Exhibit
4.1


 


SUPPLEMENTAL
INDENTURE


 


THIS SUPPLEMENTAL INDENTURE
(the “Supplemental Indenture”) dated as of July 22
2009, by and among MTR Gaming Group, Inc., a Delaware corporation (the “Issuer”), the guarantors executing the Supplemental
Indenture (the “Guarantors”) and Wilmington Trust
Company, as successor to Wells Fargo Bank Minnesota, N.A., as trustee (the “Trustee”), under the Indenture dated as of May 25,
2006, and supplemented as of June 1, 2007, June 15, 2007 and March 7,
2008 (the “Indenture”).  Capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to them in the
Indenture.


 


W I T N E S S E T H:


 


WHEREAS, the Issuer,
the Trustee and the Guarantors have heretofore executed and delivered the
Indenture providing for the issuance by the Issuer of 9% Senior Subordinated
Notes due 2012 (the “Notes”);


 


WHEREAS, the Issuer
has solicited consents from the Holders of the Notes to certain proposed
amendments to the Indenture, in accordance with the terms and conditions of a
Consent Solicitation Statement, dated July 15, 2009 (as supplemented
pursuant to the Supplement to Consent Solicitation Statement dated July 20,
2009 and the Second Supplement to Consent Solicitation Statement dated July 21,
2009, the “Solicitation Statement”);


 


WHEREAS, Section 9.2
of the Indenture provides that, with the consent of the Holders of a majority
in aggregate principal amount of the Notes then outstanding, the Issuer, the
Guarantors and the Trustee may amend or supplement the Indenture and the Notes
in accordance with Section 9.2 of the Indenture;


 


WHEREAS, the Holders
of a majority in aggregate principal amount of the outstanding Notes have duly
consented to the proposed amendments set forth in this Supplemental Indenture
in accordance with Section 9.2 of the Indenture;


 


WHEREAS, the Issuer
has heretofore delivered or is delivering contemporaneously herewith to the
Trustee (i) copies of resolutions of Boards of Directors of the Issuer and
the Guarantors authorizing the execution of this Supplemental Indenture, (ii) evidence
of the written consent of the Holders set forth in the immediately preceding
paragraph, and (iii) the Officer’s Certificate and the Opinion of Counsel
described in Section 12.4 and 12.5 of the Indenture; and


 


WHEREAS, all other
acts and proceedings required by law and the Indenture necessary to authorize
the execution and delivery of this Supplemental Indenture and to make this
Supplemental Indenture a valid and binding agreement for the purposes expressed
herein, in accordance with its terms, have been complied with or have been duly
done or performed.


 


NOW,
THEREFORE, in consideration of the foregoing and
notwithstanding any provision of the Indenture which, absent this Supplemental
Indenture, might operate to limit such action, the parties hereto, intending to
be legally bound hereby, agree as follows:


 

















 


ARTICLE
ONE


 


AMENDMENTS


 


SECTION 1.01.  Amendment of Section 1.1.


 


(a)                                  Additions.  The following definitions will added to Section 1.1
of the Indenture entitled “Definitions”:


 


(i)                                     “Amendment Date” means the date that the Proposed Amendments
become operative in accordance with the terms of the Consent Solicitation.


 


(ii)                                  “Consent Solicitation” means the Company’s solicitation of
consents from holders of the Notes pursuant to the Consent Solicitation
Statement of the Company dated July 15, 2009, as supplemented on July 20,
2009 and July 21, 2009.


 


(iii)                               “Consolidated Secured
Leverage Ratio” means, as of any date of determination, the ratio of
total consolidated secured Indebtedness of the Company and its Subsidiaries as
of such date to the Consolidated EBITDA of the Company for the most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date of determination, with such
adjustments as are consistent with the adjustment provisions set forth in the
definition of Consolidated Coverage Ratio.


 


(iv)                              “Consolidated Tangible Assets” means, with respect to any
Person, the consolidated total assets of such Person and its Subsidiaries less
all goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other similar intangibles properly classified as intangibles in
accordance with GAAP, all as shown on the most recent balance sheet for such
Person and computed in accordance with GAAP.


 


(v)                                 “Core Gaming Assets” means (a) the Mountaineer Casino,
Racetrack & Resort and all operations and business conducted at or in
connection with the Mountaineer Casino, Racetrack & Resort and all
assets located at the Mountaineer Casino, Racetrack & Resort or used
in the operations or business of the Mountaineer Casino, Racetrack &
Resort, (b) Scioto Downs and all operations and business conducted at or
in connection with Scioto Downs and all assets located at Scioto Downs or used
in the operations or business of Scioto Downs, and (c) Presque Isle Downs &
Casino and all operations and business conducted at or in connection with
Presque Isle Downs & Casino and all assets located at Presque Isle
Downs & Casino or used in the operations or business of Presque Isle
Downs & Casino.


 


(vi)                              “Non-Core Land” means each of the following parcels of land,
each of which is immaterial to the Company’s gaming operations and as to which
the Company has no intention to develop:


 


(a)                                  the 255.896
acre parcel of land known as the “Quarry Parcel” in Hancock, West Virginia;


 


(b)                                 the 162.79 acre
parcel of land known as the “Woodview Golf Course” in Hancock, West Virginia;


 


(c)                                  the 14 acre
parcel of land known as the “Downs Property” in Erie, Pennsylvania;


 


(d)                                 the 23 acre
parcel of land known as the “International Paper” site in Erie, Pennsylvania;


 

















 


(e)                                  the 130 acre
parcel of land known as the “Troyer Parcel” in Erie, Pennsylvania;


 


(f)                                    the 82.373 acre
parcel of land known as the “Green Shingle” in Erie, Pennsylvania;


 


(g)                                 the
approximately 395 acre portion of the land known as the “Original Mountaineer
Parcel” which is located to the east of State Route 2 site in Hancock, West
Virginia;


 


(h)                                 the 97.706 acre
parcel of land known as the “Coldwell Parcel” in Hancock, West Virginia;


 


(i)                                     the 0.42 acre
parcel of land known as the “Frye Parcel” in Hancock, West Virginia;


 


(j)                                     the 78.215 acre
parcel of land known as the “Hazel Parcel” in Hancock, West Virginia;


 


(k)                                  the 69.09323
acre parcel of land known as the “Kource Parcel” site in Hancock, West
Virginia;


 


(l)                                     the 1.755 acre
parcel of land known as the “Glover/Daily Double Parcel” in Hancock, West
Virginia;


 


(m)                               the 6.788 acre
parcel of land known as the “Jusczak Parcel” in Hancock, West Virginia;


 


(n)                                 the 13.8765
acre parcel of land known as the “J&T Parcel” in Hancock, West Virginia;


 


(o)                                 the 109.01 acre
parcel of land known as the “LSW Sanitation Parcel” in Hancock, West Virginia;


 


(p)                                 the 0.92 acre
parcel of land known as the “Smith Parcel” in Hancock, West Virginia;


 


(q)                                 the 69.076 acre
parcel of land known as the “Watson Parcel” site in Hancock, West Virginia;


 


(r)                                    the 6.65 acre
parcel of land known as the “Phillips Parcel” in Hancock, West Virginia;


 


(s)                                  the 108.8 acre
parcel of land known as the “Stevens Parcel” in Hancock, West Virginia;


 


(t)                                    the 4.84 acre
parcel of land known as the “Baird Parcel” in Hancock, West Virginia;


 


(u)                                 the 234.99 and
79.67 acre parcels of land known as the “Logan/Realm Parcels” in Hancock, West
Virginia;


 


(v)                                 the
approximately 0.955 acre parcel of land known as the “Jefferson School Parcel”
in Hancock, West Virginia;


 

















 


(w)                               the 1.95 acre
parcel of land known as the “Carter Parcel” in Hancock, West Virginia;


 


(x)                                   the
approximately 1 acre parcel of land known as the “Hoit Parcel” in Hancock, West
Virginia;


 


(y)                                 the 0.084 acre
parcel of land known as the “Maffeo Parcel” in Erie, Pennsylvania; and


 


(z)                                   the 37.11 acre
parcel of land known as the “Mara Parcel” in Franklin County, Ohio.


 


(vii)                           “Senior
Secured Note Indenture” means the indenture among the Company, the
Guarantors and the Trustee, governing the Senior Secured  Notes.


 


(viii)                        “Senior Secured Notes”
means the $250.0 million in aggregate principal amount of Senior Secured Notes
due 2014 issued by the Company under the Senior Secured Note Indenture.


 


(b)                                 Amendments.


 


(i)                                     Disqualified
Capital Stock.  The
definition of “Disqualified Capital Stock” contained in Section 1.1 of the
Indenture entitled “Definitions” is hereby amended and restated to read in its entirety
as follows:


 


“Disqualified Capital Stock” means with respect to any
Person, Equity Interests of such Person that, by its terms or by the terms of
any security into which it is convertible, exercisable or exchangeable, is, or
upon the happening of an event or the passage of time or both would be,
required to be redeemed or repurchased by such Person or any of its
Subsidiaries, in whole or in part, on or prior to 91 days following the Stated
Maturity of the Notes; provided that any Capital Stock that would constitute
Disqualified Capital Stock solely because the holders thereof have the right to
require the Company to repurchase such Capital Stock upon the occurrence of a
Change of Control, Asset Sale or Event of Loss shall not constitute Disqualified
Capital Stock if the terms of such Capital Stock (and all such securities into
which it is convertible, exercisable or exchangeable) provide that the Company
may not repurchase or redeem such Capital Stock (and all such securities into
which it is convertible, exercisable or exchangeable) pursuant to such
provisions prior to compliance by the Company with Section 4.13 or Section 4.14.


 


(ii)                                  Future Gaming
Facility.  The
definition of “Future Gaming Facility” contained in Section 1.1 of the
Indenture entitled “Definitions” is hereby amended and restated to read in its
entirety as follows:


 


“Future Gaming  Facility” means
(i) any Gaming Facility owned or operated, or to be owned or operated, by
the Company or its Subsidiaries after the Issue Date but which is not owned or
operated by the Company or its Subsidiaries on the Issue Date and (ii) gaming
operations initially conducted following the Issue Date at a Gaming Facility
owned or operated by the Company as a result of the approval of additional
permitted gaming activities by the applicable Gaming Authorities.


 


(iii)                               Permitted
Indebtedness.  The
definition of “Permitted Indebtedness” contained in Section 1.1 of the
Indenture entitled “Definitions” is hereby amended and restated to read in its
entirety as follows:


 

















 


“Permitted Indebtedness” means that:


 


(a)                                  Indebtedness
evidenced by the Notes and the Guarantees issued pursuant to this Indenture up
to the amounts being issued on the original Issue Date less any amounts repaid
or retired;


 


(b)                                 Refinancing
Indebtedness with respect to any Indebtedness (including Disqualified Capital
Stock) described in clause (a) or incurred pursuant to the Debt Incurrence
Ratio test of Section 4.11 or which was refinanced pursuant to this clause
(b);


 


(c)                                  Indebtedness
solely in respect of bankers acceptances, letters of credit and performance
bonds (to the extent that such incurrence does not result in the incurrence of
any obligation to repay any obligation relating to borrowed money or other
Indebtedness), all in the ordinary course of business in accordance with
customary industry practices, in amounts and for the purposes customary in the
Company’s industry;


 


(d)                                 (i) the
Company may incur Indebtedness owed to (borrowed from) any Guarantor, (ii) any
Guarantor may incur Indebtedness owed to (borrowed from) any other Guarantor or
the Company and (iii) any Subsidiary may incur Indebtedness owed to
(borrowed from) any Guarantor or the Company; provided, that (x) in the
case of Indebtedness of the Company, such obligations shall be unsecured and
contractually subordinated in all respects to the Company’s obligations
pursuant to the Notes and any event that causes such Guarantor no longer to be
a Guarantor (including by designation to be an Unrestricted Subsidiary) shall
be deemed to be a new incurrence by the Company of such Indebtedness and any
guarantor thereof subject to the provisions of Section 4.11, (y) in
the case of Indebtedness of a Guarantor, such obligations shall be unsecured
and contractually subordinated in all respects to such Guarantor’s obligations
pursuant to such Guarantor’s Guarantee and any event that causes the Guarantor
lender no longer to be a Guarantor (including a designation as an Unrestricted
Subsidiary) shall be deemed to be a new incurrence by such Guarantor borrower
of such Indebtedness and any guarantor thereof subject to the provisions of Section 4.11
and (z) in the case of Indebtedness of a Subsidiary pursuant to clause (iii) such
obligations shall be unsecured and any event that causes the Guarantor lender
no longer to be a Guarantor (including a designation as an Unrestricted
Subsidiary) shall be deemed to be a new incurrence by such Subsidiary borrower
of such Indebtedness and any guarantor thereof subject to the provisions of Section 4.11;


 


(e)                                  Interest Swap
and Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate or currency risk with respect to any fixed or floating rate
Indebtedness that is permitted by the Indenture to be outstanding or any
receivable or liability the payment of which is determined by reference to a
foreign currency; provided, that the notional amount of any such Interest Swap
and Hedging Obligation does not exceed the principal amount of Indebtedness to
which such Interest Swap and Hedging Obligation relates;


 


(f)                                    FF&E
Financing; provided, that the aggregate principal amount of such Indebtedness
(including any Permitted Refinancing Indebtedness and any other Indebtedness
incurred following the Amendment Date to repay, redeem, discharge, retire, defease,
refund, refinance or replace any Indebtedness pursuant to this clause (f))
outstanding at any time (excluding any Gaming FF&E Financing incurred  pursuant to this clause (f)) does not exceed
the greater of (x) $20.0 million; and (y) 4.5% of Consolidated
Tangible Assets;


 

















 


(g)                                 Indebtedness
represented by the Senior Secured Notes and any Guarantees thereof, including
any Refinancing Indebtedness with respect thereto;


 


(h)                                 Indebtedness
incurred by the Company or any Subsidiary to finance the acquisition,
development, construction or improvement of any Gaming Facility at (i) Mountaineer
Casino, Racetrack & Resort in Chester, West Virginia, (ii) Presque
Isle Downs & Casino in Erie, Pennsylvania and (iii) Scioto Downs
in Columbus, Ohio; provided that (A) the ratio of the aggregate principal
amount of such Indebtedness to the aggregate principal amount of cash
contributions made to the equity capital of the Company or such Subsidiary or
the proceeds from the sale of Capital Stock of the Company or such Subsidiary
(other than Capital Stock that requires the payment of dividends or
distributions thereon in cash or in any form other than shares of such Capital
Stock or common stock of the Company or such Subsidiary or Capital Stock that
is Disqualified Capital Stock), in each case, after the Amendment Date does not
exceed 1.0 to 1.0, and (B) such Indebtedness is incurred within 180 days
after the making of such contribution or sale of such Capital Stock; and


 


(i)                                     Indebtedness
outstanding on the Issue Date represented by the Senior Notes and any
Guarantees thereof, including any Refinancing Indebtedness with respect
thereto.


 


(iv)                              Permitted
Investment.  The
definition of “Permitted Investment” contained in Section 1.1 of the
Indenture entitled “Definitions” is hereby amended and restated to read in its
entirety as follows:


 


“Permitted Investment” means:


 


(a)                                  any Investment
in any of the Notes;


 


(b)                                 any Investment
in Cash Equivalents;


 


(c)                                  intercompany
notes to the extent permitted under clause (i) or (ii) of clause (d) of
the definition of “Permitted Indebtedness;”


 


(d)                                 any Investment
by the Company or any Guarantor in (a) the Company or a Guarantor or (b) a
Person in a Related Business if as a result of such Investment such Person
becomes a Subsidiary and a Guarantor or such Person is merged with or into the
Company or a Guarantor;


 


(e)                                  other
Investments in any Person or Persons, provided, that after giving pro forma
effect to each such Investment, the aggregate amount of all such Investments
made on and after the Issue Date pursuant to this clause (e) that are
outstanding (after giving effect to any such Investments or any portions
thereof that are returned to the Company or the Guarantor that made such prior
Investment, without restriction, in cash on or prior to the date of any such
calculation, but only up to the amount of the Investment made under this clause
(e)) in such Person or Persons at any time does not in the aggregate exceed
$7.0 million (measured by the value attributed to the Investment at the time
made or returned, as applicable);


 


(f)                                    any Investment
in any Person in exchange for the Company’s Qualified Capital Stock or the Net
Cash Proceeds of any substantially concurrent sale of the Company’s Qualified
Capital Stock;


 

















 


(g)                                 Investments by
the Company in any grantor or “rabbi” trust for the benefit of executive
officers or other employees of the Company, consistent with the past practices
of the Company;


 


(h)                                 any Investment
(including an Investment in a joint venture) 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 4.13;


 


(i)                                     Investments by
the Company or any of its Subsidiaries in an amount not to exceed $3.0 million
from the Amendment Date; provided, that the consideration given by the Company
or such Subsidiary for such Investments consists solely of Non-Core Land; and


 


(j)                                     Investments in
any joint ventures in an amount not to exceed $5.0 million from the Amendment
Date.


 


(v)                                 Permitted Lien.  The definition of “Permitted Lien” contained
in Section 1.1 of the Indenture entitled “Definitions” is hereby amended
and restated to read in its entirety as follows:


 


“Permitted Lien” means:


 


(a)                                  Liens existing
on the Issue Date;


 


(b)                                 Liens imposed
by governmental authorities for taxes, assessments or other charges not yet
subject to penalty or which are being contested in good faith and by
appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP;


 


(c)                                  statutory liens
of carriers, warehousemen, mechanics, material men, landlords, repairmen or
other like Liens arising by operation of law in the ordinary course of business
provided that (1) the underlying obligations are not overdue for a period
of more than 30 days, or (2) such Liens are being contested in good faith
and by appropriate proceedings and adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP;


 


(d)                                 Liens securing
the performance of bids, trade contracts (other than borrowed money), leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;


 


(e)                                  easements,
rights-of-way, zoning, similar restrictions and other similar encumbrances or
title defects incurred in the ordinary course of business consistent with
industry practices which, singly or in the aggregate, do not in any case
materially detract from the value of the property subject thereto (as such property
is used by the Company or any of its Subsidiaries) or interfere with the
ordinary conduct of the business of the Company or any of its Subsidiaries;


 


(f)                                    pledges or
deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security
legislation;


 


(g)                                 Liens securing
Indebtedness of a Person existing at the time such Person becomes a Subsidiary
or is merged with or into the Company or a Subsidiary or Liens securing Indebtedness
incurred in connection with an Acquisition, provided, that such Liens were in
existence prior to the date of such acquisition, merger or consolidation, were
not incurred in anticipation thereof, and do not extend to any other assets;


 

















 


(h)                                 Liens arising
from FF&E Financing and Purchase Money Indebtedness permitted to be
incurred pursuant to Section 4.11; provided such Liens relate solely to
the property which is subject to such FF&E Financing and Purchase Money
Indebtedness;


 


(i)                                     leases or
subleases granted to other Persons in the ordinary course of business not
materially interfering with the conduct of the business of the Company or any
of its Subsidiaries or materially detracting from the value of the relative
assets of the Company or any Subsidiary;


 


(j)                                     Liens arising
from precautionary Uniform Commercial Code financing statement filings
regarding operating leases entered into by the Company or any of its
Subsidiaries in the ordinary course of business;


 


(k)                                  At any time
when no amounts are outstanding under any Credit Agreement, Liens securing up
to $5.0 million in reimbursement obligations for letters of credit incurred in
the ordinary course of business;


 


(l)                                     Liens securing
Indebtedness permitted to be incurred pursuant Section 4.11 in an amount
not to exceed $10.0 million in the aggregate at any one time outstanding;


 


(m)                               Liens securing
an aggregate amount of Indebtedness not to exceed the maximum amount that would
not cause the Consolidated Secured Leverage Ratio, after giving effect to such
Incurrence, to exceed 2.75 to 1.0;


 


(n)                                 Liens securing
the Senior Secured Notes, the Guarantees thereof;


 


(o)                                 Liens securing
Refinancing Indebtedness incurred to refinance any Indebtedness that was
previously so secured in a manner no more adverse to the Holders of the Notes
than the terms of the Liens securing such refinanced Indebtedness, and provided
that the Indebtedness secured is not increased and the Lien is not extended to
any additional assets or property that would not have been security for the Indebtedness
refinanced; and


 


(p)                                 Liens securing
Indebtedness incurred under the Credit Agreement and any Refinancing
Indebtedness with respect to the Senior Notes and the Guarantees thereof in
accordance with Section 4.11.


 


(vi)                              Unrestricted
Subsidiary.  Clause (b) of
the definition of “Unrestricted Subsidiary” contained in Section 1.1 of
the Indenture entitled “Definitions” is hereby amended and restated to read in
its entirety as follows:


 


(b)                                 any other
subsidiary of the Company that, at or prior to the time of determination, shall
have been designated by the Board of Directors of the Company as an
Unrestricted Subsidiary; provided, that such subsidiary at the time of such
designation (a) has no Recourse Indebtedness; (b) is not party to any
agreement, contract, arrangement or understanding with the Company or any
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Company; (c) is a Person with respect to which
neither the Company nor any of the Company’s Subsidiaries has any direct or
indirect obligation (x) to subscribe for additional Equity Interests or (y) to
maintain or preserve such Person’s financial condition or to cause such Person
to achieve any specified levels of operating results; and (d) does not
directly, indirectly or beneficially own any Equity Interests of, or
Subordinated Indebtedness of, or own or hold any Lien on any property of, the


 
















 


Company or any other Subsidiary of the Company; provided, further that
no subsidiary that owns or holds any Core Gaming Assets may be designated as an
Unrestricted Subsidiary; and


 


SECTION 1.02.  Amendment
of Section 4.11.  Section 4.11
entitled “Limitation on Incurrence of Additional Indebtedness” is hereby
amended and restated to read in its entirety as follows:


 


“Section 4.11.     
Limitation on Incurrence of Additional Indebtedness


 


Except as set forth in this Section 4.11, the Company and the
Guarantors shall not, and neither the Company nor the Guarantors shall permit
any of our Subsidiaries to, directly or indirectly, create, issue, assume,
guarantee, incur, become directly or indirectly liable with respect to
(including as a result of an Acquisition), or otherwise become responsible for,
contingently or otherwise (individually and collectively, to “incur” or, as
appropriate, an “incurrence”), any Indebtedness (including Disqualified Capital
Stock and Acquired Indebtedness), other than Permitted Indebtedness.


 


Notwithstanding the foregoing if:


 


(1)           no Default or Event
of Default shall have occurred and be continuing at the time of, or would occur
after giving effect on a pro forma basis to, such incurrence of such
Indebtedness, and


 


(2)           on the date of such
incurrence (the “Incurrence Date”), the Company’s Consolidated Coverage Ratio
for the Reference Period immediately preceding the Incurrence Date, after
giving effect on a pro forma basis to such incurrence of such Indebtedness and,
to the extent set forth in the definition of Consolidated Coverage Ratio, the
use of proceeds thereof, would be at least 2.0 to 1.0 (the “Debt Incurrence
Ratio”), then the Company and the Guarantors may incur such Indebtedness
(including Disqualified Capital Stock).


 


In addition, the foregoing limitations of the first paragraph of this Section 4.11
will not prohibit:


 


(a)           if no Event of
Default shall have occurred and be continuing, the Company’s incurrence
following the Amendment Date or the incurrence by any Guarantor of Indebtedness
in an aggregate amount incurred and outstanding at any time pursuant to this
paragraph (a) (plus any Refinancing Indebtedness incurred to retire,
defease, refinance, replace or refund such Indebtedness) of up to the greater
of (x) $10,000,000 and (y) 2.25% of Consolidated Tangible Assets; and


 


(b)           the Company’s
incurrence or the incurrence by any Guarantor of Indebtedness pursuant to the
Credit Agreement in an aggregate amount incurred and outstanding at any time
pursuant to this paragraph (b) (plus any Refinancing Indebtedness incurred
to retire, defease, refinance, replace or refund such Indebtedness) of up to
$20,000,000, minus the amount of any such Indebtedness (1) retired with
the Net Cash Proceeds from any Asset Sale or Event of Loss applied to
permanently reduce the outstanding amounts or the commitments with respect to
such Indebtedness pursuant to Section 4.13 or (2) assumed by a
transferee in an Asset Sale.


 


Indebtedness (including Disqualified Capital Stock) of any Person which
is outstanding at the time such Person becomes one of the Company’s
Subsidiaries (including upon designation of any Person as a Subsidiary) or is
merged with or into or consolidated with the Company or one of the Company’s
Subsidiaries shall be deemed to have been incurred at the time such Person
becomes or is designated one of the Company’s Subsidiaries or is merged with or
into or consolidated with the Company or one of the Company’s Subsidiaries as
applicable.


 

















 


Notwithstanding any other provision of this Section 4.11, but only
to avoid duplication, a guarantee by a Guarantor of the Indebtedness or of the
Indebtedness of another Guarantor incurred in accordance with the terms of the
Indenture (other than Indebtedness incurred pursuant to clause (b) of the
definition of Permitted Indebtedness) issued at the time such Indebtedness was
incurred or if later at the time the guarantor thereof became a Guarantor will
not constitute a separate incurrence, or amount outstanding, of Indebtedness.  Upon each incurrence of Indebtedness, (i) the
Company may designate pursuant to which provision of this Section 4.11
such Indebtedness is being incurred, (ii) the Company may subdivide an
amount of Indebtedness and designate more than one provision pursuant to which
such amount of Indebtedness is being incurred and (iii) such Indebtedness
shall not be deemed to have been incurred or outstanding under any other
provision of this covenant, except that all Indebtedness initially outstanding
under the Notes, the Guarantees and the Indenture shall be deemed to have been
incurred pursuant to clause (a) of the definition of Permitted
Indebtedness.


 


The Company and the Guarantors shall not, and neither the Company nor
the Guarantors shall permit any of their respective Subsidiaries to, directly
or indirectly, incur or suffer to exist any Indebtedness that is contractually
subordinated to any of the Company’s Indebtedness or the Indebtedness of any
Guarantor unless such Indebtedness is as contractually subordinated to the
Notes and such Guarantor’s Guarantee, as applicable, at least to the same
extent as it is to such other Indebtedness.”


 


SECTION 1.03.  Amendment
of Section 4.13.  The first
paragraph of Section 4.13 entitled “Limitation on Sales of Assets and
Subsidiary Stock” is hereby amended and restated to read in its entirety as
follows:


 


“Section 4.13         Limitations
on Sales of Assets and Subsidiary Stock


 


The
Company and the Guarantors shall not, and neither the Company nor the
Guarantors will permit any of their respective Subsidiaries to, in one or a
series of related transactions, convey, sell, transfer, assign or otherwise
dispose of, directly or indirectly, any of their property, business or assets,
including by merger or consolidation (in the case of a Guarantor or one of our
Subsidiaries), and including any sale or other transfer or issuance of any
Equity Interests of any of the Company’s Subsidiaries, whether by the Company
or one of its Subsidiaries or through the issuance, sale or transfer of Equity
Interests by any of the Company’s Subsidiaries and including any sale-leaseback
transaction (any of the foregoing, an “Asset
Sale”), unless, with respect to any Asset Sale or related series of
Asset Sales involving securities, property or assets with an aggregate fair
market value in excess of $2,000,000:


 


(1)                                  at least 75%
of the total consideration for such Asset Sale or series of related Asset Sales
consists of cash or Cash Equivalents,


 


(2)                                  no Default
or Event of Default shall have occurred and be continuing at the time of, or
would occur after giving effect, on a pro forma
basis, to, such Asset Sale, and


 


(3)                                  the
Company’s Board of Directors determines in reasonable good faith that the
Company will receive or such Subsidiary will receive, as applicable, fair
market value for such Asset Sale.”


 


In
addition, the eighth paragraph of Section 4.13 entitled “Limitation on
Sales of Assets and Subsidiary Stock” is hereby amended and restated to read in
its entirety as follows:


 


“Notwithstanding,
and without complying with, the provisions of this Section 4.13:


 





















 


(1)           the Company and its Subsidiaries may, in the ordinary
course of business, (a) convey, sell, transfer, assign or otherwise
dispose of inventory and other assets acquired and held for resale in the
ordinary course of business and (b) liquidate Cash Equivalents;


 


(2)           the Company and its Subsidiaries may convey, sell,
transfer, assign or otherwise dispose of assets pursuant to and in accordance
with Article V;


 


(3)           the Company may and its Subsidiaries may sell or dispose
of damaged, worn out or other obsolete personal property in the ordinary course
of business so long as such property is no longer necessary for the proper
conduct of the Company’s business or the business of such Subsidiary, as
applicable;


 


(4)           the Company and the Guarantors may convey, sell, transfer,
assign or otherwise dispose of assets to the Company or any Guarantor;


 


(5)           the Company may and its Subsidiaries may settle, release
or surrender tort or other litigation claims in the ordinary course of business
or grant Liens not prohibited by this Indenture; and


 


(6)           the Company may and its Subsidiaries may make Permitted
Investments pursuant to clause (e), (h) or (i) of the definition
thereof and Restricted Investments that are not prohibited by Section 4.3.”


 


ARTICLE TWO


 


MISCELLANEOUS


 


SECTION 2.01.  Effective
Date of this Supplemental Indenture. 
This Supplemental Indenture shall be executed, delivered and effective
as of the date first written above but shall not become operative until such
time as the Consent Conditions (as defined in the Solicitation Statement) have
been satisfied or waived and payment of the Consent Payment (as defined in the
Solicitation Statement) has been made by the Issuer in accordance with the
Solicitation Statement.


 


SECTION 2.02.  Reference
to and Effect on the Indenture.  On
and after the effective date, each reference in the Indenture to “this
Indenture,” “hereunder,” “hereof,” or “herein” (and all references to the
Indenture in any other agreements, documents or instruments) shall mean and be
a reference to the Indenture as supplemented by this Supplemental Indenture,
unless the context otherwise requires. 
The Indenture, as supplemented by this Supplemental Indenture, shall be
read, taken and construed as one and the same instrument.  Except as specifically amended above, the
Indenture shall remain in full force and effect and is hereby ratified and
confirmed.


 


SECTION 2.03.  Governing
Law.  Section 12.8 of the
Indenture shall apply to this Supplemental Indenture.


 


SECTION 2.04.  Trust
Indenture Act Controls.  No
modification of any provisions of the Indenture effected by this Supplemental
Indenture is intended to eliminate or limit any provision of the Indenture that
is required to be included therein by the Trust Indenture Act of 1939, as amended,
as in force as of the effectiveness of this Supplemental Indenture.


 


SECTION 2.05.  Trustee
Disclaimer; Trust.  The recitals
contained in this Supplemental Indenture shall be taken as the statements of
the Issuer and the Guarantors, and the Trustee assumes no 


 

















 


responsibility
for their correctness.  The Trustee makes
no representations as to the validity or sufficiency of this Supplemental
Indenture.  The Trustee accepts the trust
created by the Indenture, as supplemented by this Supplemental Indenture, and
agrees to perform the same upon the terms and conditions of the Indenture, as
supplemented hereby.


 


SECTION 2.06.  Counterparts.  This Supplemental Indenture may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall constitute but one and the same instrument.


 


SECTION 2.07.  Effect
of Headings.  The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.


 


[Signature Pages Follow]


 

















 


IN WITNESS WHEREOF, the parties hereto have
caused this Supplemental Indenture to be duly executed all as of the date
hereof.


 


	
  ISSUER:

  	
   

  
	
   

  	
  MTR
  GAMING GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Robert F. Griffin

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Robert
  F. Griffin

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President
  and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  GUARANTORS:

  	
   

  
	
   

  	
  MOUNTAINEER
  PARK, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Robert F. Griffin

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Robert
  F. Griffin

  
	
   

  	
   

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PRESQUE
  ISLE DOWNS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John W. Bittner Jr.

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John
  W. Bittner Jr.

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief
  Financial Officer and Chief Accounting Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPEAKEASY
  GAMING OF LAS VEGAS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John W. Bittner Jr.

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John
  W. Bittner Jr.

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Asst.
  Secretary and Chief Accounting Officer

  



 

















 


	
   

  	
  MTR-HARNESS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John W. Bittner Jr.

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John
  W. Bittner Jr.

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief
  Financial Officer and Chief Accounting Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SCIOTO
  DOWNS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John W. Bittner Jr.

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John
  W. Bittner Jr.

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief
  Financial Officer and Chief Accounting Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JACKSON
  RACING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John W. Bittner Jr.

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John
  W. Bittner Jr.

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief
  Financial Officer and Chief Accounting Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WILMINGTON
  TRUST COMPANY, as Trustee

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steven Cimalore

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Steven
  Cimalore

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President