND PURCHASE OF NOTES

     1   

SECTION 3.

 

CLOSING

     1   

SECTION 4.

 

CONDITIONS TO CLOSING

     2   

SECTION 5.

 

REPRESENTATIONS AND WARRANTIES OF THE AUTHORITY

     2   

Section 5.1

 

Existence, Qualification and Power

     2   

Section 5.2

 

Authorization, No Contravention; Binding Effect

     2   

Section 5.3

 

Exchange Act Reports, Projections

     3   

Section 5.4

 

[Reserved]

     4   

Section 5.5

 

Financial Statements; Material Events; No Internal Control Event

     4   

Section 5.6

 

Compliance with Laws

     4   

Section 5.7

 

Governmental Authorizations; Other Consents

     4   

Section 5.8

 

Litigation; Observance of Agreements, Statutes and Orders

     5   

Section 5.9

 

Taxes

     5   

Section 5.10

 

Title to Property

     5   

Section 5.11

 

Intangible Assets

     6   

Section 5.12

 

Compliance with ERISA

     6   

Section 5.13

 

Private Offering by the Authority

     6   

Section 5.14

 

Use of Proceeds

     6   

Section 5.15

 

Anti-Terrorism and Anti-Money Laundering Laws

     7   

Section 5.16

 

Foreign Corrupt Practices

     7   

Section 5.17

 

Investment Company Act

     8   

Section 5.18

 

Environmental Matters

     8   

Section 5.19

 

Solvency

     8   

Section 5.20

 

[Reserved]

     8   

Section 5.21

 

Designated Senior Indebtedness

     8   

Section 5.22

 

Arbitration

     9   

Section 5.23

 

No Management Contract

     9   

Section 5.24

 

No Pending Referendum

     9   

SECTION 6.

 

REPRESENTATIONS AND WARRANTIES OF THE TRIBE

     9   

Section 6.1

 

Existence and Qualification; Power; Compliance with Laws

     9   

Section 6.2

 

Compliance with Other Agreements and Instruments and Government Regulations

     9   

Section 6.3

 

No Governmental Approvals Required

     9   

Section 6.4

 

Binding Obligations

     9   

SECTION 7.

 

REPRESENTATIONS AND AGREEMENTS OF THE PURCHASERS

     10   

Section 7.1

 

Purchase for Investment

     10   

Section 7.2

 

Source of Funds

     10   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 8.

 

INFORMATION AS TO THE AUTHORITY

     11   

Section 8.1

 

Reports

     11   

Section 8.2

 

Officer’s Certificate

     12   

Section 8.3

 

Electronic Delivery

     13   

SECTION 9.

 

PAYMENT AND PREPAYMENT OF THE NOTES

     14   

Section 9.1

 

Maturity

     14   

Section 9.2

 

Optional Prepayments with Premium and Make-Whole Amount

     14   

Section 9.3

 

Allocation of Partial Prepayments

     14   

Section 9.4

 

Maturity; Surrender, Etc.

     14   

Section 9.5

 

Purchase of Notes

     15   

Section 9.6

 

Make-Whole Amount; Applicable Premium; Breakage Costs

     15   

Section 9.7

 

Payments Due on Non-Business Days

     15   

Section 9.8

 

Prepayment in Connection with Asset Disposition

     16   

Section 9.9

 

Prepayment in Connection with Change of Control

     16   

Section 9.10

 

Redemption Pursuant to Gaming Law

     17   

Section 9.11

 

Prepayment in Connection with Credit Event or Succession Event Determinations

     17   

SECTION 10.

 

COVENANTS

     18   

Section 10.1

 

Stay, Extension and Usury Laws

     18   

Section 10.2

 

Restricted Payments

     18   

Section 10.3

 

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

     22   

Section 10.4

 

Incurrence of Indebtedness and Issuance of Preferred Stock

     23   

Section 10.5

 

Asset Sales

     26   

Section 10.6

 

Sale and Leaseback Transactions

     27   

Section 10.7

 

Limitation on Issuances and Sales of Equity Interests in Wholly Owned Restricted
Subsidiaries

     27   

Section 10.8

 

Transactions with Affiliates

     28   

Section 10.9

 

Liens

     29   

Section 10.10

 

Existence of the Authority and Maintenance of the Lease

     29   

Section 10.11

 

Line of Business

     30   

Section 10.12

 

Guarantees

     30   

Section 10.13

 

Designation of Restricted and Unrestricted Subsidiaries

     30   

Section 10.14

 

Suspension of Covenants

     31   

Section 10.15

 

Taxes

     32   

Section 10.16

 

Ownership Interests in the Authority

     32   

Section 10.17

 

[Reserved]

     32   

Section 10.18

 

Restrictions on Leasing and Dedication of Property

     32   

Section 10.19

 

Maintenance of Insurance

     33   

Section 10.20

 

Gaming Licenses

     33   

Section 10.21

 

Maintenance of Properties

     33   

Section 10.22

 

Defense of this Agreement

     33   

SECTION 11.

 

SUCCESSORS

     34   

Section 11.1

 

Liquidation or Dissolution

     34   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 12.

 

COVENANTS OF THE TRIBE

     34   

Section 12.1

 

Negative Covenants of the Tribe

     34   

Section 12.2

 

Affirmative Covenants of the Tribe

     37   

Section 12.3

 

Additional Agreements and Acknowledgments of the Tribe

     37   

SECTION 13.

 

EVENTS OF DEFAULT

     37   

Section 13.1

 

Events of Default

     37   

SECTION 14.

 

REMEDIES ON DEFAULT, ETC.

     40   

Section 14.1

 

Acceleration

     40   

Section 14.2

 

Other Remedies

     40   

Section 14.3

 

Rescission

     40   

Section 14.4

 

No Waivers or Election of Remedies, Expenses, Etc.

     41   

SECTION 15.

 

REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

     41   

Section 15.1

 

Registration of Notes

     41   

Section 15.2

 

Transfer and Exchange of Notes

     41   

Section 15.3

 

Replacement of Notes

     42   

SECTION 16.

 

PAYMENTS ON NOTES

     42   

Section 16.1

 

Place of Payment

     42   

Section 16.2

 

Home Office Payment

     42   

Section 16.3

 

Withholding

     43   

SECTION 17.

 

EXPENSES, ETC.

     43   

Section 17.1

 

Transaction Expenses

     43   

Section 17.2

 

Survival

     44   

SECTION 18.

 

SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT

     44   

SECTION 19.

 

AMENDMENT AND WAIVER

     44   

Section 19.1

 

Requirements

     44   

Section 19.2

 

Solicitation of Holders of Notes

     45   

Section 19.3

 

Binding Effect, etc.

     45   

Section 19.4

 

Notes Held by the Authority, Etc.

     45   

SECTION 20.

 

NOTICES

     45   

SECTION 21.

 

REPRODUCTION OF DOCUMENTS

     46   

SECTION 22.

 

CONFIDENTIAL INFORMATION

     46   

SECTION 23.

 

SUBSTITUTION OF PURCHASER

     47   

SECTION 24.

 

MISCELLANEOUS

     48   

Section 24.1

 

Successors and Assigns

     48   

Section 24.2

 

Accounting Terms

     48   

 

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TABLE OF CONTENTS

(continued)

 

 

         Page  

Section 24.3

 

Severability

     48   

Section 24.4

 

Construction, Etc.

     48   

Section 24.5

 

Counterparts

     48   

Section 24.6

 

Applicable Law

     48   

Section 24.7

 

Jurisdiction; Dispute Resolution; Limited Waiver of Sovereign Immunity; Process;
Waiver of Jury Trial

     49   

Section 24.8

 

No Personal Liability

     51   

Section 24.9

 

Limitation of Management Activities

     51   

Section 24.10

 

Non-Petition

     52   

Section 24.11

 

Limited Recourse

     52   

Section 24.12

 

Section 81 Limitation

     53   

 

SCHEDULE A   —        DEFINED TERMS SCHEDULE A-1   —        FORM OF NOTE
GUARANTEE SCHEDULE 1   —        FORM OF FLOATING RATE SENIOR NOTE DUE DECEMBER
15, 2017 SCHEDULE 5.8   —        EXISTING LITIGATION SCHEDULE 5.18              
—        ENVIRONMENTAL MATTERS SCHEDULE B   —        INFORMATION RELATING TO
PURCHASERS

 

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Floating Rate Senior Notes due December 15, 2017

November 20, 2015

TO EACH OF THE PURCHASERS LISTED IN

SCHEDULE B HERETO:

Ladies and Gentlemen:

The Mohegan Tribal Gaming Authority (the “Authority”), a governmental
instrumentality of The Mohegan Tribe of Indians of Connecticut, a sovereign
tribe recognized by the United States of America pursuant to 25 C.F.R. § 83 (the
“Tribe”), agrees with each of the Purchasers as follows:

 

SECTION 1. AUTHORIZATION OF NOTES.

The Authority has authorized or will authorize the issue and sale of
$100,000,000 aggregate principal amount of its Floating Rate Senior Notes due
December 15, 2017 (as amended, restated or otherwise modified from time to time
pursuant to Section 19 and including any such notes issued in substitution
therefor pursuant to Section 15, the “Notes”). The Notes shall be substantially
in the form set out in Schedule 1. Certain capitalized and other terms used in
this Agreement are defined in Schedule A. References to a “Schedule” are
references to a Schedule attached to this Agreement unless otherwise specified.
References to a “Section” are references to a Section of this Agreement unless
otherwise specified.

 

SECTION 2. SALE AND PURCHASE OF NOTES.

Subject to the terms and conditions of this Agreement, the Authority will issue
and sell to each Purchaser and each Purchaser will purchase from the Authority,
at the Closing provided for in Section 3, Notes in the principal amount
specified opposite such Purchaser’s name in Schedule B at the purchase price of
100% of the principal amount thereof. The Purchasers’ obligations hereunder are
several and not joint obligations and no Purchaser shall have any liability to
any Person for the performance or non-performance of any obligation by any other
Purchaser hereunder.

 

SECTION 3. CLOSING.

The sale and purchase of the Notes to be purchased by each Purchaser shall occur
at a closing (the “Closing”) on November 20, 2015 or on such other Business Day
thereafter as may be agreed upon by the Authority and the Purchasers. At the
Closing the Authority will deliver to each Purchaser the Notes to be purchased
by such Purchaser in the form of a single Note (or such greater number of Notes
in denominations of at least $1,000,000 as such Purchaser may request) dated the
date of the Closing and registered in such Purchaser’s name (or in the name of
its nominee), against delivery by such Purchaser to the Authority or its order
of immediately available

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funds in the amount of the purchase price therefor by wire transfer of
immediately available funds to the account of the Authority previously
identified to the Purchaser in writing. If at the Closing the Authority shall
fail to tender such Notes to any Purchaser as provided above in this Section 3,
or any of the conditions referred to in Section 4 shall not have been fulfilled
to such Purchaser’s satisfaction, such Purchaser shall, at its election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights such Purchaser may have by reason of any of the conditions
referred to in Section 4 not having been fulfilled to such Purchaser’s
satisfaction or such failure by the Authority to tender such Notes.

 

SECTION 4. CONDITIONS TO CLOSING.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such
Purchaser at the Closing is subject only to the fulfillment to such Purchaser’s
satisfaction, prior to or at the Closing, of the conditions separately agreed
between such Purchaser and the Authority.

 

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE AUTHORITY.

The Authority represents and warrants to each Purchaser that:

Section 5.1 Existence, Qualification and Power. The Authority is an
unincorporated governmental instrumentality of the Tribe. Each of the Authority
and each of its Restricted Subsidiaries is duly organized or formed, validly
existing and a nontaxable entity for purposes of U.S. federal income taxation
under the Code and the gaming and other revenues of each of the Authority and
each of its Restricted Subsidiaries are exempt from U.S. federal income
taxation. To the extent required by Law, each of the Authority and each of its
Restricted Subsidiaries is qualified to do business and is in good standing
under the laws of each jurisdiction in which it is required to be qualified by
reason of the location or the conduct of its business, except where failure to
so qualify would not have a Material Adverse Effect. Each of the Authority and
each of its Restricted Subsidiaries has all requisite power and authority to
conduct its respective business, to own and lease its respective Properties, to
execute and deliver each Note Document to which it is a party and to perform its
respective Obligations. The Authority and its Restricted Subsidiaries are in
material compliance with the terms of the Compact, the Tribal Gaming Ordinance,
the Gaming Authority Ordinance and with all Laws and other legal requirements
applicable to their existence and business (including, without limitation, IGRA
and all Gaming Laws), have obtained all authorizations, consents, approvals,
orders, licenses and permits from, and have accomplished all filings,
registrations and qualifications with, or obtained exemptions from any of the
foregoing from, any Governmental Authority that are necessary for the
transaction of their business, except, in each case, where the failure so to
comply, to obtain such authority, consents, approvals, orders, licenses and
permits, or to file, register, qualify or obtain exemptions does not constitute
a Material Adverse Effect.

Section 5.2 Authorization, No Contravention; Binding Effect.

(a) The execution, delivery and performance by the Note Parties of the Note
Documents have been duly authorized by all necessary Tribal Council, Management
Board and other action, and do not: (i) require any consent or approval not
heretofore obtained of any enrolled tribal member or Tribal Council member,
Management Board member, security holder or creditor;

 

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(ii) violate or conflict with any provision of the Constitution, charter, bylaws
or other governing documents of the Tribe, the Authority or its Restricted
Subsidiaries; (iii) result in or require the creation or imposition of any Lien
upon or with respect to any of the Authority’s Property now owned or leased or
hereafter acquired; (iv) violate any Law or Requirement of Law, including any
Gaming Law, applicable to the Tribe, the Authority or its Restricted
Subsidiaries; (v) [reserved]; (vi) result in a material breach of or default
under, or would, with the giving of notice or the lapse of time or both,
constitute a material breach of or default under, or cause or permit the
acceleration of any obligation owed under, any mortgage, indenture or loan or
credit agreement or any other Contractual Obligation to which the Tribe, the
Authority or any of its Restricted Subsidiaries is a party or by which the
Tribe, the Authority, its Restricted Subsidiaries or any of their Property is
bound or affected; or (vii) require any consent or approval of any Governmental
Authority, or any notice to, registration or qualification with any Governmental
Authority, not heretofore obtained or obtained concurrently with the Closing.
The Authority and its Restricted Subsidiaries are not in violation of, or
default under, any Requirement of Law or Contractual Obligation, or any
mortgage, indenture, loan or credit agreement described in clause (vi) of the
preceding sentence, in any respect that constitutes a Material Adverse Effect.

(b) The Note Documents to which the Note Parties are party have been executed
and delivered by the Note Parties, as applicable. The Note Documents executed by
the Note Parties constitute the legal, valid and binding obligations of the Note
Parties, as applicable, enforceable against the Note Parties, as applicable, in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors’ rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law). The waivers of sovereign immunity by the Note
Parties contained in the Note Documents are legal, valid, binding and
irrevocable.

Section 5.3 Exchange Act Reports, Projections.

(a) The Authority is subject to the reporting requirements of Section 15(d) of
the Exchange Act. The reports required to be filed by the Authority with the SEC
under the Exchange Act (such reports filed on or prior to the time as of which
representations are made by the Authority hereunder, the “Exchange Act Reports”)
do not, taken as a whole, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not materially misleading. The Authority is not in possession of any
material nonpublic information with respect to the Authority that would be
required to be, but has not been, disclosed in the Exchange Act Reports or
otherwise publicly disclosed by the Authority, in connection with any purchase
or sale of the Notes, in accordance with the Securities Act, Exchange Act and
the rules and regulations of the SEC.

(b) The reports, financial statements, certificates and other written
information furnished by the Authority or on its behalf to any Purchaser in
connection with the transactions contemplated hereby and the negotiation of this
Agreement, taken as a whole, do not contain any material misstatement of fact or
omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that, with respect to projected financial information, the Authority represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.

 

3

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Section 5.4 [Reserved].

Section 5.5 Financial Statements; Material Events; No Internal Control Event.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (ii) fairly present the financial condition of the
Authority and its consolidated Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein.

(b) The unaudited consolidated balance sheet of the Authority and its
Subsidiaries dated June 30, 2015, and the related consolidated statements of
income or operations, changes in capital and cash flows for the Fiscal Quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of the Authority
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.

(c) [reserved].

(d) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

(e) To the knowledge of each Responsible Officer of the Authority, no Internal
Control Event exists or has occurred since the date of the Audited Financial
Statements that has resulted in or could reasonably be expected to result in a
misstatement, in any material respect, in any financial information delivered or
to be delivered to the Purchasers, of (i) covenant compliance calculations
provided hereunder or (ii) the assets, liabilities, financial condition or
results of operations of the Authority and its Restricted Subsidiaries on a
consolidated basis.

Section 5.6 Compliance with Laws. The Authority and its Restricted Subsidiaries
are in material compliance with all applicable Gaming Laws. The Authority and
its Restricted Subsidiaries are in compliance with all other Laws, except to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect.

Section 5.7 Governmental Authorizations; Other Consents. No authorization,
consent, approval, order, license or permit from, or filing, registration or
qualification with, any Governmental Authority is required to authorize or
permit under applicable Laws the execution, delivery and performance by the
Authority and its Restricted Subsidiaries of the Note Documents to which they
are parties, other than such as have been obtained on or prior to the Closing.
No party to this Agreement is required to register with, give notice to any
Person or receive any permit or license from any Gaming Board or other
Governmental Authority by reason of any Laws of the

 

4

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Tribe or Gaming Law in connection with its entering into any Note Document,
receipt of any Note, performance or observance of any obligation of such party
under any Note Document, in each case except as such registration has been
obtained, such notice has been given or such permit or license has been received
on or prior to the Closing (provided that, for the avoidance of doubt, the
representation in this sentence as it relates to any Purchaser with respect to
requirements under Gaming Laws is limited to any such requirement for permit or
license arising solely as a result of such Purchaser’s entry into this Agreement
and the transactions contemplated hereby, without regard to any other
transaction or activities of such Purchaser or its Affiliates or other related
parties).

Section 5.8 Litigation; Observance of Agreements, Statutes and Orders.

(a) Except for (i) any matter fully covered (subject to applicable deductibles
and retentions) by insurance and with respect to which the insurance carrier has
not denied coverage, nor issued any denial of claim, nor any other statement
that the claim is in excess of coverage, (ii) any matter, or series of related
matters, not fully covered by insurance (subject to applicable deductibles and
retentions) involving a claim against the Authority or its Restricted
Subsidiaries which is not reasonably likely to be adversely determined or, if
adversely determined, would not reasonably be expected to result in a Material
Adverse Effect, and (iii) matters set forth in Schedule 5.8, there are no
actions, suits, proceedings or investigations pending as to which the Authority
or any of its Restricted Subsidiaries has been served or has received notice or,
to the knowledge of each Responsible Officer of the Authority, threatened
against or affecting the Authority, its Restricted Subsidiaries or any of their
Property before any Governmental Authority.

(b) Neither the Authority nor any Restricted Subsidiary is in default under or
with respect to any Contractual Obligation that could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. No
Default has occurred and is continuing or would result from the consummation of
the transactions contemplated by this Agreement or any other Note Document.

Section 5.9 Taxes. The Authority and its Subsidiaries have filed all federal,
state and other material tax returns and reports which are required to be filed,
and have paid, or made provision for the payment of, all Taxes with respect to
the periods, Property or transactions covered by said returns, or pursuant to
any assessment received by the Authority or its Subsidiaries, except (a) such
Taxes, if any, as are being contested in good faith by appropriate proceedings
and as to which adequate reserves have been established and maintained in
accordance with GAAP or (b) as would not reasonably be expected to result in a
Material Adverse Effect. There is no proposed tax assessment against the
Authority or any Subsidiary that would, if made, have a Material Adverse Effect.

Section 5.10 Title to Property. Each of the Authority and each Restricted
Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of the Authority and its Restricted Subsidiaries is
subject to no Liens, other than Liens permitted by Section 10.9. The Lease is in
full force and effect and creates a valid leasehold estate on the terms of such
lease, and neither the Authority nor the Tribe is in default or breach of any
material provision thereof.

 

5

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Section 5.11 Intangible Assets. The Authority and its Restricted Subsidiaries
own, or possess the right to use to the extent necessary in their business, all
trademarks, trade names, copyrights, patents, patent rights, computer software,
licenses and other Intangible Assets that are used in the conduct of the
business of the Authority and its Restricted Subsidiaries as now operated and
which are material to the condition (financial or otherwise), business or
operations of the Authority and its Restricted Subsidiaries, and no such
Intangible Asset conflicts with the valid trademark, trade name, copyright,
patent, patent right or Intangible Asset of any other Person to the extent that
such conflict constitutes a Material Adverse Effect.

Section 5.12 Compliance with ERISA. Neither the Authority nor any ERISA
Affiliate maintains, contributes to or is required to contribute to any
“employee pension benefit plan” that is subject to Title IV of ERISA. Except as
would not reasonably be expected to result in a Material Adverse Effect, the
Authority and each ERISA Affiliate are in compliance with the applicable
provisions of ERISA and the Code, have not incurred any material liability to
the PBGC or any Plan and no Reportable Event or transaction prohibited by
Section 4975 of the Code or Section 406 of ERISA has occurred.

Section 5.13 Private Offering by the Authority.

(a) Neither the Authority nor anyone acting on its behalf has offered the Notes,
or any substantially similar security which is or would be integrated with the
sale of the Notes pursuant to this Agreement and the other Note Documents, for
sale to, or solicited any offer to buy and of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than UBS,
which has been offered the Notes at a private sale for investment. Neither the
Authority nor anyone acting on its behalf has taken, or will take, any action
that would subject the issuance or sale of the Notes to the registration
requirements of section 5 of the Securities Act

(b) Assuming the accuracy of the representations and warranties of UBS and each
Purchaser contained herein, and the compliance by UBS and each such Purchaser
with their agreements set forth herein, the offer and sale of the Notes in the
manner contemplated by this Agreement will be exempt from the registration
requirements of the Securities Act by reason of Section 4(a)(2) thereof; and it
is not necessary to qualify this Agreement or any other Note Document in respect
of the Notes under the Trust Indenture Act.

Section 5.14 Use of Proceeds. The Authority will apply the proceeds of the sale
of the Notes hereunder to fund costs in respect of the Issuer’s casino resort
project at Incheon International Airport in South Korea (or provide deposits
against related obligations) and to pay down borrowings under the Bank Credit
Facility, in a manner not in contravention of any Law or of any Note Document.
Neither the Authority, nor any Guarantor nor any of their respective
Subsidiaries has taken, and none of them will take, any action that might cause
this Agreement or the issuance of the Notes to violate Regulation T, Regulation
U or Regulation X of the Board of Governors of the Federal Reserve System.

 

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Section 5.15 Anti-Terrorism and Anti-Money Laundering Laws.

(a) None of the Authority, its Subsidiaries and, to the knowledge of the
Authority, the Tribe, the respective officers, directors, brokers or agents of
the Authority and its Subsidiaries (i) has violated, or is in violation in any
material respect of, any Anti-Terrorism Laws or Anti-Money Laundering Laws or
(ii) has been convicted of, has been charged with, or is under investigation by,
a Governmental Authority for violations of, or has been assessed civil penalties
or has had any of its funds seized or forfeited in an action under, any
Anti-Terrorism Laws or Anti-Money Laundering Laws. The Authority has established
procedures and controls which it reasonably believes are adequate (and otherwise
comply with applicable Law) to ensure that the Authority and its Subsidiaries
are and will continue to be in compliance with all applicable Anti-Terrorism
Laws and Anti-Money Laundering Laws.

(b) The funds used by the Authority to make payments hereunder to the holders of
the Notes will not be derived from activities by the Authority that violate any
Anti-Terrorism Laws or Anti-Money Laundering Laws.

(c) No part of the proceeds from the issuance and sale of the Notes constitutes
or will constitute funds obtained on behalf of any Embargoed Person or will
otherwise be used by the Authority or any of its Subsidiaries (i) in connection
with any investment in, or any transactions or dealings with, any Embargoed
Person, (ii) for any purpose that would cause any holder of the Notes to be in
violation of any Anti-Terrorism Laws or Anti-Money Laundering Laws or
(iii) otherwise in violation of any Anti-Terrorism Laws or Anti-Money Laundering
Laws.

(d) None of the Authority, its Subsidiaries and, to the knowledge of the
Authority, the Tribe and the respective officers, directors, brokers or agents
of the Authority and its Subsidiaries acting or benefiting in any capacity in
connection with the issuance and sale of the Notes is an Embargoed Person, is a
shell bank or is subject to special measures because of money laundering
concerns under Section 311 of the USA PATRIOT Act and its implementing
regulations.

(e) None of the Authority, its Subsidiaries and, to the knowledge of the
Authority, the Tribe and the respective officers, directors, brokers or agents
of the Authority and its Subsidiaries acting or benefiting in any capacity in
connection with the issuance and sale of the Notes (i) directly conducts any
business or engages in making or receiving any contribution of funds, goods or
services to any Embargoed Person, (ii) deals in, or otherwise engages in any
transaction involving, any property or interests in property blocked pursuant to
any Anti-Terrorism Law or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any Anti-Terrorism Law.

Section 5.16 Foreign Corrupt Practices. (i) Neither the Authority nor any of its
Subsidiaries, nor any member of the Management Board, officer or employee, nor,
to the Authority’s knowledge, any agent or representative of the Authority or
any of its Subsidiaries, has taken or will take any action with the proceeds of
the Notes in furtherance of an offer, payment, promise to pay, or authorization
or approval of the payment or giving of money, property, gifts or anything else
of value, directly or indirectly, to any Governmental Official to influence
official action or secure an improper advantage in each case in material
violation of applicable Laws and (ii) the Authority and its Subsidiaries have
conducted their businesses in material compliance

 

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with applicable anti-corruption laws and have instituted and maintain and will
continue to maintain policies and procedures designed to promote and achieve
compliance with such Laws and with the representation and warranty contained
herein.

Section 5.17 Investment Company Act. None of the Authority, any Person
controlling the Authority, or any Subsidiary of the Authority is or is required
to be registered as an “investment company” under the Investment Company Act of
1940, as amended.

Section 5.18 Environmental Matters. Except as described in Schedule 5.18,
neither the Authority nor any of its Restricted Subsidiaries nor, to the
knowledge of each Responsible Officer of the Authority or any of its Restricted
Subsidiaries, any predecessor in title or any third person at any time occupying
or present on the Real Property at any time has disposed of, discharged,
released or threatened the release of any material amount of Hazardous Materials
on, from or under such real property in any manner that violates any Hazardous
Materials Law except for such violations that would not, individually or in the
aggregate, have a Material Adverse Effect. Except as described in Schedule 5.18,
no condition exists that violates any Hazardous Material Law affecting the Real
Property except for such violations that would not, individually or in the
aggregate, have a Material Adverse Effect. Except as described in Schedule 5.18,
the Real Property and each portion thereof is not and has not been utilized by
the Authority or any of its Subsidiaries as a site for the manufacture of any
Hazardous Materials, except as may not reasonably be expected to result in a
Material Adverse Effect. The Real Property is in compliance with all Hazardous
Materials Law, except as may not reasonably be expected to result in a Material
Adverse Effect. Except as described in Schedule 5.18, to the extent that any
Hazardous Materials have been, or are, used, generated or stored by the
Authority or any of its Restricted Subsidiaries on any Real Property, or
transported to or from such Real Property by the Authority or any of its
Restricted Subsidiaries, such use, generation, storage and transportation have
been and are in compliance with all Hazardous Materials Laws except to the
extent that any such noncompliance could not reasonably be expected to have a
Material Adverse Effect.

Section 5.19 Solvency. Immediately after the sale of the Notes hereunder and
after giving effect to the application of the proceeds of the Notes, (a) the
fair value of the properties of the Authority and its Restricted Subsidiaries,
on a consolidated basis, will exceed their debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the property of
the Authority and its Restricted Subsidiaries, on a consolidated basis, will be
greater than the amount that will be required to pay the probable liability of
their debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; (c) the Authority
and its Restricted Subsidiaries, on a consolidated basis, will be able to pay
their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) the Authority and its
Restricted Subsidiaries, on a consolidated basis, will not have unreasonably
small capital with which to conduct their business in which they are engaged as
such business is now conducted and is proposed to be conducted following the
Closing.

Section 5.20 [Reserved].

Section 5.21 Designated Senior Indebtedness. The Obligations have been duly
designated as and constitute “Designated Senior Indebtedness” (or a similar
designation) in respect of all applicable Subordinated Indebtedness of the Note
Parties (including the Existing Senior Subordinated Notes).

 

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Section 5.22 Arbitration. To the extent that any dispute among the parties to
the Note Documents is initiated in or referred to the Tribal Court, (i) such
court lacks discretion to refuse to compel arbitration among the parties to the
dispute, and (ii) such court is obligated to honor and enforce any award by the
arbitrator, without review of any nature by such court.

Section 5.23 No Management Contract. This Agreement does not constitute a
“management contract” or “management agreement” within the meaning of Section 12
of IGRA and related regulations, or deprive the Authority of the sole
proprietary interest and responsibility of the conduct of gaming activity at
Mohegan Sun.

Section 5.24 No Pending Referendum. No Tribal law permits any tribal member to
challenge by referendum or initiative any action of the Tribal Council or the
Management Board of the Authority authorizing and approving the execution and
delivery of any Note Document (“Referendum Action”). No Referendum Action is, to
the Authority’s knowledge, threatened or pending which would reduce the
obligations of the Tribe or the Authority under the Note Documents or impair the
enforceability of the Note Documents or the rights of the purchasers thereunder
or cause a Material Adverse Effect.

 

SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE TRIBE.

In order to induce the Purchasers to enter into this Agreement, the Tribe
represents and warrants to the Purchasers that, as of the Closing (but not as of
any date subsequent thereto):

Section 6.1 Existence and Qualification; Power; Compliance with Laws. The Tribe
is a federally recognized Indian tribe, with authority to enter into this
Agreement and perform its agreements hereunder. The Constitution of the Tribe,
amended and restated in its entirety and approved on April 12, 1996, and as
further amended through the date hereof was validly adopted by the Tribe, is
effective according to its terms and is the law of the Tribe.

Section 6.2 Compliance with Other Agreements and Instruments and Government
Regulations. The execution, delivery and performance by the Tribe of its limited
obligations under this Agreement have been duly authorized by all necessary
Tribal Council and other action of the Tribe, and do not: (a) require any
consent or approval not heretofore obtained of any enrolled tribal member,
Tribal Council member, security holder or creditor; or (b) violate or conflict
with any provision of the Constitution or other governing documents of the
Tribe.

Section 6.3 No Governmental Approvals Required. No authorization, consent,
approval, order, license or permit from, or filing, registration or
qualification with, any Governmental Authority is required to authorize or
permit under applicable Laws the execution, delivery and performance by the
Tribe of this Agreement, other than such as have been obtained on or prior to
the Closing.

Section 6.4 Binding Obligations. This Agreement has been executed and delivered
by the Tribe, and constitutes the valid and legally binding obligations of the
Tribe, enforceable against the Tribe in accordance with is terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,

 

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moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law), provided
however that no representation is made as to choice of law. The limited waiver
of sovereign immunity by the Tribe in Section 24.7 below is irrevocable.

 

SECTION 7. REPRESENTATIONS AND AGREEMENTS OF THE PURCHASERS.

Section 7.1 Purchase for Investment. Each Purchaser severally represents that it
is purchasing the Notes for its own account or for one or more separate accounts
maintained by such Purchaser or for the account of one or more pension or trust
funds and not with a view to the distribution thereof, provided that the
disposition of such Purchaser’s or their property shall at all times be within
such Purchaser’s or their control. Each Purchaser understands that the Notes
have not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Authority is
not required to register the Notes. Each Purchaser severally represents that it
is an “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act) acting for its own account (and not for
the account of others) or as a fiduciary or agent for others (which others are
also “accredited investors”).

Section 7.2 Source of Funds. Each Purchaser purchasing Notes at the Closing
severally represents that at least one of the following statements is an
accurate representation as to each source of funds (a “Source”) to be used by
such Purchaser to pay the purchase price of the Notes to be purchased by such
Purchaser hereunder:

(a) the Source is an “insurance company general account” (as the term is defined
in the United States Department of Labor’s Prohibited Transaction Exemption
(“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by
the annual statement for life insurance companies approved by the NAIC (the
“NAIC Annual Statement”)) for the general account contract(s) held by or on
behalf of any employee benefit plan together with the amount of the reserves and
liabilities for the general account contract(s) held by or on behalf of any
other employee benefit plans maintained by the same employer (or affiliate
thereof as defined in PTE 95-60) or by the same employee organization in the
general account do not exceed 10% of the total reserves and liabilities of the
general account (exclusive of separate account liabilities) plus surplus as set
forth in the NAIC Annual Statement filed with such Purchaser’s state of
domicile; or

(b) the Source is a separate account that is maintained solely in connection
with such Purchaser’s fixed contractual obligations under which the amounts
payable, or credited, to any employee benefit plan (or its related trust) that
has any interest in such separate account (or to any participant or beneficiary
of such plan (including any annuitant)) are not affected in any manner by the
investment performance of the separate account; or

(c) the Source is either (i) an insurance company pooled separate account,
within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within
the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the
Authority in writing pursuant to this clause (c), no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or

 

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(d) the Source constitutes assets of an “investment fund” (within the meaning of
Part V of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional
asset manager” or “QPAM” (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan’s assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption
are satisfied, as of the last day of its most recent calendar quarter, the QPAM
does not own a 10% or more interest in the Authority and no person controlling
or controlled by the QPAM (applying the definition of “control” in section V(e)
of the QPAM Exemption) owns a 20% or more interest in the Authority (or less
than 20% but greater than 10%, if such person exercises control over the
management or policies of the Authority by reason of its ownership interest) and
(i) the identity of such QPAM and (ii) the names of all employee benefit plans
whose assets are included in such investment fund have been disclosed to the
Authority in writing pursuant to this clause (d); or

(e) the Source constitutes assets of a “plan(s)” (within the meaning of section
IV of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager”
or “INHAM” (within the meaning of Part IV of the INHAM Exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a person controlling or controlled by the INHAM (applying
the definition of “control” in section IV(d) of the INHAM Exemption) owns a 5%
or more interest in the Authority and (i) the identity of such INHAM and
(ii) the name(s) of the employee benefit plan(s) whose assets constitute the
Source have been disclosed to the Authority in writing pursuant to this clause
(e); or

(f) the Source is a governmental plan; or

(g) the Source is one or more employee benefit plans, or a separate account or
trust fund comprised of one or more employee benefit plans, each of which has
been identified to the Authority in writing pursuant to this clause (g); or

(h) the Source does not include assets of any employee benefit plan, other than
a plan exempt from the coverage of ERISA.

As used in this Section 7.2, the terms “employee benefit plan,” “governmental
plan,” and “separate account” shall have the respective meanings assigned to
such terms in section 3 of ERISA.

 

SECTION 8. INFORMATION AS TO THE AUTHORITY.

Section 8.1 Reports.

(a) Whether or not required by the rules and regulations of the SEC, so long as
any Notes are outstanding, the Authority will file a copy of each of the
following reports with the SEC for public availability (unless the SEC will not
accept such a filing, in which case the Authority

 

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will otherwise publicly post such reports) and will furnish to each Purchaser
and each holder of a Note that is an Institutional Investor (which may be deemed
to be made by electronic transmission via the SEC’s EDGAR system or any
successor system thereto, subject to the proviso at the end of Section 8.3),
within 15 days after the end of the time periods specified in the SEC’s rules
and regulations for filings of current, quarterly and annual reports:

(i) all quarterly and annual reports, including financial information, that
would be required to be contained in a filing with the SEC on Forms 10-Q (the
“Form 10-Q”) and 10-K (the “Form 10-K”) if the Authority were required to file
such forms, including a “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” that describes the financial condition and
results of operations of the Authority and its consolidated subsidiaries
(showing in reasonable detail, either on the face of the consolidated financial
statements or in the footnotes thereto and in Management’s Discussion and
Analysis of Financial Condition and Results of Operations, the financial
condition and results of operations of the Authority and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Authority, to the extent that would be
required by the rules, regulations or interpretive positions of the SEC) and,
with respect to the annual information only, a report thereon by the Authority’s
independent registered public accounting firm; and

(ii) all current reports that would be required to be filed with the SEC on Form
8-K if the Authority were required to file such reports.

(b) So long as any Notes remain outstanding, if, at any time the Authority is no
longer subject to Section 13 or 15(d) of the Exchange Act, the Authority will
furnish to the Purchaser and each holder of a Note and to securities analysts
and prospective purchasers of the Notes, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(c) The Authority shall provide to the Purchasers and each holder of a Note
(which may be deemed to be made by electronic transmission via the SEC’s EDGAR
system or any successor system thereto), within 15 days after it files them with
the NIGC, copies of all reports which the Authority is required to file with the
NIGC pursuant to 25 C.F.R. Part 514.

(d) The Authority shall, so long as any of the Notes are outstanding, deliver to
each Purchaser and each holder of a Note that is an Institutional Investor,
forthwith upon any Responsible Officer becoming aware of any Default or Event of
Default, an Officers’ Certificate specifying such Default or Event of Default
and what action the Authority is taking or proposes to take with respect
thereto.

Section 8.2 Officer’s Certificate.

(a) The Authority shall deliver to each Purchaser (and each Purchaser may
deliver to each holder of a Note that is an Institutional Investor and permit
them to rely thereupon as if an addressee thereof), within 90 days after the end
of each Fiscal Year, an Officers’ Certificate stating that a review of the
activities of the Authority and its Subsidiaries during the preceding Fiscal

 

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Year has been made under the supervision of the signing officers with a view to
determining whether the Authority has kept, observed, performed and fulfilled
its obligations under this Agreement and further stating, as to each such
officer signing such certificate, that to the best of his or her knowledge the
Authority has kept, observed, performed and fulfilled each and every covenant
contained in this Agreement and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Agreement (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Authority is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Authority is taking or proposes to
take with respect thereto.

(b) So long as not contrary to the then-current recommendations of the American
Institute of Certified Public Accountants, the year end financial statements
delivered pursuant to Section 8.1(a) above shall be accompanied by a written
statement of the Authority’s independent public accountants (who shall be a firm
of established national reputation) that in making the examination necessary for
certification of such financial statements, nothing has come to their attention
that would lead them to believe that the Authority has violated any provisions
of this Agreement hereof or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.

Section 8.3 Electronic Delivery. Financial statements, opinions of independent
certified public accountants, other information and Officer’s Certificates that
are required to be furnished or delivered by the Authority to any Purchaser or
holder of a Note pursuant to Sections 8.1 and 8.2 shall be deemed to have been
delivered if the Authority satisfies any of the following requirements with
respect thereto (for the avoidance of doubt, without limitation of any
requirement in such Sections to publicly file or post any such information):

(i) such financial statements, opinions, other information and/or Officer’s
Certificates, as applicable, satisfying the requirements of Section 8.1 or 8.2,
as applicable, are delivered to each holder of a Note by e-mail;

(ii) the Authority shall have timely filed a Form 10–Q, Form 10–K or Form 8-K,
satisfying the requirements of Section 8.1(a), or shall have otherwise filed the
applicable information, with the SEC on EDGAR or shall have made any applicable
financial statement, report, certificate or other information available on its
home page on the internet, which is located at http://www.mtga.com as of the
date of this Agreement; or

(iii) such financial statements and other information satisfying the
requirements of Section 8.1 and related Officer’s Certificate(s) satisfying the
requirements of Section 8.2 are timely posted by or on behalf of the Authority
on IntraLinks or on any other similar website to which each holder of Notes has
free access;

 

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provided, however, that upon request of any holder to receive paper copies of
such forms, financial statements and Officer’s Certificates or to receive them
by e-mail, the Authority will promptly e-mail them or deliver such paper copies,
as the case may be, to such holder.

 

SECTION 9. PAYMENT AND PREPAYMENT OF THE NOTES.

Section 9.1 Maturity. As provided therein, the entire unpaid principal balance
of each Note shall be due and payable on the Maturity Date thereof, together
with any accrued unpaid interest on such principal amount.

Section 9.2 Optional Prepayments with Premium and Make-Whole Amount. The
Authority may, at its option, upon notice as provided below, prepay at any time
all, or from time to time any part of, the Notes, in an amount not less than 5%
of the aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, plus an amount
(not less than zero) equal to the sum of (i) the Applicable Premium, if any,
(ii) Breakage Costs, if any, and (iii) the Make-Whole Amount, if any, each
determined for the prepayment date with respect to such principal amount
prepaid. The Authority will give each holder of Notes written notice of each
optional prepayment under this Section 9.2 not fewer than ten days and not more
than 60 days prior to the date fixed for such prepayment unless the Authority
and the Required Holders (on behalf of all holders) agree to another time period
pursuant to Section 19. Each such notice shall specify such date (which shall be
a Business Day), the aggregate principal amount of the Notes to be prepaid on
such date, and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid, and such notice shall be irrevocable;
provided, that any such notice may be conditioned on the consummation of a
refinancing or other transaction and may be rescinded or postponed on or prior
to the proposed prepayment date if such refinancing or other transaction is not
consummated or is delayed. In connection with such prepayment, each holder of
Notes shall notify the Authority the amount of any Make-Whole Amount or Breakage
Costs resulting from such prepayment. The Authority shall prepay on the
specified date such specified principal amount of the Notes, together with any
unpaid interest on such principal amount then being prepaid accrued to such date
and any other amounts required to be paid in connection therewith pursuant to
this Section 9.2, and such amount shall be due and payable as of such date.

Section 9.3 Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes pursuant to Sections 9.2, 9.8 or 9.9, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for prepayment. In the
case of each partial prepayment of the Notes pursuant to Section 9.10, the
applicable holder’s Notes shall be prepaid in full without the requirement to
prepay any other holder’s Notes.

Section 9.4 Maturity; Surrender, Etc. In the case of each optional or required
prepayment of Notes pursuant to this Section 9, the principal amount of each
Note to be prepaid shall mature and become due and payable on the date fixed for
such prepayment, together with any unpaid interest on such principal amount
accrued to such date, and an amount (not less than zero) equal to the sum of
(i) the Applicable Premium, if any, (ii) Breakage Costs, if any, and (iii) the
Make-Whole Amount, if any, each determined as of such date for such principal
amount and to the extent applicable. From and after such date, unless the
Authority shall fail to pay such principal

 

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amount when so due and payable, together with the interest and any other amounts
required to be paid pursuant to the foregoing sentence, interest on such
principal amount shall cease to accrue. Any Note paid or prepaid in full shall
be surrendered to the Authority and cancelled and shall not be reissued, and no
Note shall be issued in lieu of any prepaid principal amount of any Note.

Section 9.5 Purchase of Notes. The Authority will promptly cancel all Notes
acquired by it or any Subsidiary and no Notes may be issued in substitution or
exchange for any such Notes. In determining whether the holders of the required
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by the Authority, any Subsidiary or any of their Affiliates will be
considered as though not outstanding, except that for the purposes of
determining whether UBS and each Purchaser will be protected in relying on any
such direction, waiver or consent, only Notes that UBS or such Purchaser knows
are so owned will be so disregarded.

Section 9.6 Make-Whole Amount; Applicable Premium; Breakage Costs.

(a) Upon the occurrence of any acceleration of the Notes in accordance with
Section 14.1 or any event in the course of a proceeding under Bankruptcy Law or
other reorganization activities which results in any holder of a Note receiving
any amount on account of the principal amount of its portion of such Note prior
to the scheduled payment date therefor, the Authority shall owe any such
affected holder an amount (not less than zero) equal to the sum of the
Make-Whole Amount and the Applicable Premium with respect to such portion.

(b) In the event of the payment or prepayment, whether optional or mandatory, of
any principal of the Notes other than on the last day of an Interest Period
applicable thereto, then, in any such event, the Authority shall compensate each
holder of a Note for the loss, cost and expense attributable to such event. Such
loss, cost or expense to any holder shall be deemed to be an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such holder’s Note had such event not occurred, at the LIBOR
Rate (as defined in the Note) that would have been applicable to such holder’s
Note, for the period from the date of such event to the last day of the
then-current Interest Period (as defined in the Note) therefor over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such holder would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the Eurodollar market. The amounts described to in
this paragraph shall be referred to herein collectively as “Breakage Costs.” A
certificate of any holder of a Note setting forth in reasonable detail any
Breakage Costs that such holder is entitled to receive pursuant to this
Section 9.6 shall be delivered to the Authority and shall be conclusive and
binding absent manifest error. The Authority shall pay such holder of a Note the
amount shown as due on any such certificate within five Business Days after
receipt thereof.

Section 9.7 Payments Due on Non-Business Days. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or interest,
Make-Whole Amount, Breakage Costs, or Applicable Premium on any Note (including
principal due on the Maturity Date of such Note) that is due on a date that is
not a Business Day shall be made on the next succeeding Business Day.

 

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Section 9.8 Prepayment in Connection with Asset Disposition. If the Authority
makes an offer to prepay the Notes in accordance with Section 10.5(c), the
Authority will give written notice thereof to the holders of all outstanding
Notes, which notice shall (a) refer specifically to this Section 9.8 and
describe in reasonable detail the Asset Sale giving rise to such offer to prepay
the Notes, (b) specify the ratable portion of each Note being offered to be
prepaid, (c) specify a prepayment date not less than 15 days and not more than
60 days after the date of such notice (the “Disposition Prepayment Date”) and
(d) offer to prepay on the Disposition Prepayment Date such ratable portion of
each Note at par, together with any unpaid interest accrued thereon to the
Disposition Prepayment Date, and an amount (not less than zero) equal to the sum
of the Breakage Costs, if any, and the Make-Whole Amount, each determined as of
the Disposition Prepayment Date for such principal amount (which offer is, for
the avoidance of doubt, the Prepayment Offer specified in Section 10.5(c)). If
the Disposition Prepayment Date is not specified in such notice, the Disposition
Prepayment Date shall be the 45th day after the date of such notice. A holder of
Notes may accept or reject such offer to prepay by causing a notice of such
acceptance or rejection to be delivered to the Authority at least two Business
Days prior to the Disposition Prepayment Date specified by the Authority in such
offer. If a holder of Notes has not responded to such offer by a date which is
at least two Business Days prior to such specified Disposition Prepayment Date,
such holder shall be deemed to have declined such offer of prepayment. The
Authority shall prepay on the Disposition Prepayment Date such ratable portion
of each Note held by the holders who have accepted such offer in accordance with
this Section 9.8, together with any unpaid interest on such principal amount
then being prepaid accrued to the Disposition Prepayment Date and any other
amounts required to be paid in connection therewith pursuant to this
Section 9.8, and such amount shall be due and payable as of such Disposition
Prepayment Date.

Section 9.9 Prepayment in Connection with Change of Control.

(a) Within 20 Business Days following any Change of Control, the Authority will
give written notice thereof to the holders of all outstanding Notes, which
notice (such notice, a “Change of Control Offer”) shall (A) refer specifically
to this Section 9.9 and describe in reasonable detail the Change of Control
giving rise to such offer to prepay the Notes, (B) specify that the entire
outstanding principal amount of each Note is being offered to be prepaid,
(C) specify a prepayment date not less than 15 days and not more than 60 days
after the date of such notice (the “Change of Control Payment Date”) and
(D) offer to prepay on the Change of Control Payment Date the entire outstanding
principal amount of each Note at a price equal to par, together with any unpaid
interest accrued thereon to the Change of Control Payment Date, and an amount
(not less than zero) equal to the sum of (i) 1% of the principal amount thereof,
(ii) the Breakage Costs, if any, and (iii) the Make-Whole Amount, each
determined as of the Disposition Prepayment Date for such principal amount. If
the Change of Control Payment Date is not specified in such notice, the Change
of Control Payment Date shall be the 45th day after the date of such notice. A
holder of Notes may accept (in whole or in part, provided that acceptance in
part shall be in a principal amount equal to $2,000 or an integral multiple of
$1,000 in excess thereof) or reject such offer to prepay by causing a notice of
such acceptance or rejection to be delivered to the Authority at least two
Business Days prior to the Change of Control Payment Date specified by the
Authority in such offer. If a holder of Notes has not responded to such offer by
a date which is at least two Business Days prior to such specified Change of
Control Payment Date, such holder shall be deemed to have declined such offer of
prepayment in full. The Authority

 

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shall prepay on the Change of Control Payment Date such portion of each Note
held by the holders who have accepted such offer as has been so accepted in
accordance with this Section 9.9, together with any unpaid interest on such
principal amount then being prepaid accrued to the Change of Control Payment
Date, and any other amounts required to be paid in connection therewith pursuant
to this Section 9.9, and such amount shall be due and payable as of such Change
of Control Payment Date.

(b) Notwithstanding anything to the contrary in this Section 9.9, the Authority
shall not be required to make a Change of Control Offer upon a Change of Control
if a third party makes the Change of Control Offer in the manner, at the time
and otherwise in compliance with the requirements set forth in this Section 9.9
applicable to a Change of Control Offer made by the Authority and such third
party prepays all amounts of all Notes in respect of which such Change of
Control Offer has been accepted and not withdrawn by the holders thereof.

Section 9.10 Redemption Pursuant to Gaming Law. If any Gaming Board requires
that a holder of a Note must be licensed, qualified or found suitable under
applicable Gaming Laws in order for the Authority to obtain or maintain any
gaming license or franchise and such holder does not obtain such license,
qualification or finding of suitability within 30 days after being requested to
do so by such Gaming Board (or such lesser period that may be required by such
Gaming Board) or if such holder is not so licensed, qualified or found suitable,
then at the Authority’s option, (a) such holder shall be obligated, at the
request of the Authority to dispose of such holder’s Notes within 30 days of
receipt of such finding by the applicable Gaming Board (or such earlier date as
may be required by the applicable Gaming Board), provided that such holder shall
receive payment in connection with such disposition of any amount at least equal
to the principal amount of the Notes disposed or (b) the Authority shall have
the right to prepay the Notes of such holder at a prepayment price equal to the
lesser of (1) the principal amount thereof and (2) the price at which such
holder acquired the Notes, together with, in each case under (a) and (b),
accrued and unpaid interest to the date of prepayment, Breakage Costs, if any,
and the Make-Whole Amount, each determined on the date of such disposition for
such principal amount. The Authority is not required to pay or reimburse any
holder of a Note who is required to apply for such license, qualification or
finding of suitability for the costs of the licensure or investigation for such
qualification or finding of suitability. Such expenses shall be the obligation
of such holder of a Note.

Section 9.11 Prepayment in Connection with Credit Event or Succession Event
Determinations. At any time when UBS AG, London Branch or any of its Affiliates
or GIFS Capital Company LLC (any such person, a “Designated Holder”) is a holder
of any Notes, if any Designated Holder notifies the Authority in writing of
(i) any Credit Event Determination or (ii) any Succession Event Determination
(which notice shall also provide a description as published by ISDA or otherwise
in reasonable detail of such Credit Event Determination or Succession Event
Determination) and requests in writing such prepayment in accordance with this
Section 9.11, which written request shall specify a prepayment date not earlier
than five (5) Business Days after the date of effectiveness of such notice (the
“Event Determination Prepayment Date”), the Authority shall be required to
prepay the entire outstanding principal amount of any Note held by such
Designated Holder on the Event Determination Prepayment Date together with any
unpaid interest accrued thereon, the Applicable Premium, if any, Breakage Costs,
if any, and the Make-Whole Amount, each determined as of the Event Determination
Prepayment Date for such principal amount, and in such case, such amount in
respect of such Notes (and not any Notes held by any other holder) shall be due
and payable as of such Event Determination Prepayment Date.

 

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SECTION 10. COVENANTS.

Section 10.1 Stay, Extension and Usury Laws. The Authority covenants (to the
extent that it may lawfully do so) that it shall not, and shall not permit any
other Note Party to, at any time insist upon, plead or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Agreement and the other Note Documents; and
the Authority (to the extent that it may lawfully do so) hereby expressly
waives, on behalf of itself and each other Note Party, all benefit or advantage
of any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the holders
of the Notes, but shall suffer and permit the execution of every such power as
though no such law has been enacted.

Section 10.2 Restricted Payments.

(a) The Authority will not, and the Authority will not permit any of its
Restricted Subsidiaries, directly or indirectly, to: (i) make any payment on or
with respect to any of the Authority’s or any of its Restricted Subsidiaries’
Equity Interests; (ii) purchase, redeem, defease or otherwise acquire or retire
for value any Equity Interest in the Authority or any Subsidiary or Affiliate of
the Authority; (iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any Subordinated
Indebtedness, other than the purchase, repurchase or other acquisition of
Subordinated Indebtedness in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case within one
year of the Stated Maturity thereof and other than a payment of interest or
principal at the Stated Maturity thereof; (iv) make any payment or distribution
to the Tribe (or any agency, instrumentality or political subunit or Subsidiary
(other than the Authority and its Subsidiaries) thereof) or make any general
distribution to the members of the Tribe; or (v) make any Restricted Investment;
other than, in each case, Government Service Payments (all such payments and
other actions set forth in clauses (i) through (v) of this Section 10.2(a)
(exclusive of Government Service Payments) are collectively referred to as
“Restricted Payments”) unless, at the time of and after giving effect to such
Restricted Payment:

(A) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof;

(B) the Authority would, at the time of such Restricted Payment and after giving
pro forma effect thereto as if such Restricted Payment had been made at the
beginning of the applicable four-quarter period, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 10.4(a) hereof; and

(C) such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Authority and its Restricted Subsidiaries after
the Closing (excluding Restricted Payments permitted by Section 10.2(b) hereof),
is less than the

 

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sum, without duplication, of (1) 50% of the Consolidated Net Income of the
Authority for the period (taken as one accounting period) from the beginning of
the Fiscal Quarter in which the Closing occurs to the end of the Authority’s
most recently ended Fiscal Quarter for which internal consolidated financial
statements are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (2) 100% of the aggregate net cash proceeds or fair market value
(as determined in the good faith, reasonable judgment of the Management Board
and evidenced by a resolution set forth in an Officer’s Certificate delivered to
each Purchaser and holder of a Note) of assets or property (other than cash)
received by the Authority after the Closing from capital contributions from the
Tribe that bear no mandatory obligation to repay the Tribe, plus (3) to the
extent that any Restricted Investment that was made after the Closing is sold,
liquidated or otherwise disposed of, the lesser of (I) the cash or fair market
value (as determined in the good faith, reasonable judgment of the Management
Board and evidenced by a resolution set forth in an Officer’s Certificate
delivered to each Purchaser and holder of a Note) of assets other than cash
received with respect to such Restricted Investment (less the cost of
disposition, if any) and (II) the initial amount of such Restricted Investment,
plus (4) to the extent that any Unrestricted Subsidiary is redesignated as a
Restricted Subsidiary after the Closing, the lesser of (I) the fair market value
of the Authority’s Investment in such Subsidiary as of the date of such
redesignation and (II) such fair market value as of the date on which such
Subsidiary was originally designated as an Unrestricted Subsidiary, plus (5) $50
million.

(b) The preceding provisions will not prohibit:

(i) the defeasance, redemption, repurchase or other acquisition or retirement of
Subordinated Indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness;

(ii) the payment of any dividend by a Restricted Subsidiary of the Authority to
the holders of its common Equity Interests on a pro rata basis;

(iii) the repurchase, redemption or other acquisition or retirement for value of
any Equity Interests of any Restricted Subsidiary of the Authority held by any
member of the Authority’s (or any of its Restricted Subsidiaries’) management
pursuant to any management equity subscription agreement or stock option
agreement in effect as of the Closing; provided, that (a) the aggregate price
paid for all such repurchased, redeemed, acquired or retired Equity Interests
shall not exceed $1.2 million in any 12-month period and (b) the aggregate
amount of all such repurchased, redeemed, acquired or retired Equity Interests
shall not in the aggregate exceed $3.6 million;

(iv) the redemption or purchase of Subordinated Indebtedness of the Authority in
the event that the holder of such Subordinated Indebtedness has failed to be
licensed, qualified or found suitable or otherwise be eligible by any Gaming
Regulatory Authority to remain a holder of such Subordinated Indebtedness;

(v) the redemption, defeasance, repurchase or other acquisition or retirement of
Subordinated Indebtedness with the net cash proceeds from a substantially
concurrent capital contribution from the Tribe (provided that such capital
contribution is not counted for purposes of Section 10.2(a)(C)(2) hereof);

 

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(vi) [reserved];

(vii) the redemption, defeasance, repurchase or other acquisition or retirement
of Subordinated Indebtedness in connection with any repurchase offer related to
an Asset Sale or Change of Control but only if the Authority shall have complied
with Sections 9.8 and 9.9 hereof, as applicable, and purchased all Notes validly
tendered in connection therewith prior to the redemption of such Subordinated
Indebtedness;

(viii) payments to the Tribe (or any agency, instrumentality or political
subunit thereof) on account of Indebtedness of the Authority or any Restricted
Subsidiary held by the Tribe (or any agency, instrumentality or political
subunit thereof) at the Stated Maturity thereof;

(ix) other Restricted Payments in an aggregate amount since the Closing not to
exceed $60.0 million;

(x) the purchase, redemption, defeasance or other acquisition or retirement for
value of any Equity Interests in any Subsidiary or Affiliate of the Authority
that does not constitute a Permitted Investment, provided, that (A) the
Authority delivers to each Purchaser and holder of a Note an Officer’s
Certificate as to the fairness to the Authority or such Restricted Subsidiary of
the price of such repurchase, redemption or other acquisition or retirement for
value, from a financial point of view, and (B) in the aggregate, all such
repurchases, redemptions or other acquisitions or retirements for value do not
exceed $10.0 million;

(xi) the purchase, redemption, defeasance or other acquisition or retirement for
value of any Equity Interest in any Subsidiary or Affiliate of the Authority to
the extent that such purchase or acquisition constitutes a Permitted Investment;
and

(xii) the defeasance, redemption, repurchase or other acquisition or retirement
of Subordinated Indebtedness (including any Existing Senior Subordinated Notes)
in a total amount not to exceed $60.0 million;

(xiii) the defeasance, redemption, repurchase or other acquisition or retirement
of additional Subordinated Indebtedness (including any Existing Senior
Subordinated Notes) not otherwise permitted hereunder; provided, that the
Consolidated Senior Leverage Ratio is less than 4.25 to 1.0, calculated giving
pro forma effect to such defeasance, redemption, repurchase, acquisition or
retirement and the incurrence of any Indebtedness in connection therewith; and

(xiv) the purchase, redemption or other acquisition or retirement of
Indebtedness subordinated in right of payment to the Notes or any Note Guarantee
with any Excess Proceeds remaining after all holders of the Notes have been
given the opportunity to accept the Authority’s offer to prepay their Notes in
accordance with this Agreement, if any such Subordinated Indebtedness is
required to be repurchased pursuant to its respective term;

 

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provided, however, that at the time of, and after giving effect to, any
Restricted Payment pursuant to clause (iii), (vi), (viii) (other than in respect
of Indebtedness under a bond indenture or syndicated loan agreement), (ix),
(xii) or (xiii), no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof.

(c) Following the Closing, the Authority may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if such designation would not cause a Default;
provided, that in no event shall any Key Project Assets or Gaming Licenses be
transferred to an Unrestricted Subsidiary; provided, further that Gaming
Licenses unrelated to the Resort or Pocono may be transferred to an Unrestricted
Subsidiary, so long as at the time and after giving effect to such transfer
(i) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; and (ii) the Authority would, at the time
of such transfer and after giving pro forma effect thereto, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 10.4(a) hereof. In the event of such
designation, all outstanding Investments owned by the Authority and its
Restricted Subsidiaries in the Subsidiary so designated will be deemed to be an
Investment made as of the time of such designation and will reduce the amount
available for Restricted Payments under Section 10.2(a) hereof unless the
Investment constitutes a Permitted Investment (in which case, such Investment
will reduce the amount available for Permitted Investments, as applicable);
provided, that in the event that Salishan–Mohegan LLC shall become a Subsidiary
and shall be designated an Unrestricted Subsidiary in accordance with the terms
of this Note Purchase Agreement, any Investments in Salishan–Mohegan LLC
outstanding as of the Closing and still outstanding as of the date of such
designation shall be excluded from such calculation and shall not be deemed to
be an Investment or Restricted Payment and shall not reduce the amount otherwise
available for Restricted Payments or Permitted Investments. Except as set forth
above with respect to Salishan–Mohegan LLC, all such outstanding Investments
will be deemed to constitute Restricted Payments (or Permitted Investments, as
the case may be) in an amount equal to the fair market value of such Investments
at the time of such designation. Such designation will only be permitted if such
Restricted Payment (or Permitted Investments, as the case may be) would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Authority may redesignate an
Unrestricted Subsidiary to be a Restricted Subsidiary if such redesignation
would not otherwise cause a Default.

(d) The amount of all Restricted Payments (other than in the form of cash) shall
be the fair market value on the date of the Restricted Payment of the assets or
securities proposed to be transferred or issued by the Authority or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 10.2 shall be determined in good faith by the Management Board
whose resolution with respect thereto shall be delivered to each Purchaser and
holder of a Note.

 

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Section 10.3 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.

(a) Except as set forth in Section 10.3(b) hereof, the Authority will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
create or permit to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to: (i) pay dividends or make any other
distributions on its Capital Stock, or with respect to any other interest or
participation in, or measured by, its profits, to the Authority or any of the
Authority’s Restricted Subsidiaries, or pay any indebtedness owed to the
Authority or any of the Authority’s Restricted Subsidiaries; (ii) make loans or
advances to the Authority or any of the Authority’s Restricted Subsidiaries; or
(iii) transfer any of its properties or assets to the Authority or any of the
Authority’s Restricted Subsidiaries.

(b) The provisions of Section 10.3(a) hereof will not apply to encumbrances or
restrictions existing under or by reason of:

(i) contractual encumbrances or restrictions in effect on the Closing, including
without limitation pursuant to Existing Indebtedness and the Bank Credit
Facility (including any security documents relating to the Existing Indebtedness
and the Bank Credit Facility) as in effect on the Closing and any amendments,
modifications, restatements, renewals, extensions, increases, supplements,
refundings, Replacements or refinancings thereof; provided that such amendments,
modifications, restatements, renewals, extensions, increases, supplements,
refundings, Replacements or refinancings are no more restrictive, taken as a
whole, with respect to such dividend and other payment restrictions than those
contained in such contractual encumbrance or restriction, as in effect on the
Closing;

(ii) the Notes, this Agreement and the other Note Documents;

(iii) applicable law or any applicable rule, regulation or order;

(iv) any agreement or other instrument governing Indebtedness or Capital Stock
of a Person acquired by the Authority or any of its Restricted Subsidiaries as
in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired;

(v) customary non-assignment provisions in leases, licenses or other contracts
entered into in the ordinary course of business and consistent with past
practices;

(vi) purchase money obligations (including, without limitation, Capital Lease
Obligations) for property acquired in the ordinary course of business that
impose restrictions on the property so acquired of the nature described in
Section 10.3(a)(iii) hereof;

(vii) contracts or agreements for the sale of assets that impose restrictions on
the transfer of such assets and any contract or agreement for the sale or other
disposition of a Restricted Subsidiary that restricts distributions by such
Restricted Subsidiary pending its sale or other disposition;

 

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(viii) Permitted Refinancing Indebtedness; provided, that the applicable
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those contained in
the agreements governing the Indebtedness being refinanced;

(ix) any provision of secured Indebtedness otherwise permitted to be incurred
pursuant to Sections 10.4 and 10.9 hereof that limits the right of the Authority
or any of its Restricted Subsidiaries to dispose of the assets subject to the
Liens securing such Indebtedness;

(x) provisions with respect to the disposition or distribution of assets or
property in joint venture agreements and other similar agreements entered into
in the ordinary course of business;

(xi) restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business;

(xii) Indebtedness, Disqualified Stock or preferred stock of the Authority or
any Guarantor that is incurred subsequent to the Closing pursuant to
Section 10.4 hereof containing applicable encumbrances and restrictions that are
not materially more restrictive than the encumbrances and restrictions in effect
on the Closing pursuant to this Agreement and the Bank Credit Facility taken
together; and

(xiii) documents or agreements evidencing, relating to or otherwise governing
any Permitted Lease Financing to the extent such encumbrances or restrictions
are applicable solely to the Income Assets with respect to such Permitted Lease
Financing.

Section 10.4 Incurrence of Indebtedness and Issuance of Preferred Stock.

(a) The Authority will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, “incur”) any Indebtedness (including Acquired
Indebtedness) and the Authority will not issue any Disqualified Stock and will
not permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Authority may incur Indebtedness (including
Acquired Indebtedness) or issue Disqualified Stock and the Authority’s
Restricted Subsidiaries may incur Indebtedness or issue preferred stock if
(i) the Fixed Charge Coverage Ratio for the Authority’s most recently ended four
full Fiscal Quarters for which internal consolidated financial statements are
available would have been at least 2.0 to 1.0, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the Disqualified Stock or preferred
stock had been issued, as applicable, at the beginning of such four-quarter
period and (ii) no Default or Event of Default shall have occurred and be
continuing or would result from such incurrence of Indebtedness. Notwithstanding
the foregoing, the Authority will not issue any Disqualified Stock or any type
of Capital Stock that would violate IGRA.

 

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(b) Section 10.4(a) hereof will not prohibit the incurrence of any of the
following items of Indebtedness:

(i) the incurrence by the Authority or any of its Restricted Subsidiaries of
(A) Indebtedness (including letters of credit) under Credit Facilities;
provided, that the aggregate principal amount of all Indebtedness under Credit
Facilities outstanding under this clause (i) (including any Permitted
Refinancing Indebtedness incurred pursuant to clause (B) below) as of the date
of any incurrence pursuant to this clause (i), after giving effect to any such
incurrence and the application of the net proceeds therefrom (with letters of
credit being deemed to have a principal amount equal to the maximum potential
liability of the Authority and its Restricted Subsidiaries thereunder) shall not
exceed the greater of (1) $1,200.0 million, minus (x) the amount of Indebtedness
incurred pursuant to this clause (i) since the Closing that has been (a) retired
with the Net Proceeds from any Asset Sale applied to permanently reduce the
outstanding amounts of such Indebtedness pursuant to Section 10.5 hereof or
(b) assumed by a transferee in an Asset Sale and (y) the Lease Financing Amount,
if any, outstanding at such time and (2) the maximum aggregate principal amount
that could be incurred without causing the Consolidated Secured Leverage Ratio
of the Authority, at the time of incurrence, to exceed 3.00 to 1.00 (after
giving effect to the application of the net proceeds therefrom and to any other
pro forma adjustments consistent with the provisions set forth in the definition
of “Fixed Charge Coverage Ratio”) and (B) Permitted Refinancing Indebtedness to
Replace any Indebtedness outstanding pursuant to this clause (i);

(ii) the incurrence by the Authority or any of its Restricted Subsidiaries of
the Existing Indebtedness;

(iii) the incurrence by the Authority or any of its Restricted Subsidiaries of
Indebtedness represented by the Notes (including the Guarantees) issued on the
Closing;

(iv) the incurrence by the Authority or any of its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case incurred for the purpose of financing
all or any part of the purchase price of real property, furniture, fixtures,
equipment or similar assets used or useful in the business of the Authority or
such Restricted Subsidiary not to exceed 100% of the lesser of cost and fair
market value of the assets financed, together with any Permitted Refinancing
Indebtedness in respect thereof, in an aggregate principal amount under this
clause (iv) not to exceed $150.0 million at any time outstanding;

(v) the incurrence by the Authority or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to refund, refinance, renew, extend, defease or Replace, Indebtedness
that was permitted by this Agreement to be incurred under Section 10.4(a) hereof
or clause (ii) or (iii) of this Section 10.4(b) or this clause (v);

(vi) the incurrence by the Authority or any of its Restricted Subsidiaries of
Hedging and Swap Obligations that are incurred to manage interest rates or
currency exchange rates or interest rate or currency exchange rate risk and not
for speculative purposes;

 

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(vii) the guarantee by the Authority or any of its Restricted Subsidiaries of
any Indebtedness of the Authority or any of its Restricted Subsidiaries that was
permitted to be incurred by another provision of this Section 10.4;

(viii) the incurrence by (1) a Restricted Subsidiary of Indebtedness owed to
another Restricted Subsidiary or to the Authority or (2) the Authority of
Indebtedness owed to a Restricted Subsidiary; provided, that, in each case, if
at any time any such Restricted Subsidiary ceases to be a Restricted Subsidiary,
any such Indebtedness shall be deemed to be an incurrence of Indebtedness for
the purposes of this Section 10.4;

(ix) the incurrence by the Authority or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding not to exceed $120.0 million;

(x) to the extent that such incurrence does not result in the incurrence by the
Authority or any Restricted Subsidiary of any obligation for the payment of
borrowed money of others, Indebtedness incurred solely as a result of the
execution by the Authority or its Restricted Subsidiaries of a Completion
Guarantee and Keep-Well Agreement;

(xi) any guarantee of Indebtedness of another Person to the extent constituting
a Permitted Investment incurred pursuant to clause (v) of the definition
thereof; and

(xii) (A) Capital Lease Obligations owing to Downs Lodging, LLC in respect of
the hotel and convention center being constructed by Downs Lodging, LLC adjacent
to the casino facility at Pocono, for so long as such entity is an Unrestricted
Subsidiary of the Authority and (B) Indebtedness of Downs Lodging, LLC deemed to
be incurred upon its designation, if any, as a Restricted Subsidiary in
accordance with this Agreement, in an aggregate principal amount not to exceed
$55.0 million as of the date of such designation; provided, that in the case of
this clause (B) such Indebtedness was incurred to finance (or to refinance
Indebtedness incurred to finance) the hotel and convention center being
constructed by Downs Lodging, LLC adjacent to the casino facility at Pocono and
fees and expenses incurred in connection therewith.

provided, however, that at the time of, and after giving effect to, the
incurrence of any Indebtedness pursuant to clause (ix), (x) or (xi), no Default
or Event of Default shall have occurred and be continuing or would occur as a
consequence of such incurrence.

For purposes of determining compliance with this Section 10.4 in the event that
an item of proposed Indebtedness meets the criteria of more than one of the
categories of Indebtedness described in clauses (i) through (xvi) above or is
entitled to be incurred pursuant to Section 10.4(a) hereof, the Authority shall,
in its sole discretion, classify or reclassify, or later divide, classify or
reclassify, such item of Indebtedness in any manner that complies with this
Section 10.4; provided, that if such Indebtedness is secured by a Lien, such
Lien would be permitted to be incurred to

 

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secure such reclassified Indebtedness as of the date of reclassification in
accordance with Section 10.9; provided, further, that Indebtedness outstanding
under the Bank Credit Facility shall be deemed to be outstanding pursuant to
clause (i) above. The payment of dividends on Preferred Stock in the form of
additional shares of Preferred Stock of the same class, accretion of original
issue discount or liquidation preference and increases in the amount of
Indebtedness outstanding solely as a result of fluctuations in the exchange rate
of currencies shall not be deemed to be an incurrence of Indebtedness for
purposes of this Section 10.4.

Section 10.5 Asset Sales.

(a) The Authority will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless: (i) the Authority (or its
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (as determined in the
good faith, reasonable judgment of the Management Board, as evidenced by a
resolution set forth in an Officer’s Certificate delivered to each Purchaser and
holder of a Note) of the assets sold or otherwise disposed of and (ii) except in
the case of a Permitted Asset Swap, at least 75% of the consideration therefor
received by the Authority or such Restricted Subsidiary is in the form of cash;
provided, however, that the Authority will not be permitted to make any Asset
Sale of Key Project Assets. For purposes of this provision, each of the
following shall be deemed to be cash: (A) any liabilities that would appear on
the Authority’s or such Restricted Subsidiary’s balance sheet prepared in
accordance with GAAP (other than contingent liabilities and liabilities that are
by their terms subordinated to the Notes or any Guarantee) that are assumed by
the transferee of any such assets pursuant to a customary novation agreement
that releases the Authority or such Restricted Subsidiary from further
liability; and (B) any securities, notes or other obligations received by the
Authority or any such Restricted Subsidiary from such transferee that are
converted by the Authority or such Restricted Subsidiary into cash (to the
extent of the cash received) within 30 days of the receipt thereof.

(b) Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Authority may apply such Net Proceeds, at its option, to (i) (A) retire
Indebtedness secured by the asset which was the subject of the Asset Sale,
including Indebtedness under the Bank Credit Facility; provided, that in the
case of a revolving loan agreement or similar arrangement, the commitment with
respect thereto is permanently reduced by such amount, (B) repurchase, retire or
repay the Notes or (C) retire, repay and permanently reduce other Indebtedness
that is not Subordinated Indebtedness; provided, that the Notes are repurchased,
retired or repaid on a pro rata basis; (ii) acquire the assets of, or a majority
of the Voting Stock of, an entity engaged in the Principal Business or a Related
Business; (iii) make capital expenditures or acquire other long-term assets that
are used or useful in the Principal Business or a Related Business; or (iv) make
an investment in the Principal Business or a Related Business or in tangible
long-term assets used or useful in the Principal Business or a Related Business.
Pending the final application of any Net Proceeds of any Asset Sale, the
Authority may temporarily reduce revolving credit borrowings or otherwise invest
such Net Proceeds in any manner that is not prohibited by this Agreement. At any
time during such 360-day period, the Authority may elect to treat all or any
portion of such Net Proceeds as “Excess Proceeds,” and make an Asset Sale Offer
to the holders of any Notes as set forth in Sections 9.8 and 10.5(c) hereof.

 

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(c) Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraphs will be deemed to constitute “Excess
Proceeds.” When the aggregate amount of Excess Proceeds exceeds $25.0 million,
the Authority will, within 15 Business Days, make an offer to prepay the Notes
(the “Prepayment Offer”), together with any senior Indebtedness ranking pari
passu in right of payment with the Notes and containing similar provisions
requiring the Authority to make an offer to repay or purchase such pari passu
senior Indebtedness with the proceeds from such Asset Sale pursuant to a cash
offer (subject only to conditions required by applicable law, if any), pro rata
in proportion to the respective principal amounts of such pari passu senior
Indebtedness (or accreted values in the case of Indebtedness issued with an
original issue discount) and the Notes (the “Asset Sale Offer”), in accordance
with Section 9.8. To the extent that any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Authority may use such Excess Proceeds
for any purpose not otherwise prohibited by this Agreement. Upon completion of
such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

Section 10.6 Sale and Leaseback Transactions. The Authority will not, and will
not permit any of its Restricted Subsidiaries to, enter into any sale and
leaseback transaction (other than incidental to any Permitted Lease Financing)
involving the Resort or any Key Project Assets; provided, that the Authority or
any of its Restricted Subsidiaries may enter into such a sale and leaseback
transaction if: (i) the Authority or such Restricted Subsidiary, as applicable,
could have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to Section 10.4(a) or
10.4(b)(ix) hereof and (b) incurred a Lien on the Property subject to such sale
and leaseback to secure such Indebtedness pursuant to Section 10.9 hereof, and
thereafter for the term of the applicable lease, the Authority or such
Restricted Subsidiary will be deemed to have incurred Indebtedness in the amount
of the Attributable Debt secured by a Lien on such Property; (ii) the gross cash
proceeds of such sale and leaseback transaction are at least equal to the fair
market value, as determined in the good faith, reasonable judgment of the
Management Board and set forth in an Officer’s Certificate delivered to each
Purchaser and holder of a Note, of the property that is the subject of such sale
and leaseback transaction; and, in the case of any such transaction (or series
of related transactions) involving the sale of assets with a value in excess of
$25.0 million, an opinion as to the fairness to the Authority or such Restricted
Subsidiary of such sale and leaseback transaction from a financial point of view
is issued by an accounting, appraisal or investment banking firm of national
standing; (iii) the transfer of assets in such sale and leaseback transaction is
permitted by, and the Authority applies the proceeds of such transaction in
compliance with Section 10.5 hereof; and (iv) no Default or Event of Default
shall have occurred and be continuing or would occur as a result of such
transaction; provided further, that no Resort Hotel Transaction shall be subject
to provisions of this Section 10.6.

Section 10.7 Limitation on Issuances and Sales of Equity Interests in Wholly
Owned Restricted Subsidiaries. The Authority (i) will not, and will not permit
any Restricted Subsidiary of the Authority to, transfer, convey, sell, lease or
otherwise dispose of any Equity Interests in any Wholly Owned Restricted
Subsidiary of the Authority to any Person (other than the Authority or another
Wholly Owned Restricted Subsidiary of the Authority), unless (a) (1) such
transfer, conveyance, sale, lease or other disposition is of all the Equity
Interests in such Wholly Owned Restricted Subsidiary or (2) the Authority’s
Investment in such formerly Wholly Owned Restricted Subsidiary remaining
immediately after giving effect to such transfer, conveyance, sale,

 

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lease or other disposition would be permitted under Section 10.2 hereof, and
(b) the cash Net Proceeds from such transfer, conveyance, sale, lease or other
disposition are applied in accordance with Section 10.5 hereof, and (ii) will
not permit any Wholly Owned Restricted Subsidiary of the Authority to issue any
of its Equity Interests (other than, if necessary, shares of its Capital Stock
constituting directors’ qualifying shares) to any Person other than to the
Authority or a Wholly Owned Restricted Subsidiary of the Authority unless upon
such issuance, the Authority’s Investment in any such formerly Wholly Owned
Restricted Subsidiary would be permitted under Section 10.2 hereof.

Section 10.8 Transactions with Affiliates.

(a) The Authority will not, and the Authority will not permit any of its
Restricted Subsidiaries to, make any payment or distribution to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, (i) any Affiliate of the Authority or any of its Restricted
Subsidiaries or (ii) any member of the Tribe or any business entity directly or
indirectly controlled by any member or members of the Tribe (each of the
foregoing, an “Affiliate Transaction”), unless: (i) such Affiliate Transaction
is on terms that are no less favorable to the Authority or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable
transaction by the Authority or such Restricted Subsidiary with an unrelated
Person; (ii) other than with respect to transactions undertaken in the ordinary
course of business, no Default or Event of Default shall have occurred and be
continuing or would result from any such Affiliate Transaction; and (iii) the
Authority delivers to each Purchaser and holder of a Note: (A) with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, a resolution of the
Management Board set forth in an Officer’s Certificate certifying that such
Affiliate Transaction complies with this Section 10.8 and that such Affiliate
Transaction has been approved by a majority of the disinterested members of the
Management Board; and (B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$20.0 million, an opinion as to the fairness to the Authority or such Restricted
Subsidiary of such Affiliate Transaction (or series of related Affiliate
Transactions) from a financial point of view issued by an accounting, appraisal
or investment banking firm of national standing.

(b) The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of Section 10.8(a) hereof:

(i) any employment agreement or arrangement entered into by the Authority or any
of its Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Authority or such Restricted Subsidiary;

(ii) transactions between or among the Authority and/or its Restricted
Subsidiaries;

(iii) payment of reasonable Management Board fees to members of the Management
Board;

 

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(iv) transactions with Persons in whom the Authority owns any Equity Interests,
so long as the remaining equity holders of such Person are not Affiliates of the
Tribe, the Authority or any of its Subsidiaries; provided, that no Default or
Event of Default shall have occurred and be continuing or would result from
entering into such transaction;

(v) Government Service Payments;

(vi) [reserved];

(vii) Restricted Payments or Permitted Investments that are made in compliance
with the provisions of Section 10.2 hereof;

(viii) contractual arrangements existing on the Closing and any renewals,
extensions and modifications thereof that are not materially adverse to the
holders of any Notes;

(ix) the sale or other transfer of Income Assets in connection with a Permitted
Lease Financing;

(x) reasonable and customary employment and bid preferences to members of the
Tribe and businesses owned by members of the Tribe in accordance with Tribal law
or policy (as such Tribal law or policy exists on the Closing, together with
such amendments that would not reasonably be expected to be materially adverse
to the interests of the holders of any Notes); and

(xi) provision by the Authority or any of its Restricted Subsidiaries of
development or management services to a joint venture or an Unrestricted
Subsidiary engaged in the Principal Business or a Related Business; provided,
that the Authority or such Restricted Subsidiary, as the case may be, is
reimbursed by the joint venture or Unrestricted Subsidiary for all incremental
out-of-pocket costs and expenses (including without limitation payroll) it
incurs in providing such services.

Section 10.9 Liens. The Authority will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
otherwise cause or suffer to exist or become effective any Lien of any kind
(other than Permitted Liens) upon any of their respective property or assets, or
any proceeds therefrom, now owned or hereafter acquired, which secures either:
(a) Subordinated Indebtedness, unless the Notes are (and/or each applicable
Guarantee is) secured by a Lien on such property, assets or proceeds, which Lien
is senior in priority to the Liens securing such Subordinated Indebtedness, or
(b) other senior Indebtedness pari passu in right of payment with the Notes,
unless the Notes are (and/or each applicable Guarantee is) equally and ratably
secured with the Liens securing such pari passu Indebtedness.

Section 10.10 Existence of the Authority and Maintenance of the Lease.

(a) The Authority shall, and shall cause each of its Restricted Subsidiaries to,
do or cause to be done all things necessary to preserve and keep in full force
and effect their respective existence, in accordance with their respective
organizational documents and their respective

 

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rights (contractual, charter and statutory), licenses and franchises, except to
the extent permitted under Section 11.1 hereof; provided, however, that neither
the Authority nor any Restricted Subsidiary shall be required to preserve, with
respect to itself, any license, right or franchise and, with respect to its
Restricted Subsidiaries, any such existence, license, right or franchise, if its
Management Board or Board of Directors, or other governing body or officers
authorized to make such determination, as the case may be, shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Authority or any Restricted Subsidiary, and that the loss thereof is not
adverse in any material respect to the holders of the Notes.

(b) Subject to the provisions described in Section 24.8 hereof, the Authority
shall do, or cause to be done, all things necessary to perform any material
covenants set forth in the Lease in order to keep the Lease in full force and
effect.

Section 10.11 Line of Business. The Authority shall not, and shall not permit
any of its Restricted Subsidiaries to, engage in any business other than the
Principal Business or a Related Business.

Section 10.12 Guarantees. As of the Closing, the Pocono Subsidiaries, the WNBA
Subsidiary, Mohegan Ventures-Northwest, LLC, Mohegan Golf, LLC, Mohegan Ventures
Wisconsin, LLC, Wisconsin Tribal Gaming, LLC and MTGA Gaming, LLC shall be
Guarantors. If, after Closing, any Restricted Subsidiary of the Authority
guarantees any other Indebtedness of the Authority or is obligated on other
Indebtedness in excess of $50.0 million (as measured with respect to each such
Restricted Subsidiary), then the Authority will, within 20 Business Days of the
date on which it first satisfies the foregoing conditions, cause such Restricted
Subsidiary to become a Guarantor and execute a Guarantee Joinder and deliver
certificates satisfying the requirements of the Note Guarantee for additional
Guarantors. Notwithstanding the foregoing, to the extent any Restricted
Subsidiary is subject to the terms of any instrument governing Acquired
Indebtedness, as in effect at the time of acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition) which instrument or restriction prohibits such Restricted
Subsidiary from issuing a Guarantee, such Restricted Subsidiary shall not be
required to execute such Guarantee documentation until it is permitted to issue
such Guarantee pursuant to the terms of such Acquired Indebtedness.

Section 10.13 Designation of Restricted and Unrestricted Subsidiaries.

(a) The Management Board may designate any Restricted Subsidiary (including any
newly acquired or newly formed Subsidiary of the Authority) to be an
Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or
owns or holds any Lien on any property of, the Authority or any Restricted
Subsidiary; provided, that either (A) the Subsidiary to be so designated has
total assets of $1,000 or less or (B) if such Subsidiary has assets greater than
$1,000, such designation would not be prohibited by Section 10.2 hereof:

(b) Any such designation by the Management Board shall be evidenced to the
holders of the Notes by delivering to each holder a certified copy of a
resolution of the Management Board giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 10.2 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted

 

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Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for
purposes of this Agreement and any Indebtedness of such Subsidiary will be
deemed to be incurred by a Restricted Subsidiary of the Authority as of such
date (and, if such Indebtedness is not permitted to be incurred as of such date
under Section 10.4, the Authority shall be in default of such Section).

(c) The Authority may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Authority of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation,
shall only be permitted if (1) such Indebtedness is permitted under Section 10.4
hereof, calculated on a pro forma basis as if such designation had occurred at
the beginning of the applicable four-quarter reference period and (2) no Default
or Event of Default would be in existence following such designation.

(d) As of the date of Closing, each of: Mohegan Lacrosse, LLC, Downs Lodging,
LLC; Mohegan Gaming & Hospitality, LLC; Mohegan Resorts, LLC; Mohegan Resorts
Mass, LLC; Mohegan Gaming Advisors, LLC; MGA Holding NJ, LLC; MGA Gaming NJ,
LLC; MGA Gaming MA, LLC; MGA Holding MA, LLC; Inspire Integrated Resort Co.,
Ltd.; New England Black Wolves, LLC; and (2) MGNV, LLC, and each Subsidiary of
each such Person is an Unrestricted Subsidiary.

Section 10.14 Suspension of Covenants. Following the first date upon which the
Authority’s Index Debt is rated Baa3 or better by Moody’s and BBB- or better by
S&P (or, in either case, if such person ceases to rate the Index Debt for
reasons outside of the control of the Authority, the equivalent investment grade
credit rating from any other “nationally recognized statistical rating
organization” (within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange
Act) selected by the Authority as a replacement agency) (the “Rating Event
Date”) and provided no Default or Event of Default shall exist on the Rating
Event Date, the covenants specifically listed under Sections 10.2, 10.3, 10.4,
10.5, 10.7, 10.8, 10.12, 10.18 and 10.19 hereof (collectively, the “Suspended
Covenants”) will no longer be applicable to the Notes; provided, however, that
in the event that at any time after a Rating Event Date, any Index Debt shall be
rated lower than Baa3 by Moody’s or lower than BBB- by S&P, or any equivalent
rating by a successor agency to Moody’s or S&P, the Suspended Covenants shall be
automatically reinstated (the “Reinstated Covenants”) with respect to the Notes
and all transactions by the Authority that occurred during the time that such
covenants were suspended (the “Suspension Period”) and that would have violated
such covenants had such covenants been in effect at the time shall be deemed not
to constitute a Default or Event of Default, as the case may be, and shall be
deemed to have been in compliance with such covenants for all purposes; provided
further, that thereafter all transactions by the Authority occurring on or after
the date on which the Suspended Covenants have been reinstated (such date, the
“Reinstatement Date”) shall be required to be in compliance with the Reinstated
Covenants. For purposes of interpreting the definition of “Permitted Liens”
during the time any Suspended Covenants are suspended, the definition should be
read as if the Suspended Covenants were not so suspended. Calculations made
after the Reinstatement Date of the amount available to be made as Restricted
Payments under Section 10.2 hereof will be made as though such covenant had been
in effect from the Closing and throughout the Suspension Period. Accordingly,
Restricted Payments made during the Suspension Period will reduce the amount
available to be made as Restricted Payments under Section 10.2(a) hereof to the
extent provided therein.

 

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Section 10.15 Taxes. The Authority shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes and similar
assessments and governmental levies required to be paid by it or such Subsidiary
except (i) such taxes as are (or will be) contested in good faith and by
appropriate proceedings and as to which adequate reserves have been established
and maintained in accordance with GAAP or (ii) where the failure to effect such
payment would not be reasonably be expected to result in a Material Adverse
Effect.

Section 10.16 Ownership Interests in the Authority. Neither the Tribe nor the
Authority shall permit any Person other than the Tribe to acquire any Ownership
Interest whatsoever in the Authority.

Section 10.17 [Reserved].

Section 10.18 Restrictions on Leasing and Dedication of Property.

(a) Except as provided in Section 10.18(b) hereof, the Authority will not lease,
sublease, or grant a license, concession or other agreement to occupy, manage or
use any material portion of the Authority’s property and assets owned or leased
by the Authority and located on the Resort (each, a “Lease Transaction”).

(b) Section 10.18(a) hereof will not prohibit any of the following Lease
Transactions:

(i) the Authority may enter into a Lease Transaction with any Person (including,
without limitation, a lease for the purpose of developing, constructing,
operating and managing hotel, retail, restaurant, cell tower and other
commercial establishments within the Resort, including, if applicable, the
Resort Hotel Transaction); provided that: (A) such Lease Transaction will not
materially interfere with, impair or detract from the operations of the Resort;
(B) such Lease Transaction contains rent and such other terms such that the
Lease Transaction, taken as a whole, is commercially reasonable in light of
prevailing or comparable transactions in other casinos, hotels, attractions or
shopping venues; and (C) such Lease Transaction complies with all applicable
law, including obtaining any consent of the BIA, if required;

(ii) the Lease and any amendments, extensions, modifications or renewals thereof
which are not materially adverse to the holders of any Notes;

(iii) the Authority may enter into a management or operating agreement with
respect to any of the Authority’s property and assets with any Person (a
“Management Contract”); provided that: (A) the manager or operator has
experience in managing or operating similar operations and, in the case of a
Management Contract in respect of Gaming activities, is a Qualified Gaming
Company; (B) such Management Contract is on commercially reasonable and fair
terms to the Authority; and (C) to the extent required by law, such Management
Contract has been submitted to and approved by the NIGC;

(iv) [reserved]; and

(v) Permitted Lease Financings.

(c) No Lease Transaction may provide that the Authority may subordinate its
leasehold or fee interest to the real property interest of any financing party
of any lessee, and no person other than the Authority may conduct gaming or
casino operations on any property that is the subject of a Lease Transaction.

 

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Section 10.19 Maintenance of Insurance. Until the Notes have been paid in full,
the Authority shall maintain insurance with responsible carriers against such
risks and in such amounts as is customarily carried by similar businesses with
such deductibles, retentions, self-insured amounts and coinsurance provisions as
are customarily carried by similar businesses of similar size, including,
without limitation, liability, property and casualty.

Section 10.20 Gaming Licenses. The Authority will use its commercially
reasonable best efforts to obtain and retain in full force and effect at all
times all Gaming Licenses necessary for the operation of the Resort and Pocono;
provided, that, if in the course of the exercise of its governmental or
regulatory functions the Authority is required to suspend or revoke any consent,
permit or license or close or suspend any operation or any part of the Resort as
a result of any noncompliance with the law, the Authority will use its
commercially reasonable best efforts to promptly and diligently correct such
noncompliance or replace any personnel causing such noncompliance so that the
Resort will be open and fully operating. The Authority shall provide the
Purchasers and the holders of the Notes any Notice of Violation, Order of
Temporary Closure, or Assessment of Civil Fines from the NIGC pursuant to 25
C.F.R. Part 573 or 575 or any successor provision, and any Notice of
Non-Compliance issued by, or cause of action commenced by, the State of
Connecticut under Section 13 of the Compact, or any successor provision.

Section 10.21 Maintenance of Properties. Subject to, and in compliance with,
Section 24.8, the Authority shall cause all material properties used or useful
in the conduct of its business or the business of any of the Guarantors to be
maintained and kept in good operating condition, repair and working order
(ordinary wear and tear and casualty loss excepted) and shall cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereto; provided, that the Authority shall not be obligated to make or cause to
be made such repairs, renewals, replacements, betterments and improvements or
maintain such properties if the failure to do so would not result in a material
adverse effect on the ability of the Authority and the Guarantors to satisfy
their obligations under the Notes, the Guarantees and this Agreement.

Section 10.22 Defense of this Agreement. If any Person commences any action or
proceeding seeking to characterize this Agreement or any interest thereunder,
for any reason (i) as constituting, creating or providing a “proprietary
interest” in gaming activities or gaming operations or (ii) constituting a
“management contract” or a “management agreement,” in either case in violation
of IGRA, the Authority will, at its own cost, object to any such
characterization and support and defend this Agreement, as not creating
providing or constituting any “proprietary interest” in gaming activities and
not constituting a “management contract” or a “management agreement,” in either
case in violation of IGRA or any other Law.

 

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SECTION 11. SUCCESSORS.

Section 11.1 Liquidation or Dissolution.

(a) The Authority shall not consolidate or merge with or into any other Person
(other than a consolidation or merger with a Wholly Owned Restricted Subsidiary
of the Authority in which the Authority is the surviving entity).

(b) Subject to the foregoing subsection (a) and the provisions of Section 10.5
and the Note Guarantee, no Guarantor may consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another corporation,
Person or entity whether or not affiliated with such Guarantor unless
(A) (i) the Person formed by or surviving any such consolidation or merger (if
other than such Guarantor) unconditionally assumes all the obligations of such
Guarantor under the Agreement and the Guarantees pursuant to documentation
reasonably satisfactory to holders of a majority of the Notes (provided that
such documentation shall not include provisions that conflict with the
limitations in Section 24.8); and (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists; provided, that any Guarantor
may merge with or into another Guarantor or (B) such consolidation or merger
results in such Subsidiary ceasing to be a Guarantor pursuant to a transaction
otherwise permitted under the Agreement, including Section 10.5.

 

SECTION 12. COVENANTS OF THE TRIBE.

Section 12.1 Negative Covenants of the Tribe.

The Tribe shall not, and shall not permit any of its representatives, political
subunits or councils, agencies or instrumentalities, directly or indirectly,
except as required by federal or state law, to do any of the following:

(a) increase or impose any tax, fee, charge, assessment or other payment
obligation on the Authority or on any patrons of, or any activity at, the Resort
other than:

(i) payments that are due under any agreement in effect at Closing or payments
which are not materially adverse to the economic interests of the holders of any
Notes;

(ii) payments that the Authority has agreed to reimburse the holder of each Note
for the economic effect thereof, if any;

(iii) payments that correspondingly reduce the Restricted Payments otherwise
payable to the Tribe;

(iv) pursuant to the Tribal Tax Code; or

(v) Government Service Payments;

(b) subject to the provisions described under Section 24.8, rescind the Lease or
amend the terms of the Lease in any manner that would be materially adverse to
the economic interests of the holders of any Notes or which could reasonably be
expected to impair, delay, hinder or interfere with, in any material manner, any
right or remedy of any holder of a Note;

 

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(c) amend the Tribal Gaming Ordinance (or accompanying gaming regulations in
effect as of the Closing), the Compact, the Constitution or the Town Agreement
(in each case unless any such amendment is a legitimate effort to ensure that
the Authority and the Resort conduct gaming operations in a manner that is
consistent with applicable laws, rules and regulations or that protects the
environment, the public health and safety, or the integrity of the Authority or
the Resort) to restrict or eliminate the exclusive right of the Authority to
conduct gaming operations on the existing reservation of the Tribe located
adjacent to Uncasville, Connecticut in a manner that would be materially adverse
to the economic interests of the holders of any Notes or which could reasonably
be expected to impair, delay, hinder or interfere with, in any material manner,
any right or remedy of a Purchaser or any holder of any Note;

(d) permit or incur any consensual liability of the Tribe (or of any other
instrumentality, enterprise or subunit of the Tribe) that is a legal obligation
of the Authority or any of its Restricted Subsidiaries or for which assets of
the Authority or any of its Restricted Subsidiaries may be bound, other than a
liability that the Authority or its Restricted Subsidiaries are permitted or not
prohibited from incurring on their own behalf under this Agreement;

(e) exercise any power of eminent domain or condemnation over the assets of the
Authority or any of its Restricted Subsidiaries (other than any such exercise
that would not materially adversely affect the economic rights and benefits of
the Purchasers or the holders of any Notes);

(f) take any other action (including, without limitation, applying the Tribal
Gaming Ordinance or gaming regulations in a discriminatory manner against the
holders of any Notes), enter into any agreement, amend its constitution, the
Tribal Gaming Ordinance (or accompanying gaming regulations), the UCC Ordinance,
the Compact or the Town Agreement, or enact any ordinance, law, rule or
regulation that would have a material adverse effect on the economic interests
of the holders of any Notes, or which could reasonably be expected to impair,
delay, hinder or interfere with, in any material manner, any right or remedy of
the Purchasers or any holder of any Note;

(g) other than through the Authority, a Subsidiary of the Authority or a joint
venture of the Authority (with any one or more entities that are not Affiliates
of the Tribe unless they are Subsidiaries of the Authority), develop, own,
operate or manage Northeast Gaming Operations; provided, that the Tribe may
continue to own its existing interests in Mohegan Gaming and its Subsidiaries
which may in turn own, operate and manage casino gaming operations, provided
that (A) any future investments in Mohegan Gaming or its Subsidiaries or joint
ventures by the Tribe or any agency, instrumentality, political subunit or
Subsidiary (other than the Authority and its Subsidiaries) of the Tribe will be
made by or through the Authority or a Subsidiary of the Authority and (B) so
long as the Tribe holds any equity interest in Mohegan Gaming other than through
the Authority, Mohegan Gaming shall not own, operate or manage Northeast Gaming
Operations other than projects publicly disclosed as of Closing;

(h) abrogate or take any action to abrogate the Tribe’s waiver of sovereign
immunity and consent to jurisdiction or any waiver of sovereign immunity or
consents to jurisdiction provided by the Authority or any Guarantor related to
this Agreement;

 

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(i) knowingly accept or retain a Restricted Payment (which, for the avoidance of
doubt does not include any Government Service Payments) from the Authority in
violation of this Agreement;

(j) dissolve, liquidate, reorganize or restructure the Authority or any
Restricted Subsidiary, other than as permitted under this Agreement, terminate
gaming operations conducted by the Authority, or authorize gaming operations
(other than class I gaming under IGRA) on its reservation other than through the
Authority;

(k) fail to segregate Tribal assets from assets of the Authority or any
Restricted Subsidiary;

(l) convey into trust with the federal government of the United States any
Authority assets other than real property;

(m) directly or indirectly challenge the validity or legality of any provision
of this Agreement in any court or other forum on the basis that this Agreement
violates or fails to comply with IGRA or such other statutes, laws, ordinances
or government rules and regulations applicable to federally-recognized Indian
tribes;

(n) fail to maintain its existence as a federally recognized Indian tribe;

(o) take any action to enact any Bankruptcy Law or other Law pertaining to
reorganization that would impair, limit, restrict, delay or otherwise adversely
affect any of the rights and remedies of the Purchasers or the holders of any
Notes provided for in this Agreement or the Notes;

(p) take any action that impairs necessary access to the lands of the Tribe for
purposes of operating the Resort and conducting the business of the Resort;

(q) adopt, enact, amend or modify any law impairing (as such term is used in
Article I, Section 10 of the United States Constitution) any contractual
obligation of the Tribe, the Authority or the Guarantors under this Agreement or
the Notes other than laws required under applicable state or federal law or
reasonably adopted in good faith to ensure that the Principal Business and any
Related Business are conducted in a manner consistent with applicable laws to
protect the environment or the public health and safety relating to the conduct
of the Principal Business or such Related Business;

(r) initiate or join in the prosecution of any proceeding to have the interests
of the Purchasers or any the holder of any Note under this Agreement declared
invalid or unenforceable on the basis that this Agreement (a) provides any
Person with a proprietary interest in any gaming activity in contravention of
the requirements under IGRA, including 25 U.S.C. Section 2710(b)(2)(A), or under
the Tribe’s Constitution and any tribal law, ordinance or resolution including,
without limitation, the Tribal Gaming Ordinance, or (b) constitutes,
individually or as a whole, a “management contract” or a “management agreement”
under IGRA, including 25 U.S.C. Section 2711, and its implementing regulations,
or as otherwise provided under the Tribe’s Constitution and any tribal law
ordinance or resolution, including, without limitation, the Tribal Gaming
Ordinance; or

(s) except as required by federal or state law, directly or indirectly impose,
tax or otherwise make a charge on the Purchasers or the holders of any Notes in
their capacities as such, the Notes, this Agreement or any payments or deposits
to be made thereunder;

 

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provided, that except as set forth in the previous clauses (c) and (g) nothing
in the foregoing shall restrict the ability of the Tribe, directly or
indirectly, to engage in any business, including a gaming enterprise, outside of
the Authority.

Section 12.2 Affirmative Covenants of the Tribe.

(a) Any action taken by the Tribe to comply with federal or state law that would
otherwise violate Section 12.1 hereof shall be taken only after prior written
notice to the Purchasers and the holders of the Notes, accompanied with an
Officer’s Certificate and Opinion of Counsel that such action is required by
federal or state law. To the extent possible under the federal or state law, the
Tribe shall provide at least 30 days prior written notice of any such action.

(b) In the event that the Tribe or any agency, instrumentality, political
subunit or Subsidiary (other than the Authority and its Subsidiaries) of the
Tribe receives, directly or indirectly, any payment, distribution or transfer
from the Authority or any Restricted Subsidiary at a time when such payment,
distribution or transfer is prohibited by the terms of this Agreement, such
payment shall be held by the Tribe in trust for the benefit of, and shall be
paid forthwith over and delivered promptly to the Authority.

(c) The Tribe agrees that, at all times, the Authority shall have sole and
exclusive right to operate the Resort; provided, the Authority may delegate its
right to operate the Resort to one or more employees, agents, independent
contractors, managers, operators or other Persons in accordance with the terms
of this Agreement, and any such delegation shall not constitute a breach of this
clause (c).

Section 12.3 Additional Agreements and Acknowledgments of the Tribe.

(a) Any action taken in violation of this Section 12 shall be deemed in
contravention of Article XIV (“Non-Impairment of Contracts”) of the Constitution
of the Tribe.

(b) Upon any payment or distribution of assets upon any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency or similar
proceedings of the Authority or the Resort, the holders of the Notes shall be
entitled to receive payment in full in respect of all principal, premium,
interest and other amounts owing in respect of the Notes before any payment or
any distribution to the Tribe.

 

SECTION 13. EVENTS OF DEFAULT.

Section 13.1 Events of Default. An “Event of Default” occurs if:

(a) the Authority or any Guarantor defaults for 30 days in the payment when due
of interest, if any, on the Notes or any other amount (other than an amount
referred to in clause (b) below) owing under any Note Document when it becomes
due and payable;

 

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(b) the Authority or any Guarantor defaults in payment when due at maturity,
upon acceleration, required prepayment or otherwise of the principal of or
premium (including Applicable Premium), if any, on the Notes;

(c) the Authority or any its Restricted Subsidiaries defaults in the performance
of or compliance with any of the provisions of Section 10.5 or 11.1 hereof;

(d) the Authority or any Guarantor defaults in the performance of or compliance
with any term contained herein (other than those referred to in Sections
13.1(a), (b) and (c)) or in any other Note Document and such default is not
remedied within 30 days after the Authority receiving written notice of such
default from any holder of a Note (any such written notice to be identified as a
“notice of default” and to refer specifically to this Section 13.1(d));

(e) (i) any representation or warranty made by or on behalf of the Tribe or the
Authority in this Agreement proves to have been false or incorrect in any
material respect on the date as of which made, or (ii) any representation or
warranty made in writing by or on behalf of any Guarantor in any Note Document
proves to have been false or incorrect in any material respect on the date as of
which made;

(f) default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Authority or any of its Restricted Subsidiaries (or the payment
of which is guaranteed by the Authority or any of its Restricted Subsidiaries),
whether such Indebtedness or guarantee now exists or is created after the
Closing, if that default (i) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default (a
“Payment Default”); or (ii) results in the acceleration of such Indebtedness
prior to its express maturity; and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates to $50.0 million or more;

(g) the Authority or any of its Restricted Subsidiaries fails to pay final
judgments in amounts not covered by insurance or not adequately reserved for in
accordance with GAAP aggregating in excess of $50.0 million, which judgments are
not paid, discharged or stayed (by reason of pending appeal or otherwise) for a
period of 60 days;

(h) the Authority or any of the Authority’s Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, pursuant to or within the
meaning of the Bankruptcy Law or any other Law or policy relating to
reorganization activities:

(i) commences a voluntary case;

(ii) consents to the entry of an order for relief against it in an involuntary
case;

(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property;

 

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(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due; or

(i) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law or any other Law or policy relating to reorganization activities
that:

(i) is for relief against the Authority or any of the Authority’s Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary, in
an involuntary case;

(ii) appoints a custodian of the Authority or any of the Authority’s Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary,
for all or substantially all of the property of the Authority, any Guarantor or
any of the Authority’s Restricted Subsidiaries that is a Significant Subsidiary
or any group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary; or

(iii) orders the liquidation of the Authority or any of the Authority’s
Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days;

(j) revocation, termination, suspension or other cessation of effectiveness of
any Gaming License which results in the cessation or suspension of gaming
operations for a period of more than 90 consecutive days at the Resort or
Pocono;

(k) cessation of gaming operations for a period of more than 90 consecutive days
at the Resort or Pocono (other than as a result of a casualty loss);

(l) the Lease ceases to be in full force and effect in any material respect;

(m) failure by the Tribe to comply with the provisions of Section 12 hereof for
30 days after the Authority and the Tribe receiving written notice of such
default from any holder of a Note (any such written notice to be identified as a
“notice of default” and to refer specifically to this Section 13.1(m));
provided, that such 30-day period shall not apply to any failure by the Tribe to
comply with clauses (h), (j), (m) and (o) of Section 12.01; and

(n) except as permitted by this Agreement, the Note Guarantee or any Guarantee
Joinder is held in any judicial proceeding to be unenforceable or invalid or
ceases for any reason to be in full force and effect, any Guarantor or any
Person acting on behalf of any Guarantor shall contest in any manner the
validity, binding nature or enforceability of the Note Guarantee or any
Guarantee Joinder.

 

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SECTION 14. REMEDIES ON DEFAULT, ETC.

Section 14.1 Acceleration.

(a) If an Event of Default with respect to the Authority described in
Section 13.1(h) or (i) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.

(b) If any other Event of Default has occurred and is continuing, any holder or
holders of more than 25% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Authority, declare all the Notes then outstanding to be immediately due and
payable.

(c) [Reserved].

(d) Upon any Notes becoming due and payable under this Section 14.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon (including, but not limited to, interest accrued thereon at the Default
Rate) and (y) an amount (not less than zero) equal to the sum of (i) Breakage
Costs, (ii) the Make-Whole Amount, if any, and, (iii) if applicable, the
Applicable Premium, in each case determined in respect of such principal amount
(to the full extent permitted by applicable law), shall all be immediately due
and payable, in each and every case without presentment, demand, protest or
further notice, all of which are hereby waived. The Authority acknowledges, and
the parties hereto agree, that each holder of a Note has the right to maintain
its investment in the Notes free from repayment by the Authority (except as
herein specifically provided for) and that the provision for payment of Breakage
Costs, a Make-Whole Amount and Applicable Premium by the Authority in the event
that the Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of such right
under such circumstances.

Section 14.2 Other Remedies. If any Default or Event of Default has occurred and
is continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 14.1, the holder or holders
of not less than 25% in face amount of the Notes at the time outstanding may
proceed to protect and enforce the rights of such holder by an action at law,
suit in equity or other appropriate proceeding, whether for the specific
performance of any agreement contained herein or in any Note or Note Guarantee,
or for an injunction against a violation of any of the terms hereof or thereof,
or in aid of the exercise of any power granted hereby or thereby or by law or
otherwise.

Section 14.3 Rescission. At any time after any Notes have been declared due and
payable pursuant to Section 14.1(b), the holders of not less than 50.1% in
principal amount of the Notes then outstanding, by written notice to the
Authority, may rescind and annul any such declaration and its consequences if
(a) the Authority has paid all overdue interest on the Notes, all principal of
and Breakage Costs, Make-Whole Amount and Applicable Premium, if any, on any
Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Breakage Costs,
Make-Whole Amount and Applicable Premium, if any, and (to the extent permitted
by applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) neither the Authority nor any other Person shall have paid any amounts
which have become due solely by reason of such declaration, (c) all Events of
Default and Defaults, other than nonpayment of amounts that have become due
solely by reason of such declaration, have been cured or have been waived
pursuant to Section 19, and (d) no judgment or decree

 

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has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 14.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.

Section 14.4 No Waivers or Election of Remedies, Expenses, Etc. No course of
dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder’s rights, powers or remedies. No right, power or remedy conferred by
this Agreement, any Note Guarantee or any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or
now or hereafter available at law, in equity, by statute or otherwise. Without
limiting the obligations of the Authority under Section 18, the Authority will
pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 14, including, without limitation,
reasonable attorneys’ fees, expenses and disbursements.

 

SECTION 15. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

Section 15.1 Registration of Notes. The Authority shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes, including the principal amounts and stated interest thereon. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. If any holder of one or more Notes is a nominee, then (a) the
name and address of the beneficial owner of such Note or Notes shall also be
registered in such register as an owner and holder thereof and (b) at any such
beneficial owner’s option, either such beneficial owner or its nominee may
execute any amendment, waiver or consent pursuant to this Agreement. Prior to
due presentment for registration of transfer, the Person(s) in whose name any
Note(s) shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Authority shall not be affected by any
notice or knowledge to the contrary. The Authority shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.

Section 15.2 Transfer and Exchange of Notes. The written consent of the
Authority (not to be unreasonably withheld, conditioned or delayed) shall be
required for any transfer of a Note, except (a) when an Event of Default has
occurred and is continuing; (b) to any Purchaser or an Affiliate or Approved
Fund of any Purchaser (or, (x) in the case of any Note held by UBS AG, London
Branch or one of its Affiliates, to GIFS Capital Company LLC and (y) in the case
of any Note held by GIFS Capital Company LLC, to UBS AG, London Branch or any of
its Affiliates); (c) to any Person who has provided the holder of the Note to be
transferred with a credit default swap, in respect of such Note and/or other
indebtedness of the Authority, or to any person in a credit event auction
relating to indebtedness of the Authority, in each case in connection with
settling such a credit default swap following the occurrence of a “Credit Event”
thereunder, or (d) by a holder who obtained the Note to be transferred as a
result of a transfer in reliance on the preceding subclause (c) or this
subclause (d). Upon surrender of any Note to the Authority at the address and to
the attention of the designated officer (all as specified in Section 20(iii)),
for registration of transfer or exchange (and in the case of a surrender for
registration of transfer accompanied by a written instrument of transfer duly
executed by the registered holder of such

 

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Note or such holder’s attorney duly authorized in writing and accompanied by the
relevant name, address and other information for notices of each transferee of
such Note or part thereof), within ten Business Days thereafter, the Authority
shall execute and deliver, at the Authority’s expense (except as provided
below), one or more new Notes (as requested by the holder thereof) in exchange
therefor, in an aggregate principal amount equal to the unpaid principal amount
of the surrendered Note. Each such new Note shall be payable to such Person as
such holder may request and shall be substantially in the form of Schedule 1.
Each such new Note shall be dated and bear interest from the most recent date on
which interest shall have been paid on the surrendered Note or dated the date of
the surrendered Note if no interest shall have been paid thereon. The Authority
may require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer or exchange of Notes prior to
effecting such transfer or exchange. Notes shall not be transferred in
denominations of less than $1,000,000, provided, that if necessary to enable the
registration of transfer by a holder of its entire holding of Notes, one Note
may be in a denomination of less than $1,000,000.

Section 15.3 Replacement of Notes. Upon receipt by the Authority at the address
and to the attention of the designated officer (all as specified in
Section 20(iii)) of evidence reasonably satisfactory to it of the ownership of
and the loss, theft, destruction or mutilation of any Note (which evidence shall
be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and

(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least $50,000,000 or a Qualified Institutional Buyer, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b) in the case of mutilation, upon surrender and cancellation thereof,

within ten Business Days thereafter, the Authority at its own expense shall
execute and deliver, in lieu thereof, a new Note, dated and bearing interest
from the most recent date on which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon.

 

SECTION 16. PAYMENTS ON NOTES.

Section 16.1 Place of Payment. Subject to Section 16.2, payments of principal,
Breakage Costs, Make-Whole Amount and Applicable Premium, if any, and interest
becoming due and payable on the Notes shall be made in New York, New York in the
account of the Purchaser at the principal office of The Bank of New York Mellon
in such jurisdiction. The Authority may at any time, by notice to each holder of
a Note, change the place of payment of the Notes so long as such place of
payment shall be either the principal office of the Authority in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.

Section 16.2 Home Office Payment. So long as any Purchaser or its nominee shall
be the holder of any Note, and notwithstanding anything contained in
Section 16.1 or in such Note to the contrary, the Authority will pay all sums
becoming due on such Note for principal, Breakage

 

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Costs, Make-Whole Amount and Applicable Premium, if any, interest and all other
amounts becoming due hereunder by the method and at the address specified for
such purpose below such Purchaser’s name in Schedule B, or by such other method
or at such other address as such Purchaser shall have from time to time
specified to the Authority in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that
upon written request of the Authority made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, such Purchaser shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Authority at its principal executive office or at the place of
payment most recently designated by the Authority pursuant to Section 16.1.
Prior to any sale or other disposition of any Note held by a Purchaser or its
nominee, such Purchaser will, at its election, either endorse thereon the amount
of principal paid thereon and the last date to which interest has been paid
thereon or surrender such Note to the Authority in exchange for a new Note or
Notes pursuant to Section 15.2. The Authority will afford the benefits of this
Section 16.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by a Purchaser under this Agreement and that
has made the same agreement relating to such Note as the Purchasers have made in
this Section 16.2.

Section 16.3 Withholding. Notwithstanding anything herein to the contrary, the
Authority shall have the right to deduct and withhold from any payment required
to be made with respect to any Note, such amounts as are required to be deducted
and withheld with respect to the making of such payment under any applicable tax
Law. To the extent amounts are so deducted or withheld, such amounts shall be
treated for all purposes of this Agreement and such Note as having been paid to
the Person in respect of which such deduction or withholding was made.

 

SECTION 17. EXPENSES, ETC.

Section 17.1 Transaction Expenses. Whether or not the transactions contemplated
hereby are consummated, the Authority will pay all reasonable, out-of-pocket
costs and expenses (including reasonable attorneys’ fees of a special counsel
and, if reasonably required by the Required Holders, local or other counsel)
incurred by the Purchasers and each other holder of a Note in connection with
the development, preparation, negotiation and execution of this Agreement, any
Note Guarantee, the Notes or the other Note Documents (provided, the Authority
will not be required to reimburse any such expense of counsel to any holder that
is not a Purchaser unless it has approved the incurrence of such expense in
advance, such approval not to be unreasonably withheld or delayed) or any
amendments, waivers or consents thereunder (whether or not such amendment,
waiver or consent becomes effective). The Authority will pay all reasonable,
out-of-pocket costs and expenses (including reasonable attorneys’ fees of a
special counsel and, if reasonably required by the Required Holders, local or
other counsel) incurred by the Purchasers and each other holder of a Note in
connection with: (a) enforcing or defending any rights under this Agreement, any
Note Guarantee or the Notes, and (b) the insolvency or bankruptcy of the
Authority or any Subsidiary or in connection with any work-out or restructuring
of the transactions contemplated hereby and by the Notes and any Note Guarantee.
The Authority will pay, and will save each Purchaser and each other holder of a
Note harmless from, (i) all claims in respect of any fees, costs or expenses, if
any, of brokers and finders (other than those, if any, retained by a Purchaser
or other holder in connection with its purchase of the Notes) and (ii) any and
all wire transfer fees that any bank deducts from any payment under such Note to
such holder or otherwise charges to a holder of a Note with respect to a payment
under such Note.

Section 17.2 Survival. The obligations of the Authority under this Section 17
will survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement, any Note Guarantee or the Notes, and
the termination of this Agreement.

 

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SECTION 18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

All representations and warranties contained herein shall survive the execution
and delivery of this Agreement and the Notes and the purchase or transfer by any
Purchaser of any Note or portion thereof or interest therein, and may be relied
upon by any subsequent holder of a Note, regardless of any investigation made at
any time by or on behalf of such Purchaser or any other holder of a Note.
Subject to the preceding sentence, this Agreement, the Notes and any Note
Guarantees embody the entire agreement and understanding between each Purchaser
and the Authority and supersede all prior agreements and understandings relating
to the subject matter hereof.

 

SECTION 19. AMENDMENT AND WAIVER.

Section 19.1 Requirements. This Agreement, the Notes any Note Guarantee, or the
other Note Documents may be amended, and the observance of any term hereof or of
the Notes may be waived (either retroactively or prospectively), only with the
written consent of the Authority and the Required Holders, except that:

(a) no amendment or waiver of any of Sections 1, 2, 3, 4, 7 or 23 hereof, or any
defined term (as it is used therein), will be effective as to any Purchaser
unless consented to by such Purchaser in writing; and

(b) no amendment or waiver may, (i) without the written consent of each affected
Purchaser and affected holder of a Note, subject to Section 14 relating to
acceleration or rescission, change the amount or time of any payment of
principal (excluding, for the avoidance of doubt, prepayments pursuant to
Sections 9.8 or 9.9) of, or reduce the rate or change the time of payment or
method of computation of interest on the Notes or Breakage Costs, Make-Whole
Amount or Applicable Premium or waive a Default or Event of Default under
Section 13(a) or 13(b) or make any Note payable in money other than that stated
in such Note, release any Guarantor that taken together with each other
Guarantor being released from its obligations under its Guarantee or this Note
Purchase Agreement in one transaction or a series of related transactions, would
constitute a Significant Subsidiary, except in accordance with the terms of this
Agreement or the Guarantee or make any change to the sovereign immunity waiver,
governing law and consent to jurisdiction provisions of this Agreement or the
Notes, (ii) without the written consent of each Purchaser and the holder of each
Note change the percentage of the principal amount of the Notes the holders of
which are required to consent to any amendment or waiver, or amend any of
Sections 13.1(a), 13.1(b), 14, 19 or 22 or (iii) without the consent of holders
of at least 66 2/3% of the aggregate principal amount of the Notes then
outstanding, the Authority may not amend, alter or waive the provisions set
forth in Section 9.9 in a manner that adversely affects the rights of the
holders or (iv) without the consent of GIFS Capital Company LLC, amend, alter or
waive any of the provisions of Sections 24.10 or 24.11.

 

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Section 19.2 Solicitation of Holders of Notes.

(a) Solicitation. The Authority will provide each holder of a Note with
sufficient information, sufficiently far in advance of the date a decision is
required, to enable such holder to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in respect of any of the
provisions hereof or of the Notes or any Note Guarantee. The Authority will
deliver executed or true and correct copies of each amendment, waiver or consent
effected pursuant to this Section 19 or any Note Guarantee to each holder of a
Note promptly following the date on which it is executed and delivered by, or
receives the consent or approval of, the requisite holders of Notes. In
connection with any amendment, waiver or consent made or granted in accordance
with this Agreement, the Required Holders may agree that the requirements of the
first sentence of this Section 19.2(a) have been satisfied, which conclusion
shall be binding on all holders.

(b) Payment. The Authority will not directly or indirectly pay or cause to be
paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security or provide other credit support, to any
holder of a Note as consideration for or as an inducement to the entering into
by such holder of any waiver or amendment of any of the terms and provisions
hereof or of any Note Guarantee or any Note unless such remuneration is
concurrently paid, or security is concurrently granted or other credit support
concurrently provided, on the same terms, ratably to each holder of a Note that
consents to such waiver or amendment.

Section 19.3 Binding Effect, etc. Any amendment or waiver consented to as
provided in this Section 19 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Authority
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the
Authority and any holder of a Note and no delay in exercising any rights
hereunder or under any Note or Note Guarantee shall operate as a waiver of any
rights of any holder of such Note.

Section 19.4 Notes Held by the Authority, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement, any Note
Guarantee or the Notes, or have directed the taking of any action provided
herein or in any Note Guarantee or the Notes to be taken upon the direction of
the holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Authority or any of
its Affiliates shall be deemed not to be outstanding.

 

SECTION 20. NOTICES.

Except to the extent otherwise provided in Section 8.3, all notices and
communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by
an internationally recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by an internationally recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:

(i) if to any Purchaser or its nominee, to such Purchaser or nominee at the
address specified for such communications in Schedule B, or at such other
address as such Purchaser or nominee shall have specified to the Authority in
writing;

 

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(ii) if to any other holder of any Note, to such holder at such address as such
other holder shall have specified to the Authority in writing; or

(iii) if to the Authority, to the Authority at its address set forth at the
beginning hereof to the attention of Chief Executive Officer, or at such other
address as the Authority shall have specified to the holder of each Note in
writing.

Notices under this Section 20 will be deemed given only when actually received.

 

SECTION 21. REPRODUCTION OF DOCUMENTS.

This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by any Purchaser at the Closing (except the
Notes and Note Guarantees themselves) and (c) financial statements, certificates
and other information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, electronic,
digital, or other similar process and such Purchaser may destroy any original
document so reproduced. The Authority agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 21 shall not prohibit the
Authority or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.

 

SECTION 22. CONFIDENTIAL INFORMATION.

For the purposes of this Section 22, “Confidential Information” means
information delivered to any Purchaser or holder of a Note by or on behalf of
the Tribe, the Authority or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement, provided that such term
does not include information that (a) was publicly known or otherwise known to
such Purchaser or holder prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by such Purchaser or holder or
any Person acting on such Purchaser’s or holder’s behalf, (c) otherwise becomes
known to such Purchaser or holder other than through disclosure by the Authority
or any Subsidiary but not by means known to such Purchaser or holder to be in
violation of an obligation of confidentiality, or (d) constitutes financial
statements delivered to such Purchaser under Section 8.1 that are otherwise
publicly available. Each Purchaser will maintain the confidentiality of such
Confidential Information, provided that such Purchaser or holder may deliver or
disclose Confidential Information to (i) its directors, officers, employees,
agents, attorneys, trustees and affiliates (to the

 

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extent such disclosure reasonably relates to the administration of the
investment represented by its Notes), (ii) its auditors, financial advisors and
other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with this Section 22, (iii) any other
holder of any Note, (iv) any Institutional Investor to which it sells or offers
to sell such Note or any part thereof or any participation therein or any
counterparty to a derivative transaction in respect of such Note (in each case
if such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by this Section 22), (v) any federal or state regulatory
authority having jurisdiction over such Purchaser, (vi) any rating agency then
rating the debt of such Purchaser or any of its Affiliates, or (vii) any other
Person to which such delivery or disclosure may be necessary or appropriate
(x) to effect compliance with any law, rule, regulation or order applicable to
such Purchaser, (y) in response to any subpoena or other legal process or
litigation, or (z) if an Event of Default has occurred and is continuing, to the
extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under such Purchaser’s Notes, this Agreement or any Note
Guarantee. Each holder of a Note, by its acceptance of a Note, will be deemed to
have agreed to be bound by and to be entitled to the benefits of this Section 22
as though it were a party to this Agreement. On reasonable request by the
Authority in connection with the delivery to any holder of a Note of information
required to be delivered to such holder under this Agreement or requested by
such holder (other than a holder that is a party to this Agreement or its
nominee), such holder will enter into an agreement with the Authority embodying
this Section 22.

In the event that as a condition to receiving access to information relating to
the Authority or its Subsidiaries in connection with the transactions
contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder
of a Note is required to agree to a confidentiality undertaking (whether through
IntraLinks, another secure website, a secure virtual workspace or otherwise)
which is different from this Section 22, this Section 22 shall not be amended
thereby and, as between such Purchaser or such holder and the Authority, this
Section 22 shall supersede any such other confidentiality undertaking.

 

SECTION 23. SUBSTITUTION OF PURCHASER.

Each Purchaser shall have the right to substitute any one of its Affiliates (or,
if the Purchaser is (x) UBS AG, London Branch or one of its Affiliates, to
substitute GIFS Capital Company LLC, or (y) GIFS Capital Company LLC, to
substitute UBS AG, London Branch or any of its Affiliates) (in each case, a
“Substitute Purchaser”) as the purchaser of the Notes that it has agreed to
purchase hereunder, by written notice to the Authority, which notice shall be
signed by both such Purchaser and such Substitute Purchaser, shall contain such
Substitute Purchaser’s agreement to be bound by this Agreement and shall contain
a confirmation by such Substitute Purchaser of the accuracy with respect to it
of the representations set forth in Section 7. Upon receipt of such notice, any
reference to such Purchaser in this Agreement (other than in this Section 23),
shall be deemed to refer to such Substitute Purchaser in lieu of such original
Purchaser. In the event that such Substitute Purchaser is so substituted as a
Purchaser hereunder and such Substitute Purchaser thereafter transfers to such
original Purchaser all of the Notes then held by such Substitute Purchaser, upon
receipt by the Authority of notice of such transfer, any reference to such
Substitute Purchaser as a “Purchaser” in this Agreement (other than in this
Section 23), shall no longer be deemed to refer to such Substitute Purchaser,
but shall refer to such original Purchaser, and such original Purchaser shall
again have all the rights of an original holder of the Notes under this
Agreement.

 

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SECTION 24. MISCELLANEOUS.

Section 24.1 Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.

Section 24.2 Accounting Terms. All accounting terms used herein which are not
expressly defined in this Agreement have the meanings respectively given to them
in accordance with GAAP. Except as otherwise specifically provided herein,
(i) all computations made pursuant to this Agreement shall be made in accordance
with GAAP, and (ii) all financial statements shall be prepared in accordance
with GAAP. For purposes of determining compliance with this Agreement
(including, without limitation, Section 10, Section 11, Section 12 and the
definition of “Indebtedness”), any election by the Authority to measure any
financial liability using fair value (as permitted by Financial Accounting
Standards Board Accounting Standards Codification Topic No. 825-10-25 – Fair
Value Option, International Accounting Standard 39 – Financial Instruments:
Recognition and Measurement or any similar accounting standard) shall be
disregarded and such determination shall be made as if such election had not
been made.

Section 24.3 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

Section 24.4 Construction, Etc. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

Section 24.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.

Section 24.6 Applicable Law. This Agreement shall be governed by and construed
in accordance with the law of the State of New York, without regard to conflict
of law principles that would result in the application of any Law other than the
Laws of the State of New York. Authority and each other party hereto each hereby
consents to the application of New York civil law to the construction,
interpretation and enforcement of this Agreement, and to the application of New
York civil law to the procedural aspects of any suit, action or proceeding
relating thereto, including but not limited to legal process, execution of
judgments and other legal remedies. This Agreement is a “Contract of the Tribal
Gaming Authority” within the meaning of Section 1 of Article XIII (entitled
“Tribal Gaming Authority Amendment”) of the Constitution.

 

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Section 24.7 Jurisdiction; Dispute Resolution; Limited Waiver of Sovereign
Immunity; Process; Waiver of Jury Trial. (a) Each of the parties hereto agrees
that any legal suit, action or proceeding arising out of or in connection with
or based upon this Agreement or any Note, including any action for the entry of
judgment on and/or enforcement of an arbitration award or court order or
judgment, shall be in accordance with subsection 24.7(b) hereof.

(b) (1) The Tribe does not consent to the enforcement, levy, or other execution
of any judgment for money or other damages against any assets, real or personal,
of the Tribe, except that the Tribe and the Authority consent to the
enforcement, levy and other execution of any judgment for money or other
damages, whether obtained as a result of a judicial, administrative, or arbitral
proceeding, against any assets, real or personal (other than any property held
in trust or subject to a restriction on alienation by the United States and
property of which the encumbrance or transfer is not permitted under any
applicable federal or state law or regulation (the “Excluded Property”)) of the
Authority, but only to the extent set forth in the remainder of this paragraph.
Subject to the foregoing, the Tribe and the Authority expressly and irrevocably
waive their respective sovereign immunity (and any defenses based thereon) from
unconsented suit, whether such suit be brought in law or in equity, or in
administrative proceedings or proceedings in arbitration, to permit the
commencement, maintenance, and enforcement of any action, by a Purchaser (or any
of its successors or permitted assigns), subject to any limitations contained in
this Agreement, to interpret or enforce the terms of this Agreement and the
Notes and to enforce and execute any judgment resulting therefrom against the
Authority or the assets of the Authority (other than the Excluded Property).
Without limiting the generality of the foregoing, the Tribe and the Authority
each waives its immunity from unconsented suit to permit the maintenance of the
following actions in respect of this Agreement or the Notes.

(i) Courts. The Tribe and the Authority each waives its immunity from
unconsented suit to permit any court of competent jurisdiction to (A) enforce
and interpret the terms of this Agreement and the Notes and award and enforce
the award of damages against the Authority owing as a consequence of a breach
thereof, whether such award is the product of litigation, administrative
proceedings or arbitration; (B) determine whether any consent or approval of the
Tribe or the Authority has been improperly granted or unreasonably withheld;
(C) enforce any judgment prohibiting the Tribe or the Authority from taking any
action, or mandating or obligating the Tribe or the Authority to take any
action, including a judgment compelling the Tribe or the Authority to submit to
binding arbitration; and (D) adjudicate any claim under the Indian Civil Rights
Act of 1968, 25 U.S.C. § 1302 (or any successor statute).

(ii) Arbitration. The Tribe and the Authority each waive its immunity from
unconsented suit to permit arbitrators, appointed and acting under the
commercial arbitration rules of the American Arbitration Association, to
(1) enforce and interpret the terms of this Agreement and the Notes and to award
and enforce the award of any damages against the Authority owing as a
consequence thereof; (2) determine whether any consent or approval of the Tribe
or the Authority has been improperly granted or unreasonably withheld; and
(3) enforce any judgment prohibiting the Tribe or the Authority from taking any
action, or mandating or obligating the Tribe or the Authority to take any
action, including a judgment compelling the Tribe or the Authority to submit to
binding arbitration.

 

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(2) Each of the Tribe and the Authority hereby irrevocably and unconditionally
submits, for itself and, as to the Authority, its property, to the following
courts, jurisdictions and venues (i) for any action or proceeding arising out of
or relating to this Agreement or the Notes: (A) the United States District Court
for the Southern District of New York, and all courts to which any appeal
therefrom may be available; (B) or if those courts lack or decline jurisdiction
over the action, then the courts of the State of New York sitting in the City of
New York, County of New York, and all courts to which any appeal therefrom may
be available; (C) or if none of the foregoing courts shall have or accept
jurisdiction, then the Mohegan Gaming Disputes Court; and (D) or if none of the
foregoing courts shall have or accept jurisdiction, then to arbitration under
the commercial arbitration rules of the American Arbitration Association or
(ii) for recognition or enforcement of any judgment: (A) the courts identified
in clause (i) above, (B) courts of the State of Connecticut, and any appellate
court from which any appeals therefrom are available, as necessary to recognize
or enforce such judgments as it applies to any assets of the Authority, real or
personal, located in the State of Connecticut. Each of the parties hereto agrees
that a final judgment in any such action or proceeding may be enforced by any
court of competent jurisdiction.

(3) Each of the Tribe and the Authority hereby unconditionally and irrevocably
waives the jurisdiction of any court of the Tribe now or hereafter existing or
created with respect to any claim, except as otherwise specifically provided in
this Agreement or the Notes. Each of the Tribe and the Authority unconditionally
and irrevocably waives, to the fullest extent it may legally and effectively do
so, the application of any rule or doctrine relating to exhaustion of tribal
remedies or comity or abstention that might otherwise require a claim be heard
in a court of the Tribe. Each of the Tribe and the Authority expressly and
irrevocably agrees that it shall not institute any action in its own Tribal
Court system in respect of any claim under this Agreement or the Notes, but
shall instead resort to the courts set forth, and in the order set forth in
Subsection (2) hereof.

(4) Each of the Tribe and the Authority hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any court referred to in Subsection (2) hereof. Each of the Tribe and the
Authority hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

(5) Each party hereto irrevocably consents to service of process in the manner
provided for notices in Subsection (c) below. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

(c) The Authority consents to process being served by or on behalf of any holder
of Notes in any suit, action or proceeding of the nature referred to in
Section 24.7(a) by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, return receipt
requested, to it at its address specified in Section 20 or at such other address

 

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of which such holder shall then have been notified pursuant to said Section. The
Authority agrees that such service upon receipt (i) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

(d) Nothing in this Section 24.7 shall affect the right of any holder of a Note
to serve process in any manner permitted by law, or limit any right that the
holders of any of the Notes may have to bring proceedings against the Authority
in the courts of any appropriate jurisdiction or to enforce in any lawful manner
a judgment obtained in one jurisdiction in any other jurisdiction.

(e) Each Purchaser, the Tribe and the Authority hereby waives, to the fullest
extent permitted by applicable Law, any right it may have to a trial by jury in
any legal proceeding directly or indirectly arising out of or relating to this
Agreement or the transactions contemplated hereby or thereby (whether based on
contract, tort or any other theory). Each party hereto (1) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (2) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications in this Section 24.7(e).

Section 24.8 No Personal Liability.

Neither the Tribe nor any director, officer, office holder, employee, agent,
representative or member of the Authority, any Guarantor or the Tribe, as such,
shall have any liability for, nor be subject to suit in respect of, any
obligations of the Authority or any Guarantor under the Notes or this Agreement
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.

Section 24.9 Limitation of Management Activities. (a) Notwithstanding any
provision in this Agreement or any Note Documents, no Purchaser shall engage in
any of the following: planning, organizing, directing, coordinating, controlling
or managing all or any portion of the Tribe’s or the Authority’s gaming
operations that are regulated by Indian Gaming Regulatory Act of 1988
(collectively, “Management Activities”), including (but not limited to) with
respect to the following:

(i) the training, supervision, direction, hiring, firing, retention, or
compensation (including benefits) of any employee (whether or not a management
employee) or contractor;

(ii) any employment policies or practices;

(iii) the hours or days of operation;

 

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(iv) any accounting systems or procedures;

(v) any advertising, promotions or other marketing activities;

(vi) the purchase, lease, or substitution of any gaming device or related
equipment or software, including player tracking equipment;

(vii) the vendor, type, theme, percentage of payout, display or placement of any
gaming device or equipment; or

(viii) budgeting, allocating, or conditioning payments of the Authority’s
operating expenses;

provided, however, that no Purchaser will be in violation of the foregoing
restriction solely because it enforces compliance with any term in any Note
Document that does not require the gaming operation to be subject to any third
party decision-making as to any Management Activities.

Section 24.10 Non-Petition.

Each of the parties hereto hereby agrees that prior to the date that is one year
and one day after the payment of all outstanding indebtedness of GIFS Capital
Company LLC (as used in this Section 24.10 and the following Section 24.11,
“GIFS”), it shall not institute against or join any other person or entity in
instituting against GIFS any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings or other similar proceedings under the laws of the
United States or any state of the United States. This paragraph shall survive
termination of this Agreement.

Section 24.11 Limited Recourse.

Notwithstanding anything to the contrary contained in this Agreement, each of
the parties hereto hereby agrees that all transactions with GIFS hereunder shall
be without recourse of any kind to GIFS except as provided in this
paragraph. GIFS shall have no obligation to pay any amounts owing under this
Agreement other than to the extent of payments received on the Notes. In
addition, each of the parties hereto agrees that no amount owing by GIFS under
this Agreement shall constitute a claim (as defined in Section 101 of Title 11
of the United States Bankruptcy Code), including fees, reimbursement for
expenses or indemnities (collectively, as used in this Section 24.11, “Expense
Claims”) against GIFS unless or until GIFS has received amounts from the Notes
sufficient to pay such Expense Claims and such amounts are not required to pay
the outstanding indebtedness of GIFS. This paragraph shall survive termination
of this Agreement.

 

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Section 24.12 Section 81 Limitation.

For the avoidance of any doubt, it is acknowledged that none of the Note
Documents is intended to grant a lien or created an encumbrance on any real
property owned by the Tribe or the Authority. Notwithstanding any other
provision herein or in the Notes, any requirement or restriction imposed on the
Authority, the Tribe or their respective assets, and any right of UBS, a
Purchaser or a successor or assign of either that is set forth in or arises out
of this Agreement, and which “encumbers Indian land” within the meaning of 25
U.S.C. § 81, shall not be effective for longer than six years, 364 days.

*    *    *    *    *

 

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If you are in agreement with the foregoing, please sign the form of agreement on
a counterpart of this Agreement and return it to the Authority, whereupon this
Agreement shall become a binding agreement between you and the Authority.

 

Very truly yours, MOHEGAN TRIBAL GAMING AUTHORITY By:  

/s/ Robert J. Soper

Name:   Robert J. Soper Title:   President and Chief Executive Officer For
purposes of Sections 6 and 12 only: THE MOHEGAN TRIBE OF INDIANS OF CONNECTICUT
By:  

/s/ Kevin P. Brown

Name:   Kevin P. Brown Title:   Chairman

[Signature Page to Note Purchase Agreement]

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

This Agreement is hereby

accepted and agreed to as

of the date hereof.

 

GIFS CAPITAL COMPANY LLC By:  

/s/ R. Scott Chisholm

Name:   R. Scott Chisholm Title:   Authorized Signer

[Signature Page to Note Purchase Agreement]

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DEFINED TERMS

As used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:

“Acquired Indebtedness” means, with respect to any specified Person:
(i) Indebtedness of any other Person existing at the time such other Person is
consolidated or merged with or into or became a Restricted Subsidiary of such
specified Person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person consolidating or
merging with or into or becoming a Restricted Subsidiary of such specified
Person; and (ii) Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control,”
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
“controlling,” “controlled by” and “under common control with” shall have
correlative meanings. Unless the context otherwise clearly requires, any
reference to an “Affiliate” is a reference to an Affiliate of the Authority.

“Affiliate Transaction” is defined in Section 10.8(a).

“Agreement” means this Agreement, including all Schedules attached to this
Agreement, as it may be amended, restated, supplemented or otherwise modified
from time to time.

“Anti-Money Laundering Laws” shall mean any Law of the United States or any
other jurisdictions that is applicable to or binding upon the Authority, any of
its Restricted Subsidiaries, or any of their respective property, or to which
the Authority, any of its Restricted Subsidiaries or any of their respective
property is subject, related to money laundering, including 18 U.S.C. §§ 1956
and 1957 and the Bank Secrecy Act, 31 U.S.C. §§ 5311 et seq., as amended by the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56), and
its implementing regulations.

“Anti-Terrorism Laws” shall mean any Law related to terrorism financing and
economic sanctions, including the Trading With the Enemy Act (50 U.S.C. § 1 et
seq., as amended), the International Emergency Economic Powers Act (50 U.S.C.
§1701 et seq., as amended) and Executive Order 13224 (effective September 24,
2001), and their implementing regulations.

“Applicable Premium” shall mean, in relation to any Make-Whole Event with
respect to a Note, an amount equal to (a) if such Make-Whole Event occurs at any
time from and including the date of the Closing to and including the first
anniversary of the Closing, 0.25% of the principal amount of such Note that is
to be prepaid in connection with such Make-Whole Event, (b) if such Make-Whole
Event occurs at any time after the first anniversary of the Closing, zero.

 

SCHEDULE A

(to Note Purchase Agreement)

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

“Approved Fund” means, with respect to any Purchaser, any Fund that is
administered or managed by (a) such Purchaser, (b) an Affiliate of such
Purchaser or (c) an entity or an Affiliate of an entity that administers or
manages such Purchaser.

“Asset Sale” means: (i) the sale, lease, conveyance or other disposition of any
assets or rights (including, without limitation, by way of a sale and leaseback)
other than sales of inventory in the ordinary course of business consistent with
past practices; provided, that the sale, lease, conveyance or other disposition
of all or substantially all of the assets of the Authority and its Restricted
Subsidiaries taken as a whole will be governed by Section 11.1 and not by
Section 10.5 hereof; and (ii) the issuance by any of the Authority’s Restricted
Subsidiaries of Equity Interests or the sale by the Authority or any of its
Restricted Subsidiaries of Equity Interests in any of their respective
Subsidiaries. Notwithstanding the foregoing, the following items shall not be
deemed to be Asset Sales: (i) any single transaction or series of related
transactions that: (a) involves assets having a fair market value of less than
$10.0 million; or (b) results in net proceeds to the Authority and its
Restricted Subsidiaries of less than $10.0 million; (ii) a transfer of assets
between or among the Authority and its Wholly Owned Restricted Subsidiaries;
(iii) an issuance of Equity Interests by a Wholly Owned Restricted Subsidiary to
the Authority or to another Wholly Owned Restricted Subsidiary; (iv) a
Restricted Payment or Permitted Investment that is permitted by Section 10.2
hereof; (v) any Event of Loss; (vi) transfers of assets as a result of
foreclosure of a Permitted Lien; (vii) any lease or sublease permitted by
Section 10.18 hereof; (viii) the sale or other transfer of Income Assets in
connection with a Permitted Lease Financing; and (ix) any Resort Hotel
Transaction.

“Attributable Debt” in respect of a sale and leaseback transaction means, at the
time of determination, the present value of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such sale and
leaseback transaction including any period for which such lease has been
extended (or may, at the option of the lessor, be extended). Such present value
shall be calculated using a discount rate equal to the rate of interest implicit
in such transaction, determined in accordance with GAAP.

“Audited Financial Statements” means the audited consolidated balance sheet of
the Authority and its Subsidiaries for the Fiscal Year ended September 30, 2014,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such Fiscal Year of the Authority and its
Subsidiaries, including the notes thereto.

“Authority” means the Mohegan Tribal Gaming Authority, together with any
subdivision, agency or subunit that has no separate legal existence from the
Mohegan Tribal Gaming Authority, and any successor and assignee thereto.

“Bank Credit Facility” means Loan Agreement, dated as of November 19, 2013 (as
amended by that certain Increase Joinder and Amendment Agreement, dated as of
August 11, 2015), including any related notes, guarantees, instruments and
agreements executed in connection therewith, and in each case as amended,
restated, modified, renewed, refunded, Replaced or refinanced from time to time.

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as now and hereafter in effect, or any successor statute.

 

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“Bankruptcy Law” means the Bankruptcy Code and any similar federal, state,
tribal or foreign law for the relief of debtors or insolvency.

“BIA” means the Bureau of Indian Affairs.

“Breakage Costs” is defined in Section 9.6(b).

“Business Day” means any day other than a Legal Holiday.

“Capital Lease Obligation” means, at the time any determination thereof is to be
made, the amount of the liability in respect of a capital lease that would at
such time be required to be capitalized on a balance sheet in accordance with
GAAP.

“Capital Stock” means: (i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited); and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.

“Change of Control” means the occurrence of any of the following: (i) the
Authority ceases to be a wholly owned unit, instrumentality or subdivision of
the Tribe; (ii) the Authority (including any employees, agents, independent
contractors, managers, operators or other Persons to which the Authority has
delegated its right to operate the Resort in compliance with this Agreement)
ceases to have the exclusive legal right to operate the Resort; (iii) the
Authority fails to retain in full force and effect at all times all material
governmental consents, permits or legal rights necessary for the operation of
the Resort and such failure continues for a period of 90 consecutive days; or
(iv) the sale, assignment, transfer, lease, conveyance or other disposition of
all or substantially all of the assets of the Authority and its Restricted
Subsidiaries taken as a whole, or the consolidation or merger of the Authority
with or into, any other Person (other than a consolidation or merger with a
Restricted Subsidiary of the Authority in which the Authority is the surviving
entity).

“Change of Control Offer” is defined in Section 9.9(a).

“Change of Control Payment Date” is defined in Section 9.9(a).

“Closing” is defined in Section 3.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.

“Compact” means the tribal-state Compact entered into between the Tribe and the
State of Connecticut pursuant to IGRA, dated May 17, 1994, together with that
certain Memorandum of Understanding dated May 17, 1994, as such may be amended.

“Completion Guarantee and Keep-Well Agreement” means (i) the guarantee by the
Authority or a Restricted Subsidiary of the completion of the development,
construction and

 

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opening of a new gaming facility by an Affiliate of the Authority, (ii) the
agreement by the Authority or a Restricted Subsidiary to advance funds, property
or services on behalf of an Affiliate of the Authority in order to maintain the
financial condition of such Affiliate in connection with the development,
construction and opening of a new gaming facility and/or related amenities and
facilities by such Affiliate and (iii) performance bonds incurred in the
ordinary course of business; provided, that, in the case of clauses (i) and
(ii) above, such guarantee or agreement is entered into in connection with
obtaining financing for such gaming facility and/or related amenities and
facilities or is required by a Gaming Board.

“Confidential Information” is defined in Section 22.

“Consolidated Cash Flow” means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus: (i) an amount equal
to (a) any extraordinary loss, plus (b) any net loss realized in connection with
an Asset Sale, in each case to the extent such losses were deducted in computing
such Consolidated Net Income; plus (ii) provision for taxes based on the income
or profits, gross receipts or revenue of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was
included in computing such Consolidated Net Income; plus (iii) consolidated
interest expense of such Person and its Restricted Subsidiaries for such period,
whether paid or accrued (including, without limitation, amortization of debt
issuance costs and original issue discount, noncash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers’ acceptance financings, and
net payments, if any, pursuant to Hedging and Swap Obligations), to the extent
that such consolidated interest expense was deducted in computing such
Consolidated Net Income; plus (iv) depreciation, amortization (including
amortization of goodwill and other intangibles, but excluding amortization of
prepaid cash expenses that were paid in a prior period), noncash charges
associated with equity option plans and other noncash expenses (excluding any
such noncash expense to the extent that it represents an accrual of or reserve
for cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Restricted Subsidiaries
for such period to the extent that such depreciation, amortization and other
noncash expenses were deducted in computing such Consolidated Net Income; minus
(v) noncash items increasing such Consolidated Net Income for such period; plus
(vi) preopening costs and expenses, to the extent such charges or expenses were
deducted in computing such Consolidated Net Income, plus (vii) all cash charges
and expenses incurred in connection with the suspension of the “Project Horizon”
expansion, to the extent such charges or expenses were deducted in computing
such Consolidated Net Income; provided, that the aggregate amount of cash
charges or expenses that may increase Consolidated Cash Flow pursuant to this
clause (vii) will not exceed $250,000 per Fiscal Year, all determined on a
consolidated basis and in accordance with GAAP.

“Consolidated Net Income” means, with respect to any specified Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided, that without duplication: (i) the Net Income of any Person
that is not a Restricted Subsidiary or that is accounted for by the equity
method of accounting shall be included only to the extent of the amount of
dividends or distributions paid in cash to the specified Person or a Wholly
Owned Restricted Subsidiary

 

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thereof; (ii) the Net Income of any Restricted Subsidiary (other than a
Guarantor) shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders; (iii) the Net Income of any Person
acquired after Closing in a business combination for any period prior to the
date of such acquisition shall be excluded; (iv) the cumulative effect of a
change in accounting principles shall be excluded; (v) Net Income for such
period shall exclude the amount of any gains, charges or losses or other items
arising from adjustments relating to the Relinquishment Agreement; (vi) any
impairment charge or asset write-off or write-down, in each case pursuant to
GAAP, shall be excluded; (vii) the Net Income for such period of any Person that
is not a Subsidiary, or is an Unrestricted Subsidiary, shall be excluded;
provided that to the extent not otherwise included in calculating Consolidated
Net Income, the Consolidated Net Income of the specified Person shall be
increased by the amount of dividends or distributions or other payments that are
actually paid in cash to the specified Person or a Restricted Subsidiary thereof
in respect of such period; and (viii) all noncash charges and expenses incurred
in connection with the suspension of the “Project Horizon” expansion shall be
excluded.

“Consolidated Net Tangible Assets” of any Person as of any date means the total
assets of such Person and its Restricted Subsidiaries as of the most recent
Fiscal Quarter end for which a consolidated balance sheet of such Person and its
Restricted Subsidiaries is available, minus all current liabilities of such
Person and its Restricted Subsidiaries reflected on such balance sheet other
than the current portion of long-term debt minus total goodwill and other
intangible assets of such Person and its Restricted Subsidiaries reflected on
such balance sheet, all calculated on a consolidated basis in accordance with
GAAP and after giving pro forma effect to the acquisition or disposition of any
property, assets, entity or business by such Person or any Restricted Subsidiary
since such most recent Fiscal Quarter end, including any acquisition or
disposition which will be consummated as of such date. Notwithstanding the
foregoing, Consolidated Net Tangible Assets shall be reduced by the current
portion of any long-term debt that is past due or that has been reclassified as
a current liability in accordance with GAAP as a result of an Event of Default.

“Consolidated Secured Leverage Ratio” means, as of any date of determination,
the ratio of total consolidated secured Indebtedness (other than Indebtedness in
respect of undrawn letters of credit and Hedging and Swap Obligations) of the
Authority and its Restricted Subsidiaries as of such date to Consolidated Cash
Flow of the Authority and its Restricted Subsidiaries for the most recently
ended four full Fiscal Quarters for which internal financial statements are
available immediately preceding the date of determination, with such adjustments
as are consistent with the adjustment provisions set forth in the definition of
“Fixed Charge Coverage Ratio.” Notwithstanding the foregoing, with respect to
any determination of the Consolidated Secured Leverage Ratio for purposes of
Section 10.4(b)(i)(A)(2) hereof, any unsecured Indebtedness outstanding pursuant
to Section 10.4(b)(i) hereof shall be deemed to be secured.

“Consolidated Senior Leverage Ratio” means, as of any date of determination, the
ratio of total consolidated Indebtedness (other than Indebtedness in respect of
undrawn letters of credit and Hedging and Swap Obligations) of the Authority and
its Restricted Subsidiaries as of such

 

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date that is not Subordinated Indebtedness to Consolidated Cash Flow of the
Authority and its Restricted Subsidiaries for the most recently ended four full
Fiscal Quarters for which internal financial statements are available
immediately preceding the date of determination, with such adjustments as are
consistent with the adjustment provisions set forth in the definition of “Fixed
Charge Coverage Ratio.”

“Constitution” means the Constitution of the Tribe adopted by the Tribe and
ratified by the Tribe’s members by Tribal Referendum dated April 12, 1996, as
amended August 10, 2002, as amended September 6, 2003, as amended May 2, 2004,
as amended November 30, 2007, as amended June 16, 2010, as amended February 23,
2014, and as it may be further amended from time to time.

“Consumer Price Index” means the Consumer Price Index for All Urban Consumers
(“CPIU”) published by the United States Bureau of Labor Statistics, specified
for “All Items” (base year 1982-1984 = 100), or any successor index thereof as
such successor index may be appropriately adjusted to establish substantial
equivalence with the Consumer Price Index. If the Consumer Price Index ceases to
be published and there is no successor thereto, Consumer Price Index shall mean
such other index as the Authority shall determine.

“Contractual Obligation” means, as to any Person, any provision of any
outstanding security issued by such Person or of any material agreement,
instrument or other undertaking to which such Person is a party or by which it
or any of its property is bound.

“Credit Event Determination” means an announcement by ISDA that the relevant
Credit Derivatives Determination Committee has determined that any of the
following Credit Events has occurred with respect to the Authority: a Failure to
Pay (with a Payment Requirement of $50.0 million), a Restructuring or a
Bankruptcy. “Credit Derivatives Determination Committee”, “Failure to Pay”,
“Restructuring”, “Bankruptcy” and “Payment Requirement” each have the meaning
assigned under the ISDA Credit Derivatives Definitions.

“Credit Facility” means (i) the Bank Credit Facility, as amended, supplemented,
modified, extended, restructured, renewed, refinanced, restated, Replaced or
refunded in whole or in part from time to time, and (ii) whether or not the
Credit Facility referred to in clause (i) remain outstanding, one or more
(A) debt facilities or commercial paper facilities, providing for revolving
credit loans, term loans, receivables financing, financing of Income Assets or
letters of credit, (B) debt securities, indentures or other forms of debt
financing, or (C) instruments or agreements evidencing any other Indebtedness,
in each case, with the same or different borrowers or issuers and, in each case,
as amended, supplemented, modified, extended, restructured, renewed, refinanced,
restated, Replaced or refunded in whole or in part from time to time.

“Default” means any event that is or with the passage of time or the giving of
notice or both would be an Event of Default.

“Default Rate” means a rate equal to 1% in excess of the then applicable
interest rate on the Notes to the extent lawful.

“Disposition Prepayment Date” is defined in Section 9.8.

 

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“Disqualified Stock” of a Person means any Capital Stock of that Person that, by
its terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date on which the Notes mature;
provided, however, that any Capital Stock that would constitute Disqualified
Stock solely because the holders thereof have the right to require the Authority
to repurchase such Capital Stock upon the occurrence of a Change of Control or
an Asset Sale shall not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Authority may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with Section 10.2 hereof.

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System
or any successor SEC electronic filing system for such purposes.

“Embargoed Person” means any Person that (a) is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”), or resides, is organized or chartered, or has a
place of business in a country or territory that is prohibited pursuant to the
OFAC sanctions programs or (b) is publicly identified as prohibited from doing
business with the United States under the International Emergency Economic
Powers Act, the Trading With the Enemy Act or any other Law.

“Environmental Laws” means any and all Federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

“Equity Interests” means Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time in effect.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Authority within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“Event of Default” is defined in Section 13.1.

“Event of Loss” means, with respect to any property or asset (tangible or
intangible, real or personal), any of the following: (i) any loss, destruction
or damage of such property or asset; (ii) any institution of any proceedings for
the condemnation or seizure of such property or asset or for the exercise of any
right of eminent domain; (iii) any actual condemnation, seizure or taking by
exercise of the power of eminent domain or otherwise of such property or asset,
or confiscation of such property or asset or the requisition of the use of such
property or asset; or (iv) any settlement in lieu of clause (ii) or (iii) above.

 

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“Excess Proceeds” is defined in Section 10.5(c).

“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

“Exchange Act Reports” has the meaning given to such term in Section 5.3(a).

“Existing Indebtedness” means Indebtedness of the Authority and the Restricted
Subsidiaries in existence as of Closing (other than Indebtedness under the Bank
Credit Facility), including, for the avoidance of doubt, the Existing Senior
Notes and Existing Senior Subordinated Notes outstanding as of Closing.

“Existing Senior Notes” means the Authority’s 9.75% Senior Notes due 2021, to
the extent outstanding as of Closing.

“Existing Senior Subordinated Notes” means the Authority’s 11.0% Senior
Subordinated Notes due 2018, to the extent outstanding as of Closing.

“Expense Claims” is defined in Section 24.11.

“Fiscal Quarter” means the fiscal quarter of the Authority consisting of a three
month fiscal period ending on each March 31, June 30, September 30 and
December 31.

“Fiscal Year” means the fiscal year of the Authority consisting of a twelve
month fiscal period ending on each September 30.

“Fixed Charge Coverage Ratio” means, with respect to any specified Person for
any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays, redeems, repurchases or retires any Indebtedness (other than
revolving credit borrowings, except to the extent the commitments with respect
to such borrowings are permanently reduced therewith) or issues or redeems
preferred stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
“Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect (including a pro forma application of the net proceeds
therefrom) to such incurrence, assumption, guarantee, repayment, redemption,
repurchase or retirement of Indebtedness, or such issuance or redemption of
preferred stock, as if the same had occurred at the beginning of the applicable
four-quarter reference period.

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

(i) acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions,

 

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during the four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date shall be deemed to have occurred on the
first day of the four-quarter reference period and Consolidated Cash Flow for
such reference period shall be calculated without giving effect to clause
(iii) of the proviso set forth in the definition of “Consolidated Net Income”;

(ii) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations, businesses or Income Assets
disposed of prior to the Calculation Date, shall be excluded; and

(iii) the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the specified
Person or any of its Restricted Subsidiaries following the Calculation Date.

“Fixed Charges” means, with respect to any Person for any period, the sum,
without duplication, of:

(i) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including, without
limitation, amortization of debt issuance costs and original issue discount,
noncash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers’ acceptance financings, and net payments, if any, pursuant
to Hedging and Swap Obligations in respect of interest rates; plus

(ii) the consolidated interest of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus

(iii) any interest expense on Indebtedness of another Person that is guaranteed
by such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries, whether or not such
guarantee or Lien is called upon or enforcement action with respect thereto is
taken (provided, that solely for the purpose of calculating the Fixed Charge
Coverage Ratio pursuant to Section 10.2(a)(B), any such interest expense will
only be included in this definition of “Fixed Charges” if such guarantee or Lien
is called upon or enforcement action with respect thereto is taken); plus

(iv) the product of (a) all cash dividend payments or other distributions (and
noncash dividend payments in the case of a Person that is a Restricted
Subsidiary) on any series of preferred equity of such Person, times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then-current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.

“Form 10-K” is defined in Section 8.1(a)(i).

“Form 10-Q” is defined in Section 8.1(a)(i).

 

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“Fund” means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in notes or
commercial loans and/or similar extensions of credit or debt securities in the
ordinary course of its activities.

“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Closing. For the avoidance of doubt,
lease obligations not capitalized under GAAP as in effect as of Closing shall
not be deemed to constitute Indebtedness under this Note Purchase Agreement as a
result of any change in GAAP after the Closing.

“Gaming” means any and all activities defined as Class II or Class III Gaming
under IGRA or authorized under the Compact.

“Gaming Authority Ordinance” means Chapter 2, Article II of the Mohegan Tribe
Code, also known as Ordinance No. 952 of the Tribe, as enacted on July 15, 1995.

“Gaming Board” means, collectively, (a) the Mohegan Tribal Gaming Commission,
(b) the Connecticut Department of Consumer Protection Gaming Division, (c) the
NIGC and (d) any other Governmental Authority that holds licensing or permit
authority over gambling, gaming or casino activities conducted by the Authority
or any Restricted Subsidiary within its jurisdiction.

“Gaming Laws” means IGRA, the Tribal Gaming Ordinance, the Gaming Authority
Ordinance and all other Laws pursuant to which any Gaming Board possesses
licensing or permit authority over gambling, gaming or casino activities
conducted by the Tribe, the Authority or any Restricted Subsidiary within its
jurisdiction.

“Gaming License” means every license, franchise or other authorization required
to own, lease, operate or otherwise conduct gaming activities of the Tribe or
the Authority, including, without limitation, all such licenses granted under
the Tribal Gaming Ordinance, and the regulations promulgated pursuant thereto,
and other applicable federal, state, foreign or local laws.

“Governmental Authority” means the government of the United States, the Tribe or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supranational bodies such as the European Union or the
European Central Bank).

“Governmental Official” means any governmental official or employee, employee of
any government-owned or government-controlled entity, political party, any
official of a political party, candidate for political office, official of any
public international organization or anyone else acting in an official capacity.

 

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“Government Service Payments” means: (i) Priority Distributions; (ii) amounts
equal to those reflected on each annual audited income statement of the
Authority as prepared in accordance with GAAP relating to payment for
governmental goods and services (including charges for utilities, police and
fire department services, health and emergency medical services, the pro rata
portion of Tribal Council costs and salaries attributable to the operations of
the Authority, and similar pro rata costs of other tribal departments, in each
case, only to the extent that the costs of such departments are attributable to
the operations of the Authority) by the Authority and its Restricted
Subsidiaries to the Tribe or any of its representatives, political subunits,
councils, agencies or instrumentalities; provided, that goods and services
purchased pursuant to this clause (ii) shall be priced on a pass-through basis,
consistent with past practice for services heretofore provided, and made only in
respect of goods and services reasonably required by, and reasonably
attributable to the operations of, the Authority or its Subsidiaries,
(iii) payments to the Tribe pursuant to the Lease, (iv) payments to the Tribe or
any agency, instrumentality or political subunit or Affiliate thereof (other
than Restricted Investments) pursuant to the terms of transactions entered into
in compliance with the applicable requirements of Section 10.8 hereof and for
the purpose of (a) developing gaming and ancillary facilities to be owned,
leased, licensed or managed by the Authority and its Restricted Subsidiaries
(including, without limitation, pursuant to the terms of a Resort Hotel
Transaction) or (b) acquiring goods and services with respect to which the
Authority reasonably determines that the Tribe (or the applicable agency,
instrumentality or political subunit or Affiliate thereof) is the best available
supplier (but excluding, in any event, transactions in the nature of consulting,
advisory or like arrangements) and (v) payments to the Tribe for taxes permitted
under Section 12.1(a)(iv).

“Guarantee” means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness. The term “Guarantee” used as a
verb has a corresponding meaning.

“Guarantee Joinder” is defined in the Note Guarantee.

“Guarantors” means any Subsidiary of the Authority that gives a Note Guarantee
(including without limitation pursuant to a Guarantee Joinder) in accordance
with the provisions of this Agreement, and their respective successors and
assigns, in each case, until the Note Guarantee of such Person has been released
in accordance with the provisions of this Agreement.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hazardous Materials Laws” means all federal, tribal, state or local laws,
ordinances, rules or regulations governing the disposal of Hazardous Materials,
to the extent applicable.

“Hedging and Swap Obligations” means, with respect to any Person: (i) the
obligations of such Person under interest rate swap agreements, interest rate
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collar agreements and (ii) the obligations of such Person under other agreements
or arrangements relating to, or the value of which is dependent upon, interest
rates, or currency exchange rates or indices.

“holder” means, with respect to any Note, the Person in whose name such Note is
registered in the register maintained by the Authority pursuant to Section 15.1,
provided, however, that if such Person is a nominee, then for the purposes of
Sections 8, 14, 19.2 and 20 and any related definitions in this Schedule B,
“holder” shall mean the beneficial owner of such Note whose name and address
appears in such register.

“IGRA” means the federal Indian Gaming Regulatory Act of 1988, as amended,
codified at 25 U.S.C. § 2701, et seq.

“ISDA” means the International Swaps and Derivatives Association, Inc.

“ISDA Credit Derivatives Definitions” means the 2014 ISDA Credit Derivatives
Definitions, as published by ISDA.

“Income Assets” means income streams, including income and profits and other
contractual rights, created under leases or other agreements for the use or
occupancy of the whole or part of real property, lessor rights under any lease
and ancillary assets or property related thereto, from time to time held,
acquired or otherwise owned by the Authority or any Restricted Subsidiary of the
Authority; provided that such interests, and related assets or property, shall
relate to the retail, food and beverage, cell tower or other nongaming
operations of the Authority or its Subsidiaries.

“Indebtedness” means with respect to any specified Person, any indebtedness of
such Person, whether or not contingent, in respect of: (i) borrowed money;
(ii) bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof); (iii) bankers’ acceptances;
(iv) Capital Lease Obligations and Attributable Debt; (v) the balance, deferred
and unpaid, of the purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable; (vi) any Hedging and Swap
Obligations; or (vii) Obligations in respect of the Relinquishment Agreement, if
and to the extent any of the preceding items (other than letters of credit and
Hedging and Swap Obligations) would appear as a liability upon a balance sheet
of the specified Person prepared in accordance with GAAP. In addition, the term
“Indebtedness” includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the guarantee
by such specified Person of any Indebtedness of any other Person.

The amount of any Indebtedness outstanding as of any date shall be: (i) in the
case of Hedging and Swap Obligations, the net amount payable by the applicable
Person in the event of termination of the agreements governing such Hedging and
Swap Obligations; (ii) the accreted value thereof, in the case of any
Indebtedness issued with original issue discount; and (iii) the principal amount
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness.

 

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“Index Debt” means senior, unsecured, long-term indebtedness for borrowed money
of the Authority that is not guaranteed by any other Person other than the
Guarantors or subject to any other credit enhancement.

“Insolvency or Liquidation Proceeding” means:

(i) any voluntary or involuntary case or proceeding under the Bankruptcy Code
with respect to the Authority or any Restricted Subsidiary;

(ii) any other voluntary or involuntary insolvency, reorganization or bankruptcy
case or proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding, with respect to the Authority or any Restricted
Subsidiary or with respect to a material portion of the Authority’s or any
Restricted Subsidiary’s assets;

(iii) any case or proceeding for the liquidation, dissolution, reorganization or
winding up of the Authority or any Restricted Subsidiary whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy; or

(iv) any case or proceeding relating to the assignment for the benefit of
creditors or any other marshaling of assets and liabilities of the Authority or
any Restricted Subsidiary.

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a
Note holding (together with one or more of its Affiliates) more than 5% of the
aggregate principal amount of the Notes then outstanding, (c) any bank, trust
company, savings and loan association or other financial institution, any
pension plan, any investment company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form, and (d) any Related Fund of any holder of any Note that otherwise
qualifies as an Institutional Investor.

“Intangible Assets” means assets that are considered to be intangible assets
under GAAP, including customer lists, goodwill, computer software, copyrights,
trade names, trademarks, patents, franchises, licenses, unamortized deferred
charges, unamortized debt discount and capitalized research and development
costs.

“Interest Period” is defined in the Note.

“Internal Control Event” means a material weakness in, or fraud that involves
management or other employees who have a significant role in, the Authority’s
internal controls over financial reporting, in each case as described in the
Securities Laws.

“Investments” means, with respect to any Person, all investments by such Person
in other Persons (including Affiliates) in the forms of direct or indirect loans
(including guarantees of Indebtedness or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the
Authority or any Restricted Subsidiary of the Authority sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary

 

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of the Authority such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Authority, the Authority
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Restricted Subsidiary not sold or disposed of in an amount determined as
provided in Section 10.2(d) hereof.

“Key Project Assets” means: (i) the Lease and any real property or interest in
real property comprising the Resort held in trust for the Tribe by the United
States; (ii) any improvements (including, without limitation, the Resort) by the
Authority to the leasehold estate under the Lease or such real property
comprising the Resort (but excluding any obsolete personal property or real
property improvements determined by the Authority to be no longer useful to the
operations of the Resort); and (iii) any business records of the Authority
relating to the operation of the Resort.

“Laws” means, collectively, (a) all international, foreign, Federal, tribal,
state and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents or authorities, in each case to the extent
binding upon any relevant Person, (b) any interpretation or administration of
the items described in clause (a) by any Governmental Authority which has the
binding force of law, and (c) all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with,
any Governmental Authority which any relevant Person is obligated to conform to
as a matter of law.

“Lease” means the Land Lease between the Tribe and the Authority dated
September 29, 1995, as the same has been amended or hereafter may be amended in
accordance with the terms thereof and of this Agreement.

“Lease Financing Amount” means, with respect to any Permitted Lease Financing,
as of the date of any incurrence of Indebtedness pursuant to Section 10.4(b)(i),
the aggregate net cash proceeds to any Special Purpose Financing Subsidiary
under any Permitted Lease Financing in connection with the sale of, or the
obtaining of loans secured by, Income Assets by such Special Purpose Financing
Subsidiary, as the same may be reduced from time to time by collections with
respect to such Income Assets or otherwise in accordance with the terms of the
documents or agreements evidencing, relating to, or otherwise governing such
Permitted Lease Financing (but excluding any such collections used to make
payment of interest).

“Lease Transaction” is defined in Section 10.18(a).

“Legal Holiday” means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).

 

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“Make-Whole Amount” means, in relation to any Make-Whole Event with respect to
the Notes, for each holder thereof or any Affiliates of such holder (or, in the
case of GIFS Capital Company LLC as holder, for UBS AG, London Branch or any of
its Affiliates), an amount equal to the aggregate amount of losses or costs (net
of any gains, provided that the Make-Whole Amount shall in no event be less than
zero other than to the extent offset against any Breakage Costs or Applicable
Premium in connection with such Make-Whole Event) as a result of its
terminating, liquidating, or obtaining or re-establishing any offsetting hedge
or related trading position relating to such Notes in connection with such
Make-Whole Event, as such amount may be calculated by the applicable holder or
Affiliate thereof (or by UBS AG, London Branch or any of its Affiliates, as
applicable) and notified in writing to the Authority (and such calculation shall
be conclusive absent manifest error). Notwithstanding the foregoing, the
Make-Whole Amount shall not exceed the Make-Whole Amount that would arise from
the hedging and related arrangements entered into on or about the date hereof by
the Purchasers (or, in the case of GIFS Capital Company LLC as holder, by UBS
AG, London Branch or any of its Affiliates).

“Make-Whole Event” means any event (including any prepayment of Notes pursuant
to Section 9 or any acceleration of the Notes in accordance with Section 14.1,
and including in the course of a proceeding under Bankruptcy Law) which results
in a holder receiving any amount on account of the principal of its Note prior
to the scheduled payment date therefor.

“Management Activities” is defined in Section 24.8(b).

“Management Board” means the Management Board of the Authority, as established
pursuant to the Gaming Authority Ordinance.

“Management Contract” is defined in Section 10.18(b)(iii).

“Material Adverse Effect” means a material adverse effect on (i) the business,
property, operations or financial condition of the Authority and its
Subsidiaries, taken as a whole, (ii) the validity or enforceability of any of
the Note Documents or the rights and remedies of the holders or (iii) the
ability of the Tribe or the Authority and the other Note Parties, taken as a
whole, to perform their Obligations.

“Maturity Date” is defined in the first paragraph of each Note.

“Mohegan Gaming” means Mohegan Gaming & Hospitality, LLC, a Delaware limited
liability company.

“Mohegan Sun” means the casino property and related transportation, retail,
dining and entertainment facilities and Sky Hotel Tower (including any future
expansions thereof) owned by the Authority commonly known as “Mohegan Sun” and
located in Uncasville, Connecticut.

“Moody’s” means Moody’s Investors Service, Inc.

 

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“Net Income” means, with respect to any Person for any period, the net income
(loss) of such Person for such period, determined in accordance with GAAP and
before any reduction in respect of dividends on preferred interests, excluding,
however:

(i) any gain or loss, together with any related provision for taxes on such gain
or loss, realized in connection with (A) any Asset Sale (including, without
limitation, dispositions pursuant to sale leaseback transactions), (B) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries or (C) any sale, transfer or other disposition of
Income Assets in connection with Permitted Lease Financings or otherwise;

(ii) (A) any extraordinary or nonrecurring item, together with any related
provision for taxes on such extraordinary or nonrecurring item and (B) any
severance expenses or charges pertaining to workforce reductions;

(iii) any fees, expenses or charges related to any incurrence, refinancing,
Replacement or repurchase of or tender for any Indebtedness that was permitted
to be incurred under this Agreement (including without limitation the incurrence
of the Notes issued as of Closing); and

(iv) in the case of any Person that is a partnership or a limited liability
company, the amount of withholding for tax purposes of such Person for such
period.

“Net Proceeds” means the aggregate cash proceeds received by the Authority or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale including, without limitation, legal, accounting and
investment banking fees, and sales commissions and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case after taking into account any available tax credits or deductions and any
tax sharing arrangements, and 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 Asset Sale, and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.

“NIGC” means the National Indian Gaming Commission.

“Northeast Gaming Operations” means casino gaming operations, projects or
developments in the states of New York, Pennsylvania, Connecticut, Rhode Island,
Massachusetts, New Hampshire, Vermont or Maine.

“Note Documents” means, collectively, this Agreement, the Notes, and each Note
Guarantee (including each Guarantee Joinder as defined in the Note Guarantee).

“Note Guarantee” means the Guarantee Agreement, substantially in the form of
Schedule A-1, executed and delivered to each Purchaser and holder of the Notes
by each Guarantor, including through any Guarantee Joinder.

“Note Parties” means, collectively, the Authority and each Guarantor.

 

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“Notes” is defined in Section 1.

“Obligations” means any principal, interest, default interest, penalties, fees,
indemnification, reimbursements, damages and other liabilities payable under the
documentation governing the Notes (including, without limitation, interest
accruing thereon after the commencement of any Insolvency or Liquidation
Proceeding).

“Officer” means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice President of such Person and, in the case of the
Authority, shall include members of the Management Board.

“Officer’s Certificate” means a certificate signed on behalf of the Authority by
an Officer of the Authority, who is the principal executive officer, the
principal financial officer, the treasurer or the principal accounting officer
of the Authority.

“Opinion of Counsel” means a written opinion from legal counsel who is
reasonably acceptable to the holders of the Notes. The counsel may be an
employee of or counsel to the Authority, the Tribe or any Restricted Subsidiary
of the Authority.

“Organization Documents” means, (a) with respect to the Tribe, the Constitution,
(b) with respect to the Authority, the Gaming Authority Ordinance, (c) with
respect to any corporation, the certificate or articles of incorporation and the
bylaws (or equivalent or comparable constitutive documents with respect to any
non-U. S. jurisdiction), (d) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement,
and (e) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement of
formation or organization and any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Ownership Interest” means, with respect to any Person, Capital Stock of such
Person or any interest which carries the right to elect or appoint any members
of the Management Board or the Board of Directors or other executive office of
such Person.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA or any successor thereto.

“Permitted Asset Swap” means the exchange by the Authority or any Restricted
Subsidiary of any assets for other assets from a Person; provided, that the
assets received in such exchange are believed by the Authority in good faith to
be of substantially equivalent value and substantially all of which are either
(i) long term assets that are used or useful in the Principal Business,
(ii) cash or (iii) any combination of the foregoing clauses (i) and (ii).

 

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“Permitted Encumbrances” means:

(i) inchoate Liens incident to construction or maintenance of real property, and
Liens incident to construction or maintenance of real property now or hereafter
filed of record for which adequate accounting reserves have been set aside and
which are being contested in good faith by appropriate proceedings and have not
proceeded to judgment; provided, that, no such real property is subject to a
material risk of loss or forfeiture by reason of nonpayment of the obligations
secured by such Liens;

(ii) Liens for taxes and assessments on Property which are not yet past due and
Liens for taxes and assessments on Property for which adequate reserves have
been set aside and are being contested in good faith by appropriate proceedings
and have not proceeded to judgment; provided, that no such Property is subject
to a material risk of loss or forfeiture by reason of nonpayment of the
obligations secured by such Liens;

(iii) minor defects and irregularities in title to any real property which in
the aggregate do not materially impair the fair market value or use of the real
property for the purposes for which it is or may reasonably be expected to be
held;

(iv) easements, exceptions, reservations, or other agreements granted or entered
into after Closing for the purpose of pipelines, conduits, cables, wire
communication lines, power lines and substations, streets, trails, walkways,
drainage, irrigation, water and sewerage purposes, dikes, canals, ditches, the
removal of oil, gas, coal or other minerals, and other like purposes affecting
real property which in the aggregate do not materially burden or impair the fair
market value or use of such real property for the purposes for which it is or
may reasonably be expected to be held;

(v) rights reserved to or vested in any Governmental Authority by Law to control
or regulate, or obligations or duties under Law to any Governmental Authority
with respect to, the use of any real property;

(vi) rights reserved to or vested in any Governmental Authority by Law to
control or regulate, or obligations or duties under Law to any Governmental
Authority with respect to, any right, power, franchise, grant, license or
permit;

(vii) present or future zoning laws and ordinances or other laws and ordinances
restricting the occupancy, use or enjoyment of real property;

(viii) statutory Liens, other than those described in clauses (i) or (ii) above,
arising in the ordinary course of business with respect to obligations which are
not delinquent or are being contested in good faith by appropriate proceedings;
provided, that, if delinquent, adequate reserves have been set aside with
respect thereto and no Property is subject to a material risk of loss or
forfeiture by reason of nonpayment;

(ix) Liens consisting of pledges or deposits made in connection with obligations
under workers’ compensation laws, unemployment insurance or similar legislation,
including Liens of judgments thereunder which are not currently dischargeable;

(x) Liens consisting of pledges or deposits of Property to secure performance in
connection with operating leases made in the ordinary course of business to
which the

 

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Authority or any Restricted Subsidiary is a party as lessee; provided, the
aggregate value of all such pledges and deposits in connection with any such
lease does not at any time exceed 10% of the annual fixed rentals payable under
such lease;

(xi) Liens consisting of deposits of Property to secure statutory obligations of
the Authority or any Restricted Subsidiary in the ordinary course of its
business;

(xii) Liens consisting of deposits of Property to secure (or in lieu of) surety,
appeal or customs bonds in proceedings to which the Authority or any Restricted
Subsidiary is a party in the ordinary course of its business;

(xiii) Liens created by or resulting from any litigation or legal proceeding
involving the Authority or a Restricted Subsidiary which is currently being
contested in good faith by appropriate proceedings; provided, that adequate
reserves have been set aside with respect thereto, and such Liens are discharged
or stayed within 60 days of creation and no Property is subject to a material
risk of loss or forfeiture; and

(xiv) encumbrances consisting of the rights of tenants under retail, restaurant
or other commercial leases at the Resort, Pocono or any other property owned by
the Authority or any Restricted Subsidiary and associated rights of such tenants
under subordination, non-disturbance and attornment agreements.

“Permitted Investments” means:

(i) any Investment in the Authority or in a Restricted Subsidiary of the
Authority that is engaged in a Principal Business or a Related Business;

(ii) any Investment in cash or Cash Equivalents;

(iii) any Investment by the Authority or any Restricted Subsidiary of the
Authority in a Person engaged in the Principal Business or a Related Business,
if as a result of such Investment such Person (a) becomes a Restricted
Subsidiary of the Authority and a Guarantor or (b) is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, a Restricted Subsidiary of the Authority;

(iv) any Investment made as a result of the receipt of noncash consideration
from an Asset Sale that was made pursuant to and in compliance with Section 10.5
hereof;

(v) any Investment in any Persons engaged in the Principal Business or a Related
Business having an aggregate fair market value (as reasonably determined in good
faith by the Management Board and measured as of the date of such Investment,
without giving effect to any subsequent increases or decreases in value) not to
exceed at any one time outstanding the greater of (A) $100.0 million and (B) 5%
of Consolidated Net Tangible Assets;

 

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(vi) payroll advances to employees of the Authority or its Restricted
Subsidiaries for travel, entertainment and relocation expenses in the ordinary
course of business in an aggregate amount not to exceed $1.0 million at any one
time outstanding;

(vii) accounts and notes receivable if created or acquired in the ordinary
course of business and which are payable or dischargeable in accordance with
customary trade terms;

(viii) Investments related to Hedging and Swap Obligations, so long as such
Hedging and Swap Obligations are not used for speculative purposes;

(ix) Investments in entities conducting Northeast Gaming Operations with the
proceeds of equity contributions from the Tribe, provided, that such equity
contributions shall not increase the amount available for Restricted Payments
pursuant to Section 10.02(a)(C);

(x) Investments consisting of or pursuant to Completion Guarantee and Keep-Well
Agreements;

(xi) Investments existing as of the Closing; and

(xii) Investments in a Special Purpose Financing Subsidiary to the extent such
Investments are made in connection with Permitted Lease Financings.

“Permitted Lease Financings” means one or more financings, securitizations or
similar transactions or series of transactions pursuant to which the Authority
or any of its Restricted Subsidiaries sells, assigns, contributes, grants an
interest in or otherwise transfers Income Assets (and/or grants a Lien on such
Income Assets transferred or purported to be transferred) to one or more Special
Purpose Financing Subsidiaries for consideration (which may include debt or
equity received as consideration for or as a portion of the purchase price of
the Income Assets transferred, or any other instrument through which the
Authority or any of its Restricted Subsidiaries has rights to or receives
distributions in respect of any excess or residual interest in the Income
Assets) in an amount not less than the fair market value, at the time of
transfer of such Income Assets, that would be attributed to such Income Assets
by an unaffiliated third party purchasing the Income Assets in an arms-length
sale transaction, as determined in good faith by the Management Board; provided,
however, that “Permitted Lease Financings” will not include any such
transaction, unless, as of the date of any increase in the Lease Financing
Amount with respect to such transaction, the Authority could incur secured
Indebtedness under Section 10.04(b)(i) in an aggregate principal amount equal to
the amount of such increase in the Lease Financing Amount (as determined after
giving effect to any repayment of Indebtedness in connection therewith but
without giving effect to Section 10.04(b)(i)(A)(1)(y)).

“Permitted Liens” means:

(i) Liens securing Indebtedness that was permitted by the terms of this
Agreement to be incurred under clauses (iv) (provided, that such Liens do not
extend to any property owned by the Authority or a Restricted Subsidiary other
than the property being financed), (vi) and (x) of Section 10.4(b) hereof;

 

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(ii) Liens securing Indebtedness incurred pursuant to Section 10.4(b)(i) hereof
(other than Permitted Refinancing Indebtedness incurred in reliance on
Section 10.4(b)(i)(B) hereof to the extent such Permitted Refinancing
Indebtedness is a Replacement of unsecured Indebtedness outstanding pursuant to
Section 10.4(b)(i) hereof), any guarantees thereof and any Obligations relating
thereto;

(iii) Liens in favor of the Authority or a Restricted Subsidiary;

(iv) Liens existing as of Closing (other than Liens permitted by clauses (i) and
(ii) of this definition of “Permitted Liens”);

(v) Permitted Encumbrances and Permitted Rights of Others;

(vi) Liens in favor of the Tribe representing the ground lessor’s interest under
the Lease;

(vii) Liens on property existing at the time of acquisition thereof by the
Authority or a Restricted Subsidiary; provided, that such Liens were in
existence prior to the contemplation of such acquisition; provided, further,
that such Liens do not extend to any other property owned by the Authority or a
Restricted Subsidiary;

(viii) Liens incurred in the ordinary course of business of the Authority or a
Restricted Subsidiary with respect to obligations that do not exceed $500,000 at
any one time outstanding and that (a) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business) and (b) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Authority; provided, however, it is
acknowledged that Permitted Liens will not include any Lien on the land held in
trust for the Tribe by the United States or any real property interest therein,
including the buildings, improvements and fixtures, other than the leasehold
interest pursuant to the Lease, or which will give the holder thereof a
proprietary interest in any gaming activity as prohibited by Section 11(b)(2)(A)
of IGRA;

(ix) Liens created by or resulting from any legal proceeding with respect to
which the Authority or a Restricted Subsidiary is prosecuting an appeal
proceeding for review; provided, however, that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been made
therefor and such legal proceedings have the effect of preventing the forfeiture
or sale of the property or assets subject to any such Lien;

(x) Liens securing Indebtedness permitted under Section 10.4 hereof; provided,
that the aggregate principal amount of all such Indebtedness secured by Liens
pursuant to this clause (x) shall not exceed $35.0 million in the aggregate at
any one time outstanding;

(xi) Liens in respect of assets of the WNBA Subsidiary in favor of WNBA, LLC or
its designees to secure obligations of the WNBA Subsidiary under the WNBA
Agreements;

 

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(xii) Rights of Others granted pursuant to the WNBA Agreements consisting of the
right to use the Mohegan Sun Arena for scheduled home games of the Connecticut
Sun and related basketball activities;

(xiii) Liens to secure the Notes or any Guarantee;

(xiv) Liens to secure Permitted Refinancing Indebtedness incurred pursuant to
Section 10.4(b)(v) and any guarantees thereof; provided, however, that (i) the
original Indebtedness being extended, refinanced, renewed, Replaced, defeased or
refunded by such Permitted Refinancing Indebtedness was secured by a Lien
permitted to be incurred under this Agreement and (ii) the new Lien incurred
pursuant to this clause (xv) is limited to all or part of the same property and
assets (or type of property and assets) that secured or, under the written
agreements pursuant to which the original Lien was created, could secure, the
original Lien;

(xv) Liens on the assets of Downs Lodging, LLC securing Indebtedness permitted
under Section 10.4(b)(xii)(B) hereof; and

(xvi) Liens encumbering Income Assets purported to be sold or otherwise
transferred in connection with Permitted Lease Financings.

“Permitted Refinancing Indebtedness” means any Indebtedness of the Authority or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to acquire, repurchase, retire, extend, refinance, renew,
Replace, defease or refund, other Indebtedness of the Authority or any of its
Restricted Subsidiaries; provided, that:

(i) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus accrued interest with respect to the Indebtedness so
acquired, repurchased, retired, extended, refinanced, renewed, Replaced,
defeased or refunded (plus the amount of prepayment premiums, consent fees and
reasonable expenses incurred in connection therewith);

(ii) such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being acquired, repurchased, retired, extended, refinanced,
renewed, Replaced, defeased or refunded; provided, that if the original maturity
date of such Indebtedness is after the Stated Maturity of the Notes, then such
Permitted Refinancing Indebtedness shall have a maturity at least 91 days after
the Stated Maturity of the Notes;

(iii) if the Indebtedness being acquired, repurchased, retired, extended,
refinanced, renewed, Replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in
right of payment to the Notes on terms at least as favorable to the holders of
the Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, Replaced, defeased or refunded; and

(iv) such Indebtedness is incurred either by the Authority or by the Restricted
Subsidiary who is the obligor on the Indebtedness being acquired, repurchased,
retired, extended, refinanced, renewed, Replaced, defeased or refunded.

 

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“Permitted Right of Others” means a Right of Others consisting of (a) an
interest (other than a legal or equitable coownership interest, an option or
right to acquire a legal or equitable coownership interest and any interest of a
ground lessor under a ground lease) that does not materially impair the value or
use of property for the purposes for which it is or may reasonably be expected
to be held, (b) an option or right to acquire a Lien that would be a Permitted
Encumbrance, and (c) the reversionary interest of a landlord under a lease of
Property.

“Person” means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or agency or political subdivision,
instrumentality or subunit thereof (including any subdivision or ongoing
business of any such entity or substantially all of the assets of any such
entity, subdivision or business).

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Authority or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

“Pocono” means the harness racetrack and casino known as Mohegan Sun Pocono
located in Plains Township, Pennsylvania, and related assets.

“Pocono Subsidiaries” means, collectively, (a) Downs Racing, L.P., a
Pennsylvania limited partnership, Backside, L.P., a Pennsylvania limited
partnership, Mill Creek Land, L.P., a Pennsylvania limited partnership,
Northeast Concessions, L.P., a Pennsylvania limited partnership, and Mohegan
Commercial Ventures PA, LLC, a Pennsylvania limited liability company, and their
respective successors, and (b) any other Persons formed as Restricted
Subsidiaries of the Authority for the purpose of owning or operating Pocono and
the businesses related thereto.

“Preferred Stock” means any class of Capital Stock of a Person that is preferred
over any other class of Capital Stock (or similar equity interests) of such
Person as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such Person.

“Prepayment Offer” is defined in Section 10.5(c).

“Principal Business” means (i) (a) Gaming and (b) hotel and resort businesses
and any activity or business incidental, directly or indirectly related, or
similar thereto, or any business or activity that is a reasonable extension,
development or expansion thereof or ancillary thereto, including, without
limitation, any golf, entertainment, transportation, recreation or other
activity or business designed to promote, market, support, develop, construct or
enhance Gaming and other businesses, in either case operated by the Authority at
the Resort, and (ii) casino gaming and related businesses (including, without
limitation, those described in clause (i)(b) above) located outside the Tribe’s
reservation.

“Priority Distributions” means distributions to the Tribe by the Authority in an
aggregate amount not to exceed $54.1 million in fiscal year 2015, and, in each
fiscal year beginning

 

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with fiscal year 2016, the initial amount available for Priority Distributions
in the prior fiscal year increased by the percentage by which the Consumer Price
Index increased in the prior calendar year (subject to a floor of 2.00% per
annum and a cap of 4.00% per annum); provided, that, subject to the next
succeeding proviso, not more than $15 million of the Priority Distributions
permissible in any fiscal year shall be made in any fiscal quarter; provided,
further, that the amount of Priority Distributions permitted to be made in any
fiscal quarter shall be increased by the unused amount of Priority Distributions
(without the accrual of interest thereon) allocated for any prior fiscal
quarter.

“Proceeding” is defined in Section 24.7(a).

“Property,” “property” or “properties” means, unless otherwise specifically
limited, real, personal property of any kind, tangible or intangible, choate or
inchoate.

“Purchaser” or “Purchasers” means each of the purchasers that has executed and
delivered this Agreement to the Authority and such Purchaser’s successors and
assigns (so long as any such assignment complies with Section 15.2), provided,
however, that any Purchaser of a Note that ceases to be the registered holder or
a beneficial owner (through a nominee) of such Note as the result of a transfer
thereof pursuant to Section 15.2 shall cease to be included within the meaning
of “Purchaser” of such Note for the purposes of this Agreement upon such
transfer.

“Qualified Gaming Company” means a Person that, together with its Subsidiaries,
has a minimum of five years’ experience in operating casinos, gaming facilities
or gaming enterprises and which has derived at least $150.0 million of revenue
for its last four fiscal quarters from activities relating to the gaming
business, other than internet gaming.

“Qualified Institutional Buyer” means a “qualified institutional buyer” within
the meaning of such term as set forth in Rule 144A(a)(1) under the Securities
Act.

“Real Property” means, collectively, (a) the real property and improvements
underlying Mohegan Sun, (b) the real property and improvements underlying Pocono
and Authority’s other real property and improvements.

“Regulation T,” “Regulation U” and “Regulation X” mean Regulation T, Regulation
U, and Regulation X, respectively, of the Board of Governors of the Federal
Reserve System of the United States as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

“Reinstated Covenants” is defined in Section 10.14.

“Related Business” means any business related to the Principal Business.

“Related Fund” means, with respect to any holder of any Note, any fund or entity
that (i) invests in Securities or bank loans, and (ii) is advised or managed by
such holder, the same investment advisor as such holder or by an affiliate of
such holder or such investment advisor.

 

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“Relinquishment Agreement” means the Relinquishment Agreement dated February 7,
1998 between the Authority and Trading Cove Associates, as amended, restated,
supplemented or otherwise modified from time to time.

“Replacement” means, in respect of any Indebtedness, to refinance or replace, or
to issue other Indebtedness, in exchange or replacement for, such Indebtedness
in whole or in part. “Replace,” “Replaced” and “Replacement” shall have
correlative meanings.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Required Holders” means at any time on or after the Closing, the holders of at
least 50.1% in principal amount of the Notes at the time outstanding (exclusive
of Notes then owned by the Authority or any of its Affiliates).

“Requirement of Law” means, as to any Person, the Organization Documents of such
Person and any Law or judgment, award, decree, writ or determination of a
Governmental Authority, in each case applicable to or binding upon such Person
or any of its Property or to which such Person or any of its Property is
subject.

“Resort” means the multi-amenity gaming and entertainment resort located on the
existing reservation of the Tribe located adjacent to Uncasville, Connecticut
and the convention center, retail facilities, arena, hotel and improvements
constructed or proposed to be constructed on the existing reservation by the
Authority, but excluding (i) any obsolete personal property or real property
improvement reasonably determined by the Authority in good faith to be no longer
useful or necessary to the operations or support of the Resort and (ii) any
equipment leased from a third party in the ordinary course of business.

“Resort Hotel Transaction” means, to the extent in compliance with the
applicable requirements of Section 10.8, (i) the sale, sublease or other
disposition of a portion of the Lease and reasonably related interests and
rights to the extent the related real property is not then otherwise developed
for use in gaming at Mohegan Sun to the Tribe or any other Person for the
purpose of permitting the Tribe or such Person to construct a hotel on the
Authority’s Property and (ii) if applicable, the lease, license or other
contract for use by the Authority or any Restricted Subsidiary of such hotel.

“Responsible Officer” means (a) as to the Tribe, the Chairman, Vice-Chairman and
Treasurer of the Tribal Council of the Tribe, the Chief Operating Officer of the
Tribe, the Chief Financial Officer of the Tribe and the Attorney General of the
Tribe, (b) as to the Authority, the Chairman, Vice-Chairman and Treasurer of the
Management Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer and the Vice President of
Finance, and (c) as to each other Note Party, the chief executive officer,
president, chief financial officer and manager of such Note Party (or such Note
Party’s manager, sole member or general partner as applicable).

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Payments” is defined in Section 10.2(a).

 

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“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person
that is not an Unrestricted Subsidiary.

“Right of Others” means, as to any Property in which a Person has an interest,
(a) any legal or equitable right, title or other interest (other than a Lien)
held by any other Person in or with respect to that Property, and (b) any option
or right held by any other Person to acquire any right, title or other interest
in or with respect to that Property, including any option or right to acquire a
Lien.

“S&P” means Standard & Poor’s Ratings Group, a division of the McGraw-Hill
Companies, Inc.

“SEC” means the Securities and Exchange Commission of the United States, or any
successor thereto.

“Securities” or “Security” means any Capital Stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
membership interests, limited partnership interests, or any warrant, option or
other right to purchase or acquire any of the foregoing.

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

“Significant Subsidiary” means any Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 102 of Regulation S-X, as such
regulation is in effect as of the Closing.

“Special Purpose Financing Subsidiary” means an Unrestricted Subsidiary of the
Authority established in connection with, and in order to effectuate, a
Permitted Lease Financing which Unrestricted Subsidiary meets the following
criteria: (a) the business activities of such Unrestricted Subsidiary consists
solely of engaging in one or more Permitted Lease Financings and any activities
reasonably related or ancillary thereto (including the purchase and financing of
Income Assets), (b) no portion of the Indebtedness (including any Permitted
Lease Financing) of such Unrestricted Subsidiary or any other obligations
(contingent or otherwise) of such Unrestricted Subsidiary is guaranteed by or
otherwise recourse to the Authority or any of its Restricted Subsidiaries, other
than reasonable and customary undertakings in respect of the Income Assets
transferred to such Special Purpose Financing Subsidiary, (c) such Unrestricted
Subsidiary is not party to any contracts, agreements, arrangements or
understanding with the Authority or its Restricted Subsidiaries other than on
terms that are no less favorable to the Authority or such Restricted Subsidiary
than those that might be obtained by the Authority or such Restricted Subsidiary
from a Person that is not an Affiliate of the Authority and (d) neither the
Authority nor any Restricted Subsidiary has any obligation to maintain or
preserve such Unrestricted Subsidiary’s financial condition or cause such
Unrestricted Subsidiary to achieve certain levels of operating results.

“Stated Maturity” means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid including as a result of any
mandatory sinking fund payment or mandatory redemption in

 

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the documentation governing such Indebtedness in effect on the date hereof or,
if such Indebtedness is incurred after Closing, in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

“Subordinated Indebtedness” means any Indebtedness that by its terms is
expressly subordinated in right of payment to the Obligations under this
Agreement.

“Subsidiary” means: (i) any instrumentality or subdivision or sub-unit of the
Authority that has a separate legal existence or status or whose property and
assets would not otherwise be bound to the terms of this Agreement; or (ii) with
respect to any other Person, any corporation, association or other business
entity of which more than 50% of the total voting power of the shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person or a combination thereof. The Tribe and any other
instrumentality of the Tribe that is not also an instrumentality or subdivision
or subunit of the Authority shall not be a Subsidiary of the Authority.

“Substitute Purchaser” is defined in Section 23.

“Succession Event Determination” means an announcement by ISDA that the relevant
Credit Derivatives Determination Committee has identified a Successor in respect
of the Authority as the Reference Entity in respect of Credit Derivative
Transactions referencing the Authority and the occurrence of the Succession Date
in respect thereof. “Credit Derivatives Determination Committee”, “Successor”,
“Reference Entity”, “Credit Derivative Transaction” and “Succession Date” each
have the meaning assigned under the ISDA Credit Derivatives Definitions.

“Suspended Covenants” is defined in Section 10.14.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

“Town Agreement” means the Agreement dated as of June 16, 1994 between the Tribe
and the Town of Montville, Connecticut, as amended up to the Closing.

“Tribal Council” means the Tribal Council of the Tribe elected in accordance
with the Constitution.

“Tribal Court” means any tribal court of the Tribe.

“Tribal Gaming Authority Amendment” is defined in Section 24.6.

“Tribal Gaming Ordinance” means the ordinance and any amendments thereto, and
all related or implementing ordinances, including, without limitation, the
Mohegan Tribal Gaming Ordinance, enacted on July 28, 1994 as Ordinance 941, and
which are enacted by the Tribe or authorize and regulate gaming on the existing
reservation of the Tribe located adjacent to Uncasville, Connecticut pursuant to
IGRA.

 

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“Tribal Tax Code” means any sales, use, room occupancy and related excise taxes,
including admissions and cabaret taxes and any other tax (other than income tax)
that may be imposed by the State of Connecticut that the Tribe may impose on the
Authority, its patrons or operations; provided, however, that the rate and scope
of such taxes shall not be more onerous than those imposed by the State of
Connecticut.

“Tribe” has the meaning specified in the introductory paragraph hereto.

“Trust Indenture Act” means the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) as in effect on the date of this Agreement.

“UCC Ordinance” means Chapter 7, Article III of the Mohegan Tribe Code, also
known as Ordinance Number 987 of the Tribe.

“Unrestricted Subsidiary” means (i) each Subsidiary specified as such in
Section 10.13, (ii) any Subsidiary of the Authority which at the time of
determination shall be an Unrestricted Subsidiary (as designated by the
Management Board pursuant to Section 10.13) and (iii) any Subsidiary of an
Unrestricted Subsidiary.

“USA PATRIOT Act” means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

“Voting Stock” of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Management
Board or Board of Directors, as the case may be, of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing: (i) the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payment of principal, including
payment at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment, by (ii) the then outstanding principal amount of
such Indebtedness.

“Wholly Owned Restricted Subsidiary” of any Person means a Restricted Subsidiary
of such Person all of the outstanding Capital Stock or other Ownership Interests
of which (other than directors’ qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person or by such Person and one or more Wholly Owned Restricted Subsidiaries of
such Person.

“WNBA Agreements” means, collectively, the WNBA Membership Agreement between
WNBA, LLC, a Delaware limited liability company, and the WNBA Subsidiary and the
related guarantee executed by the Authority in favor of WNBA, LLC, in each case,
as amended, restated, supplemented or otherwise modified from time to time.

 

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“WNBA Subsidiary” means Mohegan Basketball Club, LLC, a limited liability
company formed under the Laws of the Tribe and a wholly owned Subsidiary of the
Authority, which is the owner and operator of the Women’s National Basketball
Association franchise known as the Connecticut Sun.

 

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Schedule A-1

[FORM OF] GUARANTEE AGREEMENT

 

SCHEDULE A-1-1

(to Note Purchase Agreement)

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

GUARANTEE AGREEMENT

November 20, 2015

This GUARANTEE AGREEMENT, dated as of November 20, 2015 (as amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms, this “Guarantee”), by Downs Racing, L.P., Backside, L.P., Mill Creek
Land, L.P., Northeast Concessions, L.P., Mohegan Commercial Ventures PA, LLC,
Mohegan Basketball Club, LLC, Mohegan Ventures-Northwest, LLC, Mohegan Golf,
LLC, Mohegan Ventures Wisconsin, LLC, Wisconsin Tribal Gaming, LLC and MTGA
Gaming, LLC (together with their respective successors and assigns, and together
with any other entity that may become a party hereto by executing a Guarantee
Joinder, the “Guarantors”) is in favor of each of the Noteholders (as such term
is hereinafter defined).

 

SECTION 25. PRELIMINARY STATEMENT

The Mohegan Tribal Gaming Authority (the “Authority”), a governmental
instrumentality of The Mohegan Tribe of Indians of Connecticut, a sovereign
tribe recognized by the United States of America pursuant to 25 C.F.R. § 83 (the
“Tribe”), has authorized the issuance of its Floating Rate Senior Notes due
December 15, 2017 (as may be amended, restated, supplemented or otherwise
modified from time to time, the “Notes”), pursuant to a Note Purchase Agreement,
of even date herewith (as may be amended, restated, supplemented or otherwise
modified from time to time, the “Note Purchase Agreement”), between the
Authority, the Tribe (for purposes of the specific sections detailed therein),
and the Purchasers party thereto.

In order to induce the Purchasers to enter into the Note Purchase Agreement and
to purchase the Notes from the Authority, the Authority has agreed that it will
cause each Guarantor to guarantee the Obligations of the Authority under the
terms of the Notes and the Note Purchase Agreement pursuant to the terms and
provisions hereof.

Each Guarantor will receive direct and indirect economic, financial and other
benefits from the indebtedness incurred under the Note Purchase Agreement and
the Notes by the Authority, and the incurrence of such indebtedness is in the
best interests of each Guarantor. The Authority and each Guarantor have induced
the Purchasers to purchase the Notes based on the consolidated financial
condition of each Guarantor and the Authority.

All acts and proceedings required by law and by the certificate of incorporation
and bylaws (or other applicable constitutive documents) of each Guarantor
necessary to constitute this Guarantee a valid and binding agreement for the
uses and purposes set forth herein in accordance with its terms have been done
and taken, and the execution and delivery hereof has been in all respects duly
authorized.

 

SECTION 26. GUARANTEE AND OTHER RIGHTS AND UNDERTAKINGS.

Section 26.1 Guaranteed Obligations. Each Guarantor, in consideration of the
execution and delivery of the Note Purchase Agreement, the purchase of the Notes
by the Purchasers and other consideration, hereby irrevocably, unconditionally,
absolutely, jointly and severally

 

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guarantees, on a continuing basis, to each holder of Notes (each such holder
being referred to herein as a “Noteholder” and, collectively, as the
“Noteholders”), as a primary obligor and not merely as a surety, until final and
indefeasible payment has been made in cash:

(a) the due and punctual payment of Obligations, including, without limitation,
overdue interest, indemnification payments and all reasonable, out-of-pocket
costs and expenses incurred by the Noteholders in connection with enforcing any
obligations of the Authority under the Note Purchase Agreement and the Notes; it
being the intent of each Guarantor that the guaranty set forth herein shall be a
continuing guaranty of payment and not a guaranty of collection; and

(b) the prompt and complete payment, on demand, of any and all reasonable,
out-of-pocket costs and expenses incurred by the Noteholders in connection with
enforcing the obligations of such Guarantor hereunder, including, without
limitation, the reasonable fees and disbursements of the Noteholders’ counsel.

All of the obligations set forth in clauses (a) and (b) of this Section 2.1 are
referred to herein as the “Guaranteed Obligations” and the guaranty thereof
contained herein is referred to herein as the “Unconditional Guarantee.” The
Unconditional Guarantee is an absolute, unconditional, continuing and
irrevocable guaranty of payment and performance and shall remain in full force
and effect until the full, final and indefeasible payment in cash of the
Guaranteed Obligations.

Section 26.2 Performance under the Note Purchase Agreement. In the event the
Authority fails to pay, perform. keep, observe, or fulfill any Guaranteed
Obligation specified in clause (a) of Section 2.1 in the manner provided in the
Notes or in the Note Purchase Agreement, each Guarantor shall cause forthwith to
be paid the moneys in respect of which such failure has occurred in accordance
with the terms and provisions of the Note Purchase Agreement and the Notes. In
furtherance of the foregoing, if an Event of Default shall exist, the Guaranteed
Obligations shall, in the manner and subject to the limitations provided in the
Note Purchase Agreement for the acceleration of the Notes, forthwith become due
and payable without notice, regardless of whether the acceleration of the Notes
shall be stayed, enjoined, delayed or otherwise prevented.

Section 26.3 Releases. Each Guarantor consents and agrees that, without notice
to or by any Guarantor and without impairing, releasing, abating, deferring,
suspending, reducing, terminating or otherwise affecting the obligations of each
Guarantor hereunder, each Noteholder, in the manner provided herein, by action
or inaction, may:

(a) compromise or settle, renew or extend the period of duration or the time for
the payment, or discharge the performance of, or may refuse to, or otherwise
not, enforce, or may, by action or inaction, release all or any one or more
parties to, any one or more of the Notes, the Note Purchase Agreement, any other
guaranty thereof or agreement or instrument related thereto or hereto;

(b) assign, sell or transfer, or otherwise dispose of, any one or more of the
Notes;

(c) grant waivers, extensions, consents and other indulgences to the Authority
or any Guarantor or guarantors in respect of any one or more of the Notes, the
Note Purchase Agreement, any other guaranty thereof or any agreement or
instrument related thereto or hereto;

 

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(d) amend, modify or supplement in any manner and at any time (or from time to
time) any one or more of the Notes, the Note Purchase Agreement, any other
guaranty thereof or any agreement or instrument related hereto; and

(e) release or substitute any one or more of the endorsers or guarantors of the
Guaranteed Obligations whether parties hereto or not.

Section 26.4 Waivers. To the fullest extent permitted by law, each Guarantor
does hereby waive:

(a) any notice of:

(i) acceptance of the Unconditional Guarantee;

(ii) any purchase of the Notes under the Note Purchase Agreement, or the
creation, existence or acquisition of any of the Guaranteed Obligations, or the
amount of the Guaranteed Obligations, subject to each Guarantor’ rights to make
inquiry of each Noteholder to ascertain the amount of the Guaranteed Obligations
owing to such Noteholder at any reasonable time;

(iii) any adverse change in the financial condition of the Authority or any
other fact that might increase, expand or affect each Guarantor’s risk
hereunder;

(iv) presentment for payment, demand, protest, and notice thereof as to the
Notes;

(v) any Default or Event of Default; and

(vi) any notice or demand of any kind or nature whatsoever to which each
Guarantor might otherwise be entitled (except if such notice or demand is
specifically otherwise required to be given to such Guarantor pursuant to the
terms of this Guarantee).

(b) any right, by statute or otherwise, to require any Noteholder to institute
suit against the Authority or any other guarantor or to exhaust the rights and
remedies of any Noteholder against the Authority or any other guarantor;

(c) the benefit of any stay or extension law or other usury law or other law now
or at any time hereafter in force which, but for this waiver, would prohibit or
forgive such Guarantor from performing the Guarantee as contemplated herein;

(d) any defense (other than defense of payment or performance) or objection to
the absolute, primary, continuing nature, or the validity, enforceability or
amount of the Unconditional Guarantee, including, without limitation:

(i) any change of law;

(ii) any invalidity or irregularity with respect to the issuance or assumption
of any Obligations;

 

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(iii) the genuineness, validity, regularity or enforceability of any of the
Guaranteed Obligations;

(iv) any default, failure or delay, willful or otherwise, in the performance of
any obligations by the Authority or any Guarantor;

(v) any creditors’ rights, bankruptcy, receivership or other insolvency
proceeding of the Authority or any Guarantor, or sequestration or seizure of any
property of the Authority or any Guarantor, or any merger, consolidation,
reorganization, dissolution, liquidation or winding up or change in corporate
constitution or corporate identity or loss of corporate identity of the
Authority or any Guarantor;

(vi) any disability or other defense of the Authority or any Guarantor to
payment and performance of all Guaranteed Obligations other than the defense
that the Guaranteed Obligations shall have been fully and finally performed and
indefeasibly paid in cash;

(vii) the cessation from any cause whatsoever of the liability of the Authority
or any Guarantor in respect of the Guaranteed Obligations (other than as
provided herein);

(viii) impossibility or illegality of performance on the part of the Authority
or any Guarantor under the Note Purchase Agreement, the Notes or this Guarantee;

(ix) any change of the circumstances of the Authority or any Guarantor, whether
or not foreseen or foreseeable, including, without limitation, impossibility of
performance through fire, explosion, accident, labor disturbance, floods,
droughts, embargoes, wars (whether or not declared), civil commotions, acts of
God or the public enemy, delays or failure of suppliers or carriers, inability
to obtain materials, economic or political conditions, or any other causes
affecting performance, or any other force majeure, whether or not beyond the
control of the Authority or any Guarantor and whether or not of the kind
hereinbefore specified;

(x) any attachment, claim, demand, charge, Lien, order, process or encumbrance,
or any withholding or diminution, by reason of any taxes, assessments, expenses,
indebtedness, obligations or liabilities of any character, foreseen or
unforeseen, and whether or not valid, incurred by or against any Person, or
against any sums payable under the Note Purchase Agreement or the Notes or any
agreement or instrument related hereto so that such sums would be rendered
inadequate or would be unavailable to make the payment as herein provided;

(xi) any change in the ownership of the equity securities of the Authority, any
Guarantor or any other Person liable in respect of the Notes; or

(xii) any other action, happening, event or reason whatsoever that shall delay,
interfere with, hinder or prevent, or in any way adversely affect, the
performance by the Authority or any Guarantor of any of their obligations under
the Note Purchase Agreement, the Notes or this Guarantee.

 

A-1-4

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Section 26.5 Certain Waivers of Subrogation, Reimbursement and Indemnity. Until
payment in full is made on the Notes, each Guarantor hereby acknowledges and
agrees that:

(a) no Guarantor shall have any right of subrogation, contribution,
reimbursement, or indemnity whatsoever in respect of the Guaranteed Obligations,
and no right of recourse to or with respect to any assets or property of the
Authority on account of such Guaranteed Obligations;

(b) [reserved]; and

(c) each holder of Notes may specifically enforce the provisions of this
Section 2.5.

Section 26.6 [Reserved].

Section 26.7 Invalid Payments. Each Guarantor further agrees that, to the extent
the Authority makes a payment or payments to any Noteholder, which payment or
payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required, for any of the foregoing
reasons or for any other reason, to be repaid or paid over to a custodian,
trustee, receiver or any other party or officer under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, state or federal law, or any common law or
equitable cause, then to the extent of such payment or repayment, the obligation
or part thereof intended to be satisfied shall be revived and continued in full
force and effect as if said payment had not been made.

Section 26.8 [Reserved].

Section 26.9 [Reserved].

Section 26.10 [Reserved].

Section 26.11 [Reserved].

Section 26.12 Election by Guarantors to Perform Obligations. Any election by any
Guarantor to pay or otherwise perform any of the obligations of the Authority
under the Notes, the Note Purchase Agreement or any agreement or instrument
related thereto shall not release the Authority, such Guarantor or any other
guarantor from such obligations or any of such Person’s other obligations under
the Notes, the Note Purchase Agreement or any agreement or instrument related
thereto.

Section 26.13 No Election of Remedies by Noteholders. Each Noteholder shall,
individually or collectively, have the right to seek recourse against any
Guarantor to the fullest extent provided for herein for such Guarantor’s
obligations under this Guarantee in respect of the Guaranteed Obligations. No
election to proceed in one form of action or proceeding, or against any party,
or on any obligation, shall constitute a waiver of such Noteholder’s right to
proceed in any other form of action or proceeding or against other parties
unless such Noteholder has expressly waived such right in writing. Specifically,
but without limiting the generality of the foregoing, no action or proceeding by
any Noteholder against the Authority or any Guarantor under any document or
instrument evidencing obligations of the Authority or any Guarantor to such
Noteholder shall serve to diminish the liability of any Guarantor under this
Guarantee, except to the extent that such Noteholder finally and unconditionally
shall have realized payment of the Guaranteed Obligations by such action or
proceeding.

 

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Section 26.14 Separate Action; Other Enforcement Rights. Subject to the terms of
the Note Purchase Agreement, each of the rights and remedies granted under this
Guarantee to each Noteholder in respect of the Notes held by such Noteholder may
be exercised by such Noteholder with notice by such Noteholder to, but without
the consent of or any other action by, any other Noteholder; provided, however,
that the maturity of the Notes may only be accelerated in accordance with the
provisions of the Note Purchase Agreement or operation of law. Each Noteholder
may proceed to protect and enforce the Unconditional Guarantee by suit or suits
or proceedings in equity, at law or in bankruptcy, and whether for the specific
performance of any covenant or agreement contained herein or in execution or aid
of any power herein granted or for the recovery of judgment for the obligations
hereby guarantied or for the enforcement of any other proper, legal or equitable
remedy available under applicable law.

Section 26.15 Noteholder Set-off. Each Noteholder shall have, to the fullest
extent permitted by law and this Guarantee, a right of set-off against any and
all credits and any and all other property of any or all of the Guarantors, now
or at any time whatsoever, with or in the possession of, such Noteholder, or
anyone acting for such Noteholder, to ensure the full performance of any and all
obligations of each Guarantor hereunder following and during the continuance of
an Event of Default.

Section 26.16 Delay or Omission; No Waiver. No course of dealing on the part of
any Noteholder and no delay or failure on the part of any such Person to
exercise any right hereunder shall impair such right or operate as a waiver of
such right or otherwise prejudice such Person’s rights, powers and remedies
hereunder.

Section 26.17 [Reserved].

Section 26.18 Cumulative Remedies. No remedy under this Guarantee, the Note
Purchase Agreement or the Notes is intended to be exclusive of any other remedy,
but each and every remedy shall be cumulative and in addition to any and every
other remedy given pursuant to this Guarantee, the Note Purchase Agreement or
the Notes.

Section 26.19 [Reserved].

Section 26.20 Limitation on Guaranteed Obligation. Notwithstanding anything in
Section 2.1 or elsewhere in this Guarantee, the Note Purchase Agreement or the
Notes to the contrary, the obligations of each Guarantor hereunder shall at each
point in time be limited to an aggregate amount equal to the greatest amount
that would not result in such obligations being subject to avoidance, or
otherwise result in such obligations being unenforceable, at such time under
applicable federal or state law (including, without limitation, to the extent,
and only to the extent, applicable to each Guarantor, Section 548 of the
Bankruptcy Code of the United States of America and any comparable provisions of
the law of any other jurisdiction, any capital preservation law of any
jurisdiction and any other law of any jurisdiction that at such time limits the
enforceability of the obligations of such Guarantor hereunder).

Section 26.21 [Reserved].

 

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Section 26.22 Release of Guarantor. A Guarantor will be automatically and
unconditionally released from its Unconditional Guarantee upon the occurrence of
any of the following:

(i) the sale, exchange, transfer or other disposition (other than to any other
Guarantor or the Authority) to any Person that is not required to become a
Guarantor of all of the Capital Stock of (including by way of merger or
consolidation), or all or substantially all the assets of, such Guarantor, which
sale, exchange or transfer is made in accordance with the provisions of the Note
Purchase Agreement;

(ii) such Guarantor otherwise ceases to be a Subsidiary of the Authority in a
transaction permitted by the Note Purchase Agreement;

(iii) such Guarantor ceases to guarantee any other Indebtedness of the Authority
or ceases to be obligated on other Indebtedness in excess of $50.0 million; or

(iv) the designation of such Guarantor as an Unrestricted Subsidiary in
accordance with the provisions of the Note Purchase Agreement;

provided, in each such case, the Authority has delivered to the Noteholders an
Officer’s Certificate certifying (i) as to the satisfaction of the relevant
requirements of this Section 2.22 and (ii) stating that all conditions precedent
provided for in the Note Purchase Agreement relating to the applicable
transactions have been complied with. At the request of the Authority or the
relevant Guarantor, the Noteholders shall execute and deliver an appropriate
instrument, in the form provided by the Authority or such Guarantor, evidencing
the release of any Guarantor pursuant to this Section 2.22.

 

SECTION 27. INTERPRETATION OF THIS GUARANTEE

Section 27.1 Defined Terms. For purposes of this Guarantee, the following terms
have the meanings specified below or provided for in the Section of this
Guarantee referred to immediately following such term (such definitions to be
equally applicable to both the singular and plural forms of the terms defined).
Capitalized terms used herein and not otherwise defined herein have the meaning
specified in the Note Purchase Agreement.

(a) Authority — Section 1.

(b) Guaranteed Obligations — Section 2.1.

(c) Guarantors — has the meaning assigned to such term in the introductory
paragraph hereof.

(d) Guarantee Joinder – a Guarantee Joinder in the form of Annex 1 hereto.

(e) Note Purchase Agreement — Section 1.

(f) Noteholder — Section 2.1.

(g) Notes — Section 1.

(h) Unconditional Guarantee — Section 2.1.

 

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SECTION 28. REPRESENTATIONS AND WARRANTIES.

Each Guarantor represents and warrants, as to itself as of the date hereof, that
each of the representations and warranties made by the Authority in Section 5 of
the Note Purchase Agreement and pertaining to such Guarantor is true and correct
with respect to each Guarantor on the date hereof in all material respects.

 

SECTION 29. [RESERVED].

 

SECTION 30. MISCELLANEOUS.

Section 30.1 Successors and Assigns.

All covenants and other agreements contained in this Guarantee by or on behalf
of any of the parties hereto bind and inure to the benefit of their respective
successors and assigns whether so expressed or not.

Section 30.2 Severability. Any provision of this Guarantee that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

Section 30.3 Communications. All notices and communications provided for
hereunder shall be in writing, shall be delivered in the manner required by the
Note Purchase Agreement, and shall be addressed, if to any Guarantor, to it care
of the Authority at the address set forth in the Note Purchase Agreement, and if
to any of the Noteholders:

(a) if such Noteholder is a Purchaser, at the address for such Purchaser set
forth on Schedule B to the Note Purchase Agreement, and further including any
parties referred to on such schedules (which are required to receive notices in
addition to such Noteholder), and

(b) if such Noteholder is not a Purchaser, at the address for such Noteholder as
such Noteholder shall have specified to the Authority in writing,

or to any such party at such other address as such party may designate by notice
duly given in accordance with this Section 6.3. Notices shall be deemed given
only when actually received.

Section 30.4 Applicable Law. This Guarantee shall be governed by and construed
in accordance with the law of the State of New York, without regard to conflict
of law principles that would result in the application of any Law other than the
Laws of the State of New York. Each party hereto each hereby consents to the
application of New York civil law to the construction, interpretation and
enforcement of this Guarantee, and to the application of New York civil law to
the procedural aspects of any suit, action or proceeding relating thereto,
including but not limited to legal process, execution of judgments and other
legal remedies.

Section 30.5 Benefits of Guarantee Restricted to Noteholders. Nothing express or
implied in this Guarantee is intended or shall be construed to give to any
Person other than each Guarantor

 

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and the Noteholders any legal or equitable right, remedy or claim under or in
respect hereof or any covenant, condition or provision herein contained; and all
such covenants, conditions and provisions are and shall be held to be for the
sole and exclusive benefit of each Guarantor and the Noteholders.

Section 30.6 Survival of Representations and Warranties; Entire Agreement. All
representations and warranties contained herein shall survive the execution and
delivery of this Guarantee and the purchase or transfer by any Purchaser of any
Note or portion thereof or interest therein, and may be relied upon by any
subsequent holder of a Note, regardless of any investigation made at any time by
or on behalf of such Purchaser or any other holder of a Note. Subject to the
preceding sentence, this Guarantee, the Note Purchase Agreement and the Notes
embody the entire agreement and understanding between each Purchaser and the
Guarantors and supersede all prior agreements and understandings relating to the
subject matter hereof.

Section 30.7 Additional Guarantors. Each Restricted Subsidiary of the Authority
that is required to become a party to this Guarantee pursuant to Section 10.12
of the Note Purchase Agreement shall, within 20 Business Days of the date on
which it first satisfies the conditions set forth in Section 10.12 of the Note
Purchase Agreement, become a Guarantor for all purposes of this Guarantee by
executing and delivering a Guarantee Joinder. Upon execution and delivery by the
Guarantor of a Guarantee Joinder in the form of Annex 1 hereto, such Restricted
Subsidiary shall become a Guarantor hereunder with the same force and effect as
if originally named as a Guarantor herein. The execution and delivery of any
such instrument shall not require the consent of any other Guarantor, Purchaser
or Noteholder. The rights and obligations of each Guarantor hereunder shall
remain in full force and effect notwithstanding the addition of any new
Guarantor as a party to this Guarantee.

Section 30.9 Amendment. Subject to Section 19 of the Note Purchase Agreement,
this Guarantee may be amended only in a writing executed by the Authority, each
Guarantor and the Required Holders.

Section 30.10 Survival. So long as the Guaranteed Obligations and all payment
obligations of each Guarantor hereunder shall not have been fully and finally
performed and indefeasibly paid, the obligations of each Guarantor hereunder
will survive.

Section 30.11 Counterparts. This Guarantee may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.

Section 30.12 Waiver of Jury Trial; Consent to Jurisdiction; Limited Waiver of
Sovereign Immunity, Etc.

(a) The Guarantors do not consent to the enforcement, levy, or other execution
of any judgment for money or other damages against any assets, real or personal,
of the Tribe, except that each of the Guarantors consents to the enforcement,
levy and other execution of any judgment for money or other damages, whether
obtained as a result of a judicial, administrative, or arbitral proceeding,
against any assets, real or personal (other than any property held in trust or

 

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subject to a restriction on alienation by the United States and property of
which the encumbrance or transfer is not permitted under any applicable federal
or state law or regulation (the “Excluded Property”)) of the Guarantor, but only
to the extent set forth in the remainder of this paragraph. Subject to the
foregoing, the Guarantors expressly and irrevocably waive their respective
sovereign immunity, to the extent applicable (and any defenses based thereon)
from unconsented suit, whether such suit be brought in law or in equity, or in
administrative proceedings or proceedings in arbitration, to permit the
commencement, maintenance, and enforcement of any action, by a Purchaser (or any
of its successors or permitted assigns), subject to any limitations contained in
this Guarantee, to interpret or enforce the terms of this Guarantee and to
enforce and execute any judgment resulting therefrom against such Guarantor or
the assets of such Guarantor (other than the Excluded Property). Without
limiting the generality of the foregoing, each of the Guarantors waives its
immunity (to the extent applicable) from unconsented suit to permit the
maintenance of the following actions in respect of this Guarantee.

(i) Courts. Each of the Guarantors waives its immunity from unconsented suit to
permit any court of competent jurisdiction to (A) enforce and interpret the
terms of this Guarantee and award and enforce the award of damages against the a
Guarantor owing as a consequence of a breach thereof, whether such award is the
product of litigation, administrative proceedings or arbitration; (B) determine
whether any consent or approval of a Guarantor has been improperly granted or
unreasonably withheld; (C) enforce any judgment prohibiting a Guarantor from
taking any action, or mandating or obligating a Guarantor to take any action,
including a judgment compelling a Guarantor to submit to binding arbitration;
and (D) adjudicate any claim under the Indian Civil Rights Act of 1968, 25
U.S.C. § 1302 (or any successor statute).

(ii) Arbitration. Each of the Guarantors waives its immunity from unconsented
suit to permit arbitrators, appointed and acting under the commercial
arbitration rules of the American Arbitration Association, to (1) enforce and
interpret the terms of this Guarantee and to award and enforce the award of any
damages against a Guarantor owing as a consequence thereof; (2) determine
whether any consent or approval of a Guarantor has been improperly granted or
unreasonably withheld; and (3) enforce any judgment prohibiting a Guarantor from
taking any action, or mandating or obligating a Guarantor to take any action,
including a judgment compelling a Guarantor to submit to binding arbitration.

(b) Each of the Guarantors hereby irrevocably and unconditionally submits, for
itself and its property, to the following courts, jurisdictions and venues
(i) for any action or proceeding arising out of or relating to this Guarantee:
(A) the United States District Court for the Southern District of New York, and
all courts to which any appeal therefrom may be available; (B) or if those
courts lack or decline jurisdiction over the action, then the courts of the
State of New York sitting in the City of New York, County of New York, and all
courts to which any appeal therefrom may be available; (C) or if none of the
foregoing courts shall have or accept jurisdiction, then the Mohegan Gaming
Disputes Court; and (D) or if none of the foregoing courts shall have or accept
jurisdiction, then to arbitration under the commercial arbitration rules of the
American Arbitration Association or (ii) for recognition or enforcement of any
judgment: (A) the courts identified in clause (i) above, (B) courts of the State
of Connecticut, and any appellate court from which any appeals therefrom are
available, as necessary to recognize or enforce such judgments as it applies to
any assets of the Authority, real or personal, located in the State of
Connecticut. Each of the parties hereto agrees that a final judgment in any such
action or proceeding may be enforced by any court of competent jurisdiction.

 

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(c) Each of the Guarantors hereby unconditionally and irrevocably waives the
jurisdiction of any court of the Tribe now or hereafter existing or created with
respect to any claim, except as otherwise specifically provided in this
Guarantee. Each of the Guarantors unconditionally and irrevocably waives, to the
fullest extent it may legally and effectively do so, the application of any rule
or doctrine relating to exhaustion of tribal remedies or comity or abstention
that might otherwise require a claim be heard in a court of the Tribe. Each of
the Guarantors expressly and irrevocably agrees that it shall not institute any
action in its own Tribal Court system in respect of any claim under this
Guarantee, but shall instead resort to the courts set forth, and in the order
set forth in Section 6.12(b) hereof.

(d) Each of the Guarantors hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guarantee in any court referred to in
Section 6.12(b) hereof. Each of the Guarantors hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(e) Each of the Guarantors irrevocably consents to service of process in the
manner provided for notices in Section 6.12(f) below. Nothing in this Guarantee
will affect the right of any party to this Guarantee to serve process in any
other manner permitted by law.

(f) Each of the Guarantors consents to process being served by or on behalf of
any holder of Notes in any suit, action or proceeding by mailing a copy thereof
by registered or certified mail (or any substantially similar form of mail),
postage prepaid, return receipt requested, to it at its address specified in
Section 20 of the Note Purchase Agreement or at such other address of which such
holder shall then have been notified pursuant to said Section. Each of the
Guarantors agrees that such service upon receipt (i) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

(g) Nothing in this Section 6.12 shall limit any right that the Noteholders may
have to bring proceedings against the Guarantors in the courts of any
appropriate jurisdiction or to enforce in any lawful manner a judgment obtained
in one jurisdiction in any other jurisdiction.

(h) Each of the Guarantors hereby waives, to the fullest extent permitted by
applicable Law, any right it may have to a trial by jury in any legal proceeding
directly or indirectly arising out of or relating to this Guarantee or the
transactions contemplated hereby or thereby (whether based on contract, tort or
any other theory). Each party hereto (1) certifies that no representative, agent
or attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (2) acknowledges that it and the other parties hereto have
been induced to enter into this Guarantee by, among other things, the mutual
waivers and certifications in this Section 6.12(h).

 

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Section 30.13 No Personal Liability. Neither the Tribe nor any director,
officer, office holder, employee, agent, representative or member of the
Authority, any Guarantor or the Tribe, as such, shall have any liability for,
nor be subject to suit in respect of, any obligations of the Authority or any
Guarantor under the Notes, the Note Purchase Agreement, this Guarantee or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.

Section 30.14 Note Document. This Guarantee is a “Note Document” as defined in
the Note Purchase Agreement.

*    *    *    *    *

 

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IN WITNESS WHEREOF, each of the undersigned Guarantors has caused this Guarantee
to be executed on each such Guarantor’s behalf by a duly authorized officer of
each such Guarantor as of the date first written above.

 

Very truly yours, MOHEGAN BASKETBALL CLUB LLC By  

 

Name:   Title:   MOHEGAN COMMERCIAL VENTURES PA, LLC By  

 

Name:   Title:   DOWNS RACING, L.P. By  

 

Name:   Title:   BACKSIDE, L.P. By  

 

Name:   Title:   MILL CREEK LAND, L.P. By  

 

Name:   Title:  

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NORTHEAST CONCESSIONS, L.P. By  

 

Name:   Title:   MOHEGAN GOLF, LLC By  

 

Name:   Title:   WISCONSIN TRIBAL GAMING, LLC By  

 

Name:   Title:   MTGA GAMING, LLC By  

 

Name:   Title:   MOHEGAN VENTURES WISCONSIN, LLC By  

 

Name:   Title:   MOHEGAN VENTURES-NORTHWEST, LLC By  

 

Name:   Title:  

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ANNEX 1

GUARANTEE JOINDER

GUARANTEE JOINDER, dated as of [                    ], made by
                    , a                      (the “Additional Guarantor”), in
favor of each of the Noteholders. All capitalized terms not defined herein shall
have the meaning ascribed to them in the Note Purchase Agreement or the
Guarantee (as defined below), as applicable.

 

SECTION 31. PRELIMINARY STATEMENT

The Mohegan Tribal Gaming Authority (the “Authority”), a governmental
instrumentality of The Mohegan Tribe of Indians of Connecticut, a sovereign
tribe recognized by the United States of America pursuant to 25 C.F.R. § 83 (the
“Tribe”), has heretofore issued its Floating Rate Senior Notes due December 15,
2017 (as may be amended, restated, supplemented or otherwise modified from time
to time, the “Notes”), pursuant to a Note Purchase Agreement, dated as of
November 20, 2015 (as may be amended, restated, supplemented or otherwise
modified from time to time, the “Note Purchase Agreement”), between the
Authority, the Tribe (for purposes of the specific sections detailed therein),
and the Purchasers party thereto.

In connection with the Note Purchase Agreement, certain of the Authority’s
Subsidiaries have entered into the Guarantee Agreement, dated as of November 20,
2015 (as may be amended, restated, supplemented or otherwise modified from time
to time, the “Guarantee”) in favor of each of the Noteholders.

Pursuant to Section 10.12 of the Note Purchase Agreement, the Additional
Guarantor is required to become a party to the Guarantee.

The Additional Guarantor will receive direct and indirect economic, financial
and other benefits from the indebtedness incurred under the Note Purchase
Agreement and the Notes by the Authority, and the incurrence of such
indebtedness is in the best interests of the Additional Guarantor.

All acts and proceedings required by law and by the certificate of incorporation
and bylaws (or other applicable constitutive documents) of the Additional
Guarantor necessary to constitute this Guarantee Joinder a valid and binding
agreement for the uses and purposes set forth herein in accordance with its
terms have been done and taken, and the execution and delivery hereof has been
in all respects duly authorized.

 

SECTION 32. GUARANTEE AND OTHER RIGHTS AND UNDERTAKINGS

Section 32.1 Guarantee and Other Rights and Undertakings. By executing and
delivering this Guarantee Joinder, the Additional Guarantor, as provided in
Section 6.7 of the Guarantee, hereby becomes a party to the Guarantee as a
Guarantor thereunder with the same force and effect as if originally named
therein as a Guarantor and, without limiting the generality of the foregoing,

 

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hereby agrees to all terms and provisions of the Guarantee applicable to it as a
Guarantor thereunder and assumes all obligations and liabilities of a Guarantor
thereunder. The Additional Guarantor hereby represents and warrants that each of
the representations and warranties contained in Section 5 of the Note Purchase
Agreement, insofar as such representations pertain to it, is true and correct in
all material respects on and as of the date hereof (after giving effect to this
Guarantee Joinder) as if made on and as of such date (except for representations
and warranties expressly stated to relate to a specific earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date). Each reference to a “Guarantor” in
the Guarantee shall be deemed to include the Additional Guarantor. The Guarantee
is hereby incorporated herein by reference. Except as expressly supplemented
hereby, the Guarantee shall remain in full force and effect.

Section 32.2 Applicable Law. This Guarantee Joinder shall be governed by and
construed in accordance with the law of the State of New York, without regard to
conflict of law principles that would result in the application of any Law other
than the Laws of the State of New York. Each party hereto each hereby consents
to the application of New York civil law to the construction, interpretation and
enforcement of this Agreement, and to the application of New York civil law to
the procedural aspects of any suit, action or proceeding relating thereto,
including but not limited to legal process, execution of judgments and other
legal remedies.

Section 32.3 Counterparts. This Guarantee Joinder may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.

Section 32.4 Note Document. This Guarantee is a “Note Document” as defined in
the Note Purchase Agreement.

Section 32.5 Limited Waiver of Sovereign Immunity. The Additional Guarantor does
not consent to the enforcement, levy, or other execution of any judgment for
money or other damages against any assets, real or personal, of the Tribe,
except that the Additional Guarantor consents to the enforcement, levy and other
execution of any judgment for money or other damages, whether obtained as a
result of a judicial, administrative, or arbitral proceeding, against any
assets, real or personal (other than any property held in trust or subject to a
restriction on alienation by the United States and property of which the
encumbrance or transfer is not permitted under any applicable federal or state
law or regulation (the “Excluded Property”)) of the Additional Guarantor, but
only to the extent set forth in the remainder of this paragraph. Subject to the
foregoing, the Additional Guarantor expressly and irrevocably waives its
sovereign immunity, to the extent applicable (and any defenses based thereon)
from unconsented suit, whether such suit be brought in law or in equity, or in
administrative proceedings or proceedings in arbitration, to permit the
commencement, maintenance, and enforcement of any action, by a Purchaser (or any
of its successors or permitted assigns), subject to any limitations contained in
this Guarantee Joinder, to interpret or enforce the terms of this Guarantee
Joinder and to enforce and execute any judgment resulting therefrom against such
Additional Guarantor or the assets of the Additional Guarantor (other than the
Excluded Property). Without limiting the generality of the foregoing, the
Additional Guarantor waives its immunity (to the extent applicable) from
unconsented suit to permit the maintenance of the following actions in respect
of this Guarantee.

 

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(i) Courts. The Additional Guarantor waives its immunity from unconsented suit
to permit any court of competent jurisdiction to (A) enforce and interpret the
terms of this Guarantee and award and enforce the award of damages against the
Additional Guarantor owing as a consequence of a breach thereof, whether such
award is the product of litigation, administrative proceedings or arbitration;
(B) determine whether any consent or approval of the Additional Guarantor has
been improperly granted or unreasonably withheld; (C) enforce any judgment
prohibiting the Additional Guarantor from taking any action, or mandating or
obligating the Additional Guarantor to take any action, including a judgment
compelling the Additional Guarantor to submit to binding arbitration; and
(D) adjudicate any claim under the Indian Civil Rights Act of 1968, 25 U.S.C. §
1302 (or any successor statute).

(ii) Arbitration. The Additional Guarantor waives its immunity from unconsented
suit to permit arbitrators, appointed and acting under the commercial
arbitration rules of the American Arbitration Association, to (1) enforce and
interpret the terms of this Guarantee Joinder and to award and enforce the award
of any damages against the Additional Guarantor owing as a consequence thereof;
(2) determine whether any consent or approval of a Guarantor has been improperly
granted or unreasonably withheld; and (3) enforce any judgment prohibiting the
Additional Guarantor from taking any action, or mandating or obligating the
Additional Guarantor to take any action, including a judgment compelling the
Additional Guarantor to submit to binding arbitration.

[signature pages follow]

 

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IN WITNESS WHEREOF, the undersigned Additional Guarantor has caused this
Guarantee Joinder to be executed on the Additional Guarantor’s behalf by a duly
authorized officer of the Additional Guarantor as of the date first written
above.

 

[ADDITIONAL GUARANTOR] By:  

 

Name:   Title:   Address for notices and communications:

 

 

 

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[Form of Note]

MOHEGAN TRIBAL GAMING AUTHORITY

Floating Rate Senior Note Due December 15, 2017

 

No. [    ]

$[            ]

  

[Date]

CUSIP[                    ]

FOR VALUE RECEIVED, the undersigned, MOHEGAN TRIBAL GAMING AUTHORITY (herein
called the “Authority”), a governmental instrumentality of The Mohegan Tribe of
Indians of Connecticut, a federally recognized Indian Tribe and Native American
sovereign nation (the “Tribe”), hereby promises to pay to
[                    ], or registered assigns, the principal sum of
[                    ] DOLLARS (or so much thereof as shall not have been
prepaid) on December 15, 2017 (the “Maturity Date”), with (a) interest payable
as and at the rate set forth below, and (b) Make-Whole Amount, Breakage Costs
and Applicable Premium, as and to the extent required pursuant to the Note
Purchase Agreement (as defined below) in connection with any payment of
principal hereof.

Interest on the unpaid balance hereof will accrue at a per annum rate (the
“LIBOR Rate”) equal to the sum of (x) Three-Month LIBOR (as defined and
determined below) and (y) 4.45% (and to the extent permitted by law, on any
overdue payment of interest or principal and on any overdue payment of any
Make-Whole Amount, Breakage Costs or Applicable Premium, at a rate equal to the
Default Rate) and will be payable quarterly in advance on the date hereof and on
each other Interest Payment Date, in each case, for the Interest Period
commencing on the date hereof or such other Interest Payment Date, as
applicable; provided that interest accrued at the Default Rate shall be payable
on demand. “Interest Payment Date” means the date hereof, each Quarterly Date
and the Maturity Date. “Quarterly Date” means the 15th day of each March, June,
September and December in each year (or, if any such day is not a Business Day,
the next succeeding Business Day). “Interest Period” means the period commencing
on the date hereof and ending on the first Quarterly Date thereafter (the
“Initial Interest Period”), and each subsequent period commencing on such
Quarterly Date and ending on the next succeeding Quarterly Date, provided that
the final such Interest Period shall end on and include the Maturity Date of the
Note. “Business Day” means each “Business Day” (as defined in the Note Purchase
Agreement) that is a day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market.

Interest on this Note will accrue from the date of original issuance or, if
interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year for the actual number
of days elapsed (including the first day but excluding the last day).

If the Maturity Date is not a Business Day at the relevant place of payment, the
Authority will pay interest, if any, and principal and premium, if any, on the
next day that is a Business Day at such place of payment as if payment were made
on the date such payment was due.

 

SCHEDULE 1

(to Note Purchase Agreement)

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The interest rate applicable to each day of each Interest Period commencing on
the related Interest Payment Date, or the date hereof in the case of the Initial
Interest Period, will be the Three-Month LIBOR determined as of the applicable
Interest Determination Date for such Interest Period. The “Interest
Determination Date” for each Interest Period will be the second London business
day immediately preceding (i) the date hereof, in the case of the Initial
Interest Period, or thereafter (ii) the applicable Interest Payment Date on
which such Interest Period commences, in the case of each other Interest Period.

UBS AG, London Branch, or its successor appointed by the Authority (with the
consent (a) of the Required Holders and (b) if UBS AG, London Branch or any
Affiliate thereof or GIFS Capital Company LLC is at such time a holder of any of
the Notes, in the case of the first appointment of a successor calculation agent
hereunder, of UBS AG, London Branch), will act as calculation agent.
“Three-Month LIBOR” will be determined by the calculation agent as of the
applicable Interest Determination Date in accordance with the following
provisions:

(i) With respect to an Interest Determination Date, Three-Month LIBOR will be
the rate for deposits in U.S. dollars having a maturity of three months
commencing on the Interest Payment Date that appears on the designated LIBOR
page as of approximately 11:00 a.m., London time, on that Interest Determination
Date. If no rate appears, Three-Month LIBOR, in respect of that Interest
Determination Date, will be determined as follows: the calculation agent shall
request the principal London offices of each of four major reference banks
(which may include affiliates of any holder of any Note or beneficial owner) in
the London interbank market, as selected and identified by the Authority to
provide the calculation agent with its offered quotation for deposits in U.S.
dollars for the period of three months, commencing on the Interest Payment Date,
to prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on that Interest Determination Date and in a principal amount that
is representative for a single transaction in U.S. dollars in that market at
that time. If at least two quotations are provided, then Three-Month LIBOR on
that Interest Determination Date will be the arithmetic mean of those
quotations. If fewer than two quotations are provided, then Three-Month LIBOR on
the Interest Determination Date will be the arithmetic mean of the rates quoted
at approximately 11:00 a.m., New York City time, on the Interest Determination
Date by three major banks (which may include affiliates of any holder of any
Note or beneficial owner) in The City of New York selected and identified by the
Authority for loans in U.S. dollars to leading European banks, having a
three-month maturity and in a principal amount that is representative for a
single transaction in U.S. dollars in that market at that time; provided,
however, that if the banks selected and identified by the Authority are not
providing quotations in the manner described by this sentence, Three-Month LIBOR
for such interest determination date will be Three-Month LIBOR determined with
respect to the immediately preceding Interest Determination Date.

(ii) However, if any Interest Period should be less than three months, then
“Three-Month LIBOR” for such Interest Period shall be determined by
interpolating linearly between (x) the rate appearing on the designated LIBOR
page for a term closest to, but shorter than, such Interest Period and (y) the
rate appearing on the designated LIBOR page for a term closest to, but longer
than, such Interest Period.

(iii) The designated LIBOR page is the Reuters screen “LIBOR01,” or any
successor service for the purpose of displaying the London interbank rates of
major banks for U.S. dollars.

 

1-2

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The Reuters screen “LIBOR01” is the display designated as the Reuters screen
“LIBOR01,” or such other page as may replace the Reuters screen “LIBOR01” on
that service or such other service or services as may be nominated for the
purpose of displaying London interbank offered rates for U.S. dollar deposits by
ICE Benchmark Administration Limited (“IBA”) or its successor or such other
entity assuming the responsibility of IBA or its successor in calculating the
London Interbank Offered Rate in the event IBA or its successor no longer does
so.

All percentages resulting from any calculation of any interest rate for the
Notes will be rounded, if necessary, to the nearest one hundred thousandth of a
percentage point, with five one-millionths of a percentage point rounded upward
(e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and
all dollar amounts will be rounded to the nearest cent, with one-half cent being
rounded upward. Any percentage resulting from any calculation of any interest
rate for the notes less than 0.00% will be deemed to be 0.00% (or .0000).

Promptly upon such determination, the calculation agent will notify the
Authority of the interest rate for the new Interest Period. Upon request of the
holder of this Note, the calculation agent will provide to such holder the
interest rate in effect on the date of such request and, if determined, the
interest rate for the next Interest Period.

All calculations made by the calculation agent for the purposes of calculating
interest on this Note shall be conclusive and binding on the holder and the
Authority, absent manifest errors.

Upon any payment or prepayment of principal on this Note, any interest paid in
advance on such principal amount and not accrued (constituting, for the
avoidance of doubt, interest payable with respect to a period after the date of
such payment or prepayment) shall be reimbursed to the Authority by setoff
against the amount required to be paid by the Authority in respect of such
principal and any Breakage Costs, Make-Whole Amount and Applicable Premium with
respect thereto, and, to the extent not so offset at the time such payment or
prepayment of principal is made, shall be payable to the Authority by the holder
of this Note within 10 Business Days of written demand therefor (accompanied by
calculation of such prepaid unaccrued interest in reasonable detail) by the
Authority to such holder, provided that such written demand is delivered to such
holder no later than 30 days after the date of such payment or prepayment of
principal.

Payments of principal of, interest on and any Breakage Costs, Make-Whole Amount
and Applicable Premium with respect to this Note are to be made in lawful money
of the United States of America in New York, New York at The Bank of New York
Mellon or at such other place as the Authority shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.

This Note is one of a series of notes (herein called the “Notes”) issued
pursuant to the Note Purchase Agreement, dated as of November 20, 2015 (as from
time to time amended, the “Note Purchase Agreement”), between the Authority and
the respective Purchasers named therein and is entitled to the benefits thereof.
In the event of a conflict between the terms of this Note and the Note Purchase
Agreement, the Note Purchase Agreement shall control. Each holder of this Note
will be deemed, by its acceptance hereof, to have agreed to the confidentiality
provisions set forth in Section 22 of the Note Purchase Agreement. Unless
otherwise indicated, capitalized terms used in this Note shall have the
respective meanings ascribed to such terms in the Note Purchase Agreement.

 

1-3

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This Note is a registered Note and, subject to Section 15.2 of the Note Purchase
Agreement, upon surrender of this Note for registration of transfer accompanied
by a written instrument of transfer duly executed, by the registered holder
hereof or such holder’s attorney duly authorized in writing, a new Note for a
like principal amount will be issued to, and registered in the name of, the
transferee. Prior to due presentment for registration of transfer, the Authority
may treat the person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes, and the
Authority will not be affected by any notice to the contrary.

This Note is subject to optional and mandatory prepayments, in whole or from
time to time in part, at the times and on the terms specified in the Note
Purchase Agreement.

If an Event of Default occurs and is continuing, the principal of this Note may
be declared or otherwise become due and payable in the manner, at the price
(including any applicable Breakage Costs, Make-Whole Amount and Applicable
Premium) and with the effect provided in the Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of
the Authority and the holder of this Note shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would permit the application of the laws of a jurisdiction other than such
State.

All provisions in the Section 24.7 Note Purchase Agreement related to limited
waivers of sovereign immunity, consents to jurisdiction and arbitration, waivers
of rights with respect to tribal courts and other matters related to the
resolutions of disputes are hereby incorporated by reference herein mutatis
mutandis, with the same force and effect as though all such provisions were set
forth at length herein.

[Signature page follows.]

 

1-4

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MOHEGAN TRIBAL GAMING AUTHORITY By  

 

  [Title]

 

1-5

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SCHEDULE 5.8

EXISTING LITIGATION

None.

 

 

SCHEDULES

(to Note Purchase Agreement)

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

SCHEDULE 5.18

ENVIRONMENTAL MATTERS

None.

 

 

SCHEDULES

(to Note Purchase Agreement)

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

MOHEGAN TRIBAL GAMING AUTHORITY

ONE MOHEGAN SUN BOULEVARD

UNCASVILLE, CT 06382

INFORMATION RELATING TO PURCHASERS

 

Name and Address of Purchaser    Principal Amount of
Notes to be Purchased  

GIFS Capital Company LLC

   $ 100,000,000.00   

 

(1)   

All payments by wire transfer of immediately available funds to:

 

BK OF NYC

ABA # 021 000 018

A/C NAME: GIFS PROJECT MAIZE COLLATERAL A/C

Account Number 5250618400

 

Attn: Darrel Thompson, 212-815-2886 with sufficient information to identify the
source and application of such funds.

   (2)   

All notices of payments and written confirmations of such wire transfers:

GIFS Capital Company, LLC

227 West Monroe, Suite 4900

Chicago, IL 60606

Attn: Operations Dept.

   (3)   

E-mail address for Electronic Delivery:

chioperations@guggenheimpartners.com

   (4)   

All other communications:

GIFS Capital Company, LLC

227 West Monroe, Suite 4900

Chicago, IL 60606

Attn: Operations Dept.

Email: chioperations@guggenheimpartners.com

  

 

SCHEDULE B

(to Note Purchase Agreement)