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Exhibit 4.12    
    


         PENN NATIONAL GAMING, INC.,  


 each of the Guarantors named herein  


 and  


 U.S. Bank National Association,  


 as Trustee  


 $200,000,000  


 67/8% SENIOR SUBORDINATED NOTES DUE 2011  


 INDENTURE  


 Dated as of December 4, 2003  







 
 

CROSS-REFERENCE TABLE*    
    



	

Trust Indenture

Act Section
	 	Indenture Section

	310(a)(1)	 	7.10
	      (a)(2)	 	7.10
	      (a)(3)	 	N.A.
	      (a)(4)	 	N.A.
	      (a)(5)	 	7.10
	      (b)	 	7.10
	      (c)	 	N.A.
	311(a)	 	7.11
	      (b)	 	7.11
	      (c)	 	N.A.
	312(a)	 	2.05
	      (b)	 	13.03
	      (c)	 	13.03
	313(a)	 	7.06
	      (b)(1)	 	10.02
	      (b)(2)	 	7.07
	      (c)	 	7.06; 13.02
	      (d)	 	7.06
	314(a)	 	4.03; 13.02
	      (c)(1)	 	13.04
	      (c)(2)	 	13.04
	      (c)(3)	 	N.A.
	      (e)	 	13.05
	      (f)	 	N.A.
	315(a)	 	7.01
	      (b)	 	7.05; 13.02
	      (c)	 	7.01
	      (d)	 	7.01
	      (e)	 	6.11
	316(a) (last sentence)	 	2.09
	      (a)(1)(A)	 	6.05
	      (a)(1)(B)	 	6.04
	      (a)(2)	 	N.A.
	      (b)	 	6.07
	      (c)	 	2.12
	317(a)(1)	 	6.08
	      (a)(2)	 	6.09
	      (b)	 	2.04
	318(a)	 	13.01
	      (b)	 	N.A.
	      (c)	 	13.01







N.A.
means not applicable. 


	*
	This
Cross-Reference Table is not part of the Indenture. 






  



 
 

TABLE OF CONTENTS    
    



	 
	 	 
	 	Page
 

	ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE
	Section 1.01.	 	Definitions	 	1
	Section 1.02.	 	Other Definitions	 	15
	Section 1.03.	 	Incorporation by Reference of Trust Indenture Act	 	16
	Section 1.04.	 	Rules of Construction	 	16
	

ARTICLE 2

THE NOTES
	

Section 2.01.	
 	

Form and Dating	
 	

16
	Section 2.02.	 	Execution and Authentication	 	17
	Section 2.03.	 	Registrar and Paying Agent	 	17
	Section 2.04.	 	Paying Agent to Hold Money in Trust	 	18
	Section 2.05.	 	Holder Lists	 	18
	Section 2.06.	 	Transfer and Exchange	 	18
	Section 2.07.	 	Replacement Notes	 	28
	Section 2.08.	 	Outstanding Notes	 	28
	Section 2.09.	 	Treasury Notes	 	29
	Section 2.10.	 	Temporary Notes	 	29
	Section 2.11.	 	Cancellation	 	29
	Section 2.12.	 	Defaulted Interest	 	29
	Section 2.13.	 	Issuance of Additional Notes	 	30
	Section 2.14.	 	Designation	 	30
	Section 2.15.	 	CUSIP Numbers	 	30
	

ARTICLE 3

REDEMPTION AND PREPAYMENT
	

Section 3.01.	
 	

Notices to Trustee	
 	

30
	Section 3.02.	 	Selection of Notes to Be Redeemed	 	30
	Section 3.03.	 	Notice of Redemption	 	31
	Section 3.04.	 	Effect of Notice of Redemption	 	31
	Section 3.05.	 	Deposit of Redemption or Purchase Price	 	32
	Section 3.06.	 	Notes Redeemed or Purchased in Part	 	32
	Section 3.07.	 	Optional Redemption	 	32
	Section 3.08.	 	Mandatory Redemption	 	33
	Section 3.09.	 	Offer to Purchase by Application of Excess Proceeds	 	33
	

ARTICLE 4

COVENANTS
	

Section 4.01.	
 	

Payment of Notes	
 	

35
	Section 4.02.	 	Maintenance of Office or Agency	 	35
	Section 4.03.	 	Reports	 	35
	Section 4.04.	 	Compliance Certificate	 	36
	Section 4.05.	 	Taxes	 	36
	Section 4.06.	 	Stay, Extension and Usury Laws	 	37
	 	 	 	 	 





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	Section 4.07.	 	Restricted Payments	 	37
	Section 4.08.	 	Dividend and Other Payment Restrictions Affecting Subsidiaries	 	39
	Section 4.09.	 	Incurrence of Indebtedness and Issuance of Preferred Stock	 	40
	Section 4.10.	 	Asset Sales	 	42
	Section 4.11.	 	Transactions with Affiliates	 	43
	Section 4.12.	 	Liens	 	44
	Section 4.13.	 	Corporate Existence	 	44
	Section 4.14.	 	Offer to Repurchase upon Change of Control	 	44
	Section 4.15.	 	No Senior Subordinated Debt	 	45
	Section 4.16.	 	Payments for Consent	 	45
	Section 4.17.	 	Additional Subsidiary Guarantees	 	45
	Section 4.18.	 	Designation of Restricted and Unrestricted Subsidiaries	 	46
	Section 4.19.	 	Business Activities	 	46
	Section 4.20.	 	Payment of Additional Interest	 	46
	

ARTICLE 5

SUCCESSORS
	

Section 5.01.	
 	

Merger, Consolidation or Sale of Assets	
 	

46
	Section 5.02.	 	Successor Corporation Substituted	 	47
	

ARTICLE 6

DEFAULTS AND REMEDIES
	

Section 6.01.	
 	

Events of Default	
 	

47
	Section 6.02.	 	Acceleration	 	48
	Section 6.03.	 	Other Remedies	 	49
	Section 6.04.	 	Waiver of Past Defaults	 	50
	Section 6.05.	 	Control by Majority	 	49
	Section 6.06.	 	Limitation on Suits	 	50
	Section 6.07.	 	Rights of Holders of Notes to Receive Payment	 	50
	Section 6.08.	 	Collection Suit by Trustee	 	50
	Section 6.09.	 	Trustee May File Proofs of Claim	 	50
	Section 6.10.	 	Priorities	 	51
	Section 6.11.	 	Undertaking for Costs	 	51
	

ARTICLE 7

TRUSTEE
	

Section 7.01.	
 	

Duties of Trustee	
 	

51
	Section 7.02.	 	Rights of Trustee	 	52
	Section 7.03.	 	Individual Rights of Trustee	 	53
	Section 7.04.	 	Trustee's Disclaimer	 	53
	Section 7.05.	 	Notice of Defaults	 	53
	Section 7.06.	 	Reports by Trustee to Holders of the Notes	 	53
	Section 7.07.	 	Compensation and Indemnity	 	53
	Section 7.08.	 	Replacement of Trustee	 	54
	Section 7.09.	 	Successor Trustee by Merger, etc.	 	55
	Section 7.10.	 	Eligibility; Disqualification	 	55
	Section 7.11.	 	Preferential Collection of Claims Against Company	 	55
	 	 	 	 	 



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ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE
	

Section 8.01.	
 	

Option to Effect Legal Defeasance or Covenant Defeasance	
 	

55
	Section 8.02.	 	Legal Defeasance and Discharge	 	55
	Section 8.03.	 	Covenant Defeasance	 	56
	Section 8.04.	 	Conditions to Legal or Covenant Defeasance	 	56
	Section 8.05.	 	Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions	 	57
	Section 8.06.	 	Repayment to Company	 	58
	Section 8.07.	 	Reinstatement	 	58
	

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER
	

Section 9.01.	
 	

Without Consent of Holders of Notes	
 	

58
	Section 9.02.	 	With Consent of Holders of Notes	 	59
	Section 9.03.	 	Compliance with Trust Indenture Act	 	60
	Section 9.04.	 	Revocation and Effect of Consents	 	60
	Section 9.05.	 	Notation on or Exchange of Notes	 	60
	Section 9.06.	 	Trustee to Sign Amendments, etc.	 	60
	

ARTICLE 10

SUBORDINATION
	

Section 10.01.	
 	

Agreement to Subordinate	
 	

61
	Section 10.02.	 	Liquidation; Dissolution; Bankruptcy	 	61
	Section 10.03.	 	Default on Designated Senior Debt	 	62
	Section 10.04.	 	Acceleration of Securities	 	62
	Section 10.05.	 	When Distribution Must Be Paid Over	 	62
	Section 10.06.	 	Notice by Company	 	63
	Section 10.07.	 	Subrogation	 	63
	Section 10.08.	 	Relative Rights	 	63
	Section 10.09.	 	Subordination May Not Be Impaired by Company	 	63
	Section 10.10.	 	Distribution or Notice to Representative	 	63
	Section 10.11.	 	Rights of Trustee and Paying Agent	 	64
	Section 10.12.	 	Authorization to Effect Subordination	 	64
	Section 10.13.	 	Amendments	 	64
	

ARTICLE 11

SUBSIDIARY GUARANTEES
	

Section 11.01.	
 	

Guarantee	
 	

64
	Section 11.02.	 	Subordination of Subsidiary Guarantee	 	65
	Section 11.03.	 	Limitation on Guarantor Liability	 	65
	Section 11.04.	 	Execution and Delivery of Subsidiary Guarantee	 	65
	Section 11.05.	 	Guarantors May Consolidate, etc., on Certain Terms	 	66
	Section 11.06.	 	Releases Following Sale	 	66
	 	 	 	 	 





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ARTICLE 12

SATISFACTION AND DISCHARGE
	

Section 12.01.	
 	

Satisfaction and Discharge	
 	

67
	Section 12.02.	 	Application of Trust Money	 	68
	

ARTICLE 13

MISCELLANEOUS
	

Section 13.01.	
 	

Trust Indenture Act Controls	
 	

68
	Section 13.02.	 	Notices	 	68
	Section 13.03.	 	Communication by Holders of Notes with Other Holders of Notes	 	69
	Section 13.04.	 	Certificate and Opinion as to Conditions Precedent	 	69
	Section 13.05.	 	Statements Required in Certificate or Opinion	 	69
	Section 13.06.	 	Rules by Trustee and Agents	 	70
	Section 13.07.	 	No Personal Liability of Directors, Officers, Employees and Stockholders	 	70
	Section 13.08.	 	Governing Law	 	70
	Section 13.09.	 	No Adverse Interpretation of Other Agreements	 	70
	Section 13.10.	 	Successors	 	70
	Section 13.11.	 	Severability	 	70
	Section 13.12.	 	Counterpart Originals	 	70
	Section 13.13.	 	Table of Contents, Headings, etc.	 	70
	
EXHIBITS
	

Exhibit A	
 	

FORM OF NOTE	
 	

 
	Exhibit B	 	FORM OF CERTIFICATE OF TRANSFER	 	 
	Exhibit C	 	FORM OF CERTIFICATE OF EXCHANGE	 	 
	Exhibit D	 	FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR	 	 
	Exhibit E	 	FORM OF SUBSIDIARY GUARANTEE	 	 
	Exhibit F	 	FORM OF SUPPLEMENTAL INDENTURE	 	 
	
SCHEDULES
	

Schedule B	
 	

SCHEDULE OF GUARANTORS	
 	

 




iv









        INDENTURE dated as of December 4, 2003 between Penn National Gaming, Inc., a Pennsylvania corporation (the "Company"), each
of the Guarantors named herein and U.S. Bank National Association, as trustee (the "Trustee"). 



        The
Company and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the 67/8% Series A Senior
Subordinated Notes due 2011 (the "Series A Notes") and the 67/8% Series B Senior Subordinated Notes due 2011 (the
"Series B Notes" and, together with the Series A Notes, the "Notes") in the form of
Initial Notes (as defined below), and, if and when issued, such Additional Notes (as defined below) that the Company may from time to time choose to issue pursuant to this Indenture, in each case
issuable as provided in this Indenture. References herein to the "Notes" shall include the Initial Notes and the Additional Notes. All things necessary
to make this Indenture a valid and legally binding agreement of the Company, in accordance with its terms, have been done, and the Company has done all things necessary to make the Notes, when
executed by the Company, and authenticated and delivered by the Trustee hereunder and duly issued by the Company, valid and legally binding obligations of the Company. 


 
 

ARTICLE 1
  
    DEFINITIONS AND INCORPORATION BY REFERENCE    
    


        Section 1.01.    Definitions.    


        "Acquired Debt" means, with respect to any specified Person, (1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or becomes a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with
or into, or becoming a Subsidiary of, such specified Person; and (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. 



        "Additional Interest" means additional interest payable to Holders of Notes following the occurrence of a Registration Default on the
principal amount of Transfer Restricted Securities held by such Holders as described under the Registration Rights Agreement. 


        "Additional Notes" means, subject to the Company's compliance with Sections 2.13 and 4.09, 67/8% Senior Subordinated Notes
due 2011 substantially in the form of Exhibit A and, if required, containing the Private Placement Legend, issued from time to time after the
Issue Date under the terms of this Indenture (other than issuances pursuant to Section 2.06, 2.07, 2.10, 3.06, 4.14 or 9.05 of this Indenture and any Exchange Notes Issued in respect thereof). 


        "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that
Beneficial Ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings. 


        "Agent" means any Registrar, Paying Agent or co-registrar. 


        "Applicable Procedures" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange. 


        "Asset Sale" means (1) the sale, lease, conveyance or other disposition of any assets or rights;  provided that the sale, conveyance or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries taken as a whole
will be governed by the provisions of Section 4.14 and/or Section 5.01 hereof and not by the provisions of Section 4.10; and (2) the issuance of Equity Interests in any of
the Company's Restricted Subsidiaries or the sale of Equity Interests in any of its 





 



Subsidiaries,
other than an Unrestricted Subsidiary. Notwithstanding the preceding, the following items will not be deemed to be Asset Sales: (1) any single transaction or series of related
transactions that involves assets having a fair market value of less than $2 million; (2) a transfer of assets between or among the Company and its Restricted Subsidiaries; (3) an
issuance of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary; (4) the sale or lease of equipment, inventory, accounts receivable or other assets in
the ordinary course of business; (5) the sale or other disposition of cash or Cash Equivalents; and (6) a Restricted Payment or Permitted Investment that is permitted by
Section 4.07 hereof. 


        "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. 


        "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the
Exchange Act. The terms "Beneficially Owns" and "Beneficially Owned" have a corresponding meaning. 


        "Board of Directors" means (1) with respect to a corporation, the board of directors of the corporation; (2) with respect to
a partnership, the Board of Directors of the general partner of the partnership; and (3) with respect to any other Person, the board or committee of such Person serving a similar function. 


        "Broker-Dealer" has the meaning set forth in the Registration Rights Agreement. 


        "Business Day" means any day other than a Legal Holiday. 


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



        "Capital Stock" means (1) in the case of a corporation, corporate stock; (2) in the case of an association or business
entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person. 


        "Cash Equivalents" means (1) United States dollars; (2) securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States
is pledged in support of those securities) having maturities of not more than six months from the date of acquisition; (3) certificates of deposit and eurodollar time deposits with maturities
of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any lender party to the Senior Credit
Facilities or with any domestic commercial bank having capital and surplus in excess of $500 million and a Thomson Bank Watch Rating of "B" or better; (4) repurchase obligations with a
term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified
in clause (3) above; (5) commercial paper having the highest rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's Rating Services and in each case
maturing within six months after the date of acquisition; and (6) money market funds substantially all of the
assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition. 


        "Change of Control" means the occurrence of any of the following: (1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole to any "person" (as that term is used in Section 13(d) of 


2





 



the
Exchange Act) other than a Principal or a Related Party of a Principal; (2) the adoption by shareholders of a plan relating to the liquidation or dissolution of the Company; (3) the
consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the Company, measured by voting power rather than number of shares; (4) the consummation
of any transaction (including, without limitation, any merger or consolidation) the result of which is that the Principals and their Related Parties (or any one of them) becomes the Beneficial Owner,
directly or indirectly, of more than 662/3% of the Voting Stock of the Company, measured by voting power rather than number of shares; or (5) the first day on which a majority of
the members of the Board of Directors of the Company are not Continuing Directors. 


        "Clearstream" means Clearstream Banking, S.A. 


        "Company" means Penn National Gaming, Inc. and any and all successors thereto. 


        "Company Order" means a written request or order signed in the name of the Company by officers who sign an Officers' Certificate. 


        "Consolidated Cash Flow" means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such
period plus: (1) an amount equal to any extraordinary loss plus any net loss realized by such Person or any of its Restricted Subsidiaries in
connection with an Asset Sale, to the extent such losses were deducted in computing such Consolidated Net Income; plus (2) provision for taxes
based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income;  plus
(3) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; plus (4) depreciation, amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for
such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income (or Net Income);  minus (5) non-cash items
increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary
course of business, in each case, on a consolidated basis and determined in accordance with GAAP. 


        "Consolidated Net Income" means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and
its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that (1) the Net Income (but
not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or distributions
paid in cash to the specified Person or a Restricted Subsidiary of the Person; (2) the Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained)
or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, 


3





 



order,
statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, other than limitations imposed by Gaming Laws generally applicable to all Persons
operating a business similar to that of such Restricted Subsidiary; (3) the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such
acquisition will be excluded; (4) the cumulative effect of a change in accounting principles will be excluded; and (5) the Net Income (and loss) of any Unrestricted Subsidiary will be
excluded, whether or not distributed to the specified Person or one of its Subsidiaries. 


        For
purposes of calculating Consolidated Net Income, any non-recurring charges or expenses of an acquired company or business incurred in connection with the purchase or
acquisition of such acquired company or business by such Person will be added to the Net Income of such Person, to the extent any such charges or expenses were deducted in computing such Net Income of
such Person. 


        "Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the Company who: (1) was a
member of such Board of Directors on the date of this Indenture; or (2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or election. 



        "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 13.02 hereof or such other
address as to which the Trustee may give notice to the Company. 


        "Credit Facilities" means one or more debt facilities or commercial paper facilities, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such
lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced, restructured or refinanced in whole or in part from time to time. 



        "Custodian" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto. 


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


        "Definitive Note" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06
hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the
"Schedule of Exchanges of Interests in the Global Note" attached thereto. 


        "Depositary" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in
Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision
of this Indenture. 


        "Designated Senior Debt" means (1) any Indebtedness outstanding under the Senior Credit Facilities; and (2) after payment in
full of all Obligations under the Senior Credit Facilities, any other Senior Debt permitted under this Indenture the principal amount of which is $25 million or more and that has been
designated by the Company as "Designated Senior Debt." 


        "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature.
Notwithstanding the preceding sentence, any Capital Stock that would constitute 


4





 



Disqualified
Stock solely because the holders of the Capital Stock have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale
will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such
repurchase or redemption complies with Section 4.07 hereof. 


        "Domestic Subsidiary" means any Subsidiary of a Person that was formed under the laws of the United States or any state of the United
States or the District of Columbia or that guarantees or otherwise provides direct credit support for any Indebtedness of such Person. 


        "DTC" means The Depository Trust Company in New York, New York. 



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


        "Equity Offering" means an offering of the Equity Interests (other than Disqualified Stock) of the Company that results in net proceeds to
the Company of at least $25 million. 


        "Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear system. 


        "Event of Default" means an event described under Article 6 hereof. 


        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 


        "Exchange Notes" means the Notes issued in the Exchange Offer pursuant to Section 2.06(f) hereof. 


        "Exchange Offer" has the meaning set forth in the Registration Rights Agreement. 



        "Exchange Offer Registration Statement" has the meaning set forth in the Registration Rights Agreement. 


        "Existing Indebtedness" means the existing Guarantees of the Company with respect to the Indebtedness of Pennwood, the Indebtedness of the
Company under its 111/8% senior subordinated notes due 2008 in the aggregate principal amount of $200,000,000 (and the guarantees related thereto) and under its 87/8%
senior subordinated notes due 2010 in the aggregate principal amount of $175,000,000 (and the guarantees related thereto), Capital Lease Obligations outstanding on the date hereof and up to $500,000
in aggregate principal amount of other Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the Senior Credit Facilities) in existence on the date hereof, until such amounts
are repaid. 


        "Fixed Charge Coverage Ratio" means with respect to any specified Person and its Restricted Subsidiaries for any period, the ratio of the
Consolidated Cash Flow of such Person and its Restricted Subsidiaries for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its
Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of preferred stock, and the use of the proceeds therefrom as if the same had
occurred at the beginning of the applicable four-quarter reference period. 


        In
addition, for purposes of calculating the Fixed Charge Coverage Ratio: (1) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries,
including through mergers or consolidations and including any related financing transactions, during the four-quarter reference 


5





 



period
or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect as if they had occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow for such reference period will be calculated on a pro forma basis in accordance with Regulation S-X under the Securities Act, but without giving
effect to clause (3) of the proviso set forth in the definition of Consolidated Net Income; (2) the Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, will be excluded; and (3) the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date. 


        "Fixed Charges" means, with respect to any specified Person and its Restricted Subsidiaries for any period, the sum, without duplication,
of (1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect of all payments made or received
pursuant to Hedging Obligations; plus (2) the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during
such period; plus (3) any interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon
(provided that interest expense on the Pennwood Debt will not be counted pursuant to this clause (3) except to the extent that the Company or any
of its Restricted Subsidiaries actually makes payments on such Pennwood Debt); plus (4) the product of (a) all dividends, whether paid or
accrued and whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests
of the Company (other than Disqualified Stock) or to the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is
one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP. 


        "Foreign Subsidiary" means any Subsidiary of the Company that (1) is not organized under the laws of the United States, any state
thereof or the District of Columbia, and (2) conducts substantially all of its business operations outside the United States of America. 


        "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession
which were in effect on February 28, 2002. 


        "Gaming Approval" means any governmental approval relating to any gaming business (including pari-mutuel betting) or
enterprise. 


        "Gaming Authority" means any governmental authority with regulatory oversight of, authority to regulate or jurisdiction over any gaming
businesses or enterprises, including the Mississippi Gaming Commission, the Pennsylvania State Horse Racing Commission, the Pennsylvania State Harness Racing Commission, the West Virginia Racing
Commission, the West Virginia Lottery Commission, the New Jersey Racing Commission, the New Jersey Casino Control Commission, the Louisiana Gaming Control Board, the Ontario Lottery and Gaming
Corporation, the Ontario Alcohol and Gaming Commission, the Colorado Limited Gaming Control Commission and the Illinois Gaming Board with regulatory 


6





 



oversight
of, authority to regulate or jurisdiction over any racing or gaming operation (or proposed gaming operation) owned, managed or operated by the Company or any Guarantor. 


        "Gaming Laws" means all applicable provisions of all (1) constitutions, treaties, statutes or laws governing gaming operations
(including without limitation card club casinos and pari-mutuel race tracks) and rules, regulations and ordinances of any Gaming Authority, (2) Gaming Approvals, and
(3) orders, decisions, judgments, awards and decrees of any Gaming Authority. 



        "Global Note Legend" means the legend set forth in Section 2.06(g)(ii) which is required to be placed on all Global Notes issued
under this Indenture. 


        "Global Notes" means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially
in the form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iii), 2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof. 



        "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America, and for the payment of
which the United States pledges its full faith and credit. 


        "Guarantee" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business,
direct or indirect, in any manner, including, without limitation, by way
of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness. 



        "Guarantors" means each of (1) all Subsidiaries of the Company that are guarantors under the Credit Facilities on the date hereof;
and (2) any other Subsidiary that executes a Subsidiary Guarantee in accordance with the provisions of this Indenture; and their respective successors and assigns. 


        "Hedging Obligations" means, with respect to any specified Person, the obligations of such Person under (1) interest rate swap
agreements, currency swap agreements, interest rate cap agreements and interest rate collar agreements; and (2) other agreements or arrangements designed to protect such Person against
fluctuations in interest rates or currency exchange rates. 


        "Holder" means a Person in whose name a Note is registered. 


        "IAI Global Note" means the Global Note substantially in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that shall be issued in a
denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors. 



        "Indebtedness" means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent, (1) in
respect of borrowed money; (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); (3) in respect of
banker's acceptances; (4) representing Capital Lease Obligations; (5) representing the balance deferred and unpaid of the purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable; or (6) representing any Hedging Obligations, if and to the extent any of the preceding items (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured
by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of
any Indebtedness of any other Person. 


        The
amount of any Indebtedness outstanding as of any date will be (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
and (2) the principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due, in the case of any other Indebtedness. 


7





 



        "Indenture" means this Indenture, as amended or supplemented from time to time. 


        "Indirect Participant" means a Person who holds a beneficial interest in a Global Note through a Participant. 


        "Initial Notes" means $200,000,000 aggregate principal amount of 67/8% senior subordinated notes due 2011 issued on the
Issue Date, substantially in the form of Exhibit A. 



        "Institutional Accredited Investor" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act that is not also a QIB. 


        "Interest Payment Date" has the meaning set forth in paragraph 1 of  Exhibit A. 


        "Investments" means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates)
in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on
a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company will be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as  provided in
the final paragraph of Section 4.07 hereof. The acquisition by the Company or any Restricted Subsidiary of the Company of a Person
that holds an Investment in a third Person will be deemed to be an Investment by the Company or such Restricted Subsidiary in such third Person in an amount equal to the fair market value of the
Investment held by the acquired Person in such third Person in an amount determined as provided in the final paragraph of Section 4.07 hereof. 


        "Issue Date" means December 4, 2003. 


        "Legal Holiday" means a Saturday, a Sunday or a day on which commercial banking institutions in The City of New York or at a place of
payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period. 


        "Letter of Transmittal" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer. 


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


        "Net Income" means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and
before any reduction in respect of preferred stock dividends, excluding, however, (1) any gain (but not loss), together with any related provision for taxes on such gain (but not loss),
realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness
of such Person or any of its Restricted Subsidiaries; and (2) any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss). 


8





 



        "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, and amounts required to be applied to the
repayment of Indebtedness, other than Indebtedness pursuant to the Senior Credit Facilities, secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for
adjustment in respect of the sale price of such asset or assets established in accordance with GAAP. 



        "Non-Recourse Debt" means Indebtedness (1) as to which neither the Company nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or
otherwise, or (c) constitutes the lender; (2) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Notes) of the Company or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its stated maturity; and (3) as to which the lenders have been notified in
writing that
they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries. 


        "Non-U.S. Person" means a Person who is not a U.S. Person. 


        "Notes" has the meaning assigned to it in the preamble to this Indenture. 


        "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities and
obligations payable under the documentation governing any Indebtedness, including, without limitation, interest after the commencement of any bankruptcy proceeding at the rate specified in the
applicable instrument governing or evidencing Senior Debt. 


        "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person. 


        "Officers' Certificate" means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 13.05 hereof. 


        "144A Global Note" means a Global Note substantially in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a
denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A. 


        "Opinion of Counsel" means an opinion from legal counsel who is reasonably acceptable to the Trustee that meets the requirements of
Section 13.05 hereof. The counsel may be an employee of or counsel to the Company or any Subsidiary of the Company. 


        "Participant" means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear
or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream). 


        "Pennwood" collectively, means Pennwood Racing, Inc., a Delaware corporation, and its subsidiaries, including, without limitation,
GS Park Services, L.P., FR Park Services, L.P., GS Park Racing, L.P. and FR Park Racing, L.P. 


9





 



        "Pennwood Debt" means the existing Indebtedness of Pennwood Racing, Inc. pursuant to that certain Term Loan and Security Agreement
dated July 29, 1999, by and among FR Park Racing, L.P., GS Park Racing, L.P. and Commerce Bank, N.A., that is guaranteed by the Company. 



        "Permitted Business" means any business in which the Company and its Restricted Subsidiaries are engaged on the date of this Indenture or
any business reasonably related, incidental or ancillary thereto. 


        "Permitted Investments" means: (1) any Investment in the Company or in a Restricted Subsidiary of the Company; (2) any
Investment in Cash Equivalents; (3) any Investment by the Company or any Subsidiary of the Company in a Person if, as a result of such Investment, (a) such Person becomes a Restricted
Subsidiary of the Company, or (b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company
or a Restricted Subsidiary of the Company; (4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereof; (5) any Investment solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company or made with the proceeds
of a substantially concurrent sale of such Equity Interests made for such purpose; (6) any Investments received in compromise of obligations of such persons incurred in the ordinary course of
trade creditors or customers that were incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any
trade creditor or customer; (7) Hedging Obligations; (8) the extension of credit to customers of the Company or its Restricted Subsidiaries consistent with gaming industry practice in
the ordinary course of business; (9) loans and advances to officers, directors and employees for business-related travel expenses, moving or relocation expenses and other similar expenses, in
each case, incurred in the ordinary course of business; (10) loans and advances to officers, directors and employees other than incurred pursuant to clause (9) of this definition in an
aggregate amount not to exceed $250,000 extended during any one fiscal year or upon and after receipt of Supplemental Illinois Gaming Approval, $1 million outstanding at any time;
(11) Guarantees that constitute Permitted Debt; (12) investments in Pennwood arising from any payment in respect of the Existing Indebtedness related to Pennwood; (13) Investments
of any Person (other than Indebtedness of such Person) in existence at the time such Person becomes a Subsidiary of the Company; provided such
Investment was not made in connection with or in anticipation of such Person becoming a Subsidiary of the Company; (14) other Investments in any Person having an aggregate fair market value
(measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (14)
since the date of this Indenture that remain outstanding, not to exceed (i) $20 million prior to receipt of Supplemental Illinois Gaming Approval or (ii) $50 million upon
and after receipt of Supplemental Illinois Gaming Approval; and (15) Indebtedness under the
Notes, the Senior Credit Facilities, the Company's 111/8% senior subordinated notes due 2008, the Company's 87/8% senior subordinated notes due 2010 and in each case the
guarantees related thereto. 


        "Permitted Joint Venture" means any joint venture arrangement (which may be structured as an unincorporated joint venture, corporation,
partnership, association or limited liability company) in which the Company and its Subsidiaries own at least 20% and no more than 50% of the voting power thereof. 


        "Permitted Junior Securities" means (1) Equity Interests in the Company or any Guarantor; or (2) debt securities of the
Company or any Guarantor that are subordinated to all Senior Debt and any debt securities issued in exchange for Senior Debt to substantially the same extent as, or to a greater extent than, the Notes
and the Subsidiary Guarantees are subordinated to Senior Debt under this Indenture. 


10





 



        "Permitted Liens" means (1) Liens of the Company and any Guarantor securing Indebtedness and other Obligations under Credit
Facilities that were securing Senior Debt that was permitted by the terms of this Indenture to be incurred; (2) Liens in favor of the Company or the Guarantors; (3) Liens on property of
a Person existing at the time such Person is merged with or into or consolidated with the Company or any Subsidiary of the Company or otherwise becomes a Subsidiary of the Company;  provided that such
Liens were not granted in connection with, or in anticipation of, such merger or consolidation or acquisition and do not extend to
any assets other than those of such Person merged into or consolidated with the Company or the Subsidiary; (4) Liens on property existing at the time of acquisition of the property by the
Company or any Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such acquisition; (5) Liens to
secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; (6) Liens to secure
Indebtedness (including Capital Lease Obligations) permitted by clause (iv) of the second paragraph of Section 4.09 hereof covering only the assets acquired with such Indebtedness;
(7) Liens existing on the date of this Indenture; (8) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in
conformity with GAAP has been made therefor; (9) judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may
have been initiated for the review of such judgment shall not have been fully terminated or the period within such proceedings may be initiated shall not have expired; (10) Liens incurred or
deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, including any Lien securing letters of credit
issued in the ordinary course of business in connection therewith; (11) Liens incurred in the ordinary course of business of the Company or any Subsidiary of the Company with respect to
obligations that do not exceed $5 million at any one time outstanding; and (12) Liens on assets of Permitted Joint Ventures or Unrestricted Subsidiaries that secure
Non-Recourse Debt of such Permitted Joint Venture or Unrestricted Subsidiary. 


        "Permitted Refinancing Indebtedness" means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for,
or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries (other than intercompany
Indebtedness); provided that (1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not
exceed the principal amount (or accreted value, if applicable) of the Indebtedness extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest on the Indebtedness and the
amount of all expenses and premiums incurred in connection therewith); (2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (3) if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing
the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and (4) such Indebtedness is incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded. 



        "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated
organization, limited liability company or government or other entity. 


11









  





        "Principal Property" means any and all right, title and interest in the property, assets, accounts, and operations of Pocono Downs in
Wilkes-Barre, Pennsylvania, the Charles Town Entertainment Complex in Charles Town, West Virginia, Casino Magic Bay St. Louis in Bay St. Louis, Mississippi, Boomtown Biloxi in Biloxi,
Mississippi, Penn National Race Course in Harrisburg, Pennsylvania, and Casino Rouge in Baton Rouge, Louisiana, Bullwhackers Casino in Colorado, Hollywood Casino Aurora in Aurora, Illinois and
Hollywood Casino Tunica in Tunica, Mississippi and the Development and Operating Agreement among the Ontario Lottery and Gaming Corporation, the Chippewas of Rama First Nation and certain of their
affiliates, and CRC Holdings Inc. and certain of its affiliates, dated March 18, 1996, as amended on April 15, 1996 and June 12, 2000. 


        "Principals" means Peter D. Carlino, Peter M. Carlino, Richard T. Carlino, Harold Cramer and The Carlino Family Trust. 



        "Private Placement Legend" means the legend set forth in Section 2.06(g)(i) to be placed on all Notes issued under this
Indenture except where otherwise permitted by the provisions of this Indenture. 


        "Purchase Money Indebtedness" means Indebtedness of the Company or any of its Restricted Subsidiaries incurred for the purpose of
financing all or any part of the purchase price or cost of installation, construction or improvement of any property. 


        "QIB" means a "qualified institutional buyer" as defined in Rule 144A. 



        "Registration Default" means Registration Default as defined in the Registration Rights Agreement. 


        "Registration Rights Agreement" means, with respect to the Initial Notes, the registration rights agreement dated as of the date of this
Indenture between the Company, the Guarantors and Bear, Stearns & Co. Inc. and Lehman Brothers Inc. and with respect to any Additional Notes, one or more registration rights
agreements among the Company, the Guarantors and the other parties thereto. 


        "Regulation S" means Regulation S promulgated under the Securities Act. 



        "Regulation S Global Note" means a Global Note bearing the Private Placement Legend and deposited with or on behalf of the
Depositary and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of
Regulation S. 


        "Related Party" means (1) any controlling stockholder, 80% (or more) owned Subsidiary, or immediate family member (in the case of
an individual) of any Principal; or (2) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of any one or more Principals and/or such other Persons referred to in the immediately preceding clause (1). 


        "Representative" means the indenture trustee or other trustee, agent or representative for any Senior Debt. 


        "Responsible Officer," when used with respect to the Trustee, means any officer within the Corporate Trust Office of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to
a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. 


        "Restricted Definitive Note" means a Definitive Note bearing the Private Placement Legend. 


        "Restricted Global Note" means a Global Note bearing the Private Placement Legend. 


        "Restricted Investment" means an Investment other than a Permitted Investment. 


12





 



        "Restricted Subsidiary" of a Person means any Subsidiary of such Person that is not an Unrestricted Subsidiary. 


        "Rule 144" means Rule 144 promulgated under the Securities Act. 


        "Rule 144A" means Rule 144A promulgated under the Securities Act. 


        "Rule 903" means Rule 903 promulgated under the Securities Act. 


        "Rule 904" means Rule 904 promulgated the Securities Act. 


        "SEC" means the Securities and Exchange Commission. 


        "Securities Act" means the Securities Act of 1933, as amended. 


        "Senior Credit Facilities" means the Credit Agreement dated as of March 3, 2003 among the Company, as borrower, the guarantors
party thereto, the several lenders from time to time party thereto and Bear, Stearns & Co., Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Joint Lead Arrangers and
Joint Bookrunners, Merrill Lynch, Pierce, Fenner & Smith Incorporated as Syndication Agent, Bear Stearns Corporate Lending Inc. as Swingline Lender, Administrative Agent and Collateral
Agent, and Societe Generale and Credit Lyonnaise New York Branch as Joint Documentation Agents and the lenders from time to time party thereto, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in each case as amended, modified, renewed, refunded, restructured, replaced or refinanced from time to time including
increases in principal amount (whether the same are provided by the original agents and lenders under such Senior Credit Facilities or other agents or other lenders). 


        "Senior Debt" means, with respect to the Company or any Guarantor, as applicable (1) any Indebtedness of the Company or such
Guarantor, as the case may be, under the Credit Facilities or otherwise permitted to be incurred under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it shall not be senior in right of payment to any Indebtedness of the Company or such Guarantor, as the case may be; and (2) all Obligations with respect to the items
listed in the preceding clause (1). Notwithstanding anything to the contrary in the preceding, Senior Debt will not include: (1) any liability for federal, state, local or other taxes
owed or owing by the Company; (2) any Indebtedness of the Company to any of its Subsidiaries or other Affiliates; (3) any trade payables; (4) the Company's 111/8%
senior subordinated notes due 2008 and the related guarantees; (5) the Company's 87/8% senior subordinated notes due 2010 and the related guarantees; or (6) the portion of
any Indebtedness that is incurred in violation of this Indenture. 


        "Senior Guarantees" means the Guarantees by the Guarantors of Obligations under the Senior Credit Facilities. 


        "Shelf Registration Statement" means the Shelf Registration Statement as defined in the Registration Rights Agreement. 



        "Shreveport Entities" means collectively, HWCC-Shreveport Inc., a Louisiana corporation, HCS I, Inc., a
Louisiana corporation, HCS II Inc., a Louisiana corporation, Hollywood Casino Shreveport, a Louisiana partnership, Shreveport Capital Corporation, a Louisiana corporation, HCS-Golf
Course LLC, a Delaware limited liability company and Shreveport Golf Company, a Delaware limited liability company. 


        "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article I,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation S-X is in effect on the date hereof. 



        "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the
payment of interest or principal was scheduled to be paid in the 


13





 



original
documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled
for the payment thereof. 


        "Subsidiary" means, with respect to any specified Person, (1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination
thereof); and (2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof). 



        "Subsidiary Guarantees" means the Guarantee by each Guarantor of the Company's payment obligations under this Indenture and on the Notes,
executed pursuant to the provisions of this Indenture. 


        "Supplemental Illinois Gaming Approval" means the supplemental Gaming Approval from the Illinois Gaming Board that will permit certain
provisions of this Indenture that are expressly conditioned upon final Illinois Gaming Approval to become automatically effective. 



        "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date on
which this Indenture is qualified under the TIA. 


        "Transfer Restricted Securities" means Transfer Restricted Securities as defined in the Registration Rights Agreement. 


        "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder. 


        "Unrestricted Definitive Note" means one or more Definitive Notes that do not bear and are not required to bear the Private Placement
Legend. 


        "Unrestricted Global Note" means a permanent Global Note substantially in the form of  Exhibit A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing a series of Notes that do not bear the Private Placement Legend. 



        "Unrestricted Subsidiary" means any Subsidiary of the Company (other than a Subsidiary that is an owner of a Principal Property) that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent that such Subsidiary (1) has, or will have after giving effect to such
designation, no Indebtedness other than Non-Recourse Debt; (2) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company; (3) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation
(a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating
results; (4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries; and (5) has at
least one director on its Board of Directors that is not a director or executive officer of the Company or any of its Restricted Subsidiaries and has at least one executive officer that is not a
director or executive officer of the Company or any 


14





 



of
its Restricted Subsidiaries; provided that the Shreveport Entities shall initially be designated as Unrestricted Subsidiaries. 


        Any
designation of a Subsidiary of the Company (other than any of the Shreveport Entities) as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the preceding conditions and was permitted by
Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness is
not permitted to be incurred as of such date under Section 4.09 hereof, the Company will be in default of such Section. The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if (1) such Indebtedness is permitted under
Section 4.09 hereof calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation. 


        "U.S. Person" means a U.S. person as defined in Rule 902(o) under the Securities Act. 


        "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of
the Board of Directors of such Person. 


        "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing
(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of
such payment; by (2) the then outstanding principal amount of such Indebtedness. 



        "Wholly-Owned Domestic Subsidiary" of any specified Person means a Domestic Subsidiary of such Person all of the outstanding Capital Stock
and other ownership interests of which (other than directors' qualifying shares) will at the time be owned by such Person or by one or more Wholly-Owned Domestic Subsidiaries of such Person. 


Section 1.02.    Other Definitions.    



	Term
 
	 	Defined in

Section

	"Affiliate Transaction"	 	4.11
	"Asset Sale Offer"	 	3.09
	"Authentication Order"	 	2.02
	"Change of Control Offer"	 	4.14
	"Change of Control Payment"	 	4.14
	"Change of Control Payment Date"	 	4.14
	"Covenant Defeasance"	 	8.03
	"Excess Proceeds"	 	4.10
	"incur"	 	4.09
	"Legal Defeasance"	 	8.02
	"Offer Amount"	 	3.09
	"Offer Period"	 	3.09
	"Paying Agent"	 	2.03
	"Permitted Debt"	 	4.09
	 	 	 





15





 

	"Purchase Date"	 	3.09
	"Registrar"	 	2.03
	"Restricted Payments"	 	4.07





Section 1.03.    Incorporation by Reference of Trust Indenture Act.    


        Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. 


        The
following TIA terms used in this Indenture have the following meanings: 



        "indenture securities" means the Notes; 


        "indenture security Holder" means a Holder of a Note; 


        "indenture to be qualified" means this Indenture; 


        "indenture trustee" or "institutional trustee" means the Trustee; and 



        "obligor" on the Notes means the Company and the Guarantors, respectively, and any successor obligor upon the Notes. 




        All
other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to
them. 


Section 1.04.    Rules of Construction.    



        Unless
the context otherwise requires: 



        (a)   a
term has the meaning assigned to it; 


        (b)   an
accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; 


        (c)   "or"
is not exclusive; 


        (d)   words
in the singular include the plural, and in the plural include the singular; 


        (e)   provisions
apply to successive events and transactions; and 


        (f)    references
to sections of or rules under the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from
time to time. 



 
 

ARTICLE 2
  
    THE NOTES    
    


Section 2.01.    Form and Dating.    



        (a)    General.    The Notes and the Trustee's certificate of authentication shall be substantially in the form of  Exhibit A
hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated
the date of its authentication. The Notes shall be in denominations of $1,000 and integral multiples thereof. 




        The
terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions
of this Indenture, the provisions of this Indenture shall govern and be controlling. 


16





 

        (b)    Global Notes.    Notes issued in global form shall be substantially in the form of  Exhibit A attached hereto (including
the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each
shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the
aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof. 


        (c)    Euroclear and Clearstream Procedures Applicable.    The provisions of the "Operating Procedures of the
Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream Banking" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Clearstream. 




Section 2.02.    Execution and Authentication.    


        The
Notes shall be executed by an Officer or an authorized signatory as identified in an Officers' Certificate (pursuant to a power of attorney or other similar instrument). The
signature of any such Officer (or authorized signatory) on the Notes shall be by manual or facsimile signature in the name and on behalf of the Company. 



        If
an Officer whose signature is on a Note no longer holds that office at the time the Trustee or authenticating agent authenticates the Note, the Note shall be valid nevertheless. 


        A
Note shall not be valid until the Trustee or authenticating agent manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note
has been authenticated under this Indenture. 


        The
Trustee or an authenticating agent shall, upon receipt of a Company Order, authenticate Initial Notes for original issue in an aggregate principal amount of $200,000,000. The
aggregate principal amount of the Initial Notes may not exceed $200,000,000 except as provided in Section 2.07 hereof. 



        The
Trustee or an authorized agent, shall upon receipt of a Company Order and an Officers' Certificate and Opinion of Counsel pursuant to Section 13.04 authenticate Additional
Notes for original issue in an aggregate principal amount set forth in the Company Order. 


        The
Trustee may appoint an authenticating agent to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such authentication agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company. 



        The
Notes shall be issuable only in registered form without coupons and only in minimum denominations of $1,000 in principal amount and any integral multiples of $1,000 in excess
thereof. 


Section 2.03.    Registrar and Paying Agent.    


        The
Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange ("Registrar") and
an office or agency where Notes may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer
and 


17





 



exchange.
The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent"
includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar. 


        The
Company initially appoints DTC to act as Depositary with respect to the Global Notes. 


        The
Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes. 


Section 2.04.    Paying Agent to Hold Money in Trust.    


        The
Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held
by the Paying Agent for the payment of principal, premium or Additional Interest, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts
as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to
the Company, the Trustee shall serve as Paying Agent for the Notes. 


Section 2.05.    Holder Lists.    


        The
Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply
with TIA § 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise
comply with TIA § 312(a). 


Section 2.06.    Transfer and Exchange.    



        (a)    Transfer and Exchange of Global Notes.    A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if: 



        (i)    the
Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency
registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary; or 


        (ii)   the
Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to
such effect to the Trustee. 


        (iii)  Upon
the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 




18





 





hereof.
Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall
be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a), however,
beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof. 




        (b)    Transfer and Exchange of Beneficial Interests in the Global Notes.    The transfer and exchange of beneficial
interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global
Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall
require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable: 



        (i)    Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement
Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in
any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i). 


        (ii)   All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either: 



        (A)  (1)
a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit
or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or 



        (B)  (1)
a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information
regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above. Upon consummation of an Exchange Offer by the Company in
accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof. 





19















  




        (iii)  Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note
may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of
Section 2.06(b)(ii) above and the Registrar receives the following: 



        (A)  if
the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of  Exhibit B hereto, including the
certifications in item (1) thereof; 


        (B)  if
the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (2) thereof; and 



        (C)  if
the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of  Exhibit B hereto, including the
certifications and certificates and Opinion of Counsel required by item (3) thereof, if applicable. 




        (iv)    Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in the Unrestricted Global
Note.    A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and: 



        (A)  such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 



        (B)  such
transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 


        (C)  such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 


        (D)  the
Registrar receives the following: 



        (1)   if
the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or 


        (2)   if
the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; 


and,
in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained 






20





 







herein
and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. 







If
any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate
principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons
who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note. 



        (c)    Transfer or Exchange of Beneficial Interests for Definitive Notes.    



        (i)    Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes.    If any holder of a
beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the
form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation: 



        (A)  if
the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof; 


        (B)  if
such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in  Exhibit B hereto, including the
certifications in item (1) thereof; 



        (C)  if
such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under
the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; 


        (D)  if
such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; 



        (E)  if
such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including
the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; 


        (F)  if
such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in  Exhibit B hereto, including the certifications in item (3)(b)
thereof; or 



        (G)  if
such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in  Exhibit B hereto, including the
certifications in item (3)(c) thereof, 




the
Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee
shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such 



21





 

beneficial
interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in
whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained therein. 



        (ii)    Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes.    A holder of a beneficial
interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if: 



        (A)  such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in
the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in
the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 


        (B)  such
transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 


        (C)  such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 


        (D)  the
Registrar receives the following: 



        (1)   if
the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or 



        (2)   if
the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the
form of a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; 




and,
in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act. 




        (iii)    Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes.    If any holder of a
beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in
the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be registered in such name or
names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such 



22





 

Notes
are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall not bear the Private Placement Legend. 




        (d)    Transfer and Exchange of Definitive Notes for Beneficial Interests.    



        (i)    Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes.    If any Holder of a
Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof
in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation: 



        (A)  if
the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in item (2)(b) thereof; 



        (B)  if
such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in  Exhibit B hereto, including the
certifications in item (1) thereof; 


        (C)  if
such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; 



        (D)  if
such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with
Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof; 


        (E)  if
such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; 


        (F)  if
such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in  Exhibit B hereto, including the certifications in
item (3)(b) thereof; or 


        (G)  if
such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(c) thereof, 




the
Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global
Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note. 



        (ii)    Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.    A Holder of a Restricted
Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note only if: 



        (A)  such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or
the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is 




23





 


not
(1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 


        (B)  such
transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 



        (C)  such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 


        (D)  the
Registrar receives the following: 



        (1)   if
the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or 



        (2)   if
the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4)
thereof; 




and,
in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act. 





Upon
satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note. 



        (iii)    Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.    A Holder of an
Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. 


        If
any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted
Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred. 




        (e)    Transfer and Exchange of Definitive Notes for Definitive Notes.    Upon request by a Holder of Definitive Notes
and such Holder's compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar
duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting 


24





 

Holder
shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e): 



        (i)    Restricted Definitive Notes to Restricted Definitive Notes.    Any Restricted Definitive Note may be
transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following: 



        (A)  (if
the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of  Exhibit B hereto, including the certifications in
item (1) thereof; 



        (B)  if
the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of  Exhibit B hereto, including the certifications in item (2)
thereof; and 


        (C)  if
the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if
applicable. 




        (ii)    Restricted Definitive Notes to Unrestricted Definitive Notes.    Any Restricted Definitive Note may be
exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if: 



        (A)  such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or
the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 


        (B)  any
such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 


        (C)  any
such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 


        (D)  the
Registrar receives the following: 



        (1)   if
the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of  Exhibit C hereto, including the
certifications in item (1)(d) thereof; or 


        (2)   if
the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; 




and,
in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the
Securities Act. 




        (iii)    Unrestricted Definitive Notes to Unrestricted Definitive Notes.    A Holder of Unrestricted Definitive Notes
may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar 



25





 

shall
register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. 




        (f)    Exchange Offer.    Upon the occurrence of the Exchange Offer in accordance with the Registration Rights
Agreement, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall authenticate 



        (i)    one
or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered
for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company, and accepted for exchange in the Exchange Offer; and 



        (ii)   Unrestricted
Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange
Offer. 


Concurrently
with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute
and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount. 




        (g)    Legends.    The following legends shall appear on the face of all Global Notes and Definitive Notes issued
under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. 



        (i)    Private Placement Legend.    Except as permitted by subparagraph (B) below, each Global Note and each
Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form: 




"THE
NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(A) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
(4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT
IS A QUALIFIED INSTITUTIONAL BUYER OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT AND
(2) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, 





26





 



IF
THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT." 




        (B)  Notwithstanding
the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. 




        (ii)    Global Note Legend.    Each Global Note shall bear a legend in substantially the following form: 




"THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF PENN NATIONAL GAMING, INC." 






        (h)    Cancellation and/or Adjustment of Global Notes.    At such time as all beneficial interests in a particular
Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest
is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and
an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. 



        (i)    General Provisions Relating to Transfers and Exchanges.    



        (i)    To
permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of a
Company Order or at the Registrar's request. 


        (ii)   No
service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar
governmental charge 



27





 




payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof). 


        (iii)  The
Registrar shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any
Note being redeemed in part. 


        (iv)  All
Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. 


        (v)   The
Company shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business
15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer
of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a
Note between a record date and the next succeeding Interest Payment Date. 


        (vi)  Prior
to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the
Company shall be affected by notice to the contrary. 


        (vii) The
Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof. 


        (viii) All
certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of
transfer or exchange may be submitted by facsimile. 




Section 2.07.    Replacement Notes.    



        If
any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company shall
issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee's requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any
of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note. 



        Every
replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly
issued hereunder. 


Section 2.08.    Outstanding Notes.    


        The
Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest
in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall not be deemed to be outstanding for purposes of
Section 3.07(a) hereof. 


28







  





        If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona
fide purchaser. 


        If
the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue. 


        If
the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that
date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest. 


Section 2.09.    Treasury Notes.    



        In
determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common control with the Company, shall be considered as though not outstanding, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee knows are so owned shall be so disregarded. 


Section
2.10.    Temporary Notes.    



        Until
certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes. 


        Holders
of temporary Notes shall be entitled to all of the benefits of this Indenture. 


Section
2.11.    Cancellation.    



        The
Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy acnceled
Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all canceled Notes shall be delivered to the Company. The Company may not issue new Notes
to replace Notes that it has paid or that have been delivered to the Trustee for cancellation. 


Section
2.12.    Defaulted Interest.    



        If
the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment
date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At
least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. 


29





 



Section
2.13.    Issuance of Additional Notes.    



        The
Company shall be entitled to issue Additional Notes under this Indenture that shall have identical terms as the Initial Notes, other than with respect to the date of issuance, issue
price, and amount of interest payable on the first Interest Payment Date applicable thereto; provided that such issuance is not prohibited by
Section 4.09. The Initial Notes and any Additional Notes and all Exchange Notes shall be treated as a single class for all purposes under this Indenture. 


        With
respect to any Additional Notes, the Company shall set forth in a resolution of its Board of Directors and in a Company Order, a copy of each of which shall be delivered to the
Trustee, the following information: 



        (1)   the
aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture; and 


        (2)   the
issue price, the issue date, the CUSIP number of such Additional Notes, the first Interest Payment Date and the amount of interest payable on such first Interest
Payment Date applicable thereto and the date from which interest shall accrue; provided, however, that no Additional Notes may be issued at a price that
would cause such Additional Notes to have "original issue discount" within the meaning of Section 1273 of the Internal Revenue Code of 1986, as amended. 




Section
2.14.    Designation.    


        Any
Additional Notes issued under this Indenture will rank pari passu in right of payment with the Initial Notes. 


Section
2.15.    CUSIP Numbers.    


        The
Company in issuing the Notes may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or
as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in
or omission of such numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers. 


 
 

ARTICLE 3
  
    REDEMPTION AND PREPAYMENT    
    


Section
3.01.    Notices to Trustee.    


        If
the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30 days but not more
than 60 days before a redemption
date, an Officers' Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price. 


Section
3.02.    Selection of Notes to Be Redeemed.    


        If
less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee will select Notes to be redeemed or purchased among the Holders of the
Notes in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro
rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the particular Notes to be
redeemed shall be selected, unless otherwise provided herein, not less than 30 


30





 



nor
more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. 


        The
Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof
to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. 


Section
3.03.    Notice of Redemption.    


        Subject
to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed,
by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture. 


        The
notice shall identify the Notes to be redeemed and shall state: 



        (a)   the
redemption date; 


        (b)   the
redemption price; 


        (c)   if
any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a
new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note; 


        (d)   the
name and address of the Paying Agent; 


        (e)   that
Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; 



        (f)    that,
unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date; 


        (g)   the
paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and 


        (h)   that
no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. 




        At
the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided,  however, that the Company shall
have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers' Certificate requesting
that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. 


Section
3.04.    Effect of Notice of Redemption.    



        Once
notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption
price. A notice of redemption may not be conditional. 


31





 



Section
3.05.    Deposit of Redemption or Purchase Price.    



        One
Business Day prior to the redemption or purchase date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of
and accrued interest on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying
Agent by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest on, all Notes to be redeemed or purchased. 


        If
the Company complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest shall cease to accrue on the Notes or the portions of Notes
called for redemption or purchase. If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest
shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption or purchase shall not be so paid upon surrender for
redemption or purchase because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such
principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof. 


Section
3.06.    Notes Redeemed or Purchased in Part.    



        Upon
surrender of a Note that is redeemed or purchased in part, the Company shall issue and, upon the Company's written request, the Trustee shall authenticate for the Holder at the
expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered. 


Section
3.07.    Optional Redemption.    


        (a)   At
any time prior to December 1, 2006, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under this
Indenture at a redemption price of 106.875% of the principal amount, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date, with the net cash proceeds of one or more
Equity Offerings; provided that at least 65% of the aggregate principal amount of Notes issued under this Indenture remains outstanding immediately
after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries) and the redemption occurs within 90 days of the date of the closing of such Equity Offering. 


        (b)   Except
as described in Section 3.07(a), the Notes shall not be redeemable at the Company's option prior to December 1, 2007. On and after
December 1, 2007, the Company may redeem all or a part of the Notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Additional Interest, if any, on the Notes redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning
on December 1 of the years indicated below: 



	Year
 
	 	Percentage
	 
	2007	 	103.438	%
	2008	 	101.719	%
	2009 and thereafter	 	100.000	%






        In
addition to the foregoing, if any Gaming Authority requires that a holder or Beneficial Owner of Notes must be licensed, qualified or found suitable under any applicable Gaming Laws
and such holder or Beneficial Owner fails to apply for a license, qualification or a finding of suitability within 30 days (or such shorter period as may be required by the applicable Gaming
Authority) after being requested to do so by the Gaming Authority, or is denied such license or qualification or not found 


32





 



suitable,
the Company shall have the right, at its option, (i) to require any such holder or Beneficial Owner to dispose of its Notes within 30 days (or such earlier date as may be
required by the applicable Gaming Authority) of receipt of such notice or finding by such Gaming Authority, or (ii) to call for the redemption of the Notes of such holder or Beneficial Owner at
a redemption price equal to the least of (A) the principal amount thereof, together with accrued interest and Additional Interest, if any, to the earlier of the date of redemption or the date
of the denial of license or qualification or of the finding of unsuitability by such Gaming Authority, (B) the price at which such holder or Beneficial Owner acquired the Notes, together with
accrued interest and Additional Interest, if any, to the earlier of the date of redemption or the date of the denial of license or qualification or of the finding of unsuitability by such Gaming
Authority, or (C) such other lesser amount as may be required by any Gaming Authority. 


        The
Company shall notify the Trustee in writing of any such redemption as soon as practicable. The Holder or Beneficial Owner applying for license, qualification or a finding of
suitability must pay all costs of the licensure or investigation for such qualification or finding of suitability. 



	(c)
	Any
redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. 




Section
3.08.    Mandatory Redemption.    


        The
Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes. 


Section
3.09.    Offer to Purchase by Application of Excess Proceeds.    



        In
the event that, pursuant to Section 4.10 hereof, the Company shall be required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below. 


        The
Asset Sale Offer shall be made to all Holders and all holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with proceeds of sales of assets. The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the "Purchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than the Offer Amount has been tendered, all Notes
tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made. 


        If
the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name
a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer. 


        Upon
the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice shall
contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall
govern the terms of the Asset Sale Offer, shall state: 



        (a)   that
the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain
open; 


        (b)   the
Offer Amount, the purchase price and the Purchase Date; 



33





 




        (c)   that
any Note not tendered or accepted for payment shall continue to accrete or accrue interest; 



        (d)   that,
unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or accrue interest after
the Purchase Date; 


        (e)   that
Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 only; 


        (f)    that
Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Note completed, or transfer by book-entry transfer, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date; 


        (g)   that
Holders shall be entitled to withdraw their election if the Company, the depositary or the Paying Agent, as the case may be, receives, not later than the expiration
of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Note purchased; 


        (h)   that,
if the aggregate principal amount of Notes and other pari passu Indebtedness surrendered by Holders exceeds the
Offer Amount, the Company shall select the Notes and other pari passu Indebtedness to be purchased on a pro
rata basis based on the principal amount of Notes and other pari passu Indebtedness surrendered (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and 



        (i)    that
Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer). 




        On
or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and shall deliver to the Trustee an
Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company, the Depositary or the
Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of
the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Purchase Date. 



        Other
than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06
hereof. 


34





 


 
 

ARTICLE 4
  
    COVENANTS    
    


Section
4.01.    Payment of Notes.    


        The
Company shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium or
Additional Interest, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on
the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium or Additional Interest, if any, and interest then due. The
Company shall pay all Additional Interest, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement. 


        The
Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess
of the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Additional Interest (without regard to any applicable grace period) at the same rate to the extent lawful. 


Section
4.02.    Maintenance of Office or Agency.    



        The
Company shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture
may be served. The Company shall give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. 



        The
Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location of any such other office or agency. 



        The
Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03. 


Section
4.03.    Reports.    


        (a)   Whether
or not required by the SEC, so long as any Notes are outstanding, the Company shall furnish to the Trustee for mailing to the Holders of Notes, within
15 days after the time periods specified in the SEC's rules and regulations, (i) all quarterly and annual financial information that is filed or that would be required to be contained in
a filing with the SEC on Forms 10-Q and 10-K if or as if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by the Company's certified independent accountants; and (ii) all current
reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports. In addition, following the consummation of the Exchange Offer
contemplated by the Registration Rights Agreement, whether or not required by the SEC, the 


35





 



Company
shall file a copy of all of the information and reports referred to in clauses (i) and (ii) above with the Commission for public availability within the time periods
specified in the SEC's rules and regulations (unless the SEC will not accept such a filing, in which event the Company shall make such information available to securities analysts and prospective
investors upon request). 


        (b)   If
the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding
paragraph will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Management's Discussion and Analysis of Financial
Condition and Results of Operations, of the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations
of the Unrestricted Subsidiaries of the Company. 


        (c)   In
addition the Company, for so long as any Notes remain outstanding will furnish to the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. 


Section
4.04.    Compliance Certificate.    


        (a)   The
Company and each Guarantor (to the extent that such Guarantor is so required under the TIA) shall deliver to the Trustee, within 105 days after the end of
each fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing
such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto. 


        (b)   So
long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements
delivered pursuant to Section 4.03(a) above shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation)
that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any
provisions of Article 4 or Article 5 hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. 


        (c)   The
Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an
Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. 


Section
4.05.    Taxes.    



        The
Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in
good faith and by 


36





 



appropriate
proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes. 


Section
4.06.    Stay, Extension and Usury Laws.    



        The
Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so) 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 herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. 



Section
4.07.    Restricted Payments.    


        The
Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or make any other distribution on account
of the Company's or any of its Restricted Subsidiaries' Equity Interests (including, without limitation, any payment from funds or property of the Company or any of its Restricted Subsidiaries in
connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company's or any of its Restricted Subsidiaries'
Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or to the Company or a Restricted
Subsidiary of the Company); (ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, any payment from funds or property of the Company or any of its
Restricted Subsidiaries in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company; (iii) make any
payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value, any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees, except a payment
of interest or principal at the Stated Maturity thereof; or (iv) make any Restricted Investment (all such payments and other actions set forth in these clauses (i) through
(iv) above being collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment: 



        (a)   no
Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; 


        (b)   the
Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof; and 


        (c)   such
Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the date of this
Indenture (excluding Restricted Payments permitted by clauses (ii), (iii), (iv) and, solely to the extent not reducing Consolidated Net Income (or Net Income), (viii) of the next
succeeding paragraph), is less than the sum, without duplication, of (i) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of
the fiscal quarter commencing on October 1, 2003 to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net cash proceeds received by the Company since
the date of this Indenture as a contribution to its common equity capital or from the issue or sale of Equity 



37





 




Interests
of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that
have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company),  plus (iii) to the
extent that any Restricted Investment that was made after the date of this Indenture is sold for cash or otherwise liquidated
or repaid for cash, the lesser of (A) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (B) the initial amount of such
Restricted Investment, plus (iv) to the extent that any Restricted Investment was made after the date of this Indenture in an entity that
subsequently becomes a Restricted Subsidiary and such Restricted Investment remains outstanding, the aggregate amount of such Restricted Investments,  plus (v) to the extent that any Unrestricted
Subsidiary of the Company is redesignated as a Restricted Subsidiary in compliance with
Section 4.18 hereof after the date of this Indenture, the lesser of (A) the fair market value of the Company's Investment in such Subsidiary as of the date of such redesignation or
(B) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. 




        The
preceding provisions will not prohibit (i) the payment of any dividend or the consummation of any irrevocable redemption within 60 days after the date of declaration of
the dividend or giving of the redemption notice, as applicable, if at the date of declaration or giving of the redemption notice, as the
case may be, the dividend or redemption payment would have complied with the provisions of this Indenture; (ii) the redemption, repurchase, retirement, defeasance or other acquisition of any
subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to
a Restricted Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock); provided that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (c)(ii) of the preceding paragraph;
(iii) the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness; (iv) the payment of any dividend by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro
rata basis; (v) redemptions, repurchases or repayments to the extent required by any Gaming Authority having jurisdiction over the Company or any Restricted Subsidiary
or deemed necessary by the Board of Directors of the Company in order to avoid the suspension, revocation or denial of a gaming license by any Gaming Authority; (vi) the repurchase, redemption
or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any member of the Company's (or any of its Restricted
Subsidiaries') management pursuant to any management equity subscription agreement, stock option agreement or similar agreement; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $750,000 in any 12 month period; (vii) other Restricted Payments not to
exceed (A) $5 million prior to Supplemental Illinois Gaming Approval or (B) $20 million upon and after receipt of Supplemental Illinois Gaming Approval, in the aggregate
since the date of this Indenture; (viii) the declaration and payment of dividends to holders of the Company's Disqualified Stock or the preferred stock of a Guarantor, in each case issued in
accordance with Section 4.09 hereof; or (ix) repurchases of Equity Interests deemed to occur upon exercise of stock options if such Equity Interests represent a portion of the exercise
price of such options. 


38







  





        The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or
issued by the Company or such Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will
be determined by the Board of Directors, whose resolution with respect thereto will be delivered to the Trustee. The Board of Directors' determination must be based upon an opinion or appraisal issued
by an accounting, appraisal or investment banking firm of national standing if the fair market value exceeds $5 million. Not later than 30 days after the date of making any Restricted
Payment, the Company will deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this
Section 4.07 were computed, together with a copy of any fairness opinion or appraisal required by this Indenture. 


Section
4.08    Dividend and Other Payment Restrictions Affecting Subsidiaries.    



        The
Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to (i) pay dividends or make any other distributions on its Capital Stock to the Company or any of its Restricted Subsidiaries, or with
respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to the Company or any of its Restricted Subsidiaries; (ii) make loans or advances to
the Company or any of its Restricted Subsidiaries; or (iii) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries. 



        However,
the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of (i) agreements governing Existing Indebtedness and Credit
Facilities as in effect on the date of this Indenture and any amendments, modifications, restatements, renewals, increases, supplements, refundings, restructurings, replacements or refinancings of
those agreements; provided that the amendments, modifications, restatements, renewals, increases, supplements, refundings, restructurings, replacements
or refinancings are no more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in those agreements on the date of this Indenture;
(ii) this Indenture, the Notes and the Subsidiary Guarantees; (iii) applicable law or requirements of any Gaming Authority; (iv) any instrument governing Indebtedness (including
Acquired Debt) or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or
Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted
by the terms of this Indenture to be incurred; (v) customary non-assignment provisions in any purchase money financing contracts or leases entered into in the ordinary course of
business and consistent with past practices; (vi) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on that property of the nature
described in clause (iii) of the preceding paragraph; (vii) any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition; (viii) Permitted Refinancing Indebtedness; provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;
(ix) Liens securing Indebtedness otherwise permitted to be incurred under the provisions of Section 4.12 hereof that limit the right of the debtor to dispose of the assets subject to
such Liens; (x) provisions with respect to the disposition or distribution of assets or property in joint venture agreements, assets sale agreements, stock sale agreements and other similar
agreements entered into in the ordinary course of business; (xi) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of
business; (xii) Senior Debt; provided that the restrictions contained in the agreements governing such Senior Debt are no more restrictive, 


39





 



taken
as a whole, than those contained in the Senior Credit Facilities as of the date of this Indenture; (xiii) Indebted-ness and related Guarantees by the Guarantors that ranks  pari passu with the Notes
and the guarantees of the Notes by the Guarantors; provided that the
restrictions contained in the agreements governing such Indebtedness and related Guarantees are no more restrictive, taken as a whole, than those contained in this Indenture; (xiv) Indebtedness
incurred, or preferred stock issued, by Foreign Subsidiaries; provided that the restrictions contained in the agreements or instruments governing such
Indebtedness or preferred stock: (A) apply only in the event of a payment default or a default with respect to a financial covenant contained in the terms of such Indebtedness or preferred
stock or will not materially affect the Company's ability to make principal or interest payments on the Notes as determined by the Board of Directors of the Company, whose determination shall be
conclusive; and (B) are not materially more disadvantageous to holders of the Notes than is customary in comparable financings as determined in good faith by the Board of Directors, whose
determination shall be conclusive; and (xv) Indebtedness incurred by a Permitted Joint Venture pursuant to clause (ix) of the definition of "Permitted Debt." 


Section
4.09.    Incurrence of Indebtedness and Issuance of Preferred Stock.    



        The
Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and the Company will not issue any
Disqualified Stock and will not permit any of its Subsidiaries to issue any shares of preferred stock; provided,  however, that the Company may incur
Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness or
issue preferred stock, if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding
the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1.0 determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning
of such four-quarter period. The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"): 



        (i)    the
incurrence by the Company and/or any of the Guarantors of Indebtedness and letters of credit pursuant to the Credit Facilities;  provided that the aggregate principal amount of all Indebtedness then
classified as having been incurred in reliance upon this clause (i) that
remains outstanding under the Credit Facilities after giving effect to such incurrence does not exceed $500 million, less the aggregate amount of all Net Proceeds of Asset Sales that have been
applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to repay any Indebtedness under a Credit Facility (and to reduce commitments with respect thereto in the
case of any such Indebtedness that is revolving credit Indebtedness) pursuant to Section 4.10 hereof; provided,  however, that the maximum amount
permitted to be outstanding under this clause (i) shall not be deemed to limit additional Indebtedness under the
Credit Facilities to the extent the incurrence of such additional Indebtedness is permitted pursuant to any of the other provisions under this Section 4.09; 


        (ii)   the
incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; 


        (iii)  the
incurrence by the Company and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture in the principal amount of
$200,000,000 (and the Exchange Notes issued in exchange therefor) and the related Subsidiary Guarantees; 


        (iv)  the
incurrence by the Company or any of the Guarantors of Indebtedness represented by Purchase Money Indebtedness and Capital Lease Obligations incurred in connection
with the purchase or capital lease of video gaming machines, slot machines or other gaming equipment in 



40





 




an
aggregate principal amount or accreted value, as applicable, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this
clause (iv), not to exceed $20 million at any time outstanding; 



        (v)   the
incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to
refund, refinance or replace, Indebtedness that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (ii), (iii), (iv), (v) or
(xiv) of this paragraph; 


        (vi)  the
incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries;  provided, however, that (A) if the Company or any Guarantor is the obligor on such Indebtedness,
such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantee, in the case
of a Guarantor; and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary of the Company and (2) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemed, in each
case, to constitute an incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be, that was not permitted by this clause (vi); 


        (vii) the
incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk or
currency exchange risk with respect to any floating rate Indebtedness or non-U.S. dollar-denominated Indebtedness that is permitted by the terms of this Indenture to be outstanding; 


        (viii) the
guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by
another provision of this Section 4.09; 


        (ix)  the
incurrence by Permitted Joint Ventures or Unrestricted Subsidiaries of Non-Recourse Debt; provided,  however, that if any such Indebtedness ceases to be
Non-Recourse Debt of a Permitted Joint Venture or an Unrestricted Subsidiary, such event
shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause; 


        (x)   Indebtedness
incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the
ordinary course of business, including without limitation letters of credit with respect to workers' compensation claims or self-insurance, or other Indebtedness with respect to
reimbursement-type obligations regarding workers' compensation claims; provided, however,
that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence; 



        (xi)  obligations
in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of
business; 


        (xii) the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business;  provided, however, that such Indebtedness is extinguished within two Business Days of incurrence; 



        (xiii) incurrence
of Indebtedness by the Company or any of its Restricted Subsidiaries (in addition to Existing Indebtedness) consisting of Guarantees of Indebtedness of
Pennwood in an aggregate principal amount at any time outstanding not to exceed $20 million; and 



41





 




        (xiv) the
incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at
any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (xiv), not to exceed
$50 million. 




        For
purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of
Permitted Debt described in clauses (i) through (xiv) above or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company will be permitted to
classify such item of Indebtedness on the date of its incurrence in any manner that complies with this Section 4.09. In addition, the Company may, at any time, change the classification of an
item of Indebtedness (or any portion thereof) to any other clause or to the first paragraph of this Section 4.09, provided that the Company would
be permitted to incur such item of Indebtedness (or portion thereof) pursuant to such other clause or the first paragraph of this Section 4.09, as the case may be, at such time of
reclassification. Indebtedness under the Senior Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will be deemed to have been incurred on
such date in reliance on the exception provided by clause (i) of the definition of "Permitted Debt." 


Section
4.10.    Asset Sales.    



        (a)   The
Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale, unless (i) the Company (or the Restricted Subsidiary,
as the case may be) receives consideration at the time of the Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;
(ii) the fair market value is determined by the Company's Board of Directors and evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the
Trustee; and (iii) at least 75% of the consideration received in the Asset Sale by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of this
provision, each of the following will be deemed to be cash: (A) any liabilities, as shown on the Company's or such Restricted Subsidiary's most recent balance sheet, of the Company or such
Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability; and (B) any securities, notes or other obligations received by
the Company or such Restricted Subsidiary from such transferee that are substantially concurrently, subject to ordinary settlement periods, converted by the Company or such Restricted Subsidiary into
cash or Cash Equivalents, to the extent of the cash or Cash Equivalents received in that conversion. 



        (b)   Within
360 days after the receipt of any Net Proceeds from an Asset Sale, the Company may apply an amount equal to those Net Proceeds at its option: (i) to
repay Senior Debt and, if the Senior Debt repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto; (ii) to acquire all or substantially all of the
assets of, or a majority of the Voting Stock of, another Person primarily engaged in a Permitted Business; (iii) to make capital expenditures; or (iv) to acquire other
long-term assets that are used or useful in a Permitted Business. Pending the final application of any Net Proceeds, the Company may temporarily reduce revolving credit borrowings or
otherwise invest the Net Proceeds in any manner that is not prohibited by this Indenture. 



        (c)   Any
Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $5 million, the Company will make an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or
redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of principal amount plus accrued and unpaid interest and Additional Interest, if any, to the date of
purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset 


42





 



Sale
Offer, the Company may use those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and other pari
passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari
passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero. 


        (d)   Notwithstanding
the foregoing, the Company or a Restricted Subsidiary will be permitted to consummate an Asset Sale without complying with the foregoing provisions if:
(i) the Company or its Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or other property sold, issued or
otherwise disposed of (as evidenced by a resolution of the Board of the Company) as set forth in an Officers' Certificate delivered to the Trustee, (ii) the transaction constitutes a
"like-kind exchange" of the type contemplated by Section 1031 of the Internal Revenue Code, and (iii) the consideration for such Asset Sale constitutes assets that the Board
of Directors in its good faith judgment at the time of the sale determines will be used or useful in a Permitted Business; provided that any
non-cash consideration not constituting assets that the Board of Directors in its good faith judgment at the time of the sale determines will be used or useful in a Permitted Business
received by the Company or a Restricted Subsidiary in connection with such Asset Sale that is converted into or sold or otherwise disposed of for cash or Cash Equivalents at any time within
360 days after such Asset Sale and any cash or Cash Equivalents received by the Company or a Restricted Subsidiary in connection with such Asset Sale shall constitute Net Proceeds subject to
the provisions set forth above. 


Section
4.11.    Transactions with Affiliates.    



        (a)   The
Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each, an "Affiliate Transaction"), unless: (i) the Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and
(ii) the Company delivers to the Trustee: (A) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of
(i) $2 million prior to receipt of Supplemental Illinois Gaming Approval or (ii) $5 million upon and after receipt of Supplemental Illinois Gaming Approval, a resolution of
the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority
of the disinterested members of the Board of Directors; and (B) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess
of (i) $5 million prior to Supplemental Illinois Gaming Approval or (ii) $25 million upon and after receipt of Supplemental Illinois Gaming Approval, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing. 


        (b)   The
following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 4.11(a): (i) any
employment agreements or arrangements and benefit plans or arrangements, and any transactions contemplated by any of the foregoing relating to the compensation and employee benefits matters, in each
case in respect of employees, officers or directors entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and consistent with the past practice of the
Company or such Restricted Subsidiary; (ii) transactions between or among the Company and/or its Restricted Subsidiaries; (iii) transactions with a Person that is an Affiliate of the
Company solely because the Company owns an Equity Interest in such Person; (iv) payment of reasonable directors' fees and indemnity provided on behalf of officers, directors or employees of the
Company or any of its Restricted Subsidiaries; (v) sales of Equity 


43





 



Interests
(other than Disqualified Stock) to Affiliates of the Company; and (vi) Restricted Payments that are permitted by Section 4.07 hereof. 


Section
4.12.    Liens.    


        The
Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind
securing Indebtedness or trade payables (other than Permitted Liens) upon any of its property or assets, now owned or hereafter acquired, unless all payments due under this Indenture and the Notes are
secured on an equal and ratable basis with the obligations so secured until such time as such obligations are no longer secured by a Lien. 


Section
4.13.    Corporate Existence.    


        Subject
to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence, and
the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or
any such Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided,  however, that
the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes. 


Section
4.14.    Offer to Repurchase upon Change of Control.    


        (a)   Upon
the occurrence of a Change of Control, the Company shall make an offer (a "Change of Control Offer") to each Holder
to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Additional Interest thereon, if any, to the date of purchase, the "Change of Control Payment"). Subject to the last paragraph in
subsection (b) herein, within 30 days following any Change of Control, the Company shall mail a notice to each Holder describing the transaction or transactions that constitute the
Change of Control pursuant to this section 4.14 and stating: (1) that the Change of Control Offer is being made pursuant to this section 4.14 and that all Notes tendered will be
accepted for payment; (2) the purchase price and the purchase date, which shall be no earlier than 30 Business Days and no later than 60 Business Days from the date such notice is mailed (the
"Change of Control Payment Date"); (3) that any Note not tendered will continue to accrue interest; (4) that, unless the Company defaults
in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have the Notes purchased; and (7) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 in principal amount or an integral multiple thereof. The Company shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase
of Notes in connection with a Change of Control. To the extent that the provisions of any 


44





 

securities
laws or regulations conflict with the provisions of this Section 4.14, the Company shall comply with the applicable securities laws and regulations and will not be deemed to have
breached its obligations of this Section 4.14 by virtue of such conflict. 


        (b)   On
the Change of Control Payment Date, the Company shall, to the extent lawful (i) accept for payment all Notes or portions of Notes properly tendered pursuant to
the Change of Control Offer; (ii) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and
(iii) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions of Notes
being purchased by the Company. The paying agent shall promptly mail to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate
and mail (or cause to be transferred by book entry) to each Holder a new note equal in principal amount to any unpurchased portion of the Notes surrendered, if any;  provided that each new note shall be
in a principal amount of $1,000 or an integral multiple of $1,000. Prior to complying with any of the provisions of
this Section 4.14, but in any event within 90 days following a Change of Control, the Company shall either repay all outstanding Senior Debt in cash or Cash Equivalents or obtain the
requisite consents, if any, under all agreements governing outstanding Senior Debt to permit the repurchase of Notes required by this covenant. The Company shall publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. 


        (c)   Notwithstanding
anything to the contrary in this Section 4.14, the Company shall not be required to make a Change of Control Offer upon a Change of Control if a
third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.14 and Section 3.09 hereof and all
other provisions of this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. 



Section
4.15.    No Senior Subordinated Debt.    


        The
Company will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Debt of the
Company and senior in any respect in right of payment to the Notes. No Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to the Senior Debt of such Guarantor and senior in any respect in right of payment to such Guarantor's Subsidiary Guarantee. 


Section
4.16.    Payments for Consent.    



        The
Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of
Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid and is paid to all
Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. 


Section
4.17.    Additional Subsidiary Guarantees.    



        (a)   (i) If
the Company or any of its Restricted Subsidiaries that is a Guarantor acquires or creates another Wholly Owned Domestic Subsidiary after the date of this
Indenture that has assets with a book value in excess of $1 million, or (ii) if any Restricted Subsidiary that is not a Guarantor becomes a guarantor (a
"Significant Debt Guarantor") with respect to any Credit Facility, the Company's 111/8% senior subordinated notes due 2008 or the
Company's 87/8% senior subordinated notes due 2010, then, subject to applicable Gaming Laws in the case of additional Subsidiary guarantees arising as a result of clause (i) of
this covenant, that newly acquired or created Wholly-Owned Domestic Subsidiary or Significant Debt Guarantor will become a Guarantor and execute a supplemental indenture and deliver 


45





 

an
Opinion of Counsel pursuant to Sections 9.06 and 13.04 hereof within 30 Business Days of the date on which it was acquired or created or became a Significant Debt Guarantor (except if that Wholly-
Owned Domestic Subsidiary has been properly designated as an Unrestricted Subsidiary in accordance with this Indenture for so long as it continues to constitute an Unrestricted Subsidiary). 



        (b)   The
obligation of any Wholly-Owned Domestic Subsidiary to execute a Subsidiary Guarantee will be subject to the receipt of required prior approvals from any applicable
Gaming Authority, which the Company and its Restricted Subsidiaries have agreed to use all commercially reasonable efforts to obtain. 


Section
4.18.    Designation of Restricted and Unrestricted Subsidiaries.    


        Each
of the Shreveport Entities shall be an Unrestricted Subsidiary. Further, the Board of Directors may designate any Restricted Subsidiary (other than an owner of a Principal Property)
to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate fair market value of all
outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary properly designated shall be deemed to be an Investment made as of the time of the designation and shall
constitute Restricted Investments under the first paragraph of Section 4.07 hereof or, if eligible, Permitted Investments, as determined by the Company. That designation shall only be permitted
if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a Default. 


Section
4.19.    Business Activities.    


        The
Company will not, and will not permit any Restricted Subsidiary to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the
Company and its Restricted Subsidiaries taken as a whole. 


Section
4.20.    Payment of Additional Interest.    



        If
Additional Interest is payable due to the occurrence of a Registration Default as described in the Registration Rights Agreement, the Company shall deliver to the Trustee a
certificate to that effect stating (1) the amount of such additional interest that is payable and (2) the date on which such interest is payable. Unless and until a Responsible Officer
of the Trustee receives at the Corporate Trust Office of the Trustee such a certificate, the Trustee may assume without inquiry that no such interest is payable. If the Company has paid additional
interest directly to the person entitled to it, the Company shall deliver to the Trustee a certificate setting forth the particulars of such payment. 


 
 

ARTICLE 5
  
    SUCCESSORS    
    


Section
5.01.    Merger, Consolidation or Sale of Assets.    


        The
Company shall not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not the Company is the surviving corporation); or (2) sell,
assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to another Person unless: (i) either: (A) the Company is the surviving corporation; or (B) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a corporation organized or existing under the laws of the United States, any state
of the United States or the District of Columbia; (ii) the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made assumes all the obligations of the Company under the Notes, this Indenture and the Registration Rights Agreement pursuant to 


46







  





agreements reasonably satisfactory to the Trustee; (iii) immediately after such transaction no Default or Event of Default exists; (iv) the Company or the Person formed by or surviving
any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition has been made shall, on the date of such transaction after
giving pro forma effect thereto and to any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof; and (v) the Company or the successor entity
shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition
and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with the applicable provisions of this Indenture and that all conditions precedent
in this Indenture relating to such transaction have been satisfied. In addition, the Company may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more
related transactions, to any other Person. This Section 5.01 will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Company and any of
its Wholly-Owned Restricted Subsidiaries. 


Section
5.02.    Successor Corporation Substituted.    


        Upon
any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the Company's or its Restricted Subsidiaries'
assets, taken as a whole, in compliance with Section 5.01 hereof, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or
other disposition, the provisions of this Indenture referring to the "Company" shall refer instead to the successor corporation and not to the Company), and may exercise every right and power of the
Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; provided,  however, that the predecessor
Company shall not be relieved from the obligation to pay the principal of and interest on the Notes except in the case of
a sale, assignment, transfer, conveyance or other disposition of all of the Company's or its Restricted Subsidiaries' assets, taken as a whole, that meets the requirements of Section 5.01
hereof. 


 
 

ARTICLE 6
  
    DEFAULTS AND REMEDIES    
    


Section
6.01.    Events of Default.    


        An
"Event of Default" occurs if: 




        (a)   the
Company defaults in the payment when due of interest on, or Additional Interest with respect to, the Notes and such default continues for a period of 30 days
whether or not prohibited by the subordination provisions of Article 10; 


        (b)   the
Company defaults in the payment when due of principal of or premium, if any, on the Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, whether or not prohibited by the subordination provisions of Article 10; 



        (c)   the
Company or any of its Restricted Subsidiaries fails to comply with any of the provisions of Sections 4.07, 4.09, 4.10, 4.14 or 5.01 hereof; 


        (d)   the
Company or any of its Restricted Subsidiaries fails to observe or perform any other covenant, representation, warranty or other agreement in this Indenture or the
Notes 




47





 





for
60 days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding voting as a single class; 


        (e)   a
default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date of this Indenture, if that default: (i) is caused by a failure to pay principal on such Indebtedness at final
maturity (a "Payment Default"); or (ii) results in the acceleration of such Indebtedness prior to its express maturity, and, in each case, the
principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $15 million or more; 


        (f)    a
final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any of its Restricted
Subsidiaries and such judgment or judgments remain undischarged for a period (during which execution shall not be effectively stayed) of 60 days;  provided that the aggregate of all such
undischarged judgments exceeds $15 million; 


        (g)   except
as permitted by this Indenture, any Subsidiary Guarantee of any Restricted Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Guarantor shall deny or disaffirm its obligations under its Subsidiary Guarantee; 


        (h)   the
Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary
case, (iii) consents to the appointment of a custodian of it or for all or substantially all of its property, (iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due; or 


        (i)    a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary in an involuntary case; (ii) appoints a
custodian of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary or for all or substantially all of the property of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary; or (iii) orders the liquidation of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; and the order or decree remains unstayed and in effect for 60 consecutive days. 





Section
6.02.    Acceleration.    



        If
any Event of Default (other than an Event of Default specified in clause (h) or (i) of Section 6.01 hereof with respect to the Company, any Restricted Subsidiary
that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (h) or (i) of Section 6.01 hereof occurs with respect to the 


48





 



Company,
any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, all outstanding
Notes shall be due and payable immediately without further action or notice. The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may
on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if the Trustee shall have received an Officers'
Certificate that all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived. 


        If
an Event of Default occurs on or after December 1, 2007 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of
avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to Section 3.07 hereof, then, upon acceleration of the Notes,
an equivalent premium shall also become and be immediately due and payable, to the extent permitted by law, anything in this Indenture or in the Notes to the contrary notwithstanding. If an Event of
Default occurs prior to December 1, 2007 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the Notes, an additional premium shall also become and be immediately due and payable in an amount, for each of the years
beginning on December 1 of the years set forth below, as set forth below (expressed as a percentage of the principal amount of the Notes on the date of payment that would otherwise be due but
for the provisions of this sentence): 



	Year
 
	 	Percentage
	 
	2003	 	106.875	%
	2004	 	106.016	%
	2005	 	105.156	%
	2006	 	104.297	%





Section
6.03.    Other Remedies.    


        If
an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium and Additional Interest, if any, and interest on
the Notes or to enforce the performance of any provision of the Notes or this Indenture. 


        The
Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of
a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law. 


Section
6.04.    Waiver of Past Defaults.    


        Holders
of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium and Additional Interest, if any, or
interest on, the Notes (including in connection with an offer to purchase) (provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right consequent thereon. 


49





 



Section
6.05.    Control by Majority.    


        Holders
of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. 


Section
6.06.    Limitation on Suits.    


        A
Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if: 




        (a)   the
Holder of a Note gives to the Trustee written notice of a continuing Event of Default; 


        (b)   the
Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy; 



        (c)   such
Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; 


        (d)   the
Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and 


        (e)   during
such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with
the request. 





        A
Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note. 


Section
6.07.    Rights of Holders of Notes to Receive Payment.    


        Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium and Additional Interest, if any, and interest on the
Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such Holder. 


Section
6.08.    Collection Suit by Trustee.    


        If
an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as Trustee of an
express trust against the Company for the whole amount of principal of, premium and Additional Interest, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to
the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel. 


Section
6.09.    Trustee May File Proofs of Claim.    


        The
Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such
claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the 


50





 



Trustee
under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts
due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of,
any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization
or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 


Section
6.10.    Priorities.    


        If
the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: 


        First:    to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; 



        Second:    to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and Additional Interest, if any,
and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and Additional Interest, if any and interest,
respectively; and 


        Third:    to the Company or to such party as a court of competent jurisdiction shall direct. 


        The
Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. 


Section
6.11.    Undertaking for Costs.    


        In
any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by
the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes. 


 
 

ARTICLE 7
  
    TRUSTEE    
    


Section
7.01.    Duties of Trustee.    




        (a)   If
an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. 


        (b)   Except
during the continuance of an Event of Default: 



        (i)    the
duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and 





51





 



        (ii)   in
the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture. 




        (c)   The
Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: 



        (i)    this
paragraph does not limit the effect of paragraph (b) of this Section; 


        (ii)   the
Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and 


        (iii)  the
Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to
Section 6.05 hereof. 




        (d)   Whether
or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and
(c) of this Section. 


        (e)   No
provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any
of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability
or expense. 


        (f)    The
Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee
need not be segregated from other funds except to the extent required by law. 





Section
7.02.    Rights of Trustee.    




        (a)   The
Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document. 


        (b)   Before
the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. 


        (c)   The
Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. 


        (d)   The
Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it
by this Indenture. 


        (e)   Unless
otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the
Company. 


        (f)    The
Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless
such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, 




52





 





expenses
and liabilities that might be incurred by it in compliance with such request or direction. 





Section
7.03.    Individual Rights of Trustee.    


        The
Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights
it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to
continue as Trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof. 


Section
7.04.    Trustee's Disclaimer.    


        The
Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company's use of
the proceeds from the Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale
of the Notes or pursuant to this Indenture other than its certificate of authentication. 


Section
7.05.    Notice of Defaults.    


        If
a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within
90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. 


Section
7.06.    Reports by Trustee to Holders of the Notes.    


        Within
60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail
to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA § 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA § 313(c). 


        A
copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in
accordance with TIA § 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange. 


Section
7.07.    Compensation and Indemnity.    



        The
Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a Trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. 


        The
Company shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and defending itself against any claim (whether
asserted by the Company or any 


53





 



Holder
or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. 


        The
obligations of the Company under this Section 7.07 shall survive the satisfaction and discharge of this Indenture. 


        To
secure the Company's payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held
in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture. 


        When
the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the compensation for the
services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. 


        The
Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable. 


Section
7.08.    Replacement of Trustee.    



        A
resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this
Section. 


        The
Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in principal amount of the then
outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: 



        (a)   the
Trustee fails to comply with Section 7.10 hereof; 


        (b)   the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; 


        (c)   a
custodian or public officer takes charge of the Trustee or its property; or 


        (d)   the
Trustee becomes incapable of acting. 




        If
the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes
office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. 


        If
a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in
principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. 


        If
the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10, such Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. 



        A
successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall
become 


54





 



effective,
and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder
have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under
Section 7.07 hereof shall continue for the benefit of the retiring Trustee. 


Section
7.09.    Successor Trustee by Merger, etc.    


        If
the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business (including the administration of the trust created by this
Indenture) to, another corporation, the successor corporation without any further act shall be the successor Trustee. 


Section
7.10.    Eligibility; Disqualification.    


        There
shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has (or in the case of a subsidiary of a bank
holding company, its bank holding company parent shall have) a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. 



        This
Indenture shall always have a Trustee who satisfies the requirements of TIA §§ 310(a)(1), (2) and (5). The Trustee is subject to TIA §
310(b). 


Section
7.11.    Preferential Collection of Claims Against Company.    


        The
Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to
TIA § 311(a) to the extent indicated therein. 


 
 

ARTICLE 8
  
    LEGAL DEFEASANCE AND COVENANT DEFEASANCE    
    


Section
8.01.    Option to Effect Legal Defeasance or Covenant Defeasance.    


        The
Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.02 or 8.03
hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8. 


Section
8.02.    Legal Defeasance and Discharge.    


        Upon
the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Notes on the date the conditions set forth below are satisfied (hereinafter,
"Legal Defeasance"). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all its other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding
Notes to receive payments in respect of the principal of, or interest or premium and Additional Interest, if any, on such Notes when such payments are due from the trust referred to below,
(b) the Company's obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or
agency for payment and 


55





 



money
for security payments held in trust, (c) the rights, powers, trusts, duties and immunities of the Trustee, and the Company's and the Guarantor's obligations in connection therewith and
(d) this Article 8. Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof. 


Section
8.03.    Covenant Defeasance.    


        Upon
the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company shall, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18 and 4.19
hereof and clause (iv) of Section 5.01 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or
act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by
reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(c) through
6.01(f) hereof shall not constitute Events of Default. 


Section
8.04.    Conditions to Legal or Covenant Defeasance.    


        The
following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes: 


        In
order to exercise either Legal Defeasance or Covenant Defeasance, 




        (a)   the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as shall be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, or interest and premium and Additional Interest, if any, on the outstanding Notes on the stated maturity or on the applicable redemption date,
as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date; 


        (b)   in
the case of an election under Section 8.02 hereof, the Company has delivered to the Trustee an Opinion of Counsel confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the date of this Indenture, there has been a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes shall not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and shall be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred; 


        (c)   in
the case of an election under Section 8.03 hereof, the Company has delivered to the Trustee an Opinion of Counsel confirming that the Holders of the
outstanding Notes shall not recognize income, gain or loss for federal income tax purposes as a result of such 




56





 





Covenant
Defeasance and shall be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; 


        (d)   no
Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence
of Indebtedness all or a portion of the proceeds of which will be used to defease the Notes pursuant to this Article Eight concurrently with such incurrence) or insofar as Sections 6.01(h) or
6.01(i) hereof is concerned, at any time in the period ending on the 91st day after the date of deposit; 



        (e)   such
Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than
this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; 


        (f)    the
Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders
over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and 



        (g)   the
Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating
to the Legal Defeasance or the Covenant Defeasance have been complied with. 





Section
8.05.    Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions.    


        Subject
to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the outstanding
Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the
Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and Additional Interest, if any,
and interest, but such money need not be segregated from other funds except to the extent required by law. 


        The
Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited
pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the
outstanding Notes. 


        Anything
in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or
non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. 


57









  





Section 8.06.    Repayment to Company.    



        Any
money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium or Additional Interest, if any, or interest
on any Note and remaining unclaimed for two years after such principal, and premium or Additional Interest, if any, or interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the Company as Trustee thereof, shall thereupon cease; provided,  however, that the
Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense of the Company cause to be
published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance of such money then remaining shall be repaid to the Company. 


Section
8.07.    Reinstatement.    


        If
the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as
the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,  however, that, if the Company makes any payment of
principal of, premium or Additional Interest, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. 


 
 

ARTICLE 9
  
    AMENDMENT, SUPPLEMENT AND WAIVER    
    


Section
9.01.    Without Consent of Holders of Notes.    


        Notwithstanding
Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Indenture, the Subsidiary Guarantees or the Notes without
the consent of any Holder of a Note: 



        (a)   to
cure any ambiguity, defect or inconsistency; 


        (b)   to
provide for uncertificated Notes in addition to or in place of certificated Notes or to alter the provisions of Article 2 hereof (including the related
definitions) in a manner that does not materially adversely affect any Holder; 


        (c)   to
provide for the assumption of the Company's or a Guarantor's obligations to the Holders of the Notes by a successor to the Company pursuant to Article 5
hereof; 


        (d)   to
comply with the rules of any applicable securities depositary; 


        (e)   to
make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any
Holder of the Note; 


        (f)    to
comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; or 



        (g)   to
allow any Guarantor to execute a supplemental indenture and/or a Subsidiary Guarantee with respect to the Notes. 



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        Upon
the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the
Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company and the Guarantors in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise. 


Section
9.02.    With Consent of Holders of Notes.    


        Except
as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture (including Sections 3.09, 4.10 and 4.14 hereof) and the Notes
with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the
Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes voting as a single class (including consents obtained in connection with a tender
offer or exchange offer for, or purchase of, the Notes). 


        Upon
the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon the filing with
the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the
Trustee shall join with the Company in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture directly affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. 



        It
shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be
sufficient if such consent approves the substance thereof. 


        After
an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture
or waiver. 


        Subject
to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive compliance in a
particular instance by the Company with any provision of this Indenture or the Notes. However, without the consent of each Holder affected, an amendment or waiver under this Section 9.02 may
not: 



        (a)   reduce
the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; 



        (b)   reduce
the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption of the Notes (other than provisions relating to
the covenants described under Sections 3.09, 4.10 and 4.14 hereof); 


        (c)   reduce
the rate of or change the time for payment of interest on any Note; 



59





 




        (d)   waive
a Default or Event of Default in the payment of principal of, or interest or premium, or Additional Interest, if any, on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration); 


        (e)   make
any Note payable in money other than that stated in the Notes; 


        (f)    make
any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, or
interest or premium or Additional Interest, if any, on the Notes; 


        (g)   waive
a redemption payment with respect to any note (other than a payment required by one of the covenants described under Sections 4.10 and 4.14 hereof); 


        (h)   release
any Guarantor from any of its obligations under its Subsidiary Guarantee or this Indenture, except in accordance with the terms of this Indenture; or 



        (i)    make
any change in Section 6.04 or 6.07 hereof or in the foregoing amendment and waiver provisions. 




        In
addition, any amendment to, or waiver of, Article 10 of this Indenture that adversely affects the rights of the Holders of the Notes shall require the consent of the Holders of
at least 75% in principal
amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). 


Section
9.03.    Compliance with Trust Indenture Act.    



        Every
amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect. 


Section
9.04.    Revocation and Effect of Consents.    


        Until
an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds every Holder. 


Section
9.05.    Notation on or Exchange of Notes.    


        The
Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the
Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. 



        Failure
to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. 


Section
9.06.    Trustee to Sign Amendments, etc.    


        The
Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article Nine if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental Indenture until the Board of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 13.04 hereof, an
Officer's Certificate and an Opinion 


60





 



of
Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. 


 
 

ARTICLE 10
  
    SUBORDINATION    
    


Section
10.01.    Agreement to Subordinate.    


        The
Company agrees, and each Holder by accepting a Note agrees, that the Indebtedness evidenced by the Notes is subordinated in right of payment, to the extent and in the manner provided
in this Article 10, to the prior payment in full of all Senior Debt (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed), and that the subordination is
for the benefit of the holders of Senior Debt. 


Section
10.02.    Liquidation; Dissolution; Bankruptcy.    


        Upon
any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, in an assignment for the benefit of creditors or any marshaling of the Company's assets and liabilities: 



        (i)    holders
of Senior Debt shall be entitled to receive payment in full of all Obligations due in respect of such Senior Debt (including interest after the commencement of
any such proceeding at the rate specified in the applicable Senior Debt) and all outstanding letters of credits under Credit Facilities shall either have been terminated or cash collateralized in
accordance with the terms thereof, before
Holders of the Notes shall be entitled to receive any payment on, or distribution with respect to the Notes (except that Holders of the Notes may receive and retain (A) Permitted Junior
Securities and (B) payments made from any defeasance trust created pursuant to Section 8.01 hereof), and 


        (ii)   until
all Obligations with respect to Senior Debt (as provided in clause (i) above) are paid in full, any distribution to which Holders would be entitled but for
this Article 10 shall be made to holders of Senior Debt (except that Holders of Notes may receive (A) Permitted Junior Securities and (B) payments and other distributions made
from any defeasance trust created pursuant to Section 8.01 hereof), as their interests may appear. 




Section
10.03.    Default on Designated Senior Debt.    



        (a)   The
Company may not make any payment on or distribution to the Trustee or any Holder in respect of Obligations with respect to the Notes (except (A) Permitted
Junior Securities and (B) payments and other distributions made from any defeasance trust created pursuant to Section 8.01 hereof) until all principal and other Obligations with respect
to the Senior Debt have been paid in full if: 



        (i)    a
payment default of any principal or other Obligations with respect to Designated Senior Debt occurs and is continuing beyond any applicable grace period in the
agreement, indenture or other document governing such Designated Senior Debt; or 


        (ii)   any
other default on Designated Senior Debt occurs and is continuing that then permits holders of the Designated Senior Debt to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from the Credit Agent, the Company or any holder of any Designated Debt. If the Trustee receives any such Payment Blockage Notice, no
subsequent Payment Blockage Notice shall be effective for purposes of this Section unless and until (A) at least 360 days shall have elapsed since the effectiveness of the immediately
prior Payment Blockage Notice and (B) all scheduled payments of principal, premium, if any, and interest on the Securities that have come due have been paid in full in 




61





 





cash.
No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days. 




        (b)   The
Company may and shall resume payments on and distributions in respect of the Notes: 



        (i)    in
the case of a payment default, upon the date on which such default is cured or waived; and 



        (ii)   in
the case of a nonpayment default, upon the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received, 





        unless
the maturity of any Designated Senior Debt has been accelerated. 


        Notwithstanding
the foregoing, the Company shall be permitted to repurchase, redeem, repay or prepay any or all of the Notes to the extent required to do so by any Gaming Authority, as
described under Section 3.07 hereof. 


Section
10.04.    Acceleration of Securities.    


        If
payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Debt of the acceleration. 


Section
10.05.    When Distribution Must Be Paid Over.    


        In
the event that the Trustee or any Holder receives any payment of any Obligations with respect to the Notes at a time when a Responsible Officer of the Trustee or such Holder, as
applicable, has actual knowledge that such payment is prohibited by Section 10.03 hereof, such payment shall be held by the Trustee or such Holder, in trust for the benefit of, and shall be
paid forthwith over and delivered to, the holders of Senior Debt as their interests may appear or their Representative under this Indenture or other agreement (if any) pursuant to which Senior Debt
may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt. 


        With
respect to the holders of Senior Debt, the Trustee undertakes to perform only such obligations on the part of the Trustee as are specifically set forth in this Article 10,
and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Debt, and shall not be liable to any such holders if the Trustee shall pay over or distribute to or on behalf of Holders or the Company or any other Person money or assets to
which any holders of Senior Debt shall be entitled by virtue of this Article 10, except if such payment is made as a result of the willful misconduct or gross negligence of the Trustee. 


Section
10.06.    Notice by Company.    



        The
Company shall promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of any Obligations with respect to the Notes to violate
this Article 10, but failure to give such notice shall not affect the subordination of the Notes to the Senior Debt as provided in this Article 10. 


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Section
10.07.    Subrogation.    



        After
all Senior Debt is paid in full and until the Notes are paid in full, Holders of Notes shall be subrogated (equally and ratably with all other Indebtedness  pari passu with the Notes) to the rights of
holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions
otherwise payable to the Holders of Notes have been applied to the payment of Senior Debt. A distribution made under this Article 10 to holders of Senior Debt that otherwise would have been
made to Holders of Notes is not, as between the Company and Holders, a payment by the Company on the Notes. 


Section
10.08.    Relative Rights.    


        This
Article 10 defines the relative rights of Holders of Notes and holders of Senior Debt. Nothing in this Indenture shall: 



        (i)    impair,
as between the Company and Holders of Notes, the obligation of the Company, which is absolute and unconditional, to pay principal of and interest on the Notes in
accordance with their terms; 


        (ii)   affect
the relative rights of Holders of Notes and creditors of the Company other than their rights in relation to holders of Senior Debt; or 



        (iii)  prevent
the Trustee or any Holder of Notes from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of
Senior Debt to receive distributions and payments otherwise payable to Holders of Notes. 




        If
the Company fails because of this Article 10 to pay principal of or interest on a Note on the due date, the failure is still a Default or Event of Default. 


Section
10.09.    Subordination May Not Be Impaired by Company.    



        No
right of any holder of Senior Debt to enforce the subordination of the Indebtedness evidenced by the Notes shall be impaired by any act or failure to act by the Company or any Holder
or by the failure of the Company or any Holder to comply with this Indenture. 


Section
10.10.    Distribution or Notice to Representative.    


        Whenever
a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Representative. 



        Upon
any payment or distribution of assets of the Company referred to in this Article 10, the Trustee and the Holders of Notes shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction or upon any certificate of such Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the
Holders of Notes for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10. 


Section
10.11.    Rights of Trustee and Paying Agent.    



        Notwithstanding
the provisions of this Article 10 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may continue to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Notes to violate this
Article 10. Only the 


63





 



Company
or a Representative may give the notice. Nothing in this Article 10 shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof. 


        The
Trustee in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. 


Section
10.12.    Authorization to Effect Subordination.    


        Each
Holder of Notes, by the Holder's acceptance thereof, authorizes and directs the Trustee on such Holder's behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in this Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact for any and all such purposes. If the Trustee does
not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.09 hereof at least 30 days before the expiration of the time to
file such claim, the Representatives are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Notes. 


Section
10.13.    Amendments.    



        The
provisions of this Article 10 shall not be amended or modified without the written consent of the holders of all Senior Debt. 


 
 

ARTICLE 11
  
    SUBSIDIARY GUARANTEES    
    


Section
11.01.    Guarantee.    


        Subject
to this Article 11, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:
(a) the principal of and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of
and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that
same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of
any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection. 


        The
Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenant that this Subsidiary Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture. 


        If
any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in
relation to either the 


64





 



Company
or the Guarantors, any amount paid either to the Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. 


        Each
Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof,
such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Subsidiary Guarantee. The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee. 


Section
11.02.    Subordination of Subsidiary Guarantee.    


        The
Obligations of each Guarantor under its Subsidiary Guarantee pursuant to this Article 11 shall be junior and subordinated to the Senior Guarantee of such Guarantor on the same
basis as the Notes are junior and subordinated to Senior Debt of the Company. For the purposes of the foregoing sentence, the Trustee and the Holders shall have the right to receive and/or retain
payments by any of the Guarantors only at such times as they may receive and/or retain payments in respect of the Notes pursuant to this Indenture, including Article 11 hereof. 


Section
11.03.    Limitation on Guarantor Liability.    


        Each
Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee of such Guarantor not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to any Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will, after
giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 11, result in the obligations of such
Guarantor under its Subsidiary Guarantee not constituting a fraudulent transfer or conveyance. 


Section
11.04.    Execution and Delivery of Subsidiary Guarantee.    


        To
evidence its Subsidiary Guarantee set forth in Section 11.01, each Guarantor hereby agrees that a notation of such Subsidiary Guarantee substantially in the form included in
Exhibit E shall be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Guarantor by its
President or one of its Vice Presidents. 


        Each
Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 11.01 shall remain in full force and effect notwithstanding any failure to endorse on each
Note a notation of such Subsidiary Guarantee. 


        If
an Officer whose signature is on this Indenture or on the Subsidiary Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Subsidiary
Guarantee is endorsed, the Subsidiary Guarantee shall be valid nevertheless. 


65





 



        The
delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of
the Guarantors. 


        In
the event that the Company creates or acquires any new Subsidiaries subsequent to the date of this Indenture, if required by Section 4.17 hereof, the Company shall cause such
Subsidiaries to execute supplemental indentures to this Indenture and Subsidiary Guarantees in accordance with Section 4.17 hereof and this Article 11, to the extent applicable. 


Section
11.05.    Guarantors May Consolidate, etc., on Certain Terms.    



        Except
as otherwise provided in Section 11.06, no Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person
whether or not affiliated with such Guarantor unless: 



        (a)   subject
to Section 11.06 hereof, the Person formed by or surviving any such consolidation or merger (if other than a Guarantor or the Company) unconditionally
assumes all the obligations of such Guarantor, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under the Notes, the Indenture and the Subsidiary
Guarantee on the terms set forth herein or therein; and 


        (b)   immediately
after giving effect to such transaction, no Default or Event of Default exists. 




        In
case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the Subsidiary Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed
by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may
cause to be signed any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Subsidiary Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Subsidiary Guarantees had been issued at the date of the execution hereof. 


        Except
as set forth in Articles 4 and 5 hereof, and notwithstanding clauses (a) and (b) above, nothing contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or conveyance of
the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. 


Section
11.06.    Releases Following Sale.    


        In
the event (i) of a sale or other disposition of all of the assets of any Guarantor, by way of merger, consolidation or otherwise, (ii) of a sale or other disposition of
all to the capital stock of any Guarantor, in each case to a Person that is not (either before or after giving effect to such transactions) a Restricted Subsidiary of the Company or (iii) that
the Company properly designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with this Indenture, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the capital stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all
or substantially all of the assets of such Guarantor) will be released and relieved of any obligations under its Subsidiary Guarantee; provided that the
Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of this Indenture, including without limitation Section 4.10 hereof. Upon delivery by the 


66





 



Company
to the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations
under its Subsidiary Guarantee. 


        Any
Guarantor not released from its obligations under its Subsidiary Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other
obligations of any Guarantor under this Indenture as provided in this Article 11. 


 
 

ARTICLE 12
  
    SATISFACTION AND DISCHARGE    
    


Section
12.01.    Satisfaction and Discharge.    



        This
Indenture shall be discharged and shall cease to be of further effect as to all Notes issued thereunder, when: 



        (1)   either:




        (a)   all
Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has been deposited in
trust and, if provided for in this Indenture, thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or 



        (b)   all
Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or
shall become due and payable within one year and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the
Holders, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as shall be
sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and
Additional Interest, if any, and accrued interest to the date of maturity or redemption; 




        (2)   no
Default or Event of Default has occurred and is continuing on the date of the deposit or shall occur as a result of the deposit and the deposit shall not result in a
breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound; 


        (3)   the
Company or any Guarantor has paid or caused to be paid all other sums payable by it under this Indenture; and 



        (4)   the
Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at maturity or the
redemption date, as the case may be. 




        In
addition, the Company must deliver an Officers' Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been
satisfied. 


        Notwithstanding
the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to subclause (b) of clause (1) of this
Section, the provisions of Section 12.02 and Section 8.06 shall survive. 


67









  





Section 12.02.    Application of Trust Money.    


        Subject
to the provisions of Section 8.06, all money deposited with the Trustee pursuant to Section 11.01 shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal (and premium or Additional Interest, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be
segregated from other funds except to the extent required by law. 


        If
the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 11.01 by reason of any legal proceeding or by reason of any order
or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01; provided that if the Company has made any payment of
principal of, premium or Additional Interest, if any, or interest on any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such
Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent. 


 
 

ARTICLE 13
  
    MISCELLANEOUS    
    


Section
13.01.    Trust Indenture Act Controls.    


        If
any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA § 318(c), the imposed duties shall control. 


Section
13.02.    Notices.    


        Any
notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class mail (registered or
certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others' address: 




If
to the Company and/or any Guarantor: 



Penn
National Gaming, Inc.

Wyomissing Professional Center

825 Berkshire Boulevard, Suite 200

Wyomissing, PA 19610

Telecopier No.: (610) 376-2842

Attention: Robert S. Ippolito 




With
a copy to: 



Skadden,
Arps, Slate, Meagher & Flom LLP

300 South Grand Avenue

Suite 3400

Los Angeles, CA 90071

Telecopier No.: (213) 687-5600

Attention: Rodrigo Guerra, Jr., Esq. 




If
to the Trustee: 



U.S.
Bank National Association

225 Asylum Street Hartford, CT 06103






68





 



Telecopier
No.: (860) 241-6881

Attention: Corporate Trust Services (Penn National Gaming, Inc. 67/8% Senior Subordinated Notes due 2011) 






        The
Company, any Guarantor or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. 


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


        Any
notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery
to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. 



        If
a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. 


        If
the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. 


Section
13.03.    Communication by Holders of Notes with Other Holders of Notes.    


        Holders
may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar
and anyone else shall have the protection of TIA § 312(c). 


Section
13.04.    Certificate and Opinion as to Conditions Precedent.    


        Upon
any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: 




        (a)   an
Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05 hereof)
stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and 


        (b)   an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05 hereof) stating
that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. 





Section
13.05.    Statements Required in Certificate or Opinion.    


        Each
certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA §
314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include: 




        (a)   a
statement that the Person making such certificate or opinion has read such covenant or condition; 



        (b)   a
brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are
based; 




69





 





        (c)   a
statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been satisfied; and 


        (d)   a
statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. 





Section
13.06.    Rules by Trustee and Agents.    


        The
Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. 



Section
13.07.    No Personal Liability of Directors, Officers, Employees and Stockholders.    


        No
director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or the Guarantors under
the Notes, this Indenture, or the Subsidiary Guarantees, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a note waives
and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws. 



Section
13.08.    Governing Law.    


        THE
INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 


Section
13.09.    No Adverse Interpretation of Other Agreements.    



        This
Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture. 


Section
13.10.    Successors.    


        All
agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each
Guarantor in this Indenture shall bind its successors. 


Section
13.11.    Severability.    



        In
case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby. 


Section
13.12.    Counterpart Originals.    


        The
parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 


Section
13.13.    Table of Contents, Headings, etc.    



        The
Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a
part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. 


[Signatures
on following page] 


70





 

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



	 	 	PENN NATIONAL GAMING, INC.
	

 	
 	
By:	
 	

/s/  ROBERT S. IPPOLITO      
 Name: Robert S. Ippolito

Title: Treasurer
	

 	
 	
W-B DOWNS, INC.
	

 	
 	
By:	
 	

/s/  WILLIAM J. CLIFFORD      

	 	 	 	 	Name:	William J. Clifford
	 	 	 	 	Title:	President
	

 	
 	
WILKES BARRE DOWNS, INC.
	

 	
 	
By:	
 	

/s/  WILLIAM J. CLIFFORD      

	 	 	 	 	Name:	William J. Clifford
	 	 	 	 	Title:	President
	

 	
 	
HOLLYWOOD CASINO-AURORA, INC.
	

 	
 	
By:	
 	

/s/  KEVIN DESANCTIS      

	 	 	 	 	Name:	Kevin DeSanctis
	 	 	 	 	Title:	President





71





 

	

 	
 	
PNGI CHARLES TOWN FOOD & BEVERAGE LIMITED LIABILITY COMPANY
	

 	
 	
By:	
 	

/s/  RICHARD MOORE      

	 	 	 	 	Name:	Richard Moore
	 	 	 	 	Title:	Manager
	

 	
 	
BACKSIDE, INC.
	

 	
 	
By:	
 	

/s/  RICHARD ORBANN      

	 	 	 	 	Name:	Richard Orbann
	 	 	 	 	Title:	President
	

 	
 	
PENN NATIONAL SPEEDWAY, INC.
	

 	
 	
By:	
 	

/s/  RICHARD J. CARLINO      

	 	 	 	 	Name:	Richard J. Carlino
	 	 	 	 	Title:	President
	

 	
 	
PENN NATIONAL GSFR, LLC.
	

 	
 	
By:	
 	

PENN NATIONAL GAMING, INC.

Sole Member and Manager
	

 	
 	

 	
 	

By:	

/s/  ROBERT S. IPPOLITO      

	 	 	 	 	Name:	Robert S. Ippolito
	 	 	 	 	Title:	Vice President, Secretary and Treasuruer



72





 

	

 	
 	
PNGI CHARLES TOWN GAMING LIMITED LIABILITY COMPANY
	

 	
 	
By:	
 	

PENN NATIONAL GAMING OF WEST VIRGINIA, INC.,

Managing Member
	 	 	 	 	 	 
	 	 	 	 	By:	/s/  ROBERT S. IPPOLITO      

	 	 	 	 	Name:	Robert S. Ippolito
	 	 	 	 	Title:	Secretary and Treasurer
	

 	
 	
ALL OTHER GUARANTORS, LISTED ON SCHEDULE B HERETO
	

 	
 	
By:	
 	

/s/  ROBERT S. IPPOLITO      

	 	 	 	 	Name:	Robert S. Ippolito
	 	 	 	 	Title:	Treasurer
	

 	
 	
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE
	

 	
 	
By:	
 	

/s/  PHILIP G. KANE, JR.      
 Authorized Signatory




73






  



 
 

EXHIBIT A    
    


[Face
of Note] 


CUSIP/CINS            


67/8%
[Series A] [Series B] Senior Subordinated Notes due 2011 



	No.	 	 	 	$





        PENN NATIONAL GAMING, INC.    promises to pay
to                        or registered assigns, the principal sum of
                        Dollars on                        , 2011.



        Interest
Payment Dates:                        and            


        Record
Dates:                        and            


        Dated:                        ,
            




	 	 	PENN NATIONAL GAMING, INC.
	

 	
 	

By:	
 	

 Name:

Title:





	

This is one of the Notes referred to in the within-mentioned Indenture:	

 
	
U.S. BANK NATIONAL ASSOCIATION, as Trustee	

 
	
By:	

 Authorized Signatory	

 




A-1





 
[Back
of Note] 


67/8%
[Series A] [Series B] Senior Subordinated Notes due 2011 


[Insert
the Global Note Legend, if applicable pursuant to the provisions of the Indenture] 


[Insert
the Private Placement Legend, if applicable pursuant to the provisions of the Indenture] 


        Capitalized
terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 


        1.    Interest.    Penn National Gaming, Inc., a Pennsylvania corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 67/8% per annum from December 4, 2003 until maturity
and shall pay any Additional Interest. Any Additional Interest following the occurrence of a Registration Default shall be assessed on the principal amount of Transfer Restricted Securities held by
such Holder as described in the Registration Rights Agreement. The Company shall pay interest and any Additional Interest semi-annually in arrears on June 1 and December 1 of
each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is
no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be June 1, 2004. The
Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate
that is 1% per annum in excess of the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and any Additional Interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months. 


        2.    Method of Payment.    The Company will pay interest on the Notes (except defaulted interest) and Additional
Interest, if any, to the Persons who are registered Holders of Notes at the close of business
on May 15 and November 15 preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and Additional Interest, if any, and interest at the office or agency of the
Company maintained for such purpose within the City and State of New York, or, at the option of the Company, payment of interest and any Additional Interest may be made by check mailed to the Holders
at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium
and any Additional Interest on, all Global Notes and all other Notes the Holders of which hold at least $1,000,000 in principal amount of the Notes and shall have provided wire transfer instructions
to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 


        3.    Paying Agent and Registrar.    Initially, State Street Bank and Trust Company, the Trustee under the Indenture,
will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 



        4.    Indenture.    The Company issued the Notes under an Indenture dated as of December 4, 2003
("Indenture") among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and 


A-2





 



Holders
are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of
this Indenture shall govern and be controlling. 


        5.    Optional Redemption.    



        (a)   At
any time prior to December 1, 2006, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes originally issued
under this Indenture at a redemption price of 106.875% of the principal amount, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date, with the net cash proceeds of
one or more Equity Offerings; provided that at least 65% of the aggregate principal amount of Notes issued under this Indenture remains outstanding
immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries); and the redemption occurs within 90 days of the date of the closing of such
Equity Offering. 


        (b)   Except
as described above, the Notes shall not be redeemable at the Company's option prior to December 1, 2007. On and after December 1, 2007, the Company
may redeem all or a part of the Notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued
and unpaid interest and Additional Interest, if any, on the Notes redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on December 1 of the years
indicated below: 



	Year
 
	 	Percentage
	 
	2007	 	103.438	%
	2008	 	101.719	%
	2009 and thereafter	 	100.000	%






        In
addition to the foregoing, if any Gaming Authority requires that a holder or beneficial owner of Notes must be licensed, qualified or found suitable under any applicable Gaming Laws
and such holder or beneficial owner (i) fails to apply for a license, qualification or a finding of suitability within 30 days (or such shorter period as may be required by the
applicable Gaming Authority) after being requested to do so by the Gaming Authority, or (ii) is denied such license or qualification or not found suitable, the Company shall have the right, at
its option (i) to require any such holder or beneficial owner to dispose of its Notes within 30 days (or such earlier date as may be required by the applicable Gaming Authority) of
receipt of such notice or finding by such Gaming Authority, or (ii) to call for the redemption of the Notes of such holder or beneficial owner at a redemption price equal to the least of
(A) the principal amount thereof, together with accrued interest and Additional Interest, if any, to the earlier of the date of redemption or the date of the denial of license or qualification
or of the finding of unsuitability by such Gaming Authority, (B) the price at which such holder or beneficial owner acquired the Notes, together with accrued interest and Additional Interest,
if any, to the earlier of the date of redemption or the date of the denial of license or qualification or of the finding of unsuitability by such Gaming Authority, or (C) such other lesser
amount as may be required by any Gaming Authority. 


        6.    Mandatory Redemption.    


        Except
as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption payments with respect to the Notes. 


        7.    Repurchase at Option of Holder.    



        (a)   If
there is a Change of Control, the Company will be required to make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Additional Interest thereon, if any, to the 



A-3





 

date
of purchase (the "Change of Control Payment"). Within 30 days following any Change of Control, the Company will mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required by the Indenture. 



        (b)   If
the Company or a Subsidiary consummates any Asset Sales, within five days of each date on which the aggregate amount of Excess Proceeds exceeds $5 million, the
Company will commence an offer to all Holders of Notes (as "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the maximum
principal amount of Notes that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest and
Additional Interest thereon, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company (or such Subsidiary) may use such deficiency for general corporate purposes. If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee will select the Notes to be purchased on a pro rata basis. Holders of Notes that are the subject of an offer to
purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes. 




        8.    Notice of Redemption.    Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. 


        9.    Denominations, Transfer, Exchange.    The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected
for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date. 


        10.    Persons Deemed Owners.    The registered Holder of a Note may be treated as its owner for all purposes. 



        11.    Amendment, Supplement and Waiver.    Subject to certain exceptions, the Indenture or the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes voting as a single class, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes voting as a single class. Without the consent of
any Holder of a Note, the Indenture, the Subsidiary Guarantees or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of the Company's or Guarantor's obligations to Holders of the Notes in case of a merger or consolidation, to make any
change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the
requirements of the SEC in order to effect or maintain the qualification of the Indenture under the 


A-4





 



Trust
Indenture Act, or to allow any Guarantor to execute a supplemental indenture to the Indenture and/or a Subsidiary Guarantee with respect to the Notes. 



        12.    Defaults and Remedies.    Events of Default include: (i) default for 30 days in the payment when
due of interest or Additional Interest on the Notes; (ii) default in payment when due of principal of or premium, if any, on the Notes when the same becomes due and payable at maturity, upon
redemption (including in connection with an offer to purchase) or otherwise, (iii) failure by the Company or any of its Restricted Subsidiaries to comply with Section 4.07, 4.09, 4.10,
4.14 or 5.01 of the Indenture; (iv) failure by the Company or any of its Restricted Subsidiaries for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding voting as a single class to comply with certain other agreements in the Indenture or the Notes; (v) default under certain other agreements
relating to Indebtedness of the Company which default results in the acceleration of such Indebtedness prior to its express maturity; (vi) certain final judgments for the payment of money that
remain undischarged for a period of 60 days; (vii) certain events of bankruptcy or insolvency with respect to the Company or any of its Restricted Subsidiaries that is a Significant
Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; and (viii) except as permitted by this Indenture, any Subsidiary Guarantee
of any Restricted Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor shall deny or
disaffirm its obligations under its Subsidiary Guarantee. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due
and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes shall become due and payable without
further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal, interest or Additional Interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the payment of interest or Additional Interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such
Default or Event of Default. 


        13.    Trustee Dealings with Company.    The Trustee, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 


        14.    No Recourse Against Others.    A director, officer, employee, incorporator or stockholder, of the Company, as
such, shall not have any liability for any obligations of the Company under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 


        15.    Authentication.    This Note shall not be valid until authenticated by the manual signature of the Trustee or
an authenticating agent. 


        16.    Abbreviations.    Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint 


A-5





 



tenants
with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 


        17.    Additional Rights of Holders of Restricted Global Notes and Restricted Definitive Notes.    In addition to the
rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration Rights Agreement. 



        18.    CUSIP Numbers.    Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to
the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. 



        The
Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: 





Penn
National Gaming, Inc.

Wyomissing Professional Center

825 Berkshire Boulevard, Suite 200

Wyomissing, PA 19610

Attention: Robert S. Ippolito 





A-6





 




ASSIGNMENT FORM  


        To assign this Note, fill in the form below: 



	(I) or (we) assign and transfer this Note to:	 	 
	 	 	
 (Insert assignee's legal name)
	

 (Insert assignee's soc. sec. or tax I.D. no.)
	

 (Print or type assignee's name, address and zip code)







	and irrevocably appoint	 	 	 	to transfer
	 	 	
	 	 
	this Note on the books of the Company. The agent may substitute another to act for him.







	Date:	 	 	 	 
	 	 	
	 	 





	Your Signature:	 	 
	 	 	
 (Sign exactly as your name appears on the face of this Note)







	Signature Guarantee*:	 	 
	 	 	







	*
	Participant
in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 


A-7





 
OPTION OF HOLDER TO ELECT PURCHASE  


        If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below: 


o Section 4.10                             o Section 4.14



        If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: 



	$	 	 	 
	 	
	 	 





	Date:	 	 	 	 
	 	 	
	 	 





	Your Signature:	 	 
	 	 	
 (Sign exactly as your name appears on the face of this Note)







	Tax Identification No.:	 	 	 	 
	 	 	
	 	 





	Signature Guarantee*:	 	 
	 	 	







	*
	Participant
in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 


A-8





 
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)  



        The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been made: 



	Date of Exchange
	 	Amount of Decrease in Principal Amount of This Global Note
	 	Amount of Increase in Principal Amount of This Global Note
	 	Principal Amount of This Global Note Following Such Decrease (or

Increase)
	 	Signature of Responsible Officer of Trustee or Note Custodian

	

 	
 	

 	
 	

 	
 	

 	
 	

 






	(1)
	This
schedule should be included only if the Note is issued in global form. 


A-9






  



 
 

EXHIBIT B    
    


 
 

FORM OF CERTIFICATE OF TRANSFER    
    


Penn
National Gaming, Inc.

Wyomissing Professional Center

825 Berkshire Boulevard, Suite 200

Wyomissing, PA 19610 



U.S.
Bank National Association

Goodwin Square

225 Asylum Street

Hartford, CT 06103

Attention: Corporate Trust Services



Re:  67/8% Senior Subordinated Notes due 2011  


        Reference is hereby made to the Indenture, dated as of December 4, 2003 (the "Indenture"), among National
Gaming, Inc., as issuer (the "Company"), the Guarantors and U.S. Bank National Association, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture. 


                                (the
"Transferor") owns and proposes to transfer the Note[s] or interest in such
Note[s] specified in Annex A hereto, in the principal amount of $                        
in such Note[s] or interests (the "Transfer"), to                        (the
"Transferee"), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that: 


[CHECK ALL THAT APPLY]


        1.     o Check
if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Definitive Note
Pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a
Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global
Note and/or the Definitive Note and in the Indenture and the Securities Act. 


        2.     o Check
if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a
Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the
Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside
the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed
in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the registration 


B-1





 



requirements
of the Securities Act, and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act. 


        3.     o Check
and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a
Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of
any state of the United States, and accordingly the Transferor hereby further certifies that (check one): 



        (a)   o such
Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; 




        or 



        (b)   o such
Transfer is being effected to the Company or a subsidiary thereof; 




        or 



        (c)   o such
Transfer is being effected pursuant to an effective registration statement under the Securities Act and
in compliance with the prospectus delivery requirements of the Securities Act; 




        or 



        (d)   o such
Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from
the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general
solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note
or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of  Exhibit D to the
Indenture and (2) if the Company so requests, an Opinion of Counsel provided by the Transferor or the Transferee (a copy
of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global
Note and/or the Definitive Notes and in the Indenture and the Securities Act. 




        4.     o Check
if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an
Unrestricted Definitive Note. 



        (a)   o Check
if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and
in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. 



B-2





 

        (b)   o Check
if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to
and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. 



        (c)   o Check
if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and
in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive
Notes and in the Indenture. 




        This certificate and the statements contained herein are made for your benefit and the benefit of the Company. 



	 	 	[Insert Name of Transferor]
	

 	
 	

By:	

    
 Name:

Title:





	

Dated:	
 	

    
	
 	

 




B-3





 
 
 

ANNEX A TO CERTIFICATE OF TRANSFER    
    



        1.     The
Transferor owns and proposes to transfer the following: 


        [CHECK
ONE OF (a) OR (b)] 



	(a)    	 	o	 	a beneficial interest in the:
	

(i)	
 	

o	
 	

144A Global Note (CUSIP            ), or
	

(ii)	
 	

o	
 	

Regulation S Global Note (CUSIP            ), or
	

(iii)	
 	

o	
 	

IAI Global Note (CUSIP            ); or
	

(b)    	
 	

o	
 	

a Restricted Definitive Note.





        2.     After
the Transfer the Transferee will hold: 


[CHECK ONE]



	(a)    	 	o	 	a beneficial interest in the:
	

(i)	
 	

o	
 	

144A Global Note (CUSIP            ), or
	

(ii)	
 	

o	
 	

Regulation S Global Note (CUSIP            ), or
	

(iii)	
 	

o	
 	

IAI Global Note (CUSIP            ); or
	

(iv)	
 	

o	
 	

Unrestricted Global Note (CUSIP            ); or
	

(b)    	
 	

o	
 	

a Restricted Definitive Note; or
	

(c)    	
 	

o	
 	

an Unrestricted Definitive Note, in accordance with the terms of the Indenture.




B-4






  



 
 

EXHIBIT C    
    


 
 

FORM OF CERTIFICATE OF EXCHANGE    
    


Penn
National Gaming, Inc.

Wyomissing Professional Center

825 Berkshire Boulevard, Suite 200

Wyomissing, PA 19610 


U.S.
Bank National Association

Goodwin Square

225 Asylum Street

Hartford, CT 06103

Attention: Corporate Trust Services 


Re:
67/8% Senior Subordinated Notes due 2011


(CUSIP                        ) 


Reference
is hereby made to the Indenture, dated as of December 4, 2003 (the "Indenture"), between Penn National Gaming, Inc., as issuer
(the "Company"), the Guarantors and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture. 


                                ,
(the "Owner") owns and proposes to exchange the Note[s] or interest in such
Note[s] specified herein, in the principal amount of $                        in such Note[s] or interests (the
"Exchange"). In connection with the Exchange, the Owner hereby certifies that: 


        1.     Exchange
of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted
Global Note 



        (a)   o Check
if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an
Unrestricted Global Note. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the "Securities
Act"), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 


        (b)   o Check
if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note.
In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant
to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance
with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 


        (c)   o Check
if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note.
In connection with the Owner's Exchange of a Restricted Definitive 



C-1





 




Note
for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer,
(ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 


        (d)   o Check
if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and
(iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 




        2.     Exchange
of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global
Notes 



        (a)   o Check
if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In
connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the
Restricted Definitive Note is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted
Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the
Securities Act. 


        (b)   o Check
if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In
connection with the Exchange of the Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE] 144A Global Note, Regulation S Global Note, IAI
Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer and (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States. Upon consummation
of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Note and in the Indenture and the Securities Act. 




        This certificate and the statements contained herein are made for your benefit and the benefit of the Company. 



	 	 	[Insert Name of Transferor]
	

 	
 	

By:	

 Name:

Title:




C-2






  



 
 

EXHIBIT D    
    


 
 

FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR    
    


Penn
National Gaming, Inc.

Wyomissing Professional Center

825 Berkshire Boulevard, Suite 200

Wyomissing, PA 19610 



U.S.
Bank National Association

Goodwin Square

225 Asylum Street

Hartford, CT 06103

Attention: Corporate Trust Services



Re:  67/8% Senior Subordinated Notes due 2011  


        Reference is hereby made to the Indenture, dated as of December 4, 2003 (the "Indenture"), between Penn
National Gaming, Inc., as issuer (the "Company"), the Guarantors and U.S. Bank National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture. 



        In
connection with our proposed purchase of $                        aggregate principal amount of: 


        (a)   o a
beneficial interest in a Global Note, or 


        (b)   o a
Definitive Note, 


        we confirm that: 



        1.     We
understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act"). 


        2.     We
understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer"
(as defined therein), (C) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you
and to the Company a signed letter substantially in the form of this letter and if the Company so requests, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person
purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated herein. 


        3.     We
understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably require to confirm that the proposed sale 


D-1





 



complies
with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect. 


        4.     We
are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting
are each able to bear the economic risk of our or its investment. 


        5.     We
are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion. 


        You
and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby. 



	 	 	[Insert Name of Accredited Investor]
	

 	
 	

By:	

 Name:

Title:




D-2






  



 
 

EXHIBIT E    
    


 
 

FORM OF SUBSIDIARY GUARANTEE    
    


        For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the
extent set forth in the Indenture and subject to the provisions in the Indenture dated as of December 4, 2003 (the "Indenture") among Penn
National Gaming, Inc. (the "Company"), the Guarantors and U.S. Bank National Association, as trustee (the
"Trustee"), (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes (as defined in the Indenture),
whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal and premium or Additional Interest, if any, and, to the extent permitted by
law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of
any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and
the Indenture are expressly set forth in Article 11 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Subsidiary Guarantee. Each Holder of a Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee, on behalf of such Holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such purpose;  provided, however, that the Indebtedness evidenced by this Subsidiary Guarantee shall cease to be so
subordinated and subject in right of payment upon any defeasance of this Note in accordance with the provisions of the Indenture. 



	 	 	[NAME OF GUARANTOR(S)]
	

 	
 	
By:	

 Name:

Title:




E-1






  



 
 

EXHIBIT F    
    


 
 

FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS    
    


        SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of                        ,
among                        (the
"Guaranteeing Subsidiary"), a subsidiary of Penn National Gaming, Inc. (or its permitted successor), a Pennsylvania corporation (the
"Company"), the Company, the other Guarantors (as defined in the Indenture referred to herein) and U.S. Bank National Association, as trustee under this
Indenture referred to below (the "Trustee"). 


W I T N E S S E T H  


        WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the "Indenture"), dated as
of December 4, 2003 providing for the issuance of an unlimited amount of 67/8% Senior Subordinated Notes due 2011 (the "Notes"); 


        WHEREAS,
the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Company's Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the
"Subsidiary Guarantee"); and 


        WHEREAS,
pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. 



        NOW
THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee
mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 


        1.    Capitalized Terms.    Capitalized terms used herein without definition shall have the meanings assigned to them
in the Indenture. 


        2.    Agreement to Guarantee.    The Guaranteeing Subsidiary hereby agrees as follows: 



        (a)   Along
with all Guarantors named in the Indenture, to jointly and severally Guarantee, on a senior subordinated basis, to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns, the Notes or the obligations of the Company hereunder or thereunder, that: 



        (i)    the
principal of and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and 


        (ii)   in
case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. 




        (b)   The
obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or
any other 



F-1





 

circumstance
which might otherwise constitute a legal or equitable discharge or defense of a guarantor. 



        (c)   The
following is hereby waived: diligence presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice and all demands whatsoever. 


        (d)   This
Subsidiary Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture, and the Guaranteeing
Subsidiary accepts all obligations of a Guarantor under the Indenture. 


        (e)   If
any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any Custodian, Trustee, liquidator or other similar
official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. 


        (f)    The
Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in
full of all obligations guaranteed hereby. 


        (g)   As
between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Subsidiary Guarantee. 


        (h)   The
Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Guarantee. 


        (i)    Pursuant
to Section 11.03 of the Indenture, after giving effect to any maximum amount and any other contingent and fixed liabilities that are relevant under any
applicable Bankruptcy or fraudulent conveyance laws, and after giving effect to any collections from, any rights to receive contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under Article 11 of the Indenture, this new Subsidiary Guarantee shall be limited to the maximum amount permissible such that the obligations
of such Guarantor under this Subsidiary Guarantee will not constitute a fraudulent transfer or conveyance. 




        3.    Execution and Delivery.    Each Guaranteeing Subsidiary agrees that the Subsidiary Guarantees shall remain in
full force and effect notwithstanding any failure to endorse on each Note a notation of such Subsidiary Guarantee. 


        4.    Guaranteeing Subsidiary May Consolidate, etc. on Certain Terms.    



        (a)   The
Guaranteeing Subsidiary may not consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another corporation, Person or entity
whether or not affiliated with such Guarantor unless: 



        (i)    subject
to Sections 11.05 and 11.06 of the Indenture, the Person formed by or surviving any such consolidation or merger (if other than a Guarantor or the Company)
unconditionally assumes all the obligations of such Guarantor, pursuant to a supplemental 




F-2





 


indenture
in form and substance reasonably satisfactory to the Trustee, under the Notes, the Indenture and the Subsidiary Guarantee on the terms set forth herein or therein; and 


        (ii)   immediately
after giving effect to such transaction, no Default or Event of Default exists. 




        (b)   In
case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of the Indenture to
be performed by the Guarantor, such successor corporation shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor
corporation thereupon may cause to be signed any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued shall in all respects have the same legal rank and benefit under the Indenture as the Subsidiary Guarantees theretofore and
thereafter issued in accordance with the terms of the Indenture as though all of such Subsidiary Guarantees had been issued at the date of the execution hereof. 


        (c)   Except
as set forth in Articles 4 and 5 and Section 11.06 of Article 11 of the Indenture, and notwithstanding clauses (a) and (b) above,
nothing contained in the Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. 




        5.    Releases.    



        (a)   In
the event of a sale or other disposition of all of the assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all
the capital stock of any Guarantor, in each case to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, then such Guarantor (in the
event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of the capital stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets of such Guarantor) will be released and relieved of any obligations under its Subsidiary Guarantee;  provided that the Net Proceeds of such
sale or other disposition are applied in accordance with the applicable provisions of the Indenture, including
without limitation Section 4.10 of the Indenture. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of the Indenture, including without limitation Section 4.10 of the Indenture, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its obligations under its Subsidiary Guarantee. 


        (b)   Any
Guarantor not released from its obligations under its Subsidiary Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for
the other obligations of any Guarantor under the Indenture as provided in Article 11 of the Indenture. 




        6.    No Recourse Against Others.    No past, present or future director, officer, employee, incorporator, stockholder
or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the Indenture
or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of the 


F-3





 

Notes.
Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy. 


        7.    New York Law to Govern.    THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS
SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 



        8.    Counterparts.    The parties may sign any number of copies of this Supplemental Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement. 


        9.    Effect of Headings.    The Section headings herein are for convenience only and shall not affect the
construction hereof. 


        10.    The Trustee.    The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity
or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company. 


F-4





 

        IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written. 



	Dated:	 	,	 	 	 	 	 
	 	
	 	 	
	 	 	 
	

 	

 	

 	
 	

 	
 	
[GUARANTEEING SUBSIDIARY]
	

 	

 	

 	
 	

 	
 	

By:	

 Name:

Title:
	

 	

 	

 	
 	

 	
 	
PENN NATIONAL GAMING, INC.
	

 	

 	

 	
 	

 	
 	

By:	

 Name:

Title:
	

 	

 	

 	
 	

 	
 	
[EXISTING GUARANTORS]
	

 	

 	

 	
 	

 	
 	

By:	

 Name:

Title:
	

 	

 	

 	
 	

 	
 	
U.S. BANK NATIONAL ASSOCIATION, as Trustee
	

 	

 	

 	
 	

 	
 	

By:	

 Authorized Signatory






F-5





 
Schedule B

SCHEDULE OF GUARANTORS  


        The following schedule lists each Guarantor under the Indenture as of the Issue Date: 



BSL, INC.

BTN, INC.

BACKSIDE, INC.

CHC CASINOS CORP.

CRC HOLDINGS, INC.

THE DOWNS RACING, INC.

EBETUSA.COM, INC.

HOLLYWOOD CASINO-AURORA, INC.

HOLLYWOOD CASINO CORPORATION

HOLLYWOOD MANAGEMENT, INC.

HWCC DEVELOPMENT CORPORATION

HWCC-HOLDINGS, INC.

HWCC-GOLF COURSE PARTNERS, INC.

HWCC-TRANSPORTATION, INC.

HWCC-TUNICA, INC.

LOUISIANA CASINO CRUISES, INC.

MILL CREEK LAND, INC.

MOUNTAINVIEW THOROUGHBRED RACING ASSOCIATION

NORTHEAST CONCESSIONS, INC.

PNGI CHARLES TOWN GAMING LIMITED LIABILITY COMPANY

PNGI CHARLES TOWN FOOD & BEVERAGE LIMITED LIABILITY COMPANY

PNGI POCONO, INC.

PENN BULLPEN, INC.

PENN BULLWHACKERS, INC.

PENN MILLSITE, INC.

PENN NATIONAL GAMING OF WEST VIRGINIA, INC.

PENN NATIONAL GSFR, INC.

PENN NATIONAL HOLDING COMPANY

PENN NATIONAL SPEEDWAY, INC.

PENN SILVER HAWK, INC.

PENNSYLVANIA NATIONAL TURF CLUB, INC.

STERLING AVIATION, INC.

W-B DOWNS, INC.

WILKES BARRE DOWNS, INC. 


F-6











QuickLinks



Exhibit 4.12



CROSS-REFERENCE TABLE


TABLE OF CONTENTS


ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE


ARTICLE 2 THE NOTES


ARTICLE 3 REDEMPTION AND PREPAYMENT

ARTICLE 4 COVENANTS


ARTICLE 5 SUCCESSORS


ARTICLE 6 DEFAULTS AND REMEDIES

ARTICLE 7 TRUSTEE

ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE


ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER

ARTICLE 10 SUBORDINATION

ARTICLE 11 SUBSIDIARY GUARANTEES

ARTICLE 12 SATISFACTION AND DISCHARGE


ARTICLE 13 MISCELLANEOUS



EXHIBIT A




EXHIBIT B


FORM OF CERTIFICATE OF TRANSFER

ANNEX A TO CERTIFICATE OF TRANSFER



EXHIBIT C


FORM OF CERTIFICATE OF EXCHANGE



EXHIBIT D


FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR




EXHIBIT E


FORM OF SUBSIDIARY GUARANTEE



EXHIBIT F


FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS