Exhibit
4.2


 




 





 


REGISTRATION RIGHTS AGREEMENT


 


 


Dated as of July 31, 2003


 


 


by and among


 


 


MANDALAY RESORT GROUP


 


 


and


 


 


BANC OF AMERICA
SECURITIES LLC 

DEUTSCHE BANK SECURITIES INC.

CITIGROUP GLOBAL MARKETS INC.

CREDIT SUISSE FIRST BOSTON LLC

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

SG COWEN SECURITIES CORPORATION

CREDIT LYONNAIS SECURITIES (USA) INC.

SCOTIA CAPITAL (USA) INC.

BNY CAPITAL MARKETS, INC. 

MIZUHO INTERNATIONAL plc


 




 





 

















 


REGISTRATION
RIGHTS AGREEMENT


 


THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is made and entered into as of July 31, 2003 by and among MANDALAY
RESORT GROUP, a Nevada corporation (the “Company”), and BANC OF
AMERICA SECURITIES LLC (“Banc of America”), DEUTSCHE BANK SECURITIES
INC., CITIGROUP GLOBAL MARKETS INC., CREDIT SUISSE FIRST BOSTON LLC, MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED, SG COWEN SECURITIES
CORPORATION, CREDIT LYONNAIS SECURITIES (USA) INC., SCOTIA CAPITAL (USA) INC.,
BNY CAPITAL MARKETS, INC., and MIZUHO INTERNATIONAL plc (collectively, the “Initial Purchasers”).


 


This Agreement is made pursuant to the Purchase
Agreement dated July 22, 2003 by and among the Company and the
Initial Purchasers (the “Purchase Agreement”) that provides for, among
other things, the sale by the Company to the Initial Purchasers of an aggregate
of $250,000,000 principal amount of the Company’s 61⁄2% Senior Notes due 2009
(the “Notes”).  In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Company
has agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement.  The execution and delivery of this Agreement
is a condition to the closing under the Purchase Agreement.


 


In consideration of the foregoing, the parties
hereto agree as follows:


 


1.  Definitions.  As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:


 


“Additional Interest” see Section 2(e)
hereof.


 


“Advice” see the last paragraph
Section 3 hereof.


 


“Applicable Period” see Section 3(s)
hereof.


 


“Banc of America” shall have the meaning set
forth in the preamble to this Agreement.


 


“Business Day” shall mean a day that is not a
Saturday, a Sunday, or a day on which banking institutions in New York, New
York are required to be closed.


 


“Closing Time” shall mean the Closing Time as
defined in the Purchase Agreement.


 

















 


“Company” shall have the meaning set forth in
the preamble to this Agreement and also includes the Company’s successors and
permitted assigns.


 


“Depositary” shall mean The Depository Trust
Company, or any other depositary appointed by the Company; provided, however,
that such depositary must have an address in the Borough of Manhattan, in The
City of New York.


 


“Effectiveness Period” see Section 2(b)
hereof.


 


“Effectiveness Target Date” see
Section 2(e) hereof.


 


“Event Date” see Section 2(e) hereof.


 


“Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.


 


“Exchange Offer” shall mean the exchange
offer by the Company of Exchange Notes for Notes pursuant to Section 2(a)
hereof.


 


“Exchange Offer Registration” shall mean a
registration under the Securities Act effected pursuant to Section 2(a)
hereof.


 


“Exchange Offer Registration Statement” shall
mean an exchange offer registration statement on Form S-1, S-3 or S-4 (or, if
applicable, on another appropriate form), and all amendments and supplements to
such registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.


 


“Exchange Period” see Section 2(a)
hereof.


 


“Exchange Notes” shall mean the 61⁄2% Senior
Notes due 2009, issued by the Company under the Indenture containing terms
identical to the Notes (except that (i) interest thereon shall accrue from the
last date on which interest was paid on the Notes or, if no such interest has
been paid, from the Issue Date, (ii) the transfer restrictions with respect to
the Notes and all registration rights in respect thereof shall be eliminated
and (iii) the provisions relating to Additional Interest to be offered to
Holders of Notes in exchange for Notes pursuant to the Exchange Offer shall be
eliminated).


 


“Holders” shall mean the Initial Purchasers,
for so long as they own any Transfer Restricted Notes, each of their direct and
indirect successors, assigns and transferees who become registered owners of
Transfer Restricted Notes under the Indenture and each Participating
Broker-Dealer that holds Exchange Notes for so long as such Participating
Broker-Dealer is required to deliver a prospectus meeting the 


 


2

















 


requirements of the
Securities Act in connection with any resale of such Exchange Notes.


 


“Indenture” shall mean the Indenture relating
to the Notes dated as of July 31, 2003 between the Company and The
Bank of New York, as trustee, as the same may be amended from time to time in
accordance with the terms thereof.


 


“Initial Purchasers” shall have the meaning
set forth in the preamble to this Agreement.


 


“Inspectors” see Section 3(m) hereof.


 


“Issue Date” shall mean the date on which the
Notes are originally issued.


 


“Majority Holders” shall mean the Holders of
a majority of the aggregate principal amount of outstanding Transfer Restricted
Notes.


 


“Notes” shall have the meaning set forth in
the preamble of this Agreement.


 


“Participating Broker-Dealer” shall have the
meaning set forth in Section 3(s) hereof.


 


“Person” shall mean an individual,
partnership, corporation, trust or unincorporated organization, or a government
or agency or political subdivision thereof.


 


“Private Exchange” see Section 2(a)
hereof.


 


“Private Exchange Notes” see
Section 2(a) hereof.


 


“Prospectus” shall mean the prospectus
included in a Registration Statement, including any preliminary prospectus, and
any such prospectus as amended or supplemented by any prospectus supplement,
including a prospectus supplement with respect to the terms of the offering of
any portion of the Transfer Restricted Notes covered by a Shelf Registration Statement,
and by all other amendments and supplements to a prospectus, including
post-effective amendments, and in each case including all material incorporated
by reference therein.


 


“Purchase Agreement” shall have the meaning
set forth in the preamble to this Agreement.


 


“Records” see Section 3(m) hereof.


 


3

















 


“Registration Expenses” shall mean any and
all expenses incident to performance of or compliance by the Company with this
Agreement, including without limitation: 
(i) all applicable SEC, stock exchange or National Association of
Securities Dealers, Inc. (the “NASD”) registration and filing fees, (ii)
all fees and expenses incurred in connection with compliance with state securities
or blue sky laws (including reasonable fees and disbursements of one counsel
for Holders that are Initial Purchasers in connection with blue sky
qualification of any of the Exchange Notes or Transfer Restricted Notes) and
compliance with the rules of the NASD, (iii) all applicable expenses incurred
by the Company in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus and any
amendments or supplements thereto, and in preparing or assisting in preparing
any other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, if any, (v) the fees and disbursements
of counsel for the Company, (vii) all fees and expenses incurred in connection
with the listing, if any, of any of the Transfer Restricted Notes on any
securities exchange or exchanges, if the Company, in its discretion, elects to
make any such listing; but excluding fees of counsel to the Holders and
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Transfer Restricted Notes by a Holder.


 


“Registration Statement” shall mean any
registration statement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement) of the Company which covers any
of the Exchange Notes or Transfer Restricted Notes pursuant to the provisions
of this Agreement, and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.


 


“SEC” shall mean the Securities and Exchange
Commission.


 


“Securities Act” shall mean the Securities
Act of 1933, as amended.


 


“Shelf Registration” shall mean a
registration effected pursuant to Section 2(b) hereof.


 


“Shelf Registration Event Date” see
Section 2(b).


 


“Shelf Registration Statement” shall mean a
“shelf” registration statement of the Company pursuant to the provisions of
Section 2(b) hereof that covers all of the Transfer Restricted Notes or
all of the Private Exchange Notes, as the case may be, on an appropriate form
under Rule 415 under the Securities Act, or any similar rule that may be
adopted by the SEC, and all amendments and supplements to such registration


 


4

















 


statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.


 


“Target Consummation Date” see
Section 2(a).


 


“Target Effectiveness Date” see
Section 2(a).


 


“TIA” shall have the meaning set forth in
Section 3(k) hereof.


 


“Transfer Restricted Notes” means each Note
until (i) the date on which such has been exchanged by a person other than
a broker-dealer for an Exchange Note in the Exchange Offer, (ii) following
the exchange by a broker-dealer in the Exchange Offer of a Note for an Exchange
Note, the date on which such Exchange Note is sold to a purchaser who receives
from such broker-dealer on or prior to the date of such sale a copy of the
prospectus contained in the Exchange Offer Registration Statement,
(iii) the date on which such Note has been effectively registered under
the Securities Act and disposed of in accordance with the Shelf Registration
Statement, (iv) the date on which such Note is distributed to the public
pursuant to Rule 144(k) under the Securities Act (or any similar provision
then in force, but not Rule 144A under the Securities Act), (v) such
Note shall have been otherwise transferred by the holder thereof and a new Note
not bearing a legend restricting further transfer shall have been delivered by
the Company and subsequent disposition of such Note shall not require
registration or qualification under the Securities Act or any similar state law
then in force or (vi) such Note ceases to be outstanding.


 


“Trustee” shall mean the trustee with respect
to the Notes under the Indenture.


 


2.  Registration Under the Securities Act.


 


(a)  Exchange Offer.  The Company shall, for the benefit of the
Holders, at the Company’s cost, (i) unless the Exchange Offer would not be
permitted by applicable law or SEC policy, file with the SEC within 90 days
after the Closing Time an Exchange Offer Registration Statement on an
appropriate form under the Securities Act covering the offer by the Company to
the Holders to exchange all of the Transfer Restricted Notes (other than Private
Exchange Notes (as defined below)) for a like principal amount of Exchange Notes,
(ii) unless the Exchange Offer would not be permitted by applicable law or
SEC policy, use its best efforts to have such Exchange Offer Registration
Statement declared effective under the Securities Act by the SEC not later than
150 days after the Closing Time (the “Target Effectiveness Date”),
(iii) have such Registration Statement remain effective until the closing
of the Exchange Offer and (iv) unless the Exchange Offer would not be
permitted by applicable law or SEC policy, commence the Exchange Offer and use
its best efforts to issue,


 


5

















 


on or prior to the 180th day
after the Closing Time (the “Target Consummation Date”), Exchange Notes
in exchange for all Notes tendered prior thereto in the Exchange Offer.  Upon the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Exchange Offer,
it being the objective of such Exchange Offer to enable each Holder eligible
and electing to participate in the Exchange Offer to exchange Transfer
Restricted Notes for Exchange Notes (assuming that such Holder is not an
affiliate of the Company within the meaning of Rule 405 under the Securities
Act and is not a broker-dealer tendering Transfer Restricted Notes acquired
directly from the Company for its own account, acquires the Exchange Notes in
the ordinary course of such Holder’s business and has no arrangements or
understandings with any Person to participate in the Exchange Offer for the
purpose of distributing (within the meaning of the Securities Act) the Exchange
Notes) and to transfer such Exchange Notes from and after their receipt without
any limitations or restrictions under the Securities Act and under state securities
or blue sky laws.


 


In connection with the Exchange Offer, the Company
shall:


 


(i)                          mail to each Holder a copy of the Prospectus
forming part of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;


 


(ii)                       keep the Exchange Offer open for acceptance
for a period of not less than 30 calendar Days after the date notice thereof is
mailed to the Holders (or longer if required by applicable law) (such period
referred to herein as the “Exchange Period”);


 


(iii)                    utilize the services of the Depositary for
the Exchange Offer;


 


(iv)                   permit Holders to withdraw tendered Notes at
any time prior to the close of business, New York time, on the last Business
Day of the Exchange Period, by sending to the institution specified in the
notice, a telegram, telex, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of Notes delivered for exchange, and
a statement that such Holder is withdrawing his election to have such Notes
exchanged; and


 


(v)                      otherwise comply in all material respects
with all applicable laws relating to the Exchange Offer.


 


If, prior to consummation of the Exchange Offer, the
Initial Purchasers hold any Notes acquired by them and not having been sold in
the initial distribution, the Company upon the request of any Initial Purchaser
shall, simultaneously with the delivery of the Exchange Notes in the Exchange
Offer, issue and deliver to such Initial Purchaser in exchange (the “Private
Exchange”) for the Notes held by such Initial Purchaser, a like principal
amount 


 


6

















 


of debt securities of the Company that are identical
(except that such securities shall bear appropriate transfer restrictions) to
the Exchange Notes (the “Private Exchange Notes”).


 


The Exchange Notes and the Private Exchange Notes
shall be issued under (i) the Indenture or (ii) an indenture identical to all
material respects to the Indenture and that, in either case, has been qualified
under the TIA or is exempt from such qualification and shall provide that the
Exchange Notes shall not be subject to the transfer restrictions set forth in
the Indenture.  The Indenture or such
indenture shall provide that the Exchange Notes, the Private Exchange Notes and
the Notes shall vote and consent together on all matters as one class and that
none of the Exchange Notes, the Private Exchange Notes or the Notes will have
the right to vote or consent as a separate class on any matter.  The Private Exchange Notes shall be of the
same series as and the Company shall use all commercially reasonable efforts to
have the Private Exchange Notes bear the same CUSIP number as the Exchange
Notes.  The Company shall not have any
liability under this Agreement solely as a result of such Private Exchange
Notes not bearing the same CUSIP number as the Exchange Notes.


 


The Exchange Offer and the Private Exchange shall
not be subject to any conditions, other than that (i) the Exchange Offer or
Private Exchange, as the case may be, does not violate applicable law or any
applicable interpretation of the staff of the SEC, (ii) no action or proceeding
shall have been instituted or threatened in any court or by any governmental
agency that might materially impair the ability of the Company to proceed with
the Exchange Offer or the Private Exchange, and no material adverse development
shall have occurred in any existing action or proceeding with respect to the
Company and (iii) all governmental approvals shall have been obtained, which
approvals the Company deems necessary for the consummation of the Exchange
Offer or Private Exchange.  As soon as
practicable after the close of the Exchange Offer and/or the Private Exchange,
as the case may be, the Company shall:


 


(i)                                     accept for exchange all Transfer Restricted
Notes or portions thereof properly tendered and not validly withdrawn pursuant
to the Exchange Offer in accordance with the terms of the Exchange Offer
Registration Statement and the letter of transmittal that is an exhibit
thereto;


 


(ii)                                  accept for exchange all Notes properly tendered
pursuant to the Private Exchange; and


 


(iii)                               deliver, or cause to be delivered, to the Trustee
for cancellation all Transfer Restricted Notes or portions thereof so accepted
for exchange by the Company, and issue, and cause the Trustee under the Indenture
to promptly authenticate and deliver to each Holder, a new Exchange Note or
Private Exchange Note, as the case may be, equal in principal amount to the
principal amount of the Transfer Restricted Notes surrendered by such Holder
and accepted for exchange.


 


7

















 


To the extent not prohibited by any law or
applicable interpretation of the staff of the SEC, the Company shall use its
best efforts to complete the Exchange Offer as provided above and shall comply
with the applicable requirements of the Securities Act, the Exchange Act and
other applicable laws in connection with the Exchange Offer.  Each Holder of Transfer Restricted Notes who
wishes to exchange such Transfer Restricted Notes for Exchange Notes in the
Exchange Offer will be required to make certain customary representations in
connection therewith, including representations that such Holder is not an affiliate
of the Company within the meaning of Rule 405 under the Securities Act, that
any Exchange Notes to be received by it will be acquired in the ordinary course
of business and that at the time of the commencement of the Exchange Offer it
has no arrangement with any Person to participate in the distribution (within
the meaning of the Securities Act) of the Exchange Notes.  The Company shall inform the Initial Purchasers
of the names and addresses of the Holders to whom the Exchange Offer is made,
and the Initial Purchasers shall have the right to contact such Holders and
otherwise facilitate the tender of Transfer Restricted Notes in the Exchange
Offer.


 


Upon consummation of the Exchange Offer in
accordance with this Section 2(a), the provisions of this Agreement shall
continue to apply, mutatis  mutandis, solely with respect to
Transfer Restricted Notes that are Private Exchange Notes and Exchange Notes
held by Participating Broker-Dealers, and the Company shall have no further
obligation to register Transfer Restricted Notes (other than Private Exchange
Notes) pursuant to Section 2(b) hereof.


 


(b)  Shelf Registration.  If (i) the Company is not permitted to
file the Exchange Offer Registration Statement or to consummate the Exchange
Offer because the Exchange Offer is not permitted by applicable law or SEC
policy, (ii) the Exchange Offer is not for any other reason consummated by
the Target Consummation Date, (iii) any holder of Notes notifies the
Company that (a) due to a change in law or policy, in the opinion of counsel,
it is not entitled to participate in the Exchange Offer, (b) due to a
change in law or policy, in the opinion of counsel, it may not resell the
Exchange Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and (x) the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales
by such holder and (y) such prospectus is not promptly amended or modified
in order to be suitable for use in connection with such resales for such holder
and all similarly situated holders or (c) it is a broker-dealer and owns
Notes acquired directly from the Company or an affiliate of the Company,
(iv) the holders of a majority of the Notes may not resell the Exchange
Notes acquired by them in the Exchange Offer to the public without restriction
under the Securities Act and without restriction under applicable blue sky or
state securities laws or (v) the Exchange Offer shall not have been
consummated within 180 days after the Issue Date (the date of any of (i)-(v),
the “Shelf Registration Event Date”), then the Company shall, at its
cost, use its best efforts to cause to be filed a Shelf Registration Statement
prior to 


 


8

















 


the later of (A) 60 days
after the Shelf Registration Event Date and (B) 180 days after the Issue Date and
use its best efforts to cause the Shelf Registration Statement to be declared
effective by the SEC on or prior to 90 days after the filing of the Shelf
Registration Statement.  Each Holder as
to which any Shelf Registration is being effected agrees to furnish to the
Company all information with respect to such Holder necessary to make any
information previously furnished to the Company by such Holder not materially
misleading.


 


The Company agrees to use its best efforts to keep
the Shelf Registration Statement continuously effective for a  period of two years from the date the Shelf
Registration Statement is declared effective under the Securities Act by the
SEC (the “Shelf Effectiveness Date”), or until one year after the Shelf
Effectiveness Date if the Shelf Registration Statement is filed at the request
of an Initial Purchaser, or in either case, such longer period as may be
required by applicable law (subject to extension pursuant to the last paragraph
of Section 3 hereof) (or such shorter period that will terminate when all
of the Transfer Restricted Notes covered by such Shelf Registration Statement
have been sold pursuant thereto or cease to be outstanding) (the “Effectiveness
Period”); provided, however, that the Effectiveness Period in
respect of the Shelf Registration Statement shall be extended to the extent
required to permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174 under the Securities Act and as otherwise provided
herein.  The Company shall not permit any
securities other than Transfer Restricted Notes to be included in the Shelf
Registration.  The Company further
agrees, if necessary, to supplement or amend the Shelf Registration Statement,
if required by the rules, regulations or instructions applicable to the registration
form used by the Company for such Shelf Registration Statement or by the
Securities Act or by any other rules and regulations thereunder for shelf
registrations, and the Company agrees to furnish to the Holders of Transfer
Restricted Notes copies of any such supplement or amendment promptly after its
being used or filed with the SEC.


 


(c)  Expenses.  The Company shall pay all Registration Expenses in connection
with the registration pursuant to Section 2(a) or 2(b) hereof and the
reasonable fees and expenses of one counsel, if any, designated in writing by
the Majority Holders to act as counsel for the Holders of the Transfer
Restricted Notes in connection with a Shelf Registration Statement.  Except as provided in the preceding sentence,
each Holder shall pay all expenses of its own counsel, underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of such Holder’s Transfer Restricted Notes pursuant to the Shelf Registration
Statement.


 


(d)  Effective Registration Statement.  An Exchange Offer Registration Statement
pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant
to Section 2(b) hereof will not be deemed to have become effective unless
it has been declared effective by the SEC; provided, however,
that if, after it has been declared effective, the offering of Transfer
Restricted Notes pursuant to a Shelf Registration Statement is interfered 


 


9

















 


with by any stop order, injunction
or other order or requirement of the SEC or any other governmental agency or
court, such Registration Statement will be deemed not to have been effective
during the period of such interference, until the offering of Transfer
Restricted Notes may legally resume. 
The Company will be deemed not to have used its best efforts to cause
the Exchange Offer Registration Statement or the Shelf Registration Statement,
as the case may be, to become, or to remain, effective during the requisite
period if it voluntarily takes any action that would result in any such
Registration Statement not being declared effective or in the Holders of
Transfer Restricted Notes covered thereby not being able to exchange or offer
and sell such Transfer Restricted Notes during that period, unless such action
is required by applicable law and except as otherwise provided in the second
paragraph of Section 2(e) below.


 


(e)  Additional Interest.  In the event that (i) the applicable
Registration Statement is not filed with the SEC on or prior to the date
specified herein for such filing, (ii) the applicable Registration Statement is
not declared effective on or prior to the date specified herein for such
effectiveness after such obligation arises (the “Effectiveness Target Date”),
(iii) if the Exchange Offer is required to be consummated hereunder, the
Company fails to consummate the Exchange Offer by the Target Consummation Date
with respect to the Exchange Offer Registration Statement or (iv) the
applicable Registration Statement is filed and declared effective during the
period effectiveness is required by Section 2(e) and 3(a) but shall
thereafter cease to be effective or usable without being succeeded immediately
by an additional Registration Statement covering the Transfer Restricted Notes
that has been filed and declared effective (each such event referred to in
clauses (i) through (iv), a “Registration Default”), then the interest
rate on the Transfer Restricted Notes as to which such Registration Default
relates will increase (“Additional Interest”), with respect to the first
90-day period (or portion thereof) while a Registration Default is continuing
immediately following the occurrence of such Registration Default in an amount
equal to 0.25% per annum of the principal amount of the Notes.  The rate of additional Interest will
increase by an additional 0.25% per annum of the principal amount of the Notes
for each subsequent 90-day period (or portion thereof) while a Registration
Default is continuing until all Registration Defaults have been cured, up to a
maximum amount of 1.00% of the principal amount of the Notes.  Additional Interest shall be computed based
on the actual number of days elapsed during which any such Registration
Defaults exists.  Following the cure of
a Registration Default, the accrual of Additional Interest with respect to such
Registration Default will cease.


 


If the Company issues a notice that the Shelf
Registration Statement is unusable due to the pendency of an announcement of a
material corporate transaction, or such notice is required under applicable
securities laws to be issued by the Company, and the aggregate number of days
in any consecutive twelve-month period for which the Shelf Registration
Statement shall not be usable due to all such notices issued or required to be
issued exceeds 60 days in the aggregate, then the interest rate borne by the
Notes will be 


 


10

















 


increased by 0.25% per annum of the principal amount
of the Notes for the first 90-day period (or portion thereof) beginning on the
31st such date that such Shelf Registration Statement ceases to be usable,
which rate shall be increased by an additional 0.25% per annum of the principal
amount of the Notes at the beginning of each subsequent 90-day period (or
portion thereof), up to a maximum amount of 1.00% of the principal amount of
the Notes.  Upon the Shelf Registration
Statement once again becoming usable, the interest rate borne by the Notes will
be reduced to the original interest rate if the Company is otherwise in compliance
with this Agreement at such time. 
Additional Interest shall be computed based on the actual number of days
elapsed in each 90-day period in which the Shelf Registration Statement is unusable.


 


The Company shall notify the Trustee within three
Business Days after each and every date on which an event occurs in respect of
which Additional Interest is required to be paid (an “Event Date”).  Additional Interest shall be paid by
depositing with the Trustee, in trust, for the benefit of the Holders of
Transfer Restricted Notes, on or before the applicable semi-annual interest
payment date, immediately available funds in sums sufficient to pay the
Additional Interest then due.  The
Additional Interest due shall be payable on each interest payment date to the
record Holder of Notes entitled to receive the interest payment to be paid on
such date as set forth in the Indenture. 
Each obligation to pay Additional Interest shall be deemed to accrue
from and including the day following the applicable Event Date.


 


3.  Registration Procedures. 
In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Sections 2(a) and 2(b) hereof, the Company
shall:


 


(a)                                  prepare and file with the SEC a Registration
Statement or Registration Statements as prescribed by Sections 2(a) and 2(b)
hereof within the relevant time period specified in Section 2 hereof on
the appropriate form under the Securities Act, which form (i) shall be selected
by the Company, (ii) shall, in the case of a Shelf Registration, be available
for the sale of the Transfer Restricted Notes by the selling Holders thereof
and (iii) shall comply as to form in all material respects with the requirements
of the applicable form and include all financial statements required by the SEC
to be filed therewith; and use its best efforts to cause such Registration Statement
to become effective and remain effective in accordance with Section 2
hereof.  The Company shall not file any
Registration Statement or Prospectus or any amendments or supplements thereto
in respect of which the Holders must provide information for inclusion therein
without the Holders being afforded an opportunity to review such documentation
a reasonable time prior to the filing of such document if the Majority Holders
or such Participating Broker-Dealer, as the case may be, their counsel or the
managing underwriters, if any, shall reasonably object;


 


11

















 


(b)                                 prepare and file with the SEC such amendments
and post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the Effectiveness
Period or the Applicable Period, as the case may be; and cause each Prospectus
to be supplemented by any required prospectus supplement and as so supplemented
to be filed pursuant to Rule 424 (or any similar provision then in force) under
the Securities Act, and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder applicable to
it with respect to the disposition of all securities covered by each Registration
Statement during the Effectiveness Period or the Applicable Period, as the case
may be, in accordance with the intended method or methods of distribution by
the selling Holders thereof described in this Agreement (including sales by any
Participating Broker-Dealer);


 


(c)                                  in the case of a Shelf Registration,
(i) notify each Holder of Transfer Restricted Notes, at least three
Business Days prior to filing, that a Shelf Registration Statement with respect
to the Transfer Restricted Notes is being filed and advising such Holder that
the distribution of Transfer Restricted Notes will be made in accordance with
the method selected by the Majority Holders; and (ii) furnish to each
Holder of Transfer Restricted Notes, without charge, as many copies of each
Prospectus, and any amendment or supplement thereto and such other documents as
such Holder may reasonably request, in order to facilitate the disposition of
the Transfer Restricted Notes; and (iii) subject to the last paragraph of
Section 3 hereof, hereby consent to the use of the Prospectus or any amendment
or supplement thereto by each of the selling Holders of Transfer Restricted
Notes in connection with the offering and sale of the Transfer Restricted Notes
covered by such Prospectus or any amendment or supplement thereto subject to
the limitations on the use thereof provided in Sections 2(d) and 2(e);


 


(d)                                 in the case of a Shelf Registration, use its
best efforts to register or qualify, as may be required by applicable law, the
Transfer Restricted Notes under all applicable state securities or “blue sky”
laws of such jurisdictions by the time the applicable Registration Statement is
declared effective by the SEC as any Holder of Transfer Restricted Notes
covered by a Registration Statement shall reasonably request in advance of such
date of effectiveness, and do any and all other acts and things that may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Transfer Restricted Notes owned
by such Holder; provided, however, that the Company shall not be
required to (i) qualify as a foreign corporation or as a broker or dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), (ii) file any general consent to
service of process or (iii) subject itself to taxation in any such jurisdiction
if it is not so subject;


 


12

















 


(e)                                  in the case of (1) a Shelf Registration
or (2) Participating Broker-Dealers who have notified the Company that
they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(s) hereof, notify each
Holder of Transfer Restricted Notes, or such Participating Broker-Dealers, as
the case may be, and their counsel if known to the Company, if any, promptly
and confirm such notice in writing (i) when a Registration Statement has become
effective and when any post-effective amendments and supplements thereto become
effective, (ii) of any request by the SEC or any state securities authority for
amendments and supplements to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) if the Company receives any notification
with respect to the suspension of the qualification of the Transfer Restricted
Notes or the Exchange Notes to be sold by any Participating Broker-Dealer for
offer or sale in any jurisdiction or the initiation of any proceeding for such
purpose, (v) of the happening of any event or the failure of any event to
occur or the discovery of any facts or otherwise, during the period a Shelf
Registration Statement is effective that makes any statement made in such
Registration Statement or the related Prospectus untrue in any material respect
or that causes such Registration Statement or Prospectus to omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and (vi) of the
Company’s reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate;


 


(f)                                    make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement as soon as practicable;


 


(g)                                 in the case of a Shelf Registration, furnish
to each Holder of Transfer Restricted Notes, without charge, at least one
conformed copy of each Registration Statement relating to such Shelf
Registration and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless requested);


 


(h)                                 in the case of a Shelf Registration,
cooperate with the selling Holders of Transfer Restricted Notes to facilitate
the timely preparation and delivery of certificates not bearing any restrictive
legends representing Notes covered by such Shelf Registration to be sold and
relating to the subsequent transfer of such Notes; and cause such Transfer
Restricted Notes to be in such denominations (consistent with the provisions of
the Indenture) and registered in such names as the selling Holders may reasonably
request at least two Business Days prior to the closing of any sale of Transfer
Restricted Notes;


 


13

















 


(i)                                     in the case of a Shelf Registration or an
Exchange Offer Registration, upon the occurrence of any circumstance
contemplated by Section 3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi)
hereof, use its best efforts to prepare a supplement or post-effective
amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of the Transfer Restricted Notes, such
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and to notify
each Holder to suspend use of the Prospectus as promptly as practicable after
the occurrence of such an event, and each Holder hereby agrees to suspend use
of the Prospectus until the Company has amended or supplemented the Prospectus
to correct such misstatement or omission;


 


(j)                                     obtain a CUSIP number for all Exchange Notes
or Private Exchange Notes, as the case may be, not later than the effective
date of a Registration Statement, and provide the Trustee with certificates for
the Exchange Notes or the Private Exchange Notes, as the case may be, in a form
eligible for deposit with the Depositary;


 


(k)                                  cause the Indenture to be qualified under the
Trust Indenture Act of 1939, as amended (the “TIA”), in connection with
the registration of the Exchange Notes or Transfer Restricted Notes, as the
case may be, cooperate with the Trustee and the Holders to effect such changes
to the Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and execute, and use its best efforts to
cause the Trustee to execute, all documents as may be required to effect such
changes, and all other forms and documents required to be filed with the SEC to
enable the Indenture to be so qualified in a timely manner;


 


(l)                                     in the case of a Shelf Registration, enter
into such agreements (including underwriting agreements) and take all such
other appropriate actions as are reasonably requested in order to expedite or
facilitate the registration or the disposition of such Transfer Restricted
Notes, and in such connection, (i) make such representations and
warranties to Holders of such Transfer Restricted Notes with respect to the
business of the Company and its subsidiaries as then conducted and the
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings, and
confirm the same if and when requested; (ii) obtain opinions of counsel to
the Company and updates thereof in form and substance reasonably satisfactory
to the Holders of a majority in principal amount of the Transfer Restricted
Notes being sold, addressed to each selling Holder covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Holders; (iii) obtain
“cold 


 


14

















 


comfort”
letters and updates thereof from the independent certified public accountants
of the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to the selling
Holders of Transfer Restricted Notes, such letters to be in customary form and
covering matters of the type customarily covered in “cold comfort” letters in
connection with underwritten offerings and such other matters as reasonably
requested by such selling Holders; and (iv) if an underwriting agreement
is entered into, the same shall contain indemnification provisions and procedures
no less favorable than those set forth in Section 4 hereof (or such other
provisions and procedures acceptable to the Company and the Holders of a
majority in aggregate principal amount of Transfer Restricted Notes covered by
such Registration with respect to all parties to be indemnified pursuant to
said Section including, without limitation, such selling Holders).  The above shall be done at each closing in
respect of the sale of Transfer Restricted Notes, or as and to the extent required
thereunder;


 


(m)                               if (1) a Shelf Registration is filed pursuant
to Section 2(b) or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section  2(a) is required to be
delivered under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Notes during the Applicable Period, make available for
inspection by each such person who would be an “underwriter” as a result of
either (i) the sale by such person of Notes covered by such Shelf Registration
Statement or (ii) the sale during the Applicable Period by a Participating
Broker-Dealer of Exchange Notes (provided that a Participating Broker-Dealer
shall not be deemed to be an underwriter solely as a result of it being
required to deliver a prospectus in connection with any resale of Exchange
Notes) and any attorney, accountant or other agent retained by any such person
(collectively, the “Inspectors”), at the offices where normally kept,
during reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries
(collectively, the “Records”) as shall be reasonably necessary to enable
them to exercise any applicable due diligence responsibilities, and cause the
officers, directors and employees of the Company and its subsidiaries to supply
all information in each case reasonably requested by any such Inspector in
connection with such Registration Statement. 
Records that the Company determines, in good faith, to be confidential
and any Records that it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a material misstatement or omission in such
Registration Statement during a period with respect to which the Company has
not given notice that the Registration Statement is unusable, (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction or (iii) the 


 


15

















 


information
in such Records has been made generally available to the public, and, in the instances
referred to in clauses (i) and (ii), the notice to the Company and related provisions
described in this Section 2(m) have been complied with.  Each selling Holder of such Transfer
Restricted Notes and each such Participating Broker-Dealer will be required to
agree that information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company unless and until such is made
generally available to the public.  Each
Selling Holder of such Transfer Restricted Notes and each such Participating
Broker-Dealer will be required to further agree that it will, upon learning
that disclosure of such Records is necessary to avoid or correct a material
misstatement or omission under the circumstances described in clause (i) above,
give notice to the Company and allow the Company at its expense to correct the material
misstatement or omission.  Each selling
Holder of such Transfer Restricted Notes and each such Participating
Broker-Dealer will be required to further agree that it will, upon learning
that disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company at its expense to undertake
appropriate action to prevent disclosure of the Records deemed confidential;


 


(n)                                 comply with all applicable rules and
regulations of the SEC and make generally available to its securityholders
earning statements satisfying the provisions of  Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 60
days after the end of any 12-month period (or 135 days after the end of any
12-month period if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Transfer Restricted Notes are sold to
underwriters in a firm commitment or best efforts underwritten offering and
(ii) if not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Company after the effective date
of a Registration Statement, which statements shall cover said 12-month
periods;


 


(o)                                 upon consummation of an Exchange Offer or a
Private Exchange, obtain an opinion of counsel to the Company addressed to the
Trustee for the benefit of all Holders of Transfer Restricted Notes
participating in the Exchange Offer or the Private Exchange, as the case may
be, that (i) the Company has duly authorized, executed and delivered the
Exchange Notes and Private Exchange Notes, as the case may be, and
(ii) each of the Exchange Notes or the Private Exchange Notes, as the case
may be, constitute a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its respective terms (in each case, with
customary exceptions);


 


16

















 


(p)                                 if an Exchange Offer or a Private Exchange is
to be consummated, upon proper delivery of the Transfer Restricted Notes by
Holders to the Company (or to such other Person as directed by the Company) in
exchange for the Exchange Notes or the Private Exchange Notes, as the case may
be, the Company shall mark, or cause to be marked, on such Transfer Restricted
Notes and on the books of the Trustee, the Transfer Agent, the Registrar and
the Depositary delivered by such Holders that such Transfer Restricted Notes
are being canceled in exchange for the Exchange Notes or the Private Exchange
Notes, as the case may be; but in no event shall such Transfer Restricted Notes
be marked as paid or otherwise satisfied solely as a result of being exchanged
for Exchange Notes or Private Exchange Notes in the Exchange Offer or the Private
Exchange, as the case may be;


 


(q)                                 cooperate with each seller of Transfer Restricted
Notes covered by any Registration Statement participating in the disposition of
such Transfer Restricted Notes and one counsel acting on behalf of all such
sellers in connection with the filings, if any, required to be made with the
NASD;


 


(r)                                    use its best efforts to take all other steps
necessary to effect the registration of the Transfer Restricted Notes covered
by a Registration Statement contemplated hereby; and


 


(s)                                  (A) 
in the case of the Exchange Offer Registration Statement (i) include in
the Exchange Offer Registration Statement a section entitled “Plan of
Distribution,” which section shall be reasonably acceptable to Banc of
America, as representative of the Initial Purchasers, and which shall contain a
summary statement of the positions taken or policies made by the staff of the
SEC with respect to the potential “underwriter” status of any broker-dealer (a
“Participating Broker-Dealer”) that holds Transfer Restricted Notes
acquired for its own account as a result of market-making activities or other
trading activities and that will be the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) of Exchange Notes to be received by such broker-dealer
in the Exchange Offer, whether such positions or policies have been publicly
disseminated by the staff of the SEC or such positions or policies, in the
reasonable judgment of Banc of America, as representative of the Initial Purchasers,
represent the prevailing views of the staff of the SEC, including a statement
that any such broker-dealer who receives Exchange Notes for Transfer Restricted
Notes pursuant to the Exchange Offer may be deemed a statutory underwriter and
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes, (ii) furnish to each
Participating Broker-Dealer who has delivered to the Company the notice
referred to in Section 3(e), without charge, as many copies of each Prospectus
included in the Exchange Offer Registration Statement, and any amendment or
supplement thereto, as such 


 


17

















 


Participating
Broker-Dealer may reasonably request; (iii) hereby consent to the use of
the Prospectus forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto, by any Person subject to the prospectus
delivery requirements of the SEC, including all Participating Broker-Dealers,
in connection with the sale or transfer of the Exchange Notes covered by the
Prospectus or any amendment or supplement thereto, (iv) use its best
efforts to keep the Exchange Offer Registration Statement effective and to
amend and supplement the Prospectus contained therein in order to permit such
Prospectus to be lawfully delivered by all Persons subject to the prospectus
delivery requirements of the Securities Act for such period of time as such
Persons must comply with such requirements in order to resell the Exchange
Notes; provided, however, that such period shall not be required
to exceed 90 days (or such longer period if extended pursuant to the last
sentence of Section 3 hereof) (the “Applicable Period”), and (iv)
include in the transmittal letter or similar documentation to be executed by an
exchange offeree in order to participate in the Exchange Offer (x) the
following provision:


 


“If
the exchange offeree is a broker-dealer holding Transfer Restricted Notes
acquired for its own account as a result of market-making activities or other
trading activities, it will deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of Exchange Notes received in
respect of such Transfer Restricted Notes pursuant to the Exchange Offer;”


 


and (y) a statement to the
effect that by a broker-dealer making the acknowledgment described in clause
(x) and by delivering a Prospectus in connection with the exchange of Transfer
Restricted Notes, such broker-dealer will not be deemed to admit that it is an
underwriter within the meaning of the Securities Act; and


 


(B)  in the case of any Exchange Offer
Registration Statement, the Company agrees to deliver, upon request, to the
Trustee or to Participating Broker-Dealers upon consummation of the Exchange
Offer (i) an opinion of counsel substantially in the form attached hereto as
Exhibit A, and (ii) an officers’ certificate containing certifications
substantially similar to those set forth in Section 5(d) of the Purchase
Agreement.


 


The Company may require each seller of Transfer Restricted
Notes as to which any registration is being effected to furnish to the Company
such information regarding such seller and the proposed distribution of such
Transfer Restricted Notes, as the Company may from time to time reasonably
request in writing.  The Company may
exclude from such registration the Transfer Restricted Notes of any seller who
fails to furnish such information within a reasonable time (not to exceed 10
Business Days) after receiving such request and shall be under no obligation to
compensate any such seller for any lost income, interest or 


 


18

















 


other opportunity forgone, or any liability
incurred, as a result of the Company’s decision to exclude such seller.


 


In the case of (1) a Shelf Registration
Statement or (2) Participating Broker-Dealers who have notified the
Company that they will be utilizing the Prospectus contained in the Exchange
Offer Registration Statement as provided in Section 3(s) hereof, that are
seeking to sell Exchange Notes and are required to deliver Prospectuses, each
Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(e)(ii),
3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Notes pursuant to a Registration
Statement until such Holder’s receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(i) hereof or until it is
advised in writing (the “Advice”) by the Company that the use of the
applicable Prospectus may be resumed, and, if so directed by the Company, such
Holder will deliver to the Company (at the Company’s expense) all copies in
such Holder’s possession, other than permanent file copies then in such
Holder’s possession, of the Prospectus covering such Transfer Restricted Notes
or Exchange Notes, as the case may be, current at the time of receipt of such
notice.  If the Company shall give any
such notice to suspend the disposition of Transfer Restricted Notes or Exchange
Notes, as the case may be, pursuant to a Registration Statement, the Company
shall use its best efforts to file and have declared effective (if an
amendment) as soon as practicable an amendment or supplement to the
Registration Statement or Prospectus and, in the case of an amendment, have
such amendment declared effective as soon as practicable and shall extend the
period during which such Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days in the period from and
including the date of the giving of such notice to and including the date when
the Company shall have made available to the Holders (x) copies of the
supplemented or amended Prospectus necessary to resume such dispositions or (y)
the Advice.


 


4.  Indemnification and Contribution.  (a) 
The Company shall indemnify and hold harmless each Initial Purchaser,
each Holder, each Participating Broker-Dealer, each underwriter who
participates in an offering of Transfer Restricted Notes, their respective affiliates,
each Person, if any, who controls any of such parties within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act,
as follows:


 


(i)                                     against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred, arising out of
any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement (or any amendment or supplement thereto), covering
Transfer Restricted Notes or Exchange Notes, including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any untrue statement or



 


19

















 


alleged
untrue statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;


 


(ii)                                  against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or any investigation
or proceeding by any court or governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Sections 4(c) and 4(d) below) any such settlement is effected
with the prior written consent of the Company; and


 


(iii)                               against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of one counsel (in
addition to any local counsel) chosen by Banc of America, such Holder, such
Participating Broker-Dealer or any underwriter (except to the extent otherwise
expressly provided in Section 4(c) hereof)), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any court or governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) of this
Section 4(a);


 


provided, however, that this indemnity does
not apply to any loss, liability, claim, damage or expense to the extent
arising out of an untrue statement or omission or alleged untrue statement or
omission (i) made in reliance upon and in conformity with written
information furnished in writing to the Company by or on behalf of such Initial
Purchaser, such Holder, such Participating Broker-Dealer or any underwriter
with respect to such Initial Purchaser, Holder, Participating Broker-Dealer or
underwriter, as the case may be, expressly for use in the Registration
Statement (or any amendment or supplement thereto) or any Prospectus (or any
amendment or supplement thereto) or (ii) contained in any preliminary
prospectus if such Initial Purchaser, such Holder, such Participating
Broker-Dealer or such underwriter failed to send or deliver a copy of the Prospectus
(in the form it was first provided to such parties for confirmation of sales)
to the Person asserting such losses, claims, damages or liabilities on or prior
to the delivery of written confirmation of any sale of securities covered
thereby to such Person in any case where the Company shall have previously
furnished copies thereof to such Initial Purchaser, such Holder, such
Participating Broker-Dealer or such underwriter, as the case may be, in
accordance with this Agreement, at or prior to the written confirmation of the
sale of such Notes to such Person and the untrue statement contained in or the
omission from the preliminary prospectus was corrected in the Final Prospectus
(or any amendment or supplement thereto). 
Any amounts advanced by the Company to an indemnified party 


 


20

















 


pursuant to this
Section 4 as a result of such losses shall be returned to the Company if
it shall be finally determined by a court of competent jurisdiction in a
judgment not subject to appeal or final review that such indemnified party was
not entitled to indemnification by the Company.


 


(b)  Each Holder agrees, severally and not
jointly, to indemnify and hold harmless the Company, each Initial Purchaser,
each underwriter who participates in an offering of Transfer Restricted Notes
and the other selling Holders and each of their respective directors and each
Person, if any, who controls any of the Company, any Initial Purchaser, any
underwriter or any other selling Holder within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, against any and all loss,
liability, claim, damage and expense whatsoever described in the indemnity
contained in Section 4(a) hereof, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment or supplement thereto) or any
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such selling Holder with respect to such Holder expressly for use in the  Registration Statement (or any supplement
thereto), or any such Prospectus (or any amendment thereto); provided, however,
that, in the case of the Shelf Registration Statement, no such Holder shall be
liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Transfer Restricted Notes pursuant to
the Shelf Registration Statement; provided, further, however,
that for purposes of Section 4(a)(iii), such counsel shall (subject to
Section 4(c) hereof) be chosen by the Company.


 


(c)  Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially
prejudiced as a result thereof and in any event shall not relieve it from any
liability that it may have otherwise than on account of this indemnity
agreement.  In the case of parties indemnified
pursuant to Section 4(a) above, one counsel to all the indemnified parties
shall be selected by Banc of America, and, in the case of parties indemnified
pursuant to Section 4(b) above, counsel to all the indemnified parties
shall be selected by the Company.  An
indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. 
Notwithstanding the foregoing, if it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action (which approval shall not be unreasonably withheld),
unless such indemnified parties reasonably object to such assumption on the
ground that there may be 


 


21

















 


legal defenses available to
them which are different from or in addition to those available to such indemnifying
party.  If an indemnifying party assumes
the defense of such action, the indemnifying parties shall not be liable for
any fees and expenses of counsel for the indemnified parties incurred thereafter
in connection with such action.  In no
event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions arising out of the same general
allegations or circumstances.  No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
in respect of which indemnification or contribution could be sought under this
Section 4 (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent
(i) includes a full and unconditional release of each indemnified party
from all liability arising out of such litigation, investigation, proceeding or
claim and the offer and sale of any Notes and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.


 


(d)  If at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified party for
reasonable fees and expenses of counsel pursuant to Section 4(a)(iii)
above, then such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.  Notwithstanding the immediately preceding
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, an indemnifying party shall not be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its consent if
such indemnifying party (i) reimburses the indemnified party in accordance with
such request to the extent it considers such request to be reasonable and (ii)
provides written notice to the indemnified party which states the indemnifying
party’s basis for its belief that any unpaid balance of such request is
unreasonable, in each case prior to the date of such settlement.


 


(e)  In order to provide for just and equitable
contribution in circumstances under which any of the indemnity provisions set
forth in this Section 4 is for any reason held to be unavailable to the
indemnified parties although applicable in accordance with its terms, the
Company, the Initial Purchasers and the Holders, as applicable, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by such 


 


22

















 


indemnity agreement incurred
by the Company, the Initial Purchasers and the Holders; provided, however,
that no Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any Person that was not guilty of such fraudulent misrepresentation.  As between the Company and the Initial
Purchasers and the Holders, such parties shall contribute to such aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement in such proportion as shall be appropriate to reflect
the relative fault of the Company on the one hand and of the Holder of Transfer
Restricted Notes, the Participating Broker-Dealer or Initial Purchaser, as the
case may be, on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as
well as any other relevant equitable considerations.


 


The relative fault of the Company on the one hand
and the Holder of Transfer Restricted Notes, the Participating Broker-Dealer or
the Initial Purchasers, as the case may be, on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company, or by the
Holder of Transfer Restricted Notes, the Participating  Broker-Dealer or the Initial Purchasers, as
the case may be, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.


 


The Company and the Holders of the Transfer Restricted
Notes and the Initial Purchasers agree that it would not be just and equitable
if contribution pursuant to this Section 4 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 4.


 


For purposes of this Section 4, each affiliate
of any Person, if any, who controls a Holder of Transfer Restricted Notes, an Initial
Purchaser or a Participating Broker-Dealer within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as such other Person, and each
director of the Company, each affiliate of the Company, each executive officer
of the Company who signed the Registration Statement, and each Person, if any,
who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company.


 


5.  Miscellaneous.


 


(a)  Rule 144 and Rule 144A.  The Company shall provide to each Holder
such reports as are required under Section 4.07 of the Indenture and, upon
the request of any Holder of Transfer Restricted Notes (a) make publicly
available such information as is necessary to permit sales pursuant to Rule 144
under the Securities Act, (b) deliver such information to a prospective
purchaser as is necessary to permit sales pursuant to Rule 144A under the


 


23

















 


Securities Act and it will
take such further action as any Holder of Transfer Restricted Notes may
reasonably request, and (c) take such further action, if any, that is
reasonable in the circumstances, in each case, to the extent required from time
to time to enable such Holder to sell its Transfer Restricted Notes without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such rule may be amended
from time to time, (ii) Rule 144A under the Securities Act, as such rule may be
amended from time to time, or (iii) any similar rules or regulations hereafter
adopted by the SEC.  Upon the reasonable
request of any Holder of Transfer Restricted Notes, the Company will deliver to
such Holder a written statement as to whether they have complied with such
requirements.


 


(b)  No Inconsistent Agreements.  The rights granted to the Holders hereunder
do not, and will not for the term of this Agreement in any way conflict with
and are not, and will not during the term of this Agreement be inconsistent
with the rights granted to the holders of the Company’s other issued and
outstanding securities under any other agreements entered into by the Company.


 


(c)  Amendments and Waivers.  The provisions of this Agreement, including
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
otherwise than with the prior written consent of the Company and the Majority
Holders; provided, however, that no amendment, modification, or
supplement or waiver or consent to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Transfer Restricted
Notes or the Company unless consented to in writing by such Holder of Transfer
Restricted Notes or the Company, as the case may be.


 


(d)  Notices.  All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of
this Section 5(d), which address initially is, with respect to the Initial
Purchasers, the address set forth in the Purchase Agreement; and (ii) if
to the Company, initially at the Company’s address set forth in the Purchase
Agreement and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 5(d).


 


All such notices and communications shall be deemed
to have been duly given:  at the time
delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and on the next Business
Day, if timely delivered to an air courier guaranteeing overnight delivery.


 


24

















 


Copies of all such notices, demands, or other
communications shall be concurrently delivered by the Person giving the same to
the Trustee, at the address specified in the Indenture.


 


(e)  Successors and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of the Initial
Purchasers, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Transfer Restricted Notes in violation of the terms of the Purchase
Agreement or the Indenture.  If any  transferee of any Holder shall acquire
Transfer Restricted Notes, in any manner, whether by operation of law or
otherwise, such Transfer Restricted Notes shall be held subject to all of the
terms of this Agreement, and by taking and holding such Transfer Restricted
Notes, such Person shall be conclusively deemed to have agreed to be bound by
and to perform all of the terms and provisions of this Agreement and such
Person shall be entitled to receive the benefits hereof.


 


(f)  Third Party Beneficiary.  Each of the Initial Purchasers and each
Holder shall be a third party beneficiary of the agreements made hereunder
between the Company, on the one hand, and the Initial Purchasers, on the other
hand, and shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights
or the rights of Holders hereunder.


 


(g)  Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.


 


(h)  Headings.  The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.


 


(i)  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. Specified times of day
refer to New York City time.


 


(j)  Severability.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.


 


(k)  Notes Held by the Company or Any of Its
Affiliates.  Whenever the consent or
approval of Holders of a specified percentage of Transfer Restricted Notes is


 


25

















 


required hereunder, Transfer
Restricted Notes held by the Company or any of their affiliates (as such term
is defined in Rule 405 under the Securities Act) shall not be counted in
determining whether  such consent or
approval was given by the Holders of such required percentage.


 


[Signature
Page Follows]


 


26

















 


IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.


 


	
   

  	
  MANDALAY RESORT GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn Schaeffer

  	
   

  
	
   

  	
   

  	
  Name: Glenn Schaeffer

  
	
   

  	
   

  	
  Title: President

  



 


Confirmed and accepted as of the date first above
written:


 


BANC
OF AMERICA SECURITIES LLC 

DEUTSCHE BANK SECURITIES INC.

CITIGROUP GLOBAL MARKETS INC.

CREDIT SUISSE FIRST BOSTON LLC

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

SG COWEN SECURITIES CORPORATION

CREDIT LYONNAIS SECURITIES (USA) INC.

SCOTIA CAPITAL (USA) INC.

BNY CAPITAL MARKETS, INC. 

MIZUHO INTERNATIONAL plc


 


	
  By:

  	
  Banc of America Securities
  LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Bruce R. Thompson

  	
   

  	
   

  
	
   

  	
  Name: Bruce R. Thompson

  	
   

  
	
   

  	
  Title: Managing Director

  	
   

  
				



 

















 


Exhibit A


 


Form
of Opinion of Counsel


 


1.                                       Each of the Exchange Offer Registration Statement
and the Prospectus (other than the financial statements, notes and schedules
thereto and other financial and statistical information and supplemental
schedules included or referred to therein or omitted therefrom and the Form
T-1, as to which such counsel need express no opinion), complies as to form in
all material respects with the applicable requirements of the Securities Act
and the applicable rules and regulations promulgated under the Securities Act.


 


2.                                       In the course of such counsel’s review and
discussion of the contents of the Exchange Offer Registration Statement and the
Prospectus with certain officers and other representatives of the Company and
representatives of the independent certified public accountants of the Company,
but without independent check or verification or responsibility for the
accuracy, completeness or fairness of the statements contained therein, on the
basis of the foregoing (relying as to materiality to a large extent upon
representations and opinions of officers and other representatives of the
Company), no facts have come to such counsel’s attention which cause such
counsel to believe that the Exchange Offer Registration Statement (other than
the financial statements, notes and schedules thereto and other financial and
statistical information contained or referred to therein and the Form T-1, as
to which such counsel need express no belief), at the time the Exchange Offer
Registration Statement became effective and at the time of the consummation of
the Exchange Offer, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading, or that the Prospectus (other than
the financial statements, notes and schedules thereto and other financial and
statistical information contained or referred to therein, as to which such
counsel need express no belief) contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not misleading.