EXHIBIT 4.2




 





REGISTRATION RIGHTS AGREEMENT


Dated as of November 25, 2003


by and among


MANDALAY RESORT GROUP


and


BANC
OF AMERICA SECURITIES LLC 

CITIGROUP GLOBAL MARKETS INC.

DEUTSCHE BANK SECURITIES INC.

CREDIT SUISSE FIRST BOSTON LLC

J.P. MORGAN SECURITIES INC. 

SG COWEN SECURITIES CORPORATION

CREDIT LYONNAIS SECURITIES (USA) INC. 

SCOTIA CAPITAL (USA) INC. 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

MIZUHO INTERNATIONAL plc 

WELLS FARGO SECURITIES, LLC 






 





 

















REGISTRATION
RIGHTS AGREEMENT


THIS REGISTRATION RIGHTS
AGREEMENT (the “Agreement”) is made and entered into as of
November 25, 2003 by and among MANDALAY RESORT GROUP, a Nevada
corporation (the “Company”), and BANC OF AMERICA SECURITIES LLC (“Banc of America”),
CITIGROUP GLOBAL MARKETS INC., DEUTSCHE BANK SECURITIES INC., CREDIT SUISSE
FIRST BOSTON LLC, J.P. MORGAN SECURITIES INC., SG COWEN SECURITIES CORPORATION,
CREDIT LYONNAIS SECURITIES (USA) INC., SCOTIA CAPITAL (USA) INC., MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED, MIZUHO INTERNATIONAL plc and
WELLS FARGO SECURITIES, LLC (collectively, the “Initial Purchasers”).


This Agreement is made
pursuant to the Purchase Agreement dated November 13, 2003 by and
among the Company and the Initial Purchasers (the “Purchase Agreement”)
that provides for, among other things, the sale by the Company to the Initial
Purchasers of an aggregate of $250,000,000 principal amount of the Company’s 6
3/8% Senior Notes due 2011 (the “Notes”).  In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide to the Initial Purchasers
and their direct and indirect transferees the registration rights set forth in
this Agreement.  The execution and delivery
of this Agreement is a condition to the closing under the Purchase Agreement.


In consideration of the
foregoing, the parties hereto agree as follows:


1.  Definitions.  As used in this Agreement, the following
capitalized defined terms shall have the following meanings:


“Additional Interest”
see Section 2(e) hereof.


“Advice” see the last
paragraph Section 3 hereof.


“Applicable Period”
see Section 3(s) hereof.


“Banc of America”
shall have the meaning set forth in the preamble to this Agreement.


“Business Day” shall
mean a day that is not a Saturday, a Sunday, or a day on which banking
institutions in New York, New York are required to be closed.


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


 


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“Company” shall have
the meaning set forth in the preamble to this Agreement and also includes the
Company’s successors and permitted assigns.


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


“Effectiveness Period”
see Section 2(b) hereof.


“Effectiveness Target
Date” see Section 2(e) hereof.


“Event Date” see Section
2(e) hereof.


“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.


“Exchange Offer”
shall mean the exchange offer by the Company of Exchange Notes for Notes
pursuant to Section 2(a) hereof.


“Exchange Offer
Registration” shall mean a registration under the Securities Act effected
pursuant to Section 2(a) hereof.


“Exchange Offer
Registration Statement” shall mean an exchange offer registration statement
on Form S-1, S-3 or S-4 (or, if applicable, on another appropriate form), and
all amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.


“Exchange Period” see
Section 2(a) hereof.


“Exchange Notes”
shall mean the 6 3/8% Senior Notes due 2011, issued by the Company under the
Indenture containing terms identical to the Notes (except that (i) interest
thereon shall accrue from the last date on which interest was paid on the Notes
or, if no such interest has been paid, from the Issue Date, (ii) the transfer
restrictions with respect to the Notes and all registration rights in respect
thereof shall be eliminated and (iii) the provisions relating to Additional
Interest to be offered to Holders of Notes in exchange for Notes pursuant to
the Exchange Offer shall be eliminated).


“Holders” shall mean
the Initial Purchasers, for so long as they own any Transfer Restricted Notes,
each of their direct and indirect successors, assigns and transferees who
become registered owners of Transfer Restricted Notes under the Indenture and
each Participating Broker-Dealer that holds Exchange Notes for so long as such
Participating Broker-Dealer is required to deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Notes.


 


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“Indenture” shall
mean the Indenture relating to the Notes dated as of November 25, 2003
between the Company and The Bank of New York, as trustee, as the same may be
amended from time to time in accordance with the terms thereof.


“Initial Purchasers”
shall have the meaning set forth in the preamble to this Agreement.


“Inspectors” see
Section 3(m) hereof.


“Issue Date” shall
mean the date on which the Notes are originally issued.


“Majority Holders”
shall mean the Holders of a majority of the aggregate principal amount of
outstanding Transfer Restricted Notes.


“Notes” shall have
the meaning set forth in the preamble of this Agreement.


“Participating
Broker-Dealer” shall have the meaning set forth in Section 3(s)
hereof.


“Person” shall mean
an individual, partnership, corporation, trust or unincorporated organization,
or a government or agency or political subdivision thereof.


“Private Exchange”
see Section 2(a) hereof.


“Private Exchange Notes”
see Section 2(a) hereof.


“Prospectus” shall
mean the prospectus included in a Registration Statement, including any
preliminary prospectus, and any such prospectus as amended or supplemented by
any prospectus supplement, including a prospectus supplement with respect to
the terms of the offering of any portion of the Transfer Restricted Notes
covered by a Shelf Registration Statement, and by all other amendments and
supplements to a prospectus, including post-effective amendments, and in each
case including all material incorporated by reference therein.


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


“Records” see Section 3(m)
hereof.


“Registration Expenses”
shall mean any and all expenses incident to performance of or compliance by the
Company with this Agreement, including without limitation:  (i) all applicable SEC, stock exchange or
National Association of Securities Dealers, Inc. (the “NASD”)
registration and filing fees, (ii) all fees and expenses in-


 


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curred in connection with
compliance with state securities or blue sky laws (including reasonable fees
and disbursements of one counsel for Holders that are Initial Purchasers in
connection with blue sky qualification of any of the Exchange Notes or Transfer
Restricted Notes) and compliance with the rules of the NASD, (iii) all
applicable expenses incurred by the Company in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto, and in
preparing or assisting in preparing any other documents relating to the
performance of and compliance with this Agreement, (iv) all rating agency fees,
if any, (v) the fees and disbursements of counsel for the Company, (vii) all
fees and expenses incurred in connection with the listing, if any, of any of
the Transfer Restricted Notes on any securities exchange or exchanges, if the
Company, in its discretion, elects to make any such listing; but excluding fees
of counsel to the Holders and underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of Transfer
Restricted Notes by a Holder.


“Registration Statement”
shall mean any registration statement (including, without limitation, the
Exchange Offer Registration Statement and the Shelf Registration Statement) of
the Company which covers any of the Exchange Notes or Transfer Restricted Notes
pursuant to the provisions of this Agreement, and all amendments and supplements
to any such Registration Statement, including post-effective amendments, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.


“SEC” shall mean the
Securities and Exchange Commission.


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


“Shelf Registration”
shall mean a registration effected pursuant to Section 2(b) hereof.


“Shelf Registration Event
Date” see Section 2(b).


“Shelf Registration
Statement” shall mean a “shelf” registration statement of the Company
pursuant to the provisions of Section 2(b) hereof that covers all of the
Transfer Restricted Notes or all of the Private Exchange Notes, as the case may
be, on an appropriate form under Rule 415 under the Securities Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.


“Target Consummation Date”
see Section 2(a).


 


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“Target Effectiveness
Date” see Section 2(a).


“TIA” shall have the
meaning set forth in Section 3(k) hereof.


“Transfer Restricted
Notes” means each Note until (i) the date on which such has been
exchanged by a person other than a broker-dealer for an Exchange Note in the Exchange
Offer, (ii) following the exchange by a broker-dealer in the Exchange
Offer of a Note for an Exchange Note, the date on which such Exchange Note is
sold to a purchaser who receives from such broker-dealer on or prior to the
date of such sale a copy of the prospectus contained in the Exchange Offer
Registration Statement, (iii) the date on which such Note has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement, (iv) the date on which such Note is
distributed to the public pursuant to Rule 144(k) under the Securities Act
(or any similar provision then in force, but not Rule 144A under the Securities
Act), (v) such Note shall have been otherwise transferred by the holder
thereof and a new Note not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of such Note
shall not require registration or qualification under the Securities Act or any
similar state law then in force or (vi) such Note ceases to be
outstanding.


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


2.  Registration Under the
Securities Act.


(a)  Exchange
Offer.  The Company shall, for the
benefit of the Holders, at the Company’s cost, (i) unless the Exchange Offer
would not be permitted by applicable law or SEC policy, file with the SEC
within 90 days after the Closing Time an Exchange Offer Registration Statement
on an appropriate form under the Securities Act covering the offer by the
Company to the Holders to exchange all of the Transfer Restricted Notes (other
than Private Exchange Notes (as defined below)) for a like principal amount of
Exchange Notes, (ii) unless the Exchange Offer would not be permitted by
applicable law or SEC policy, use its best efforts to have such Exchange Offer
Registration Statement declared effective under the Securities Act by the SEC
not later than 150 days after the Closing Time (the “Target Effectiveness
Date”), (iii) have such Registration Statement remain effective until
the closing of the Exchange Offer and (iv) unless the Exchange Offer would
not be permitted by applicable law or SEC policy, commence the Exchange Offer
and use its best efforts to issue, on or prior to the 180th day after the
Closing Time (the “Target Consummation Date”), Exchange Notes in exchange
for all Notes tendered prior thereto in the Exchange Offer.  Upon the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Exchange Offer,
it being the objective of such Exchange Offer to enable each Holder eligible
and electing to participate in the Exchange Offer to exchange Transfer
Restricted Notes for Exchange Notes (assuming that such Holder is not an
affiliate of the Company within the mean-


 


 


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ing of Rule 405 under the Securities
Act and is not a broker-dealer tendering Transfer Restricted Notes acquired
directly from the Company for its own account, acquires the Exchange Notes in
the ordinary course of such Holder’s business and has no arrangements or understandings
with any Person to participate in the Exchange Offer for the purpose of
distributing (within the meaning of the Securities Act) the Exchange Notes) and
to transfer such Exchange Notes from and after their receipt without any
limitations or restrictions under the Securities Act and under state securities
or blue sky laws.


In connection with the
Exchange Offer, the Company shall:


                    (i)        mail to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents;


                   (ii)        keep the Exchange Offer open for
acceptance for a period of not less than 30 calendar Days after the date notice
thereof is mailed to the Holders (or longer if required by applicable law)
(such period referred to herein as the “Exchange Period”);


                  (iii)        utilize the services of the Depositary
for the Exchange Offer;


                  (iv)        permit Holders to withdraw tendered
Notes at any time prior to the close of business, New York time, on the last
Business Day of the Exchange Period, by sending to the institution specified in
the notice, a telegram, telex, facsimile transmission or letter setting forth
the name of such Holder, the principal amount of Notes delivered for exchange,
and a statement that such Holder is withdrawing his election to have such Notes
exchanged; and


                   (v)        otherwise comply in all material
respects with all applicable laws relating to the Exchange Offer.


If, prior to consummation of
the Exchange Offer, the Initial Purchasers hold any Notes acquired by them and
not having been sold in the initial distribution, the Company upon the request
of any Initial Purchaser shall, simultaneously with the delivery of the Exchange
Notes in the Exchange Offer, issue and deliver to such Initial Purchaser in
exchange (the “Private Exchange”) for the Notes held by such Initial
Purchaser, a like principal amount of debt securities of the Company that are
identical (except that such securities shall bear appropriate transfer
restrictions) to the Exchange Notes (the “Private Exchange Notes”).


The Exchange Notes and the
Private Exchange Notes shall be issued under (i) the Indenture or (ii) an
indenture identical to all material respects to the Indenture and that, in
either case, has been qualified under the TIA or is exempt from such
qualification and shall 


 


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provide that the Exchange
Notes shall not be subject to the transfer restrictions set forth in the
Indenture.  The Indenture or such
indenture shall provide that the Exchange Notes, the Private Exchange Notes and
the Notes shall vote and consent together on all matters as one class and that
none of the Exchange Notes, the Private Exchange Notes or the Notes will have
the right to vote or consent as a separate class on any matter.  The Private Exchange Notes shall be of the
same series as and the Company shall use all commercially reasonable efforts to
have the Private Exchange Notes bear the same CUSIP number as the Exchange
Notes.  The Company shall not have any
liability under this Agreement solely as a result of such Private Exchange
Notes not bearing the same CUSIP number as the Exchange Notes.


The Exchange Offer and the
Private Exchange shall not be subject to any conditions, other than that (i)
the Exchange Offer or Private Exchange, as the case may be, does not violate
applicable law or any applicable interpretation of the staff of the SEC, (ii)
no action or proceeding shall have been instituted or threatened in any court
or by any governmental agency that might materially impair the ability of the
Company to proceed with the Exchange Offer or the Private Exchange, and no
material adverse development shall have occurred in any existing action or
proceeding with respect to the Company and (iii) all governmental approvals
shall have been obtained, which approvals the Company deems necessary for the
consummation of the Exchange Offer or Private Exchange.  As soon as practicable after the close of
the Exchange Offer and/or the Private Exchange, as the case may be, the Company
shall:


                    (i)        accept for exchange all Transfer
Restricted Notes or portions thereof properly tendered and not validly
withdrawn pursuant to the Exchange Offer in accordance with the terms of the
Exchange Offer Registration Statement and the letter of transmittal that is an
exhibit thereto;


                   (ii)        accept for exchange all Notes properly
tendered pursuant to the Private Exchange; and


                  (iii)        deliver, or cause to be delivered, to
the Trustee for cancellation all Transfer Restricted Notes or portions thereof
so accepted for exchange by the Company, and issue, and cause the Trustee under
the Indenture to promptly authenticate and deliver to each Holder, a new
Exchange Note or Private Exchange Note, as the case may be, equal in principal
amount to the principal amount of the Transfer Restricted Notes surrendered by
such Holder and accepted for exchange.


To the extent not prohibited
by any law or applicable interpretation of the staff of the SEC, the Company
shall use its best efforts to complete the Exchange Offer as provided above and
shall comply with the applicable requirements of the Securities Act, the Exchange
Act and other applicable laws in connection with the Exchange Offer.  Each Holder of Transfer Restricted Notes who
wishes to exchange such Transfer Restricted Notes for Exchange 


 


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Notes in the Exchange Offer
will be required to make certain customary representations in connection
therewith, including representations that such Holder is not an affiliate of
the Company within the meaning of Rule 405 under the Securities Act, that any
Exchange Notes to be received by it will be acquired in the ordinary course of
business and that at the time of the commencement of the Exchange Offer it has
no arrangement with any Person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Notes.  The Company shall inform the Initial Purchasers of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchasers
shall have the right to contact such Holders and otherwise facilitate the
tender of Transfer Restricted Notes in the Exchange Offer.


Upon
consummation of the Exchange Offer in accordance with this Section 2(a),
the provisions of this Agreement shall continue to apply, mutatis mutandis,
solely with respect to Transfer Restricted Notes that are Private Exchange
Notes and Exchange Notes held by Participating Broker-Dealers, and the Company
shall have no further obligation to register Transfer Restricted Notes (other
than Private Exchange Notes) pursuant to Section 2(b) hereof.


(b)  Shelf Registration.  If (i) the Company is not permitted to
file the Exchange Offer Registration Statement or to consummate the Exchange
Offer because the Exchange Offer is not permitted by applicable law or SEC
policy, (ii) the Exchange Offer is not for any other reason consummated by
the Target Consummation Date, (iii) any holder of Notes notifies the
Company that (a) due to a change in law or policy, in the opinion of counsel,
it is not entitled to participate in the Exchange Offer, (b) due to a
change in law or policy, in the opinion of counsel, it may not resell the
Exchange Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and (x) the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales
by such holder and (y) such prospectus is not promptly amended or modified
in order to be suitable for use in connection with such resales for such holder
and all similarly situated holders or (c) it is a broker-dealer and owns
Notes acquired directly from the Company or an affiliate of the Company,
(iv) the holders of a majority of the Notes may not resell the Exchange
Notes acquired by them in the Exchange Offer to the public without restriction
under the Securities Act and without restriction under applicable blue sky or
state securities laws or (v) the Exchange Offer shall not have been
consummated within 180 days after the Issue Date (the date of any of (i)-(v),
the “Shelf Registration Event Date”), then the Company shall, at its
cost, use its best efforts to cause to be filed a Shelf Registration Statement
prior to the later of (A) 60 days after the Shelf Registration Event Date and
(B) 180 days after the Issue Date and use its best efforts to cause the Shelf
Registration Statement to be declared effective by the SEC on or prior to 90
days after the filing of the Shelf Registration Statement.  Each Holder as to which any Shelf Registration
is being effected agrees to furnish to the Company all informa-


 


 


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tion
with respect to such Holder necessary to make any information previously
furnished to the Company by such Holder not materially misleading.


The Company agrees to use
its best efforts to keep the Shelf Registration Statement continuously
effective for a  period of two years
from the date the Shelf Registration Statement is declared effective under the
Securities Act by the SEC (the “Shelf Effectiveness Date”), or until one year
after the Shelf Effectiveness Date if the Shelf Registration Statement is filed
at the request of an Initial Purchaser, or in either case, such longer period
as may be required by applicable law (subject to extension pursuant to the last
paragraph of Section 3 hereof) (or such shorter period that will terminate when
all of the Transfer Restricted Notes covered by such Shelf Registration
Statement have been sold pursuant thereto or cease to be outstanding) (the “Effectiveness
Period”); provided, however, that the Effectiveness Period in
respect of the Shelf Registration Statement shall be extended to the extent
required to permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174 under the Securities Act and as otherwise provided
herein.  The Company shall not permit
any securities other than Transfer Restricted Notes to be included in the Shelf
Registration.  The Company further
agrees, if necessary, to supplement or amend the Shelf Registration Statement,
if required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or
by the Securities Act or by any other rules and regulations thereunder for
shelf registrations, and the Company agrees to furnish to the Holders of
Transfer Restricted Notes copies of any such supplement or amendment promptly
after its being used or filed with the SEC.


(c)  Expenses.  The Company shall pay all Registration
Expenses in connection with the registration pursuant to Section 2(a) or 2(b)
hereof and the reasonable fees and expenses of one counsel, if any, designated
in writing by the Majority Holders to act as counsel for the Holders of the
Transfer Restricted Notes in connection with a Shelf Registration
Statement.  Except as provided in the preceding
sentence, each Holder shall pay all expenses of its own counsel, underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder’s Transfer Restricted Notes pursuant to the Shelf
Registration Statement.


(d)  Effective
Registration Statement.  An Exchange
Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf
Registration Statement pursuant to Section 2(b) hereof will not be deemed to
have become effective unless it has been declared effective by the SEC; provided,
however, that if, after it has been declared effective, the offering of
Transfer Restricted Notes pursuant to a Shelf Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such Registration Statement will be
deemed not to have been effective during the period of such interference, until
the offering of Transfer Restricted Notes may legally resume.  The Company will be deemed not to have used
its best efforts to cause the Exchange 


 


 


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Offer Registration Statement
or the Shelf Registration Statement, as the case may be, to become, or to
remain, effective during the requisite period if it voluntarily takes any
action that would result in any such Registration Statement not being declared
effective or in the Holders of Transfer Restricted Notes covered thereby not
being able to exchange or offer and sell such Transfer Restricted Notes during
that period, unless such action is required by applicable law and except as
otherwise provided in the second paragraph of Section 2(e) below.


(e)  Additional
Interest.  In the event that (i) the
applicable Registration Statement is not filed with the SEC on or prior to the
date specified herein for such filing, (ii) the applicable Registration
Statement is not declared effective on or prior to the date specified herein for
such effectiveness after such obligation arises (the “Effectiveness Target
Date”), (iii) if the Exchange Offer is required to be consummated hereunder,
the Company fails to consummate the Exchange Offer by the Target Consummation
Date with respect to the Exchange Offer Registration Statement or (iv) the
applicable Registration Statement is filed and declared effective during the
period effectiveness is required by Section 2(e) and 3(a) but shall thereafter
cease to be effective or usable without being succeeded immediately by an additional
Registration Statement covering the Transfer Restricted Notes that has been
filed and declared effective (each such event referred to in clauses (i)
through (iv), a “Registration Default”), then the interest rate on the
Transfer Restricted Notes as to which such Registration Default relates will
increase (“Additional Interest”), with respect to the first 90-day
period (or portion thereof) while a Registration Default is continuing
immediately following the occurrence of such Registration Default in an amount
equal to 0.25% per annum of the principal amount of the Notes.  The rate of additional Interest will
increase by an additional 0.25% per annum of the principal amount of the Notes
for each subsequent 90-day period (or portion thereof) while a Registration
Default is continuing until all Registration Defaults have been cured, up to a
maximum amount of 1.00% of the principal amount of the Notes.  Additional Interest shall be computed based
on the actual number of days elapsed during which any such Registration
Defaults exists.  Following the cure of
a Registration Default, the accrual of Additional Interest with respect to such
Registration Default will cease.


If the Company issues a
notice that the Shelf Registration Statement is unusable due to the pendency of
an announcement of a material corporate transaction, or such notice is required
under applicable securities laws to be issued by the Company, and the aggregate
number of days in any consecutive twelve-month period for which the Shelf
Registration Statement shall not be usable due to all such notices issued or
required to be issued exceeds 60 days in the aggregate, then the interest rate
borne by the Notes will be increased by 0.25% per annum of the principal amount
of the Notes for the first 90-day period (or portion thereof) beginning on the
31st such date that such Shelf Registration Statement ceases to be usable,
which rate shall be increased by an additional 0.25% per annum of the principal
amount of the Notes at the beginning of each subsequent 90-day period (or
portion thereof), up to a maximum amount of 1.00% of the principal amount of
the Notes.  Upon the Shelf Registration 


 


 


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Statement once again
becoming usable, the interest rate borne by the Notes will be reduced to the
original interest rate if the Company is otherwise in compliance with this
Agreement at such time.  Additional
Interest shall be computed based on the actual number of days elapsed in each 90-day
period in which the Shelf Registration Statement is unusable.


The Company shall notify the
Trustee within three Business Days after each and every date on which an event
occurs in respect of which Additional Interest is required to be paid (an “Event
Date”).  Additional Interest shall
be paid by depositing with the Trustee, in trust, for the benefit of the
Holders of Transfer Restricted Notes, on or before the applicable semi-annual
interest payment date, immediately available funds in sums sufficient to pay
the Additional Interest then due.  The
Additional Interest due shall be payable on each interest payment date to the
record Holder of Notes entitled to receive the interest payment to be paid on
such date as set forth in the Indenture. 
Each obligation to pay Additional Interest shall be deemed to accrue
from and including the day following the applicable Event Date.


3.  Registration Procedures.  In connection with the obligations of the Company
with respect to the Registration Statements pursuant to Sections 2(a) and 2(b)
hereof, the Company shall:


                     (a)      prepare and file with the SEC a
Registration Statement or Registration Statements as prescribed by Sections
2(a) and 2(b) hereof within the relevant time period specified in Section 2
hereof on the appropriate form under the Securities Act, which form (i) shall
be selected by the Company, (ii) shall, in the case of a Shelf Registration, be
available for the sale of the Transfer Restricted Notes by the selling Holders
thereof and (iii) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith; and use its best efforts to cause
such Registration Statement to become effective and remain effective in accordance
with Section 2 hereof.  The Company
shall not file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must provide information
for inclusion therein without the Holders being afforded an opportunity to
review such documentation a reasonable time prior to the filing of such
document if the Majority Holders or such Participating Broker-Dealer, as the
case may be, their counsel or the managing underwriters, if any, shall reasonably
object;


                     (b)      prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be; and cause
each Prospectus to be supplemented by any required prospectus supplement and as
so supplemented to be filed pursuant to Rule 424 (or any similar provision then
in force) under the Securities Act, and comply with the provisions of the Securities
Act, the Exchange Act and the rules and regulations promulgated there-


 


 


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under applicable to it with respect to the
disposition of all securities covered by each Registration Statement during the
Effectiveness Period or the Applicable Period, as the case may be, in
accordance with the intended method or methods of distribution by the selling
Holders thereof described in this Agreement (including sales by any Participating
Broker-Dealer);


                     (c)      in the case of a Shelf Registration,
(i) notify each Holder of Transfer Restricted Notes, at least three
Business Days prior to filing, that a Shelf Registration Statement with respect
to the Transfer Restricted Notes is being filed and advising such Holder that
the distribution of Transfer Restricted Notes will be made in accordance with
the method selected by the Majority Holders; and (ii) furnish to each
Holder of Transfer Restricted Notes, without charge, as many copies of each
Prospectus, and any amendment or supplement thereto and such other documents as
such Holder may reasonably request, in order to facilitate the disposition of
the Transfer Restricted Notes; and (iii) subject to the last paragraph of
Section 3 hereof, hereby consent to the use of the Prospectus or any amendment
or supplement thereto by each of the selling Holders of Transfer Restricted
Notes in connection with the offering and sale of the Transfer Restricted Notes
covered by such Prospectus or any amendment or supplement thereto subject to
the limitations on the use thereof provided in Sections 2(d) and 2(e);


                     (d)      in the case of a Shelf Registration, use
its best efforts to register or qualify, as may be required by applicable law,
the Transfer Restricted Notes under all applicable state securities or “blue
sky” laws of such jurisdictions by the time the applicable Registration Statement
is declared effective by the SEC as any Holder of Transfer Restricted Notes
covered by a Registration Statement shall reasonably request in advance of such
date of effectiveness, and do any and all other acts and things that may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Transfer Restricted Notes owned
by such Holder; provided, however, that the Company shall not be
required to (i) qualify as a foreign corporation or as a broker or dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), (ii) file any general consent to service of
process or (iii) subject itself to taxation in any such jurisdiction if it is
not so subject;


                     (e)      in the case of (1) a Shelf
Registration or (2) Participating Broker-Dealers who have notified the
Company that they will be utilizing the Prospectus contained in the Exchange
Offer Registration Statement as provided in Section 3(s) hereof, notify each
Holder of Transfer Restricted Notes, or such Participating Broker-Dealers, as
the case may be, and their counsel if known to the Company, if any, promptly
and confirm such notice in writing (i) when a Registration Statement has be-


 


 


13

















 


come effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for amendments and supplements to a
Registration Statement or Prospectus or for additional information after the
Registration Statement has become effective, (iii) of the issuance by the SEC
or any state securities authority of any stop order suspending the effectiveness
of a Registration Statement or the initiation of any proceedings for that
purpose, (iv) if the Company receives any notification with respect to the
suspension of the qualification of the Transfer Restricted Notes or the Exchange
Notes to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction
or the initiation of any proceeding for such purpose, (v) of the happening
of any event or the failure of any event to occur or the discovery of any facts
or otherwise, during the period a Shelf Registration Statement is effective
that makes any statement made in such Registration Statement or the related
Prospectus untrue in any material respect or that causes such Registration
Statement or Prospectus to omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and (vi) of the Company’s reasonable determination
that a post-effective amendment to the Registration Statement would be appropriate;


                      (f)      make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement as soon as practicable;


                     (g)      in the case of a Shelf Registration,
furnish to each Holder of Transfer Restricted Notes, without charge, at least
one conformed copy of each Registration Statement relating to such Shelf
Registration and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless requested);


                     (h)      in the case of a Shelf Registration,
cooperate with the selling Holders of Transfer Restricted Notes to facilitate
the timely preparation and delivery of certificates not bearing any restrictive
legends representing Notes covered by such Shelf Registration to be sold and
relating to the subsequent transfer of such Notes; and cause such Transfer
Restricted Notes to be in such denominations (consistent with the provisions of
the Indenture) and registered in such names as the selling Holders may reasonably
request at least two Business Days prior to the closing of any sale of Transfer
Restricted Notes;


                      (i)      in the case of a Shelf Registration or an
Exchange Offer Registration, upon the occurrence of any circumstance contemplated
by Section 3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi) hereof, use its
best efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Transfer Restricted Notes, such 


 


 


14

















 


Prospectus will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an event,
and each Holder hereby agrees to suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such misstatement
or omission;


                      (j)      obtain a CUSIP number for all Exchange
Notes or Private Exchange Notes, as the case may be, not later than the
effective date of a Registration Statement, and provide the Trustee with
certificates for the Exchange Notes or the Private Exchange Notes, as the case
may be, in a form eligible for deposit with the Depositary;


                     (k)      cause the Indenture to be qualified under
the Trust Indenture Act of 1939, as amended (the “TIA”), in connection
with the registration of the Exchange Notes or Transfer Restricted Notes, as
the case may be, cooperate with the Trustee and the Holders to effect such
changes to the Indenture as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA and execute, and use its best
efforts to cause the Trustee to execute, all documents as may be required to
effect such changes, and all other forms and documents required to be filed
with the SEC to enable the Indenture to be so qualified in a timely manner;


                      (l)      in the case of a Shelf Registration, enter
into such agreements (including underwriting agreements) and take all such other
appropriate actions as are reasonably requested in order to expedite or
facilitate the registration or the disposition of such Transfer Restricted
Notes, and in such connection, (i) make such representations and
warranties to Holders of such Transfer Restricted Notes with respect to the business
of the Company and its subsidiaries as then conducted and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to underwriters
in underwritten offerings, and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company and updates thereof in form
and substance reasonably satisfactory to the Holders of a majority in principal
amount of the Transfer Restricted Notes being sold, addressed to each selling
Holder covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such Holders; (iii) obtain “cold comfort” letters and updates thereof from
the independent certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the Registration
Statement), addressed to the selling Holders of Transfer Restricted Notes, such
letters to be in customary form and covering matters of the type customarily
covered in 


 


 


15

















 


“cold comfort” letters in connection with
underwritten offerings and such other matters as reasonably requested by such
selling Holders; and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 4 hereof (or such other provisions
and procedures acceptable to the Company and the Holders of a majority in aggregate
principal amount of Transfer Restricted Notes covered by such Registration with
respect to all parties to be indemnified pursuant to said Section including,
without limitation, such selling Holders). 
The above shall be done at each closing in respect of the sale of
Transfer Restricted Notes, or as and to the extent required thereunder;


                    (m)      if (1) a Shelf Registration is filed
pursuant to Section 2(b) or (2) a Prospectus contained in an Exchange
Offer Registration Statement filed pursuant to Section  2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, make available for inspection by each such
person who would be an “underwriter” as a result of either (i) the sale by such
person of Notes covered by such Shelf Registration Statement or (ii) the sale
during the Applicable Period by a Participating Broker-Dealer of Exchange Notes
(provided that a Participating Broker-Dealer shall not be deemed to be an
underwriter solely as a result of it being required to deliver a prospectus in
connection with any resale of Exchange Notes) and any attorney, accountant or
other agent retained by any such person (collectively, the “Inspectors”),
at the offices where normally kept, during reasonable business hours, all
financial and other records, pertinent corporate documents and properties of
the Company and its subsidiaries (collectively, the “Records”) as shall
be reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the Company
and its subsidiaries to supply all information in each case reasonably
requested by any such Inspector in connection with such Registration Statement.  Records that the Company determines, in good
faith, to be confidential and any Records that it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless (i) the
disclosure of such Records is necessary to avoid or correct a material misstatement
or omission in such Registration Statement during a period with respect to
which the Company has not given notice that the Registration Statement is
unusable, (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or
(iii) the information in such Records has been made generally available to
the public, and, in the instances referred to in clauses (i) and (ii), the
notice to the Company and related provisions described in this Section 2(m)
have been complied with.  Each selling
Holder of such Transfer Restricted Notes and each such Participating
Broker-Dealer will be required to agree that information obtained by it as a
result of such inspections shall be deemed confidential and shall not be used
by it as the basis for any market transactions in the securities of the Company
unless and until such is made generally available to the public.  Each 


 


 


16

















 


Selling Holder of such Transfer Restricted Notes and
each such Participating Broker-Dealer will be required to further agree that it
will, upon learning that disclosure of such Records is necessary to avoid or
correct a material misstatement or omission under the circumstances described
in clause (i) above, give notice to the Company and allow the Company at its
expense to correct the material misstatement or omission.  Each selling Holder of such Transfer
Restricted Notes and each such Participating Broker-Dealer will be required to
further agree that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company and
allow the Company at its expense to undertake appropriate action to prevent
disclosure of the Records deemed confidential;


                     (n)      comply with all applicable rules and
regulations of the SEC and make generally available to its securityholders
earning statements satisfying the provisions of  Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 60 days
after the end of any 12-month period (or 135 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any
fiscal quarter in which Transfer Restricted Notes are sold to underwriters in a
firm commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods;


                     (o)      upon consummation of an Exchange Offer or
a Private Exchange, obtain an opinion of counsel to the Company addressed to
the Trustee for the benefit of all Holders of Transfer Restricted Notes
participating in the Exchange Offer or the Private Exchange, as the case may
be, that (i) the Company has duly authorized, executed and delivered the
Exchange Notes and Private Exchange Notes, as the case may be, and
(ii) each of the Exchange Notes or the Private Exchange Notes, as the case
may be, constitute a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its respective terms (in each case, with
customary exceptions);


                     (p)      if an Exchange Offer or a Private Exchange
is to be consummated, upon proper delivery of the Transfer Restricted Notes by
Holders to the Company (or to such other Person as directed by the Company) in
exchange for the Exchange Notes or the Private Exchange Notes, as the case may
be, the Company shall mark, or cause to be marked, on such Transfer Restricted
Notes and on the books of the Trustee, the Transfer Agent, the Registrar and
the Depositary delivered by such Holders that such Transfer Restricted Notes
are being canceled in exchange for the Exchange Notes or the Private Exchange
Notes, as the case may be; but in no event shall such Transfer Restricted Notes
be marked as paid or otherwise satisfied solely as a result of being 


 


 


17

















 


exchanged for Exchange Notes or Private Exchange
Notes in the Exchange Offer or the Private Exchange, as the case may be;


                     (q)      cooperate with each seller of Transfer Restricted
Notes covered by any Registration Statement participating in the disposition of
such Transfer Restricted Notes and one counsel acting on behalf of all such
sellers in connection with the filings, if any, required to be made with the
NASD;


                      (r)      use its best efforts to take all other
steps necessary to effect the registration of the Transfer Restricted Notes
covered by a Registration Statement contemplated hereby; and


                     (s)      (A) 
in the case of the Exchange Offer Registration Statement (i) include in
the Exchange Offer Registration Statement a section entitled “Plan of Distribution,”
which section shall be reasonably acceptable to Banc of America, as representative
of the Initial Purchasers, and which shall contain a summary statement of the
positions taken or policies made by the staff of the SEC with respect to the
potential “underwriter” status of any broker-dealer (a “Participating
Broker-Dealer”) that holds Transfer Restricted Notes acquired for its own
account as a result of market-making activities or other trading activities and
that will be the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) of Exchange Notes to be received by such broker-dealer in the Exchange
Offer, whether such positions or policies have been publicly disseminated by
the staff of the SEC or such positions or policies, in the reasonable judgment
of Banc of America, as representative of the Initial Purchasers, represent the
prevailing views of the staff of the SEC, including a statement that any such
broker-dealer who receives Exchange Notes for Transfer Restricted Notes
pursuant to the Exchange Offer may be deemed a statutory underwriter and must
deliver a prospectus meeting the requirements of the Securities Act in connection
with any resale of such Exchange Notes, (ii) furnish to each Participating
Broker-Dealer who has delivered to the Company the notice referred to in
Section 3(e), without charge, as many copies of each Prospectus included in the
Exchange Offer Registration Statement, and any amendment or supplement thereto,
as such Participating Broker-Dealer may reasonably request; (iii) hereby
consent to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto, by any Person
subject to the prospectus delivery requirements of the SEC, including all
Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Notes covered by the Prospectus or any amendment or supplement
thereto, (iv) use its best efforts to keep the Exchange Offer Registration
Statement effective and to amend and supplement the Prospectus contained
therein in order to permit such Prospectus to be lawfully delivered by all
Persons subject to the prospectus delivery requirements of the Securities Act
for such period of time as such Persons must comply with such re-


 


 


18

















 


quirements in order to resell the Exchange Notes; provided,
however, that such period shall not be required to exceed 90 days (or
such longer period if extended pursuant to the last sentence of Section 3
hereof) (the “Applicable Period”), and (iv) include in the transmittal
letter or similar documentation to be executed by an exchange offeree in order
to participate in the Exchange Offer (x) the following provision:


“If the exchange offeree is a broker-dealer holding
Transfer Restricted Notes acquired for its own account as a result of
market-making activities or other trading activities, it will deliver a
prospectus meeting the requirements of the Securities Act in connection with
any resale of Exchange Notes received in respect of such Transfer Restricted
Notes pursuant to the Exchange Offer;”


and
(y) a statement to the effect that by a broker-dealer making the acknowledgment
described in clause (x) and by delivering a Prospectus in connection with the
exchange of Transfer Restricted Notes, such broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the Securities Act; and


 (B)  in the case of any Exchange Offer
Registration Statement, the Company agrees to deliver, upon request, to the
Trustee or to Participating Broker-Dealers upon consummation of the Exchange
Offer (i) an opinion of counsel substantially in the form attached hereto as
Exhibit A, and (ii) an officers’ certificate containing certifications
substantially similar to those set forth in Section 5(d) of the Purchase
Agreement.


The Company may require each
seller of Transfer Restricted Notes as to which any registration is being
effected to furnish to the Company such information regarding such seller and
the proposed distribution of such Transfer Restricted Notes, as the Company may
from time to time reasonably request in writing.  The Company may exclude from such registration the Transfer
Restricted Notes of any seller who fails to furnish such information within a
reasonable time (not to exceed 10 Business Days) after receiving such request
and shall be under no obligation to compensate any such seller for any lost
income, interest or other opportunity forgone, or any liability incurred, as a
result of the Company’s decision to exclude such seller.


In the case of (1) a
Shelf Registration Statement or (2) Participating Broker-Dealers who have
notified the Company that they will be utilizing the Prospectus contained in
the Exchange Offer Registration Statement as provided in Section 3(s) hereof,
that are seeking to sell Exchange Notes and are required to deliver
Prospectuses, each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Notes pursuant to a
Registration Statement until such Holder’s receipt of the copies of the
supplemented or amended Prospectus contemplated 


 


 


19

















 


by Section 3(i) hereof or
until it is advised in writing (the “Advice”) by the Company that the
use of the applicable Prospectus may be resumed, and, if so directed by the
Company, such Holder will deliver to the Company (at the Company’s expense) all
copies in such Holder’s possession, other than permanent file copies then in
such Holder’s possession, of the Prospectus covering such Transfer Restricted
Notes or Exchange Notes, as the case may be, current at the time of receipt of
such notice.  If the Company shall give
any such notice to suspend the disposition of Transfer Restricted Notes or
Exchange Notes, as the case may be, pursuant to a Registration Statement, the
Company shall use its best efforts to file and have declared effective (if an
amendment) as soon as practicable an amendment or supplement to the Registration
Statement or Prospectus and, in the case of an amendment, have such amendment
declared effective as soon as practicable and shall extend the period during
which such Registration Statement shall be maintained effective pursuant to
this Agreement by the number of days in the period from and including the date
of the giving of such notice to and including the date when the Company shall
have made available to the Holders (x) copies of the supplemented or
amended Prospectus necessary to resume such dispositions or (y) the Advice.


4.  Indemnification
and Contribution.  (a)  The Company shall indemnify and hold
harmless each Initial Purchaser, each Holder, each Participating Broker-Dealer,
each underwriter who participates in an offering of Transfer Restricted Notes,
their respective affiliates, each Person, if any, who controls any of such
parties within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, as follows:


                    (i)        against any and all loss, liability,
claim, damage and expense whatsoever, joint or several, as incurred, arising
out of any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement (or any amendment or supplement thereto), covering
Transfer Restricted Notes or Exchange Notes, including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;


                   (ii)        against any and all loss, liability,
claim, damage and expense whatsoever, joint or several, as incurred, to the extent
of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any court or governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission; provided
that (subject to Sections 4(c) and 4(d) below) any such settlement is effected
with the prior written consent of the Company; and


 


 


20

















 


                  (iii)        against any and all expenses whatsoever,
as incurred (including reasonable fees and disbursements of one counsel (in
addition to any local counsel) chosen by Banc of America, such Holder, such
Participating Broker-Dealer or any underwriter (except to the extent otherwise
expressly provided in Section 4(c) hereof)), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation
or proceeding by any court or governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) of this Section 4(a);


provided, however,
that this indemnity does not apply to any loss, liability, claim, damage or
expense to the extent arising out of an untrue statement or omission or alleged
untrue statement or omission (i) made in reliance upon and in conformity
with written information furnished in writing to the Company by or on behalf of
such Initial Purchaser, such Holder, such Participating Broker-Dealer or any
underwriter with respect to such Initial Purchaser, Holder, Participating
Broker-Dealer or underwriter, as the case may be, expressly for use in the Registration
Statement (or any amendment or supplement thereto) or any Prospectus (or any
amendment or supplement thereto) or (ii) contained in any preliminary
prospectus if such Initial Purchaser, such Holder, such Participating
Broker-Dealer or such underwriter failed to send or deliver a copy of the Prospectus
(in the form it was first provided to such parties for confirmation of sales)
to the Person asserting such losses, claims, damages or liabilities on or prior
to the delivery of written confirmation of any sale of securities covered
thereby to such Person in any case where the Company shall have previously
furnished copies thereof to such Initial Purchaser, such Holder, such
Participating Broker-Dealer or such underwriter, as the case may be, in
accordance with this Agreement, at or prior to the written confirmation of the
sale of such Notes to such Person and the untrue statement contained in or the
omission from the preliminary prospectus was corrected in the Final Prospectus
(or any amendment or supplement thereto). 
Any amounts advanced by the Company to an indemnified party pursuant to
this Section 4 as a result of such losses shall be returned to the Company if
it shall be finally determined by a court of competent jurisdiction in a
judgment not subject to appeal or final review that such indemnified party was
not entitled to indemnification by the Company.


(b)  Each
Holder agrees, severally and not jointly, to indemnify and hold harmless the
Company, each Initial Purchaser, each underwriter who participates in an
offering of Transfer Restricted Notes and the other selling Holders and each of
their respective directors and each Person, if any, who controls any of the
Company, any Initial Purchaser, any underwriter or any other selling Holder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
against any and all loss, liability, claim, damage and expense whatsoever
described in the indemnity contained in Section 4(a) hereof, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
or supplement thereto) or any Prospectus (or any 


 


 


21

















 


amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such selling Holder with respect to such
Holder expressly for use in the 
Registration Statement (or any supplement thereto), or any such
Prospectus (or any amendment thereto); provided, however, that,
in the case of the Shelf Registration Statement, no such Holder shall be liable
for any claims hereunder in excess of the amount of net proceeds received by
such Holder from the sale of Transfer Restricted Notes pursuant to the Shelf
Registration Statement; provided, further, however, that
for purposes of Section 4(a)(iii), such counsel shall (subject to Section 4(c)
hereof) be chosen by the Company.


(c)  Each
indemnified party shall give notice as promptly as reasonably practicable to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability that it may have otherwise than on
account of this indemnity agreement.  In
the case of parties indemnified pursuant to Section 4(a) above, one
counsel to all the indemnified parties shall be selected by Banc of America,
and, in the case of parties indemnified pursuant to Section 4(b) above,
counsel to all the indemnified parties shall be selected by the Company.  An indemnifying party may participate at its
own expense in the defense of any such action; provided, however,
that counsel to the indemnifying party shall not (except with the consent of
the indemnified party) also be counsel to the indemnified party.  Notwithstanding the foregoing, if it so
elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may
assume the defense of such action with counsel chosen by it and approved by the
indemnified parties defendant in such action (which approval shall not be
unreasonably withheld), unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to
them which are different from or in addition to those available to such
indemnifying party.  If an indemnifying
party assumes the defense of such action, the indemnifying parties shall not be
liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action.  In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions arising out of the same
general allegations or circumstances. 
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 4 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent
(i) includes a full and unconditional release of each indemnified party
from all liability arising out of such litigation, investigation, proceeding or



 


 


22

















 


claim and the offer and sale
of any Notes and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.


(d)  If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel
pursuant to Section 4(a)(iii) above, then such indemnifying party agrees that
it shall be liable for any settlement of the nature contemplated by Section
4(a)(ii) effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.  Notwithstanding the
immediately preceding sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, an indemnifying party shall not be liable for any settlement
of the nature contemplated by Section 6(a)(ii) effected without its consent if
such indemnifying party (i) reimburses the indemnified party in accordance with
such request to the extent it considers such request to be reasonable and (ii)
provides written notice to the indemnified party which states the indemnifying
party’s basis for its belief that any unpaid balance of such request is
unreasonable, in each case prior to the date of such settlement.


(e)  In order
to provide for just and equitable contribution in circumstances under which any
of the indemnity provisions set forth in this Section 4 is for any reason
held to be unavailable to the indemnified parties although applicable in
accordance with its terms, the Company, the Initial Purchasers and the Holders,
as applicable, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, the Initial Purchasers and the Holders; provided,
however, that no Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person that was not guilty of such fraudulent
misrepresentation.  As between the
Company and the Initial Purchasers and the Holders, such parties shall
contribute to such aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by such indemnity agreement in such proportion as
shall be appropriate to reflect the relative fault of the Company on the one
hand and of the Holder of Transfer Restricted Notes, the Participating
Broker-Dealer or Initial Purchaser, as the case may be, on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.


The relative fault of the
Company on the one hand and the Holder of Transfer Restricted Notes, the
Participating Broker-Dealer or the Initial Purchasers, as the case may be, on
the other hand shall be determined by reference to, among other things, whether
the untrue 


 


 


23

















 


or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, or by the Holder of Transfer Restricted
Notes, the Participating  Broker-Dealer
or the Initial Purchasers, as the case may be, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.


The Company and the Holders
of the Transfer Restricted Notes and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 4.


For purposes of this Section
4, each affiliate of any Person, if any, who controls a Holder of Transfer
Restricted Notes, an Initial Purchaser or a Participating Broker-Dealer within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as such other Person, and each
director of the Company, each affiliate of the Company, each executive officer
of the Company who signed the Registration Statement, and each Person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
the Company.


5.  Miscellaneous.


(a)  Rule
144 and Rule 144A.  The Company
shall provide to each Holder such reports as are required under Section 4.07
of the Indenture and, upon the request of any Holder of Transfer Restricted
Notes (a) make publicly available such information as is necessary to permit
sales pursuant to Rule 144 under the Securities Act, (b) deliver such
information to a prospective purchaser as is necessary to permit sales pursuant
to Rule 144A under the Securities Act and it will take such further action as
any Holder of Transfer Restricted Notes may reasonably request, and (c) take
such further action, if any, that is reasonable in the circumstances, in each
case, to the extent required from time to time to enable such Holder to sell
its Transfer Restricted Notes without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, (ii) Rule 144A
under the Securities Act, as such rule may be amended from time to time, or
(iii) any similar rules or regulations hereafter adopted by the SEC.  Upon the reasonable request of any Holder of
Transfer Restricted Notes, the Company will deliver to such Holder a written
statement as to whether they have complied with such requirements.


(b)  No
Inconsistent Agreements.  The rights
granted to the Holders hereunder do not, and will not for the term of this
Agreement in any way conflict with and are not, and will not during the term of
this Agreement be inconsistent with the rights granted to the hold-


 


 


24

















 


ers of the Company’s other issued
and outstanding securities under any other agreements entered into by the
Company.


(c)  Amendments
and Waivers.  The provisions of this
Agreement, including provisions of this sentence, may not be amended, modified
or supplemented, and waivers or consents to departures from the provisions
hereof may not be given, otherwise than with the prior written consent of the
Company and the Majority Holders; provided, however, that no
amendment, modification, or supplement or waiver or consent to the departure with
respect to the provisions of Section 4 hereof shall be effective as against any
Holder of Transfer Restricted Notes or the Company unless consented to in
writing by such Holder of Transfer Restricted Notes or the Company, as the case
may be.


(d)  Notices.  All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address given
by such Holder to the Company by means of a notice given in accordance with the
provisions of this Section 5(d), which address initially is, with respect
to the Initial Purchasers, the address set forth in the Purchase Agreement; and
(ii) if to the Company, initially at the Company’s address set forth in
the Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 5(d).


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


Copies of all such notices,
demands, or other communications shall be concurrently delivered by the Person
giving the same to the Trustee, at the address specified in the Indenture.


(e)  Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors, assigns and
transferees of the Initial Purchasers, including, without limitation and
without the need for an express assignment, subsequent Holders; provided,
however, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Notes in violation of the
terms of the Purchase Agreement or the Indenture.  If any  transferee of any Holder
shall acquire Transfer Restricted Notes, in any manner, whether by operation of
law or otherwise, such Transfer Restricted Notes shall be held subject to all
of the terms of this Agreement, and by taking and holding such Transfer
Restricted Notes, such Person shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this Agreement and
such Person shall be entitled to receive the benefits hereof.


 


 


25

















 


(f)  Third
Party Beneficiary.  Each of the
Initial Purchasers and each Holder shall be a third party beneficiary of the
agreements made hereunder between the Company, on the one hand, and the Initial
Purchasers, on the other hand, and shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of Holders hereunder.


(g)  Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.


(h)  Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.


(i)  GOVERNING
LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
Specified times of day refer to New York City time.


(j)  Severability.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.


(k)  Notes
Held by the Company or Any of Its Affiliates.  Whenever the consent or approval of Holders of a specified percentage
of Transfer Restricted Notes is required hereunder, Transfer Restricted Notes
held by the Company or any of their affiliates (as such term is defined in Rule
405 under the Securities Act) shall not be counted in determining whether  such consent or approval was given by the
Holders of such required percentage.


[Signature
Page Follows]


 


 


26

















 


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




	
  MANDALAY RESORT GROUP

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  Glenn W. Schaeffer

  
	
   

  	
  Name:

  	
  Glenn W. Schaeffer

  
	
   

  	
  Title:

  	
  President

  






 


Confirmed and accepted as of the date first
above written:


 


BANC OF AMERICA SECURITIES LLC 

CITIGROUP GLOBAL MARKETS INC.

DEUTSCHE BANK SECURITIES INC.

CREDIT SUISSE FIRST BOSTON LLC

J.P. MORGAN SECURITIES INC.

SG COWEN SECURITIES CORPORATION

CREDIT LYONNAIS SECURITIES (USA) INC. 

SCOTIA CAPITAL (USA) INC. 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

MIZUHO INTERNATIONAL plc

WELLS FARGO SECURITIES, LLC 




	
  By:

  	
  Banc of America Securities
  LLC

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Bruce R. Thompson

  
	
   

  	
  Name:

  	
  Bruce R. Thompson

  
	
   

  	
  Title:

  	
  Managing Director

  



 

















 


Exhibit A


Form
of Opinion of Counsel


1.             Each of the Exchange Offer Registration Statement and the
Prospectus (other than the financial statements, notes and schedules thereto
and other financial and statistical information and supplemental schedules
included or referred to therein or omitted therefrom and the Form T-1, as to
which such counsel need express no opinion), complies as to form in all
material respects with the applicable requirements of the Securities Act and
the applicable rules and regulations promulgated under the Securities Act.


2.             In the course of such counsel’s review and discussion of
the contents of the Exchange Offer Registration Statement and the Prospectus
with certain officers and other representatives of the Company and
representatives of the independent certified public accountants of the Company,
but without independent check or verification or responsibility for the
accuracy, completeness or fairness of the statements contained therein, on the
basis of the foregoing (relying as to materiality to a large extent upon
representations and opinions of officers and other representatives of the
Company), no facts have come to such counsel’s attention which cause such
counsel to believe that the Exchange Offer Registration Statement (other than
the financial statements, notes and schedules thereto and other financial and
statistical information contained or referred to therein and the Form T-1, as
to which such counsel need express no belief), at the time the Exchange Offer
Registration Statement became effective and at the time of the consummation of
the Exchange Offer, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading, or that the Prospectus (other than
the financial statements, notes and schedules thereto and other financial and
statistical information contained or referred to therein, as to which such
counsel need express no belief) contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not misleading.