Exhibit
4.2


 


MTR GAMING GROUP, INC.


$125,000,000
9% Senior Subordinated Notes due 2012


PURCHASE
AGREEMENT


May 22, 2006


JEFFERIES & COMPANY, INC.

WELLS FARGO SECURITIES, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, California  90025


Ladies and Gentlemen:


Each of MTR Gaming Group, Inc., a Delaware
corporation (the “Company”), and
each Guarantor (as defined below) hereby agrees with you as follows:


1.     Issuance of
Securities. The Company
proposes to issue and sell to the initial purchasers listed on Schedule 1
hereto (each, an “Initial Purchaser”
and, together, the “Initial Purchasers”),
and the Initial Purchasers propose to purchase, $125,000,000 aggregate
principal amount of the Company’s 9% Senior Subordinated Notes due 2012, Series A
(the “Series A Notes”). The Series A
Notes will be issued pursuant to an indenture (the “Indenture”), to be dated as of the Closing Date (as defined
below), among the Company, the Guarantors, and Wells Fargo Bank, N.A., as
trustee (the “Trustee”). The Series A
Notes and the Series B Notes (as defined below), each with the Guarantee
(as defined below) endorsed thereon, are collectively referred to herein as the
“Notes.”


Each of the entities listed on Schedule 2
hereto and any future subsidiary guarantors party to the Indenture (such
entities and such future subsidiary guarantors, each a “Guarantor” and collectively the “Guarantors”) will fully and unconditionally
guarantee on a senior subordinated unsecured basis the obligations under the Notes
and the Indenture (the “Guarantees”),
including the payment of principal, interest, premium, if any, and Liquidated
Damages (as defined in the Time of Sale Information and the Final Offering
Circular, as such terms are defined below), if any, on the Notes. The Company
and the Guarantors are sometimes collectively referred to herein as the “Company Entities.”









 



The Series A Notes will be offered and sold to
the Initial Purchasers pursuant to an exemption from the registration
requirements under the Securities Act of 1933, as amended (the “Act”). The Company and the Guarantors have
prepared (i) a preliminary offering circular, dated May 12, 2006 (the
“Preliminary Offering Circular”),
and (ii) a pricing term sheet attached hereto as Schedule 3, which
includes pricing terms and other information with respect to the Notes (the “Pricing Term Sheet”), in each case,
relating to the offer and sale of the Series A Notes (the “Offering”). The Preliminary Offering
Circular and the Pricing Term Sheet are together referred to herein as the “Time of Sale Information.”  Promptly after execution of this Agreement,
the Company and the Guarantors shall prepare a final offering circular, dated May 22,
2006 (the “Final Offering Circular”),
relating to the Offering.


Upon original issuance thereof, and until such time as
the same is no longer required under the Indenture or the applicable
requirements of the Act, the Series A Notes shall bear the following
legend:


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.


THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS
THAT (X) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), (Y) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, OR (Z) IT IS AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS TWO YEARS (OR SUCH
OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) UNDER
THE SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES BY
NON-AFFILIATES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO
THE ISSUER OR ANY SUBSIDIARIES OF THE ISSUER, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THIS 



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SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL “ACCREDITED INVESTOR,” FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT
TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E), OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN
ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER
APPLICABLE JURISDICTION.


2.     Agreements to
Sell and Purchase. On
the basis of the representations, warranties and agreements contained herein,
and subject to the terms and conditions hereof, the Company shall issue and
sell to each of the Initial Purchasers (and, in order to induce the Initial
Purchasers to purchase the Series A Notes, the Guarantors shall enter into
the Guarantees), and each of the Initial Purchasers, severally and not jointly,
shall purchase from the Company, the principal amount of Series A Notes
set forth opposite the name of such Initial Purchaser on Schedule 1
hereto. The purchase price for the Series A Notes shall be 98.5% of the
principal amount thereof.


3.     Terms of
Offering. The Initial
Purchasers have advised the Company that the Initial Purchasers will make
offers to sell (the “Exempt Resales”)
the Series A Notes purchased by the Initial Purchasers hereunder on the
terms set forth in the Time of Sale Information, solely to persons whom the
Initial Purchasers reasonably believe to be (a) ”qualified institutional 



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buyers,”
as defined in Rule 144A under the Act (“QIBs”),
(b) persons permitted to purchase Series A Notes in offshore
transactions in reliance upon Regulation S under the Act (each, a “Regulation S Purchaser”) or (c) a
limited number of institutional “accredited investors,” as defined in Rule 501(a)(1),
(2), (3) or (7) under the Act that make certain representations and
warranties to the Company and the Initial Purchasers as set forth in the
Accredited Investor Letter attached as Annex A to the Preliminary Offering
Circular (“Accredited Investors”
and, collectively with QIBs and Regulation S Purchasers, “Eligible Purchasers”).


Holders of the Series A
Notes (including subsequent transferees) will have the registration rights set
forth in the registration rights agreement (the “Registration Rights Agreement”), to be executed on and dated
as of the Closing Date. Pursuant to the Registration Rights Agreement, the
Company and the Guarantors will agree, among other things, to file with the
Securities and Exchange Commission (the “Commission”)
under the circumstances set forth therein (a) a registration statement
under the Act (the “Exchange Offer
Registration Statement”) relating to, among other things, the 9% Senior Subordinated Notes due 2012, Series B,
of the Company (the “Series B Notes”),
identical in all material respects to the Series A Notes, including with
respect to the Guarantees thereof (except that the Series B Notes shall
have been registered pursuant to such registration statement), to be offered in
exchange for the Series A Notes (such offer to exchange being referred to
as the “Registered  Exchange Offer”), and (b) under
certain circumstances, a shelf registration statement pursuant to Rule 415
under the Act (the “Shelf Registration
Statement”) relating to the resale by certain holders of the Series A
Notes.


In connection with the Offering, the Company obtained
consents (the “Consent Solicitation”)
from the holders of the Company’s 93⁄4% Senior Notes due 2010 (the “Senior Notes”) to the adoption of certain proposed amendments
(the “Proposed Amendments”) to the
indenture governing the Senior Notes, to permit the issuance of the Notes and
additional borrowings under the New Credit Facility (as defined below), as more
fully described in the Consent Solicitation Statement dated April 18, 2006
(as supplemented, the “Statement”),
and the Letter of Consent, dated April 18, 2006 (as supplemented, the “Letter of Consent”), and the other documents related to the
Consent Solicitation (such other documents, collectively with the Statement and
the Letter of Consent, the “Consent Documents”).
On May 17, 2006, the Company and the Guarantors entered into a
supplemental indenture with Wells Fargo Bank, N.A., the trustee for the Senior
Notes, to effectuate the Proposed Amendments (the “Supplemental Indenture”). The Consent Solicitation, the
Proposed Amendments, and the transactions contemplated by the Consent Documents
and the Supplemental Indenture (including, without limitation, the payment of
the Consent Fee (as defined in the Statement) and the Proposed Amendments
becoming effective and operative), together with any and all other actions
required to be taken, and transactions required to be entered into, by the
Company and the Guarantors to consummate the Consent Solicitation and make
effective and operative the Proposed Amendments on or prior to the Closing
Date, are referred to herein collectively as the “Consent Transactions.”



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In addition, in connection with the Offering, (i) the
Company shall repay on the Closing Date with a portion of the proceeds from the
Offering all amounts owed under its Fourth Amended and Restated Credit
Agreement with Wells Fargo Bank, N.A. (the “Existing
Credit Facility”); and (ii) concurrently with or shortly after
the Closing Date, the Company expects to enter into a Fifth Amended and
Restated Credit Agreement with Wells Fargo Bank, N.A. (the “New Credit Facility”).


This Agreement, the
Indenture, the Registration Rights Agreement, the Notes, the Guarantees, the
Supplemental Indenture and the Consent Documents collectively are referred to
herein as the “Operative Documents.”  The New Credit Facility, together with the
Operative Documents and all other documents or instruments executed by either
of the Company or any of the Subsidiaries in connection with the transactions
contemplated thereby or by the Operative Documents, collectively are referred
to herein as the “Transaction Documents.”  The transactions contemplated by the
Transaction Documents, including, without limitation, the Offering and the
application of the proceeds therefrom as described in the Time of Sale
Information and the Final Offering Circular (including the repayment of all amounts owed under the Existing
Credit Facility), the issuance and
sale of the Notes in accordance with this Agreement, the Consent Transactions
and the borrowing (if any) under the New Credit Facility, collectively are
referred to herein as the “Transactions.”


4.     Delivery and
Payment. Delivery to the
Initial Purchasers of and payment for the Series A Notes shall be made at
a Closing (the “Closing”) to be
held at 9:00 a.m., New York City time, on May 25, 2006, (such time
and date, the “Closing Date”) at
the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South
Grand Avenue, Suite 3400, Los Angeles, California 90071. The Closing Date
and the location of delivery of and the form of payment for the Series A
Notes may be varied by agreement between the Initial Purchasers and the
Company.


The Company shall deliver
to the Initial Purchasers one or more certificates representing the Series A
Notes (the “Global Securities”),
each in definitive form, registered in the name of Cede & Co., as
nominee of The Depository Trust Company (“DTC”),
or such other names as the Initial Purchasers may request upon at least two
Business Day’s notice to the Company, in an amount corresponding to the
aggregate principal amount of the Series A Notes sold pursuant to Exempt
Resales to QIBs and to Accredited Investors, respectively, in each case against
payment by the Initial Purchasers of the purchase price therefor by immediately
available Federal funds bank wire transfer to such bank account as the Company
shall designate to the Initial Purchasers at least two Business Days prior to
the Closing. “Business Day” means
any day other than a Saturday, a Sunday or a day on which banking institutions
in The City of New York or at a place of payment are authorized by law,
regulation or executive order to remain closed.


The Global Securities in
definitive form shall be made available to the Initial Purchasers for
inspection at the offices of Skadden, Arps, Slate, Meagher & Flom LLP,
300 South Grand Avenue, Suite 3400, Los Angeles, California 90071 (or such other place as shall be 



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acceptable
to the Initial Purchasers) not later than the close of business, New York
City time, one Business Day immediately preceding the Closing Date.


5.     Agreements of the Company Entities. Each
of the Company Entities, jointly and severally, hereby agrees:


(a)           Certain
Events. To (i) advise
the Initial Purchasers promptly after obtaining knowledge (and, if requested by
the Initial Purchasers, confirm such advice in writing) of (A) the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Series A Notes
for offer or sale in any jurisdiction, or the initiation of any proceeding for
such purpose by any state securities commission or other regulatory authority,
and (B) the happening of any event that makes any statement of a material
fact made in the Time of Sale Information or the Final Offering Circular untrue
or that requires the making of any additions to or changes in the Time of Sale
Information or the Final Offering Circular in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading, (ii) use its best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption from qualification of
any of the Notes under any state securities or Blue Sky laws, and (iii) if
at any time any state securities commission or other regulatory authority shall
issue an order suspending the qualification or exemption from qualification of
any of the Series A Notes under any such laws, use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time.


(b)           Offering Circular. At any time prior to the completion of the
resale by the Initial Purchasers of all of the Series A Notes pursuant to
Exempt Resales, to (i) furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company, without charge, as many
copies of the Preliminary Offering Circular, the Pricing Term Sheet and the
Final Offering Circular, and any amendments or supplements thereto, as the
Initial Purchasers may reasonably request, and (ii) promptly prepare, upon
the Initial Purchasers’ request, any amendment or supplement to the Preliminary
Offering Circular, the Pricing Term Sheet and/or the Final Offering Circular
that the Initial Purchasers deem may be necessary in connection with Exempt
Resales (and the Company Entities hereby consent, subject to the Initial
Purchasers’ compliance with their representations and warranties set forth in Section 7,
to the use of each of the Preliminary Offering Circular, the Pricing Term Sheet
and the Final Offering Circular, and any amendments and supplements thereto, by
the Initial Purchasers in connection with Exempt Resales).


(c)           Final
Offering Circular; Notice of Amendment or Supplement. As promptly as practicable following
the execution and delivery of this Agreement, to prepare and deliver to the
Initial Purchasers the Final Offering Circular, which shall consist of the
Preliminary Offering Circular as modified only by the information contained in
the Pricing Term Sheet, and the Company shall use its reasonable best 



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efforts to so prepare and deliver the Final
Offering Circular no later than the second business day following the date
hereof. Not to
amend or supplement the Preliminary Offering Circular, the Pricing Term Sheet
or the Final Offering Circular prior to the Closing Date, or at any time prior
to the completion of the resale by the Initial Purchasers of all of the Series A
Notes, unless the Initial Purchasers shall previously have been advised thereof
and shall not have objected thereto within three Business Days after being
furnished a copy thereof.


(d)           Preparation
of Amendments and Supplements.
At any time prior to the completion of the resale by the Initial Purchasers of
all of the Series A Notes pursuant to Exempt Resales, (i) if any
event shall occur as a result of which, in the reasonable judgment of the
Company or the Initial Purchasers or their respective counsel, it becomes
necessary or advisable to amend or supplement the Time of Sale Information or
the Final Offering Circular in order to make the statements therein, in the
light of the circumstances under which they were made and when such Time of
Sale Information or Final Offering Circular, respectively, is delivered to an
Eligible Purchaser, not misleading, or if it is necessary to amend or
supplement the Time of Sale Information or the Final Offering Circular to
comply with Applicable Law (as defined below), forthwith to prepare an
appropriate amendment or supplement to the Time of Sale Information or the
Final Offering Circular, as the case may be (in form and substance satisfactory
to the Initial Purchasers), so that as so amended or supplemented, (A) the
Time of Sale Information and the Final Offering Circular, as the case may be,
will not include an untrue statement of material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made and when such Time of Sale
Information or Final Offering Circular, as the case may be, is so delivered,
not misleading, and (B) the Time of Sale Information and the Final
Offering Circular, as the case may be, will comply with Applicable Law, and (ii) if
it becomes necessary or advisable to amend or supplement the Time of Sale Information
or the Final Offering Circular so that the Time of Sale Information and the
Final Offering Circular, as the case may be, will contain all of the
information specified in, and meet the requirements of, Rule 144A(d)(4) under
the Act, forthwith to prepare an appropriate amendment or supplement to the
Time of Sale Information or the Final Offering Circular, as the case may be,
(in form and substance satisfactory to the Initial Purchasers), so that the
Time of Sale Information or the Final Offering Circular, as the case may be, as
so amended or supplemented, will contain the information specified in, and meet
the requirements of, such Rule.


(e)           Qualification
of Securities. Prior to the
completion of the resale by the Initial Purchasers of all of the Series A
Notes pursuant to Exempt Resales, to cooperate with the Initial Purchasers and
the Initial Purchasers’ counsel in connection with the qualification of the Series A
Notes under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may request and continue such qualification in effect so
long as reasonably required for Exempt Resales, and to file such consents to 



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service of process or other documents as may be
necessary in order to effect such qualification; provided, that none of the Company Entities shall be
required in connection therewith to file any general consent to service of
process or to register or qualify as a foreign corporation in any jurisdiction
where it is not now so qualified or to subject itself to general taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.


(f)            Costs
and Expenses. Whether or not
any of the Transactions are consummated or this Agreement is terminated, to pay
(i) all costs, expenses, fees and taxes incident to and in connection with
the performance of the obligations of the Company Entities under this
Agreement, including:  (A) the
preparation, printing and distribution of the Preliminary Offering Circular,
the Pricing Term Sheet and the Final Offering Circular and all amendments and
supplements thereto (including, without limitation, financial statements and
exhibits), and all preliminary and final Blue Sky memoranda and all other
agreements, memoranda, correspondence and other documents prepared and delivered
in connection herewith (including the furnishing of copies of the foregoing to
the Initial Purchasers and such other persons as the Initial Purchasers may
designate), (B) the printing, processing and distribution (including,
without limitation, word processing and duplication costs) and delivery of, and
performance under, each of the Transaction Documents and any other agreements
or documents in connection with the Transactions, (C) the preparation,
issuance and delivery of the Notes, including the fees and expenses of the
Trustee (including reasonable fees and expenses of its counsel) and the cost of
their respective personnel, and all costs and expenses related to the delivery
of the Notes to the Initial Purchasers and pursuant to Exempt Resales, including
any transfer or other taxes payable thereon (but in no event income taxes of
the Initial Purchasers), and (D) the qualification of the Notes for offer
and sale under the securities or Blue Sky laws of the several states
(including, without limitation, filing fees and reasonable fees and
disbursements of the Initial Purchasers’ counsel relating to such registration
or qualification and the preparation of memoranda related thereto, subject to
the terms of the engagement letter dated April 17, 2006 between Jefferies &
Company, Inc. and the Company); (ii) all fees and expenses of the
counsel and accountants of the Company Entities; (iii) all expenses and
listing fees in connection with the application for quotation of the Series A
Notes in The Portal Market (“PORTAL”) of the National Association of Securities
Dealers, Inc. (the “NASD”); (iv) all fees and expenses
(including fees and expenses of counsel) of the Company in connection with
approval of the Notes by DTC for “book-entry” transfer; (v) all fees
charged by rating agencies in connection with the rating of the Notes; (vi) the
costs and charges of any transfer agent, registrar and/or depositary (including
DTC); (vii) all costs and expenses of the Registered Exchange Offer, the
Exchange Offer Registration Statement and any Shelf Registration Statement, as
set forth in the Registration Rights Agreement; (viii) all fees and
expenses (including reasonable fees and expenses of counsel, subject to any
limitations set forth in the engagement letter between the Company and the
Initial Purchasers) incurred by the Initial Purchasers in connection with the
preparation, negotiation and execution of the 



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Transaction Documents and the consummation of the
Transactions; and (ix) all other costs and expenses incident and necessary
to the performance of the obligations of the Company Entities for which
provision is not otherwise made in this section.


(g)           Use
of Proceeds. To use its
reasonable best efforts to use the proceeds from the sale of the Series A
Notes in the manner described in each of the Time of Sale Information and the
Final Offering Circular under the caption “Use of Proceeds.”


(h)           Waiver
of Certain Laws. To the
extent it may lawfully do so, not to insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension usury
or other law, wherever enacted, now or at any time hereafter in force, that
would prohibit or forgive the payment of all or any portion of the principal of
or interest on the Notes, or that may affect the covenants or the performance
of the Indenture (and, to the extent it may lawfully do so, the Company hereby
expressly waives all benefit or advantage of any such law, and covenants that
it shall not, by resort to any such law, hinder, delay or impede the execution
of any power granted to the Trustee in the Indenture but shall suffer and
permit the execution of every such power as though no such law had been
enacted).


(i)            Integration. Not to, and to ensure that no affiliate (as
defined in Rule 501(b) under the Act) of any of the Company Entities
will, sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any “security” (as defined in the Act) that would be integrated with
the sale of the Series A Notes in a manner that would require the
registration under the Act of the sale to the Initial Purchasers or of the
offers or sales of Series A Notes pursuant to Exempt Resales.


(j)            Rule 144A
Information. For so long as
any of the Series A Notes remain outstanding, during any period in which
the Company is not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), to
make available, upon request, to any holder of the Notes in connection with any
sale thereof and any prospective Eligible Purchaser of such Notes from such
holder, the information required by Rule 144A(d)(4) under the Act.


(k)           DTC. To obtain the approval of DTC for “book
entry” transfer of the Notes, and to comply with the representation letter of
the Company
and the Guarantors to DTC
relating to the approval of the Notes by DTC for “book entry” transfer.


(l)            PORTAL. To use its best efforts to effect the
inclusion of the Series A Notes for trading in PORTAL and to use its best
efforts to maintain the inclusion of the Series A Notes for trading in
PORTAL for so long as the Series A Notes are outstanding.



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(m)          
Reporting Requirements. For
so long as any of the Notes are outstanding, and whether or not required to do
so by the rules and regulations of the Commission, (i) to furnish to
the Trustee and deliver or cause to be delivered to the holders of the Notes
and the Initial Purchasers, within 15 days after the Company is or would have
been required to file such with the Commission, (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the Commission on Forms 10-Q and 10-K if the Company were
required to file such Forms, including for each a “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and, with respect to
the annual information only, a report thereon by the Company’s independent
certified public accountants and (B) all information that would be
required to be contained in a filing with the Commission on Form 8-K
if the Company were required to file such reports, and (ii) from and after
the time the Exchange Offer Registration
Statement or the Shelf Registration Statement (or other registration statement
under the Act with respect to the Notes) is filed with the Commission, to file
such information with the Commission so long as the Commission will accept such
filings.


(n)           No
Selling Efforts or General Solicitation. Except in connection with the Registered Exchange Offer or the filing
of the Shelf Registration Statement, not to, and not to authorize or permit any
person acting on its behalf to, (i) distribute any offering material,
including without limitation, any roadshow materials, in connection with the
offer and sale of the Series A Notes (collectively, “Supplemental Offering Material”) other than
(A) the Preliminary Offering Circular, the Pricing Term Sheet and the
Final Offering Circular and any amendments and supplements thereto prepared in
compliance with Section 5(d) and (B) any Supplemental Offering
Material listed on Schedule 4 hereto, or (ii) solicit any offer to
buy or offer to sell the Series A Notes by means of any form of general
solicitation or general advertising (including, without limitation, as such
terms are used in Regulation D under the Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Act.


(o)           No Similar Offerings.
Not to, and to ensure that no affiliate (as defined in Rule 501(b) of
the Act) of the Company will, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any “security” (as defined in the Act) that
would be integrated with the sale of the Series A Notes in a manner that
would require the registration under the Act of the sale to the Initial
Purchasers or to the Eligible Purchasers of the Series A Notes.


(p)           ERISA. At any time prior to the completion of the
resale by the Initial Purchasers of the Series A Notes, to notify the
Initial Purchasers promptly in writing if any of the Company Entities or any of
their Affiliates becomes a party in interest or a disqualified person with
respect to any employee benefit plan, other than any plan set forth in Schedule
6(kk) hereto, and to identify such plans. The terms “ERISA,” 



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“Affiliates,” “party in interest,” “disqualified
person” and “employee benefit plan” shall have the meanings as set forth in Section 6(kk)
hereof.


(q)           Performance
of Agreements. To comply
with all of its agreements set forth in the Transaction Documents in all
material respects, and to use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under the Operative
Documents by it prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Series A Notes and the Guarantees.


6.     Representations
and Warranties of the Company Entities. Each of the Company Entities, jointly and severally, represents and
warrants to the Initial Purchasers that:


(a)           Offering
Circular. (i) Neither
the Time of Sale Information, nor any individual Supplemental Offering Material
when considered together with the Time of Sale Information, in each case, as of
the Applicable Time (as defined below) contained, (ii) the Final Offering
Circular, as of its date did not, and as of the Closing Date will not, contain
and (iii) each amendment or supplement thereto as of its date will not
contain, in each case, any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
foregoing representation and warranty made in this Section 6(a) shall
not apply to any statements or omissions made in reliance on and in conformity
with information relating to the Initial Purchasers furnished in writing to the
Company by the Initial Purchasers specifically for inclusion in the Time of
Sale Information or the Final Offering Circular. The parties hereto acknowledge
that for purposes of this Agreement (including this Section 6(a) and Section 8)
the only information furnished in writing to the Company by the Initial
Purchasers specifically for inclusion in the Time of Sale Information or the
Final Offering Circular is the information set forth (i) on the cover page of
the Final Offering Circular and in the Pricing Term Sheet with respect to the
price of the Notes, (ii) in the third paragraph on page 132 of the
Preliminary Offering Circular and the Final Offering Circular concerning
offering the Notes for resale by the Initial Purchasers, (iii) in the
fifth, sixth and seventh sentences of the fourth paragraph on page 132 of
the Preliminary Offering Circular and the Final Offering Circular concerning
market-making by the Initial Purchasers, (iv) in the carryover paragraph
from page 132 to 133 of the Preliminary Offering Circular and the Final
Offering Circular concerning stabilization by the Initial Purchasers and (v) in
the first and second full paragraphs on page 133 of the Preliminary
Offering Circular and the Final Offering Circular concerning the affiliation of
the Initial Purchasers and their respective affiliates with the Company and its
affiliates (such information described in the immediately preceding clauses (i) through
(v) of this Section 6(a), the “Furnished Information”).
The Time of Sale Information, as of the Applicable Time, contained, and the
Final Offering Circular, as of its date, contained, and, as of the Closing Date
and as amended or supplemented, will contain, all of the information specified
in, and meet the requirements of, Rule 144A(d)(4) under the Act.



 11














 


Each of the Transaction Documents, as executed and
delivered, and each of the Transactions conforms to the description thereof in
each of the Time of Sale Information and the Final Offering Circular. “Applicable Time” means 1:15 p.m. (New
York city time) as of the date of this Agreement.


(b)           144A
Eligibility. When the Series A
Notes and the Guarantees are issued and delivered pursuant to this Agreement,
neither the Series A Notes nor the Subsidiary Guarantees will be of the
same class (within the meaning of Rule 144A under the Act) as any security
of the Company or the Guarantors that is listed on a national securities
exchange registered under Section 6 of the Exchange Act or that is quoted
in a United States automated inter-dealer quotation system.


(c)           Due
Organization; Good Standing.
Each of the Company Entities (i) has been duly organized, is validly
existing and is in good standing under the laws of its jurisdiction of
organization, (ii) has all requisite power and authority to conduct and
carry on its business and to own, lease, use and operate its properties and
assets as described in each of the Time of Sale Information and the Final
Offering Circular, and (iii) is duly qualified or licensed to do business
and is in good standing as a foreign corporation, authorized to do business in
each jurisdiction in which the nature of its business or the ownership,
leasing, use or operation of its properties and assets requires such
qualification or licensing, except where the failure to be so qualified or
licensed would not, singly or in the aggregate, have a material adverse effect
on (A) the properties, business, operations, earnings, assets, liabilities
or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, (B) the ability of any of the Company Entities to
perform its obligations under any of the Transaction Documents or (C) the
validity of any of the Transaction Documents or the consummation of any of the
Transactions (each, a “Material
Adverse Effect”).


(d)           Subsidiaries. Immediately following the Closing, the only
subsidiaries of the Company will be the direct or indirect subsidiaries of the
Company listed on Schedule 6(d) hereto (collectively, the “Subsidiaries” and each, a “Subsidiary”) and the
Company, except as otherwise set forth on Schedule 6(d) hereto,
will directly own 100% of the outstanding shares of capital stock in each
Subsidiary, in each case, free and clear of all Liens (as defined in each of
the Time of Sale Information and the Final Offering Circular), except Permitted
Liens (as defined in each of the Time of Sale Information and the Final
Offering Circular). Except as disclosed in each of the Time of Sale Information
and the Final Offering Circular, there are no outstanding (i) securities
convertible into or exchangeable for any capital stock of any of the Company
Entities or any of the Subsidiaries, (ii) options, warrants or other
rights to purchase or subscribe for any capital stock or any securities
convertible into or exchangeable for any capital stock of any of the Company
Entities or (iii) contracts, commitments, agreements, understandings,
arrangements, undertakings, rights, calls or claims of any kind relating to the
issuance of any capital stock of any of the Company Entities or any of the 



 12
 






 



Subsidiaries, any such convertible or exchangeable
securities or any such options, warrants or rights. Except as set forth above,
immediately following the Closing, none of the Company Entities will directly
or indirectly own any capital stock of or other equity interest in any person.


(e)           Capitalization. All of the outstanding shares of capital
stock of each of the Company and each of the Subsidiaries have been duly
authorized, are validly issued, fully paid and nonassessable, and were not
issued in violation of, and are not subject to, any preemptive or similar
rights. The table under the caption “Capitalization” in each of the Time of
Sale Information and the Final Offering Circular (including the footnotes
thereto) sets forth, as of its date, the pro forma capitalization of the
Company and the Subsidiaries, on a consolidated basis, after giving effect to
the Transactions. Immediately following the Closing, except as set forth in
such table, neither of the Company nor any of the Subsidiaries will have any
liabilities, absolute, accrued, contingent or otherwise other than:  (i) liabilities that are reflected in
the Company Financial Statements (as defined below), (ii) loans made under
the New Credit Facility or (iii) liabilities incurred subsequent to December 31,
2005, in the ordinary course of business, consistent with past practice, that
would not, singly or in the aggregate, have a Material Adverse Effect.


(f)            No
Other Registration Rights. Except
for this Agreement and the Registration Rights Agreement and, except for
agreements between the Company and its directors, officers and employees
relating to the registration of shares underlying stock options granted in the
ordinary course of the Company’s business, there are no contracts, commitments,
agreements, arrangements, understandings or undertakings of any kind to which
any of the Company Entities or any of the Subsidiaries is a party, or by which
any of them is bound, granting to any person the right (i) to require
either of the Company or any Subsidiary to file a registration statement under
the Act with respect to any securities of either of the Company of any
Subsidiary or requiring either of the Company or any Subsidiary to include such
securities with the Notes registered pursuant to any registration statement, or
(ii) to purchase or offer to purchase any securities of any of the Company
Entities or any of their respective affiliates.


(g)           Power
and Authority. Each of the
Company Entities has all requisite power and authority to execute and deliver,
and to perform its obligations under, the Transaction Documents to which it is
a party and to consummate the Transactions.


(h)           Authorization
of this Agreement. This
Agreement and the Transactions contemplated hereby (including, without
limitation, the Offering and the issuance and sale of the Notes in accordance
with this Agreement) have been duly authorized by each of the Company Entities,
and this Agreement has been validly executed and delivered by, and is the
legal, valid and binding obligation of, each of the Company Entities,
enforceable against each of the Company Entities in accordance with 



 13
 






 



its terms, except that (i) such enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors’ rights generally, (ii) any rights of acceleration and the
availability of equitable remedies may be subject to general principles of
equity (whether considered in a proceeding in equity or at law), and (iii) the
enforceability of the provisions of Section 8 providing for the
indemnification of or contribution to a party with respect to a liability may
be limited if such provisions violate or are contrary to public policy under
applicable law.


(i)            Authorization
of Indenture. The Indenture
and the Transactions contemplated thereby have been duly authorized by each of
the Company and the Guarantors and, on the Closing Date, the Indenture will
have been validly executed and delivered by, and will be the legal, valid and
binding obligation of, each of the Company and the Guarantors, enforceable against
each of the Company and the Guarantors in accordance with its terms, except
that (i) such enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights generally and (ii) any
rights of acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a proceeding in
equity or at law). On the Closing Date, the Indenture will conform to the
requirements of the Trust Indenture Act of 1939, as amended (the “TIA”), applicable to an indenture that is
required to be qualified under the TIA.


(j)            Authorization
of Registration Rights Agreement. The Registration Rights Agreement and the Transactions contemplated
thereby have been duly authorized by each of the Company and the Guarantors
and, on the Closing Date, the Registration Rights Agreement will have been
validly executed and delivered by, and will be the legal, valid and binding
obligation of, each of the Company and the Guarantors, enforceable against each
of the Company and the Guarantors in accordance with its terms, except that (i) such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally, (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law), and (iii) the enforceability of the provisions of Section 8
thereof providing for the indemnification of or contribution to a party with
respect to a liability may be limited if such provisions violate or are
contrary to public policy under applicable law.


(k)           Authorization
of Series A Notes. The Series A
Notes have been duly authorized by the Company for issuance and sale to the
Initial Purchasers pursuant to this Agreement and, on the Closing Date, will
have been validly executed, authenticated, issued and delivered by the Company
in accordance with the terms of this Agreement and the Indenture. When the Series A
Notes have been issued, executed and authenticated in accordance with the terms
of the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Series A Notes will be
legal, valid and binding obligations of the Company, entitled to the benefits 



 14
 






 



of the Indenture and enforceable against the Company
in accordance with their terms, except to the extent that (i) such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law). The Series A Notes rank and will rank junior to all Senior Debt
(as defined in each of the Time of Sale Information and the Final Offering
Circular) of the Company that is outstanding on the date hereof or that may be
incurred hereafter and senior to all Subordinated Indebtedness (as defined in each
of the Time of Sale Information and the Final Offering Circular) of the Company
that is outstanding on the date hereof or that may be incurred hereafter.


(l)            Authorization
of Series B Notes. The Series B
Notes have been duly authorized by the Company and, when issued in the
Registered Exchange Offer, (A) will have been validly executed,
authenticated, issued and delivered in accordance with the terms of the
Indenture, the Registration Rights Agreement and the Registered Exchange Offer
and (B) will be legal, valid and binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against the Company
in accordance with their terms, except to the extent that (i) such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law). The Series B Notes rank and will rank junior to all Senior Debt
of the Company that is outstanding on the date hereof or that may be incurred
hereafter and senior to all Subordinated Indebtedness of the Company that is
outstanding on the date hereof or that may be incurred hereafter.


(m)          
Authorization of Guarantees of Series A Notes. The Guarantee to be endorsed on the Series A
Notes by each Guarantor has been duly authorized by each such Guarantor and, on
the Closing Date, will have been validly executed and delivered by each such
Guarantor in accordance with the terms of the Indenture. When the Series A
Notes have been issued, executed and authenticated in accordance with the terms
of the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Guarantee of each Guarantor
endorsed on the Series A Notes will be the legal, valid and binding
obligation of each such Guarantor, enforceable against each such Guarantor in
accordance with its terms, except to the extent that (i) such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law). The Guarantees to be endorsed on the Series A Notes rank and will
rank junior to all Senior Debt of the Guarantors that is outstanding on the
date hereof or that may be incurred hereafter and senior to all Subordinated



 15
 






 



Indebtedness of the Guarantors that is outstanding
on the date hereof or that may be incurred hereafter.


(n)           Authorization
of Guarantees of Series B Notes. The Guarantee to be endorsed on the Series B Notes by each
Guarantor has been duly authorized by each such Guarantor and, when the Series B
Notes are issued, will have been validly executed and delivered by each such
Guarantor in accordance with the terms of the Indenture, the Registration
Rights Agreement and the Registered Exchange Offer. When the Series B
Notes have been issued, executed and authenticated in accordance with the terms
of the Registered Exchange Offer and the Indenture, the Guarantee of each
Guarantor endorsed on the Series B Notes will be the legal, valid and
binding obligation of each such Guarantor, enforceable against each such
Guarantor in accordance with its terms, except to the extent that (i) such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law). The Guarantees to be endorsed on the Series B Notes will rank
junior to all Senior Debt of the Guarantors that is outstanding on the date
hereof or that may be incurred hereafter and senior to all Subordinated
Indebtedness of the Guarantors that is outstanding on the date hereof or that
may be incurred hereafter.


(o)           Authorization
of the New Credit Facility.
The New Credit Facility and the Transactions contemplated thereby have been
duly authorized by the Company and each Guarantor party thereto, and when the
New Credit Facility is entered into, the New Credit Facility will have been
validly executed and delivered by the Company and each Guarantor party thereto.
When the New Credit Facility has been executed and delivered by the Company and
each Guarantor party thereto, and assuming the due authorization, execution and
delivery of the New Credit Facility by parties thereto other than the Company
and the Guarantors party thereto, the New Credit Facility will be the legal,
valid and binding obligation of, the Company and each Guarantor party thereto,
enforceable against the Company and each Guarantor party thereto in accordance
with its terms, except that (i) such enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors’ rights
generally and (ii) any rights of acceleration and the availability of
equitable remedies may be subject to general principles of equity (whether
considered in a proceeding in equity or at law).


(p)           Authorization of
Consent Documents. The Supplemental Indenture has been duly
authorized, executed and delivered by each of the Company and the Guarantors,
and the Proposed Amendments and the other Consent Transactions have been duly
authorized by the Company and each of the Guarantors, as applicable, and the
Supplemental Indenture constitutes the legal, valid and binding obligation of,
the Company and each of the Guarantors, enforceable against the Company and the
Guarantors in accordance with its terms, except that (i) such
enforceability may be 



 16
 






 



limited by applicable bankruptcy, insolvency or
similar laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law).


(q)           No
Violation. The Company is
not in violation of its certificate of incorporation or bylaws (the “Company Charter Documents”), and none of the Guarantors is in
violation of its certificate of incorporation or bylaws (the “Guarantor Charter Documents” and, collectively with the Company Charter
Documents, the “Charter
Documents”). Neither the
Company nor any of the Subsidiaries is (i) in violation of any federal,
state, local or foreign statute, law or ordinance, or any judgment, decree,
rule, regulation or order, including, without limitation, the West Virginia
Racetrack Video Lottery Act, the West Virginia Racing Act, the Nevada Gaming
Control Act, the Pennsylvania Racing Act, the Pennsylvania Race Horse
Development and Gaming Act, the Minnesota Pari-Mutuel Horse Racing Act, the Ohio
Revised Code Horse Racing Law, the Michigan Horse Racing Law, and the Federal
Interstate Horse Racing Act, in each case including the rules and
regulations promulgated thereunder (collectively, “Applicable Law”), of
any government, governmental or regulatory agency or body (including, without
limitation, the West Virginia Lottery Commission, the West Virginia Racing
Commission, the Nevada Gaming Commission, the Nevada Gaming Control Board, the
Pennsylvania State Horse Racing Commission, the Pennsylvania Gaming Control
Board, the Minnesota Racing Commission, the Ohio State Racing Commission, the
Michigan Office of Racing Commissioner, or other applicable gaming or racing
authority (each, a “Gaming/Racing
Authority”)), court,
arbitrator or self-regulatory organization, domestic or foreign (each, a “Governmental Authority”), other than violations that would not,
singly or in the aggregate, have a Material Adverse Effect, or (ii) in
breach of or default under any bond, debenture, note or other evidence of
indebtedness, indenture, mortgage, deed of trust, lease or any other agreement
or instrument to which any such person is a party or by which any of them or
any of their respective property is bound (collectively, “Applicable Agreements”), other than breaches or defaults that
would not, singly or in the aggregate, have a Material Adverse Effect. There
exists no condition that, with the passage of time or otherwise, would (x) constitute
a violation of such Charter Documents or Applicable Laws or (y) constitute
a breach of or default under any Applicable Agreement or (z) result in the
imposition of any penalty or the acceleration of any indebtedness, other than,
in the case of the immediately preceding clauses (y) and (z), such
breaches, penalties or defaults that would not, singly or in the aggregate,
have a Material Adverse Effect. All Applicable Agreements are in full force and
effect and are legal, valid and binding obligations, and no default has
occurred or is continuing thereunder, other than such defaults that would not,
singly or in the aggregate, have a Material Adverse Effect.


(r)            No
Conflict.
None of the execution,
delivery or performance of any of the Transaction Documents, nor the compliance
with the terms and provisions 



 17
 






 



thereof, nor the consummation of any of the
Transactions shall conflict with, violate, constitute a breach of or a default
(with the passage of time or otherwise) under, result in the imposition of a
Lien on any assets or capital stock of or membership interests in either of the
Company or any of the Subsidiaries (except as created by the Indenture), or
result in an acceleration of indebtedness under or pursuant to, (i) the
Charter Documents, (ii) any Applicable Agreement or (iii) any
Applicable Law. After giving effect to the Transactions, no Default or Event of
Default (each, as defined in each of the Time of Sale Information and the Final
Offering Circular) will exist.


(s)           Permits. No permit, certificate, authorization,
approval, consent, license or order of, or filing, registration, declaration or
qualification with, any Governmental Authority or any other person
(collectively, “Permits”) is required in connection with, or as a
condition to, the execution, delivery or performance of any of the Transaction
Documents, the compliance with the terms and provisions thereof or the
consummation of any of the Transactions, other than (i) such Permits as
have been made or obtained on or prior to the Closing Date, which Permits are
in full force and effect on the Closing Date, (ii) the filing and approval
of (A) the Exchange Offer Registration Statement and, if required by the
Registration Rights Agreement, the Shelf Registration Statement and (B) the
Guarantee of the Series B Notes by Speakeasy Gaming of Las Vegas, Inc.
and Speakeasy Gaming of Fremont, Inc., with the Nevada Gaming Commission
and the Nevada Gaming Control Board, (iii) the order of the Commission
declaring the Exchange Offer Registration Statement or the Shelf Registration
Statement, as the case may be, effective (the Permits described in clause (ii) and
(iii) of this Section 6(s), collectively, the “Post-Closing Permits”) and (iv) such Permits the failure of
which to make or obtain would not, singly or in the aggregate, have a Material
Adverse Effect.


(t)            No Proceedings. Except as disclosed in each of the Time of
Sale Information and the Final Offering Circular, there is no action, claim,
suit, demand, hearing, notice of violation or deficiency, or proceeding
(including, without limitation, any investigation or partial proceeding, such
as a deposition), domestic or foreign (collectively, “Proceedings”), pending or, to the knowledge of the
Company Entities, threatened (i) either with respect to any of the Company
Entities in connection with, or that seeks to restrain, enjoin, prevent the
consummation of, or otherwise challenge, any of the Transaction Documents or
any of the Transactions, or (ii) that could, singly or in the aggregate,
have a Material Adverse Effect. None of the Company Entities is subject to any
judgment, order, decree, rule or regulation of any Governmental Authority
that could, singly or in the aggregate, have a Material Adverse Effect. No
injunction or order has been issued and no Proceeding is pending or, to the
knowledge of the Company Entities, threatened that (i) asserts that the
offer, sale and delivery of the Series A Notes and the Guarantees to the
Initial Purchasers pursuant to this Agreement or the initial resale of the Series A
Notes and the Guarantees by the Initial Purchasers in the manner contemplated
by this Agree­ment is subject to the registration requirements of the Act, or (ii) would
prevent or suspend the issuance or sale of the Notes, including the Exempt
Resales, or the 



 18
 






 



use of the Time of Sale
Information, the Final Offering Circular, or any amendment or supplement
thereto, in any jurisdiction.


(u)           Regulated Persons. Each of the Company Entities and each of
their respective directors, members, managers, officers, employees and agents
(each of the Company Entities and each of such other persons, a “Regulated Person” and, collectively, the “Regulated Persons”) has, and is in compliance with the terms
and conditions of, all Permits (including, without limitation, Permits with
respect to engaging in gaming and/or racing operations, as applicable), necessary
or advisable to own, lease, use and operate the properties and assets and to
conduct and carry on the businesses described in each of the Time of Sale
Information and the Final Offering Circular, other than (i) such Permits
the failure of which to have would not, singly or in the aggregate, have a
Material Adverse Effect and (ii) Post-Closing Permits. All such Permits
are valid and in full force and effect. Each of the Regulated Persons is in
compliance with the terms and conditions of all Permits (including, without
limitation, Permits with respect to engaging in gaming and/or racing
operations, as applicable) necessary or advisable to own, lease, use and
operate the properties and assets and to conduct and carry on the businesses
described in each of the Time of Sale Information and the Final Offering
Circular, other than where such failure to be in compliance would not, singly
or in the aggregate, have a Material Adverse Effect. None of the execution,
delivery or performance of any of the Transaction Documents, nor the compliance
with the terms and provisions thereof, nor the consummation of any of the
Transactions will allow or result in, and no event has occurred which allows or
results in, or after notice or lapse of time would allow or result in, the
imposition of any material penalty under, or the revocation or termination of,
any such Permit or any material impairment of the rights of the holder of any
such Permit. None of the Company Entities has any reason to believe that any
issuer is considering limiting, conditioning, suspending, modifying, revoking
or not renewing any such Permit.


(v)           No Investigations of Regulated Persons. To the knowledge of the Company Entities, (i) no
Governmental Authority is investigating any Regulated Person, and (ii) there
is no basis for any of the Gaming/Racing Authorities to deny the renewal of the
current Permits held by any of the Regulated Persons, except for ordinary
course investigations.


(w)          Title to Assets. Immediately following the Closing, each of
the Company and the Subsidiaries (i) will have good and marketable title,
free and clear of all Liens (other than Permitted Liens), to all property and
assets described in each of the Time of Sale Information and the Final Offering
Circular as being owned by it, (ii) will enjoy peaceful and undisturbed
possession under all leases to which it is a party as lessee and (iii) will
hold a valid leasehold interest with respect to each such lease.



 19














 


(x)            Sufficiency and Condition of
Assets. The assets of each
of the Company and the Subsidiaries include all of the assets and properties
necessary or required in, or otherwise material to, the conduct of the
businesses of each of them as currently conducted and as proposed to be
conducted, and such assets are in working condition, except where the failure
of such assets to be in working condition would not, singly or in the
aggregate, have a Material Adverse Effect.


(y)           Insurance. Each of the Company and the Subsidiaries
maintains reasonably adequate insurance covering its properties, operations,
personnel and businesses against losses and risks in accordance with customary
industry practice. All such insurance is outstanding and duly in force.


(z)            Real Property. No condemnation, eminent domain, or similar
proceeding exists, is pending or, to the knowledge of the Company Entities, is
threatened, with respect to or that could affect any properties or assets of
either of the Company or any of the Subsidiaries, except for such proceedings
as would not, singly or in the aggregate, have a Material Adverse Effect. Other
than as set forth in Schedule 6(z), no owned real property of either of
the Company or any of the Subsidiaries is subject to any sales contract, option,
right of first refusal or similar agreement or arrangement with any third party.
There is no real property currently under contract or subject to an option in
favor of any of the Company or any of the Subsidiaries, except for (i) real
property which the failure of the Company or any of the Subsidiaries to
acquire, would not, singly or in the aggregate, have a Material Adverse Effect,
and (ii) the real property listed on Schedule 6(z) hereto.


(aa)         Related Party Transactions. Except as adequately disclosed in each of
the Time of Sale Information and the Final Offering Circular, there are no
material related party transactions between any of the Company Entities and (i) any
director (or nominee for election as a director) or executive officer of any of
the Company Entities, (ii) any beneficial or record owner of more than
five percent of any class of the Company’s voting securities or (iii) any
member of the immediate family of any of the foregoing persons.


(bb)         Taxes. All tax returns required to be filed by
either of the Company or by any of the Subsidiaries in any jurisdiction
(including foreign jurisdictions) have been filed and, when filed, all such
returns were accurate in all material respects, and all taxes, assessments,
fees and other charges (including, without limitation, withholding taxes,
penalties and interest) due or claimed to be due from either of the Company or
from any of the Subsidiaries have been paid, other than those being contested
in good faith by appropriate proceedings, or those that are currently payable
without penalty or interest and, in each case, for which an adequate reserve or
accrual has been established on the books and records of the Company or the
Subsidiaries, as applicable, in accordance with generally accepted accounting
principles of the United



 20
 






 



States, consistently applied
(“GAAP”). There are no actual or proposed
additional tax assessments for any tax period against either of the Company or
against any of the Subsidiaries that could, singly or in the aggregate, have a
Material Adverse Effect. The charges, accruals and reserves on the books and
records of the Company and the Subsidiaries, as applicable, in respect of any
tax liability for any tax periods not finally determined are adequate to meet
any assessments of tax or re-assessments of additional tax for any such period.


(cc)         Intellectual Property. Other than as would not, singly or in the
aggregate, have a Material Adverse Effect, the Company and the Subsidiaries
own, possess or are licensed under, and have the right to use, all patents,
patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade names
(collectively, “Intellectual
Property”) currently used
in, or necessary for the conduct of, their businesses, free and clear of all
Liens, other than Permitted Liens. To the knowledge of the Company Entities, no
claims have been asserted by any person challenging the use of any such
Intellectual Property by any of the Company or the Subsidiaries or questioning
the validity or effectiveness of any license or agreement related thereto, and
there is no valid basis for any such claim, and the use of such Intellectual
Property by the Company and the Subsidiaries will not infringe on the
Intellectual Property rights of any other person.


(dd)         Accounting Controls. Except as disclosed in each of the Time of
Sale Information and the Final Offering Circular, each of the Company and the
Subsidiaries maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) material transactions are executed
in accordance with management’s general or specific authorization, (ii) material
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP, and to maintain asset accountability, (iii) access
to assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any material differences.


(ee)         Financial Statements. The audited historical consolidated
financial statements and related notes of the Company and the Subsidiaries
contained in each of the Time of Sale Information and the Final Offering
Circular (the “Company
Audited Financial Statements”)
and the unaudited condensed consolidated financial statements and related notes
of the Company and the Subsidiaries contained in each of the Time of Sale
Information and the Final Offering Circular (the “Company Interim Financial Statements” and, together with the Company Audited Financial Statements, the “Company Financial Statements”) present fairly the consolidated financial
position, results of operations and cash flows of the Company and the
Subsidiaries, as of the respective dates and for the respective periods to
which they apply, and have been



 21
 






 



prepared in accordance with
GAAP consistently applied throughout the periods involved and the requirements
of Regulation S-X that would be applicable if the Preliminary Offering Circular
or the Final Offering Circular, as the case may be, were a prospectus included
in a registration statement on Form S-1 filed under the Act (the “S-X Requirements”). The summary historical financial data
included in each of the Time of Sale Information and the Final Offering
Circular for the Company and the Subsidiaries have been prepared on a basis
consistent with that of the Company Financial Statements and present fairly the
financial position and results of operations of the Company and the
Subsidiaries, on a consolidated basis, as of the respective dates and for the
respective periods indicated.


All other financial,
statistical and market and industry related data included in each of the Time
of Sale Information and the Final Offering Circular are fairly and accurately
presented in all material respects and are based on or derived from sources the
Company believe to be reliable and accurate. Ernst & Young LLP are
independent public accountants with respect to the Company.


(ff)           No Material Adverse Change. Subsequent to the respective dates as of
which information is given in each of the Time of Sale Information and the
Final Offering Circular, except as adequately disclosed in each of the Time of
Sale Information and the Final Offering Circular, (i) neither of the
Company nor any of the Subsidiaries has incurred any liabilities, direct or contingent,
that are material, singly or in the aggregate, to any of them, or has entered
into any material transactions not in the ordinary course of business, (ii) there
has not been any decrease in the capital stock, or any material increase in
long-term indebtedness or any material increase in short-term indebtedness of
any of the Company or the Subsidiaries, or any payment of or declaration to pay
any dividends or any other distribution with respect to any of the Company or
the Subsidiaries (other than dividends or distributions between the Company and
any of the Guarantors), and (iii) there has not been any material adverse
change in the properties, business, prospects, operations, earnings, assets,
liabilities or condition (financial or otherwise) of the Company and the
Subsidiaries taken as a whole (each of clauses (i), (ii) and (iii), a “Material Adverse Change”). Except as disclosed in each of the Time
of Sale Information and the Final Offering Circular, there is no event that has
occurred or that is reasonably likely to occur which, if it were to occur,
could reasonably be expected, singly or in the aggregate, to have a Material
Adverse Effect or result in a Material Adverse Change.


(gg)         Ratings. No “nationally recognized statistical
rating organization” as such term is defined for purposes of Rule 436(g)(2) under
the Act (i) has imposed (or has informed either of the Company or any
Guarantor that it is considering imposing) any condition (financial or
otherwise) on the Company’s or any Guarantor’s retaining any rating assigned to
any securities of either of the Company or any Guarantor, or (ii) has
indicated to either of the Company or any Guarantor that it is considering (A) the



 22
 






 



downgrading, suspension, or
withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned, or (B) any
change in the outlook for any rating of any securities of either of the Company
or any Guarantor.


(hh)         Solvency. Each of the Company and each Guarantor is
incurring its respective indebtedness under the Series A Notes and the
Guarantees for proper purposes and in good faith. Immediately before and after
giving effect to the issuance of the Series A Notes, (i) the assets
of the Company and the Subsidiaries (including the Guarantors), considered as a
whole and as a going concern, at a fair valuation, will exceed the sum of their
debts, taken as a whole; (ii) the present fair salable value of the assets
of the Company and the Subsidiaries (including the Guarantors), considered as a
whole and as a going concern, will exceed the amount required to pay their
liability on their debts, taken as a whole; (iii) the Company will have
adequate capital with which to conduct its present and anticipated businesses;
and (iv) neither the Company nor any Guarantor will intend to incur or
believe or reasonably should believe that it will incur debts beyond its
ability to pay as those debts become due. The Company is not aware of any
reason why it would be inappropriate to consider, for purposes of clauses (i) and
(ii) above, the Company and the Subsidiaries as a going concern. For
purposes of this paragraph, “debts” includes contingent and unliquidated debts.


(ii)           No Solicitation. Neither of the Company nor any of their affiliates
nor anyone acting on their behalf has (i) taken, directly or indirectly,
any action designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation
of the price of the Notes or to facilitate the sale or resale of any of the
Notes, (ii) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, any of the Notes, or (iii) paid or agreed to pay
to any person any compensation for soliciting another to purchase any other
securities of either of the Company.


(jj)           No Registration. Without limiting clause (s) above, no
registration under the Act, and no qualification of the Indenture under the TIA
is required for the sale of the Series A Notes and the Guarantees to the
Initial Purchasers as contemplated hereby or for the Exempt Resales, assuming (i) that
the purchasers in the Exempt Resales are Eligible Purchasers, (ii) the
accuracy of the Initial Purchasers’ representations contained in Section 7,
and (iii) the accuracy of the representations made by each Accredited
Investor who purchases the Series A Notes pursuant to an Exempt Resale as
set forth in the letter of representation in the form of Annex A to the
Preliminary Offering Circular. No form of general solicitation or general
advertising (including, without limitation, as such terms are defined in
Regulation D under the Act) was used by either of the Company or any of their
respective affiliates or any of their respective representatives in connection
with the offer and sale of any of the Series A Notes or in connection with
Exempt Resales. No securities of the same class as the Series A Notes have
been offered,



 23
 






 



issued or sold by either of
the Company or any of their respective affiliates within the six-month period
immediately prior to the date hereof.


(kk)         ERISA. Except as set forth in Schedule 6(kk)
hereto, neither of the Company nor any of their respective “Affiliates”
maintains a plan that is intended to qualify under Section 401(a) of
the Code, or is a “party in interest” or a “disqualified person” with respect
to any employee benefit plans. No condition exists or event or transaction has
occurred in connection with any employee benefit plan that could result in
either of the Company or any such “Affiliate” incurring any liability, fine or
penalty that could, singly or in the aggregate, have a Material Adverse Effect.
Neither of the Company nor any trade or business under common control with the
Company (for purposes of Section 414(c) of the Code) maintains any
employee pension benefit plan that is subject to Title IV of the Employee
Retirement Income Act of 1974, as amended, or the rules and regulations
promulgated thereunder (“ERISA”).


The terms “employee
benefit plan,” “employee pension benefit plan,” and “party in interest” shall
have the meanings assigned to such terms in Section 3 of ERISA. The term “Affiliate”
shall have the meaning assigned to such term in Section 407(d)(7) of
ERISA, and the term “disqualified person” shall have the meaning assigned to
such term in section 4975 of the Internal Revenue Code of 1986, as amended, or
the rules, regulations and published interpretations promulgated thereunder
(collectively the “Code”).


(ll)           Investment Company Act and Other Federal
Regulations. None of the
Company nor any of the Subsidiaries has taken, and none of them will take, any
action that may cause this Agreement or the issuance of the Series A Notes
to, and none of the Transactions will, violate or result in a violation of Section 7
of the Exchange Act (including, without limitation, Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224)
of the Board of Governors of the Federal Reserve System). Neither of the
Company or any of the Subsidiaries is subject to regulation, or shall become
subject to regulation upon the consummation of the Offering and sale of the Series A
Notes and the application of the net proceeds thereof as described in each of
the Time of Sale Information and the Final Offering Circular, or the
consummation of any of the other Transactions, under the Investment Company Act
of 1940, as amended, and the rules and regulations and interpretations
promulgated thereunder, or under any other Federal or state statute or regulation
limiting its ability to incur or assume indebtedness for borrowed money.


(mm)       No
Brokers. Neither of the
Company nor any of the Subsidiaries has dealt with any broker, finder,
commission agent or other person (other than the Initial Purchasers) in connection
with the Transactions and neither of the Company or any of the Subsidiaries is
under any obligation to pay any broker’s fee or commission in connection



 24
 






 



with the Transactions (other
than commissions and fees to the Initial Purchasers as set forth in each of the
Time of Sale Information and the Final Offering Circular).


(nn)         No Labor Disputes. To the knowledge of the Company Entities,
none of the Company Entities  is engaged
in any unfair labor practice. There is (i) no unfair labor practice complaint
or other proceeding pending or, to the knowledge of the Company Entities,
threatened against either of the Company or any of the Subsidiaries before the
National Labor Relations Board or any state, local or foreign labor relations
board or any industrial tribunal, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending or,
to the knowledge of the Company Entities, threatened, (ii) no strike,
labor dispute, slowdown or stoppage pending or, to the knowledge of the
Company Entities, threatened against either of the Company or any of the
Subsidiaries, and (iii) no union representation question existing with
respect to the employees of either of the Company or any of the Subsidiaries,
and, to the knowledge of the Company Entities, no union organizing activities
are taking place that, in the case of each of clauses (i), (ii) and (iii) above,
would, singly or in the aggregate, have a Material Adverse Effect.


(oo)         Environmental Laws. Except as disclosed in each of the Time of
Sale Information and the Final Offering Circular or as otherwise would not,
singly or in the aggregate, have a Material Adverse Effect or otherwise require
disclosure in the Time of Sale Information or the Final Offering Circular, (i) neither
of the Company nor any of the Subsidiaries has been or is in violation of any
federal, state or local laws and regulations relating to pollution or
protection of human health or the environment, including, without limitation,
laws and regulations relating to emissions, discharges, releases or threatened
releases of toxic or hazardous substances, materials or wastes, or petroleum
and petroleum products (“Materials
of Environmental Concern”),
or otherwise relating to the protection of human health and safety, or the use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, “Environmental Laws”),
which violation includes, but is not limited to, noncompliance with, or lack
of, any permits or other environmental authorizations; (ii) there are no
circumstances, either past, present or that are reasonably foreseeable, that
may lead to any such violation in the future; (iii) neither of the Company
nor any of the Subsidiaries has received any communication (written or oral),
whether from a Governmental Authority or otherwise, alleging any such
violation; (iv) there is no pending or, to the knowledge of the Company
Entities, threatened claim, action, investigation, notice (written or oral) or
other Proceeding by any person or entity alleging potential liability of either
of the Company or any of the Subsidiaries (or against any person or entity for
whose acts or omissions the Company or any of the Subsidiaries is or may
reasonably be expected to be liable, either contractually or by operation of
law) for investigatory, cleanup, or other response costs, or natural resources
or property damages, or personal injuries, attorney’s fees or penalties
relating to (A) the presence, or release into the environment, of any
Materials of Environmental Concern at any location, or (B)



 25
 






 



circumstances forming the
basis of any violation or potential violation, of any Environmental Law
(collectively, “Environmental
Claims”); and (v) there
are no past or present actions, activities, circumstances, conditions, events
or incidents that could form the basis of any Environmental Claim.


Each of the
Company and the Subsidiaries, as the Company reasonably believes to be
necessary and appropriate, (i) has conducted a review of the effect of
Environmental Laws on the business, operations and properties of each of the
Company and the Subsidiaries, in the course of which, or as a result of which,
the Company has identified and evaluated associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for cleanup, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities,
and any potential liabilities to third parties); and (ii) has conducted,
as necessary and appropriate, environmental investigations of, and, in any
case, has reviewed reasonably available information regarding, the business,
properties and operations of each of the Company and the Subsidiaries, and of
other properties within the vicinity (consistent with ASTM or other applicable
industry standards with respect to such offsite properties) of their business,
properties and operations, as the Company reasonably believes to be necessary
and appropriate for the circumstances of each such property and operation; on
the basis of such reviews, investigations and inquiries, the Company has
reasonably concluded that any costs and liabilities associated with such
matters would not have, singularly or in the aggregate, a Material Adverse
Effect or otherwise require disclosure in the Time of Sale Information or the
Final Offering Circular.


(pp)         Directed Selling Efforts. None of the Company Entities nor any of
their respective affiliates or any person acting on its or their behalf (other
than the Initial Purchasers, as to whom the Company Entities make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act (“Regulation S”) with
respect to the Series A Notes or the Guarantees.


(qq)         Offshore Transactions. The Series A Notes offered and sold in
reliance on Regulation S have been and will be offered and sold only in
offshore transactions, as such term is defined in Regulation S (“Offshore Transactions”).


(rr)           No Plan or Scheme. The sale of the Series A Notes
pursuant to Regulation S is not part of a plan or scheme to evade the
registration provisions of the Act.


(ss)         Regulation S Offering Restrictions. The 
Company Entities and their respective affiliates and all persons acting
on their behalf (other than the Initial Purchasers, as to whom the Company
Entities make no representation) have complied with and will comply with the
offering restrictions requirements of Regulation S in connection with the
offering of the Series A Notes outside the United States.



 26
 






 



(tt)           Restricted Period. The Series A Notes sold in reliance on
Regulation S will be represented upon issuance by a temporary global security
that may not be exchanged for definitive securities until the expiration of the
40-day restricted period referred to in Rule 903(b)(3) of the
Act and only upon certification of beneficial ownership of such Series A
Notes by non-U.S. persons or U.S. persons who purchased such Series A
Notes in transactions that were exempt from the registration requirements of
the Act.


(uu)         Disclosure Controls. Each of the Company and the Subsidiaries has
established and maintains and evaluates “disclosure controls and procedures”
(as such term is defined in Rule 13a-15 and 15d-15 under the
Exchange Act) and “internal control over financial reporting” (as such term is
defined in Rule 13a-15 and 15d-15 under the Exchange Act). Such
disclosure controls and procedures are designed to ensure that material
information relating to the Company, including its consolidated subsidiaries,
is made known to the Company’s Chief Executive Officer and Chief Financial
Officer by others within those entities, and, except as disclosed in each of
the Time of Sale Information and the Final Offering Circular, such disclosure
controls and procedures are effective to perform the functions for which they
were established. The Company’s independent auditors and board of directors
have been advised of: (i) all significant deficiencies, if any, in the design
or operation of internal controls which could adversely affect any of the
Company’s and the Subsidiaries’ ability to record, process, summarize and
report financial data; and (ii) all fraud, if any, whether or not
material, that involves management or other employees who have a role in any of
the Company’s or the Subsidiaries’ internal controls. All material weaknesses,
if any, in internal controls have been identified to the Company’s and the
Subsidiaries’ independent auditors. Since the date of the most recent
evaluation of such disclosure controls and procedures and internal controls,
there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses. The
principal executive officers (or their equivalents) and principal financial
officers (or their equivalents) of each of the Company and the Subsidiaries
have made all certifications required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and any related rules and
regulations promulgated by the Commission, and the statements contained in each
such certification are complete and correct. The Company, the Subsidiaries and
the Company’s directors and officers are each in compliance in all material
respects with all applicable effective provisions of the Sarbanes-Oxley Act and
the rules and regulations of the Commission promulgated thereunder.


(vv)         Representations and Warranties. Each certificate signed by any officer of
any of the Company Entities and delivered to the Initial Purchasers or counsel
for the Initial Purchasers in connection with the Transactions shall be deemed
to be a representation and warranty by such Company Entities to the Initial
Purchasers as to the matters covered thereby.



 27
 






 



7.     Representations and Warranties of the Initial Purchasers. Each
Initial Purchaser, severally but not jointly, represents and warrants to the
Company and the Guarantors that:


(a)           QIB. It is a QIB with such knowledge and experience in financial and
business matters as is necessary in order to evaluate the merits and risks of
an investment in the Series A Notes.


(b)           Eligible Purchasers. It (i) is not acquiring the Series A
Notes with a view to any distribution thereof that would violate the Act or the
securities laws of any state of the United States or any other applicable
jurisdiction, and (ii) will be soliciting offers for the Series A
Notes only from, and will be reoffering and reselling the Series A Notes
only to, persons in the United States whom it reasonably believes to be (A) QIBs
in reliance on the exemption from the registration requirements of the Act
provided by Rule 144A under the Act, (B) Accredited Investors that
execute and deliver to each of the Company and the Initial Purchasers a letter
containing certain representations and agreements in the form attached as Annex
A to the Preliminary Offering Circular or (C) Regulation S Purchasers in
Offshore Transactions in reliance upon Regulation S under the Act.


(c)           No General Solicitation. No form of general solicitation or general
advertising within the meaning of Section 502(c) of the Act has been
or will be used by the Initial Purchasers or any of their respective
representatives in connection with the offer and sale of any of the Series A
Notes.


(d)           Representations of Eligible Purchasers. In connection with the Exempt Resales, it
will solicit offers to buy the Series A Notes only from, and will offer
and sell the Series A Notes only to, persons whom it reasonably believes
to be Eligible Purchasers, who, in purchasing such Series A Notes, will be
deemed to have represented and agreed that (i) if such Eligible Purchaser
is a QIB that it is purchasing the Series A Notes for its own account or
for the account of another QIB; (ii) such Series A Notes have not
been registered under the Act or any other applicable securities law, and may
not be offered, sold or otherwise transferred prior to the date which is two
years (or such other period that may hereafter be provided under Rule 144(k) under
the Act as permitting resales of restricted securities by non-affiliates
without restriction) after the later of the original issue date of the Series A
Notes and the last date on which the Company or any affiliate of the Company
was the owner of the Series A Notes (or any predecessor of the Series A
Notes) only (A) to the Company pursuant to the indenture governing the
Notes, (B) pursuant to a registration statement which has been declared
effective under the Act, (C) for so long as the Series A Notes are
eligible for resale pursuant to Rule 144A under the Act, to a person who
the seller reasonably believes is a QIB that purchases for its own account or
the account of a QIB to whom notice is given that the transfer is being made in
reliance on Rule 144A under the Act, (D) outside the



 28
 






 



United States in an Offshore
Transaction in accordance with Rule 904 under the Act, (E) to an
institutional “accredited investor” within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Act that is acquiring the Series A
Notes for its own account or the account of such an institutional “accredited
investor,” for investment purposes and not with a view to, or for offer or sale
in connection with, any distribution in violation of the Act or (E) pursuant
to another available exemption from the registration requirements of the Act,
subject to the Company’s and the Trustee’s right prior to any such offer, sale
or transfer pursuant to clause (E) or (F) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to each of them, and in each of the foregoing cases, a certificate
of transfer in the form appearing on the Series A Notes is completed and
delivered by the transferor to the Trustee and in each case in accordance with
applicable securities laws of any U.S. state or any other applicable
jurisdiction; and (iii) that the holder will, and each subsequent holder
is required to, notify any purchaser from it of the Series A Notes of the
resale restrictions set forth in clause (ii) above.


(e)           Power and Authority. It has all requisite power and authority to
enter into, deliver and perform its obligations under this Agreement and the
Registration Rights Agreement and each of this Agreement and the Registration
Rights Agreement has been duly authorized by it.


(f)            Directed Selling Efforts. Such Initial Purchaser and its affiliates
or any person acting on its or their behalf have not engaged and will not
engage in any directed selling efforts within the meaning of Regulation S with
respect to the Series A Notes or the Guarantees.


(g)           Offshore Transactions. The Series A Notes offered and sold by
such Initial Purchaser pursuant hereto in reliance on Regulation S have been
and will be offered and sold by such Initial Purchaser only in Offshore
Transactions.


(h)           No Plan or Scheme. The sale of the Series A Notes offered
and sold by such Initial Purchaser pursuant hereto in reliance on Regulation S
is not part of a plan or scheme to evade the registration provisions of the
Act.


(i)            Regulation S Offering Restrictions. Such Initial Purchaser has not offered or
sold and will not offer or sell the Series A Notes in the United States or
to, or for the benefit or account of, a U.S. Person (other than a distributor),
in each case, as defined in Rule 902 under the Act (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the later
of the commencement of the offering of the Series A Notes pursuant hereto and
the Closing Date, other than in accordance with Regulation S of the Act or
another exemption from the registration requirements of the Act. During such 40-day
restricted period, such Initial Purchaser will not cause any advertisement with
respect to the Series A Notes (including any “tombstone” advertisement) to
be



 29
 






 



published in any newspaper
or periodical or posted in any public place and will not issue any circular
relating to the Series A Notes, except such advertisements as permitted by
and include the statements required by Regulation S.


(j)            Notice
Required. At or prior to
confirmation of a sale of Series A Notes by it to any distributor, dealer
or person receiving a selling concession, fee or other remuneration during the
40-day restricted period referred to in Rule 903(b)(3) under
the Act, such Initial Purchaser will send to such distributor, dealer or person
receiving a selling concession, fee or other remuneration a confirmation or
notice to substantially the following effect:


“The Series A Notes covered hereby have not
been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered and sold within
the United States or to, or for the account or benefit of, U.S. persons (i) as
part of your distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the Offering and the Closing Date,
except in either case in accordance with Regulation S under the Securities Act
(or Rule 144A under the Securities Act or to institutional “accredited
investors,” as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act) in transactions that are exempt from the registration
requirements of the Securities Act), and in connection with any subsequent sale
by you of the Series A Notes covered hereby in reliance on Regulation S
during the period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you must deliver a
notice to substantially the foregoing effect. Terms used above have the
meanings assigned to them in Regulation S.”


(k)           Regulation
S Security. The Series A
Notes offered and sold in reliance on Regulation S will be represented upon
issuance by a global security that may not be exchanged for definitive
securities until the expiration of the 40-day restricted period referred
to in Rule 903(b)(3) of the Act and only upon certification of
beneficial ownership of such Series A Notes by non-U.S. persons or U.S.
persons who purchased such Series A Notes in transactions that were exempt
from the registration requirements of the Act.


8.     Indemnification.


(a)           Indemnification
of Initial Purchasers. Each
of the Company Entities shall, jointly and severally, without limitation as to
time, indemnify and hold harmless each of the Initial Purchasers and each
person, if any, who controls (within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act) any of the Initial



 30
 






 



Purchasers (any of such persons being hereinafter
referred to as a “controlling
person”), and the respective
officers, directors, partners, employees, representatives and agents of any of
the Initial Purchasers and any such controlling person (collectively, with the
Initial Purchasers the “Purchaser
Indemnified Parties”), to
the fullest extent lawful, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, costs of
preparation and reasonable attorneys’ fees) and expenses (including, without
limitation, costs and expenses incurred in connection with investigating,
preparing, pursuing or defending against any of the foregoing) (collectively, “Losses”), as incurred, directly or indirectly
caused by, related to, based upon, arising out of or in connection with (i) any
untrue statement or alleged untrue statement of a material fact contained in
the Time of Sale Information, the Final Offering Circular or any Supplemental
Offering Material or, in each case, any amendment or supplement thereto, or (ii) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, that neither of the Company nor any
Guarantor shall be liable under the indemnity provided in this Section 8(a) to
any Purchaser Indemnified Party for any Losses that are based on an untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with the Furnished Information. The parties hereto agree
that the only information furnished in writing to the Company by the Initial
Purchasers specifically for inclusion in the Time of Sale Information, the
Final Offering Circular or any Supplemental Offering Material or any amendment
or supplement thereto is the Furnished Information. The Company shall notify
the Initial Purchasers promptly of the institution, threat or assertion of any
Proceeding of which either of the Company or any Subsidiary is aware in
connection with the matters addressed by this Agreement which involves either
of the Company, any of the Subsidiaries or any of the Purchaser Indemnified
Parties.


(b)           Actions
Against Parties; Notification.
If any Proceeding shall be brought or asserted against any person entitled to
indemnification hereunder (an “Indemnified
Party”), such Indemnified
Party shall give prompt written notice to the party or parties from which such
indemnification is sought (the “Indemnifying
Parties” and each, an “Indemnifying Party”); provided, that the
failure to so notify the Indemnifying Parties shall not relieve any of the
Indemnifying Parties from any obligation or liability except to the extent (but
only to the extent) that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal) that such
Indemnifying Party has been prejudiced materially by such failure.


The Indemnifying Parties
shall have the right, exercisable by giving written notice to an Indemnified
Party, within 20 Business Days after receipt of written notice from such
Indemnified Party of such Proceeding, to assume, at their expense, the defense
of any such Proceeding; provided, that an Indemnified Party shall have the
right to employ separate counsel in any such Proceeding and to participate in
the defense



 31
 






 



thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party or parties unless: (i) the
Indemnifying Parties have agreed to pay such fees and expenses; (ii) the
Indemnifying Parties shall have failed promptly to assume the defense of such
Proceeding or shall have failed to employ counsel reasonably satisfactory to
such Indemnified Party; or (iii) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and one
or more Indemnifying Parties (or any affiliates or controlling persons of any
of the Indemnifying Parties), and such Indemnified Party shall have been
advised by counsel that there may be one or more defenses available to such
Indemnified Party that are in addition to, or in conflict with, those defenses
available to the indemnifying party or such affiliate or controlling person (in
which case, if such Indemnified Party notifies the Indemnifying Parties in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Parties, the Indemnifying Parties shall not have the right to
assume the defense thereof and the reasonable fees and expenses of such counsel
shall be at the expense of the Indemnifying Parties; it being understood, however,
that, the Indemnifying Parties shall not, in connection with any one such
Proceeding or separate but substantially similar or related Proceedings in the
same jurisdiction, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for
such Indemnified Party).


None of the
Indemnifying Parties shall, without the prior written consent of the
Indemnified Party, consent to entry of any judgment in or enter into any
settlement of any pending or threatened Proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Party is a party thereto) unless such judgment or settlement
includes, as an unconditional term thereof, the giving by the claimant or
plaintiff to each Indemnified Party of a release, in form and substance
reasonably satisfactory to the Indemnified Party, from all Losses that may
arise from such Proceeding or the subject matter thereof (whether or not any
Indemnified Party is a party thereto).


(c)           Indemnification
of the Company Entities. Each
of the Initial Purchasers shall, severally but not jointly, indemnify and hold
harmless each of the Company Entities and each of their controlling persons and
the respective members, managers, officers, directors, partners, employees,
representatives and agents of the Company Entities and any such controlling
person to the same extent as the foregoing indemnity from the Company Entities
to each of the Purchaser Indemnified Parties stated in Section 8(a), but
only with respect to Losses that are caused by an untrue statement or omission
or alleged untrue statement or omission made in reliance on and in conformity
with the Furnished Information. The parties hereto agree that the only
information furnished in writing to the Company by the Initial Purchasers
specifically for inclusion in the Time of Sale Information, the Final Offering
Circular or any Supplemental Offering Material or any amendment or supplement
thereto is the Furnished Information. Notwithstanding the foregoing, any
liability of an Initial Purchaser hereunder shall be



 32
 






 



limited to an amount not to exceed the excess (such
excess, the “Aggregate
Amount”) of (i) the
aggregate gross proceeds received by such Initial Purchaser from the sale of
the Series A Notes over (ii) the sum of (A) the aggregate price
at which such Initial Purchaser purchased the Series A Notes from the
Company and (B) the amount of any Losses that such Initial Purchaser or
such Initial Purchaser’s  Purchaser
Indemnified Parties otherwise have been required to pay by reason of such
untrue or alleged untrue statement of such omission or alleged omission.


(d)           Contribution. If the indemnification provided for in this
Section 8 is unavailable to an Indemnified Party or is insufficient to
hold such Indemnified Party harmless for any Losses in respect of which this Section 8
would otherwise apply by its terms (other than by reason of exceptions provided
in this Section 8), then each indemnifying party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Subsidiaries, on the one hand, and the Initial Purchasers, on the other hand,
from the Offering or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company Entities, on the one hand, and the
Initial Purchasers, on the other hand, in connection with the actions,
statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company Entities, on the one hand, and the Initial Purchasers, on the other
hand, shall be deemed to be in the same proportion as the total net proceeds
from the Offering (before deducting expenses) received by the Company Entities,
on the one hand, and the total discounts and commissions received by the
Initial Purchasers, on the other hand, bear to the total price of the Series A
Notes in Exempt Resales as set forth on the cover page of the Final
Offering Circular. The relative fault of the Company Entities, on the one hand,
and the Initial Purchasers, on the other hand, shall be determined by reference
to, among other things, whether any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or any Subsidiary, on the one hand, or
the Initial Purchasers, on the other hand, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by an Indemnified Party as a
result of any Losses shall be deemed to include any legal or other fees or
expenses incurred by such party in connection with any Proceeding, to the
extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section 8 was available to such
party.


Each party hereto agrees
that it would not be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section



 33
 






 



8(d), the Initial
Purchasers shall not be required to contribute, in the aggregate, any amount in
excess of the Aggregate Amount. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.


(e)           Nonexclusive
Remedy. The indemnity and
contribution agreements contained in this Section 8 are in addition to any
liability that any of the Indemnifying Parties may otherwise have to the
Indemnified Parties, and do not limit in any way rights or remedies which may
otherwise be available at law or in equity.


9.     Conditions.


(a)           Conditions to Obligations of Initial
Purchasers. The obligations
of the Initial Purchasers to purchase the Series A Notes under this
Agreement are subject to the satisfaction or waiver of each of the following
conditions:


(i)            Representations
and Warranties of Company Entities. All the representations and
warranties of each of the Company Entities in this Agreement and in each of the
Transaction Documents to which it is a party shall be true and correct in all
material respects (other than representations and warranties with a Material Adverse
Effect qualifier or other materiality qualifier, which shall be true and
correct as written) at and as of the Closing Date after giving effect to the
Transactions with the same force and effect as if made on and as of such date. On
or prior to the Closing Date, each of the Company and the Subsidiaries and, to
the knowledge of the Company Entities, each other party to the Transaction
Documents (other than the Initial Purchasers) shall have performed or complied
in all material respects with all of the agreements and satisfied in all
material respects all conditions on their respective parts to be performed,
complied with or satisfied pursuant to the Operative Documents.


(ii)           Contents
of Offering Circular. (i) Neither the Time of Sale Information,
nor any individual Supplemental Offering Material when considered together with
the Time of Sale Information, in each case, as of the Applicable Time,
contained, (ii) the Final Offering Circular, as of its date did not and,
without giving effect to any amendment or supplement thereto, as of the Closing
Date does not, contain, and (iii) each amendment or supplement thereto as
of its date did not contain, any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided, that the foregoing shall not
apply to any statements or omissions made by the Company in reliance on and in
conformity with the Furnished Information.


(iii)          Availability
of Offering Circular. The Final Offering Circular shall have been
printed and copies made available to the Initial Purchasers as required by Section 5(c).



 34














 


(iv)          No
Injunction. No injunction, restraining order or order of any nature
by a Governmental Authority shall have been issued as of the Closing Date that
would prevent or interfere with the issuance and sale of the Series A
Notes and the Guarantees or the consummation of any of the Transactions; and no
stop order suspending the qualification or exemption from qualification of any
of the Series A Notes in any jurisdiction shall have been issued and no
Proceeding for that purpose shall have been commenced or be pending or
contemplated.


(v)           No
Proceedings. No action shall have been taken and no Applicable Law
shall have been enacted, adopted or issued that would, as of the Closing Date,
prevent the consummation of any of the Transactions. No Proceeding shall be
pending or threatened other than Proceedings that (A) if adversely
determined would not, singly or in the aggregate, adversely affect the issuance
or marketabil­ity of the Series A Notes, and (B) would not, singly or
in the aggregate, have a Material Adverse Effect.


(vi)          No
Material Adverse Change. Since the date as of which information is
given in the Time of Sale Information (without giving effect to any amendment
thereto or supplement thereto), there shall not have been any Material Adverse
Change.


(vii)         PORTAL.
The Notes shall have (A) been designated PORTAL securities in accordance
with the rules and regulations adopted by the NASD relating to trading in
the PORTAL market, and (B) received a rating of “B-” and “BBB” from
Standard & Poor’s Corporation and Moody’s Investors Services, Inc.,
respectively.


(viii)        Maintenance
of Rating. As of the Closing Date, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice
have been given of any potential or intended downgrading, suspension or
withdrawal of, or of any review (or of any potential or intended review) for a
possible change that does not indicate the direction of the possible change in,
any rating of any securities of either of the Company (including, without limitation,
the placing of any of the foregoing ratings on credit watch with negative or
developing implications or under review with an uncertain direction) by any “nationally
recognized statistical rating organization” as such term is defined for purposes
of Rule 436(g)(2) under the Act, (ii) there shall not have
occurred any change, nor shall any notice have been given of any potential or
intended change, in the outlook for any rating of any securities of either of
the Company by any such rating organization and (iii) no such rating
organization shall have given notice that it has assigned (or is considering
assigning) a lower rating to the Notes than that on which the Notes were
marketed.


(ix)           Officers’,
Secretary’s and Solvency Certificates. The Initial Purchasers shall
have received on the Closing Date (A) certificates dated the Closing Date,
signed by (1) the Chief Executive Officer, and (2) the principal
financial or 



 35
 






 



accounting officer of each
of the Company Entities, on behalf of such Company Entity, confirming the
matters set forth in paragraphs (i), (ii), (iv), (v), (vi), (viii)  and
(xiv) of this Section 9(a), (B) a certificate, dated the Closing
Date, signed by the (1) Chief Executive Officer and (2) the principal
financial or accounting officer of each of the Company Entities, on behalf of
each such Company Entity, stating that the industry, statistical and
market-related data included in each of the Time of Sale Information and the
Final Offering Circular has been reviewed by such persons and, to the best
knowledge of such persons, subject to the risks and limitations described in
each of the Time of Sale Information and the Final Offering Circular, is true
and accurate in all material respects and is based on or derived from sources
which the Company believe to be reliable and accurate, which certificate shall
be in form and substance satisfactory to counsel for the Initial Purchasers, (C) a
certificate, dated the Closing Date, signed by the Secretary of each of the
Company Entities, certifying such matters as the Initial Purchasers may
reasonably request, and (D) a certificate of solvency, dated the Closing
Date, signed by the principal financial or accounting officer of the Company
Entities substantially in the form previously approved by the Initial
Purchasers.


(x)            Opinions
of Counsel. The Initial Purchasers shall have received, a favorable
opinion (in form and substance satisfactory to the Initial Purchasers and
counsel to the Initial Purchasers), dated the Closing Date, of each of the
following:  (A) Ruben &
Aronson, LLP, special counsel to the Company Entities, containing opinions
substantially to the effect of the opinions set forth in Exhibit A
hereto; (B) Turner & Johns, PLLC, special West Virginia counsel
to Mountaineer Park, Inc., containing the opinions substantially to the
effect of the opinions set forth in Exhibit B hereto; (C) Jones
Vargas, special Nevada counsel to Speakeasy Gaming of Las Vegas, Inc. and
Speakeasy Gaming of Fremont, Inc. containing the opinions substantially to
the effect of the opinions set forth in Exhibit C hereto; (D) Stevens &
Lee, special Pennsylvania counsel to Presque Isle Downs, Inc., containing
the opinions substantially to the effect of the opinions set forth in Exhibit D
hereto; (E) Crabbe, Brown & James, LLP, special Ohio counsel to
Scioto Downs, Inc., containing the opinions substantially to the effect of
the opinions set forth in Exhibit E hereto; and (F) Warner,
Norcross & Judd, LLP, special Michigan counsel to Jackson Racing, Inc.,
containing the opinions substantially to the effect of the opinions set forth
in Exhibit F hereto; (G) Fredrikson & Byron, P.A.,
special Minnesota counsel to MTR Harness, Inc., containing the opinions
substantially to the effect of the opinions set forth in Exhibit G
hereto; and (H) Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to the Initial Purchasers.


(xi)           Accountants’
Comfort Letters. The Initial Purchasers shall have received from
Ernst & Young LLP, independent public accountants with respect to the
Company, (1) a customary comfort letter, dated as of the date of this
Agreement, in form and substance satisfactory to the Initial Purchasers,
containing the information and statements of the type ordinarily included in
accountants’ “comfort letters,” with respect to the financial statements of the
Company and the Subsidiaries and certain financial 



 36
 






 



information with respect to
the Company and the Subsidiaries contained in the Time of Sale Information and (2) a
customary “bring-down comfort letter,” dated the Closing Date, in form and
substance satisfactory to the Initial Purchasers, to the effect that Ernst &
Young LLP reaffirms the statements made in its letter furnished pursuant to
clause (1) above with respect to such financial statements and certain
financial information contained in the Time of Sale Information and the Final
Offering Circular, except that the specified date referred to shall be a date
not more than five days prior to the Closing Date. 


(xii)          Execution
and Delivery of Documents. The Operative Documents shall have been
executed and delivered by all parties thereto and the Initial Purchasers shall
have received a fully executed original of each Operative Document.


(xiii)         Additional
Transaction Documents. The Initial Purchasers or their counsel shall
have received copies of all opinions, certificates, letters and other documents
delivered under or in connection with the Operative Documents.


(xiv)        Consummation
of Transactions. Each of the Transactions shall have been
consummated on terms that conform to the description thereof in each of the
Time of Sale Information and the Final Offering Circular. The terms of each
Document shall conform in all material respects to the description thereof in
each of the Time of Sale Information and the Final Offering Circular.


(xv)         Permits.
All Permits required to be obtained from, and all notices or declarations
required to be made with, any Gaming/Racing Authority or other Governmental
Authority to permit the issuance and sale of the Series A Notes and the
Guarantees in accordance with the terms of, and in the aggregate principal
amount set forth in, this Agreement shall have been obtained and made, in each
case free of any conditions other than those set forth in this Agreement; and
all Permits (other than the Post-Closing Permits) required to be obtained from,
and all notices or declarations required to be made with, any Gaming/Racing
Authority or other Governmental Authority to consummate the other Transactions
contemplated by the Transaction Documents shall have been obtained and made, in
each case free of any conditions other than those set forth in such Transaction
Documents or as described in each of the Time of Sale Information and the Final
Offering Circular.


(xvi)        Consent Solicitation.
Pursuant to the Consent Solicitation, (A) the Company shall have received
validly delivered (and not validly revoked) consents to the Proposed
Amendments, (B) the Company and the Guarantors shall have executed the
Supplemental Indenture and paid the Consent Fee (as defined in the Statement)
to all persons entitled to receive the Consent Fee under the Consent Documents
and (C) the Proposed Amendments shall have become effective and operative.


(xvii)       Credit Agreement Amendment.
The Company shall have 



 37
 






 



received the written consent
of the Requisite Lenders (as defined in the Existing Credit Facility) to the
issuance of the Notes.


(xviii)      Additional
Documents. Counsel to the Initial Purchasers shall have been
furnished with such documents as they may reasonably require for the purpose of
enabling them to review or pass upon the matters referred to in this Section 9
and in order to evidence the accuracy, completeness and satisfaction of the
representations, warranties and conditions contained in this Agreement.


(b)           Conditions to the Company’s and the Guarantors’ Obligations.
The obligations of the Company to sell, and the obligations of the Guarantors to guarantee, the Series A
Notes under this Agreement are subject to the satisfaction or waiver of each of
the following conditions:


(i)            Payment.
The Initial Purchasers shall have delivered payment to the Company for the Series A
Notes pursuant to Sections 2 and 4 of this Agreement and shall have complied in
all material respects with all other obligations and agreements required to be
complied with by it hereunder on or prior to the Closing Date.


(ii)           Representations and Warranties. All of the
representations and warranties of the Initial Purchasers in this Agreement
shall be true and correct in all material respects at and as of the Closing Date,
with the same force and effect as if made on and as of such date.


(iii)          No
Injunctions. No injunction, restraining order or order of any nature
by a Governmental Authority shall have been issued as of the Closing Date that
would prevent or interfere with the issuance and sale of the Series A
Notes; and no stop order suspending the qualification or exemption from
qualification of any of the Series A Notes in any jurisdiction shall have
been issued and no Proceeding for that purpose shall have been commenced or be
pending or contemplated as of the Closing Date.


10.   Termination. This Agreement shall become effective upon
the execution and delivery of this Agreement by the parties hereto. The Initial
Purchasers may terminate this Agreement at any time prior to the Closing Date
by written notice to the Company if any of the following has occurred:


(a)           Material
Adverse Effect. Since the
date as of which information is given in the Time of Sale Information, any
Material Adverse Effect or any Material Adverse Change that could, in the
Initial Purchasers’ judgment, (i) make it impracticable or inadvisable to
proceed with the Offering or delivery of the Series A Notes, including the
Exempt Resales, on the terms and in the manner contemplated in the Time of Sale
Information or (ii) materially impair the investment quality of the Notes.



 38
 






 



(b)           Failure
to Satisfy Conditions. The
failure of any of the Company Entities to satisfy the conditions contained in Section 9(a) on
or prior to the Closing Date.


(c)           Outbreak
of Hostilities. Any outbreak
or escalation of hostilities, any declaration of war by the United States, any
other calamity, emergency or crisis, any material adverse change in economic
conditions in or the financial markets of the United States or elsewhere or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which could make it, in the Initial Purchasers’ judgment,
impracticable or inadvisable to market or proceed with the offering or delivery
of the Series A Notes on the terms and in the manner contemplated in the
Time of Sale Information or to enforce contracts for the sale of any of the Series A
Notes.


(d)           Suspension
of Trading. The suspension
or limitation of trading generally in securities on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market or any
setting of limitations on prices for securities on any such exchange or on the
Nasdaq National Market.


(e)           Enactment
of Adverse Law. The
enactment, publication, decree or other promulgation after the date hereof of
any Applicable Law that in the Initial Purchasers’ opinion materially and
adversely affects, or could materially and adversely affect, the properties,
business, prospects, operations, earnings, assets, liabilities or condition
(financial or otherwise) of either of the Company or any of the Subsidiaries.


(f)            Downgrade
of Securities. On or after
the date hereof, (i) there shall not have occurred any downgrading, suspension
or withdrawal of, nor shall any notice have been given of any potential or
intended downgrading, suspension or withdrawal of, or of any review (or of any
potential or intended review) for a possible change that does not indicate the
direction of the possible change in, any rating of any of the Company Entities
or any securities of any of the Company Entities (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain
direction) by any “nationally recognized statistical rating organization” as
such term is defined for purposes of Rule 436(g)(2) under the Act, (ii) there
shall not have occurred any change, nor shall any notice have been given of any
potential or intended change, in the outlook for any rating of any of the
Company Entities or any securities of any of the Company Entities (by any such
rating organization and (iii) no such rating organization shall have given
notice that it has assigned (or is considering assigning) a lower rating to the
Notes than that on which the Notes were marketed.


(g)           Banking
Moratorium. The declaration
of a banking moratorium by any Governmental Authority; or the taking of any
action by any Governmental Authority after the date hereof in respect of its
monetary or fiscal affairs that in the Initial 



 39
 






 



Purchasers’ opinion could have a material adverse
effect on the financial markets in the United States or elsewhere.


The respective
indemnities, contribution and expense reimbursement provisions and agreements,
and representations, warranties and other statements of the Company Entities
and the Initial Purchasers set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive,
regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of the Initial Purchasers or any of the Company
Entities, or any of their respective officers, directors, members or managers
or any of their respective controlling persons, (ii) acceptance of the
Notes, and payment for them hereunder, and (iii) any termination of this
Agreement (including, without limitation, any termination pursuant to this Section 10).
Without limiting the foregoing, notwithstanding any termination of this
Agreement, the Company Entities shall be and shall remain jointly and severally
liable (i) for all expenses that they have agreed to pay pursuant to Section 5(f),
and (ii) pursuant to Section 8.


11.    Default of Initial Purchasers. If one of the Initial Purchasers defaults in its obligations to
purchase Notes hereunder and the aggregate principal amount of the Notes that
such defaulting Initial Purchaser agreed but failed to purchase does not exceed
10% of the total principal amount of the Notes, the non-defaulting Initial
Purchaser may make arrangements satisfactory to the Company for the purchase of
such Notes by other persons, including the non-defaulting Initial Purchaser,
but if no such arrangements are made by the Closing Date, the non-defaulting
Initial Purchaser shall be obligated to purchase the Notes that such defaulting
Initial Purchaser agreed but failed to purchase. If one Initial Purchaser so
defaults and the aggregate principal amount of the Notes with respect to which
such default occurs exceeds 10% of the total principal amount of the Notes and
arrangements satisfactory to the non-defaulting Initial Purchaser and the
Company for the purchase of such Notes by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on
the part of the non-defaulting Initial Purchaser or the Company, except as
provided in Section 10 hereof. As used in this Agreement, the term “Initial
Purchaser” includes any person substituted for an Initial Purchaser under this Section 9.
Nothing herein will relieve a defaulting Initial Purchaser from liability for
its default.


12.   Miscellaneous.


(a)           Notices. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: 
(i) if to any of the Company Entities, to MTR Gaming Group, Inc.,
State Route 2 South, P.O. Box 358, Chester, West Virginia 26034, facsimile
number (304) 387-8302, Attention: Chief Financial Officer, with a copy to
Ruben & Aronson, LLP, 4800 Montgomery Lane, Suite 150, Bethesda,
Maryland 20814, facsimile number (301) 951-9636, Attention: Robert L.
Ruben, Esq., and (ii) if to the Initial Purchasers, c/o Jefferies &
Company, Inc., 520 Madison Avenue, 12th Floor, New York, New York 10022,
Attention:  Lloyd Feller, Esq., with
a copy to Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand
Avenue, Suite 3400, Los Angeles, 



 40
 






 



California 90071, facsimile number (213) 687-5600,
Attention:  Nicholas P. Saggese, Esq.
(provided, that any notice pursuant to Section 8
hereof will be mailed, delivered, telegraphed or sent by facsimile and
confirmed to the party to be notified and its counsel), or in any case to such
other address as the person to be notified may have requested in writing.


(b)           Successors
and Assigns. This Agreement
has been and is made solely for the benefit of and shall be binding upon each
of the Company Entities, the Initial Purchasers and, to the extent provided in Section 8,
the controlling persons, officers, directors, partners, employees, representa­tives
and agents referred to in Section 8, and their respective heirs,
executors, administrators, successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term “successors and assigns” shall
not include a purchaser of any of the Series A Notes from the Initial
Purchasers merely because of such purchase. Notwithstanding the foregoing, it
is expressly understood and agreed that each purchaser who purchases Series A
Notes from the Initial Purchasers is intended to be a beneficiary of the
Company’s covenants contained in the Registration Rights Agreement to the same
extent as if the Notes were sold and those covenants were made directly to such
purchaser by the Company, and each such purchaser shall have the right to take
action against the Company to enforce, and obtain damages for any breach of,
those covenants.


(c)           GOVERNING
LAW. THIS AGREEMENT SHALL BE
CONSTRUED AND INTERPRETED, AND THE RIGHTS OF THE PARTIES SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT
LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAWS AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAWS AND
RULES. EACH OF THE COMPANY ENTITIES HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE EXTENT PERMITTED BY LAW, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE COMPANY
ENTITIES IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDINGS BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH OF THE 



 41
 






 



COMPANY ENTITIES IRREVOCABLY CONSENTS, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE
OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE COMPANY OR SUCH GUARANTOR, AS THE CASE MAY BE, AT THE
ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE INITIAL PURCHASERS TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OF THE COMPANY ENTITIES IN ANY
OTHER JURISDICTION.


(d)           Counterparts. This Agreement may be signed in various
counterparts which together shall constitute one and the same instrument.


(e)           Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. When a reference is made in this Agreement to a Section,
paragraph, subparagraph, Schedule or Exhibit, such reference shall mean a
Section, paragraph, subparagraph, Schedule or Exhibit to this Agreement
unless otherwise indicated.


(f)            Interpretation. The words “include,” “includes,” and “including” when used
in this Agreement shall be deemed in each case to be followed by the words “without limitation.”  The
phrases “the date of this Agreement,” “the date hereof,”
and terms of similar import, unless the context otherwise requires, shall be
deemed to refer to May 22, 2006. The words “hereof,” “herein,” “herewith,”  “hereby” and “hereunder” and words
of similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
phrase “to the knowledge of the
Company Entities” means the
actual knowledge, after due inquiry, of any of the directors or officers of any
of the Company Entities. Unless the context otherwise requires, defined terms
shall include the singular and plural and the conjunctive and disjunctive forms
of the terms defined.


(g)           Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining 



 42
 






 



terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.


(h)           Amendment. This Agreement may be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may be given, provided that the same are in writing and signed by
each of the signatories hereto.


(i)            No Advisory or
Fiduciary Relationship. The Company acknowledges and agrees that (a) the
purchase and sale of the Notes pursuant to this Agreement, including the
determination of the public offering price of the Notes and any related
discounts and commissions, is an arm’s-length commercial transaction between
the Company, on the one hand, and the Initial Purchasers, on the other hand, (b) in
connection with the offering contemplated hereby and the process leading to
such transaction each Initial Purchaser is and has been acting solely as a
principal and is not the agent or fiduciary of the Company, or its
stockholders, creditors, employees or any other party, (c) no Initial
Purchaser has assumed or will assume an advisory or fiduciary responsibility in
favor of the Company with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether such Initial Purchaser has
advised or is currently advising the Company on other matters) and no Initial
Purchaser has any obligation to the Company with respect to the offering
contemplated hereby except the obligations expressly set forth in this
Agreement, (d) the Initial Purchasers and their respective affiliates may
be engaged in a broad range of transactions that involve interests that differ
from those of the Company, and (e) the Initial Purchasers have not
provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed appropriate.


[signature
pages follow]



 43














 


Please confirm that the foregoing correctly sets forth
the agreement between the Company and the Initial Purchasers.


Very truly yours,




	
  ISSUER:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MTR GAMING GROUP, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
   Edson R.
  Arneault 

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GUARANTORS:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MOUNTAINEER PARK, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
   Edson R.
  Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRESQUE ISLE DOWNS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
   Edson R.
  Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  



 



 Purchase Agreement Page S-1
 






 



 


	
  

  	
   

  	
  SPEAKEASY GAMING OF LAS VEGAS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SCIOTO DOWNS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPEAKEASY GAMING OF FREMONT, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JACKSON RACING, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MTR HARNESS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 



 Purchase Agreement Page S-2
 






 



 


	
  ACCEPTED AND AGREED TO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JEFFERIES & COMPANY, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Christian Morris

  	
   

  	
   

  
	
   

  	
  Name:

  	
   Christian
  Morris

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WELLS FARGO SECURITIES, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Andrew J. McCarthy

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Andrew J. McCarthy

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  	
   

  



 



 Purchase Agreement Page S-3














 


EXHIBIT A


FORM OF
OPINION OF RUBEN & ARONSON, LLP


May 25, 2006


Jefferies & Company, Inc.

Wells Fargo Securities, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, CA  90025


Re:         MTR
Gaming Group, Inc.

9% Senior Subordinated Notes due 2012


Ladies
and Gentlemen:


We have acted as securities counsel to (i) MTR
Gaming Group, Inc., a Delaware corporation (the “Company”), (ii) Mountaineer
Park, Inc., a West Virginia corporation (“Mountaineer”), (iii) Speakeasy
Gaming of Las Vegas, Inc., a Nevada corporation (“Speakeasy Vegas”), (iv) Presque
Isle Downs, Inc., a Pennsylvania corporation (“PDI”), (v) (v) Speakeasy
Gaming of Fremont, Inc., a Nevada corporation (“Speakeasy Fremont”), (vi) Scioto
Downs, Inc., an Ohio corporation (“Scioto”), (vii) Jackson Racing, Inc.,
a Michigan corporation (“Jackson”), and (viii) MTR-Harness, Inc., a
Minnesota corporation (“MTR-Harness”), in connection with the Purchase
Agreement dated as of May 22, 2006 (the “Purchase Agreement”) entered into
by and among the Company, Mountaineer, Speakeasy Vegas, PDI, Speakeasy Fremont,
Scioto, Jackson, MTR-Harness, Jefferies & Company, Inc. (“Jefferies”),
and Wells Fargo Securities, LLC (“Wells”) pursuant to which the Company is
selling to Jefferies and Wells $125,000,000 aggregate principal amount of MTR’s
9% Series A Senior Subordinated Notes due 2012, including the Guarantees
endorsed thereon. This opinion is being delivered pursuant to Section 9(a)(x)(A) of
the Purchase Agreement. All capitalized terms used herein and not otherwise
defined herein, shall have the meanings set forth in the Purchase Agreement.


In connection with this opinion we have examined and
reviewed (a) the Purchase Agreement dated as of May 22, 2006; (b) the
Indenture dated as of May 25, 2006; (c) the Time of Sale Information;
(d) the Final Offering Circular dated May 22, 2006; (e) the
Notes, including the Guarantees thereon dated May 25, 2006; (f) the
Registration Rights Agreement dated May 25, 2006; (g) the
Supplemental Indenture dated as of May 17, 2006; (h) the Consent
Documents; (i) the Articles of Incorporation and Bylaws of each of the
Company Entities, in each case, as amended to date, certified by the respective
Secretary of each such Company; (j) certificates from the Delaware
Secretary of State indicating that the Company is a Delaware corporation in
good standing as of May 24, 2006; and (k) a certificate of the
Secretary of the Company attesting to the validity of, and attaching copies of
resolutions adopted by the Board of Directors of the 









 



Company authorizing the execution, delivery and performance of the
Documents (as defined below) to which they are a party, signed by each of the
members of the Board of Directors. The documents set forth in items (a) through
(k) above are referred to herein collectively as the “Documents.”


In making such examination and review, we have
assumed the genuineness of all signatures (other than the signatures of
officers signing on behalf of the Company Entities), the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. We have also assumed the valid
authorization, execution and delivery of each of the Documents by each party
thereto (other than the Company Entities), and we have assumed, where
applicable, that each such other party has been duly organized, is validly
existing and in good standing under its jurisdiction of organization and possess
the corporate or other organization power to perform its obligations thereunder.
We have made such inquiries of fact and law as we believed necessary and
appropriate in giving our opinions. We have made reasonable inquiry of the
Company with respect thereto, and nothing has come to our attention that leads
us to believe we are not justified in making our assumptions set forth in this
opinion.


With respect to matters of law of the States of
Nevada, West Virginia, Pennsylvania, Ohio, Michigan, and Minnesota, unless
otherwise stated herein, we have relied upon the opinions (which have been
provided to you) of Jones Vargas, Nevada counsel to Speakeasy Vegas and
Speakeasy Fremont; Turner & Johns, PLLC, West Virginia counsel to
Mountaineer; Stevens & Lee, Pennsylvania counsel to PDI; Crabbe, Brown &
James, LLP, Ohio counsel to Scioto, Warner, Norcross & Judd LLP,
Michigan counsel to Jackson; and Fredrikson Byron, P.A., Minnesota counsel to
MTR-Harness (collectively, “Local Counsel”).


Based on the foregoing and subject to the
assumptions, qualifications and limitations set forth herein, we are of the
opinion that:


1.           Due Organization; Good Standing of the Company.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite power
and authority to conduct and carry on its business and to own, lease, use and
operate its properties and assets as described in each of the Time of Sale
Information and the Final Offering Circular. The Company is duly qualified or
licensed to do business and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature of its
business or the ownership, leasing, use or operation of its properties and
assets requires such qualification or licensing.


2.           Outstanding Shares and Interests. All of
the outstanding shares of capital stock in the Company have been duly
authorized, are validly issued, fully paid and nonassessable, and were not
issued in violation of, and are not subject to, any preemptive or similar
rights.









 



3.           Power and Authority. The Company has all
requisite power and authority to execute, deliver and perform its obligations
under the Documents to which it is a party and to consummate the Transactions contemplated
thereby.


4.           Subsidiaries. Immediately following the
Closing, the only subsidiaries of the Company will be the direct and indirect
subsidiaries of the Company listed on Schedule 6(d) to the Purchase
Agreement and (ii) except as set forth on Schedule 6(d) to the
Purchase Agreement, the Company will directly own 100% of the outstanding
shares of capital stock of each Subsidiary, in each case, free and clear of all
Liens, except for Liens securing loans made under the Existing Credit Facility,
the New Credit Facility and Permitted Liens.


5.           No Other Obligations to Issue Certain Securities.
To our knowledge, except as disclosed in each of the Time of Sale Information
and Final Offering Circular, there are no outstanding (i) securities
convertible into or exchangeable for any capital stock of any of the Company
Entities, (ii) options, warrants or other rights to purchase or subscribe
for any capital stock, or any securities convertible into or exchangeable for
any capital stock of any of the Company Entities or (iii) contracts,
commitments, agreements, understandings, arrangements, undertakings, rights,
calls or claims of any kind relating to the issuance of any capital stock of
any of the Company Entities, any such convertible or exchangeable securities or
any such options, warrants or rights, except commitments of the Company or
Company Entities to cause the Company to issue options to certain employees and
non-employee directors pursuant to employment or engagement agreements in
effect on the Issue Date. To our knowledge, except as set forth above, none of
the Company Entities owns, directly or indirectly, any capital stock of or
equity interest in any person, except that Scioto, Mid-America Racing
Association, Inc., and Jackson Trotting Association, LLC own 790 shares,
760 shares, and 975 shares, respectively, of Wagering Insurance North America,
Ltd.


6.           No Other Registration Rights. To our
knowledge, except for the Purchase Agreement, the Registration Rights
Agreement, and agreements between the Company and its directors and officers
relating to the registration of shares underlying stock options granted in the
ordinary course of the Company’s business, there are no contracts, commitments,
agreements, arrangements, understandings or undertakings of any kind to which
any of the Company Entities is a party, or by which any of them is bound,
granting to any person the right (i) to require the Company or any
Subsidiary to file a registration statement under the Act with respect to any
securities of the Company or any Subsidiary or requiring the Company or any
Subsidiary to include such securities with the Notes and the Guarantees
registered pursuant to any registration statement, or (ii) to purchase or
offer to purchase any securities of any of the Company Entities or any of their
respective affiliates, it being understood that from time to time the Company
may deem it advisable to repurchase its common stock from any Disqualified
Holder as that term is defined in the Company’s Articles of Incorporation or may
be required by Gaming/Racing Authorities (as defined in the Purchase Agreement)
to repurchase the Company’s securities from any holder deemed unsuitable by
such Gaming/Racing Authorities.


7.           Valid, Binding and Enforceability.









 



(a) Purchase
Agreement. The Purchase Agreement and the Transactions contemplated
thereby (including without limitation the Offering and the issuance and sale of
the Notes in accordance with the Purchase Agreement, and the execution of the
Supplemental Indenture) have been duly authorized, validly executed and
delivered by the Company, and, assuming the due authorization, execution and
delivery of the Purchase Agreement by the Initial Purchasers, is the legal,
valid and binding obligation of the Company and each of the Guarantors, enforceable
against the Company and each of the Guarantors in accordance with its terms,
except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer or similar laws and (ii) any
rights of acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a proceeding in
equity or at law).


(b) Indenture.
The Indenture and the Transactions contemplated thereby have been duly
authorized by the Company, and the Indenture has been validly executed and
delivered by the Company, and, assuming the due authorization, execution and
delivery of the Indenture by the Trustee, is the legal, valid and binding
obligation of the Company and each of the Guarantors, and is enforceable
against the Company and each of the Guarantors in accordance with its terms,
except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer or similar laws and (ii) any
rights of acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a proceeding in
equity or at law). The Indenture conforms to the requirements of the Trust
Indenture Act of 1939, as amended (the “TIA”), applicable to an indenture that
is required to be qualified under the TIA.


(c) Registration
Rights Agreement. The Registration Rights Agreement and the
Transactions contemplated thereby have been duly authorized, validly executed
and delivered by the Company, and, assuming the due authorization, execution
and delivery of the Registration Rights Agreement by the Initial Purchasers, is
the legal, valid and binding obligation of the Company and each of the
Guarantors, enforceable against the Company and each of the Guarantors in
accordance with its terms, except that (i) such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent transfer or similar
laws and (ii) any rights of acceleration and the availability of equitable
remedies may be subject to general principles of equity (whether considered in
a proceeding in equity or at law).


(d) Series A
Notes. The Series A Notes have been duly authorized by the
Company for issuance and sale to the Initial Purchasers pursuant to the
Purchase Agreement and have been validly executed and delivered by the Company
and, when authenticated by the Trustee in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers in accordance
with the terms of the Purchase Agreement, the Series A Notes will be the
legal, valid and binding obligations of the Company, entitled to the benefits
of the Indenture and enforceable against the Company in accordance with their
terms, except that (i) such enforceability may be limited by applicable bankruptcy,
insolvency or similar laws and (ii) any 









 



rights of acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a proceeding in
equity or at law).


(e) Series B
Notes. The Series B Notes have been duly authorized by the
Company and, when issued and executed by the Company and authenticated by the
Trustee in accordance with the terms of the Indenture and delivered in the
Registered Exchange Offer in exchange for the Series A Notes, the Series B
Notes will have been validly executed and delivered and will be the legal,
valid and binding obligation of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency or similar laws and (ii) any rights of acceleration
and the availability of equitable remedies may be subject to general principles
of equity (whether considered in a proceeding in equity or at law).


(f) Guarantees
of Series A Notes. The Guarantee to be endorsed on the Series A
Notes by each Guarantor, when the Series A Notes have been authenticated
by the Trustee in accordance with the terms of the Indenture and delivered to
and paid for by the Initial Purchasers in accordance with the terms of the
Purchase Agreement, will be the legal, valid and binding obligation of each
such Guarantor, enforceable against each such Guarantor in accordance with its
terms, except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer or similar laws and (ii) any
rights of acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a proceeding in
equity or at law).


(g) Guarantees
of Series B Notes. The Guarantee to be endorsed on the Series B
Notes by each Guarantor, when the Series B Notes have been issued and
executed by the Company and authenticated by the Trustee in accordance with the
terms of the Indenture (and the Guarantees of the Series B Notes by
Speakeasy Vegas and Speakeasy Fremont have been approved by the Nevada Gaming
Control Board and the Nevada Gaming Commission as set forth in the opinion of
Jones Vargas, special Nevada Counsel, delivered to the Initial Purchasers
pursuant to the Purchase Agreement) and delivered in exchange for the Series A
Notes in accordance with the terms of the Indenture, the Registration Rights
Agreement and the Registered Exchange Offer, will be the legal, valid and
binding obligation of each such Guarantor, enforceable against each such
Guarantor in accordance with its terms, except that (i) such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
transfer or similar laws and (ii) any rights of acceleration and the
availability of equitable remedies may be subject to general principles of
equity (whether considered in a proceeding in equity or at law).


(h) Transaction
Documents. Each of the Transactions has been duly authorized by each
of the Company Entities party thereto. The Supplemental Indenture has been duly
executed and delivered by each of the Company Entities party thereto and is the
legal, valid and binding obligation of each of the Company Entities party
thereto, enforceable against each of the Company Entities party thereto in
accordance with its terms, except that (i) such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent transfer or 









 



similar laws and (ii) any rights of acceleration and the
availability of equitable remedies may be subject to general principles of
equity (whether considered in a proceeding in equity or at law).


8.           No Violation. To our knowledge, none of
the Company Entities is (i) in material violation of any Applicable Law,
or (ii) in material breach of or material default under any Applicable
Agreement.


9.           No Conflict. To our knowledge, none of the
execution, delivery or performance of any of the Documents, nor the compliance
with the terms and provisions thereof, nor the consummation of any of the
Transactions will conflict with, violate, constitute a material breach of or a
material default (with the passage of time or otherwise) under, result in the
imposition of a Lien on any assets or capital stock of or membership interests
in either of the Company or any of the Guarantors, or result in an acceleration
of indebtedness pursuant to, (i) any Applicable Agreements or (iii) any
Applicable Law. To our knowledge, after giving effect to the Transactions, no
Default or Event of Default (each, as defined in the Indenture) will exist.


10.         Permits.


(a) No Permit is required in connection with,
or as a condition to, the execution, delivery or performance of the Documents,
the compliance with the terms and provisions thereof or the consummation of any
of the Transactions, other than (i) such Permits as have been made or
obtained on or prior to the Closing Date, which Permits are in full force and
effect on the Closing Date, (ii) the order of the Commission declaring the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
the case may be, effective, (iii) as set forth in the Purchase Agreement,
or the Time of Sale Information; and (iv) such Permits as have been set
forth in the opinions of any Local Counsel delivered to the Initial Purchasers
pursuant to the Purchase Agreement.


(b) To our knowledge, the Company has, and is
in material compliance with the terms and conditions of, all Permits necessary
or advisable to own, lease, use and operate the properties and assets and to
conduct and carry on the businesses described in each of the Time of Sale
Information and the Final Offering Circular other than those the failure of
which to have would not, singly or in the aggregate, have a Material Adverse
Effect. To our knowledge, except as described in each of the Time of Sale
Information and the Final Offering Circular, the Company has not received
notice that any entity is challenging or considering limiting, conditioning,
suspending, modifying, revoking or not renewing any such Permit.


(c) Except as described in each of the Time of
Sale Information and the Final Offering Circular, none of the execution,
delivery or performance of any of the Documents, nor the compliance with the
terms and provisions thereof, nor the consummation of any of the Transactions
will allow or result in, and, to our knowledge, no event has occurred which
allows or results in, or after notice or lapse of time would allow or result
in, the imposition of any material penalty under, or the revocation or
termination of, any such Permit or any material impairment of the rights of the
holder of any such Permit.









 



(d) Our opinions in this paragraph 10 expressly exclude Permits with respect
to the operation of gaming, racing, lottery and the sale of alcohol as to which
we refer you to the opinions of Local Counsel.


11.         No Proceedings.


(a) To our knowledge, there is no Proceeding
pending or threatened either (i) with respect to any of the Company
Entities in connection with, or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge, any of the Documents or any of the
Transactions, or (ii) except as described in each of the Time of Sale
Information and the Final Offering Circular, that could, singly or in the
aggregate, have a Material Adverse Effect.


(b) To our knowledge, no injunction or order
has been issued and there is no Proceeding pending or, threatened that (i) asserts
that the offer, sale and delivery of the Series A Notes and the Guarantees
to the Initial Purchasers pursuant to the Purchase Agreement or the initial
resale of the Series A Notes and the Guarantees by the Initial Purchasers
in the manner contemplated by the Purchase Agreement are subject to the
registration requirements of the Act, or (ii) would prevent or suspend the
issuance or sale of the Notes or the use of the Preliminary Offering Circular,
the Pricing Term Sheet or the Final Offering Circular, or any amendment or
supplement thereto, in any jurisdiction. With respect to our opinion in this
Paragraph 11(b), we have assumed that purchasers of the Notes are either
qualified institutional buyers as defined in Rule 144A under the
Securities Act, institutional accredited investors within the meaning of Rule 501(a)(1),
(2), (3), or (7) of the Securities Act, or, with respect to purchasers
acquiring the Notes pursuant to the transaction exemption provided by
Regulation S under the Securities Act, non-U.S. persons as defined in
Regulation S.


12.         Related Party Transactions. Except as
adequately disclosed in each of the Time of Sale Information or the Final
Offering Circular, to our knowledge, there are no related party transactions
that would be required to be disclosed in the Time of Sale Information or the
Final Offering Circular if the Time of Sale Information or the Final Offering
Circular, respectively, were a prospectus included in a registration statement
on Form S-1 filed under the Act.


13.         No Registration. It is not necessary in
connection with the offer, sale and delivery of the Series A Notes and the
Guarantees to the Initial Purchasers pursuant to the Purchase Agreement or the
initial resale of the Series A Notes and the Guarantees by the Initial
Purchasers in the manner contemplated by the Purchase Agreement and described
in each of the Time of Sale Information and the Final Offering Circular, to
register such sales or resales of the Series A Notes and the Guarantees
under the Act, and it is not necessary, prior to the Registered Exchange Offer
or the effectiveness of the Shelf Registration Statement to qualify the
Indenture under the TIA.









 



14.         Rule 144A Eligibility. Except for the
Company’s Common Stock, $.00001 Par Value, and the Company’s Contingent Earnout
Participation Rights issued to certain former holders of the common stock of
Scioto, there are no securities of any Company Entity registered under the
Exchange Act or listed on a national securities exchange registered under Section 6
of the Exchange Act or quoted in a United States automated inter-dealer
quotation system. The Series A Notes are eligible for resale pursuant to Rule 144A
under the Act, provided that such notes are offered for resale and are resold
in the manner described in the Time of Sale Information.


15.         Investment Company Act. None of the
Company or any of the Guarantors is subject to regulation, or shall become
subject to regulation solely by reason of the consummation of the Transactions,
under the Investment Company Act of 1940, as amended, and the rules and
regulations and interpretations promulgated thereunder, or under any other
Federal or state statute or regulation limiting its ability to incur or assume
indebtedness for borrowed money.


16.         Offering Circular. Each of the Documents
conforms in all material respects to the descriptions thereof contained in each
of the Time of Sale Information and the Final Offering Circular. The
information in each of the Time of Sale Information and the Final Offering
Circular under the headings “Offering Circular Summary—The Offering,” “Certain
Transactions,” “Business—Properties,” “Business—Litigation,” “Description of
Certain Indebtedness,” “Description of Notes,” “Regulation and Licensing—IRS
Regulations and Currency Transaction Reporting,” “Regulation and
Licensing—Compliance with Other Laws,” “Regulation and Licensing—Environmental
Matters,” “Plan of Distribution” and “Notice to Investors” has been reviewed by
us and, to the extent that it constitutes statements or matters of law,
summaries of legal matters, summaries or descriptions of securities,
instruments, agreements or other documents, summaries of proceedings, or legal
conclusions, it is correct in all material respects.


We have participated in conferences with officers
and other representatives of the Company Entities, counsel for the Company
Entities, representatives of the independent accountants of the Company,
representatives of the Initial Purchasers and counsel for the Initial
Purchasers, at which the contents of each of the Time of Sale Information and
the Final Offering Circular and related matters were discussed. Although we are
not passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Time of Sale
Information or the Final Offering Circular and, except as set forth above, have
made no independent check or verification thereof, nothing has come to our
attention which leads us to believe that (i) the Time of Sale Information,
as of the Applicable Time, (ii) the Final Offering Circular, as of its
date and as of the date hereof, and (iii) any amendment or supplement
thereto, as of its date and as of the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading.









 



The foregoing opinions are further subject to the
following qualifications and limitations:


a)                                      Our opinions are limited to the laws of the
States of Delaware and New York, and the federal laws of the United States, and
no opinion is expressed as to any matter governed by the laws of any other
state or jurisdiction. The opinions expressed herein are based on the
applicable Delaware and New York laws, rules and regulations and the
federal laws of the United States in effect as of the date hereof;


b)                                     Our opinions are limited to the matters
stated herein and no opinion is implied or may be inferred beyond the matters
expressed herein;


c)                                      Our opinions are given as of this date and we
assume no obligation to update to reflect any facts or circumstances which may
hereafter come to our attention or any change in any laws or regulations which
may hereafter occur;


d)                                     As used in this opinion, the phrase “to our
knowledge” means the knowledge of the attorneys of this firm who have
represented the Company Entities in this transaction, without independent
inquiry, except as obtained in this representation and except as expressly
noted in this opinion letter; and


Our opinions are also subject to the following
assumptions, qualifications and limitations:


e)                                      Our opinions are limited by the effect and
possible unenforceability of contractual provisions providing for choice of
governing law or jurisdiction;


f)                                        Our opinions are limited by the possible
unenforceability of provisions requiring indemnification for, or providing
exculpation, release or exemption for liability for, action or inaction, to the
extent such action or inaction involves negligent or willful misconduct, or to
the extent otherwise contrary to federal or state securities laws or public
policy;


g)                                     Our opinions are limited by the possible
unenforceability of provisions that waivers or consents by a party may not be
given effect unless in writing or in compliance with particular requirements,
or that a person’s course of dealing, course of performance, or the lack or
failure or delay in taking action may constitute a waiver of related rights or
provisions, or that one or more waivers may not under certain circumstances
constitute a waiver of other matters of the same kind;


h)                                     Our opinions are limited by the possible
unenforceability of provisions permitting modifications or amendments of an
agreement only in writing;









 



i)                                         Our opinions are limited by the possible
unenforceability of provisions stating that the provisions of an agreement are
severable;


j)                                         Our opinions are limited by the possible
unenforceability of provisions that are against public policy;


k)                                      Our opinions are limited by the possible
unenforceability of provisions permitting the exercise, under certain
circumstances, of rights without notice or without providing opportunity to
cure failures to perform;


l)                                         Our opinions are limited by the
unenforceability under certain circumstances of provisions to the effect that
failure to exercise or delay in exercising rights or remedies will not operate
as a waiver of the right or remedy;


m)                                   Our opinions are limited based on statutes or
on public policy limiting a person’s right to waive the benefits of statutory
provisions or common law right; and


n)                                     Our opinions are limited based on the effect
of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws affecting the rights and remedies of
creditors.


Our opinions are also subject to the following
assumptions:


(i)                                     The factual information contained in the
material which we have reviewed is accurate and complete and contains no
material omission or misrepresentations;


(ii)                                  That all laws and regulations that we have
reviewed are valid;


(iii)                               All permits issued or other actions taken by
State or Federal governments are valid and supported by proper authority; and


(iv)                              That the original executed Documents will be
in the form submitted to us for our review, and will be completed and conformed
in a full, accurate, and consistent manner.


This opinion letter is given solely for your
benefit, and your respective successors and assigns, in connection with the
transactions referred to herein and may not be relied upon by any other party
without the prior written consent of this firm.


Very
truly yours,


Ruben &
Aronson, LLP















 


EXHIBIT B


FORM OF
OPINION OF TURNER & JOHNS, PLLC


May 25, 2006


Jefferies &
Company, Inc.

Wells Fargo Securities, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, CA  90025


Ladies and
Gentlemen:


We
are special West Virginia counsel to Mountaineer Park, Inc., a West
Virginia corporation (the “West Virginia Guarantor”), and have acted in such
capacity in connection with the Purchase Agreement, the other Operative
Documents (as defined below) and the transactions relating to the Offering
and the application of the proceeds therefrom as described in each of the Time of Sale Information and the Final
Offering Circular and the issuance and sale of the Notes in accordance
with the Purchase Agreement (the “Transaction”). This opinion is delivered to
you at the request of the West Virginia Guarantor pursuant to Section 9(a)(x)(B) of
the Purchase Agreement for the reliance of the Initial Purchasers.


All
capitalized terms which are used herein, and which are not otherwise defined
herein, shall have the meaning set forth in the Purchase Agreement. We have
made such investigations of law as we have deemed necessary or advisable for
the purpose of this opinion, and we have reviewed the following documents all
dated as of May 25, 2006, unless otherwise indicated:  (i) the Purchase Agreement dated May 22,
2006; (ii) the Indenture; (iii) the Registration Rights Agreement; (iv) the
form of the Series A Notes; (v) the Supplemental Indenture; (vi) the
Consent Documents; and (vii) the Guarantee as it relates to the
West Virginia Guarantor (the “Operative Documents”). We also have reviewed
the Time of Sale Information and the Final Offering Circular, dated May 22,
2006.


In
rendering the opinions set forth herein, we have further (i) made such
inquiries, and reviewed such other documents, as we deemed appropriate under
the circumstances; (ii) reviewed the Certificate of Good Standing issued
by the State of West Virginia as of
[            ],
2006; and (iii) reviewed the contracts listed on Schedule I hereto (the “Contracts”).


In
making such examination and review, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such copies. We
have also assumed the valid authorization, execution and delivery (other than
the West Virginia Guarantor) of each Operative Document by









 



each party
thereto, and we have assumed, where applicable, that each such other party has
been duly organized, is validly existing and in good standing under its
jurisdiction of organization and possesses the corporate or other organization
power to perform its obligations thereunder. As to various questions of fact
material to our opinion, we have relied upon an Opinion Certificate of an
officer of the West Virginia Guarantor and have assumed that such Certificate
and the representations contained therein continue to remain true and complete
as of the date of this opinion.


In
basing the opinions and other matters set forth herein on “our knowledge,” the
words “our knowledge” and similar language signify that, in the course of our
representation of the West Virginia Guarantor in matters with respect of which
we have been engaged by the West Virginia Guarantor as special counsel, no
information has come to our attention that would give us actual knowledge or
actual notice that any such opinions or other matters are not accurate or that
any of the foregoing documents, certificates and information on which we have
relied are not accurate and complete. Except as otherwise stated herein, we
have undertaken no independent investigation or verification of such matters. The
words “our knowledge” and similar language used herein are intended to be
limited to the knowledge of the lawyers within our Firm who have provided
substantive legal advice to the West Virginia Guarantor in connection with this
Transaction, without independent investigation.


Based
on the foregoing and subject to the qualifications, limitations and assumptions
set forth herein, we are of the opinion that:


1.           Due
Organization; Good Standing of the West Virginia Guarantor. The West
Virginia Guarantor is a corporation duly organized, validly existing and in
good standing under the laws of the State of West Virginia, and has all
requisite power and authority to conduct and carry on its business and to own,
lease, use and operate its properties and assets as described in each of the Time
of Sale Information and the Final Offering Circular. The West Virginia
Guarantor is duly qualified or licensed to do business and is in good standing
as a foreign corporation authorized to do business in each jurisdiction in
which the nature of its business or the ownership, leasing, use or operation of
its properties and assets require such qualification or licensing.


2.           Outstanding
Shares and Interests. All of the outstanding shares of capital stock
in the West Virginia Guarantor have been duly authorized, are validly issued,
fully paid and non-assessable, and were not issued in violation of, and are not
subject to, any preemptive or similar rights.


3.           Power
and Authority. The West Virginia Guarantor has all requisite power
and authority to execute, deliver and perform its obligations under the
Operative Documents to which it is a party and to consummate the Transactions
contemplated thereby.


4.           Authorization,
Execution and Delivery. The Purchase Agreement and the other
Operative Documents to which the West Virginia Guarantor is a party and the
Transactions









 



contemplated
thereby (including, without limitation, the Offering and the issuance and sale
of the Notes in accordance with the Purchase Agreement, and the execution
of the Supplemental Indenture) have been duly authorized by the
West Virginia Guarantor, and the Purchase Agreement and each of the other
Operative Documents to which the West Virginia Guarantor is a party have been
validly executed and delivered by the West Virginia Guarantor.


5.           No
Violation. To our knowledge, the West Virginia Guarantor is not (i) in
violation of its Charter Documents, (ii) any Contract, or (iii) in
material violation of any corporate, lottery or horse racing law of the State
of West Virginia.


6.           No
Conflict. To our knowledge, none of the execution, delivery or
performance of any of the Operative Documents, nor the compliance with the
terms and provisions thereof, nor the consummation of any of the Transactions
will conflict with, violate, constitute a breach of or a default (with the
passage of time or otherwise) under, result in the imposition of any Lien on
any of the assets of the West Virginia Guarantor (except as created by the
Indenture) or result in an acceleration of indebtedness pursuant to any
Contract.


7.           Permits.


(a) No
Permit (including without limitation any Permit of the West Virginia
Gaming/Racing Authorities) is required under Applicable Law of the State of
West Virginia in connection with, or as a condition to, the execution, delivery
or performance of any of the Operative Documents, the compliance with the terms
and provisions thereof or the consummation of any of the Transactions, other
than such Permits as have been made or obtained on or prior to the Closing
Date, which Permits are in full force and effect on the Closing Date.


(b) To
our knowledge, each of the Regulated Persons has and  is in compliance with the terms and
conditions of, all Permits with respect to engaging in lottery and horse racing
operations necessary or advisable under Applicable Law of the State of
West Virginia to own, lease, use and operate the properties and to conduct
and carry on the businesses described in each of the Time of Sale Information and the Final Offering Circular other
than those the failure of which to have could not, singly or in the aggregate,
have a Material Adverse Effect. All such Permits with respect to engaging in
lottery and horse racing operations are valid and in full force and effect. To
our knowledge, no Regulated Person has received notice that any entity is
considering limiting, conditioning, suspending, modifying, revoking or not
renewing any such Permit with respect to engaging in lottery and horse racing
operations. To our knowledge, no Governmental Authority of the State of West
Virginia is investigating any Regulated Person.


(c) None
of the execution, delivery or performance of any of the Operative Documents,
nor the compliance with the terms and provisions thereof, nor the consummation
of any of the Transactions will allow or result in, and, to our knowledge, no
event has occurred which allows or results in, or after notice or lapse of time
would allow or result in,









 



the imposition of
any material penalty under, or the revocation or termination of, any such
permit or any material impairment of the rights of the holder of any such
Permit.


8.           No
Proceedings. There is no Proceeding before or by any Governmental
Authority of the State of West Virginia pending or, to our knowledge,
threatened either (i) with respect to the West Virginia Guarantor in
connection with, or that seeks to restrain, enjoin, prevent the consummation of
or otherwise challenge any of the Operative Documents or any of the
Transactions, or (ii) could, singly or in the aggregate, have a Material
Adverse Effect.


9.           Real
Property. To our knowledge, no condemnation, eminent domain, or
similar proceeding before or by any Governmental Authority exists, is pending
or to our knowledge, threatened, with respect to or that could affect, any
properties or assets of the West Virginia Guarantor, except those
acquisitions in lieu of condemnation by the West Virginia Department of
Transportation, Division of Highways, which are described in Schedule 6(z) attached
to the Purchase Agreement.


10.         Offering
Circular. The information in each of the Time of Sale Information and the Final Offering Circular under the
headings “Risk Factors — Risks Related to this Offering and the Notes — You may
be required to sell your Notes if any gaming authority finds you unsuitable to
hold them,” “Risk Factors — Risks Related To Our Business — We are subject to
extensive regulation by gaming and racing authorities,” “Risk Factors — Risks
Related To Our Business — We will continue to depend on Mountaineer for the
vast majority of our revenues, and therefore, 
any risks faced by our Mountaineer operations will have a material
impact on our results of operations,” “ Regulation and Licensing — West
Virginia Racing and Gaming Regulation,” “ Regulation and Licensing — IRS
Regulations and Currency Transaction Reporting,” “Regulation and Licensing —
Restrictions on Share Ownership and Transfer” and  “Regulation and Licensing — Compliance With
Other Laws” has been reviewed by us and, to the extent that it constitutes
statements or matters of law, summaries of legal matters, summaries or
descriptions of securities, instruments, agreements or other documents,
summaries of proceedings, or legal conclusions, it is correct in all material
respects.


The
opinions set forth above are subject to the following qualifications and
limitations:


(1)          The effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other
similar laws affecting the rights and remedies of creditors.


(2)          The effect of general principles of
equity, whether applied by a court of law or equity.


(3)          The effect and possible
unenforceability of contractual provisions of providing for choice of governing
law or jurisdiction.









 



(4)          The possible unenforceability of
provisions requiring indemnification for, or providing exculpation, release or
exemption for liability for, action or inaction, to the extent such action or
inaction involves negligent or willful misconduct, or to the extent otherwise
contrary to public policy.


(5)          The effect of judicial decisions that
may permit the introduction of extrinsic evidence to modify the terms or the
interpretation of an agreement.


(6)          The possible unenforceability of
provisions that waivers or consents by a party may not be given effect unless
in writing or in compliance with particular requirements, or that a person’s
course of dealing, course of performance, or the lack or failure or delay in
taking action may constitute a waiver of related rights or provisions, or that
one or more waivers may not under certain circumstances constitute a waiver of
other matters of the same kind.


(7)          The possible unenforceability of
provisions permitting modifications or amendments of an agreement only in
writing.


(8)          The possible unenforceability of
provisions stating that the provisions of an agreement are severable.


(9)          The possible unenforceability of
provisions that are against public policy.


(10)        The possible unenforceability of
provisions permitting the exercise, under certain circumstances, of rights
without notice or without providing opportunity to cure failures to perform.


(11)        The effect of cause of dealing, course
of performance, or the like, that would modify the terms of any agreement or
the respective rights or obligations of the parties under an agreement.


(12)        We express no opinion regarding federal
or state securities laws of any jurisdiction.


(13)        We express no opinion as to the laws of
any jurisdiction other than the laws of the State of West Virginia and the laws
of the United States of America. To the extent that any documents referred to
herein are governed by and construed in accordance with the laws of a
jurisdiction other than the State of West Virginia, we have assumed that the
laws of such jurisdiction are the same as the laws of the State of West
Virginia.


(14)        We assume no obligation to supplement
this opinion if any applicable laws change after the date hereof or if we
become aware of any facts that might change the opinions expressed herein after
the date hereof.









 



Further,
certain provisions contained in the Operative Documents may be unenforceable in
whole or in part to the extent any such provision may contravene the public
policy of the State of West Virginia.


The
opinions expressed herein are solely for your use in connection with the
Transactions contemplated by the Operative Documents. This opinion may not be
relied on by any other person or in connection with any other matter without
our prior written consent. The opinions expressed herein are limited to the
matters set forth herein, and no other opinion should be inferred beyond the matters
expressly stated.


Very truly yours,


TURNER &
JOHNS, PLLC















 
  


Schedule
I


MOUNTAINEER
PARK, INC. CONTRACTS


1.           Agreement dated January 10, 2004
, between Mountaineer Park, Inc. and the Mountaineer Park Horsemen’s
Benevolent and Protective Association, Inc.


2.           Agreement dated January 7, 2004,
between Mountaineer Park, Inc. and Racetrack Employees Union Local No. 101.


3.           Master Lease Agreement dated January 31,
2000, by and between Mountaineer Park, Inc., and PNC Leasing, LLC.


4.           Master Equipment Lease Agreement
dated November 12, 2001, between Mountaineer Park, Inc. and National
City Leasing Corporation.


5.           Equipment Lease dated December 16,
2002, between Mountaineer Park, Inc. and BB&T Leasing Corporation.















 


EXHIBIT
C


FORM OF
OPINION OF JONES VARGAS


May 25, 2006


JEFFERIES &
COMPANY, INC.

WELLS FARGO SECURITIES, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard, 10th floor

Los Angeles, California 90025


Re:         MTR
Gaming Group, Inc.

$125,000,0009% Senior Subordinated Notes due 2012


Ladies and
Gentlemen:


We
have acted as Nevada counsel to Speakeasy Gaming of Las Vegas, Inc. (“SGLV”)
and Speakeasy Gaming of Fremont, Inc. (“SGFI”) (collectively, the “Nevada
Guarantors”) and special Nevada counsel to MTR Gaming Group, Inc., a
Delaware corporation (“MTR” or the “Company”), in connection with that certain
Purchase Agreement dated as of May 22, 2006 (the “Purchase Agreement”),
pursuant to the terms of which MTR is issuing and selling to Jefferies &
Company, Inc. and Wells Fargo Securities, LLC (the “Initial Purchasers”)
$125,000,000 aggregate principal amount at maturity of MTR’s 9% Senior
Subordinated Notes due 2012, Series A, including the Guarantees endorsed
thereon (the “Notes”). This opinion is delivered to you at the request of the
Nevada Guarantors pursuant to Section 9(a)(x)(c) of the Purchase
Agreement for reliance by the Initial Purchasers.


All
capitalized terms which are used herein, and which are not otherwise defined
herein, shall have the meanings which are set forth in the Purchase Agreement. For
purposes of this letter, the following terms have the following meanings: (i) Nevada
Gaming Laws means, collectively, the Nevada Gaming Control Act and the NGC
Regulations, (ii) NGC Regulations means the regulations adopted by the
Commission under the Nevada Gaming Control Act, and (iii) Gaming
Commission means the Nevada Gaming Commission.


We
have been furnished with and have examined originals or copies, certified or
otherwise identified to our satisfaction, of all the documents, records,
reports, and certificates specifically described below, and have relied thereon
with respect to questions of fact material to our opinions. Although we have
not independently verified information obtained from third persons, we have no
current actual knowledge of any factual information which would lead us to form
legal opinions different from those expressed herein. These records, documents,
and reports and certificates include drafts of the following:


(a)           The
Purchase Agreement dated as of May 22, 2006;









 



(b)           The
Indenture dated as of May 25, 2006;


(c)           The
Final Offering Circular dated as of May 22, 2006;


(d)           The
Time of Sale Information;


(e)           The
Notes, including the Guarantees endorsed thereon dated as of May 25, 2006;


(f)            The
Registration Rights Agreement dated as of May 25, 2006;


(g)           The
Supplemental Indenture dated as of May 17, 2006;


(h)           The
Consent Documents (as defined in the Purchase Agreement);


(i)            The
Articles of Incorporation and Bylaws of each of the Nevada Guarantors, in each
case, as amended to date, certified by the respective President and Secretary
of each of the Nevada Guarantors;


(j)            Certificates
from the Nevada Secretary of State indicating that each of the Nevada
Guarantors is a Nevada corporation in good standing;


(k)           A
certificate from the Nevada Secretary of State indicating that the Company is a
foreign corporation in good standing;


(l)            A
certificate of the Secretary of each of 
SGLVI and SGFI attesting to the validity of, and attaching copies of
resolutions adopted by the respective Boards of Directors of SGLVI and SGFI
authorizing the execution, delivery and performance of the Documents (as
defined below) to which they are parties, signed by each member of the
respective Boards of Directors; and


(m)          A
certificate of the Secretary of the Company attesting to certain matters of
fact.


The
documents set forth in items (a) through (h) above are referred to
herein collectively as the “Documents.”


Whenever
any opinion or confirmation set forth in this letter is qualified by the words “to
our knowledge” or by other words of similar meaning, such words mean the actual
current awareness by lawyers in the Primary Lawyer Group (as defined below) of
factual matters such lawyers recognize as being relevant to the opinion or
confirmation so qualified. The term “Primary Lawyer Group,” as used in this
letter, means the lawyer who signs this opinion, the lawyer within this firm
having supervisory responsibility for this firm’s relationship with MTR and the
Nevada Guarantors, and every other lawyer in this firm who participated in the
representation of MTR and the Nevada Guarantors in connection with the
transaction 









 



contemplated by
the Documents. We have not undertaken any independent investigation to
determine the existence or absence of such facts, and no inference as to our
knowledge of the existence or absence of such facts should be drawn from our
representation of MTR or the Nevada Guarantors.


Assumptions:


In rendering this
opinion, we have assumed, with your permission, and without independent
investigation:


(i)                                     the
authenticity of all documents submitted to us as originals and the conformity
to authentic genuine originals of all documents submitted to us as certified,
conformed or photostatic copies, whether signed or unsigned;


(ii)                                  that
each party to the Documents other than the Nevada Guarantors, and each party
constituting such party other than Nevada Guarantors: (a) is duly
organized, validly existing, and in good standing under the laws of the state
of its organization, (b) has full power, authority, and legal right under
the laws of the state of its organization and its organizational documents to
execute and deliver, and observe and perform its obligations under the
Documents, (c) has taken all actions necessary to authorize the execution
and delivery of, and to carry out and consummate the transactions contemplated
to be performed on its part by, the Documents, and (d) has duly executed
and delivered each of the Documents to which it is a party, and such Documents
constitute the legal, valid and binding obligation of the parties thereto,
enforceable in accordance with their terms;


(iii)                               the
necessary legal capacity and competence of all natural persons;


(iv)                              the
genuineness of all signatures;


(v)                                 that
the Documents accurately and completely describe and contain the mutual
understandings of the parties thereto, and that there are no oral or written
statements or agreements among the parties to the Documents, or between any two
or more of them, that modify, amend, or vary any of the terms of the Documents
or that would have an effect on the opinions rendered herein;


(vi)                              that
the original executed Documents will be in the form submitted to us for our
review, and will be completed and conformed in a full, accurate, and consistent
manner;


(vii)                           all
representations and warranties made by any party in any of the 









 



Documents as to factual matters are and, upon
execution and delivery of the Documents will be, true, complete and correct in
all relevant respects, and all material conditions precedent to the
effectiveness of the Documents have been appropriately satisfied or waived;


(viii)                        to the
extent the real property of the Nevada Guarantors shall be used for the
operation of gaming, no enforcement of, or foreclosure of, or any other resort
to a security interest in “gaming devices” or in the proceeds from the
operation of a “gaming device,” “game,” “race book” or “sports pool,” or in a “security”
issued by the Nevada Guarantors (as such terms are defined in the Nevada Gaming
Laws), including the stock or other equity securities of the Nevada
Guarantors  and any other affiliate or
subsidiary that holds or obtains a Nevada gaming license or that becomes
registered with the Gaming Commission and is subject to the provisions of NGC
Regulation 15, shall occur without first securing the approvals required by the
Nevada Gaming Laws;


(ix)                                to
the extent the real property of the Nevada Guarantors shall be used for the
operation of gaming, no acquisition of control (as defined in NGC Regulation
16.010(3) and as governed by NGC Regulation 16.200) of Nevada Guarantors,
and any other affiliate or subsidiary that holds or obtains a Nevada gaming
license or that becomes registered with the Nevada Gaming Authorities and is
subject to the provisions of NGC Regulation 15, by any of the Trustee, the
Initial Purchasers, or the Eligible Purchasers due to the exercise of rights
pursuant to the transfer or assignment of a security of, or leases held by the
Nevada Guarantors or any affiliate or subsidiary, the taking of possession of
or operation of the premises of a gaming licensee, or the collection of or
receipt of rents and profits from a gaming licensee, in each case after an
Event of Default (as defined in the Indenture), shall occur without first
securing the approvals required by the Nevada Gaming Laws;


(x)                                   none
of the Trustee, the Initial Purchasers or any Eligible Purchaser shall take
dominion over any premises of the Nevada Guarantors while or if such premises
continue to be used for gaming purposes without first obtaining the approvals
required by the Nevada Gaming Laws;


(xi)                                none
of the Trustee, the Initial Purchasers or any Eligible Purchaser shall exercise
“significant influence” (as set forth in NGC Regulation 16.400) over the
activities of a gaming licensee without first securing the approvals required
by the Nevada Gaming Laws; and


(xii)                             notices,
if necessary, shall be given by the Nevada Guarantors pursuant to NGC
Regulations 3.020 and 8.130 within the time limits required by those Regulations.









 



We
have also assumed that the Nevada Guarantors will not in the future take any
discretionary action (including the decision not to act) permitted by the
Transaction Documents that would require any registration with, consent or
approval of, or notice to, or other action to, with or by, any Nevada
governmental authority or regulatory body.


Opinions:


Based
on the foregoing, and such other investigation as we have deemed appropriate
for these opinions, and subject to the limitations, assumptions, and
qualifications set forth herein, we are of the opinion that:


1.    Each of the Nevada Guarantors is a
corporation duly organized, validly existing and, based solely on the Good
Standing Certificates, in good standing under the laws of the State of Nevada
and has all requisite corporate power and authority under its Charter Documents
and the Nevada corporation law to conduct and carry on its business and to own,
lease, use and operate its properties and assets as described in each of the
Time of Sale Information and the Final
Offering Circular.


2.    Each of the Nevada Guarantors has all
requisite corporate power and authority under its Charter Documents and the
Nevada corporation law to execute, deliver and perform its obligations under
the Documents to which it is a party and to consummate the Transactions
contemplated thereby.


3.    The Documents to which the Nevada Guarantors
are a party and the Transactions contemplated thereby (including without
limitation the Offering and the issuance and sale of the Notes in accordance
with the Purchase Agreement, and the execution of the Supplemental Indenture)
have been duly authorized by each of the Nevada Guarantors, and the Documents
to which the Nevada Guarantors are a party have been validly executed and
delivered by each of the Nevada Guarantors.


4.    To our knowledge, none of the Nevada
Guarantors is (i) in violation of its Charter Documents, (ii) in
violation of any Applicable Law of the State of Nevada, or (iii) in breach
of or default under any Applicable Agreement.


5.    None of the execution, delivery or
performance of any of the Documents, nor the compliance with the terms and
provisions thereof, nor the consummation of any of the Transactions will
conflict with, violate, constitute a breach of or a default (with the passage
of time or otherwise) under, result in the imposition of a Lien (as defined in
the Indenture) on any assets of the Nevada Guarantors (except as created by the
Indenture) or result in an acceleration of indebtedness pursuant to, (i) its
Charter Documents, (ii) to our knowledge, any Applicable Agreements; or (iii) any
Applicable Law of the State of Nevada.









 



6.    (a)           No
Permit (including without limitation any Permit of the Nevada Gaming
Authorities or under Nevada Gaming Law) is required under Applicable Law of the
State of Nevada in connection with, or as a condition to, the execution,
delivery or performance of any of the Documents, the compliance with the terms
and provisions thereof or the consummation of any of the Transactions, other
than (i) such Permits as have been made or obtained on or prior to the
Closing Date, which Permits, to our knowledge, are in full force and effect on
the Closing Date and (ii) any Permits required to be obtained from the
Gaming Commission approving the Registered Exchange Offer (including the
Guarantee of the Series B Notes by SGLV and SGFI).


(b)           Each of the Nevada Guarantors has,
and, to our knowledge, is in compliance with the terms and conditions of, all
Permits (including, without limitation, Permits with respect to engaging in
gaming operations, but excluding, for purposes of this Section 6(b), those
Permits the failure of which to have could not, singly or in the aggregate,
have a Material Adverse Effect) necessary or advisable under Applicable Law of
the State of Nevada to own, lease, use and operate the properties and to
conduct and carry on the businesses described in each of the Time of Sale
Information and the Final Offering Circular. All such Permits are valid and in
full force and effect. To our knowledge, no Nevada Guarantor has received
notice that any entity is considering limiting, conditioning, suspending,
modifying, revoking or not renewing any such Permit. To our knowledge, no
Governmental Authority of the State of Nevada is investigating any Nevada Guarantor.


(c)          None of the execution, delivery or
performance of any of the Documents, nor the compliance with the terms and
provisions thereof, nor the consummation of any of the Transactions, will allow
or result in, and, to our knowledge, no event has occurred which allows or
results in, or after notice or lapse of time would allow or result in, the
imposition of any material penalty under, or the revocation or termination of,
any such Permit or any material impairment of the rights of the holder of any
such Permit, except for the approval of the Registered Exchange Offer
(including the Guarantee of the Series B Notes by SGLV and SGFI)
delineated in the Registration Rights Agreement by the Nevada State Gaming
Control Board and the Gaming Commission.


7.    There is no Proceeding before or by any
Governmental Authority of the State of Nevada pending or, to our knowledge,
threatened either (i) with respect to any of the Nevada Guarantors in
connection with, or that seeks to restrain, enjoin, prevent the consummation of
or otherwise challenge any of the Documents or any of the Transactions, or (ii) could,
singly or in the aggregate have a Material Adverse Effect.


8.    To our knowledge, no condemnation, eminent
domain, or similar proceeding before or by any Governmental Authority exists,
is pending or is threatened, with respect to or that could affect, any
properties or assets of the Nevada Guarantors.


9.    The information in each of the Time of Sale
Information and the Final Offering
Circular under the headings “Risk Factors—Risks Related to this Offering
and the Notes—You may be required to sell your Notes if any gaming authority
finds you unsuitable to hold them,” 









 



“Risk Factors—
Risks Related to Our Business—We are subject to extensive regulation by gaming
and racing authorities,” “Regulation and Licensing—Nevada Gaming Regulation,” “Regulation
and Licensing—IRS Regulations and Currency Transaction Reporting,” “Regulation
and Licensing—Impact of Resort Hotel Legislation” and “Regulation and
Licensing—Compliance with Other Laws” has been reviewed by us and, to the
extent that it constitutes statements or matters of law, summaries of legal
matters, summaries or descriptions of securities, instruments, agreements or
other documents, summaries of proceedings, or legal conclusions, it is correct
in all material respects with respect to the Nevada Gaming Laws.


Limitations and
Qualifications:


The
opinions expressed in this letter are subject to, limited, and qualified by the
following:


(a)                                  Limitations
on the right of a creditor, secured party or beneficiary to exercise rights and
remedies or to impose penalties for late payments or other defaults if it is
determined that (i) the defaults are not material, the penalties bear no
reasonable relation to the damage suffered as a result of the delinquencies or
defaults, or it cannot be demonstrated that the enforcement of the restrictions
or burdens is reasonably necessary for the protection of such creditor, secured
party or beneficiary, or (ii) the enforcement of the covenants or provisions
under the circumstances would violate such creditor’s implied covenant of good
faith and fair dealing;


(b)                                 The
effect of federal securities laws;


(c)                                  The
unenforceability under certain circumstances of provisions to the effect that
failure to exercise or delay in exercising rights or remedies will not operate
as a waiver of the right or remedy;


(d)                                 The
unenforceability under certain circumstances of provisions indemnifying, or
prospectively releasing, a party against liability for its own wrongful acts or
where the release or indemnification is contrary to public policy; and


(e)                                  Limitations
based on statutes or on public policy limiting a person’s right to waive the
benefits of statutory provisions or common law rights.


We
express no opinion as to:


(1)                                  The
ability of SGLV, SGFI or any affiliate or subsidiary to assign, transfer,
encumber, or to create or perfect a security interest in any business, liquor,
gaming or other license or approval granted by a Nevada state or local
political subdivision;









 



(2)                                  The
enforceability under Nevada law of a contractual provision which purports to
waive trial by jury, the assertion of counterclaims in an action, or the
consolidation of actions;


(3)                                  Title
to any property or the priority of any lien or security interest;


(4)                                The
reasonableness of any late charge or liquidated damages;


(5)                                  Any
attachment to, or document to which reference is made in, any of the Documents
(except for references to other Documents);


(6)                                  The
effectiveness of any provision requiring consents, modifications or waivers to
be in writing;


(7)                                  The
unenforceability under certain circumstances of provisions expressly or by
implication waiving broadly or vaguely stated rights, unknown future rights,
defenses to obligations, or rights granted by laws, where such waivers are
against public policy or prohibited by law;


(8)                                  The
effectiveness of any provision purporting to require that litigation and other
proceedings with respect to the Documents only be prosecuted in certain
jurisdictions; and


(9)                                  The
effect on the Documents of the covenant of good faith and fair dealing which is
impliedly contained in all contracts entered into in the State of Nevada.


We
are admitted to practice in the State of Nevada, and our opinion is limited to
matters under or involving the laws of the State of Nevada (except for
securities or Blue Sky laws on which we express no opinion). We express no
opinion as to matters under or involving the laws of any jurisdiction other
than the laws of the State of Nevada as those laws presently exist.


This
opinion is rendered to the Initial Purchasers, and their respective successors
and assigns, in connection with the transactions referred to herein and may not
be relied on in any other context; nor may it be relied on by any other Person.
This opinion may not be quoted nor may copies hereof be furnished to any other
Person without the prior written consent of the undersigned, except that the
Initial Purchasers and their respective successors and assigns, and may furnish
a copy hereof:  (i) to their
respective in-house and independent auditors and attorneys; (ii) to any
Governmental Authority or authority having regulatory jurisdiction over any of
the Initial Purchasers, or their respective successors and assigns; (iii) pursuant
to order or legal process of any court or Governmental Authority; (iv) in
connection with any legal action to which any of the Initial Purchasers, or
their successors and assigns, are a party arising out of the transactions
referred to above.


This
letter is issued in the State of Nevada and by issuing this letter the law firm
of Jones 









 



Vargas shall not
be deemed to be transacting business in any other state. Furthermore, by
issuing this letter the law firm of Jones Vargas does not consent to the
jurisdiction of any state but the State of Nevada and any claim or cause of
action arising out of the opinions expressed herein must be brought in the
State of Nevada.


The
opinions expressed in this letter are based upon the law in effect on the date
hereof, and we assume no obligation to revise or supplement the opinion should
such law be changed by legislative action, judicial decision or otherwise.


Respectfully submitted,


JONES VARGAS















 


EXHIBIT D


FORM OF OPINION OF
STEVENS & LEE


May 25, 2006


Jefferies &
Company, Inc.

Wells Fargo Securities, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, CA  90025


Re:                   Purchase
Agreement (the “Purchase Agreement”) dated as of May 22, 2006, by
and among MTR Gaming Group, Inc., a Delaware corporation (the “Company”),
the Guarantors party thereto, and Jefferies & Company, Inc. and
Wells Fargo Securities, LLC (collectively, the “Initial Purchasers”)


Ladies and Gentlemen:


We have acted as special
Pennsylvania counsel to Presque Isle Downs, Inc., a Pennsylvania
corporation (the “Pennsylvania Guarantor”), in connection with its role
as a Guarantor pursuant to the Purchase Agreement and in particular with its
execution and delivery of the following documents:


13.           the Purchase Agreement;


14.           the Indenture dated as of May 25, 2006;


15.           the Registration Rights Agreement dated as of May 25,
2006; and


16.           the Guarantee dated as of May 25, 2006.


The documents described
in the foregoing clauses (a) through (d) are collectively
referred to herein as the “Operative Documents.”  Unless otherwise indicated, capitalized terms
used but not defined herein shall have the respective meanings set forth in the
Purchase Agreement. This opinion is furnished to you pursuant to Section 9(a)(x)(D) of
the Purchase Agreement.


In connection with this
opinion, we have examined each Operative Document, or a copy thereof, signed by
each of the Company Entities party thereto.


In connection with this
opinion, we have also reviewed: (a) the Time of Sale Information; (b) the
Final Offering Circular; (c) the Articles of Incorporation and By-Laws of
the Pennsylvania Guarantor, in each case as amended through the date hereof,
certified as true, correct and complete by the corporate secretary of the
Pennsylvania Guarantor; (d) a subsistence certificate dated May 16,
2006 issued by the Secretary of State of the Commonwealth with 









 



respect to the
Pennsylvania Guarantor; (e) a certificate of the corporate secretary of
the Pennsylvania Guarantor attesting to the validity of, and attaching copies
of, resolutions adopted by the board of directors of the Pennsylvania Guarantor
authorizing, among other things, the Pennsylvania Guarantor’s execution,
delivery and performance of the Operative Documents; and (f) the stock
ledger of the Pennsylvania Guarantor in the form submitted to us by the
corporate secretary of the Pennsylvania Guarantor together with a certificate
certifying as to, among other things, the number of issued and outstanding
shares of the capital stock of the Pennsylvania Guarantor, the number of shares
of such capital stock held by the sole shareholder of the Pennsylvania
Guarantor, and other matters relating to the capitalization of the Pennsylvania
Guarantor.


The opinions hereinafter
expressed are subject to the following qualifications, limitations, assumptions
and exceptions:


(a)           We have assumed the genuineness of
all signatures other than those of the officers of the Pennsylvania Guarantor,
the legal capacity of all natural persons executing the Operative Documents,
the authenticity of all documents submitted to us as originals and the
conformity of all documents submitted to us as copies to the originals thereof.
As to the accuracy of various factual matters material to our opinion, we have
relied, without independent investigation or verification, upon the
representations and warranties of the Company Entities (including the
Pennsylvania Guarantor) contained in the Operative Documents, copies of which
have been delivered to you, and, as to certain matters, certificates, letters,
telegrams or statements of public officials.


(b)           As special counsel to the
Pennsylvania Guarantor, we are only engaged to render substantive attention to
specific matters and express no opinion on any matter on which the Pennsylvania
Guarantor has not engaged us to render substantive legal advice.


(c)           This opinion is based upon (A) the
laws of the Commonwealth of Pennsylvania (the “Commonwealth”) as now in
effect, and we express no opinion on the laws of any other jurisdiction (state
or federal) and (B) such laws of the Commonwealth that in our experience
are normally applicable to transactions of the type contemplated by the
Operative Documents.


(d)           It is to be understood that the
rights of the Initial Purchasers and the Holders (as defined in the Indenture)
with respect to the validity, enforceability or binding nature of the Operative
Documents may be limited or otherwise affected by applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent transfer and other similar
laws affecting creditors’ rights generally heretofore or hereafter enacted and
that their validity, enforcement or binding nature may also be subject to the
exercise of judicial discretion in the application of general principles of
equity in appropriate cases (regardless of whether enforcement is sought in
equity or at law). We also express no opinion with respect to the 









 



enforceability
of the Operative Documents to the extent that such enforceability may be
limited by:  (a) the effect of
certain laws and judicial decisions limiting on constitutional or public policy
grounds:  (i) the remedy of
self-help or similar rights and remedies contained in the Operative Documents;
and (ii) various waivers of rights and defenses set forth in the Operative
Documents, including the right to trial by jury; or (b) the application of
a standard of “good faith” or “commercial reasonableness” to any decisions,
actions or conduct at any time on the part of the Initial Purchasers and the
Holders.


(e)           We have assumed that (a) each of
the parties (other than the Pennsylvania Guarantor) to the Operative Documents
is duly organized, validly existing and in good standing under the laws of all
jurisdictions where it is conducting its businesses or otherwise required to be
so qualified, and has full power and authority to execute, deliver and perform
its duties under the Operative Documents, (b) the Operative Documents
executed by each party (other than the Pennsylvania Guarantor) have been duly
authorized, executed and delivered by, and, subject to the qualifications
listed in clause (iv) above, constitute legal, valid and binding
agreements of, such party, (c) no consent, approval, authorization,
declaration or filing by or with any Governmental Authority is required for the
valid execution and delivery of the Operative Documents by any party (other
than the Pennsylvania Guarantor), and (d) each party (other than the
Pennsylvania Guarantor) has acted and will act in good faith and will seek
to enforce its rights and remedies under the Operative Documents in a
commercially reasonable manner.


(f)            It is to be understood that the
enforcement of guaranty and/or security documents entered into by entities to
support the obligations of their affiliates has generally required a showing
that such affiliated entities are economically integrated and interdependent
and that the party guarantying, and/or granting liens to secure the obligations
of its affiliate has derived significant economic benefit in connection with
its having entered into such guaranty and/or security documents. Accordingly,
we have assumed that the business and affairs of the Pennsylvania Guarantor are
sufficiently integrated and interdependent with the business and affairs of the
Company and that the Pennsylvania Guarantor has derived a sufficient economic
benefit from the transactions in connection with which the Operative Documents
have been executed and delivered such that a court called upon to enforce the
Operative Documents would enforce the Pennsylvania Guarantor’s obligations
under the Operative Documents in accordance with their terms.


(g)           We have assumed that the proceeds of
the Notes have been disbursed in whole or in part to the Company or in
accordance with the Company’s instructions.









 



(h)           We express no opinion as to the
validity or enforceability of any of the following provisions in any of the
Operative Documents:  (a) self-help
provisions; (b) provisions declaring that failure to exercise or delay in
exercising rights or remedies will not impair or operate as a waiver of or
acquiescence to any such right or remedy; (c) provisions precluding
modification, waiver, discharge or termination of the Operative Documents or
any provision thereof by oral agreement or through conduct, custom, course of
performance, action or dealing; (d) provisions imposing increased interest
rates upon delinquency in payment or the occurrence of a Default or an Event of
Default (as defined in the Indenture), liquidated damages or prepayment premiums,
to the extent any of the above are deemed to be penalties or forfeitures; (e) provisions
purporting to require (or which may be construed to require) waiver of the
obligations of good faith, fair dealing, diligence or reasonableness; (f) provisions
purporting to grant the Initial Purchasers or the Holders the right to declare
an event of default or exercise rights or remedies under the Operative
Documents (including acceleration of the interest payments) for certain
breaches; (g) provisions purporting to prohibit or restrict (or that may
be construed to prohibit or restrict) the Pennsylvania Guarantor from curing
any breach on its part; (h) provisions releasing, exculpating or exempting
a party from, or requiring indemnification of a party for, liability for its
own action or inaction, to the extent the action or inaction involves
negligence, recklessness, willful misconduct or unlawful misconduct, or to the
extent such release, exculpation, exemption or indemnification is contrary to
the public policy of the Commonwealth or any applicable law; (i) provisions
purporting to limit judicial discretion regarding the determination of damages
and entitlement to attorneys’ fees, costs, expenses or other items which are
unreasonable in nature or amount; (j) provisions purporting to waive
equitable rights or remedies or any right afforded under any statute,
constitutional provision or applicable law; (k) provisions purporting to
assign, or permit the assignment of the right, title and interest of any party
in and to any of its leases, licenses, permits, warranties, contracts or
approvals as against any other party to the Operative Documents to the extent
that the consent or approval of such other party is required for any such
assignment and has not been obtained; (l) provisions regarding the
severability of any provision judicially determined to be unenforceable to the
extent any such unenforceable provision is, or is integrally related to, an
essential part of the agreed exchange; (m) provisions purporting to establish
(or may be construed to establish) evidentiary standards or burdens of proof; (n) provisions
purporting to waive any notice requirements; (o) provisions waiving the
right to a trial by jury; (p) provisions purporting to constitute a waiver
prohibited under the laws of the Commonwealth; (q) provisions regarding
forum selection; (r) provisions purporting to consent to jurisdiction,
venue or manner of service of process; (s) provisions regarding
arbitration; (t) provisions relating to conflicts of laws; (u) provisions
relating to the effects of law which may be enacted in the future; (v) provisions
appointing or purporting to appoint the Initial Purchasers or any Holder as the
attorney-in-fact of the Pennsylvania Guarantor; (w) provisions 









 



purporting to
require the payment or reimbursement of fees, costs, expenses, or other amounts
which are unreasonable in nature or amount; and (x) provisions purporting
to limit the liability of any party for its negligent acts or omissions.


(i)            With respect to Opinion 2 below, we
have relied upon the above-described certificate of the corporate secretary of
the Pennsylvania Guarantor with respect to the capitalization of and related
matters concerning the Pennsylvania Guarantor.


(j)            With
respect to Opinion 8 below, we express no opinion on the effects, or
prospective effects, material or otherwise, of any events on the business of
the Pennsylvania Guarantor. In addition, we express no opinion with respect to
any specific reservation of rights of the Pennsylvania legislature.


Based upon and subject to
the foregoing, and subject to the qualifications, limitations, assumptions and
exceptions set forth herein, it is our opinion that:


Due
Incorporation; Subsistence of the Pennsylvania Guarantor. The Pennsylvania Guarantor is a corporation
duly incorporated and presently subsisting under the laws of the Commonwealth
and has all requisite corporate power to conduct and carry on its business and
to own, lease, use and operate its properties and assets as it is now being
conducted.


Outstanding
Shares and Interests. All
of the outstanding shares of capital stock in the Pennsylvania Guarantor have
been duly authorized, are validly issued, fully paid and nonassessable, and, to
our knowledge, were not issued in violation of, and are not subject to, any
preemptive rights.


Power
and Authority. The
Pennsylvania Guarantor has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Operative Documents.


Authorization,
Execution and Delivery. All
necessary corporate action has been taken to authorize the execution, delivery
and performance by the Pennsylvania Guarantor of the Purchase Agreement and the
other Operative Documents, and the Purchase Agreement and each of the other
Operative Documents have been validly executed and delivered by the
Pennsylvania Guarantor.


No
Conflict. Neither the
execution or delivery of the Operative Documents nor the performance by the
Pennsylvania Guarantor of its obligations thereunder, will conflict with,
violate, constitute a breach of or a default (with the passage of time or
otherwise) under, result in the imposition of a lien on any assets of the
Pennsylvania Guarantor (except those liens, if any, as may be created or
permitted by the Indenture) or result in an acceleration of indebtedness
pursuant to: (i) its Guarantor Charter Documents; or (ii) any
Applicable Law of the Commonwealth.









 



Permits.
Except as otherwise
disclosed in each of the Time of Sale Information and the Final Offering
Circular, no Permit (including without limitation any Permit of the
Pennsylvania State Horse Racing Commission or under the Pennsylvania Race Horse
Industry Reform Act) is required under Applicable Law of the Commonwealth in
connection with, or as a condition to, the execution, delivery or performance
by the Pennsylvania Guarantor of any of the Operative Documents, other than
such Permits as have been granted or obtained on or prior to the Closing Date,
which Permits, to our knowledge, without independent investigation, inquiry or
verification, are in full force and effect on the Closing Date.


No Proceedings. To
our knowledge, except as otherwise disclosed in each of the Time of Sale
Information and the Final Offering Circular, there is no Proceeding before or
by any Governmental Authority of the Commonwealth pending or
threatened with respect to the Pennsylvania Guarantor (i) in
connection with, or that seeks to restrain, enjoin, prevent the consummation of
or otherwise challenge any of the Operative Documents, or (ii) which
would, singly or in the aggregate, have a material adverse effect upon the
properties, business, earnings, assets, liabilities and financial condition of
the Company and its Subsidiaries taken as a whole.


Offering
Circular. We have
reviewed the information in each of the Time of Sale Information and the Final
Offering Circular under the headings “Risk Factors — Risks Related to
this Offering and the Notes — You may be required to sell your Notes
if any gaming authority finds you unsuitable to hold them,” “Risk Factors — Risks
Related to Our Business — We are subject to extensive regulation by
gaming and racing authorities,” “Regulation and Licensing—Pennsylvania
Racing and Gaming Regulation,” and “Regulation and Licensing — Compliance
with Other Laws” and, to the extent that such information relates or pertains
solely to the Pennsylvania Guarantor or any Applicable Law of the Commonwealth
in effect as of the date hereof, and such information constitutes
statements  of law or legal conclusions,
such information is, subject, however, in all respects, to the
caveats and qualifications set forth in each of the Time of Sale Information
and the Final Offering Circular relating to such information, correct in all
material respects.


In basing the opinions
set forth herein on “our knowledge,” the words “our knowledge” mean that, in
the course of our representation of the Pennsylvania Guarantor, no information
has come to our attention which would give us actual (as opposed to
constructive) knowledge that such opinions are not accurate or that any of the
foregoing documents, agreements, instruments, certificates and corporate
records upon which we have relied are not accurate and complete. Except as
otherwise stated herein, we have undertaken no independent investigation,
inquiry or verification of any matters as to which our opinion is
qualified as being to “our knowledge.” 
The words “our knowledge” are further limited to the actual (as opposed
to constructive) knowledge of the lawyers within our Firm who have worked on
the matters specifically referenced in this opinion in the introductory
paragraph on behalf of the Pennsylvania Guarantor or who have given substantive
legal attention to the representation of the Pennsylvania Guarantor.


The opinions herein are
given as of the date hereof. We assume no obligation to update or supplement
any of the opinions to reflect any facts or circumstances which may hereafter
come to our attention or any changes in laws which may hereafter occur.









 



This opinion is
furnished by us solely for your benefit and may not be relied upon by any other
person. This opinion may not be used, circulated, quoted or otherwise
referred to for any purposes other than the Transactions contemplated by the
Operative Documents.


This opinion is
limited to the matters set forth herein. No opinion may be inferred or implied
beyond the matters expressly stated herein, and our opinions expressed in this
opinion must be read in conjunction with the assumptions, limitations,
exceptions and qualifications set forth in this opinion.


Very Truly Yours,


STEVENS & LEE















 


EXHIBIT E


FORM OF
OPINION OF CRABBE, BROWN & JAMES, LLP


May 25, 2006


Ladies and Gentlemen:


We have acted as counsel to MTR Gaming Group, Inc.,
a Delaware corporation (“MTR Gaming Group”), and Scioto Downs, Inc., an Ohio
corporation (the “Ohio Guarantor”),
in connection with the transactions contemplated by the Purchase Agreement,
dated as of May 22, 2006, by and among Jefferies & Company, Inc.,
Wells Fargo Securities, LLC, MTR Gaming Group, Inc., the Ohio Guarantors
and the other guarantors signatory therein (the “Purchase Agreement”).


In order to render the opinions expressed herein, we
have made such inquiries of the Ohio Guarantor as we have considered
appropriate and we have examined executed copies of the following documents,
each dated as of May 25, 2006, unless stated otherwise:


1.    the
Purchase Agreement dated as of May 22, 2006;


2.    the
Indenture;


3.    the
Registration Rights Agreement;


4.    the form
of the Series A Notes;


5.    the
Guarantee as it relates to the Ohio Guarantor;


6.    the
Supplemental Indenture dated as of May 17, 2006; and


7.    the
Consent Documents (as defined in the Purchase Agreement).


Except when specifically referred to by name, each
of the Purchase Agreement, the Indenture, the Registration Rights Agreement,
the form of the Series A Notes, the Guarantee as it relates to the Ohio
Guarantor, the Supplemental Indenture, and the Consent Documents are referred
to collectively herein as the “Documents.”  Any
terms capitalized herein but not defined herein shall have the same meaning as
given to such terms in the Purchase Agreement.


We have reviewed either originals, certified copies,
or copies otherwise authenticated to our satisfaction of the organizational
documents of the Ohio Guarantor, including the Ohio Guarantor’s Articles of
Incorporation and By-Laws and Code of Regulations (collectively, the “Organizational Documents”), the Time of Sale Information and the Final Offering Circular, dated May 22,
2006. We have made such inquiry and investigation and examined such other and
additional writings, certificates, statutes, authorizations and other matters
as we have deemed 









 



necessary and appropriate for the purpose of rendering the opinions of
this firm as set forth in this letter.


In giving this opinion letter, we have relied upon a
fact certificate executed by the Ohio Guarantor (the “Certificate”). We
have no knowledge inconsistent with the Certificate and we have no reason to
believe that further independent investigation of the representations in the
Certificate would in any way cause us to alter this opinion. We have conducted
such investigations of law as we deemed necessary or appropriate with respect
to the opinions expressed herein. Except to the extent expressly set forth
herein, we have not undertaken any independent investigations to determine the
existence or absence of facts, none having been expected or requested of us,
and no inference as to our knowledge of the existence or absence of such facts
should be drawn from our representation of the Ohio Guarantor.


We have also relied upon the representations and
warranties as to factual matters contained in and made pursuant to the
Documents and have further assumed that (i) each statement and
representation contained in the Documents, to the extent any such statement or
representation materially affects the enforceability of or performance under
the Documents, is accurate and contains all statements of material fact
necessary to prevent it, and the Documents generally, from being misleading. We
have assumed that the Documents present an accurate description of the Ohio
Guarantor and the business of the Ohio Guarantor that are the subject of the
Documents, and we have no knowledge that the description of the Ohio Guarantor,
or the description of the business of the Ohio Guarantor are inaccurate in any
material respect.


Based upon the foregoing, but in each case subject
to the limitations and qualifications hereinafter set forth, we are of the
opinion that as of the date hereof:


1.    Due Organization; Good Standing of  the Ohio Guarantors. The Ohio
Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio and has all requisite power and
authority to conduct and carry on its business and to own, lease, use and
operate its properties and assets as described in each of the Time of Sale
Information and the Final Offering Circular. To our knowledge, the Ohio
Guarantor is duly qualified or licensed to do business and is in good standing
as a foreign corporation authorized to do business in each jurisdiction in
which the nature of its business or the ownership, leasing, use or operation of
its properties and assets requires such qualification or licensing.


2.    Outstanding Shares and Interests. All of
the outstanding shares of capital stock in the Ohio Guarantor have been duly
authorized, are validly issued, fully paid and nonassessable, and were not
issued in violation of, and are not subject to, any preemptive or similar
rights.


3.    Power and Authority. The Ohio Guarantor
has all requisite power and authority to execute, deliver and perform its
obligations under the Documents to which it is a party and to consummate the
Transactions contemplated thereby.









 



4.    Authorization, Execution and Delivery. The
Purchase Agreement and the other Operative Documents to which Ohio Guarantor is
a party and the Transactions contemplated thereby (including without limitation
the Offering and the issuance and sale of the Notes in accordance with the
Purchase Agreement and the execution of the Supplemental Indenture) have been
duly authorized by the Ohio Guarantor, and the Purchase Agreement and each of
the other Operative Documents to which the Ohio Guarantor is a party have been
validly executed and delivered by the Ohio Guarantor.


5.    No Violation. To our knowledge, the Ohio
Guarantor is not (i) in violation of its Organizational Documents, (ii) in
violation of any Applicable Law of the State of Ohio, or (iii) in breach
of or default under any Applicable Agreement.


6.    No Conflict. To our knowledge, none of the
execution, delivery or performance of any of the Documents, nor the compliance
with the terms and provisions thereof, nor the consummation of any of the
Transactions will conflict with, violate, constitute a breach of or a default
(with the passage of time or otherwise) under, result in the imposition of a
Lien on any assets of the Ohio Guarantor (except as created by the Indenture)
or result in an acceleration of indebtedness pursuant to, (i) its
Organizational Documents, (ii) any Applicable Agreements; or (iii) any
Applicable Law of the State of Ohio.


7.    No Proceedings. To our knowledge, there is
no Proceeding before or by any Governmental Authority of the State of Ohio
pending or, to our knowledge after due inquiry, threatened either (i) with
respect to the Ohio Guarantor in connection with, or that seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge any of the Operative
Documents any of the Transactions, or (ii) could, singly or in the
aggregate have a Material Adverse Effect.


8.    Offering Circular. The information in each
of the Time of Sale Information and the Final Offering Circular under the
headings “Risk Factors—Risks Related to this Offering the Notes—You may be
required to sell your Notes if any gaming authority finds you unsuitable to hold
them,” “Risk Factors—Risks Related To Our Business—We are subject to extensive
regulation by gaming and racing authorities,” “Regulation and Licensing—Ohio
Racing Regulations” and “Regulation and Licensing—Compliance with Other Laws”
has been reviewed by us and, to the extent that it constitutes statements or
matters of law, summaries of legal matters, summaries or descriptions of
securities, instruments, agreements or other documents, summaries of
proceedings, or legal conclusions, it is correct in all material respects.


The opinions expressed herein are made subject to
and are qualified by the following:


a.    We have
assumed the genuineness of all signatures (other than the Ohio Guarantor) on
the executed documents that we have examined, the authenticity of all documents
submitted to us as originals, the conformity of copies of documents submitted
to us to the corresponding original documents, and the authenticity of all
originals of such copies;









 



b.    We
express no opinion as to any documents not enumerated in this letter as the
Documents nor as to any documents referenced in the Documents or of record in
any jurisdiction, unless the same are expressly referred to herein as being
opined upon;


d.    In basing
the opinions and other matters set forth herein on “our knowledge”, the words “our
knowledge” signify that, after due inquiry, including obtaining and reviewing
the Certificate, no information has come to our attention during the course of
our representation of the Ohio Guarantor that would give us actual knowledge or
actual notice that any such opinions or other matters are not accurate or that
any of the documents or certificates on which we have relied are not accurate
and complete. As to questions of fact material to our opinion, we have relied
upon the Certificate, certificates of public officials, and representations of
the Ohio Guarantor contained in the Documents;


e.    With
respect to the opinion regarding good standing expressed in paragraph 1 hereof,
we have relied solely upon current certificate of good standing from the
appropriate state agency;


f.     We
express no opinion as to legal matters governed by laws other than those of the
State of Ohio and the federal laws of the United States, except as otherwise
stated herein, all as currently in effect;


h.    Except as
expressly stated herein, we express no opinion as to the United States
Bankruptcy Code, state insolvency, liquidation or fraudulent conveyance
statutes or laws of similar import;


i.     The
opinions expressed herein are subject to applicable laws in effect from time to
time relating to bankruptcy, insolvency, reorganization, receivership,
moratorium, assignment for the benefit of creditors and other laws affecting
creditors’ rights generally, including, without limitation, such laws regarding
fraudulent transfers, fraudulent conveyances, preferences, avoidance, automatic
stay and turnover;


j.     The
opinions expressed herein are stated as of the date hereof and are limited to
the matters expressly addressed herein. No other opinion is implied or may be inferred
from the opinions expressly set forth herein. The opinions expressed herein are
based solely upon facts of which we are aware and upon laws which are in effect
as of the date hereof. We assume no obligation to supplement this opinion if
any applicable laws change after the date hereof or if we become aware of any
facts that might change this opinion after the date hereof;


k.    The
opinions expressed herein also are qualified to the extent that the remedy of
specific performance or of any other equitable remedy may be unavailable in a
jurisdiction or may be withheld or limited as a matter of judicial discretion;
for example, if the exercise of such remedy is predicated upon a breach which
the court concludes is not material, or if such remedy is deemed to be in the
nature of a penalty;









 



l.     Provisions
relating to liability limitations, waivers of remedies or statutory rights may
not be enforceable;


m.   We express
no opinion as to the reasonableness of any late charge or liquidated damages;


n.    The
rights and remedies contained in the Documents are subject to limitations
imposed by general principles of equity upon the specific enforceability of any
of  the remedies, covenants or other
provisions of such documents or instruments, and upon the availability of
injunctive relief or other equitable remedies and the application  of general principles of equity and public
policy (regardless of whether enforcement is considered in proceedings at law
or in equity). These principles of equity include without limitation the
following:


i.            principles
governing the availability of specific performance, injunctive relief or other
traditional equitable remedies, which generally place the award of such
remedies, subject to certain guidelines, in the discretion of the court to
which application for such relief is made;


ii.           principles
affording traditional equitable defenses (e.g., waiver, laches and estoppel) as
applied to a party seeking enforcement;


iii.          a
requirement of good faith and fair dealing in the performance and enforcement
of an agreement on the part of a party seeking enforcement after the agreement
has been entered into;


iv.          the
reasonableness of the enforcing party’s conduct or of enforcing a particular
provision, after the agreement has been entered into, in light of the
circumstances existing at the time of such conduct or attempted enforcement;


v.           the
materiality of any breach;


vi.          impracticability
or impossibility of performance at the time of attempted enforcement; and


vii.         unconscionability,
as applied to the enforcing party’s conduct after the agreement is entered into
and at or before the time of attempted enforcement.


The opinions stated herein are rendered solely for
the benefit of the Jefferies & Company, Inc., Wells Fargo
Securities, LLC and their legal counsel, Skadden, Arps, Slate, Meagher &
Flom LLP, and may not be quoted to, relied on by, or communicated to any other
person or entity or used for any other purpose without our prior written
consent. Similarly, the original or copies of this opinion letter may not be
delivered to any other person or entity without our prior written consent,
which consent shall not be unreasonably withheld.


Very truly yours,


CRABBE, BROWN & JAMES, LLP















 


EXHIBIT
F


FORM OF
OPINION OF WARNER NORCROSS & JUDD LLP


May 25, 2006


Jefferies &
Company, Inc.

Wells Fargo Securities, LLC

c/o Jeffries & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, California  90025


Ladies and
Gentlemen:


MTR
Gaming Group, Inc. (“MTR”) has
requested that we furnish this opinion to you in connection with a Purchase
Agreement dated May 22, 2006 (“Purchase Agreement”)
among MTR, you (as the Initial Purchasers) and the entities identified in, and
party to, the Purchase Agreement as Guarantors, including Jackson Raceway, Inc.,
a Michigan corporation (“Michigan Guarantor”).
Each capitalized term that this opinion letter uses but does not define has the
meaning that the Purchase Agreement gives it.


We
have examined forms of the following documents (collectively called “Note Documents”):


·                  An
executed copy of the Purchase Agreement, which we received on May   ,
2006, by electronic mail from Ruben & Aronson, LLP.


·                  An
executed copy of the Indenture dated May 25, 2006, among MTR, the
Guarantors and Wells Fargo Bank, N.A., as Trustee, with respect to MTR’s
issuance of its 9% Senior Subordinated Notes due June 1, 2012, in the
aggregate principal amount of up to $125,000,000, which we received on May   ,
2006 by electronic mail from Ruben & Aronson, LLP (“Indenture”).


·                  An
executed copy of the Registration Rights Agreement dated May 25, 2006,
among MTR, the Initial Purchasers and Guarantors which we received on May   ,
2006 by electronic mail from Ruben & Aronson, LLP (“Registration Rights Agreement”).



  
  
  
 






 



·                  Executed
copies of the Notes, together with the Guarantee of the Michigan Guarantor,
which we received on May   , 2006, by electronic mail from Ruben &
Aronson, LLP.


We
have also examined the following documents:


·                  Certificate
dated May 12, 2006, issued by the Michigan Department of Labor and
Economic Growth (“Department”)
certifying as to the documents on file in the Department with respect to the
Michigan Guarantor and as to the good standing of the Michigan Guarantor in the
State of Michigan (“Good Standing Certificate”).


·                  Certificate
dated May 12, 2006, issued by the Department with respect to the Articles
of Incorporation of the Michigan Guarantor (“Articles
Certificate”).


·                  Certificate
dated May   , 2006, signed by                 ,
as the               
of the Michigan Guarantor, certifying as to the bylaws of the Michigan
Guarantor, the adoption of certain resolutions by the board of directors of the
Michigan Guarantor and as to the incumbency of certain officers of the Michigan
Guarantor (“Officer’s Certificate”).


·                  Certificate
dated May   , 2006, signed by John W. Bittner, Jr., as the
Chief Financial Officer of MTR, certifying as to the issuance of shares of the
capital stock of the Michigan Guarantor (“Shares Certificate”).


In
our examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals and the conformity to authentic original documents of all
documents submitted to us as certified or photostatic copies.


Any
reference in this opinion letter to our knowledge means the actual knowledge of
the attorney who has signed this letter and each attorney in this firm who has
been actively involved in reviewing the Note Documents or in preparing this
opinion letter and William C. Fulkerson, who is this firm’s engagement partner
with respect to MTR and the Michigan Guarantor, and those attorneys have not
made any investigation of or inquiry as to those matters with respect to which
this opinion letter states that we do or do not have knowledge.


Subject
to the assumptions, limitations and qualifications set forth in this letter, we
express the following opinions:


1.             The
Michigan Guarantor is a corporation duly incorporated and validly
existing under the laws of the State of Michigan and has all requisite
corporate power to conduct and carry on business and to own, lease, use and
operate properties and assets.


2.             All of
the outstanding shares of capital stock of the Michigan Guarantor 



  
  
  
 






 



have
been duly authorized, are validly issued, fully paid and nonassessable.


3.             The
outstanding shares of capital stock of the Michigan Guarantor were not issued
in violation of, and are not subject to, (1) any preemptive rights under
either the Michigan Guarantor’s articles of incorporation or bylaws or under
the Michigan Business Corporation Act or (2) any preemptive rights created
by any contract of which we have knowledge.


4.             The Michigan Guarantor has corporate power
and authority to execute, deliver and perform its obligations under the Note
Documents.


5.             All
necessary corporate action has been taken to authorize the Michigan Guarantor’s
execution, delivery and performance of the Note Documents, and the Michigan
Guarantor has duly executed the Note Documents.


6.             We do not
have knowledge that the Michigan Guarantor is either in violation of its
Guarantor Charter Documents or in violation of a law of the State of Michigan.


7.             The
Michigan Guarantor’s execution, delivery and performance of the Note Documents
will not conflict with, violate or constitute a breach of or a default (with
the passage of time or otherwise) under either its Guarantor Charter Documents
or a law of the State of Michigan.


8.             The
Michigan Guarantor’s execution, delivery or performance of a Note Document will
not result in the imposition of a lien on an asset of the Michigan Guarantor
(except a lien created by a Note Document) or result in an acceleration of
indebtedness pursuant to either its Guarantor Charter Documents or a law of the
State of Michigan.


9.             We do not
have knowledge that either the Michigan Guarantor or any of its directors,
officers or employees has received notice that a Governmental Authority is
considering limiting, conditioning, suspending, modifying, revoking or not
renewing a Permit.


10.           We do not
know of any requirement of Michigan law that a Permit be obtained in connection
with, or as a condition to, the Michigan Guarantor’s execution, delivery or
performance of any of the Note Documents.


11.           We do not
have knowledge that the Michigan Guarantor’s execution, delivery or performance
of a Note Document, its compliance with the terms and provisions of a Note
Document or the consummation of a Transaction would allow or result in or,
after notice or lapse of time, would allow or result in, the imposition of a
material penalty under, or the revocation or termination of, a Permit.


12.           We do not have knowledge that there is a
Proceeding, before or by a Governmental Authority of the State of Michigan,
pending or threatened against the Michigan Guarantor, either (1) that
seeks to restrain, enjoin, prevent the consummation of or otherwise 



  
  
  
 






 



challenge
a Note Document or (2) that we believe, if decided adversely, would have a
Material Adverse Effect.


13.           We have
reviewed the information in each of the Time
of Sale Information and the Final Offering Circular under the headings “Risk
Factors—Risks Related to this Offering and the Notes—You may be required to
sell your Notes if any gaming authority finds you unsuitable to hold them,” “Risk
Factors— Risks Related to Our Business—We are subject to extensive regulation
from gaming and racing authorities” (exclusive of the subparagraph entitled “Taxation”),
“Regulation and Licensing—Michigan Racing Regulation,” and “Regulation and Licensing—Compliance
with Other Laws” and, to the extent that such information relates or pertains
to the Michigan Guarantor or to a law of the State of Michigan in effect as of
the date of this opinion letter, and such information constitutes statements or
matters of law, summaries of legal matters, summaries of proceedings or legal
conclusions, we do not have knowledge that it is not correct in any material
respect.


The
opinions expressed above are subject to the following assumptions, limitations
and qualifications:


A.          We do not express an opinion as to
laws, statutes, rules, or regulations other than the laws, statutes, rules and
regulations of the State of Michigan (excluding municipal and other local
ordinances, codes and regulations). We note, however, that the Note Documents
provide that they are governed by the laws of the State of New York. In
addition, our opinions are limited to laws, rules and regulations that in
our experience would generally be recognized as applying both to (1) business
entities doing business in Michigan, without regard to the activities in which
they are engaged, and (2) transactions of the types provided for in the
Note Documents. For example, except as expressly set forth in paragraphs 9, 10
and 11 above, we do not express an opinion as to laws or regulations that
require a business entity to obtain a license or meet other requirements in
order to engage in certain activities.


B.           We have assumed that the statements
contained in the Articles Certificate, the Good Standing Certificate, the
Officer’s Certificate and the Shares Certificate are true and correct as of the
date of this opinion letter.


C.           We have assumed that MTR owns all of
the issued and outstanding capital stock of the Michigan Guarantor.


D.          Our opinions are subject to (1) the
effect of generally applicable bankruptcy, insolvency, fraudulent transfer or
conveyance, reorganization, arrangement, moratorium and other similar laws and (2) limitations
that are imposed by the effect of general principles of equity (regardless of
whether enforcement is considered in proceedings at law or in equity).


E.           Our opinion as to the due
incorporation and valid existence of the Michigan Guarantor in good standing in
Michigan is based solely upon the Good Standing 



  
  
  
 






 



Certificate and
the Articles Certificate.


F.           We do not give an opinion as to the
enforceability of any provision of any Note Document.


Our
opinions are matters of professional judgment and are not a guaranty of’
results. This opinion may be relied upon by the Initial Purchasers and by
successors and assignees of the Initial Purchasers, in connection with the Note
Documents, and may not be relied upon by any other person, party or entity, or
for any other purpose, without our prior written consent. The opinions that we
express above are as of the date of this opinion letter only, and we do not
assume an obligation to update or supplement those opinions to reflect a fact
or circumstance that in the future comes to our attention or a change in law
that in the future occurs or becomes effective. This opinion letter is limited
to the matters set forth in it, and no opinions are intended to be implied or
may be inferred beyond those that are expressly stated above.


	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WARNER NORCROSS & JUDD LLP

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  James H. Breay

  
	
   

  	
   

  	
   

  	
   

  	
  A Partner

  



 



  
  
  














 


EXHIBIT
G


FORM OF
OPINION OF FREDRIKSON &
BYRON, P.A.


 


May 25, 2006


Jefferies &
Company, Inc.

Wells Fargo Securities, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, CA  90025


Ladies and
Gentlemen:


We have acted as Minnesota
special counsel to MTR-Harness, Inc., a Minnesota corporation (the “Minnesota
Guarantor”), in connection with its role as a guarantor pursuant to the
terms of that certain Purchase Agreement dated as of May 22, 2006, by and
among Jefferies & Company, Inc., Wells Fargo Securities, LLC, MTR
Gaming Group, Inc. (“MTR Gaming”), the Minnesota Guarantor, and the other
guarantors signatory therein (the “Purchase Agreement”), under the terms of
which MTR Gaming is issuing and selling $125,000,000 principal amount of MTR
Gaming’s 9% Senior Subordinated Notes due 2012 (the “Notes”) to Jefferies &
Company, Inc. and Wells Fargo Securities, LLC (the “Initial Purchasers”).


Our opinion is given pursuant to Section 9(a)(x)(G) of
the Purchase Agreement. Capitalized terms
not otherwise defined in this opinion letter have the same meanings as in the
Purchase Agreement.


As
to various matters of fact material to this opinion, we have relied on
certificates, statements and representations of the Minnesota Guarantor or its
officers or directors. We have also examined and relied on the following
documents: (i) the Purchase Agreement; (ii) the Indenture; and (iii) the
Guarantee as it relates to the Minnesota Guarantor (collectively the “Guarantor
Documents”). In addition we have also examined and relied  upon the following additional documents: (iv) certificates
from the Minnesota Secretary of State indicating that the Minnesota Guarantor
is a Minnesota company in good standing as of May 16, 2006; (v) the
Articles of Incorporation and Bylaws of the Minnesota Guarantor, each as
amended to date as presented to us by the Minnesota Guarantor; (vi) a
certificate of the Secretary of the Minnesota Guarantor, attesting to the
validity of, and attaching copies of resolutions of the Board of Directors of
the Minnesota Guarantor, dated May 19, 2006, signed by the sole Director; (vii) the
Member Control Agreement of North Metro Harness Initiative, LLC, dated June 8,
2004, by and between Southwest Casino and Hotel Corp., the Minnesota Guarantor,
and MTR Gaming, as presented to us by the Minnesota Guarantor; and (viii) the
information in the Final Offering 









 



Circular
referenced in Paragraph 7 of this opinion letter, as presented to us by the
Minnesota Guarantor.  We have not
independently or through third parties verified such representations,
certificates, documents or statements or made any independent investigation as
to the existence of agreements, instruments, corporate records, other
documents, proceedings, orders, judgments, or decrees by which the Minnesota
Guarantor or any of its properties may be bound or which may otherwise affect
the Minnesota Guarantor.


References
in this opinion to “our knowledge,” “our awareness,” “our attention,” “known to
us,” “the best of our knowledge” or the like mean: that in the course of the
actions described in the preceding sentences of this paragraph no information
has come to the attention of Daniel A. Yarano, Timothy R. Nelson, Ryan C.
Brauer, John E. Drawz or Jay M. Quam, the attorneys in our firm who have
principally represented the Minnesota Guarantor in connection with the
transactions contemplated by the Purchase Agreement or who have otherwise done
substantive legal work for the Minnesota Guarantor, that gives such attorney
present conscious awareness that any of the opinions set forth herein are not
accurate; that we have not undertaken any independent investigation or
verification of such matters; and that no inference as to our knowledge with
respect to such matters should be drawn from the fact of our representation of
the Minnesota Guarantor.


Our
opinion is limited solely to the present substantive law of the State of
Minnesota (excluding its conflict of laws
principles) as such law presently exists and has been interpreted as of the
date hereof. We express no opinion as to the laws of any county,
municipality, other state or other jurisdiction or the laws of the United
States of America.


For
purposes of this opinion, we have assumed, among other things, the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to
us as copies, and that the information in the certificates, representations,
and statements referred to above remains true and complete as of the date
hereof. In examining documents, we have
assumed that parties executing the same, other than the Minnesota Guarantor,
have all necessary power to enter into and perform all of their
obligations thereunder and that such parties have duly executed and delivered
such documents. We have also assumed, as to each such party, the due
authorization by all requisite action of the execution, delivery and
performance of such documents by such parties and that such documents are
legal, valid, binding on and enforceable against such parties in accordance
with their respective terms. We have also assumed that each natural person
executing any of the documents and agreements involved in the matters covered
by this opinion has the capacity and is legally competent to do so. We have
assumed that each of the documents and
agreements involved in any matter covered by this opinion letter accurately
describes the mutual understanding of the parties as to all matters contained
therein and that no other agreements or understandings exist between the
parties relating to the transactions contemplated by such document or
agreement.


Based
upon and subject to the foregoing, and subject to the qualifications set forth
herein, it is our opinion as of this date that:









 



1.               The Minnesota Guarantor is a
corporation duly incorporated and validly existing as a corporation in good
standing under the laws of the State of Minnesota.


2.             The
Minnesota Guarantor has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Guarantor Documents.


3.             All
necessary corporate action has been taken on the part of the Minnesota
Guarantor to authorize the execution, delivery and performance by the Minnesota
Guarantor of the Guarantor Documents, and the Guarantor Documents have been
validly executed and delivered by the Minnesota Guarantor.


4.             To our
knowledge, the execution, delivery and performance by the Minnesota Guarantor
of any of the Guarantor Documents will not violate, constitute a breach of or a
default (with the passage of time or otherwise) under, result in the imposition
of a lien on any assets of the Minnesota Guarantor (except as may be created by
the Guarantor Documents) or result in an acceleration of indebtedness of the
Minnesota Guarantor pursuant to: (i) the Articles of Incorporation or
Bylaws of the Minnesota Guarantor; (ii) the Member Control Agreement of
North Metro Harness Initiative, LLC, dated June 8, 2004, by and between
Southwest Casino and Hotel Corp., the Minnesota Guarantor, and MTR Gaming; or (iii) any
law of the State of Minnesota, assuming compliance with the matters referenced
in clause (ii) of Paragraph 5.


5.             To
our knowledge, no Permit required from any Governmental Authority of the
State of Minnesota (including without limitation any permit of the Minnesota
Racing Commission or under the Minnesota Pari-Mutuel Horse Racing Act,
including the rules and regulations promulgated thereunder) is required on
the part of the Minnesota Guarantor under the laws of the State of Minnesota in
connection with, or as a condition to, the execution, delivery or performance
by the Minnesota Guarantor of any of the Guarantor Documents, other than (i) such
Permits of the Minnesota Guarantor as have been granted or obtained on or prior
to the date hereof, which Permits, to our knowledge, are in full force and
effect on the date hereof and (ii) any Permits of the Minnesota Guarantor
required to be obtained from Minnesota Racing Commission approving the
Registered Exchange Offer.


To our knowledge, the execution, delivery or performance by
the Minnesota Guarantor of the Guarantor Documents, the compliance with the
terms and provisions thereof by the Minnesota Guarantor, and the consummation
of the Guarantor’s obligations under the Guarantor Documents will not allow or
result in, or after notice or lapse of time will not allow or result in, the
imposition of any material penalty under, or the  revocation or termination of, any Permit
identified in (i) above or any material impairment of the rights of the
holder of any such Permit.


6.             Except for the challenge to the Minnesota
Racing Commission license granted to the Minnesota Guarantor as described in
Appellate Case No. A05-471 and the Petition for Discretionary Review
thereof, District Court File No C3-04-12118, Appellate Case No. A05-1743,
and the Final Offering Circular, to our knowledge there are no legal
proceedings before or 









 



by any
Governmental Authority of the State of Minnesota pending or threatened either (i) with
respect to the Minnesota Guarantor in connection with, or that seeks to
restrain, enjoin, prevent the consummation by or otherwise challenge the
Minnesota Guarantor’s performance of the Guarantor Documents, or (ii) to
which the Minnesota Guarantor is a party.


7.               We have reviewed the information in the Final Offering Circular under the
headings “Business—North Metro Harness,” “Regulation and Licensing—Minnesota
Racing and Card Room Regulation” and the first two paragraphs under the
heading “Business—Litigation” and, only to the extent that such information
relates and pertains to the Minnesota Guarantor and any law of the State of
Minnesota in effect as of the date hereof and also constitutes statements or
matters of law, summaries of legal matters, summaries of Minnesota proceedings,
or legal conclusions, it is correct in all material respects as to the law of
the State of Minnesota.


Our
opinions expressed above are specifically subject to the following additional
limitations, exceptions, qualifications and assumptions:


(A) Our opinions with regard to the Guarantor
Documents and transactions contemplated thereby are limited to laws,
regulations and authorities that in our experience are normally applicable to
transactions of the type contemplated in such documents. We express no opinion
as to the effect of, or compliance with, any laws or regulations applicable to
the transactions contemplated by such documents because of the beneficial
ownership interest of any party thereto in the Minnesota Guarantor or the
nature of the business of any party thereto other than the Minnesota Guarantor.
We express no opinion as to the existence of, or compliance with laws
concerning, conflicts of interest or fiduciary duties of any directors or
officers of the Minnesota Guarantor in connection with such agreements and the
transactions contemplated thereby, and, with your consent, we have assumed for
purposes of the opinions stated herein that such agreements and the
transactions contemplated thereby are fair and reasonable to the Minnesota
Guarantor. Also, we express no statements or opinion as to the compliance by
any entity or person with any federal, state or foreign securities laws in
connection with the transactions contemplated by the Guarantor Documents.


(B)  Our opinions stated in paragraph 1 above are
given in reliance upon a good standing certificate received from the Office of
the Secretary of State of Minnesota, and we give no opinion with respect to the
tax good standing of the Minnesota Guarantor.


This
opinion letter is rendered as of the date first written above solely for your
benefit in connection with the Closing under the Purchase Agreement and may not
be delivered to, quoted or relied upon by any person other than you, or for any
other purpose, without our prior written consent. Our opinions are expressly
limited to the matters set forth above, and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Minnesota
Guarantor or any other entity or person. We assume no obligation to advise you
of facts, 









 



circumstances,
events, developments, or changes or developments in law that hereafter may be
brought to our attention and that may alter, affect or modify the opinions
expressed herein.


	
   

  	
   

  	
   

  
	
  

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FREDRIKSON & BYRON, P.A.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its: Vice President