sec document





                                                                     Exhibit 4.5


                                                           STATE OF DELAWARE
                                                           SECRETARY OF STATE
                                                        DIVISION OF CORPORATIONS
                                                       FILED 09:00 AM 02/08/2000
                                                          001063665 - 2329793


                           CERTIFICATE OF DESIGNATIONS
                     SETTING FORTH THE PREFERENCES, RIGHTS
                   AND LIMITATIONS OF SERIES D PREFERRED STOCK
                        OF ALPHA HOSPITALITY CORPORATION


     The undersigned officers of ALPHA HOSPITALITY CORPORATION (the
"Corporation"), a Delaware corporation, DO HEREBY CERTIFY that, pursuant to the
provisions of Section 151 of the General Corporation Law of the State of
Delaware:

     1. The name of the Corporation is Alpha Hospitality Corporation and the
Corporation is validly existing and incorporated.

     2. On February 7, 2000, pursuant to authority vested in the Board of
Directors by Article FOURTH of the Corporation's Certificate of Incorporation,
the Board of Directors established a series of up to 4,000 shares of Series D
Preferred Stock of the Corporation, par value $ .01 per share, and adopted the
following preambles and resolutions with respect to the Certificate of
Designations of the Series D Preferred Stock:

     WHEREAS, the Corporation desires to create a new series of its Preferred
     Stock to be designated as "Series D) Preferred Stock";

     NOW THEREFORE. it is hereby

     RESOLVED, that a new series of the class of authorized preferred stock of
     the Corporation, designated "Series D Preferred Stock," be hereby created,
     and that the designation and amount thereof and the voting powers,
     preferences and relative, participating, optional and other special rights
     of the shares of such series, and the qualifications, limitations and
     restrictions thereof shall be as set forth below:

     Section 1. Designation and Amount; Par Value.

     The shares of such series shall be designated as "Series D Preferred Stock"
     and the number of shares constituting such series shall be 4,000, The par
     value of each share of the series shall be $.01. Each share of the Series
     D Preferred Stock shall have a stated value of $1,000.

     Section 2. Dividends on Series D Preferred Stock.

     The Corporation shall pay dividends on the stated value of each share of
     the Series D Preferred Stock at the rate of 7 % per annum, computed based
     an a 360-day year consisting of twelve 30-day months; provided that the
     applicable dividend rate will permanently increase to 15% per annum upon
     the occurrence of the events described in the second paragraph of Section
     4(a) below. Dividends shall be cumulative with respect to each share of the
     Series D Preferred Stock while such share is outstanding. Dividends shall
     be payable in arrears on the earlier to occur of (1) the date of conversion
     of a share of the Series D Preferred Stock into Common Stock (as defined





     in Section 4 below) as provided herein and (ii) the Redemption Date (as
     defined below). At the opiion of the Corporation, dividends may be payable
     to the holder of shares of the Series D Preferred Stock registered on the
     books of the Corporation (the "Holder") in the form of either (i) 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 or (ii) provided, and
     to the extent, that the Maximum Share Issuance (as defined in Section 4(a)
     below) shall not have occurred in respect of the shares of Series D
     Preferred Stock held by such Holder, the number of full shares of Common
     Stock that the amount of accrued dividends payable would entitle such
     Holder to acquire based upon a price per share equal to the Conversion
     Price (as defined in Section 4(a) below) determined as if the Conversion
     Date were the date on which such dividends became payable. The Corporation
     shall notify the Holder in writing within two (2) business days of the date
     Notice of Conversion by the Holder is received by the Corporation or five
     (5) business days prior to the Redemption Date, as applicable, of the form
     in which the Corporation elects to pay accumulated dividends. In the event
     the Corporation fails to timely provide such notice, payments of dividends
     shall be in Common Stock.

     Section 3. Redemption.

            (a) REDEMPTION DATE; MANDATORY REDEMPTION DATE.

                    (1) The "Redemption Date" shall mean, (i) in the case of a
mandatory redemption, the Mandatory Redemption Date, (ii) in the case of
redemption upon a Redemption Event (as defined below), the date a demand for
redemption is made following such Redemption Event, or (iii) in the case of an
elective redemption in the event of a Change of Control (as defined below), the
time immediately prior to the consummation of the Change of Control Transaction
(as defined below).

                    (2) The "Mandatory Redemption Date" shall mean February 8,
2005.

                    (3) The "Default Redemption Date" shall mean the date a
demand for redemption is made or deemed to be made following a Redemption Event.

            (b) MANDATORY REDEMPTION. On the Mandatory Redemption Date, upon
surrender to the Corporation of the Holder's stock certificate representing then
outstanding shares of the Series D Preferred Stock (the "Series D Stock
Certificates"), the Corporation shall deliver to the Holder, subject to, and
only to the extent such conversion is within the limits of, the Maximum Share
Issuance and the 9.9% Limitation (as defined in Section 4(a) below), the number
of shares of Common Stock determined pursuant to Section 4(a) as if such
Mandatory Redemption Date were the Date of Conversion. In the event the Maximum
Share Issuance prevents any shares of Series D Preferred Stock from being
converted in full, the dividend rate payable on any such remaining outstanding
Shares of Series D of Preferred Stock shall permanently increase to 15% per
annum, payable in cash in arrears, semi-annually on June 30 and December 31 of
each year to the extent such payments in cash are lawful.

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            (c) OTHER REDEMPTION PROVISIONS. The Series D Preferred Stock may
also be redeemed prior to a Change of Control Transaction or following a
Redemption Event, as provided elsewhere herein.

     Section 4. Conversion.

            (a) CONVERSION PRICE; AMOUNT; MAXIMUM SHARE ISSUANCE. Subject to
this Section 4, a Holder has the right to convert shares of the Series D
Preferred Stock, in whole or from time to time in part, into shares of common
stock, par value $.01 per share, of the Corporation (the "Common Stock"), The
price at which the Holder may convert shares of the Series D Preferred Stock (or
any portion thereof) into shares of Common Stock (the "Conversion Price") shall
be the lesser of (i) $6.00 (the "Maximum Conversion Price") and (ii) the
average of the two lowest Closing Prices (as defined below) of the Common Stock
during the 30 consecutive trading days immediately preceding (but excluding) the
Date of Conversion (as defined below) (the "Variable Conversion Price"). The
"Closing Price" with respect to the per share price of Common Stock on any day
means the last reported bid price regular way on NASDAQ Small Cap Market (or the
NASDAQ National Market, the New York Stock Exchange or American Stock Exchange
in the event any such market or exchange constitutes the principal market on
which the Common Stock is quoted or listed or admitted to trading) (such four
markets and exchanges, the "Approved Markets") or, if not quoted or listed or
admitted to trading on any such Approved Market, the closing bid price in the
over-the-counter market as furnished by any New York Stock Exchange member firm
that is selected from time to time by the Corporation for that purpose. In lieu
of any fractional share of Common Stock to which the Holder would otherwise be
entitled upon conversion of shares of the Series D Preferred Stock, the number
of shares of Common Stock issuable upon conversion thereof shall be rounded up
to the nearest whole number. In the case of a dispute as to the calculation of
the Conversion Price, the Holder's calculation shall be deemed conclusive absent
manifest error.

     The maximum number of shares of Common Stock (the "Maximum Share Issuance")
issuable upon conversion of all or any shares of the Series D Preferred Stock
(including shares of Common Stock that (x) the Corporation elects to issue in
payment of dividends as provided in Section 2 hereof and (y) the Holder elects
to receive in the form of Common Stock, if any, pursuant to the Registration
Rights Agreement (as from time to time amended, supplemented, restated or
otherwise modified, the "Registration Rights Agreement"), dated as of the
Initial Issuance Date, between the Corporation and the original purchaser of the
Series D Preferred Stock) is 3,300,000 (subject to adjustment for stock splits,
stock dividends, reclassification or other similar events). In the event there
is more than one Holder of Series D Preferred Stock, the unused portion of the
Maximum Share Issuance shall be allocated on a pro rata basis among the Holders
based upon the aggregate outstanding shares of Series D Preferred Stock. As of
the date on which the Maximum Share Issuance has occurred in respect of a
Holder's entire position of shares of the Series D Preferred Stock (and
accordingly, such Holder is unable to convert its remaining Series D Preferred
Stock into shares of Common Stock), the dividend rate payable on the remaining
shares of the Series D Preferred Stock held by such Holder shall permanently
increase to 15% per annum and shall be payable in arrears in cash on June 30 and
December 31 of each year, to the extent payment in cash shall be lawful
(regardless of whether the allocable Maximum Share Issuance applicable to such


                                       3




Holder's shares of the Series D Preferred Stock subsequently increases as a
result of conversions by other Holdcrs or otherwise).

     Except as otherwise provided herein, the Holder shall be entitled to
convert shares of the Series D Preferred Stock into Common Stock as follows: (i)
during calendar days 1 through 75 following the Initial Issuance Date, up to 25%
of the Holder's original position in shares of the Series D Preferred Stock;
(ii) during calendar days 76 through 150 following the Initial Issuance Date, an
amount that, when added to that previously converted, does not exceed 50% of the
Holder's original position in shares of the Series D Preferred Stock; (iii)
during calendar days 151 through 225 following the Initial Issuance Date, an
amount that, when added to that previously converted, does not exceed 75% of the
Holder's original position in shares of the Series D Preferred Stock; and (iv)
at any time on or after the 226th calendar day following the Initial Issuance
Date, all the remaining outstanding shares of the Series D Preferred Stock. In
the event of any transfer of the Series D Preferred Stock prior to the 226th day
following the Initial Issuance Date, the transferring Holder and the transferee
shall agree (and notify the Corporation in writing) as to the limitation on
their respective ability to convert shares of Series D Preferred Stock (giving
effect to conversion which have already accrued) in order to effectuate the
purpose of the foregoing sentence. The last date on which shares of the Series D
Preferred Stock may be converted is three (3) business days prior to the
Redemption Date. The foregoing limitation on conversion shall not apply to any
conversion to the extent the Closing Price on the trading day immediately
preceding the Date of Conversion is at least $10.00 per share (the "Minimum
Release Price").

     Notwithstanding any other provision of this Section 4, as of any date prior
to the Redemption Date, (i) the aggregate number of shares of Common Stock into
which all shares of the Series D Preferred Stock (inclusive of shares of Common
Stock issuable in payment of accrued dividends) and all other securities
convertible into Common Stock held by a Holder and its affiliates shall be
convertible, together with the shares of Common Stock then beneficially owned
(as defined in the Securities Exchange Act of 1934, at amended (the "Exchange
Act")) by such Holder and its affiliates (excluding shares of Common Stock
otherwise deemed beneficially owned as a result of the convertibility of the
shares of the Series D Preferred Stock held by the Holder or its affiliates),
shall not exceed 4.9% of the total outstanding shares of Common Stock as of such
date. In addition, notwithstanding any other provision of this Section 4, during
any consecutive 61-day period no Holder (together with its affiliates) may (x)
convert its Series D Preferred Stock into a number of shares of Common Stock
exceeding 9.9% of the Corporation's issued and outstanding shares of Common
Stock as of the first day of such 61-day period or sell shares of Common Stock
(whether acquired upon conversion of the Series D Preferred Stock or otherwise
in excess of 9.9% of the Corporation's issued and outstanding shares of Common
stock as of the first day of such 61-day period) (the "9.9% Limitation").
Notwithstanding any other provision of this Certificate of Designations, the
foregoing limitations on conversion may not be waived, amended or modified. The
Corporation shall have no obligation to monitor compliance with the foregoing
limitations on conversion.

          (b) MECHANICS OF CONVERSION. To convert shares of the Series D
Preferred Stock, the Holder must (i) complete and sign a Notice of Conversion in
form acceptable to the Corporation (the "Notice of Conversion") and deliver the
Notice of Conversion to the Corporation as herein provided and (ii) prior to the
date on which delivery of Common Stock is required to be made hereunder, (x)
duly endorse and deliver to the Corporation the Series D Stock Certificate(s)
representing the shares of the Series D Preferred Stock being converted and


                                        4



(y) pay any transfer or similar tax with respect to the delivery of such Series
D Stock Certificate(s) if required. The Holder shall surrender such Series D
Stock Certificate(s) and the Notice of Conversion to the Corporation (with an
advance copy by facsimile of the Notice of Conversion). The date on which
Notice of Conversion is given (the "Date of Conversion") shall be deemed to be
the date of receipt by the Corporation of the facsimile of the Notice of
Conversion, provided that such Series D Stock Certificate(s) are received by the
Corporation within five (5) business days thereafter. The Corporation shall not
be obligated to cause the transfer agent for the Common Stock (the "Transfer
Agent") to issue certificates evidencing the shares of Common Stock issuable
upon such conversion unless either such Series D Stock Certificate has been
received by the Corporation or, if such Series D Stock Certificates) have been
lost, stolen or destroyed, the Holder has executed and delivered to the
Corporation an agreement satisfactory to the Corporation to indemnify the
Corporation from any loss incurred by it in connection with the shares of the
Series D Preferred Stock represented by such Series D Stock Certificate(s).

     If the Transfer Agent is participating in the Depository Trust Company
("DTC") Fast Automated Securities Transfer ("FAST") program, the Corporation
shall cause the Transfer Agent to transmit electronically the shares of Common
Stock issuable to the Holder upon conversion of shares of the Series D Preferred
Stock by crediting the account of the Holder's prime broker with DTC through
DTC's Deposit Withdrawal Agent Commission ("DWAC") system, within three (3)
business days after delivery to the Corporation of the Holder's Series D Stock
Certificate(s). In the event the Holder otherwise elects in writing, however,
the Corporation shall cause the Transfer Agent to issue and deliver (within such
three (3) business day period) to the address of the Holder on the books of the
Corporation, as contemplated by the purchase agreement pursuant to which the
shares of the Series D Preferred Stock being converted were issued (the
"Securities Purchase Agreement"), or as otherwise directed pursuant to the
Notice of Conversion, a certificate or certificaies for the number of shares of
Common Stock to which such Holder shall be entitled as aforesaid. In the event
the Corporation fails to complete such delivery as aforesaid, it shall be
responsible for actual damages incurred by the Holder as a result thereof. The
person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date. Notwithstanding that the
Holder is required to deliver the Series D Stock Certificate(s), duty endorsed,
within five (5) business days after the Date of Conversion, if such Series D
Certificate(s) are not received by the Corporation within ten (10) business days
after the Date of Conversion, the Corporation may at its option elect, by
written notice given to the Holder within fifteen (15) business days after the
Date of Conversion, elect (A) to treat Notice of Conversion as null and void or
(B) to treat the Notice of Conversion as binding and require the Holder to
deliver the applicable Series D Stock Certificate(s). In the event the
Corporation elects to treat the Notice of Conversion as binding, the shares of
Series D Preferred Stock with respect to which such Notice of Conversion was
given shall thereafter no longer be deemed outstanding and the Holder thereof
shall not be entitled to any voting or other rights attendant thereto, excepting
only the right to receive, upon the delivery to the Corporation of the
applicable Series D Stock Ccrtificate(s), the share of Common Stock upon the
conversion thereof as contemplated above.

     Following conversion of a share of the Series D Preferred Stock, such share
will no longer be outstanding and may not be reissued. In the event of the
conversion of less than all of the shares of the Series D Preferred Stock
represented by a Series D Stock Certificate, the Corporation or its Transfer
Agent will issue to the Holder a new stock certificate representing the


                                       5




number of shares of the Series D Preferred Stock not converted or shall endorse
the Series D Stock Certificate to reflect such conversion.

          (c) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock or shares of Common Stock held in treasury, or
both, solely for the purpose of effecting the conversion of the Series D
Preferred Stock, such number of shares of Common Stock as shall from time to
time be sufficient to effect the conversion of the Series D Preferred Stock and
all other securities of the Corporation convertible or exchangeable into Common
Stock.

          (d) ADJUSTMENT TO FIXED CONVERSION PRICE, VARIABLE CONVERSION PRICE,
MAXIMUM SHARE ISSUANCE, MINIMUM TRIGGER PRICE AND MINIMUM RELEASE PRICE.

               (i) If, prior to the conversion of all shares of the Series D
Preferred Stock, the number of outstanding shares of Common Stock is increased
by a stock split, stock dividend of shares of Common Stock or other shares of
capital stock, reclassification or other similar event, the Maximum Conversion
Price, if applicable, and the Variable Conversion Price (together, the
"Conversion Prices") shall be proportionately reduced, or if the number of
outstanding shares of Common Stock is decreased by a combination or
reclassification of shares or other similar event, the Conversion Prices shall
be proportionately increased, in each case, such that a Holder will have the
right to receive upon conversion of shares of the Series D Preferred Stock the
number of shares of Common Stock (or other shares of capital stock) of the
Corporation (notwithstanding the limitation set forth in the fourth paragraph of
Section 4(a)) that such Holder would have been entitled to receive had the
Holder converted such shares of the Series D Preferred Stock immediately prior
to such action. The Maximum Share Issuance, the Minimum Trigger Price (as
defined in clause (iv) below) and the Minimum Release price shall likewise be
proportionately adjusted upon any increase in the number of outstanding shares
of Common Stock on account of any stock split, stock dividend of shares of
Common Stock or other shares of capital stock, reclassification or other similar
event or upon any decrease in number of outstanding shares of Common Stock on
account of any combination or reclassification of shares or other similar event.

               (ii) If, prior to the conversion of all shares of the Series D
Preferred Stock, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization or other similar event (a "Conversion
Reclassification Event"), as a result of which shares of Common Stock shall be
changed into the same or a different number of shares of the Corporation or the
same or another class or classes of stock or securities of the Corporation or
another entity, then the Holder shall thereafter have the right to receive upon
conversion of shares of the Series D Preferred Stock, upon the basis and the
terms and conditions specified herein, such shares of stock and/or securities as
may be issued or payable with respect to or in exchange for the number of shares
of Common Stock immediately theretofore receivable upon the conversion of such
shares of the Series D Preferred Stock (irrespective of the limitations set
forth in Section 4(a)) had such Conversion Reclassification Event not taken
place, and in any such case appropriate provisions shall be made with respect to
the rights and interests of the Holder such that the provisions hereof
(including, without limitation, provisions for adjustment of the Conversion
Price and of the number of shares issuable upon conversion of shares of the
Series D Preferred Stock) shall thereafter be applicable, as nearly as may be
practicable in relation to any shares of stock or securities thereafter
deliverable upon the conversion of shares of the Series D Preferred Stock. The
Corporation shall not effect any Conversion Reclassification  Event unless the


                                       6




resulting successor or acquiring entity (if not the Corporation) assumes by
written instrument the obligation to deliver to the Holder such shares of stock
and/or securities as the Holder is entitled to receive upon conversion in
accordance with the foregoing.

               (iii) In addition to the adjustments set forth above, if the
Corporation distributes to all holders of its Common Stock any of its assets or
debt securities or any rights or warrants to purchase securities other than
Common Stock, then the Conversion Prices shall be adjusted in such a manner as
shall be agreed to by the Corporation and the Holders of a majority of the
outstanding shares of Series D Preferred Stock as shall fairly preserve the
economic rights and benefits of each Holder as contemplated by this Certificate
of Designations. In the event that within 15 days of any such event, the
Corporation and such Holders do not reach an agreement as to the appropriate
adjustment, the Corporation shall retain, and pay for, a nationally recognized
investment bank or accounting firm to determine the appropriate adjustment as
soon as possible, but in any event not later than 45 days, after the date of
such event.

               No adjustment to the Conversion Prices pursuant to any of the
events or circumstances set forth herein shall be made unless such adjustment
shall be in an amount of at least five cents ($0.05); provided, however, that
any adjustment that would otherwise be required to be made hereunder but for the
fact that it is less than five cents ($0.05) shall be carried forward and made
part of any subsequent adjustment that (a) when aggregated with prior
adjustment(s) that have not been made because it was (or each of them was) less
than five cents ($0.05) or (b) is in excess of five cents ($0.05).

               (iv) In the event that, after the Initial Issuance Date, the
     Corporation shall (other than upon the exercise, exchange or conversion of
     any securities of, the Corporation that are exercisable or exchangeable
     for, or convertible into, shares of Common Stock and that are outstanding
     as of the Initial Issuance Date (including, without limitation, the right
     granted to Stanley Tollman to convert deferred compensation into shares of
     Common Stock), upon the exercise of stock options granted under or pursuant
     to any stock option plan approved by shareholders of the Corporation, upon
     the conversion of any shares of Series D Preferred Stock or Parallel
     Preferred Stock (as defined in Section 11 below) or any shares of preferred
     stock issued by the Corporation prior to the Initial Issuance Date or upon
     the issuance of shares of Common Stock in lieu of cash dividends on any
     shares of preferred stock of the Corporation) at any time while any shares
     of the Series D Preferred Stock are outstanding (A) issue shares of Common
     Stock without consideration (other than in the form of a dividend) or at a
     price per share less than the Closing Price on the Initial Issuance Date
     (such Closing Price, the "Minimum Trigger Price") (B) issue options, rights
     or warrants to subscribe for or purchase Common Stock that provide for
     (upon the exercise thereof) the issuance of shares of Common Stock without
     consideration or at a price per share, which when added to the price or
     other consideration received for such options, rights or warrants, is less
     than the Minimum Trigger Price or (C) issue securities convertible into
     Common Stock having a conversion price less than the Minimum Trigger Price,
     the Conversion Prices to be in effect after the date of such issuance shall
     be adjusted by multiplying the Conversion Prices in effect immediately
     prior to the date of any such issuances referenced above by a fraction, of
     which the numerator shall be the number of shares of Common Stock
     outstanding on the date of such issuance plus the number of shares of
     Common Stock that the aggregate offering price of the total number of
     shares of Common Stock so to be issued (or the aggregate issue price of the
     convertible securities so to be issued) would purchase at the Minimum


                                       7




     Trigger Price and of which the denominator shall be the number of shares of
     Common Stock outstanding on the date of such issuance plus the number of
     additional shares of Common Stock to be issued (or into which the
     convertible securities so to be issued are initially convertible). In case
     the price for such securities may be paid in a consideration part or all of
     which shall be in a form other than cash, the value of such consideration
     shall be as determined in good faith by the Board of Directors of the
     Corporation, whose determination shall be conclusive. Such adjustment shall
     be made successively whenever the date of such issuance is fixed and, in
     the event that such options, rights, warrants or convertible securities
     (or portions thereof) expire or are otherwise discharged or redeemed
     without being exercised or converted, any adjustment in the Conversion
     Prices on account of the issuance of the same shall be reversed.

               (v) Adjustments to the Maximum Conversion Price pursuant to this
     Section 4, subject to subsection (i) above and the last sentence of
     subsection (ii) above, shall be permanent. Adjustment to the Variable
     Conversion Price pursuant to this Section 4 shall be made only to the
     extent an event requiring adjustment occurs during the period that the
     Variable Conversion Price is required to be calculated to determine the
     Conversion Price by making adjustments to the applicable Closing Prices
     within such period.

               (vi) If any adjustment under this Section 4(d) would create a
     fractional share of Common Stock or a right to acquire a fractional share
     of Common Stock, such fractional share shall be disregarded and the number
     of shares of Common Stock issuable upon conversion shall be the next higher
     number of shares.

          (e) ADJUSTMENTS OR ADDITIONS TO RIGHTS ATTENDANT TO SERIES D
PREFERRED STOCK. If at any time after the Initial Issuance Date, the
Corporation shall issue a class or series of preferred stock that is convertible
into Common Stock at varying prices based upon the market price of the Common
Stock at the time of conversion ("New Preferred Stock"), which new class or
series contains terms which the Holder determines are more favorable than the
terms of the Series D Preferred Stock, each Holder may elect to have all, but
not less than all, of such terms replace the applicable provisions set forth
herein. In the event such election is not made, the antidilution provisions of
Section 4(d) shall apply. The Corporation shall advise each Holder of the terms
of any New Preferred Stock within five (5) business days of the issuance
thereof, and each Holder shall have thirty (30) business days after receipt of
such notice to make such election; such election to be effective immediately
upon notice by such Holder to the Corporation.

          Section 5. Redemption Events.

          (a) A "Redemption Event" occurs if:

          (1) the Corporation defaults in effecting a conversion of shares of
     the Series D Preferred Stock in accordance with the provisions hereof
     (provided such default was (i) voluntarily caused or permitted by the
     Corporation, (ii) not due to some legal inability and (iii) otherwise
     within the Corporation's reasonable control) and such default continues for
     a period of 10 days; or


                                       8




          (2) the Corporation defaults in the payment of the stated value of or
     dividends on the Series D Preferred Stock when due (provided such default
     was (i) voluntarily caused or permitted by the Corporation, (ii) not due to
     some legal inability and (iii) otherwise within the Corporation's
     reasonable control) and any such default continues for a period of 10 days.

          (b) If a Redemption Event occurs and is continuing, the Holder of
shares of the Series D Preferred Stock may demand that the Corporation redeem
its shares in cash at a price equal to 125% of (i) the stated value plus (ii)
dividends accumulated thereon until such date of redemption.

          Section 6. Change of Control.

          A "Change of Control Transaction" shall mean, (i) the sale, conveyance
or disposition of all or substantially all of the assets of the Corporation,
(ii) a consolidation or merger of the Corporation with or into any other
"Person" (as defined in the Exchange Act) (whether or not the Corporation is the
surviving Person, but other than a merger or consolidation whereby the
stockholders of the Corporation. immediately preceding the merger or
consolidation continue to own greater than 50% of the voting power attributable
to the capital stock of the surviving Person in such merger or consolidation
that is normally entitled to vote in the election of directors, managers or
trustees, as applicable) or, (iii) any Person or any "group" (as such term is
used in Section 13(d) of the Exchange Act), becomes the beneficial owner or is
deemed to beneficially own (as described in Rule 13d-3 under the Exchange Act
without regard to the 60-day exercise period) in excess of 50% of the
Corporation's voting power of the capital stock of the Corporation normally
entitled to vote in the election of directors of the Corporation (other than (A)
any Person or any such group that held such voting power as of the Initial
Issuance Date or (B) any group that holds such voting power subsequent to the
Initial Issuance Date, provided that the Persons that constitute such group
include the Person or a majority of the members of, and at least 50% of the
voting power held by, a group referenced in the foregoing clause (A)).

          Upon the notice or occurrence of, or announcement of the Corporation's
intent (or a third party's or parties' intent in the case of Change of Control
Transaction of the type set forth in clause (iii) of the definition of a Change
of Control Transaction) to engage in, a Change of Control Transaction, then, the
Series D Preferred Stock shall thereupon be convertible in full, notwithstanding
any limitations set forth in Section 4 hereof other than the 9.9% Limitation;
provided that the Holder's ability to convert the Series D Preferred Stock shall
cease three (3) trading days prior to the consummation of a Change of Control
Transaction of the type set forth in clauses (i) and (ii) of the definition
thereof. In addition, upon either the notice of, or the announcement of the
Corporation's intent to engage in, a Change of Control Transaction (of the type
set forth in clauses (i) and (ii) of the definition thereof), the Holder shall
have the right, up to and including the third trading day prior to the date of
effectiveness of such Change of Control Transaction, to elect to convert the
Series D Preferred Stock (subject to the 9.9% Limitation) into a number of
shares equal to 125% of the amount into which such Series D Preferred Stock
would otherwise be convertible, which conversion, in the case of such Change of
Control Transaction, shall be conditioned upon and shall be effective
immediately prior to consummation of such Change of Control Transaction. If the
Holder does not make such an election, the outstanding shares of Series D
Preferred Stock shall be deemed automatically converted into shares of Common
Stock immediately prior to the consummation of such Change of Control
Transaction, and the Holder shall receive the same consideration that a holder
of Common Stock is entitled to receive in connection with such Change of Control

                                       9



Transaction as if it held shares of Common Stock as of such date.

          The Corporation shall promptly mail written notice to the Holder of
either the occurrence of, or the announcement of the Corporation's intent to
engage in, a Change of Control Transaction (with a copy sent by facsimile), but
in any event such notice (other than, if applicable, in the case of a Change of
Control Transaction of the type set forth in clause (iii) of the definition of a
Change of Control Transaction) shall not be given less than twenty (20) days
prior to the effective date of such Change of Control Transaction.

          Section 7. Reacquired Shares.

          Any shares of the Series D Preferred Stock redeemed, purchased,
converted or otherwise acquired by the Corporation in any manner whatsoever
shall not be reissued as part of the Series D Preferred Stock and shall be
retired promptly after the acquisition thereof.  All such shares of the Series D
Preferred Stock upon their retirement and the filing of any certificate required
in connection therewith pursuant to the Delaware General Corporation Law shall
become authorized but unissued shares of Preferred Stock.

          Section 8. Equality.

          All Holders of Series D Preferred Stock shall be subject to the same
terms and conditions as set forth herein. No Holders of Series D Preferred Stock
shall be entitled to or receive terms that are more favorable than those given
to any other Holder of Series D Preferred Stock. In the event a Holder of Series
D Preferred Stock is given by the Corporation or receives from the Corporation
terms more favorable than those given by the Corporation or received from the
Corporation by any other Holder of Series D Preferred Stock, then in such event
all Holders of Series D Preferred Stock shall be given and entitled to those
more favorable terms.

          Section 9. Registered Holder.

          The Corporation may for all purposes treat the holder of shares of the
Series D Preferred Stock registered on the books of the Corporation as the
Holder, notwithstanding any notice or claim by any other Person with respect to
any interest in such shares.

          Section 10. Voting Rights.

          (a) Prior to conversion thereof, Holders of the Series D Preferred
Stock shall not be entitled to any of the rights of a holder of Common Stock,
including without limitation, the right to vote or to attend any meetings of
common stockholders or any other proceedings of the Corporation and shall only
be entitled to such voting rights as are provided by Delaware law and as set
forth in clause (b) below.

          (b) So long as any shares of Series D Preferred Stock are outstanding,
the Corporation shall not, without first obtaining the approval of the Holders
of majority of the outstanding shares of Series D Preferred Stock; (A) alter or
change the rights, preferences or privileges of the Series D Preferred Stock;
(B) alter or change the rights, preferences or privileges of any capital stock
of the Corporation so as to affect adversely the Series D Preferred Stock; (C)
create or issue any Senior Securities (except as provided in Section 11 below);
(D) create or issue any Pari Passu Securities (as defined in Section 11 below)
other than any additional series of preferred stock that has terms (other than


                                       10




the amount of the maximum conversion price) identical or substantially identical
to the terms of the Series D Preferred Stock and the outstanding shares of which
shall not have an aggregate stated value in excess of three million dollars
($3,000,000) and a maximum conversion price which is not set at a discount to
the Closing Price of the Common Stock as the trading date immediately preceding
the date of issuance thereof above the discount that the Maximum Conversion
Price bears to the Closing Price on the trading day immediately preceding the
Initial Issuance Date (such additional series of preferred stock, the "Parallel
Preferred Stock"); (E) increase the authorized number of shares of Series D
Preferred Stock; (F) do any act or thing not authorized or contemplated by this
Certificate of Designation that would result in any taxation with respect to the
Series D Preferred Stock under Section 305 of the Internal Revenue Code of 1986,
as amended, or any comparable provision of the Internal Revenue Code as
hereafter from time to time amended, (or otherwise suffer to exist any such
taxation as a result thereof). Notwithstanding the foregoing, any Holder (and
all of its, his or her successors and assigns) shall be bound by any waiver or
other amendment, modification or other agreement set forth in writing and signed
by such Holder or otherwise obtained in accordance with the immediately
preceding sentence.

          Section 11. Rank.

          All shares of the Series D Preferred Stock shall rank (i) prior to the
Common Stock; (ii) prior to any class or series of capital stock of the
Corporation hereafter created other than the Senior Preferred Stock, the
Parallel Preferred Stock and any other series or class of capital stock of the
Corporation (A) that has been consented to by the Holders of a majority of the
outstanding shares of Series D Preferred Stock, and (B) that specially, by its
terms, ranks senior to or pari passu with the Series D Preferred Stock) (the
Common Stock and any other class or series of capital stock of the Corporation
hereafter created (other than the Senior Preferred Stock and the Parallel
Preferred Stock) that does not specifically, by its terms, rank senior to or
pari passu with the Series D Preferred Stock being hereinafter referred to
collectively as "Junior Securities"); (iii) pari passu with the Parallel
Preferred Stock and any other class or series of capital stock of the
Corporation hereafter created (A) that has been consented to by the Holders of a
majority of the outstanding shares of Series D Preferred Stock and (B) that,
specifically by its terms, ranks on parity with the Series D Preferred Stock
(the "Pan Passu Securities"); and (iv) junior to the Corporation's Series B and
Series C Preferred Stock, the Senior Preferred Stock and any other class or
series of capital stock of the Corporation hereafter created, (A) that has been
consented to by the Holders of a majority of the outstanding shares of Series D
Preferred Stock and (B) that specifically, by its terms, ranks senior to the
Series D Preferred Stock (all of the foregoing, collectively, the "Senior
Securities"), in each case as to distribution of assets upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary.
In the event the Board of Directors of the Corporation, in order to raise
funding or financing all or substantially all of the net proceeds of which are
to be applied or used in the development of the proposed casino and related
projects of the Corporation and/or its subsidiaries and other affiliates in the
Monticello, New York region deems it in the best interests of the Corporation
and its shareholders that the Corporation issue one or more series of preferred
stock (which shall not be convertible into Common Stock based on a variable
market price) ranking senior to the Series D Preferred Stock, the Corporation
shall be entitled to do so and the Holders of the Series D Preferred Stock,
shall be deemed to have consented to the issuance of each such series and that
such series shall rank senior to the Series D Preferred Stock (any such series
of preferred stock, "Senior Preferred Stock").


                                       11



Section 12. Liquidation Preference.

          A. LIQUIDATION OF THE CORPORATION. If the Corporation shall commence
a voluntary case under the U.S. Federal bankruptcy laws or any other applicable
bankruptcy, insolvency or similar law, or consent to the entry of an order for
relief in an involuntary case under any law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Corporation or of any substantial part of its property, or make
an assignment for the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due, or if a decree or order
for relief in respect of the Corporation shall be entered by a court having
jurisdiction in the premises in an involuntary case under the U.S Federal
bankruptcy laws or any other applicable bankruptcy, insolvency or similar law
resulting in the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Corporation or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and any such decree or order shall be unstayed and in effect for a
period of sixty (60) consecutive days and, on account of any such event, the
Corporation shall liquidate, dissolve or wind up, or if the Corporation shall
otherwise liquidate, dissolve or wind up (a "Liquidation Event"), no
distribution shall be made to the holders of any shares of capital stock of the
Corporation (other than Senior Securities and, together with the Holders of
Series D Preferred Stock, the Pari Passu Securities) upon liquidation,
dissolution or winding up unless prior thereto the Holders shall have received
the Liquidation Preference (as hereinafter defined) with respect to each share
of Series D Preferred Stock. If, upon the occurrence of a Liquidation Event, the
assets and funds available for distribution among the Holders and holders of
Pari Passu Securities shall be insufficient to permit the payment to such
Holders of the preferential amounts payable thereon, then the entire assets and
funds of the Corporation legally available for distribution to the Series D
Preferred Stock and the Pari Passu Securities shall be distributed ratably among
such shares in proportion to the ratio that the Liquidation Preference payable
on each such share bears to the aggregate Liquidation Preference payable on all
such shares.

          B. CERTAIN ACTS NOT A LIQUIDATION. The purchase or redemption by the
Corporation of stock of any class or series, in any manner permitted by law,
shall not, for the purposes hereof, be regarded as a liquidation, dissolution or
winding up of the Corporation. Neither the consolidation or merger of the
Corporation with or into any other entity nor the sale or transfer by the
Corporation of less than substantially all of its assets shall, for the purposes
hereof, be deemed to be a liquidation, dissolution or winding up of the
Corporation.

          C. DEFINITION OF LIQUIDATION PREFERENCE, The "Liquidation Preference
with respect to a share of Series D Preferred Stock means an amount equal to the
stated value thereof plus any other amounts that may be due from the Corporation
with respect thereto pursuant to this Certificate of Designation, the Securities
Purchase Agreement or the Registration Rights Agreement. The Liquidation
Preference with respect to any Pari Passu Securities shall be as set forth in
the Certificate of Designation filed in respect thereof and, as applicable, any
other agreements related thereto.

          Section 13. Lost or Destroyed Certificates.

          If a Series D Stock Certificate shall be mutilated, lost, stolen or
destroyed, the Corporation shall execute and deliver, in exchange and
substitution for and upon cancellation of such mutilated Series D Stock
Certificate, or in lieu of or in substitution for a lost, stolen or destroyed


                                       12




Series D Stock Certificate, a new Series D Stock Certificate for the Series D
Stock Certificate so mutilated, lost, stolen or destroyed, but only upon receipt
of evidence of such loss, theft or destruction of such Series D Stock
Certificate, and of the ownership thereof, and indemnity, if requested, all
reasonably satisfactory to the Corporation,

          Section 14. Certain Definitions.

          (a) BUSINESS DAY. For purposes hereof, the term "business day" shall
mean any day on which banks are generally open for business in the City of New
York.

          (b) TRADING DAY. For purposes hereof, the term "trading day" shall
mean any day on which the principal market on which the Common Stock is traded
is open for business.

          (c) PERSON. For purposes hereof, the term "Person" means an individual
or a corporation, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, governmental authority or other
entity of any kind.

          Section 15. Waiver.

          Any waiver by the Corporation or a Holder of a breach of any provision
of this Certificate of Designations shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of the Series D Preferred Stock. The failure of the Corporation or the
Holder to insist upon strict adherence to any term of this Certificate of
Designations on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Certificate of Designations of the Series D
Preferred Stock Any waiver must be in writing.

          Section 16. Unenforceable Provisions.

          If any provision of this Certificate of Designations is invalid,
illegal or unenforceable, the remaining provisions of thereof shall remain in
effect, and if any provision is inapplicable to any Person or circumstance, it
shall nevertheless remain applicable to all other Persons and circumstances,

          Section 17. Copies of Agreements, Instruments, Documents.

          Copies of any of the agreements, instruments or other documents
referred to in this Certificate of Designations shall be furnished to any Holder
of Series D Preferred Stock upon written request to the Corporation at its
principal place of business.

          Section 18. Notices.

          All notices, demands, requests, consents, approvals or other
communications required or permitted to be given hereunder or that are given
with respect to the Series D Preferred Stock shall be in writing and shall be
personally served or deposited in the mail, registered or certified, return
receipt requested, postage prepaid, or delivered by reputable air courier
service with charges prepaid, or transmitted by hand delivery, telegram, telex
or facsimile, addressed as set forth below: (i) if to the Corporation, to: Alpha
Hospitality Corporation, 12 East 49th Street, New York, New York 10017,
Attention: Thomas Aro, Secretary, Facsimile No.: (212) 750-5171 (or to such


                                       13




other address of which notice has been given as herein provided, with copies
(which shall not constitute notice) to: Parker Duryee Rosoff& Haft, 529 Fifth
Avenue, New York, New York 10017, Attention: Herbert F. Kozlov, Esq., Facsimile
No.: (212) 972-9487; and (ii) if to the Holder, to the address of the registered
holder according to the books and records of the Corporation or its transfer
agent. Notice shall be deemed given on the date so served, deposited for
mailing, transmitted by hand delivery, telegram, telex or facsimile or delivered
to a reputable air courier for delivery as contemplated above and shall be
deemed received on the date so served, if served or transmitted by hand
delivery, telegram, telex or facsimile, one business day after being so
delivered to a reputable air courier for delivery as contemplated above or three
business days after being so mailed as contemplated above.

          IN WITNESS WHEREOF, ALPHA HOSPITALITY CORPORATION has caused this
Certificate of Designations to be executed by its Chairman and President and
attested to by its Secretary this 7th dayof February, 2000,


                                     ALPHA HOSPITALITY CORPORATION



                                      /s/ Stanley S. Tollman
                                     -------------------------------------------
                                     Stanley S. Tollman, Chairman and President


ATTEST:



/s/ Thomas W. Aro
------------------------
Thomas W. Aro, Secretary

                                       14