**Exhibit 4.2**

 

**REGISTRATION RIGHTS AGREEMENT**

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This Registration Rights Agreement (the “Agreement”)is made and entered into this 23rd day of May, 2005, among Seneca GamingCorporation, a tribally chartered entity under the laws of the Seneca Nation ofIndians of New York (the “Company”), the Guarantors party hereto, andMerrill Lynch & Co., Merrill Lynch, Pierce, Fenner & SmithIncorporated, Banc of America Securities LLC and Wells Fargo Securities, LLC(collectively, the “Initial Purchasers”).

 

This Agreement is made pursuant to the PurchaseAgreement, dated May 18, 2005, among the Company, the Guarantors partythereto and the Initial Purchasers (the “Purchase Agreement”), whichprovides for the sale by the Company to the Initial Purchasers of an aggregateof $200,000,000 principal amount of the Company’s 71⁄4% Senior Notes due 2012(together with the Guarantees, the “Securities”).  In order to induce the Initial Purchasers toenter into the Purchase Agreement, the Company and the Guarantors have agreedto provide to the Initial Purchasers and their direct and indirect transfereesthe registration rights set forth in this Agreement.  The execution of this Agreement is acondition to the closing under the Purchase Agreement.

 

In consideration of the foregoing, the parties heretoagree as follows:

 

1.             Definitions.

 

As used in this Agreement, the followingcapitalized defined terms shall have the following meanings:

 

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

 

“1934 Act”shall mean the Securities Exchange Act of l934, as amended from time to time.

 

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

 

“Company”shall have the meaning set forth in the preamble and shall also include theCompany’s successors.

 

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

 

“Exchange Offer”shall mean the exchange offer by the Company and the Guarantors of ExchangeSecurities for Registrable Securities pursuant to Section 2.1hereof.

 

“Exchange Offer Registration”shall mean a registration under the 1933 Act effected pursuant to Section 2.1hereof.

 

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“Exchange Offer Registration Statement”shall mean an exchange offer registration statement on Form S-4 (or, ifapplicable, on another appropriate form), and all amendments and supplements tosuch registration statement, including the Prospectus contained therein, allexhibits thereto and all documents incorporated by reference therein.

 

“ExchangePeriod” shall have the meaning set forth in Section 2.1 hereof.

 

“Exchange Securities”shall mean the 71⁄4% Senior Notes due 2012 issued by the Company under the Indenture,and the Guarantees thereon, containing terms identical to the Securities in allmaterial respects (except for references to certain interest rate provisions,restrictions on transfers and restrictive legends), to be offered to Holders ofSecurities in exchange for Registrable Securities pursuant to the ExchangeOffer.

 

“Guarantee”means the senior unsecured guarantee by each Guarantor of the Company’s paymentobligations under the Indenture and the Securities, the Exchange Securities andthe Private Exchange Securities, executed pursuant to the Indenture.

 

“Guarantors”means each of: (1) Seneca Erie Gaming Corporation and Seneca TerritoryGaming Corporation, each a tribally chartered entity formed by the Nation andwholly owned by the Company; (2) effective upon the repayment of theExisting Facility (as defined in the Indenture) on the Closing Date, SenecaNiagara Falls Gaming Corporation, a tribally chartered entity formed by theNation and wholly owned by the Company, and (3) any other Subsidiary thatexecutes a Guarantee in accordance with the provisions of the Indenture; andtheir respective successors and assigns, in each case, until such Person isreleased from its Guarantee in accordance with the terms of the Indenture.

 

“Holder”shall mean an Initial Purchaser, for so long as it owns any RegistrableSecurities, and each of its successors, assigns and direct and indirecttransferees who become registered owners of Registrable Securities under theIndenture and each Participating Broker-Dealer that holds Exchange Securitiesfor so long as such Participating Broker-Dealer is required to deliver aprospectus meeting the requirements of the 1933 Act in connection with anyresale of such Exchange Securities.

 

“Indenture”shall mean the Indenture relating to the Securities, dated as of May 5,2004, as amended by the supplemental indenture, dated as of May 23, 2005,among the Company, the Guarantors and Wells Fargo Bank, National Association,as trustee, as the same may be amended, supplemented, waived or otherwisemodified from time to time in accordance with the terms thereof.

 

“Initial Purchaser”or “Initial Purchasers” shall have the meaning set forth in thepreamble.

 

“Majority Holders”shall mean the Holders of a majority of the aggregate principal amount ofoutstanding Registrable Securities;  providedthat whenever the consent or approval of Holders of a specified percentage ofRegistrable Securities is required hereunder, Registrable Securities held bythe Company and other obligors on the

 

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Securities or any Affiliate (as defined inthe Indenture) of the Company shall be disregarded in determining whether suchconsent or approval was given by the Holders of such required percentageamount.

 

“Nation”shall mean the Seneca Nation of Indians of New York, a sovereign Indian Nation.

 

“Participating Broker-Dealer”shall mean any of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &Smith Incorporated, Banc of America Securities LLC and Wells Fargo Securities,LLC and any other broker-dealer which makes a market in the Securities andexchanges Registrable Securities in the Exchange Offer for Exchange Securities.

 

“Person”shall mean an individual, partnership (general or limited), corporation,limited liability company, trust or unincorporated organization, or agovernment or agency or political subdivision thereof.

 

“PrivateExchange” shall have the meaning set forth in Section 2.1hereof.

 

“PrivateExchange Securities” shall have the meaning set forth in Section 2.1hereof.

 

“Prospectus”shall mean the prospectus included in a Registration Statement, including anypreliminary prospectus, and any such prospectus as amended or supplemented byany prospectus supplement, including any such prospectus supplement withrespect to the terms of the offering of any portion of the RegistrableSecurities covered by a Shelf Registration Statement, and by all otheramendments and supplements to a prospectus, including post-effectiveamendments, and in each case including all material incorporated by referencetherein.

 

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

 

“Registrable Securities”shall mean the Securities and, if issued, the Private Exchange Securities; provided*,*however, that Securities and, ifissued, the Private Exchange Securities, shall cease to be RegistrableSecurities when (i) a Registration Statement with respect to suchSecurities shall have been declared effective under the 1933 Act and suchSecurities shall have been disposed of pursuant to such Registration Statement,(ii) such Securities are eligible to be sold pursuant to Rule l44(k)(or any similar provision then in force, but not Rule 144A) under the 1933Act, (iii) such Securities shall have ceased to be outstanding or (iv) theExchange Offer is consummated (except in the case of Securities purchased fromthe Company and continued to be held by the Initial Purchasers).

 

“Registration Expenses”shall mean any and all expenses incident to performance of or compliance by theCompany and the Guarantors with this Agreement, including withoutlimitation:  (i) all SEC, stockexchange or National Association of Securities Dealers, Inc. (the “NASD”)registration and filing fees, including, if applicable, the fees and expensesof any “qualified independent underwriter” (and its counsel) that is required

 

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to be retained by any holder of RegistrableSecurities in accordance with the rules and regulations of the NASD, (ii) allfees and expenses incurred in connection with compliance with state securitiesor blue sky laws and compliance with the rules of the NASD (includingreasonable fees and disbursements of counsel for any underwriters or Holders inconnection with blue sky qualifications of any of the Exchange Securities orRegistrable Securities and any filings with the NASD), (iii) all expensesof any Persons in preparing or assisting in preparing, word processing,printing and distributing any Registration Statement, any Prospectus, anyamendments or supplements thereto, any underwriting agreements, securitiessales agreements and other documents relating to the performance of andcompliance with this Agreement, (iv) all fees and expenses incurred inconnection with the listing, if any, of any of the Registrable Securities onany securities exchange or exchanges, (v) all rating agency fees, (vi) thefees and disbursements of counsel for the Company and the Guarantors and of theindependent public accountants of the Company, including the expenses of anyspecial audits or “cold comfort” letters required by or incident to suchperformance and compliance, (vii) the fees and expenses of the Trustee,and any escrow agent or custodian, (viii) the reasonable fees and expensesof the Initial Purchasers in connection with the Exchange Offer, including thereasonable fees and expenses of counsel to the Initial Purchasers in connectiontherewith, (ix) in the case of an Exchange Offer or a Shelf Registration,all costs and expenses (including, without limitation, legal fees and expenses)of the Holders, Initial Purchasers or underwriters up to $10,000 in theaggregate and (x) any fees and disbursements of the underwriterscustomarily required to be paid by issuers or sellers of securities and the feesand expenses of any special experts retained by the Company and the Guarantorsin connection with any Registration Statement, but excluding underwritingdiscounts and commissions and transfer taxes, if any, relating to the sale ordisposition of Registrable Securities by a Holder.

 

“Registration Statement”shall mean any registration statement of the Company and the Guarantors whichcovers any of the Exchange Securities or Registrable Securities pursuant to theprovisions of this Agreement, and all amendments and supplements to any suchRegistration Statement, including post-effective amendments, in each caseincluding the Prospectus contained therein, all exhibits thereto and allmaterial incorporated by reference therein.

 

“SEC”shall mean the Securities and Exchange Commission or any successor agency orgovernment body performing the functions currently performed by the UnitedStates Securities and Exchange Commission.

 

“Shelf Registration”shall mean a registration effected pursuant to Section 2.2 hereof.

 

“Shelf Registration Statement”shall mean a “shelf” registration statement of the Company and the Guarantorspursuant to the provisions of Section 2.2 of this Agreement whichcovers all of the Registrable Securities or all of the Private Exchange Securitieson an appropriate form under Rule 415 under the 1933 Act, or any similar rule thatmay be adopted by the SEC, and all amendments and supplements to suchregistration statement,

 

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including post-effective amendments, in eachcase including the Prospectus contained therein, all exhibits thereto and allmaterial incorporated by reference therein.

 

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

 

2.             Registration Under the 1933 Act.

 

2.1           Exchange Offer.  The Company and the Guarantors shall, for thebenefit of the Holders, at the Company’s cost, (A) prepare and, as soon aspracticable but not later than 120 days following the Closing Date, file withthe SEC an Exchange Offer Registration Statement on an appropriate form underthe 1933 Act with respect to a proposed Exchange Offer and the issuance anddelivery to the Holders, in exchange for the Registrable Securities (other thanPrivate Exchange Securities), of a like principal amount of ExchangeSecurities, (B) use its reasonable best efforts to cause the ExchangeOffer Registration Statement to be declared effective under the 1933 Act within270 days of the Closing Date, (C) use its reasonable best efforts tokeep the Exchange Offer Registration Statement effective until the closing ofthe Exchange Offer and (D) use its reasonable best efforts to cause theExchange Offer to be consummated not later than 300 days following the ClosingDate.  Upon the effectiveness of the ExchangeOffer Registration Statement, the Company and the Guarantors shall promptlycommence the Exchange Offer, it being the objective of such Exchange Offer toenable each Holder eligible and electing to exchange Registrable Securities forExchange Securities (assuming that such Holder (a) is not an affiliate ofthe Company or the Guarantors within the meaning of Rule 405 under the1933 Act, (b) is not a broker-dealer tendering Registrable Securitiesacquired directly from the Company and the Guarantors for its own account, (c) acquiredthe Exchange Securities in the ordinary course of such Holder’s business and (d) hasno arrangements or understandings with any Person to participate in theExchange Offer for the purpose of distributing the Exchange Securities) totransfer such Exchange Securities from and after their receipt without anylimitations or restrictions under the 1933 Act and under state securities orblue sky laws.

 

In connection with the Exchange Offer, the Company andthe Guarantors shall:

 

(a)           mailas promptly as practicable to each Holder a copy of the Prospectus forming partof the Exchange Offer Registration Statement, together with an appropriateletter of transmittal and related documents;

 

(b)           keepthe Exchange Offer open for acceptance for a period of not less than30 calendar days after the date notice thereof is mailed to the Holders(or longer if required by applicable law) (such period referred to herein asthe “Exchange Period”);

 

(c)           utilizethe services of the Depositary for the Exchange Offer;

 

(d)           permitHolders to withdraw tendered Registrable Securities at any time prior to 5:00 p.m.(Eastern Time), on the last business day of the Exchange Period, by sending tothe institution specified in the notice, a telegram, telex, facsimiletransmission or letter setting forth the name of such Holder, the principalamount of Registrable Securities delivered for exchange, and a statement thatsuch Holder is withdrawing such Holder’s election to have such Securitiesexchanged;

 

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(e)           notifyeach Holder that any Registrable Security not tendered will remain outstandingand continue to accrue interest, but will not retain any rights under thisAgreement (except in the case of the Initial Purchasers and ParticipatingBroker-Dealers as provided herein); and

 

(f)            otherwisecomply in all respects with all applicable laws relating to the Exchange Offer.

 

If, prior to consummation of the Exchange Offer, theInitial Purchasers hold any Securities acquired by them and having the statusof an unsold allotment in the initial distribution, the Company and theGuarantors upon the request of any Initial Purchaser shall, simultaneously withthe delivery of the Exchange Securities in the Exchange Offer, issue anddeliver to such Initial Purchaser in exchange (the “Private Exchange”)for the Securities held by such Initial Purchaser, a like principal amount ofdebt securities of the Company on a senior unsecured basis, that are identical(except that such securities shall bear appropriate transfer restrictions) tothe Exchange Securities (including the Guarantees thereon, the “PrivateExchange Securities”).

 

The Exchange Securities and the Private ExchangeSecurities shall be issued under (i) the Indenture or (ii) anindenture identical in all material respects to the Indenture and which, ineither case, has been qualified under the Trust Indenture Act of 1939, asamended (the “TIA”), or is exempt from such qualification and shallprovide that the Exchange Securities shall not be subject to the transferrestrictions set forth in the Indenture but that the Private ExchangeSecurities shall be subject to such transfer restrictions.  The Indenture or such indenture shall providethat the Exchange Securities, the Private Exchange Securities and theSecurities shall vote and consent together on all matters as one class and thatnone of the Exchange Securities, the Private Exchange Securities or theSecurities will have the right to vote or consent as a separate class on anymatter.  The Private Exchange Securitiesshall be of the same series as and the Company and the Guarantors shall use allcommercially reasonable efforts to have the Private Exchange Securities bearthe same CUSIP number as the Exchange Securities.  The Company and the Guarantors shall not haveany liability under this Agreement solely as a result of such Private ExchangeSecurities not bearing the same CUSIP number as the Exchange Securities.

 

As soon as practicable after the close of the ExchangeOffer and/or the Private Exchange, as the case may be, the Company and theGuarantors shall:

 

(i)  accept forexchange all Registrable Securities duly tendered and not validly withdrawnpursuant to the Exchange Offer in accordance with the terms of the Exchange OfferRegistration Statement and the letter of transmittal which shall be an exhibitthereto;

 

(ii)  accept forexchange all Securities properly tendered pursuant to the Private Exchange;

 

(iii)  deliver tothe Trustee for cancellation all Registrable Securities so accepted forexchange; and

 

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(iv)  cause theTrustee promptly to authenticate and deliver Exchange Securities or PrivateExchange Securities, as the case may be, to each Holder of Registrable Securitiesso accepted for exchange in a principal amount equal to the principal amount ofthe Registrable Securities of such Holder so accepted for exchange.

 

Interest on each Exchange Security and PrivateExchange Security will accrue from the last date on which interest was paid onthe Registrable Securities surrendered in exchange therefor or, if no interesthas been paid on the Registrable Securities, from the date of originalissuance.  The Exchange Offer and the PrivateExchange shall not be subject to any conditions, other than (i) that theExchange Offer or the Private Exchange, or the making of any exchange by aHolder, does not violate applicable law or any applicable interpretation of thestaff of the SEC, (ii) the due tendering of Registrable Securities inaccordance with the Exchange Offer and the Private Exchange, (iii) thateach Holder of Registrable Securities exchanged in the Exchange Offer shallhave represented that all Exchange Securities to be received by it shall beacquired in the ordinary course of its business and that at the time of theconsummation of the Exchange Offer it shall have no arrangement orunderstanding with any person to participate in the distribution (within themeaning of the 1933 Act) of the Exchange Securities and shall have made suchother representations as may be reasonably necessary under applicable SECrules, regulations or interpretations to render the use of Form S-4 orother appropriate form under the 1933 Act available and (iv) that noaction or proceeding shall have been instituted or threatened in any court orby or before any governmental agency with respect to the Exchange Offer or thePrivate Exchange which, in the Company’s judgment, would reasonably be expectedto impair the ability of the Company and the Guarantors to proceed with theExchange Offer or the Private Exchange. The Company shall inform the Initial Purchasers of the names andaddresses of the Holders to whom the Exchange Offer is made, and the Initial Purchasersshall have the right to contact such Holders and otherwise facilitate thetender of Registrable Securities in the Exchange Offer.

 

2.2           Shelf Registration.  (i) If, because of any changes in law,SEC rules or regulations or applicable interpretations thereof by thestaff of the SEC, the Company and the Guarantors are not permitted to effectthe Exchange Offer as contemplated by Section 2.1 hereof, (ii) iffor any other reason the Exchange Offer Registration Statement is not declaredeffective within 270 days following the original issue of the RegistrableSecurities or the Exchange Offer is not consummated within 300 days after theoriginal issue of the Registrable Securities, (iii) if a Holder is notentitled to participate in the Exchange Offer due to a change in law or SECpolicy or if a Holder may not resell the Exchange Notes acquired by it in theExchange Offer to the public without delivering a prospectus and the prospectuscontained in the Exchange Offer Registration Statement is not appropriate oravailable for such resales by such Holder due to a change in law or SEC policy,provided that in each case such Holder provides notice to the Companywithin 30 days of any such change in law or SEC policy, (iv) if a Holdernotifies the Company that it is a broker-dealer and owns Securities acquireddirectly from the Company or the Company’s Affiliates (as defined in theIndenture), or (v) Holders of a majority of the Securities are notpermitted to resell the Exchange Notes acquired by them in the Exchange Offerto the public without restriction under the 1933 Act and without restrictionunder applicable blue sky or state securities laws, then in case of each of clauses(i) through (v) the Company and the Guarantors shall, atthe Company’s cost:

 

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(a)           Aspromptly as practicable but no later than 300 days after the original issue ofthe Registrable Securities, file with the SEC, and thereafter shall use itsreasonable best efforts to cause to be declared effective as promptly aspracticable thereafter, a Shelf Registration Statement relating to the offerand sale of the Registrable Securities by the Holders from time to time inaccordance with the methods of distribution elected by the Majority Holdersparticipating in the Shelf Registration and set forth in such ShelfRegistration Statement.

 

(b)           Useits reasonable best efforts to keep the Shelf Registration Statementcontinuously supplemented and amended until the earliest of (i) the timewhen the Registrable Securities covered by the Shelf Registration Statement canbe sold pursuant to Rule 144 without any limitations under clauses (c),(e), (f) and (h) of Rule 144, (ii) thesecond anniversary of the effective date of the Shelf Registration Statement,or (iii) for such shorter period that will terminate when all RegistrableSecurities covered by the Shelf Registration Statement have been sold pursuantto the Shelf Registration Statement or cease to be outstanding or otherwise tobe Registrable Securities (the “Effectiveness Period”);  provided*,*however,that the Effectiveness Period in respect of the Shelf Registration Statementshall be extended to the extent required to permit dealers to comply with theapplicable prospectus delivery requirements of Rule 174 under the 1933 Actand as otherwise provided herein.

 

(c)           Notwithstandingany other provisions hereof, use its best efforts to ensure that (i) anyShelf Registration Statement and any amendment thereto and any Prospectusforming part thereof and any supplement thereto complies in all materialrespects with the 1933 Act and the rules and regulations thereunder, (ii) anyShelf Registration Statement and any amendment thereto does not, when itbecomes effective, contain an untrue statement of a material fact or omit tostate a material fact required to be stated therein or necessary to make thestatements therein not misleading and (iii) any Prospectus forming part ofany Shelf Registration Statement, and any supplement to such Prospectus (asamended or supplemented from time to time), does not include an untruestatement of a material fact or omit to state a material fact necessary inorder to make the statements, in light of the circumstances under which theywere made, not misleading.

 

The Company and the Guarantors shall not permit anysecurities other than Registrable Securities to be included in the ShelfRegistration Statement.  The Company andthe Guarantors further agree, if necessary, to supplement or amend the ShelfRegistration Statement, as required by Section 3(b) below, andto furnish to the Holders of Registrable Securities copies of any suchsupplement or amendment promptly after its being used or filed with the SEC.

 

2.3           Expenses.  The Company shall pay all RegistrationExpenses in connection with the registration pursuant to Section 2.1or 2.2.  Each Holder shall pay allunderwriting discounts and commissions and transfer taxes, if any, relating tothe sale or disposition of such Holder’s Registrable Securities pursuant to theShelf Registration Statement.

 

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2.4           Effectiveness.  (a) The Company and the Guarantors willbe deemed not to have used their reasonable best efforts to cause the ExchangeOffer Registration Statement or the Shelf Registration Statement, as the casemay be, to become, or to remain, effective during the requisite period if theCompany and the Guarantors voluntarily take any action that would, or omit totake any action which omission would, result in any such Registration Statementnot being declared effective or in the Holders of Registrable Securitiescovered thereby not being able to exchange or offer and sell such RegistrableSecurities during that period as and to the extent contemplated hereby, unlesssuch action is required by applicable law.

 

(b)           AnExchange Offer Registration Statement pursuant to Section 2.1hereof or a Shelf Registration Statement pursuant to Section 2.2hereof will not be deemed to have become effective unless it has been declaredeffective by the SEC; provided*,*however,that if, after it has been declared effective, the offering of RegistrableSecurities pursuant to an Exchange Offer Registration Statement or a ShelfRegistration Statement is interfered with by any stop order, injunction orother order or requirement of the SEC or any other governmental agency orcourt, such Registration Statement will be deemed not to have become effectiveduring the period of such interference, until the offering of RegistrableSecurities pursuant to such Registration Statement may legally resume.

 

2.5           Interest.  In the event that either (a) theExchange Offer Registration Statement is not filed with the Commission on orprior to the 120th calendar day following the date of original issue of theSecurities, (b) the Exchange Offer Registration Statement has not beendeclared effective on or prior to the 270th calendar day following the date oforiginal issue of the Securities or (c) the Exchange Offer is notconsummated or a Shelf Registration Statement is not filed, in either case, onor prior to the 300th calendar day following the date of original issue of theSecurities (each such event referred to in clauses (a) through (c) above,a “Registration Default”), the interest rate borne by the Securitiesshall be increased (“Additional Interest”) by one-quarter of one percentper annum upon the occurrence of each Registration Default, which rate willincrease by one quarter of one percent (0.25%) each 90-day period that suchAdditional Interest continues to accrue under any such circumstance, providedthat the maximum aggregate increase in the interest rate will in no eventexceed one percent (1%) per annum. Following the cure of all Registration Defaults the accrual ofAdditional Interest will cease and the interest rate will revert to theoriginal rate.

 

If the Shelf Registration Statement is unusable by theHolders for any reason after the effective date, and the aggregate number ofdays in any consecutive twelve-month period for which the Shelf RegistrationStatement shall not be usable exceeds 30 days in the aggregate, then theinterest rate borne by the Securities will be increased by 0.25% per annum ofthe principal amount of the Securities for the first 90-day period (or portionthereof) beginning on the 31st such date that such ShelfRegistration Statement ceases to be usable, which rate shall be increased by anadditional 0.25% per annum of the principal amount of the Securities at thebeginning of each subsequent 90-day period, provided that the maximumaggregate increase in the interest rate will in no event exceed one percent(1%) per annum.  Any amounts payableunder this paragraph shall also be deemed “Additional Interest” for purposes ofthis Agreement.  Upon the ShelfRegistration Statement once again becoming usable, the interest rate borne by theSecurities will be reduced to the original interest rate if the Company and theGuarantors are otherwise in compliance with this Agreement at such time.  Additional Interest shall be

 

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computed based on the actualnumber of days elapsed in each 90-day period in which the Shelf RegistrationStatement is unusable.

 

A Registration Default referred to above shall bedeemed not to have occurred and be continuing in relation to a ShelfRegistration Statement if (i) such Registration Default has occurredsolely as a result of (x) the filing of a post-effective amendment to suchShelf Registration Statement to incorporate annual audited financialinformation with respect to the Company where such post-effective amendment isnot yet effective and needs to be declared effective to permit Holders to usethe related prospectus or (y) other material events, with respect to theCompany that would need to be described in such Shelf Registration Statementand (ii) in the case of clause (y), the Company is proceedingpromptly and in good faith to amend or supplement such Shelf RegistrationStatement to describe such events; provided, however, that in anycase if such Registration Default occurs for a continuous period in excess of30 days, Additional Interest shall be payable in accordance with the aboveparagraph from the day such Registration Default occurs until suchRegistration Default is cured.

 

The Company and the Guarantors shall notify theTrustee within three business days after each and every date on which an eventoccurs in respect of which Additional Interest is required to be paid (an “EventDate”).  Additional Interest shall bepaid by depositing with the Trustee, in trust, for the benefit of the Holdersof Registrable Securities, on or before the applicable semiannual interestpayment date, immediately available funds in sums sufficient to pay theAdditional Interest then due.  TheAdditional Interest due shall be payable on each interest payment date to therecord Holder of Securities entitled to receive the interest payment to be paidon such date as set forth in the Indenture. Each obligation to pay Additional Interest shall be deemed to accruefrom and including the day following the applicable Event Date.

 

3.             Registration Procedures.

 

In connection with the obligations of the Company andthe Guarantors with respect to Registration Statements pursuant to Sections2.1 and 2.2 hereof, the Company and the Guarantors shall:

 

(a)           prepareand file with the SEC a Registration Statement, within the relevant time periodspecified in Section 2, on the appropriate form under the 1933 Act,which form (i) shall be selected by the Company, (ii) shall, in thecase of a Shelf Registration, be available for the sale of the RegistrableSecurities by the selling Holders thereof, (iii) shall comply as to formin all material respects with the requirements of the applicable form andinclude or incorporate by reference all financial statements required by theSEC to be filed therewith or incorporated by reference therein, and (iv) shallcomply in all respects with the requirements of Regulation S-T under the 1933Act, and use its best efforts to cause such Registration Statement to becomeeffective and remain effective in accordance with Section 2 hereof;

 

(b)           prepareand file with the SEC such amendments and post-effective amendments to eachRegistration Statement as may be necessary under applicable law to keep suchRegistration Statement effective for the applicable period; and cause eachProspectus to be supplemented by any required prospectus supplement, and as sosupplemented to be filed pursuant to Rule 424 (or any similar provisionthen in force) under the 1933 Act and comply

 

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with the provisions of the 1933Act, the 1934 Act and the rules and regulations thereunder applicable tothem with respect to the disposition of all securities covered by eachRegistration Statement during the applicable period in accordance with the intendedmethod or methods of distribution by the selling Holders thereof (includingsales by any Participating Broker-Dealer);

 

(c)           inthe case of a Shelf Registration, (i) notify each Holder of RegistrableSecurities, at least five business days prior to filing, that a ShelfRegistration Statement with respect to the Registrable Securities is beingfiled and advising such Holders that the distribution of Registrable Securitieswill be made in accordance with the method selected by the Majority Holdersparticipating in the Shelf Registration; (ii) furnish to each Holder ofRegistrable Securities and to each underwriter of an underwritten offering ofRegistrable Securities, if any, without charge, as many copies of eachProspectus, including each preliminary Prospectus, and any amendment orsupplement thereto and such other documents as such Holder or underwriter mayreasonably request, including financial statements and schedules and, if theHolder so requests, all exhibits in order to facilitate the public sale orother disposition of the Registrable Securities; and (iii) hereby consentto the use of the Prospectus or any amendment or supplement thereto by each ofthe selling Holders of Registrable Securities in connection with the offeringand sale of the Registrable Securities covered by the Prospectus or anyamendment or supplement thereto;

 

(d)           useits best efforts to register or qualify the Registrable Securities under allapplicable state securities or “blue sky” laws of such jurisdictions as anyHolder of Registrable Securities covered by a Registration Statement and eachunderwriter of an underwritten offering of Registrable Securities shallreasonably request by the time the applicable Registration Statement isdeclared effective by the SEC, and do any and all other acts and things whichmay be reasonably necessary or advisable to enable each such Holder andunderwriter to consummate the disposition in each such jurisdiction of suchRegistrable Securities owned by such Holder; provided*,*however, that the Company and theGuarantors shall not be required to (i) qualify as foreign corporations oras dealers in securities in any jurisdiction where they would not otherwise berequired to qualify but for this Section 3(d), or (ii) takeany action which would subject them to general service of process or taxationin any such jurisdiction where they are not then so subject;

 

(e)           notifypromptly each Holder of Registrable Securities under a Shelf Registration orany Participating Broker-Dealer who has notified the Company and the Guarantorsthat it is utilizing the Exchange Offer Registration Statement as provided inparagraph (f) below and, if requested by such Holder or ParticipatingBroker-Dealer, confirm such advice in writing promptly (i) when aRegistration Statement has become effective and when any post-effectiveamendments and supplements thereto become effective, (ii) of any requestby the SEC or any state securities authority for post-effective amendments andsupplements to a Registration Statement and Prospectus or for additionalinformation after the Registration Statement has become effective, (iii) ofthe issuance by the SEC or any state securities authority of any stop ordersuspending the effectiveness of a Registration Statement or the initiation of anyproceedings for that purpose, (iv) in the case of a Shelf Registration,if, between the effective date of a Registration Statement and the closing ofany sale of Registrable Securities covered thereby, the representations andwarranties of the Company and the Guarantors contained in any underwritingagreement, securities sales agreement or other similar

 

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agreement, if any, relating tothe offering cease to be true and correct in all material respects, (v) ofthe happening of any event or the discovery of any facts during the period aShelf Registration Statement is effective which makes any statement made insuch Registration Statement or the related Prospectus untrue in any materialrespect or which requires the making of any changes in such RegistrationStatement or Prospectus in order to make the statements therein not misleading,(vi) of the receipt by the Company and the Guarantors of any notificationwith respect to the suspension of the qualification of the RegistrableSecurities or the Exchange Securities, as the case may be, for sale in anyjurisdiction or the initiation or threatening of any proceeding for suchpurpose and (vii) of any determination by the Company and the Guarantorsthat a post-effective amendment to such Registration Statement would beappropriate;

 

(f)            (A) in the case of the Exchange Offer Registration Statement (i) include inthe Exchange Offer Registration Statement a section entitled “Plan ofDistribution” which section shall be reasonably acceptable to MerrillLynch on behalf of the Participating Broker-Dealers, and which shall contain asummary statement of the positions taken or policies made by the staff of theSEC with respect to the potential “underwriter” status of any broker-dealerthat holds Registrable Securities acquired for its own account as a result ofmarket-making activities or other trading activities and that will be thebeneficial owner (as defined in Rule 13d-3 under the Exchange Act) ofExchange Securities to be received by such broker-dealer in the Exchange Offer,whether such positions or policies have been publicly disseminated by the staffof the SEC or such positions or policies, in the reasonable judgment of MerrillLynch on behalf of the Participating Broker-Dealers and its counsel, representthe prevailing views of the staff of the SEC, including a statement that anysuch broker-dealer who receives Exchange Securities for Registrable Securitiespursuant to the Exchange Offer may be deemed a statutory underwriter and mustdeliver a prospectus meeting the requirements of the 1933 Act in connectionwith any resale of such Exchange Securities, (ii) furnish to eachParticipating Broker-Dealer who has delivered to the Company and the Guarantorsthe notice referred to in Section 3(e), without charge, as manycopies of each Prospectus included in the Exchange Offer RegistrationStatement, including any preliminary prospectus, and any amendment orsupplement thereto, as such Participating Broker-Dealer may reasonably request,(iii) hereby consent to the use of the Prospectus forming part of theExchange 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 ortransfer of the Exchange Securities covered by the Prospectus or any amendmentor supplement thereto, and (iv) include in the transmittal letter orsimilar documentation to be executed by an exchange offeree in order toparticipate in the Exchange Offer (x) the following provision:

 

“If the exchange offeree is a broker-dealer holdingRegistrable Securities acquired for its own account as a result ofmarket-making activities or other trading activities, it will deliver aprospectus meeting the requirements of the 1933 Act in connection with anyresale of Exchange Securities received in respect of such RegistrableSecurities pursuant to the Exchange Offer;” and

 

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(y) astatement to the effect that by a broker-dealer making the acknowledgmentdescribed in clause (x) and by delivering a Prospectus in connectionwith the exchange of Registrable Securities, the broker-dealer will not bedeemed to admit that it is an underwriter within the meaning of the 1933 Act;and

 

(B)  in the case ofany Exchange Offer Registration Statement, the Company and the Guarantors agreeto deliver to the Initial Purchasers on behalf of the ParticipatingBroker-Dealers upon the effectiveness of the Exchange Offer RegistrationStatement (i) an opinion of counsel or opinions of counsel substantiallyin the form attached hereto as Exhibit A, (ii) officers’ certificatessubstantially in the form customarily delivered in a public offering of debtsecurities and (iii) an agreed upon procedures letter or letters incustomary form from the Company’s independent certified public accountants(and, if necessary, any other independent certified public accountants of anysubsidiary of the Company or of any business acquired by the Company and theGuarantors for which financial statements are, or are required to be, includedin the Registration Statement) at least as broad in scope and coverage as thecomfort letter or comfort letters delivered to the Initial Purchasers inconnection with the initial sale of the Securities to the Initial Purchasers;

 

(g)           (i) in the case of an Exchange Offer, furnish counsel for the Initial Purchasersand (ii) in the case of a Shelf Registration, furnish counsel for theHolders of Registrable Securities copies of any comment letters received fromthe SEC or any other request by the SEC or any state securities authority foramendments or supplements to a Registration Statement and Prospectus or foradditional information;

 

(h)           makeevery reasonable effort to obtain the withdrawal of any order suspending theeffectiveness of a Registration Statement at the earliest possible moment;

 

(i)            inthe case of a Shelf Registration, furnish to each Holder of RegistrableSecurities, and each underwriter, if any, without charge, at least oneconformed copy of each Registration Statement and any post-effective amendmentthereto, including financial statements and schedules (without documentsincorporated therein by reference and all exhibits thereto, unless requested);

 

(j)            inthe case of a Shelf Registration, cooperate with the selling Holders ofRegistrable Securities to facilitate the timely preparation and delivery ofcertificates representing Registrable Securities to be sold and not bearing anyrestrictive legends; and enable such Registrable Securities to be in suchdenominations (consistent with the provisions of the Indenture) and registeredin such names as the selling Holders or the underwriters, if any, mayreasonably request at least three business days prior to the closing of anysale of Registrable Securities;

 

(k)           inthe case of a Shelf Registration, upon the occurrence of any event or thediscovery of any facts, each as contemplated by Sections 3(e)(v) and3(e)(vi) hereof, as promptly as practicable after the occurrence ofsuch an event, use its reasonable best efforts to prepare a supplement orpost-effective amendment to the Registration Statement or the relatedProspectus or any document incorporated therein by reference or file any otherrequired document so that, as

 

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thereafter delivered to thepurchasers of the Registrable Securities or Participating Broker-Dealers, suchProspectus will not contain at the time of such delivery any untrue statementof a material fact or omit to state a material fact necessary to make thestatements therein, in light of the circumstances under which they were made,not misleading or will remain so qualified. At such time as such public disclosure is otherwise made or the Companydetermines that such disclosure is not necessary, in each case to correct anymisstatement of a material fact or to include any omitted material fact, theCompany agrees promptly to notify each Holder of such determination and tofurnish each Holder such number of copies of the Prospectus as amended orsupplemented, as such Holder may reasonably request;

 

(l)            inthe case of a Shelf Registration, a reasonable time prior to the filing of anyRegistration Statement, any Prospectus, any amendment to a RegistrationStatement or amendment or supplement to a Prospectus or any document which isto be incorporated by reference into a Registration Statement or a Prospectusafter initial filing of a Registration Statement, provide copies of suchdocument to the Initial Purchasers on behalf of such Holders; and makerepresentatives of the Company as shall be reasonably requested by the Holdersof Registrable Securities, or the Initial Purchasers on behalf of such Holders,available for discussion of such document;

 

(m)          obtaina CUSIP number for all Exchange Securities, Private Exchange Securities orRegistrable Securities, as the case may be, not later than the effective dateof a Registration Statement, and provide the Trustee with printed certificatesfor the Exchange Securities, Private Exchange Securities or the RegistrableSecurities, as the case may be, in a form eligible for deposit with theDepositary;

 

(n)           (i) cause the Indenture to be qualified under the TIA in connection with theregistration of the Exchange Securities or Registrable Securities, as the casemay be, (ii) cooperate with the Trustee and the Holders to effect suchchanges to the Indenture as may be required for the Indenture to be soqualified in accordance with the terms of the TIA and (iii) execute, anduse its best efforts to cause the Trustee to execute, all documents as may berequired to effect such changes, and all other forms and documents required tobe filed with the SEC to enable the Indenture to be so qualified in a timelymanner;

 

(o)           inthe case of a Shelf Registration, enter into agreements (including underwritingagreements) and take all other customary and appropriate actions in order toexpedite or facilitate the disposition of such Registrable Securities and insuch connection whether or not an underwriting agreement is entered into andwhether or not the registration is an underwritten registration:

 

(i)  make suchrepresentations and warranties to the Holders of such Registrable Securitiesand the underwriters, if any, in form, substance and scope as are customarilymade by issuers to underwriters in similar underwritten offerings as may bereasonably requested by them;

 

(ii)  obtainopinions of counsel to the Company and the Guarantors and updates thereof(which counsel and opinions (in form, scope and substance) shall be reasonablysatisfactory to the managing underwriters, if any, and the holders of amajority in

 

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principal amount of the Registrable Securities beingsold) addressed to each selling Holder and the underwriters, if any, coveringthe matters customarily covered in opinions requested in sales of securities orunderwritten offerings and such other matters as may be reasonably requested bysuch Holders and underwriters;

 

(iii)  obtain “coldcomfort” letters and updates thereof from the Company’s independent certifiedpublic accountants (and, if necessary, any other independent certified publicaccountants of any subsidiary of the Company or of any business acquired by theCompany and the Guarantors for which financial statements are, or are requiredto be, included in the Registration Statement) addressed to the underwriters,if any, and use reasonable efforts to have such letter addressed to the sellingHolders of Registrable Securities (to the extent consistent with Statement onAuditing Standards No. 72 of the American Institute of Certified PublicAccounts), such letters to be in customary form and covering matters of the typecustomarily covered in “cold comfort” letters to underwriters in connectionwith similar underwritten offerings;

 

(iv)  enter into asecurities sales agreement with the Holders and an agent of the Holdersproviding for, among other things, the appointment of such agent for theselling Holders for the purpose of soliciting purchases of RegistrableSecurities, which agreement shall be in form, substance and scope customary forsimilar offerings;

 

(v)  if anunderwriting agreement is entered into, cause the same to set forthindemnification provisions and procedures substantially equivalent to theindemnification provisions and procedures set forth in Section 4hereof with respect to the underwriters and all other parties to be indemnifiedpursuant to said Section or, at the request of any underwriters, in theform customarily provided to such underwriters in similar types oftransactions; and

 

(vi)  deliver suchdocuments and certificates as may be reasonably requested and as arecustomarily delivered in similar offerings to the Holders of a majority inprincipal amount of the Registrable Securities being sold and the managingunderwriters, if any.

 

The above shall be done at (i) the effectivenessof such Registration Statement (and each post-effective amendment thereto) and (ii) eachclosing under any underwriting or similar agreement as and to the extentrequired thereunder;

 

(p)           inthe case of a Shelf Registration or if a Prospectus is required to be deliveredby any Participating Broker-Dealer in the case of an Exchange Offer, makeavailable for inspection by representatives of the Holders of the RegistrableSecurities, any underwriters participating in any disposition pursuant to aShelf Registration Statement, any Participating Broker-Dealer and any counselor accountant retained by any of the foregoing, all financial and otherrecords, pertinent corporate documents and properties of the Company and theGuarantors reasonably requested by any such persons, and cause the respectiveofficers, directors, employees, and any other agents of the Company and theGuarantors to supply all information reasonably requested by any suchrepresentative, underwriter, special counsel or accountant in connection with aRegistration Statement, and make such representatives of the Company and

 

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the Guarantors available fordiscussion of such documents as shall be reasonably requested by the InitialPurchasers;

 

(q)           (i) in the case of an Exchange Offer Registration Statement, a reasonable timeprior to the filing of any Exchange Offer Registration Statement, anyProspectus forming a part thereof, any amendment to an Exchange OfferRegistration Statement or amendment or supplement to such Prospectus, providecopies of such document to the Initial Purchasers and to counsel to the Holdersof Registrable Securities and make such changes in any such document prior tothe filing thereof as the Initial Purchasers or counsel to the Holders ofRegistrable Securities may reasonably request and, except as otherwise requiredby applicable law, not file any such document in a form to which the InitialPurchasers on behalf of the Holders of Registrable Securities and counsel tothe Holders of Registrable Securities shall not have previously been advisedand furnished a copy of or to which the Initial Purchasers on behalf of theHolders of Registrable Securities or counsel to the Holders of RegistrableSecurities shall reasonably object, and make the representatives of the Companyand the Guarantors available for discussion of such documents as shall bereasonably requested by the Initial Purchasers; and

 

(ii)  in the case ofa Shelf Registration, a reasonable time prior to filing any Shelf RegistrationStatement, any Prospectus forming a part thereof, any amendment to such ShelfRegistration Statement or amendment or supplement to such Prospectus, providecopies of such document to the Holders of Registrable Securities, to theInitial Purchasers, to counsel for the Holders and to the underwriter orunderwriters of an underwritten offering of Registrable Securities, if any,make such changes in any such document prior to the filing thereof as theInitial Purchasers, the counsel to the Holders or the underwriter orunderwriters reasonably request and not file any such document in a form towhich the Majority Holders, the Initial Purchasers on behalf of the Holders ofRegistrable Securities, counsel for the Holders of Registrable Securities orany underwriter shall not have previously been advised and furnished a copy ofor to which the Majority Holders, the Initial Purchasers on behalf of theHolders of Registrable Securities, counsel to the Holders of RegistrableSecurities or any underwriter shall reasonably object, and make therepresentatives of the Company and the Guarantors available for discussion ofsuch document as shall be reasonably requested by the Holders of RegistrableSecurities, the Initial Purchasers on behalf of such Holders, counsel for theHolders of Registrable Securities or any underwriter.

 

(r)            inthe case of a Shelf Registration, use its best efforts to cause all RegistrableSecurities to be listed on any securities exchange on which similar debtsecurities issued by the Company are then listed if requested by the MajorityHolders, or if requested by the underwriter or underwriters of an underwrittenoffering of Registrable Securities, if any;

 

(s)           inthe case of a Shelf Registration, use its best efforts to cause the RegistrableSecurities to be rated by the appropriate rating agencies, if so requested bythe Majority Holders, or if requested by the underwriter or underwriters of anunderwritten offering of Registrable Securities, if any;

 

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(t)            otherwisecomply with all applicable rules and regulations of the SEC and makeavailable to its security holders, as soon as reasonably practicable, anearnings statement covering at least 12 months which shall satisfy theprovisions of Section 11(a) of the 1933 Act and Rule 158thereunder;

 

(u)           cooperateand assist in any filings required to be made with the NASD and, in the case ofa Shelf Registration, in the performance of any due diligence investigation byany underwriter and its counsel (including any “qualified independentunderwriter” that is required to be retained in accordance with the rules andregulations of the NASD); and

 

(v)           uponconsummation of an Exchange Offer or a Private Exchange, obtain a customaryopinion of counsel to the Company and the Guarantors addressed to the Trusteefor the benefit of all Holders of Registrable Securities participating in theExchange Offer or Private Exchange, and which includes an opinion that (i) theCompany and the Guarantors have duly authorized, executed and delivered theExchange Securities and/or Private Exchange Securities, as applicable, and therelated indenture, and (ii) each of the Exchange Securities and relatedindenture constitute a legal, valid and binding obligation of the Company andthe Guarantors, enforceable against the Company and the Guarantors inaccordance with its respective terms (with customary exceptions).

 

In the case of a Shelf Registration Statement, theCompany and the Guarantors may (as a condition to such Holder’s participationin the Shelf Registration) require each Holder of Registrable Securities tofurnish to the Company and the Guarantors such information regarding the Holderand the proposed distribution by such Holder of such Registrable Securities asthe Company may from time to time reasonably request in writing.

 

In the case of a Shelf Registration Statement, eachHolder agrees that, upon receipt of any notice from the Company of thehappening of any event or the discovery of any facts, each of the kinddescribed in Section 3(e)(v) hereof, such Holder willforthwith discontinue disposition of Registrable Securities pursuant to aRegistration Statement until such Holder’s receipt of the copies of thesupplemented or amended Prospectus contemplated by Section 3(k)hereof, and, if so directed by the Company, such Holder will deliver to theCompany (at its expense) all copies in such Holder’s possession, other thanpermanent file copies then in such Holder’s possession, of the Prospectuscovering such Registrable Securities current at the time of receipt of suchnotice.

 

In the event that the Company and the Guarantors failto effect the Exchange Offer or file any Shelf Registration Statement andmaintain the effectiveness of any Shelf Registration Statement as providedherein, the Company and the Guarantors shall not file any RegistrationStatement with respect to any securities (within the meaning of Section 2(1) ofthe 1933 Act) of the Company other than Registrable Securities.

 

If any of the Registrable Securities covered by anyShelf Registration Statement are to be sold in an underwritten offering, theunderwriter or underwriters and manager or managers that will manage suchoffering will be selected by the Majority Holders of such RegistrableSecurities included in such offering and shall be acceptable to theCompany.  No Holder of RegistrableSecurities may participate in any underwritten registration hereunder

 

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unless such Holder (a) agreesto sell such Holder’s Registrable Securities on the basis provided in anyunderwriting arrangements approved by the persons entitled hereunder to approvesuch arrangements and (b) completes and executes all questionnaires,powers of attorney, indemnities, underwriting agreements and other documentsrequired under the terms of such underwriting arrangements.

 

4.             Indemnification; Contribution.

 

(a)           TheCompany and the Guarantors, jointly and severally, agree to indemnify and holdharmless the Initial Purchasers, each Holder, each Participating Broker-Dealer,each Person who participates as an underwriter (any such Person being an “Underwriter”)and each Person, if any, who controls any Holder or Underwriter within themeaning of Section 15 of the 1933 Act or Section 20 of the 1934 Actas follows:

 

(i)  against any andall loss, liability, claim, damage and expense whatsoever, as incurred, arisingout of any untrue statement or alleged untrue statement of a material factcontained in any Registration Statement (or any amendment or supplementthereto) pursuant to which Exchange Securities or Registrable Securities wereregistered under the 1933 Act, including all documents incorporated therein byreference, or the omission or alleged omission therefrom of a material factrequired to be stated therein or necessary to make the statements therein notmisleading, or arising out of any untrue statement or alleged untrue statementof a material fact contained in any Prospectus (or any amendment or supplementthereto) or the omission or alleged omission therefrom of a material fact necessaryin order to make the statements therein, in the light of the circumstancesunder which they were made, not misleading;

 

(ii)  against anyand all loss, liability, claim, damage and expense whatsoever, as incurred, tothe extent of the aggregate amount paid in settlement of any litigation, or anyinvestigation or proceeding by any governmental agency or body, commenced orthreatened, or of any claim whatsoever based upon any such untrue statement oromission, or any such alleged untrue statement or omission;  provided that (subject to Section 4(d) below)any such settlement is effected with the written consent of the Company; and

 

(iii)  against anyand all expense whatsoever, as incurred (including the fees and disbursementsof counsel chosen by any indemnified party), reasonably incurred ininvestigating, preparing or defending against any litigation, or anyinvestigation or proceeding by any governmental agency or body, commenced orthreatened, or any claim whatsoever based upon any such untrue statement oromission, or any such alleged untrue statement or omission, to the extent thatany such expense is not paid under subparagraph (i) or (ii) above;

 

provided, however, that thisindemnity agreement shall not apply to any loss, liability, claim, damage orexpense to the extent arising out of any untrue statement or omission oralleged untrue statement or omission made in reliance upon and in conformitywith written information furnished to the Company by the Holder or Underwriterexpressly for use in a Registration

 

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Statement (or any amendment thereto) or any Prospectus(or any amendment or supplement thereto).

 

(b)           EachHolder severally, but not jointly, agrees to indemnify and hold harmless theCompany, the Guarantors, the Initial Purchasers, each Underwriter and the otherselling Holders, and each of their respective directors and officers, and eachPerson, if any, who controls the Company, the Guarantors, the InitialPurchasers, any Underwriter or any other selling Holder within the meaning of Section 15of the 1933 Act or Section 20 of the 1934 Act, against any and all loss,liability, claim, damage and expense described in the indemnity contained in Section 4(a) hereof,as incurred, but only with respect to untrue statements or omissions, oralleged untrue statements or omissions, made in the Shelf RegistrationStatement (or any amendment thereto) or any Prospectus included therein (or anyamendment or supplement thereto) in reliance upon and in conformity withwritten information with respect to such Holder furnished to the Company bysuch Holder expressly for use in the Shelf Registration Statement (or anyamendment thereto) or such Prospectus (or any amendment or supplement thereto);provided*,*however,that no such Holder shall be liable for any claims hereunder in excess of theamount of net proceeds received by such Holder from the sale of RegistrableSecurities pursuant to such Shelf Registration Statement.

 

(c)           Eachindemnified party shall give notice as promptly as reasonably practicable toeach indemnifying party of any costs and expenses incurred by such indemnifyingparty or any action commenced against it in respect of which indemnity may besought hereunder, but failure so to notify an indemnifying party shall notrelieve such indemnifying party from any liability hereunder to the extent itis not materially prejudiced as a result thereof and in any event shall notrelieve it from any liability which it may have otherwise than on account of thisindemnity agreement.  An indemnifyingparty may participate at its own expense in the defense of such action; provided,however, that counsel to the indemnifying party shall not (except withthe consent of the indemnified party) also be counsel to the indemnifiedparty.  In no event shall theindemnifying party or parties be liable for the fees and expenses of more thanone counsel (in addition to any local counsel) separate from their own counselfor all indemnified parties in connection with any one action or separate butsimilar or related actions in the same jurisdiction arising out of the samegeneral allegations or circumstances. No indemnifying party shall, without theprior written consent of the indemnified parties, settle or compromise or consentto the entry of any judgment with respect to any litigation, or anyinvestigation or proceeding by any governmental agency or body, commenced orthreatened, or any claim whatsoever in respect of which indemnification orcontribution could be sought under this Section 4 (whether or notthe indemnified parties are actual or potential parties thereto), unless suchsettlement, compromise or consent (i) includes an unconditional release ofeach indemnified party from all liability arising out of such litigation,investigation, proceeding or claim and (ii) does not include a statementas to or an admission of fault, culpability or a failure to act by or on behalfof any indemnified party.

 

(d)           Ifat any time an indemnified party shall have requested an indemnifying party toreimburse the indemnified party for fees and expenses of counsel, suchindemnifying party agrees that it shall be liable for any settlement of thenature contemplated by Section 4(a)(ii) effected without itswritten consent if (i) such settlement is entered into more than 45 daysafter receipt by such indemnifying

 

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party of the aforesaid request,(ii) such indemnifying party shall have received notice of the terms ofsuch settlement at least 30 days prior to such settlement being entered intoand (iii) such indemnifying party shall not have reimbursed suchindemnified party in accordance with such request prior to the date of suchsettlement.

 

(e)           Ifthe indemnification provided for in this Section 4 is for anyreason unavailable to or insufficient to hold harmless an indemnified party inrespect of any losses, liabilities, claims, damages or expenses referred totherein, then each indemnifying party shall contribute to the aggregate amountof such losses, liabilities, claims, damages and expenses incurred by suchindemnified party, as incurred, in such proportion as is appropriate to reflectthe relative fault of the Company and the Guarantors on the one hand and theHolders and the Initial Purchasers on the other hand in connection with thestatements 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 and the Guarantorson the one hand and the Holders and the Initial Purchasers on the other handshall be determined by reference to, among other things, whether any suchuntrue or alleged untrue statement of a material fact or omission or allegedomission to state a material fact relates to information supplied by theCompany, the Guarantors, the Holders or the Initial Purchasers and the parties’relative intent, knowledge, access to information and opportunity to correct orprevent such statement or omission.

 

The Company, the Guarantors, the Holders and theInitial Purchasers agree that it would not be just and equitable ifcontribution pursuant to this Section 4 were determined by pro rataallocation (even if the Initial Purchasers were treated as one entity for suchpurpose) or by any other method of allocation which does not take account ofthe equitable considerations referred to above in this Section 4.The aggregate amount of losses, liabilities, claims, damages and expensesincurred by an indemnified party and referred to above in this Section 4shall be deemed to include any legal or other expenses reasonably incurred bysuch indemnified party in investigating, preparing or defending against anylitigation, or any investigation or proceeding by any governmental agency orbody, commenced or threatened, or any claim whatsoever based upon any suchuntrue or alleged untrue statement or omission or alleged omission.

 

Notwithstanding the provisions of this Section 4,no Initial Purchaser shall be required to contribute any amount in excess ofthe amount by which the total price at which the Securities sold by it wereoffered exceeds the amount of any damages which such Initial Purchaser hasotherwise been required to pay by reason of such untrue or alleged untruestatement or omission or alleged omission.

 

No Person guilty of fraudulent misrepresentation(within the meaning of Section 11(f) of the 1933 Act) shall beentitled to contribution from any Person who was not guilty of such fraudulentmisrepresentation.

 

For purposes of this Section 4, eachPerson, if any, who controls an Initial Purchaser or Holder within the meaningof Section 15 of the 1933 Act or Section 20 of the 1934 Act shallhave the same rights to contribution as such Initial Purchaser or Holder, andeach director of the Company or the Guarantors, and each Person, if any, whocontrols the Company or the Guarantors within the meaning of Section 15 ofthe 1933 Act or Section 20 of the 1934

 

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Act shall have the same rightsto contribution as the Company or the Guarantors.  The Initial Purchasers’ respectiveobligations to contribute pursuant to this Section 4 are several inproportion to the principal amount of Securities set forth opposite theirrespective names in Schedule A to the Purchase Agreement and not joint.

 

5.             Miscellaneous.

 

5.1           Rule 144 and Rule 144A.  For so long as the Company is subject to thereporting requirements of Section 13 or 15 of the 1934 Act, the Companycovenants that it will use its reasonable best efforts to file the reportsrequired to be filed by it under the 1933 Act and Section 13(a) or 15(d) ofthe 1934 Act and the rules and regulations adopted by the SECthereunder.  If the Company ceases to beso required to file such reports, the Company covenants that it will upon therequest of any Holder of Registrable Securities (a) make publiclyavailable such information as is necessary to permit sales pursuant to Rule 144under the 1933 Act, (b) deliver such information to a prospective purchaseras is necessary to permit sales pursuant to Rule 144A under the 1933 Actand it will take such further action as any Holder of Registrable Securitiesmay reasonably request, and (c) take such further action that isreasonable in the circumstances, in each case, to the extent required from timeto time to enable such Holder to sell its Registrable Securities withoutregistration under the 1933 Act within the limitation of the exemptionsprovided by (i) Rule 144 under the 1933 Act, as such Rule may beamended from time to time, (ii) Rule 144A under the 1933 Act, as suchRule may be amended from time to time, or (iii) any similar rules orregulations hereafter adopted by the SEC. Upon the request of any Holder of Registrable Securities, the Companywill deliver to such Holder a written statement as to whether it has compliedwith such requirements.  Notwithstandingthe foregoing, nothing in this Section 5.1 shall be deemed to require theCompany and the Guarantors to register any of their securities under the 1934Act.

 

5.2           No Inconsistent Agreements.  Neither the Company nor the Guarantors haveentered into, and the Company and the Guarantors will not after the date ofthis Agreement enter into, any agreement which is inconsistent with the rightsgranted to the Holders of Registrable Securities in this Agreement or otherwiseconflicts with the provisions hereof. The rights granted to the Holders hereunder do not and will not for theterm of this Agreement in any way conflict with the rights granted to theholders of the Company’s and the Guarantors’ other issued and outstandingsecurities under any such agreements.

 

5.3           Amendments and Waivers.  The provisions of this Agreement, includingthe provisions of this sentence, may not be amended, modified or supplemented,and waivers or consents to departures from the provisions hereof may not begiven unless the Company has obtained the written consent of Holders of atleast a majority in aggregate principal amount of the outstanding RegistrableSecurities affected by such amendment, modification, supplement, waiver ordeparture.

 

5.4           Notices.  All notices and other communications providedfor or permitted hereunder shall be made in writing by hand delivery,registered first-class mail, telex, telecopier, or any courier guaranteeingovernight delivery (a) if to a Holder, at the most current address givenby such Holder to the Company by means of a notice given in accordance with theprovisions of this Section 5.4, which address initially is theaddress set forth in the Purchase

 

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Agreement with respect to theInitial Purchasers; and (b) if to the Company or the Guarantors, initiallyat the Company’s address set forth in the Purchase Agreement, and thereafter atsuch other address of which notice is given in accordance with the provisionsof this Section 5.4.

 

All such notices and communications shall be deemed tohave been duly given:  at the timedelivered by hand, if personally delivered; two business days after beingdeposited in the mail, postage prepaid, if mailed; when answered back, iftelexed; when receipt is acknowledged, if telecopied; and on the next businessday if timely delivered to an air courier guaranteeing overnight delivery.

 

Copies of all such notices, demands, or othercommunications shall be concurrently delivered by the person giving the same tothe Trustee under the Indenture, at the address specified in such Indenture.

 

5.5           Successor and Assigns.  This Agreement shall inure to the benefit ofand be binding upon the successors, assigns and transferees of each of theparties, including, without limitation and without the need for an expressassignment, subsequent Holders; provided that nothing herein shall bedeemed to permit any assignment, transfer or other disposition of RegistrableSecurities in violation of the terms of the Purchase Agreement or theIndenture.  If any transferee of anyHolder shall acquire Registrable Securities, in any manner, whether byoperation of law or otherwise, such Registrable Securities shall be heldsubject to all of the terms of this Agreement, and by taking and holding suchRegistrable Securities such person shall be conclusively deemed to have agreedto be bound by and to perform all of the terms and provisions of thisAgreement, including the restrictions on resale set forth in this Agreementand, if applicable, the Purchase Agreement, and such person shall be entitledto receive the benefits hereof.

 

5.6           Third Party Beneficiaries.  The Initial Purchasers (even if the InitialPurchasers are not Holders of Registrable Securities) shall be third partybeneficiaries to the agreements made hereunder between the Company and theGuarantors, on the one hand, and the Holders, on the other hand, and shall havethe right to enforce such agreements directly to the extent they deem suchenforcement necessary or advisable to protect their rights or the rights ofHolders hereunder.  Each Holder ofRegistrable Securities shall be a third party beneficiary to the agreementsmade hereunder between the Company and the Guarantors, on the one hand, and theInitial Purchasers, on the other hand, and shall have the right to enforce suchagreements directly to the extent it deems such enforcement necessary oradvisable to protect its rights hereunder.

 

5.7           SpecificEnforcement.  Without limiting theremedies available to the Initial Purchasers and the Holders, the Company andthe Guarantors acknowledge that any failure by the Company or the Guarantors tocomply with their obligations under Sections 2.1 through 2.4hereof may result in material irreparable injury to the Initial Purchasers orthe Holders for which there is no adequate remedy at law, that it would not bepossible to measure damages for such injuries precisely and that, in the eventof any such failure, the Initial Purchasers or any Holder may obtain suchrelief as may be required to specifically enforce the Company’s and theGuarantors’ obligations under Sections 2.1 through 2.4 hereof.

 

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5.8           Restrictionon Resales.  Until the expiration oftwo years after the original issuance of the Securities and the Guarantees, theCompany and the Guarantors will not, and will cause their “affiliates” (as suchterm is defined in Rule 144(a)(1) under the 1933 Act) not to, resellany Securities and Guarantees which are “restricted securities” (as such termis defined under Rule 144(a)(3) under the 1933 Act) that have beenreacquired by any of them and shall immediately upon any purchase of any suchSecurities and Guarantees submit such Securities and Guarantees to the Trusteefor cancellation.

 

5.9           Counterparts.  This Agreement may be executed in any numberof counterparts and by the parties hereto in separate counterparts, each ofwhich when so executed shall be deemed to be an original and all of which takentogether shall constitute one and the same agreement.

 

5.10         Headings.  The headings in this Agreement are forconvenience of reference only and shall not limit or otherwise affect themeaning hereof.

 

5.11         LimitedWaiver of Sovereign Immunity

 

(a)           *Retention of Sovereign Immunity*.  Byexecuting this Agreement, none of the Company or the Guarantors waives, limitsor modifies its sovereign immunity from unconsented suit or judiciallitigation, except as provided for herein.

 

(b)           *Scope of Waiver*.  Subject to theprovisions contained herein, each of the Company and the Guarantors herebyexpressly grants to the Initial Purchasers and any indemnified party under thisAgreement, an irrevocable limited waiver of its sovereign immunity fromunconsented suit and consent irrevocably to suit exclusively to:

 

(i)            interpret orenforce the terms of this Agreement;

 

(ii)           compelarbitration under the commercial arbitration rules of the AmericanArbitration Association;

 

(iii)          enforce anarbitrator’s decision with respect to arbitration under the commercialarbitration rules of the American Arbitration Association;

 

(iv)          order amountspayable under this Agreement to be paid in accordance with the terms thereofand enforce the award of damages owing as a consequence of a breach of thisAgreement, whether such order or award is the product of litigation orarbitration;

 

(v)           order theseizure and sale of any assets of the Company or a Guarantor used or held foruse in the Related Business (as defined in the Indenture), or the exercise ofany other remedy available generally in the State of New York for judgmentcreditors;

 

(vi)          determinewhether any consent or approval of the Company or a Guarantor has beenimproperly granted or unreasonably withheld; and

 

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(vii)         enforce any judgment or arbitrationdecision prohibiting the Company or a Guarantor from taking any action, ormandating or obligating the Company or a Guarantor to take any action.

 

(c)           *Procedural Requirements*.  The limitedwaiver by each of the Company and the Guarantors of its sovereign immunity asto unconsented suit is effective if, and only if, each and every one of thefollowing conditions is met:

 

(i)  the claim ismade by a party designated under clause (d) below and not by anyother person whatsoever;

 

(ii)  the claimalleges a breach by one or more of the Company and the Guarantors of one ormore of the specific obligations or duties expressly assumed by the Company andthe Guarantors under the terms of this Agreement;

 

(iii)  the claimseeks (a) payment of a specified sum, some specific action, ordiscontinuance of some action, by one or more of the Company and the Guarantorsto bring the Company or the Guarantors, as applicable, into full compliancewith the duties and obligations expressly assumed by the Company and theGuarantors under this Agreement; or (b) money damages for noncompliancewith the terms and provisions of this Agreement;

 

(iv)  the claim ismade in a detailed written statement to each of the Company and the Guarantorsagainst which such claim is being made stating the specific action ordiscontinuance of action by the Company and the Guarantors that would cure thealleged breach or non-performance, or the sum of money claimed to be due andowing to one or more of the Initial Purchasers or Holders by reason of suchspecific breach or non-performance, and the Company and the Guarantors shallhave seven (7) calendar days to cure or cause the cure of such breach ornon-performance or to make such payment before judicial proceedings may beinstituted; provided, however, that this cure period may bereasonably extended in the sole discretion of the Initial Purchasers and theHolders for non-monetary matters as long as the Company and the Guarantors aremaking good faith efforts to cure such breach or non-performance; and

 

(v)  with respect toany claim authorized herein, initial suit, as authorized herein, shall becommenced within the later of three (3) years after the claim accrues oris discovered upon the exercise of due diligence, or such claim shall beforever barred.  The waiver granted herein shall commence on the datehereof and shall continue for three (3) years following the date of thetermination of this Agreement, except that the waiver shall remain effectivefor any proceedings then pending, and all appeals therefrom.

 

(d)           *Recipient of Waiver*.  The recipientsof the benefit of this irrevocable waiver of sovereign immunity are limited tothe Initial Purchasers, the Holders and any and all persons covered by theindemnification provisions hereof; provided, however, that as tosuch latter persons, this waiver extends only to the enforcement of any rightsto indemnification by the Company and the Guarantors and to no other actions orpersons.

 

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(e)           *Governing Law*.  The Company, theGuarantors, the Initial Purchasers and the Holders agree that any disputearising under the provisions of this Agreement shall be governed by, andconstrued in accordance with, the laws of the State of New York applicable tocontracts executed in and to be performed in that state.

 

(f)            *Enforcement*.  Each of the Company andthe Guarantors irrevocably waives its sovereign immunity from a judgment ororder consistent with the terms and provisions of this limited waiver andagreement, which is final because either the time for appeal thereof hasexpired or the judgment or an order is issued by a court having final appellatejurisdiction over the matter. Each of the Company and the Guarantorsconsents to the jurisdiction of, to be sued in and accepts and agrees to bebound by any order or judgment of any of the United States District Courts forNew York or the New York State Supreme Court, and any federal or state courthaving appellate jurisdiction thereover, consistent with the terms andprovisions of this limited waiver and agreement. Each of the Company andthe Guarantors irrevocably waives its sovereign immunity as to any action bythe Initial Purchasers or the Holders in any of the United States DistrictCourts for New York or the New York State Supreme Court, and in the federal orstate courts having appellate jurisdiction thereover, seeking injunctive and/ordeclaratory relief against any of the Company and the Guarantors based upon anyattempt to revoke its irrevocable waiver of its sovereign immunity under thisAgreement, and as to enforcement in said United States Federal District Courtsor New York State Supreme Court of any such final judgment against any of theCompany and the Guarantors. Without in any way limiting the generality ofthe foregoing, each of the Company and the Guarantors expressly authorizes anygovernmental authorities who have the right and duty under applicable law totake any action authorized or ordered by any such court, to take such action togive effect to any judgment entered or order granted in accordance with thisAgreement.

 

(g)           *Waivers*. Each of the Company and the Guarantors hereby expressly and irrevocablywaives:

 

(i)  its rights tohave any dispute, controversy, suit, action or proceeding arising under thisAgreement heard in any other forum whether or not such forum now exists or ishereafter created including, without limitation, any court or other tribunal,forum, council, or adjudicative body of the Nation (each, a “Nation Forum”);

 

(ii)  any claim orright which it may possess to the exercise of jurisdiction by any Nation Forum,including, without limitation, any determination that any Nation Forum hasjurisdiction over any such dispute, controversy, suit, action or proceeding orjurisdiction to determine the scope of such Nation Forum’s jurisdiction;

 

(iii)  anyrequirement which may exist for exhaustion of any remedies available in anyNation Forum prior to the commencement of any dispute, controversy, suit,action or proceeding in any state or federal court even if any such NationForum would have concurrent jurisdiction over any such dispute, controversy,suit, action or proceeding but for such waiver;

 

(iv)  its sovereignimmunity as to the action of the Initial Purchasers or the Holders in any ofthe United States District Courts for New York or the New York State

 

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Supreme Courts, and in the federal or state courtshaving appellate jurisdiction thereover, seeking injunctive and/or declaratoryrelief against any of the Company and the Guarantors based upon an attempt byany of them to revoke its irrevocable waiver of its sovereign immunity or otherwaivers granted hereunder; and

 

(v)  its sovereignimmunity from a judgment or order (including any appellate judgment or otherorder) and post-judgment proceedings supplemental thereto consistent with theterms and provisions hereof, which is final because either the time for appealthereof has expired or the judgment or an order is issued by the court havingfinal jurisdiction over the matter.

 

(h)           *No Revocation of Sovereign Immunity Waiver*. Each of the Company and the Guarantors agrees not to revoke or limit, in wholeor in part, its limited waiver of sovereign immunity contained in this limitedwaiver and agreement or in any way attempt to revoke or limit, in whole or inpart, such limited waiver of sovereign immunity.  In the event of any suchrevocation, limitation, attempted revocation, or attempted limitation, theparties expressly recognize and agree that there remains no adequate remedy atlaw available to the Initial Purchasers and the Holders, each will beirreparably injured upon any revocation or limitation hereof, and each of theCompany and the Guarantors hereby consents to the entry of appropriateinjunctive relief, consistent with the terms and conditions of thisAgreement. In the event of any attempted limitation or revocation of thelimited waiver of sovereign immunity granted herein, the Initial Purchaser orthe Holder affected thereby may immediately seek judicial injunctive relief asprovided in this limited waiver and agreement without first complying with anyof the prerequisites contained herein to the limited waiver of sovereignimmunity granted herein.  Any action seeking injunctive relief hereundershall be brought in one of the United States District Courts for New York orthe New York State Supreme Court, and each of the Company and the Guarantorsexpressly consents to the jurisdiction of, and agrees to be bound by any orderor judgment of such District Courts or state court, and any federal or statecourt with appellate jurisdiction thereover.

 

5.12         DisputeResolution.

 

(a)           *Arbitration*.  If, and only if, a dispute arises between theparties over a matter for which the Company and the Guarantors have provided alimited waiver of immunity under this Agreement (the “Dispute”), andneither the United States District Courts for New York nor the New York StateSupreme Court can or is willing to hear the Dispute, then either party mayrequest binding arbitration of such Dispute in accordance with the proceduresset forth herein.  To initiate binding arbitration of such Dispute, aparty shall notify the other party in writing.  The Dispute shall besettled by binding arbitration in accordance with the Commercial Arbitration Rules ofthe American Arbitration Association, and judgment on the award rendered by thearbitrator may be entered in any court.  One arbitrator shall preside andshall be selected by the American Arbitration Association.

 

(b)           *Restraining Order/Preliminary Injunction*.  Any party, before or during any arbitration,may apply to a court having jurisdiction for a temporary restraining order orpreliminary injunction where such relief is necessary to protect its interestspending completion of the dispute resolution proceedings.

 

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(c)           *Confidentiality*.  Neither party nor the arbitrator may disclosethe existence or results of any arbitration hereunder, which shall beconsidered confidential to the parties, except:

 

(i)  with theexpress prior written consent of the other party, which consent shall not beunreasonably withheld or delayed;

 

(ii)  as required byapplicable law, the rules of any relevant stock exchange or requirement ofany Initial Purchaser or Holder, by order or decree of a court or othergovernmental authority having jurisdiction over such party, or in connectionwith such party’s enforcement of any rights it may have at law or in equity;

 

(iii)  on a “need toknow” basis to persons within or outside such party’s organization, such asattorneys, accountants, bankers, financial advisors and other consultants; or

 

(iv)  after suchinformation has become publicly available without breach of this Agreement.

 

(d)           *Fees and Costs*.  In the event of arbitration, the prevailingparty shall be entitled to all of its costs, including reasonable attorneys’fees and costs and expenses, from the nonprevailing party.

 

(e)           *Location of Arbitration*.  The arbitration shall take place at alocation in an agreed city in the State of New York or such other place as theparties may jointly agree.  The arbitrator shall render an award withinforty-five (45) days from the conclusion of the arbitration.

 

(f)            *Enforcement of Arbitration Decisions*.  The decision of the arbitrator will be finaland binding and enforced with the same force and effect as a decree of a court havingcompetent jurisdiction.  For this purpose, should the losing party in anyarbitration proceeding pursuant to this limited waiver and agreement refuse toabide by the decision of the arbitrator, the prevailing party may apply to anyof the United States District Courts for New York or the New York State SupremeCourt to compel enforcement of the arbitrator’s award resulting from bindingarbitration and each party hereto consents to the jurisdiction of each suchcourt for this purpose.  Each of the Company and the Guarantors herebyexpressly and irrevocably waives its sovereign immunity with respect to theentry of judgment on, and enforcement of, such award by such courts.

 

5.13         Serviceof Process.

 

(a)           *Designation of Service Recipients*.  In any action or proceeding as to which eachof the Company and the Guarantors have waived their sovereign immunity asprovided herein, each of the Company and the Guarantors consents and agreesthat process against it shall be effective if served:

 

(i)  On the Chairmanof the Board of Directors thereof; and

 

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(ii)  By sending two(2) copies of the process by registered or certified mail to the ChiefExecutive Officer of the Company or the Guarantors, as applicable, at theaddress set forth above.

 

(b)           *Appointment Irrevocable*.  The Company and the Guarantors irrevocablyappoint each of the persons in the foregoing clauses and their respectivesuccessors in said offices from time to time, as agent for service of process madein accordance herewith.

 

5.14         Severability.In the event that any one or more of the provisions contained herein, or theapplication thereof in any circumstance, is held invalid, illegal orunenforceable, the validity, legality and enforceability of any such provisionin every other respect and of the remaining provisions contained herein shallnot be affected or impaired thereby.

 

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IN WITNESS WHEREOF, the parties have executedthis Agreement as of the date first written above.

 
|   | SENECA GAMING CORPORATION                            |
|--------|------------------------------------------------------|
|   |                                                 |
|   |                                                 |
|   | By:                                                  |     /s/ John Pasqualoni |   |
|   | Name: John Pasqualoni                                |
|   | Title: Interim President and Chief Executive Officer |
|   |                                                 |
|   |                                                 |
|   | SENECA ERIE GAMING CORPORATION                       |
|   |                                                 |
|   |                                                 |
|   | By:                                                  |     /s/ John Pasqualoni |   |
|   | Name: John Pasqualoni                                |
|   | Title: Interim President and Chief Executive Officer |
|   |                                                 |
|   |                                                 |
|   | SENECA TERRITORY GAMING CORPORATION                  |
|   |                                                 |
|   |                                                 |
|   | By:                                                  |     /s/ John Pasqualoni |   |
|   | Name: John Pasqualoni                                |
|   | Title: Interim President and Chief Executive Officer |
|   |                                                 |
|   |                                                 |
|   | SENECA NIAGARA FALLS GAMING  CORPORATION             |
|   |                                                 |
|   |                                                 |
|   | By:                                                  |     /s/ John Pasqualoni |   |
|   | Name: John Pasqualoni                                |
|   | Title: Interim President and Chief Executive Officer |
|        |                                                      |  |  |  |  |  |

 

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| CONFIRMED AND ACCEPTED,                                 |                                           |
|---------------------------------------------------------|------------------------------------------------|
|  as of the  date first above written:              |                                           |
|                                                    |                                           |
| MERRILL LYNCH & CO.                            |                                           |
|                                                    |                                           |
| MERRILL LYNCH, PIERCE, FENNER & SMITH          |
|                                                    | INCORPORATED                                   |
|                                                    |
| BANC OF AMERICA SECURITIES  LLC                         |                                           |
|                                                    |                                           |
| WELLS FARGO SECURITIES,  LLC                            |                                           |
|                                                    |                                           |
| **By: MERRILL LYNCH, PIERCE, FENNER &  SMITH** |
| ** **                                              | **INCORPORATED**                               |
|                                                    |
| By:                                                     |      /s/ David Tuvlin |   |
| Name:                                                   | David Tuvlin                                   |
| Title:                                                  | Managing  Director                             |
|                                                         |                                                |  |  |  |  |  |

 

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Exhibit A

 

**Form of Opinion of Counsel**

 
| Merrill Lynch & Co.                        |
|-----------------------------------------------------|
| Merrill Lynch, Pierce, Fenner &  Smith     |
|                                                | Incorporated |
| Banc of America Securities LLC                      |
| Wells Fargo Securities, LLC                         |
| c/o Merrill Lynch, Pierce,  Fenner & Smith |
|                                                | Incorporated |
| 4 World Financial Center                            |
| New York, New York 10080                            |
|                                                     |  |  |

 

Ladies and Gentlemen:

 

We have acted as specialcounsel for Seneca Gaming Corporation, a tribally chartered entity under thelaws of the Nation (the “Company”), and the Guarantors (as defined inthe Registration Rights Agreement), in connection with the sale by the Companyto the Initial Purchasers (as defined below) of $200,000,000 aggregateprincipal amount of 71⁄4% Senior Notes due 2012 (the “Notes”) of theCompany pursuant to the Purchase Agreement dated May 18, 2005 (the “PurchaseAgreement”) among the Company, the Guarantors party thereto and MerrillLynch & Co., Merrill Lynch, Pierce, Fenner & SmithIncorporated, Banc of America Securities LLC and Wells Fargo Securities, LLC(collectively, the “Initial Purchasers”) and the filing by the Companyand the Guarantors of an Exchange Offer Registration Statement (the “RegistrationStatement”) in connection with an Exchange Offer to be effected pursuant tothe Registration Rights Agreement (the “Registration Rights Agreement”),dated May 23, 2005 among the Company, the Guarantors and the InitialPurchasers.  This opinion is furnished toyou pursuant to Section 3(f)(B) of the Registration RightsAgreement.  Unless otherwise definedherein, capitalized terms used in this opinion that are defined in theRegistration Rights Agreement are used herein as so defined.

 

We have examined suchdocuments, records and matters of law as we have deemed necessary for purposesof this opinion.  In rendering thisopinion, as to all matters of fact relevant to this opinion, we have assumedthe completeness and accuracy of, and are relying solely upon, therepresentations and warranties of the Company and the Guarantors set forth inthe Purchase Agreement and the statements set forth in certificates of publicofficials and officers of the Company and the Guarantors, without making anyindependent investigation or inquiry with respect to the completeness oraccuracy of such representations, warranties or statements, other than a reviewof the charter, by-laws and relevant minute books of the Company and theGuarantors.

 

Because theprimary purpose of our professional engagement was not to establish or confirmfactual matters or financial or accounting information, and because manydeterminations involved in the preparation of the Registration Statement andthe Prospectus are of a wholly or

 

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partially non-legal character,we are not passing upon and do not assume any responsibility for the accuracy,completeness or fairness of the statements contained in the RegistrationStatement and the Prospectus and we make no representation that we haveindependently verified the accuracy, completeness or fairness of suchstatements.

 

However, in thecourse of our acting as special counsel to the Company in connection with itspreparation of the Registration Statement and the Prospectus, prior to thefiling of the Registration Statement and the Prospectus, we participated inconferences and telephone conversations with representatives of the Company,representatives of the independent public accountants for the Company, duringwhich conferences and conversations the contents of the Registration Statementand the Prospectus and related matters were discussed, and we reviewed certaincorporate records and documents furnished to us by the Company.

 

Based on ourparticipation in such conferences and conversations, our review of such recordsand documents as described above, our understanding of the U.S. federalsecurities laws and the experience we have gained in our practice thereunder, weadvise you that:

 

(1) The Registration Statement and the Prospectus (except the financial statements,financial schedules and other financial data included therein and thestatements set forth under the heading “Plan of Distribution” and the Statementof Eligibility and Qualification of the Trustee on Form T-1 as to which weexpress no view), at the time it was filed with the Commission, appeared on itsface to be appropriately responsive in all material respects to therequirements of the 1933 Act and the rules and regulationsthereunder.  In addition, we do not knowof any contracts or other documents of a character required to be filed asexhibits to the Registration Statement and the Prospectus or required to bedescribed in the Registration Statement and the Prospectus that are not filedor described as required.

 

(2) No information has come to our attention that causes us to believe that theRegistration Statement and the Prospectus (except the financial statements andother financial data included therein and the statements set forth under theheading “Plan of Distribution” and the Statement of Eligibility andQualification of the Trustee on Form T-1 as to which we express no view),as of the date thereof or hereof, contained or contains an untrue statement ofa material fact or omitted or omits to state a material fact necessary in orderto make the statements therein, in the light of the circumstances under whichthey were made, not misleading.

 

This opinion is beingfurnished to you solely for your benefit in connection with the transactionscontemplated by the Registration Rights Agreement, and may not be used for anyother purpose or relied upon by any person other than you.  Except with our prior written consent, theopinions herein expressed are not to be used, circulated, quoted or otherwisereferred to in connection with any transactions other than those contemplatedby the Registration Rights Agreement by or to any other person.

 

Very truly yours,

 

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