Document:

Exhibit
4.1

 

 

 

MANDALAY RESORT GROUP,

as Issuer

 

 

and

 

 

THE BANK OF NEW YORK,

as Trustee

 

 

 

INDENTURE

 

 

Dated as of July 31, 2003

 

61⁄2% Senior Notes due 2009

 

 

 

 

CROSS-REFERENCE TABLE*

 

	
  TIA

  Section

  	
   

  	
   

  	
  Indenture

  Section 

  
	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
  7.10

  
	
   

  	
  (a)(2)

  	
  7.10

  
	
   

  	
  (a)(3)

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
  7.10

  
	
   

  	
  (b)

  	
  7.08;
  7.10; 12.02

  
	
   

  	
  (c)

  	
  N.A.

  
	
  311

  	
  (a)

  	
  7.11

  
	
   

  	
  (b)

  	
  7.11

  
	
   

  	
  (c)

  	
  N.A.

  
	
   

  	
  312(a)

  	
  2.05

  
	
   

  	
  (b)

  	
  12.03

  
	
   

  	
  (c)

  	
  12.03

  
	
  313

  	
  (a)

  	
  7.06

  
	
   

  	
  (b)

  	
  7.06

  
	
   

  	
  (c)

  	
  7.06;
  12.02

  
	
   

  	
  (d)

  	
  7.06

  
	
  314

  	
  (a)

  	
  4.07;
  12.02

  
	
   

  	
  (b)

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
  12.04

  
	
   

  	
  (c)(2)

  	
  12.04

  
	
   

  	
  (c)(3)

  	
  N.A.

  
	
   

  	
  (d)

  	
  N.A.

  
	
   

  	
  (e)

  	
  12.05

  
	
   

  	
  (f)

  	
  N.A.

  
	
  315

  	
  (a)

  	
  7.01(b)

  
	
   

  	
  (b)

  	
  7.05;
  12.02

  
	
   

  	
  (c)

  	
  7.01(a)

  
	
   

  	
  (d)

  	
  7.01(c)

  
	
   

  	
  (e)

  	
  6.11

  
	
  316

  	
  (a)(last
  sentence)

  	
  12.06

  
	
   

  	
  (a)(1)(A)

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
  6.04

  
	
   

  	
  (a)(2)

  	
  N.A.

  
	
   

  	
  (b)

  	
  6.07

  
					

 

N.A. means Not
Applicable.

 

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

 

 

	
  317

  	
  (a)(1)

  	
  6.08

  
	
   

  	
  (a)(2)

  	
  6.09

  
	
   

  	
  (b)

  	
  2.04

  
	
  318

  	
  (a)

  	
  12.01

  
	
   

  	
  (b)

  	
  N.A.

  
	
   

  	
  (c)

  	
  10.01

  

 

N.A. means Not
Applicable.

 

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

 

 

TABLE OF CONTENTS

 

	
  ARTICLE ONE

  
	
   

  
	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  
	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions.

  
	
  SECTION
  1.02.

  	
  Incorporation
  by Reference of Trust Indenture Act.

  
	
  SECTION 1.03.

  	
  Rules of
  Construction.

  
	
   

  	
   

  
	
  ARTICLE TWO

  
	
   

  
	
  THE SECURITIES

  
	
   

  	
   

  
	
  SECTION 2.01.

  	
  Forms Generally.

  
	
  SECTION
  2.02.

  	
  Execution
  and Authentication; Aggregate Principal Amount; Delivery.

  
	
  SECTION 2.03.

  	
  Registrar and
  Paying Agent.

  
	
  SECTION
  2.04.

  	
  Paying
  Agent To Hold Money in Trust.

  
	
  SECTION 2.05.

  	
  Securityholder
  Lists.

  
	
  SECTION 2.06.

  	
  Transfer and
  Exchange.

  
	
  SECTION 2.07.

  	
  Replacement
  Securities.

  
	
  SECTION 2.08.

  	
  Outstanding
  Securities.

  
	
  SECTION 2.09.

  	
  Temporary
  Securities.

  
	
  SECTION 2.10.

  	
  Cancellation.

  
	
  SECTION 2.11.

  	
  Defaulted Interest.

  
	
  SECTION
  2.12.

  	
  Mandatory
  Disposition of Securities Pursuant to Gaming Laws.

  
	
  SECTION 2.13.

  	
  CUSIP Numbers.

  
	
  SECTION 2.14.

  	
  Restrictive Legends.

  
	
  SECTION
  2.15.

  	
  Book-Entry
  Provisions For Global Security.

  
	
  SECTION
  2.16.

  	
  Special
  Transfer Provisions.

  

 

i

 

	
  ARTICLE THREE

  
	
   

  
	
  [RESERVED]

  
	
   

  
	
  ARTICLE FOUR

  
	
   

  
	
  COVENANTS

  
	
   

  	
   

  
	
  SECTION 4.01.

  	
  Payment of
  Securities.

  
	
  SECTION 4.02.

  	
  Corporate Existence.

  
	
  SECTION
  4.03.

  	
  Payment
  of Taxes and Other Claims.

  
	
  SECTION 4.04.

  	
  Maintenance of
  Properties.

  
	
  SECTION
  4.05.

  	
  Maintenance
  of Office or Agency.

  
	
  SECTION
  4.06.

  	
  Compliance
  Certificate; Notice of Default.

  
	
  SECTION
  4.07.

  	
  Reports.

  
	
  SECTION
  4.08.

  	
  Waiver
  of Stay, Extension of Usury Laws.

  
	
  SECTION 4.09.

  	
  Limitation on Liens.

  
	
  SECTION
  4.10.

  	
  Limitation
  on Sale and Lease-Back Transactions.

  
	
  SECTION
  4.11.

  	
  Defeasance
  of Certain obligations.

  
	
  SECTION 4.12.

  	
  Change of Control.

  
	
   

  	
   

  
	
  ARTICLE FIVE

  
	
   

  
	
  SUCCESSOR
  CORPORATION

  
	
   

  
	
   

  
	
  ARTICLE SIX

  
	
   

  
	
  DEFAULTS
  AND REMEDIES

  
	
   

  	
   

  
	
  SECTION 6.01.

  	
  Events of Default.

  
	
  SECTION 6.02.

  	
  Acceleration.

  
	
  SECTION 6.03.

  	
  Other Remedies.

  
	
  SECTION 6.04.

  	
  Waiver of Past
  Defaults.

  
	
  SECTION 6.05.

  	
  Control by Majority.

  
	
  SECTION 6.06.

  	
  Limitation on Suits.

  
	
  SECTION
  6.07.

  	
  Rights
  of Holders To Receive Payment.

  
	
  SECTION 6.08.

  	
  Collection
  Suit by Trustee.

  
	
  SECTION
  6.09.

  	
  Trustee
  May File Proofs of Claim.

  
	
  SECTION 6.10.

  	
  Priorities.

  
	
  SECTION 6.11.

  	
  Undertaking for
  Costs.

  

 

ii

 

	
  ARTICLE SEVEN

  
	
   

  
	
  TRUSTEE

  
	
   

  	
   

  
	
  SECTION 7.01.

  	
  Duties of Trustee.

  
	
  SECTION 7.02.

  	
  Rights of Trustee.

  
	
  SECTION
  7.03.

  	
  Individual
  Rights of Trustee.

  
	
  SECTION 7.04.

  	
  Trustee’s
  Disclaimer.

  
	
  SECTION 7.05.

  	
  Notice of Defaults.

  
	
  SECTION 7.06.

  	
  Reports by Trustee.

  
	
  SECTION 7.07.

  	
  Compensation
  and Indemnity.

  
	
  SECTION 7.08.

  	
  Replacement of
  Trustee.

  
	
  SECTION
  7.09.

  	
  Successor
  Trustee by Merger, Etc.

  
	
  SECTION
  7.10.

  	
  Eligibility;
  Disqualification.

  
	
  SECTION
  7.11.

  	
  Preferential
  Collection of Claims Against Company.

  
	
  SECTION 7.12.

  	
  Authenticating
  Agent.

  
	
   

  	
   

  
	
  ARTICLE EIGHT

  
	
   

  
	
  DISCHARGE
  OF INDENTURE

  
	
   

  	
   

  
	
  SECTION
  8.01.

  	
  Termination
  of Company’s obligations.

  
	
  SECTION 8.02.

  	
  Application
  of Trust Money.

  
	
  SECTION 8.03.

  	
  Repayment to
  the Company.

  
	
  SECTION 8.04.

  	
  Reinstatement.

  
	
   

  	
   

  
	
  ARTICLE NINE

  
	
   

  
	
  AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  
	
   

  	
   

  
	
  SECTION 9.01.

  	
  Without
  Consent of Holders.

  
	
  SECTION 9.02.

  	
  With Consent of
  Holders.

  
	
  SECTION
  9.03.

  	
  Compliance
  with Trust Indenture Act.

  
	
  SECTION
  9.04.

  	
  Revocation
  and Effect of Consents.

  
	
  SECTION
  9.05.

  	
  Notation
  on or Exchange of Securities.

  
	
  SECTION
  9.06.

  	
  Trustee
  To Sign Amendments, Etc.

  
	
   

  	
   

  
	
  ARTICLE TEN

  
	
   

  
	
  MEETINGS OF SECURITYHOLDERS

  
	
   

  	
   

  
	
  SECTION
  10.01.

  	
  Purposes
  for Which Meetings May Be Called.

  

 

iii

 

	
  SECTION
  10.02.

  	
  Manner of Calling
  Meetings.

  
	
  SECTION
  10.03.

  	
  Call
  of Meetings by Company or Holders.

  
	
  SECTION
  10.04.

  	
  Who
  May Attend and Vote at Meetings.

  
	
  SECTION
  10.05.

  	
  Regulations
  May Be Made by Trustee; Conduct of the Meeting; Voting Rights;
  Adjournment.

  
	
  SECTION
  10.06.

  	
  Voting
  at the Meeting and Record To Be Kept.

  
	
  SECTION
  10.07.

  	
  Exercise
  of Rights of Trustee or Securityholders May Not Be Hindered or Delayed
  by Call of Meeting.

  
	
   

  	
   

  
	
  ARTICLE ELEVEN

  
	
   

  
	
  REDEMPTION

  
	
   

  	
   

  
	
  SECTION 11.01.

  	
  Notices to Trustee.

  
	
  SECTION
  11.02.

  	
  Selection
  of Securities To Be Redeemed.

  
	
  SECTION 11.03.

  	
  Notice of
  Redemption.

  
	
  SECTION
  11.04.

  	
  Effect of
  Notice of Redemption.

  
	
  SECTION
  11.05.

  	
  Deposit of
  Redemption Price.

  
	
  SECTION
  11.06.

  	
  Securities
  Redeemed in Part.

  
	
   

  	
   

  
	
  ARTICLE TWELVE

  
	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  SECTION
  12.01.

  	
  Trust Indenture
  Act Controls.

  
	
  SECTION
  12.02.

  	
  Notices.

  
	
  SECTION
  12.03.

  	
  Communication
  by Holders with Other Holders.

  
	
  SECTION
  12.04.

  	
  Certificates
  and Opinion as to Conditions Precedent.

  
	
  SECTION
  12.05.

  	
  Statements
  Required in Certificate or Opinion.

  
	
  SECTION
  12.06.

  	
  When
  Treasury Securities Disregarded.

  
	
  SECTION
  12.07.

  	
  Rules
  by Paying Agent, Registrar.

  
	
  SECTION 12.08.

  	
  Legal Holidays.

  
	
  SECTION 12.09.

  	
  Governing Law.

  
	
  SECTION
  12.10.

  	
  No
  Adverse Interpretation of Other Agreements.

  
	
  SECTION
  12.11.

  	
  No Recourse
  Against Others.

  
	
  SECTION 12.12.

  	
  Successors.

  
	
  SECTION 12.13.

  	
  Duplicate Originals.

  
	
  SECTION 12.14.

  	
  Severability.

  
	
  SECTION
  12.15.

  	
  Effect
  of Headings, Table of Contents, Etc.

  
	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of Initial Security

  
	
  Exhibit B

  	
  -

  	
  Form of Exchange Security

  

 

iv

 

	
  Exhibit C

  	
  -

  	
  Form of Certificate To Be Delivered in
  Connection with Transfers to Non-QIB Accredited Investors

  
	
  Exhibit D

  	
  -

  	
  Form of Certificate To Be Delivered in
  Connection with Transfers Pursuant to Regulation S

  

 

v

 

INDENTURE, dated as of July 31, 2003, between
Mandalay Resort Group, a Nevada corporation (“Company”), and The Bank of New
York, a New York banking corporation, as Trustee (“Trustee”).

 

RECITALS

 

The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance of its 61⁄2% Series A
Senior Notes due 2009 and the issuance of 61⁄2% Series B Senior Notes due
2009 to be exchanged for the Initial Securities (as defined herein).

 

All things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration of the premises and the
purchase of the Securities by the Holders (as hereinafter defined) thereof, it
is mutually covenanted and agreed, for the equal and proportionate benefit of
the Holders of the Securities, as follows:

 

ARTICLE ONE

 

DEFINITIONS
AND INCORPORATION BY REFERENCE

 

SECTION 1.01.                      Definitions.

 

“Additional Securities” shall mean Securities issued
under this Indenture after the Issue Date in accordance with Section 2.02.

 

“Affiliate” of any specified Person means any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person.  For purposes of this definition, “control” (including, with
correlative meaning, the term “controlling,” “controlled by” and “under common
control with”) as used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by agreement or otherwise.

 

“Authenticating Agent” shall have the meaning provided
in Section 7.12.

 

“Bankruptcy Law” shall have the meaning provided in
Section 6.01.

 

“Board of Directors” means the Board of Directors of
the Company or any committee of such Board.

 

 

“Board Resolution” means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full force and effect
on the date of such certification and delivered to the Trustee.

 

“Capital lease obligation” means, at the time any
determination thereof is to be made, the amount of the liability in respect of
a capital lease that would at such time be so required to be capitalized on the
balance sheet in accordance with GAAP.

 

“Capital Stock” means, with respect to any Person,
any and all shares, interests, participations, rights in or other equivalents
(however designated) of such Person’s capital stock, and any rights (other than
debt securities convertible into capital stock), warrants or options
exchangeable for or convertible into such capital stock.

 

“Certificated Securities” means Securities in definitive
registered form.

 

“Change of Control” means the occurrence of any of
the following events:  (a) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall
be deemed to have “beneficial ownership” of all securities that such Person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 50% of the
total Voting Stock of the Company; or (b) the Company consolidates with,
or merges with or into, another Person or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its assets to any
Person or any Person consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which the outstanding Voting Stock
of the Company is converted into or exchanged for cash, securities or other property,
other than any such transaction where (i) the outstanding Voting Stock of
the Company is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee corporation or its parent
corporation and (ii) immediately after such transaction no “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act) is the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a Person shall be deemed to have “beneficial
ownership” of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total Voting Stock of the
surviving or transferee corporation, as applicable; or (c) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board (together with any new directors whose election by the
Board of Directors or whose nomination for election by the stockholders of the
Company was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in office.

 

2

 

“Company” means the party named as such in this
Indenture until a successor replaces it pursuant to the applicable provisions
of this Indenture and thereafter means the successor.

 

“Consolidated Net Tangible Assets” means the total
amount of assets (less applicable reserves and other properly deductible items)
after deducting therefrom (i) all current liabilities (excluding any thereof
which are by their terms extendible or renewable at the option of the obligor
thereon to a time more than 12 months after the time as of which the amount
thereof is being computed) and (ii) all goodwill, trade names, trademarks,
patents, purchased technology, unamortized debt discount and other like
intangible assets, all as set forth on the most recent quarterly balance sheet
of the Company and its consolidated subsidiaries and computed in accordance
with generally accepted accounting principles.

 

“Consolidated Property” means any property of the
Company or its subsidiaries.

 

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

 

“Custodian” shall have the meaning provided in
Section 6.01.

 

“Debt” of any Person means (a) any indebtedness of
such Person, contingent or otherwise, in respect of borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or letters of credit, or representing the balance deferred and
unpaid of the purchase price of any property, including any such indebtedness incurred
in connection with the acquisition by such Person or any of its subsidiaries of
any other business or entity, if and to the extent such indebtedness would
appear as a liability upon a balance sheet of such Person prepared in
accordance with generally accepted accounting principles, including for such
purpose obligations under capitalized leases, and (b) any guaranty, endorsement
(other than for collection or deposit in the ordinary course of business),
discount with recourse, agreement (contingent or otherwise) to purchase,
repurchase or otherwise acquire or to supply or advance funds with respect to,
or to become liable with respect to (directly or indirectly), any indebtedness,
obligation, liability or dividend of any Person, but shall not include
indebtedness or amounts owed (except to banks or other financial institutions)
for compensation to employees, or for goods or materials purchased, or services
utilized, in the ordinary course of business of such Person.  Notwithstanding anything to the contrary in
the foregoing, “Debt” shall not include (i) any contracts providing for
the 

 

3

 

completion of construction
or other payment or performance with respect to the construction, maintenance
or improvement of property or equipment of the Company or its Affiliates or
(ii) any contracts providing for the obligation to advance funds, property
or services on behalf of an Affiliate of the Company in order to maintain the
financial condition of such Affiliate, in each case, including Existing and
Permitted Completion Guarantees and Make-Well Agreements.  For purposes hereof, a “capitalized lease”
shall be deemed to mean a lease of real or personal property which, in
accordance with generally accepted accounting principles, is required to be
capitalized.

 

“Default” means any event that is, or after notice
or passage of time or both would be, an Event of Default.

 

“Depositary” shall mean The Depository Trust Company.

 

“Detroit Joint Venture” means the Michigan limited
liability company governed by an Operating Agreement, dated October 7,
1997, by and between Circus Circus Michigan, Inc., a wholly owned subsidiary of
the Company, and Atwater Casino Group, L.L.C.

 

“Disqualified Stock” means, with respect to any
Person, any Capital Stock of such Person which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable),
or upon the happening of any event, matures or is mandatorily redeemable (in
each case, other than into common stock of the Company), pursuant to a sinking
fund obligation or otherwise, or is exchangeable for Debt, or is redeemable at
the option of the holder thereof, in whole or in part, on or prior to the final
maturity date of the specified security. 
Notwithstanding the foregoing, in no event shall Capital Stock that is
considered Disqualified Stock solely by reason of such Capital Stock being
convertible at the option of the holder of such Capital Stock into other
Capital Stock (other than Disqualified Stock) constitute Disqualified Stock.

 

“Event of Default” shall have the meaning provided
in Section 6.01.

 

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

 

“Exchange Securities” shall mean (i) the 61⁄2%
Series B Senior Notes due 2009 to be issued from time to time pursuant to
this Indenture in connection with the Exchange Offer (as defined in the
Registration Rights Agreement) and (ii) the Additional Securities, if any,
issued (x) without the Private Placement Legend or (y) pursuant to a
registration rights agreement substantially similar to the Registration Rights
Agreement.

 

“Existing and Permitted Completion Guarantees and
Make-Well Agreements” means (i) that certain Company Guaranty by the
Company in favor of Bank of America 

 

4

 

National Trust and Savings
Association dated as of June 30, 1999, and any other contract providing
for the completion of construction or other payment or performance with respect
to the construction, maintenance or improvement of property or equipment of the
Detroit Joint Venture, or (ii) any “make-well,” “keep-well” or other
agreement or arrangement of whatever nature providing for the obligation to
advance funds, property or services on behalf of the Detroit Joint Venture, or
given for the purpose of assuring or holding harmless any governmental entity
or agency and/or lender against loss with respect to any obligation of the
Detroit Joint Venture.

 

“Funded Debt” means all Debt of the Company that
(i) matures by its terms, or is renewable at the option of any obligor
thereon to a date, more than one year after the date of original issuance of
such Debt and (ii) ranks at least equal in right of payment  with
the Securities.

 

“GAAP” means generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or of
such other entity as has been approved by a significant segment of the
accounting profession, which are in effect from time to time.

 

“Gaming Authority” means the Nevada Gaming
Commission, the Nevada Gaming Control Board, the Mississippi Gaming Commission,
the Illinois Gaming Board and the Michigan Gaming Control Board, or any similar
federal, state or local commission, agency or other regulatory body which has,
or may at any time after the date of this Indenture have, jurisdiction over the
gaming activities of the Company or a subsidiary of the Company (or any joint
venture in which the Company or a subsidiary of the Company is a participant)
or any successor thereto.

 

“Gaming Laws” means the gaming laws of a
jurisdiction or jurisdictions to which the Company or a subsidiary of the
Company (or any joint venture in which the Company or a subsidiary of the
Company is a participant) is, or may at any time after the date of this
Indenture be, subject.

 

“Global Security” shall have the meaning provided in
Section 2.01.

 

“Holder” or “Securityholder” means the Person in
whose name a Security is registered on the Registrar’s books.

 

“Indenture” means this Indenture as amended or
supplemented from time to time.

 

5

 

“Initial Purchasers” means Banc of America
Securities LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc.,
Credit Suisse First Boston LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, SG Cowen Securities Corporation, Credit Lyonnais Securities (USA)
Inc., Scotia Capital (USA) Inc., BNY Capital Markets, Inc., and Mizuho International
plc.

 

“Initial Securities” shall mean the 61⁄2%
Series A Senior Notes due 2009 issued from time to time under this Indenture,
including those issued on the Issue Date.

 

“Interest Rate Protection obligations” means, with
respect to any Person, the obligations of such Person under (i) interest
rate swap agreements, interest rate cap agreements and interest rate collar
agreements, and (ii) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates.

 

“Issue Date” means July 31, 2003.

 

“Institutional
Accredited Investor” means an institutional accredited investor as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act

 

“Joint Venture” means (i) with respect to properties
located in the United States, any partnership, corporation or other entity, in
which up to and including 50% of the partnership interests, outstanding voting
stock or other equity interests are owned, directly or indirectly, by the
Company and/or one or more subsidiaries, and (ii) with respect to properties
located outside the United States, any partnership, corporation or other entity
in which up to and including 60% of the partnership interests, outstanding
voting stock or other equity interests are owned, directly or indirectly, by
the Company and/or one or more subsidiaries.

 

“Legal Holiday” shall have the meaning provided in
Section 12.08.

 

“Lien” means any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, security interest, lien
(statutory or other), or preference, priority or other security or similar
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement having substantially the same economic effect as any of the
foregoing).

 

“Non-U.S.
Person” means a Person who is not a U.S. person, as defined in Regulation S
under the Securities Act.

 

“obligations” means any principal, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Debt.

 

6

 

“Officer” means the Chairman of the Board, the Vice
Chairman of the Board, the President, any Executive Vice President, any Vice
President, the Chief Financial Officer, the Treasurer, the Secretary or the
Controller of the Company.

 

“Officers’ Certificate” means a certificate signed
by two Officers or by an Officer and an Assistant Treasurer, Assistant
Secretary or Assistant Controller of the Company.  See Sections 12.04 and 12.05. 
The Trustee shall have no duty or obligation to investigate the accuracy
of such Officers’ Certificate.

 

“Opinion of Counsel” means a written opinion from
legal counsel who is acceptable to the Trustee.  The counsel may be an employee of or counsel to the Company or
the Trustee.  See Sections 12.04 and
12.05.

 

“Paying Agent” shall have the meaning provided in
Section 2.03.

 

“Person” means any individual, corporation,
partnership, joint venture, association, joint stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.

 

“Physical Securities” shall have the meaning
provided in Section 2.01.

 

“Predecessor Securities” of any Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security, and, for the purpose at this definition,
any Security authenticated and delivered under Section 2.07 in lieu of a
lost, destroyed or stolen Security shall be deemed to evidence the same debt as
the lost, destroyed or stolen Security.

 

“principal” of a debt security, including the
Securities, means the principal of the security plus, when appropriate, the
premium, if any, on the security.

 

“Private Placement Legend” shall have the meaning
provided in Section 2.14.

 

“Project Cost” means, with respect to any Resort
Property, the aggregate costs required to complete such construction project in
accordance with the plans therefor and applicable legal requirements, as set
forth in an Officers’ Certificate submitted to the Trustee, setting forth in
reasonable detail all amounts theretofore expended and any anticipated costs
and expenses estimated to be incurred and reserves to be established in
connection with the construction and development of such future addition or
improvement, including direct costs related thereto such as construction
management, architectural engineering and interior design fees, site work,
utility installations and hook-up fees, construction permits, certificates and
bonds, land acquisition costs and the cost of furniture, fixtures, furnishings,
machinery and equipment, but excluding the following:  principal or interest payments on any Debt (other 

 

7

 

than interest which is
required to be capitalized in accordance with GAAP, which shall be included in
determining Project Cost), or costs related to the operation of the Resort
Property including, but not limited to, non-construction supplies and
pre-operating payroll.  The Trustee
shall have no duty or obligation to investigate the accuracy of such Officers’
Certificate.

 

“QIB”
means a qualified institutional buyer as defined in Rule 144A under the
Securities Act.

 

“Registrar” shall have the meaning provided in
Section 2.03.

 

“Registration Rights Agreement” means the
Registration Rights Agreement, dated as of July 31, 2003, among the
Company and the Initial Purchasers, as such agreement may be amended, modified
or supplemented from time to time in accordance with the terms thereof.

 

“Resort Property” means any property owned or to be
owned by the Company or any of its subsidiaries that is, or will be upon
completion, a casino (including a riverboat casino), casino-hotel, destination
resort or a theme park.

 

“Responsible Officer” shall mean, when used with
respect to the Trustee, any officer within the corporate trust department of
the Trustee, including any vice president, assistant vice president, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such Person’s knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Indenture.

 

“Restricted Security” shall have the meaning
provided in Section 2.14.

 

“Rule 144A” means Rule 144A under the Securities
Act.

 

“Sale and Lease-Back Transaction” means any
arrangement with any Person (other than the Company or a subsidiary of the
Company), or to which any such Person is a party, providing for the leasing to
the Company or a subsidiary of the Company for a period of more than three
years of any Consolidated Property which has been or is to be sold or
transferred by the Company or such subsidiary to such Person or to any other
Person (other than the Company or a subsidiary of the Company) to which funds
have been or are to be advanced by such Person on the security of the leased
property.

 

“SEC” means the Securities and Exchange Commission.

 

8

 

“Securities” means the Initial Securities and the
Exchange Securities and more particularly means any Securities authenticated
and delivered under this Indenture.

 

“Securities Act” means the Securities Act of 1933,
as amended, and the rules and regulations promulgated by the SEC thereunder.

 

“subsidiary” of any Person means (i) any corporation
of which at least a majority in interest of the outstanding stock having by the
terms thereof voting power under ordinary circumstances to elect a majority of
the directors of such corporation, irrespective of whether or not at the time
stock of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency, is at the
time, directly or indirectly, owned or controlled by such Person, or by one or
more other corporations a majority in interest of such stock of which is
similarly owned or controlled, or by such Person and one or more other
corporations a majority in interest of such stock of which is similarly owned
or controlled and (ii) any other Person (other than a corporation, or a partnership,
corporation or other entity described in clause (ii) of the definition of Joint
Venture) in which such Person or any subsidiary, directly or indirectly, has
greater than a 50% ownership interest.

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S.
Code Sections 77aaa-77bbbb) as in effect on the date of this Indenture, except
as provided in Section 9.03 hereto.

 

“Treasury Securities” means any investment in
obligations issued or guaranteed by the United States government or any agency
thereof.

 

“Trustee” means the party named as such in this
Indenture until a successor replaces it pursuant to the applicable provisions
of this Indenture and thereafter means the successor.

 

“U.S. Government obligations” means direct
non-cancelable obligations of the United States of America for the payment of
which the full faith and credit of the United States is pledged.

 

“Value” means, with respect to a Sale and Lease-Back
Transaction, as of any particular time, the amount equal to the greater of (i)
the net proceeds of the sale or transfer of property leased pursuant to such
Sale and Lease-Back Transaction or (ii) the fair value, in the opinion of the
Board of Directors as evidenced by a board resolution, of such property at the
time of entering into such Sale and Lease-Back Transaction.

 

“Voting Stock” means, with respect to any Person,
securities of any class or classes of Capital Stock in such Person entitling
the holders thereof to vote in the election of members of the board of
directors of such Person.

 

9

 

“wholly owned” means with respect to any subsidiary
of any Person of which at least 99% of the outstanding Capital Stock is owned
by such Person or another wholly owned subsidiary of such Person.  For purposes of this definition, any
directors’ qualifying shares or investments by foreign nationals mandated by
applicable law shall be disregarded in determining the ownership of a
subsidiary.

 

SECTION 1.02.                      Incorporation
by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a part of this
Indenture.  The following TIA terms used
in this Indenture have the following meanings:

 

“Commission” means the SEC.

 

“indenture securities” means the Securities.

 

“indenture security holder” means a Securityholder
or Holder.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means
the Trustee.

 

“obligor” on the indenture securities means the Company.

 

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

 

SECTION 1.03.                      Rules
of Construction.

 

Unless the context otherwise requires:

 

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

 

(2)           an accounting term not otherwise defined has the meaning assigned to it
in accordance with generally accepted accounting principles;

 

(3)           “or” is not exclusive;

 

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

 

(5)           provisions apply to successive events and transactions.

 

10

 

ARTICLE TWO

 

THE
SECURITIES

 

SECTION 2.01.                      Forms
Generally.

 

The Initial Securities issued from time to time and
the Trustee’s certificate of authentication relating thereto shall be
substantially in the form of Exhibit A. 
Initial Securities may be issued in an unlimited aggregate principal
amount, of which $250,000,000 will be issued on the Issue Date.  The Exchange Securities issued from time to
time and the Trustee’s certificate of authentication relating thereto shall be
substantially in the form of Exhibit B.  Exchange Securities may also be issued in an unlimited aggregate
principal amount.  The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
Depositary rule or usage.  The Company
and the Trustee shall approve the form of the Securities and any notation,
legend or endorsement on them.  If
required, the Securities may bear the appropriate legend regarding any original
issue discount for federal income tax purposes.  Each Security shall be dated the date of its authentication.

 

The terms and provisions contained in the
Securities, annexed hereto as Exhibit A and Exhibit B, shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.

 

Securities offered and sold in reliance on
Rule 144A or Regulation S shall be issued initially in the form of
one or more permanent global Securities in registered form, substantially in
the form set forth in Exhibit A (the “Global Security”), deposited
with the Trustee, as custodian for the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided, and shall bear the
legend set forth in Section 2.14. 
The aggregate principal amount of the Global Security may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary, as hereinafter provided.

 

Securities issued in exchange for interests in a
Global Security pursuant to Section 2.15 may be issued in the form of
permanent Certificated Securities in registered form in substantially the form
set forth in Exhibits A and B (the “Physical Securities”).

 

SECTION 2.02.                      Execution
and Authentication; Aggregate Principal Amount; Delivery.

 

Two Officers shall sign the Securities for the Company
by original or facsimile signature.

 

11

 

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

 

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

 

Upon a written order of the Company signed by two Officers
or by an Officer and an Assistant Treasurer of the Company, the Trustee shall
authenticate the Securities.

 

The Trustee shall authenticate (i) Initial
Securities and (ii) Exchange Securities, in each case upon a written order
of the Company in the form of an Officers’ Certificate of the Company.  Each such written order shall specify the
amount of Securities to be authenticated and the date on which the Securities
are to be authenticated, whether the Securities are to be Initial Securities or
Exchange Securities and whether the Securities are to be issued as Physical Securities
or Global Securities or such other information as the Trustee may reasonably
request.  In addition, with respect to
authentication pursuant to clause (ii) of the first sentence of this paragraph,
the first such written order from the Company shall be accompanied by an
Opinion of Counsel of the Company in a form reasonably satisfactory to the
Trustee stating that the issuance of the Exchange Securities complies with this
Indenture and has been duly authorized by the Company.  The aggregate principal amount of Securities
outstanding at any time is unlimited.

 

The Securities shall be issuable only in registered
form without coupons and only in minimum denominations of $1,000 and in
integral multiples of $1,000 in denominations above $1,000.

 

The Company and the Trustee, by their execution and
authentication, respectively, of the Securities, expressly agree to the terms
and conditions stated therein and to be bound thereby.

 

SECTION 2.03.                      Registrar
and Paying Agent.

 

The Company shall maintain an office or agency where
the Securities may be presented for registration of transfer or for exchange
(“Registrar”) and an office or agency where the Securities may be presented for
payment (“Paying Agent”).  At all times
the Registrar and the Paying Agent shall each maintain an office or agency in
the State of New York where the Securities may be presented for the above
purposes.  The Registrar shall keep a
register of the Securities and of their registration of transfer and exchange.  The Company may have one or more
co-registrars and one or more additional paying agents for the Securities.  The term “Paying Agent” includes any additional
paying agent.  The term “Registrar”
includes any co-registrar.

 

12

 

The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a party to this
Indenture.  The agreement shall implement
the provisions of this Indenture that relate to such agent.  The Company shall notify the Trustee of the
name and address of any such agent.  If
the Company fails to maintain a Registrar or Paying Agent for the Securities,
the Trustee shall act as such.

 

The Company initially appoints the Trustee as Registrar
and Paying Agent.

 

SECTION 2.04.                      Paying
Agent To Hold Money in Trust.

 

Subject to the provisions of Section 8.03
hereof, each Paying Agent shall hold in trust for the benefit of Securityholders
or the Trustee all money held by the Paying Agent for the payment of principal
of or interest on the Securities, and shall notify the Trustee of any default
by the Company in making any such payment. 
If the Company or a subsidiary of the Company acts as Paying Agent, it
shall, on or before each due date of principal of or interest on the
Securities, segregate the money and hold it as a separate trust fund.  The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee.  Upon doing so the Paying Agent shall have no further liability
for the money.

 

SECTION 2.05.                      Securityholder
Lists.

 

The Trustee shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names and
addresses of Securityholders and shall otherwise comply with TIA
Section 312(a).  If the Trustee is
not the Registrar, the Company shall furnish to the Trustee on or before each
interest payment date and at such other times as the Trustee may request in
writing a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders relating to such interest
payment date or request, as the case may be.

 

SECTION 2.06.                      Transfer
and Exchange.

 

Where a Security is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401(1) of the
New York Uniform Commercial Code are met. 
Where Securities are presented to the Registrar or a co-registrar with a
request to exchange them for an equal principal amount of Securities of other denominations,
the Registrar shall make the exchange as requested if the same requirements are
met.  To permit registration of
transfers and exchanges, the Trustee shall authenticate Securities at the
Registrar’s request.  The Company may
charge a reasonable fee for any transfer or exchange but not for any exchange
pursuant to Section 2.09 or 9.05.

 

13

 

The Company need not issue, and the Registrar or
co-Registrar need not register the transfer or exchange of, (i) any Security
during a period beginning at the opening of business 15 days before the day of
mailing of a notice of redemption of the Securities for redemption under
Section 11.02 and ending at the close of business on the day of such
mailing, or (ii) any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.

 

SECTION 2.07.                      Replacement
Securities.

 

If the Holder of a Security claims that the Security
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate and make available for delivery a replacement
Security if the requirements of Section 8-405 of the New York Uniform
Commercial Code are met.  Before any
Security is replaced, an indemnity bond must be provided sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee,
the Paying Agent, the Registrar or any co-registrar from any loss which any of
them may suffer if a Security is replaced. 
The Company may charge for its expenses in replacing a Security.  Every replacement Security shall constitute
a contractual obligation of the Company and shall be entitled to all the
benefits of this Indenture equally with all other Securities issued hereunder.

 

SECTION 2.08.                      Outstanding
Securities.

 

Securities outstanding at any time are all the
Securities that have been authenticated by the Trustee except for those canceled
by it and those described in this Section. 
Subject to the provisions of Section 12.06 hereof, a Security does
not cease to be outstanding because the Company or an Affiliate holds the
Security.  If a Security is replaced
pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives
proof satisfactory to it that the replaced Security is held by a bona fide
purchaser.

 

If the Paying Agent holds on the maturity date money
sufficient to pay Securities payable on that date, then on and after that date
such Securities shall cease to be outstanding and interest on them shall cease
to accrue.

 

SECTION 2.09.                      Temporary
Securities.

 

Until definitive Securities are ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary Securities
upon a written order of the Company signed by two Officers of the Company.  Temporary Securities shall be substantially
in the form of definitive Securities, but may have variations that the Company
considers appropriate for temporary Securities.  Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities in exchange for temporary Securities.

 

14

 

SECTION 2.10.                      Cancellation.

 

The Company at any time may deliver Securities to
the Trustee for cancellation.  The
Registrar and the Paying Agent shall cancel and dispose of any Securities surrendered
to them for registration of transfer, exchange, payment or cancellation in
accordance with their customary procedures. 
The Company may not issue new Securities to replace Securities it has
paid or delivered to the Trustee for cancellation.

 

SECTION 2.11.                      Defaulted
Interest.

 

If the Company defaults in a payment of interest on
the Securities, it shall pay the defaulted interest to the Persons who are
Securityholders on a subsequent special record date.  After the deposit by the Company with the Trustee of money
sufficient to pay such defaulted interest, the Company shall fix the record date
and payment date.  At least 15 days
before the record date, the Company shall mail to each Securityholder, with a
copy to the Trustee, a notice that states the record date, the payment date,
and the amount of defaulted interest to be paid.  The Company may pay defaulted interest in any other lawful manner.

 

SECTION 2.12.                      Mandatory
Disposition of Securities Pursuant to Gaming Laws.

 

Each Holder and beneficial owner of Securities, by
accepting or otherwise acquiring an interest in the Securities, shall be deemed
to have agreed that if the Gaming Authority of any jurisdiction in which the
Company or any of its subsidiaries (or any Joint Venture in which the Company
or a subsidiary of the Company is a participant) now or hereafter conducts or
proposes to conduct gaming requires that a Person who is a Holder or beneficial
owner of Securities must be licensed, qualified or found suitable, or comply
with any other requirement under applicable Gaming Laws, such Holder or
beneficial owner shall apply for a license, qualification or a finding of
suitability or comply with such other requirement, as the case may be, within
the prescribed time period.  The Trustee
shall have no duty to conduct or perform any due diligence or investigation to
determine whether any Holder must comply with any applicable Gaming Laws.  If such Holder or beneficial owner fails to
apply to be, or fails to become, licensed or qualified, is found unsuitable
under applicable gaming laws or fails to comply with any other requirement, as
the case may be (a “failure of compliance”), then the Company shall have the
right, at its option, (i) to require such Person to dispose of its Securities
or beneficial interest therein within 30 days of receipt of notice of the Company’s
election or such earlier date as may be requested or prescribed by the Gaming
Authority or (ii) to redeem such Securities (which redemption may be less
than 30 days following the notice of redemption if so requested or prescribed
by the Gaming Authority) at a redemption price equal to the lesser of (A) such
Person’s cost, (B) 100% of the principal amount thereof, plus accrued and
unpaid interest to the earlier of the redemption date and the date of any failure
of compliance, or (C) such other amount as may be required by 

 

15

 

applicable law or by order
of any Gaming Authority.  The Company
shall notify the Trustee in writing of any such redemption as soon as
practicable.  The Company and the
Trustee shall not be responsible for any costs or expenses any such Holder or
beneficial owner may incur in connection with its application for a license,
qualification or a finding of suitability or its compliance with any other
requirement of a Gaming Authority. 
Immediately upon the imposition by a Gaming Authority of a requirement
that a Holder or beneficial owner of Securities dispose of Securities, such
Holder or beneficial owner shall, to the extent required by applicable Gaming
Laws, have no further right (i) to exercise, directly or indirectly, through
any trustee, nominee or any other Person or entity, any right conferred by the
Securities or (ii) to receive any interest, dividends or any other
distributions or payments with respect to the Securities or any remuneration in
any form with respect to the Securities from the Company or the Trustee, except
the redemption price referred to in this Section 2.12.

 

SECTION 2.13.                      CUSIP
Numbers.

 

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

 

SECTION 2.14.                      Restrictive
Legends.

 

Each Global Security and Physical Security that
constitutes an Initial Security shall bear the following legend (the “Private
Placement Legend”) (each, a “Restricted Security”) on the face thereof until
after the second anniversary of the later of the date of issuance of such
Security and the last date on which the Company or any Affiliate of the Company
was the owner of such Security (or any predecessor security) (or such shorter
period of time as permitted by Rule 144(k) under the Securities Act or any successor
provision thereunder) (or such longer period of time as may be required under
the Securities Act or applicable state securities laws in the opinion of
counsel for the Company, unless otherwise agreed by the Company and the Holder
thereof):

 

THE
SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH 

 

16

 

REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THE SECURITY EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.  THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF MANDALAY RESORT GROUP (“MANDALAY”)
THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b)  IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(c) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF MANDALAY SO REQUESTS), (2) TO MANDALAY OR (3) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.

 

Each Global Security shall also bear the following
legends on the face thereof:

 

UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE
FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY
THE DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION 

 

17

 

OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16
OF THE INDENTURE GOVERNING THIS NOTE.

 

SECTION 2.15.                      Book-Entry
Provisions For Global Security.

 

(a)  The Global Securities initially shall (i) be
registered in the name of the Depositary or the nominee of such Depositary,
(ii) be delivered to the Trustee as custodian for such Depositary and (iii)
bear legends as set forth in Section 2.14.

 

Members of, or participants in, the Depositary
(“Agent Members”) shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depositary, or the Trustee as its
custodian, or under the Global Securities, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.

 

(b)  Transfers of a Global Security shall be
limited to transfers in whole, but not in part, to the Depositary, its successors
or their respective nominees.  Interests
of beneficial owners in a Global Security may be transferred or exchanged for
Physical Securities in accordance with the rules and procedures of the
Depositary and the provisions of Section 2.16.  In addition, Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global
Security if (i) the Depositary notifies the Company 

 

18

 

and
the Trustee that it is unwilling or unable to continue as Depositary for the
Global Securities and a successor depositary is not appointed by the Company
within 90 days of such notice or (ii) an Event of Default has occurred and
is continuing and the Registrar has received a written request from the
Depositary to issue Physical Securities.

 

(c)  In connection with any transfer or exchange
of a portion of the beneficial interest in a Global Security to beneficial
owners pursuant to paragraph (b), the Registrar shall (if one or more Physical
Securities are to be issued) reflect on its books and records the date and a
decrease in the principal amount of such Global Security in an amount equal to
the principal amount of the beneficial interest in the Global Security to be
transferred, and the Company shall execute and prepare and the Trustee shall
authenticate and deliver one or more Physical Securities of like tenor and
amount.

 

(d)  In connection with the transfer of an entire
Global Security to beneficial owners pursuant to paragraph (b), such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute and prepare and the Trustee shall authenticate and
deliver, to each beneficial owner identified by the Depositary in exchange for
its beneficial interest in the Global Security, an equal aggregate principal
amount of Physical Securities of authorized denominations registered in the
name of such beneficial owners.  The
Trustee is not responsible for any delay in said delivery as it is contingent
upon the Depositary’s delivery of information and the co-delivery of the
Physical Securities.

 

(e)  Any Physical Security constituting a
Restricted Security delivered in exchange for an interest in a Global Security
pursuant to paragraph (b) or (c) shall, except as otherwise provided by
paragraphs (a)(i)(x) and (c) of Section 2.16, bear the legend regarding
transfer restrictions applicable to the Physical Securities set forth in
Section 2.14.

 

(f)  The Holder of a Global Security may grant
proxies and otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which a
Holder is entitled to take under this Indenture or the Securities.

 

SECTION 2.16.                      Special
Transfer Provisions.

 

(a)  Transfers to Non-QIB Institutional
Accredited Investors and Non-U.S. Persons. 
The following provisions shall apply with respect to the registration of
any proposed transfer of a Security constituting a Restricted Security to any
Institutional Accredited Investor that is not a QIB or to any Non-U.S. Person:

 

(i)      the Registrar shall register the transfer of any Security constituting
a Restricted Security, whether or not such Security bears the Private Placement
Legend, if (x) the requested transfer is after the second anniversary of the
date of issuance of 

 

19

 

such
Security (provided, however, that, to the knowledge of the
Registrar, neither the Company nor any Affiliate of the Company has held any
beneficial interest in such Security, or portion thereof, at any time on or
within two years prior to the date of transfer of such Security) or
(y) (1) in the case of a transfer to an Institutional Accredited
Investor which is not a QIB (excluding Non-U.S. Persons), the proposed
transferee has delivered to the Registrar a certificate substantially in the
form of Exhibit C and any legal opinions and certifications
required thereby or (2) in the case of a transfer to a Non-U.S. Person,
the proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit D; and

 

(ii)     if the proposed transferor is an Agent Member holding a beneficial interest
in the Global Security, upon receipt by the Registrar of (x) the certificate,
if any, required by paragraph (i) above and (y) written instructions given in accordance
with the Depositary’s and the Registrar’s procedures,

 

whereupon (a) the Registrar shall
reflect on its books and records the date and (if the transfer does not involve
a transfer of outstanding Physical Securities) a decrease in the principal
amount of such Global Security in an amount equal to the principal amount of
the beneficial interest in the Global Security to be transferred, and
(b) the Company shall execute and the Trustee shall authenticate and
deliver one or more Physical Securities of like tenor and amount.

 

(b)  Transfers to QIBs.  The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):

 

(i)      the Registrar shall register the transfer if such transfer is being
made by a proposed transferor who has checked the box provided for on the form
of Security stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with the provisions of Rule
144A to a transferee who has signed the certification provided for on the form
of Security stating, or has otherwise advised the Company and the Registrar in
writing, that it is purchasing the Security for its own account or an account
with respect to which it exercises sole investment discretion and that it and
any such account is a QIB within the meaning of Rule 144A, and is aware that
the sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided by
Rule 144A; and

 

(ii)     if the proposed transferee is an Agent Member, and the Securities to be
transferred consist of Physical Securities which after transfer are to be
evidenced by an 

 

20

 

interest
in a Global Security, upon receipt by the Registrar of written instructions
given in accordance with the Depositary’s and the Registrar’s procedures, the
Registrar shall reflect on its books and records the date and an increase in
the principal amount of such Global Security in an amount equal to the
principal amount of the Physical Securities to be transferred, and the Trustee
shall cancel the Physical Securities so transferred.

 

(c)  Private Placement Legend.  Upon the transfer, exchange or replacement
of Securities not bearing the Private Placement Legend, the Registrar shall
deliver Securities that do not bear the Private Placement Legend.  Upon the transfer, exchange or replacement
of Securities bearing the Private Placement Legend, the Registrar shall deliver
only Securities that bear the Private Placement Legend unless (i) the
requested transfer is after the second anniversary of the date of issuance of
such Securities (provided, however, that, to the knowledge of the
Registrar, neither the Company nor any Affiliate of the Company has held any
beneficial interest in such Security, or portion thereof, at any time on or
within two years prior to the date of transfer of such Security), or (ii) there
is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to
the Company and the Trustee to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.

 

(d)  General.  By its acceptance of any Security bearing the Private Placement
Legend, each Holder of such a Security acknowledges the restrictions on
transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.

 

The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to Section 2.15
or this Section 2.16.  The Company
shall have the right to inspect and make copies of all such letters, notices or
other written communications at any reasonable time during the Registrar’s
normal business hours upon the giving of reasonable written notice to the Registrar.

 

The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers between
or among Agent Members or beneficial owners of interests in any Global Security)
other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.

 

(e)  Transfers of Securities Held by
Affiliates.  Any certificate
(i) evidencing a Security that has been transferred to an Affiliate of the
Company after the date of issuance of 

 

21

 

such
Security, as evidenced by a notation on the Assignment Form for such transfer
or in the representation letter delivered in respect thereof, or
(ii) evidencing a Security that has been acquired from an Affiliate (other
than by an Affiliate) in a transaction or a chain of transactions not involving
any public offering, shall, until two years after the last date on which either
the Company or any Affiliate of the Company was an owner of such Security, in
each case, bear a legend in substantially the form set forth in
Section 2.14, unless otherwise agreed by the Company (with written notice
thereof to the Trustee).

 

ARTICLE THREE

 

[RESERVED]

 

ARTICLE FOUR

 

COVENANTS

 

SECTION 4.01.                      Payment
of Securities.

 

The Company shall pay by 10:00 a.m. New York
City time, the principal of and interest on the Securities on the dates and in
the manner provided in the Securities. 
An installment of principal of or interest on the Securities shall be
considered paid on the date it is due if the Trustee or Paying Agent holds on
that date money designated for and sufficient to pay the installment.

 

The Company shall pay interest on overdue principal
at the rate borne by the Securities; it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

 

SECTION 4.02.                      Corporate
Existence.

 

Subject to Article Five, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other
existence of each subsidiary in accordance with the respective organizational
documents of each subsidiary and the rights (charter and statutory), licenses
and franchises of the Company and its subsidiaries; provided, however,
that the Company shall not be required to preserve, with respect to itself, any
right, license or franchise, and with respect to the subsidiaries, any such
existence, right, license or franchise, if the Board of Directors, or the board
of directors or managing partners of the subsidiary concerned, shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company or any subsidiary and that the loss thereof is not
disadvantageous in any material respect to the Holders.

 

22

 

SECTION 4.03.                      Payment
of Taxes and Other Claims.

 

The Company will pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
subsidiary or upon the income, profits or property of the Company or any
subsidiary, and (2) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of the Company or any
subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings; and provided, further,
that the Company shall not be required to cause to be paid or discharged any
such tax, assessment, charge or claim if the Board of Directors, or the board
of directors or managing partners of the subsidiary concerned, shall determine
that such payment is not advantageous to the conduct of the business of the
Company or any subsidiary and that the failure so to pay or discharge is not
disadvantageous in any material respect to the Holders.

 

SECTION 4.04.                      Maintenance
of Properties.

 

The Company will cause all properties used in the
conduct of its business or the business of any subsidiary to be maintained and
kept in such condition, repair and working order as in the judgment of the
Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company
from discontinuing the operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is, in the
judgment of the Board of Directors or of the board of directors or managing
partners of the subsidiary concerned, desirable in the conduct of the business
of the Company or any subsidiary and not disadvantageous in any material
respect to the Holders; and provided, further, that property may
be disposed of in the ordinary course of the business of the Company or its
subsidiaries at the discretion of the appropriate officers of the Company and
its subsidiaries.

 

SECTION 4.05.                      Maintenance
of Office or Agency.

 

The Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served.  Unless the Trustee serves as Paying Agent or
Registrar, the Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency.  If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such 

 

23

 

presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 12.02.

 

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

 

SECTION 4.06.                      Compliance
Certificate; Notice of Default.

 

The Company shall deliver to the Trustee within 120
days after the end of each fiscal year of the Company an Officers’ Certificate
(one of the signers of which shall be the principal executive officer,
principal financial officer or principal accounting officer of the Company)
stating whether or not the signers know of any default by the Company in performing
its covenants hereunder, without regard to notice requirements or periods of
grace, in Sections 4.02, 4.03, 4.04, 4.05, 4.09 and 4.10.  If they do know of such a default, the
certificate shall describe the default in detail.

 

The Company shall deliver to the Trustee, as soon as
possible and in any event within five days after the Company becomes aware of
the occurrence of any Event of Default or an event which, with notice or the
lapse of time or both, would constitute an Event of Default, an Officers’
Certificate setting forth the details of such Event of Default or default and
the action which the Company proposes to take with respect thereto.

 

SECTION 4.07.                      Reports.

 

The Company shall file with the Trustee within 15
days after it files them with the SEC copies of the quarterly and annual
reports and of the information, documents, and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. 
The Company also shall comply with the other provisions of TIA
Section 314(a).

 

So long as any of the Securities remain outstanding
the Company shall cause to be mailed to the Holders at their addresses
appearing in the register of Securities maintained by the Registrar all annual,
quarterly or other reports which the Company mails or causes to be mailed to
its stockholders generally, concurrently with such mailing to stockholders, and
will cause to be disclosed in such annual reports as of the date of the most
recent financial statements in each such report the amount available for dividends
and other payments pursuant to the most restrictive covenant therefor as of
such date.

 

24

 

Delivery of such reports, information and documents
to the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the Trustee
is entitled to rely exclusively on Officers’ Certificates).

 

SECTION 4.08.                      Waiver
of Stay, Extension of Usury Laws.

 

The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in an
manner whatsoever claim, and will resist any and all efforts to be compelled to
take the benefit or advantage of, any stay or extension law or any usury law or
other law which would prohibit or forgive the Company from paying all or any
portion of the interest on the Securities as contemplated herein, whenever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.

 

SECTION 4.09.                      Limitation
on Liens.

 

Nothing in this Indenture or in the Securities shall
in any way restrict or prevent the Company or any of its subsidiaries from
incurring any Debt; provided, however, that neither the Company
nor any of its subsidiaries may issue, assume or guarantee any Debt secured by
a Lien upon any Consolidated Property without securing the Securities equally
and ratably with (or prior to) such Debt so long as such Debt shall be so
secured, except that this restriction will not apply to:

 

(a)  Liens existing on the date of issuance of
the Securities;

 

(b)  Liens affecting property of a corporation or
other entity existing at the time it becomes a subsidiary of the Company or at
the time of acquisition through a merger, consolidation or otherwise by the
Company or any subsidiary of the Company;

 

(c)  Liens on property existing at the time of
acquisition thereof or incurred to secure payment of all or a part of the purchase
price thereof or to secure Debt incurred prior to, at the time of or within 24
months after the acquisition thereof, for the purpose of financing all or part
of the purchase price thereof;

 

(d)  Liens on any property to secure all or part
of the cost of improvements or construction thereon or Debt incurred to provide
funds for that purpose in a principal amount not exceeding the cost of those
improvements or construction;

 

25

 

(e)  Liens to secure Debt of a subsidiary of the
Company to the Company or to a subsidiary of the Company;

 

(f)  Liens to secure Debt of the Company, the
proceeds of which are used substantially simultaneously with the incurrence of
such Debt to retire Funded Debt;

 

(g)  purchase money security Liens on personal
property;

 

(h)  Liens securing Debt of the Company, the
proceeds of which are used within 24 months of the incurrence of such Debt for
the Project Cost of the construction and development or improvement of a Resort
Property;

 

(i)  Liens on the stock, partnership or other
equity interest of the Company or any subsidiary in any Joint Venture or any
subsidiary which owns an equity interest in the Joint Venture to secure Debt, provided
the amount of such Debt is contributed and/or advanced solely to such Joint
Venture;

 

(j)  Liens securing debt under the Credit
Facilities;

 

(k)  Liens in favor of any government or
governmental body, including the United States or any state thereof, or any department,
agency, instrumentality or political subdivision of any such jurisdiction,
including, without limitation, Liens to secure Debt of the pollution control or
industrial revenue bond type;

 

(l)  Liens required by any contract or statute in
order to permit the Company or a subsidiary of the Company to perform any
contract or subcontract made by it or any subsidiary with or at the request of
a governmental entity, including the United States or any state, or any
department, agency or instrumentality or political subdivision of any such
jurisdiction;

 

(m)  mechanic’s, materialman’s, carrier’s or
other like Liens, arising in the ordinary course of business;

 

(n)  Liens for taxes or assessments and similar
charges either (i) not delinquent or (ii) contested in good faith by
appropriate proceedings and as to which the Company or a subsidiary of the
Company shall have set aside adequate reserves on its books;

 

(o)  zoning restrictions, easements, licenses,
covenants, reservations, restrictions on the use of real property and minor
irregularities of title incident thereto which do not in the aggregate
materially detract from the value of the property or assets of the Company and
its subsidiaries taken as a whole or impair the use of such property in the
operation of the Company’s or any of its subsidiaries business; and

 

26

 

(p)  any extension, renewal, replacement or
refinancing of any Lien referred to in the foregoing clauses (a) through (j)
inclusive or of any Debt secured thereby; provided that the principal
amount of Debt secured thereby shall not exceed the principal amount of Debt so
secured at the time of such extension, renewal, replacement or refinancing, and
that such extension, renewal, replacement or refinancing Lien shall be limited
to all or part, of substantially the same property which secured the Lien extended,
renewed, replaced or refinanced (plus improvements on such property).

 

Notwithstanding the foregoing provisions of this
Section 4.09, the Company and any one or more of its subsidiaries may,
without securing the Securities, issue, assume or guarantee Debt which would
otherwise be subject to the foregoing restrictions in an aggregate principal
amount which, together with all other such Debt of the Company and its subsidiaries
which would otherwise be subject to the foregoing restrictions (not including
Debt permitted to be secured under clauses (a) through (j) inclusive above) and
the aggregate Value of Sale and Lease-Back Transactions (other than those in
connection with which the Company has voluntarily retired Funded Debt) does not
at any one time exceed 15% of Consolidated Net Tangible Assets of the Company
and its consolidated subsidiaries.

 

SECTION 4.10.                      Limitation
on Sale and Lease-Back Transactions.

 

Neither the Company nor any of its subsidiaries
shall enter into any Sale and Lease-Back Transaction unless either (a) the
Company or such subsidiary would be entitled, pursuant to the provisions of
Section 4.09, to incur Debt in a principal amount equal to or exceeding
the Value of such Sale and Lease-Back Transaction, secured by a Lien on the property
to be leased, without equally and ratably securing the Securities or (b) the
Company (and in any such case the Company covenants and agrees that it will do
so) within 120 days after the effective date of such Sale and Lease-Back
Transaction (whether made by the Company or a subsidiary of the Company)
applies to the voluntary retirement of its Funded Debt an amount equal to the
Value of the Sale and Lease-Back Transaction less the principal amount of other
Funded Debt voluntarily retired by the Company within four months after the
effective date of such arrangement, excluding retirements of Funded Debt as a
result of conversions or pursuant to mandatory sinking fund or prepayment
provisions or by payment at maturity.

 

SECTION 4.11.                      Defeasance
of Certain obligations.

 

The Company may omit to comply with any term,
provision or condition set forth in Sections 4.03, 4.04, 4.09, 4.10 and 4.12
and Article Five and Section 6.01(3) and (7) (with respect to
Sections 4.03, 4.04, 4.09, 4.10 and 4.12 and Article Five) and, in each
case with respect to any series of Securities, such omission shall be deemed
not to be an Event of Default; provided that the following conditions
have been satisfied with respect to such series:

 

27

 

(1)           the Company has irrevocably deposited or caused to be deposited with
the Trustee, as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities,
(A) money in an amount, or (B) U.S. Government obligations which
through the payment of interest and principal in respect thereof in accordance
with their terms will, without consideration of any reinvestment of such
interest, provide not later than the opening of business on the relevant due
date, money in an amount, or (C) a combination thereof, in the opinion of a
nationally recognized firm of independent certified public accountants
expressed in a written certification thereof delivered to the Trustee at the
expense of the Company, sufficient to pay and discharge the principal of, and
each installment of interest on, such series of Securities then outstanding on
the date of maturity of such principal or installment of interest or on the
redemption date, as the case may be;

 

(2)           such deposit shall not cause the Trustee with respect to the Securities
to have a conflicting interest for purposes of the TIA with respect to the Securities;

 

(3)           such deposit will not result in a breach or violation of, or constitute
a default under, this Indenture;

 

(4)           no Event of Default or event that with the giving of notice or lapse of
time, or both, would become an Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit and no Event
of Default under Section 6.01(5) or Section 6.01(6) or event which
with the giving of notice or lapse of time, or both, would become an Event of
Default under Section 6.01(5) or Section 6.01(6) shall have occurred
and be continuing at any time during the period ending on the 91st day after
such date or, if longer, ending on the day following the expiration of the
longest preference period applicable to the Company in respect of such deposit
(it being understood that this condition shall not be deemed satisfied until
the expiration of such period);

 

(5)           the deposit shall not result in the Company, the Trustee or the trust
becoming or being deemed to be an “investment company” under the Investment Company
Act of 1940;

 

(6)           the Company has delivered to the Trustee an Opinion of Counsel,
reasonably satisfactory to the Trustee, to the effect that (i) Holders of the
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and defeasance of certain obligations and
will be subject to federal income tax on the same amount and in the same manner
and at the same times, as would have been the case if such deposit and
defeasance had not occurred and (ii) (A) the trust funds will not be subject to
any rights of holders of Debt under the Credit Facilities, and (B) after the
passage of 90 days following the deposit, the trust funds 

 

28

 

will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally; provided
that if a court were to rule under any such law in any case or proceeding that
the trust funds remained property of the Company, no opinion need be given as
to the effect of such laws on the trust funds except the following: (x)
assuming such trust funds remained in the Trustee’s possession prior to such
court ruling to the extent not paid to Holders of the Securities, the Trustee
will hold, for the benefit of the Holders of the Securities, a valid and perfected
security interest in such trust funds that is not avoidable in bankruptcy or
otherwise and (y) no property, rights in property or other interests granted to
the Trustee for the benefit of the Holders of the Securities or to the Holders
of the Securities in exchange for or with respect to any of such trust funds
will be subject to any prior rights of holders of Debt under the Credit
Facilities; and

 

(7)           the Company has delivered to the Trustee an Officers’ Certificate and
an Opinion of Counsel, each stating that all conditions precedent provided for
herein relating to the defeasance contemplated by this Section have been
complied with.

 

SECTION 4.12.                      Change
of Control.

 

(a)  Following the occurrence of a Change of
Control (the date of such occurrence being the “Change of Control Date”), the
Company shall, within 30 days after the Change of Control Date, make an offer
to purchase (a “Change of Control Offer”) all of the then outstanding
Securities at a purchase price (the “Change of Control Purchase Price”) in cash
equal to 101% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the purchase date. The Company shall be required to purchase
all Securities properly tendered in the Change of Control Offer and not
withdrawn.  The Change of Control Offer
shall remain open for 20 days and until the close of business on the Change of
Control Payment Date (as defined below).

 

(b)  Within 45 days following the date upon
which the Change of Control occurred, the Company shall mail, or cause the
Trustee to mail, by first class mail, a notice to each Holder at such Holder’s
last registered address, with a copy to the Trustee, if applicable, which
notice shall govern the terms of the Change of Control Offer.  The notice to the Holders shall contain all
instructions and materials necessary to enable such Holders to tender Securities
pursuant to the Change of Control Offer. 
Such notice shall state:

 

(i)            that the Change of Control Offer is being
made pursuant to this Section 4.12 and that all Securities tendered and
not withdrawn shall be accepted for payment;

 

(ii)           the purchase price (including the amount of accrued interest) and the
purchase date (which shall be no earlier than 30 days nor later than 45 days
from the 

 

29

 

date
such notice is mailed, other than as may be required by law) (the “Change of
Control Payment Date”);

 

(iii)          that any Security not tendered shall continue to accrue interest;

 

(iv)          that, unless the Company defaults in making payment therefor, any
Security accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;

 

(v)           that Holders electing to have a Security purchased pursuant to a Change
of Control Offer shall be required to surrender the Security, with the form
entitled “Option of Holder to Elect Purchase” on the reverse of the Security completed,
to the Paying Agent at the address specified in the notice prior to the close
of business on the third business day prior to the Change of Control Payment
Date;

 

(vi)          that Holders shall be entitled to withdraw their election if the Paying
Agent receives, not later than the second business day prior to the Change of
Control Payment Date, a telegram, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Securities the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Securities purchased;

 

(vii)         that Holders whose Securities are purchased only in part shall be
issued new Securities in a principal amount equal to the unpurchased portion of
the Securities surrendered; provided, however, that each Security
purchased and each new Security issued shall be in an original principal amount
of $1,000 or integral multiples thereof; and

 

(viii)        the circumstances and relevant facts regarding such Change of Control.

 

On the Change of Control Payment Date, the Company
shall, to the extent permitted by law, (i) accept for payment all
Securities or portions thereof properly tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent an amount equal to the
aggregate Change of Control Payment in respect of all Securities or portions
thereof so tendered and (iii) deliver, or cause to be delivered, to the
Trustee for cancellation the Securities so accepted together with an Officers’
Certificate stating that such Securities or portions thereof have been tendered
to and purchased by the Company.  The
Paying Agent will promptly either (x) pay to the Holder against
presentation and surrender (or, in the case of partial payment, endorsement) of
the Global Securities or (y) in the case of Certificated Securities, mail
to each Holder of Securities the Change of Control Payment for such Securities,
and the Trustee will promptly authenticate and deliver to the Holder of the
Global Securities a new Global Security or Securities or, in the case of
Certificated Securities, mail to 

 

30

 

each Holder new Certificated
Securities, as applicable, equal in principal amount to any unpurchased portion
of the Securities surrendered, if any, provided that each new Certificated
Security will be in a principal amount of $1,000 or an integral multiple
thereof.  The Company will notify the
Trustee and the Holders of the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.

 

Neither the Board of Directors of the Company nor
the Trustee may waive the provisions of this Section 4.12 relating to the
Company’s obligation to make a Change of Control Offer or a Holder’s right to
redemption upon a Change of Control.

 

The Company shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable
in connection with the repurchase of Securities pursuant to a Change of Control
Offer.  To the extent that the
provisions of any securities laws or regulations conflict with the provisions
of this Section 4.12, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached their
obligations under the provisions of this Section 4.12 by virtue thereof.

 

ARTICLE FIVE

 

SUCCESSOR
CORPORATION

 

The Company shall not consolidate with or merge into
any other Person or sell, assign, transfer or convey its properties and assets
substantially as an entirety to any Person unless:

 

(1)           either the Company shall be the continuing corporation, or the Person
(if other than the Company) formed by such consolidation or into which the Company
is merged or to which the properties and assets of the Company substantially as
an entirety are transferred shall be a corporation, partnership or trust
organized and existing under the laws of the United States of America or any
State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture;

 

(2)           immediately after giving effect to such transaction, no Default or
Event of Default exists; and

 

(3)           the Company has delivered to the Trustee an Officers’ Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or transfer
and such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.

 

31

 

The successor corporation formed by such
consolidation or into which the Company is merged or to which such transfer is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor corporation had been named as the Company herein, and thereafter the
predecessor corporation shall be relieved of all obligations and covenants
under the Indenture and the Securities, and in the event of such transfer any
such predecessor corporation may be dissolved and liquidated.

 

ARTICLE SIX

 

DEFAULTS AND REMEDIES

 

SECTION 6.01.                      Events
of Default.

 

An “Event of Default” with respect to the Securities
occurs if:

 

(1)           the Company defaults in the payment of interest on the Securities when
the same becomes due and payable and the default continues for a period of 30
days; or

 

(2)           the Company defaults in the payment of principal of or premium, if any,
on the Securities when due at maturity, upon redemption, pursuant to an offer
to purchase required under this Indenture pursuant to Section 4.12 or
otherwise by acceleration or otherwise; or

 

(3)           the Company fails to perform, or breaches, any covenant in this
Indenture and the default continues for the period and after the notice
specified below; or

 

(4)           an event or events of default, as defined in any one or more mortgages,
indentures or instruments under which there may be issued, or by which there
may be secured or evidenced, any Debt of the Company or a subsidiary, whether
such Debt now exists or shall hereafter be created, shall happen and shall
entitle the holders of such Debt to declare an aggregate principal amount of at
least $10,000,000 of such Debt due and payable and such event of default shall
not have been cured or waived in accordance with the provisions of such
instrument, or such Debt shall not have been discharged, within a period of 30
days after there shall have been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of such series of Securities then outstanding a
written notice specifying such event or events of default and requiring the Company
to cause such event of default to be cured or such Debt to be discharged and
stating that such notice is a “Notice of Default” hereunder; provided, however,

 

32

 

that
the Company is not in good faith contesting in appropriate proceedings the
occurrence of such an event of default; or

 

(5)           a court of competent jurisdiction enters a judgment, decree or order
for relief in respect of the Company or any Subsidiary in an involuntary case
or proceeding under any Bankruptcy Law which shall (A) approve as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
in respect of the Company or any subsidiary, (B) appoint a Custodian of the
Company or any subsidiary or for any substantial part of its property or (C)
order the winding-up or liquidation of its affairs; and such judgment, decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or any bankruptcy or insolvency petition or application is filed, or any
bankruptcy or insolvency proceeding is commenced, against the Company or any
subsidiary and such petition, application or proceeding is not dismissed within
60 days; or any warrant of attachment is issued against any substantial portion
of the property of the Company or any subsidiary which is not released within
60 days of service; or

 

(6)           the Company or any subsidiary shall (A) become insolvent,
(B) generally fail to pay its debts as they become due, (C) make any
general assignment for the benefit of creditors, (D) admit in writing its
inability to pay its debts generally as they become due, (E) commence a
voluntary case or proceeding under any Bankruptcy Law, (F) consent to the
entry of a judgment, decree or order for relief in an involuntary case or
proceeding under any Bankruptcy Law, (G) consent to the institution of
bankruptcy or insolvency against it, (H) apply for, consent to or acquiesce in
the appointment of or taking possession by a Custodian of the Company or any
subsidiary or for any substantial part of its property or (I) take any corporate
action in furtherance of any of the foregoing; or

 

(7)           the Company fails to comply with its obligations described in
Section 4.12 of this Indenture.

 

The term “Bankruptcy Law” means Title 11, U.S. Code
or any similar federal or state law for the relief of debtors.  The term “Custodian” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

A default under clause (3) (other than a Default
under Section 4.02 or Article Five which Default shall be an Event of
Default without the notice or passage of time specified in this paragraph) is
not an Event of Default with respect to the Securities until the Trustee or the
Holders of at least 25% in principal amount of the Securities then outstanding
notify the Company (with a copy to the Trustee) of the default and the Company
does not cure the default within 30 days after receipt of the notice.  The notice must specify the default, demand
that it be remedied and state that the notice is a “Notice of Default.”

 

33

 

SECTION 6.02.                      Acceleration.

 

If an Event of Default (other than as specified in
clauses (5) and (6) of Section 6.01 above) relating to the Securities occurs
and is continuing, the Trustee by notice in writing to the Company, or the
Holders of not less than 25% in principal amount of the Securities then
outstanding by notice in writing to the Company and the Trustee, may declare
the unpaid principal (but in no event more than the maximum amount of principal
and interest thereon allowed by law) to be due and payable immediately.  Upon any such declaration such principal and
interest shall be payable immediately. 
If an Event of Default specified in Section 6.01(5) or (6) occurs,
the principal amount and accrued interest on the Securities shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.

 

At any time after such a declaration of acceleration
has been made and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article provided, the
Holders of a majority in principal amount of the Securities then outstanding,
by written notice to the Company and the Trustee, may rescind and annul such
declaration as to the Securities and its consequences if:

 

(1)           the Company has paid or deposited with the Trustee a sum sufficient to
pay

 

(A)          the
principal of the Securities that has become due otherwise than by such
declaration of acceleration (together with interest, if any, payable thereon);
and

 

(B)           all
sums paid by the Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents, attorneys and counsel;
and

 

(2)           all existing Events of Default relating to the Securities have been
cured or waived and the rescission would not conflict with any judgment or
decree.

 

SECTION 6.03.                      Other
Remedies.

 

If an Event of Default relating to the Securities
occurs and is continuing, the Trustee may pursue any available remedy by
proceeding at law or in equity to collect the payment of principal of or
interest on such series of Securities or to enforce the performance of any
provisions of the Securities or this Indenture.

 

The Trustee may maintain a proceeding even if it
does not possess any of the Securities or does not produce any of them in the
proceeding.  A delay or omission by the 

 

34

 

Trustee or any Securityholder
in exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default.  No remedy is
exclusive of any other remedy.  All
available remedies are cumulative to the extent permitted by law.

 

SECTION 6.04.                      Waiver
of Past Defaults.

 

Subject to Section 9.02, the Holders of a
majority in principal amount of the Securities then outstanding by notice to
the Trustee may waive an existing Default or Event of Default with respect to
the Securities and its consequences. 
When a Default or Event of Default is waived, it is cured and stops
continuing.

 

SECTION 6.05.                      Control
by Majority.

 

The Holders of a majority in principal amount of the
Securities then outstanding may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it with respect to any default under the Securities.  However, subject to Section 7.01, the
Trustee may refuse to follow any direction that conflicts with any rule of law
or this Indenture, that is unduly prejudicial to the rights of another Holder
of the Securities, or that would involve the Trustee in personal liability.

 

SECTION 6.06.                      Limitation
on Suits.

 

A Holder of the Securities may not pursue any remedy
with respect to this Indenture or any of the Securities unless:

 

(1)           the Holder gives to the Trustee written notice of a continuing Event of
Default with respect to such series;

 

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

 

(3)           such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;

 

(4)           the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and

 

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

 

35

 

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

 

SECTION 6.07.                      Rights
of Holders To Receive Payment.

 

Notwithstanding any other provision of this
Indenture, the right of any Holder of a Security to receive payment of
principal of or interest on the Security on or after the respective due dates
expressed in the Security or to bring suit for the enforcement of any such
payment on or after such respective dates shall not be impaired or affected
without the consent of the Holder.

 

SECTION 6.08.                      Collection
Suit by Trustee.

 

If an Event of Default in payment of interest or
principal specified in Section 6.01(1) or (2) occurs and is continuing
with respect to the Securities, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount of principal (or such portion of the principal as may be specified as
due upon acceleration at that time in the terms of the Securities) and
interest, if any, remaining unpaid on the Securities then outstanding.

 

SECTION 6.09.                      Trustee
May File Proofs of Claim.

 

The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee and the Securityholders allowed in any judicial
proceedings relative to the Company, its creditors or its property.

 

SECTION 6.10.                      Priorities.

 

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

 

First: 
to the Trustee for amounts due under Section 7.07;

 

Second: 
to Securityholders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and

 

Third: 
to the Company.

 

36

 

The Trustee may fix a record date and payment date
for any payment to Holders of the Securities pursuant to this Section.  The Trustee shall notify the Company in
writing reasonably in advance of any such record date and payment date.

 

SECTION 6.11.                      Undertaking
for Costs.

 

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

 

ARTICLE SEVEN

 

TRUSTEE

 

The Trustee hereby accepts the trust imposed upon it
by this Indenture and covenants and agrees to perform the same, as herein
expressed.

 

SECTION 7.01.                      Duties
of Trustee.

 

(a)  If an Event of Default has occurred and is
known to the Trustee (and is not cured), the Trustee shall exercise its rights
and powers and use the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person’s own affairs.

 

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

 

(1)           The Trustee need perform only those duties that are specifically set
forth in this Indenture or in the TIA and no covenants or obligations shall be
implied in this Indenture which bind the Trustee.

 

(2)           In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture.  However, in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall be under a duty to examine the same to determine whether or 

 

37

 

not
they conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).

 

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

 

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

 

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

 

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

 

(4)           The Trustee shall, subject to Section 7.08, comply with any order
or directive of a Gaming Authority that the Trustee submit an application for
any license, finding of suitability or other approval pursuant to any Gaming
Law and will cooperate fully and completely in any proceeding related to such
application; provided, however, that if the Trustee’s resignation
is pending, the failure to comply with this Section 7.01(b)(4) shall not
be a violation of this Indenture.

 

(d)  Every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of
this Section.

 

(e)  The Trustee may refuse to perform any duty
or exercise any right or power unless it receives security and indemnity
satisfactory to it against any loss, liability or expense.

 

(f)  The Trustee shall not be liable for interest
on any money received by it except as the Trustee may agree in writing with the
Company.

 

SECTION 7.02.                      Rights
of Trustee.

 

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

 

(b)  Before the Trustee acts or refrains from
acting, it may require an Officers’ Certificate or an Opinion of Counsel.  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel.

 

38

 

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

 

(d)  The Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to be authorized
or within its rights or power.

 

(e)  No provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or satisfactory indemnity against such
risk or liability is not reasonably assured to it.

 

(f)  The Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.

 

(g)  The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.

 

(h)  The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such matter inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.

 

(i)  The Trustee shall not be deemed to have
notice of any Default or Event of Default unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any event which
is in fact such a default is received by the Trustee at the principal corporate
trust office of the Trustee, and such notice references the Securities and this
Indenture.

 

(j)  The rights, privileges, protections,
immunities and benefits given to the Trustee, including, without limitation,
its right to be indemnified, are extended to, and shall be 

 

39

 

enforceable
by, the Trustee in each of its capacities hereunder, and to each agent,
custodian and other Person employed to act hereunder.

 

(k)  The Trustee may request that the Company
deliver an Officers’ Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant
to this Indenture, which Officers’ Certificate may be signed by any Person
authorized to sign an Officers’ Certificate, including any Person specified as
so authorized in any such certificate previously delivered and not superseded.

 

SECTION 7.03.                      Individual
Rights of Trustee.

 

The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the
Company or its subsidiaries or Affiliates with the same rights it would have if
it were not Trustee.  Any Paying Agent,
Registrar or co-registrar may do the same with like rights.  However, the Trustee must comply with Sections
7.10 and 7.11.

 

SECTION 7.04.                      Trustee’s
Disclaimer.

 

The Trustee makes no representation as to the
validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company’s use of the proceeds from the Securities, and it
shall not be responsible for any statement in the Securities other than its
certificate of authentication.

 

SECTION 7.05.                      Notice
of Defaults.

 

If a Default occurs with respect to the Securities
and is continuing and if it is known to a Responsible Officer of the Trustee,
the Trustee shall mail to each Holder of the Securities, notice of the Default
within 90 days after it occurs.  Except
in the case of a default in the payment of principal of or interest on the
Securities, the Trustee may withhold the notice if and so long as a committee
of its Responsible Officers in good faith determines that withholding the
notice is in the interests of the Holders of the Securities.

 

SECTION 7.06.                      Reports
by Trustee.

 

Within 60 days after each June 15 beginning
with the June 15 following the date of this Indenture, the Trustee shall
mail to each Securityholder a brief report dated as of such June 15 that
complies with TIA Section 313(a) if required by such Section 313(a).  The Trustee also shall comply with TIA
Section 313(b).

 

A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange on which
the Securities are listed.  The Company
shall 

 

40

 

promptly notify the Trustee
when the Securities are listed on any stock exchange or of any delisting
thereof.

 

To the extent reasonably requested in writing by the
Company, the Trustee shall cooperate with the Gaming Authorities in order to
provide such Gaming Authorities with any information and documentation that
they may request and as otherwise required by law.

 

SECTION 7.07.                      Compensation
and Indemnity.

 

The Company shall pay to the Trustee from time to
time such compensation for its services as shall be agreed in writing by the
Company and the Trustee.  The Company
shall reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred by it.  Such expense
may include the reasonable compensation and expenses of the Trustee’s agents
and counsel.  The Company shall
indemnify each of the Trustee and any predecessor Trustee against any and all
loss, damage, claim (whether asserted by the Company, a Holder or any other
Person), liability or expense, including taxes (other than taxes based on the income
of the Trustee) incurred by it, without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this trust.  The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity.  The Company shall defend the claim and the
Trustee shall cooperate in the defense. 
The Trustee may have separate counsel of its selection and the Company shall
pay the reasonable fees and expenses of such counsel.  The Company need not pay for any settlement made without its
consent.  The Company need not reimburse
any expense or indemnify against any loss or liability incurred by the Trustee
through negligence or bad faith.

 

To secure the Company’s payment obligations in this
Section, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities.

 

When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section 6.01(5) or
Section 6.01(6), the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.

 

The provisions of this Section shall survive
the termination of this Indenture.

 

SECTION 7.08.                      Replacement
of Trustee.

 

The Trustee may resign by so notifying the Company
in writing.  The Holders of a majority
in principal amount of the Securities then outstanding may remove the Trustee
with respect to the Securities by so notifying the removed Trustee and may
appoint a 

 

41

 

successor Trustee with the
Company’s consent. The Company may remove the Trustee with respect to the
Securities if:

 

(1)           the Trustee fails to comply with Section 7.10;

 

(2)           the Trustee is adjudged a bankrupt or an insolvent;

 

(3)           a receiver or other public officer takes charge of the Trustee or its
property; or

 

(4)           the Trustee becomes incapable of acting.

 

If, as to the Securities, the Trustee resigns or is
removed or if a vacancy exists in the office of Trustee for any reason, the
Company shall promptly appoint a successor Trustee for that series.

 

A successor Trustee as to any series of Securities
shall deliver a written acceptance of its appointment to the retiring Trustee
and to the Company.  Immediately after
that, the retiring Trustee shall, upon payment of its charges, promptly
transfer all property held by it as Trustee to the successor Trustee, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture as to the Securities. 
A successor Trustee shall mail notice of its succession to the Holders
of the Securities.

 

If a successor Trustee as to the Securities does not
take office within 45 days after the retiring Trustee resigns or is removed,
then (i) the retiring Trustee or the Company may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a
successor Trustee and (ii) the Holders of a majority in principal amount of the
Securities then outstanding may petition any court of competent jurisdiction
for the appointment of a successor Trustee.

 

If the Trustee fails to comply with
Section 7.10 with respect to the Securities, any Holder of the Securities
who satisfies the requirements of TIA Section 310(b) may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee for the Securities.

 

In case of appointment hereunder of a successor
Trustee with respect to the Securities, the Company, the retiring Trustee and
each successor Trustee with respect to the Securities shall execute and deliver
an indenture supplemental hereto wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or 

 

42

 

those series to which the
appointment of such successor Trustee relates, (2) shall contain such
provisions as shall be necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary or
desirable to provide for or facilitate the administration of the trusts hereunder
by more than one Trustee; provided, however, that nothing herein
or in such supplemental Indenture shall constitute such Trustee co-trustees of
the same trust and that each such Trustee shall be a trustee of a trust
hereunder separate and apart from any trust hereunder and administered by any
other such Trustee.

 

Upon the execution and delivery of such supplemental
Indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates.

 

SECTION 7.09.                      Successor
Trustee by Merger, Etc.

 

If the Trustee as to the Securities consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust assets to, another corporation, the resulting, surviving or
transferee corporation shall, if such resulting, surviving or transferee
corporation is otherwise eligible hereunder, without any further act, be the successor
Trustee as to the Securities.

 

SECTION 7.10.                      Eligibility;
Disqualification.

 

The Securities shall always have a Trustee who
satisfies the requirements of TIA Section 310(a).  The Trustee as to the Securities shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. 
The Trustee shall comply with TIA Section 310(b), including the
optional provision permitted by the second sentence of TIA Section 310(b)(9).

 

SECTION 7.11.                      Preferential
Collection of Claims Against Company.

 

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

 

43

 

SECTION 7.12.                      Authenticating
Agent.

 

If the Company so requests, there shall be an
Authenticating Agent appointed by the Trustee with power to act on its behalf
and subject to its direction in the authentication and delivery of the
Securities in connection with the exchange or registration of transfer thereof
as fully to all intents and purposes as though the Authenticating Agent had
been expressly authorized by the relevant Sections hereof to authenticate and
deliver the Securities, and such Securities so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as though authenticated by the Trustee hereunder, and for all purposes
of this Indenture, the authentication and delivery of such Securities by the
Authenticating Agent pursuant to this Section shall be deemed to be the
authentication and delivery of such Securities “by the Trustee.”  Notwithstanding anything to the contrary contained
in Section 2.02, or in any other Section hereof, all authentication
in connection with exchange or registration of transfer thereof shall be
effected either by the Trustee or an Authenticating Agent and such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States or of any State, with a combined
capital and surplus of at least $5,000,000 and authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authority.  If at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect herein specified in this Section. 
If such corporation publishes reports of condition at least annually
pursuant to law or the requirements of such authority, then for the purposes of
this Section the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.

 

Any corporation into which any Authenticating Agent
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of any Authenticating Agent,
shall be the successor of the Authenticating Agent hereunder, if such successor
corporation is otherwise eligible under this Section, without the execution or
filing of any paper or any further act on the part of the parties hereto or the
Authenticating Agent or such successor corporation.

 

Any Authenticating Agent may at any time resign by
giving written notice of resignation to the Trustee and to the Company.  The Trustee may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination to
such Authenticating Agent and to the Company. 
Upon receiving such a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible
under this Section, the Trustee shall promptly appoint a successor Authenticating
Agent, shall give written notice of such appointment to the Company and shall
mail notice of 

 

44

 

such appointment to all
Holders of the Securities as the names and addresses of such Holders appear on
the register of Securities, and shall publish notices of such appointment at
least once in a newspaper of general circulation in the place where such
successor Authenticating Agent has its principal office.

 

Any Authenticating Agent by the acceptance of its appointment
shall be deemed to have agreed with the Trustee that:  it will perform and carry out the duties of an Authenticating
Agent as herein set forth, including, without limitation, the duties to
authenticate and deliver the Securities when presented to it in connection with
exchanges or registrations of transfer thereof; it will furnish from time to
time, as requested by the Trustee, appropriate records of all transactions
carried out by it as Authenticating Agent and will furnish the Trustee such
other information and reports as the Trustee may reasonably require; it is
eligible for appointment as Authenticating Agent under this Section and
will notify the Trustee promptly in writing if it shall cease to be so
qualified; and it will indemnify the Trustee against any loss, liability or
expense incurred by the Trustee and will defend any claim asserted against the
Trustee by reason of any act or failure to act of the Authenticating Agent but
it shall have no liability for any action taken by it at the specific written
direction of the Trustee.

 

The Company agrees that it will pay to the
Authenticating Agent from time to time reasonable compensation for its services.

 

The provisions of Sections 7.02, 7.03 and 7.04 shall
bind and inure to the benefit of any Authenticating Agent to the same extent
that they bind and inure to the benefit of the Trustee.

 

If an appointment is made pursuant to this Section,
the Securities may have endorsed thereon, in addition to the Trustee’s
certificate of authentication, an alternate certificate of authentication in
the following form:

 

This is one of the Securities referred to in the
within mentioned Indenture.

 

THE BANK OF NEW YORK,

as Trustee

 

	
  By:

  	
   

  
	
   

  	
  As
  Authenticating Agent

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Authorized
  Signatory

  

 

45

 

ARTICLE EIGHT

 

DISCHARGE
OF INDENTURE

 

SECTION 8.01.                      Termination
of Company’s Obligations.

 

The Company may terminate its obligations under the
Securities and this Indenture, except those obligations referred to in the
immediately succeeding paragraph, if:

 

(a)  all Securities previously authenticated and
delivered (other than mutilated, destroyed, lost or stolen Securities which
have been replaced or the Securities which are paid for pursuant to
Section 4.01 or the Securities for whose payment money or securities have
theretofore been held in trust and thereafter repaid to the Company, as
provided in Section 8.03) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder with respect
to such series; or

 

(b)  (1) the Securities mature within one year or
all of them are to be called for redemption within one year after arrangements
satisfactory to the Trustee for giving the notice of redemption; and

 

(b)  (2) the Company has irrevocably deposited or
caused to be deposited with the Trustee, during such one-year period, as trust
funds in trust, specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of such series of Securities, (A) money in an
amount, or (B) U.S. Government obligations which through the payment of
interest and principal in respect thereof in accordance with their terms will,
without consideration of any reinvestment of such interest, provide not later
than the opening of business on the relevant due date, money in an amount, or
(C) a combination thereof, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written certification
thereof delivered to the Trustee, sufficient to pay and discharge the principal
of, and each installment of interest on, such series of Securities then
outstanding on the date of maturity of such principal or installment of
interest or the redemption date, as the case may be; or

 

(c)  (1) the Company has irrevocably deposited or
caused to be deposited with the Trustee, as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of
the Securities, (A) money in an amount, or (B) U.S. Government
obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will, without consideration of any
reinvestment of such interest, provide not later than 10:00 a.m., New York
City time, on the relevant due date, money in an amount, or (C) a
combination thereof, in the opinion of a nationally recognized firm of independent
certified public accountants 

 

46

 

expressed in a written certification thereof delivered to the Trustee, sufficient
to pay and discharge the principal of and each installment of interest on such
series of Securities then outstanding on the date of maturity of such principal
or installment of interest, or, on the redemption date, as the case may be; and

 

(2)  the Company delivers to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for in clause (c) and in Section 4.11 relating to the
satisfaction and discharge of this Indenture with respect to such series of
Securities have been complied with.

 

Notwithstanding the foregoing clause (c), prior to
the end of the 90-day period referred to in clause (6)(ii) of Section 4.11,
none of the Company’s obligations under this Indenture shall be discharged, and
subsequent to the end of the 90-day period only the Company’s obligations in
Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 4.02, 7.07, 7.08, 8.03 and 8.04
shall survive until such series of Securities are no longer outstanding.  Thereafter, the Company’s obligations in
Sections 7.07, 8.03 and 8.04 shall survive; provided, that the Company
shall pay any taxes or other costs and expenses incurred by any trust created
pursuant to this Article Eight.

 

After any such irrevocable deposit and after
satisfaction of all the conditions of this Section 8.01, the Trustee, upon
the Company’s request, shall acknowledge in writing the discharge of the
Company’s obligations under the Securities and this Indenture, except for those
surviving obligations specified above. 
The Trustee shall not be responsible for any calculations made by the
Company in connection with the deposit of funds pursuant to clauses (b)(2) or
(c)(1) of this Section 8.01.

 

The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government obligations deposited pursuant to this Section 8.01 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of outstanding
Securities.

 

SECTION 8.02.                      Application
of Trust Money.

 

The Trustee or Paying Agent shall, with respect to
the Securities, hold in trust money or U.S. Government obligations deposited
with it pursuant to Section 8.01, and shall apply the deposited money and
the money from U.S. Government obligations in accordance with this Indenture,
to the payment of principal of and interest on the Securities.

 

47

 

SECTION 8.03.                      Repayment
to the Company.

 

Subject to Section 8.02, the Trustee and the
Paying Agent shall promptly pay to the Company upon written request any excess
money or U.S. Government obligations held by them at any time and thereupon
shall be relieved from all liability with respect to such money.  The Trustee and the Paying Agent shall pay
to the Company upon written request any money held by them for the payment of
principal or interest that remains unclaimed for two years; provided, however,
that the Company shall, if requested by the Trustee or such Paying Agent, give
the Trustee or such Paying Agent satisfactory indemnification against any and
all liability which may be incurred by it by reason of such payment; and provided,
further, that the Trustee or such Paying Agent before being required to
make any payment shall at the expense of the Company cause to be published once
in a newspaper or newspapers printed in the English language, customarily published
at least five days a week and of general circulation in the City of Las Vegas,
Nevada and in the Borough of Manhattan, The City of New York and mail to each
Securityholder entitled to such money notice that such money remains unclaimed
and that, after a date specified therein which shall be at least 30 days from
the date of such publication or mailing, any unclaimed balance of such money
then remaining will be repaid to the Company. 
After payment to the Company, Securityholders entitled to such money
must look to the Company for payment as general creditors unless an applicable
law designates another Person.

 

SECTION 8.04.                      Reinstatement.

 

If the Trustee or Paying Agent is unable to apply
any money or U.S. Government obligations in accordance with Section 8.01
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company’s obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.01 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government obligations in accordance
with Section 8.01; provided, however, that if the Company
has made any payment of interest on or principal of the Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of the Securities to receive such payment from the money
or U.S. Government obligations held by the Trustee or Paying Agent.

 

48

 

ARTICLE NINE

 

AMENDMENTS,
SUPPLEMENTS AND WAIVERS

 

SECTION 9.01.                      Without
Consent of Holders.

 

The Company and the Trustee may amend or supplement
this Indenture or the Securities without notice to or consent of any Holder:

 

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

 

(2)           to comply with Article Five;

 

(3)           to provide for uncertificated Securities in addition to or in place of
Certificated Securities;

 

(4)           to comply with any requirements of the SEC in connection with the qualification
of this Indenture under the TIA; or

 

(5)           to make any change that does not adversely affect the rights of any
Securityholder.

 

SECTION 9.02.                      With
Consent of Holders.

 

The Company and the Trustee may amend or supplement
this Indenture or the Securities without notice to any Securityholder but with
the written consent of the Holders of at least a majority in principal amount
of the then outstanding Securities affected by such amendment or
supplement.  The Holders of a majority
delivered to the Trustee in principal amount of the Securities then outstanding
may also waive compliance in a particular instance by the Company with any
provision of this Indenture with respect to the Securities; provided, however,
that without the consent of each Securityholder affected, an amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may not:

 

(1)           reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;

 

(2)           reduce the rate, or extend the time for payment of interest on, any
Security in a manner adverse to the Holders thereof;

 

(3)           reduce the principal of, or extend the fixed maturity or fixed
redemption date of any Securities, in a manner adverse to the Holders thereof;

 

49

 

(4)           waive a default in the payment of the principal of, or interest on, any
Security;

 

(5)           waive a default upon the occurrence of a Change of Control under
Section 4.12;

 

(6)           affect the ranking of the Securities;

 

(7)           make any Security payable in money other than that stated in the Security;
or

 

(8)           make any changes in Section 6.04, 6.07 and 9.02.

 

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

 

After an amendment or waiver under this
Section becomes effective, the Company shall mail to Holders of the Securities
affected thereby a notice briefly describing the amendment or waiver.

 

SECTION 9.03.                      Compliance
with Trust Indenture Act.

 

Every amendment to or supplement of this Indenture
or the Securities shall comply with the TIA as then in effect.

 

SECTION 9.04.                      Revocation
and Effect of Consents.

 

Until an amendment, supplement or waiver becomes
effective, a consent to such amendment, supplement or waiver by a Holder of a
Security shall bind the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder’s
Security, even if notation of the consent is not made on any Security.  However, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of a Security if
the Trustee receives notice of revocation before the date the amendment, supplement
or waiver becomes effective.

 

The Company may, but shall not be obligated to, set
a record date for the purpose of determining the identity of Holders entitled
to consent to any amendment, supplement or waiver permitted by this Indenture.  If a record date is fixed, the Holders of
the Securities outstanding on such record date, and no other Holders, shall be
entitled to consent to such amendment, supplement or waiver or revoke any
consent previously given, whether or not such Holders remain Holders after such
record date.  No consent shall be valid
or effective for more than 90 days after such record date unless consents from
Holders of the principal 

 

50

 

amount of the Securities
required hereunder for such amendment, supplement or waiver to be effective
shall have also been given and not revoked within such 90-day period.

 

After an amendment, supplement or waiver becomes
effective, it shall bind the Holder of every Security unless it makes a change
described in clause (1), (2), (3), (4), (5), (6) or (7) of
Section 9.02.  In that case the
amendment, supplement or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder’s Security.

 

SECTION 9.05.                      Notation
on or Exchange of Securities.

 

If an amendment, supplement or waiver changes the
terms of a Security, the Company may require the Holder of the Security to
deliver it to the Trustee.  The Trustee
may place an appropriate notation on the Security about the changed terms and return
it to the Holder.  Alternatively, if the
Company so determines, the Company in exchange for the Security shall issue and
the Trustee shall authenticate a new Security that reflects the changed terms.

 

SECTION 9.06.                      Trustee
To Sign Amendments, Etc.

 

The Trustee shall sign any amendment, supplement or
waiver authorized pursuant to this Article if the amendment, supplement or
waiver does not adversely affect the rights of the Trustee.  If it does, the Trustee may but need not
sign it.  The Company may not sign an
amendment or supplement until the Board of Directors approves it.  The Trustee, subject to Sections 7.01 and
7.02, shall be fully protected in relying on an Opinion of Counsel and an
Officers’ Certificate, each stating that any amendment, supplement or waiver is
authorized by this Indenture and complies with the provisions of this
Article Nine.

 

ARTICLE TEN

 

MEETINGS
OF SECURITYHOLDERS

 

SECTION 10.01.                    Purposes
for Which Meetings May Be Called.

 

A meeting of Holders of the Securities may be called
at any time and from time to time pursuant to the provisions of this
Article Ten for any of the following purposes:

 

(a)  to give any notice to the Company or to the
Trustee, or to give any directions to the Trustee, or to waive or to consent to
the waiving of any Default or Event of Default hereunder and its consequences,
or to take any other action 

 

51

 

authorized to be taken by Securityholders pursuant to any of the
provisions of Article Six;

 

(b)  to remove the Trustee or appoint a successor
Trustee pursuant to the provisions of Article Seven;

 

(c)  to consent to an amendment, supplement or
waiver pursuant to the provisions of Section 9.02; or

 

(d)  to take any action (i) authorized to be
taken by or on behalf of the Holders of any specified aggregate principal
amount of such series of Securities under any other provision of this
Indenture, or authorized or permitted by law or (ii) which the Trustee deems
necessary or appropriate in connection with the administration of this Indenture.

 

SECTION 10.02.                    Manner
of Calling Meetings.

 

The Trustee may at any time call a meeting of
Holders of the Securities to take any action specified in Section 10.01,
to be held at such time and at such place in the City of Las Vegas, Nevada, or
in the Borough of Manhattan, The City of New York, as the Trustee shall
determine.  Notice of every meeting of
Holders of the Securities, setting forth the time and place of such meeting and
in general terms the action proposed to be taken at such meeting, shall be
mailed by the Trustee, first-class postage prepaid, to the Company, and to the
Holders of the Securities at their last addresses as they shall appear on the
registration books of the Registrar, not less than ten nor more than 60 days
prior to the date fixed for the meeting.

 

Any meeting of Holders of the Securities shall be
valid without notice if all Holders of the Securities then outstanding are
present in Person or by proxy, or if notice is waived before or after the
meeting by all Holders of the Securities then outstanding, if the Company and
the Trustee are either present by duly authorized representative or have, before
or after the meeting waived notice.

 

SECTION 10.03.                    Call
of Meetings by Company or Holders

 

In case at any time the Company, pursuant to
resolution of its Board of Directors, or the Holders of not less than 25% in
aggregate principal amount of the Securities then outstanding shall have
requested the Trustee to call a meeting of Securityholders, either separately
or jointly, to take any action specified in Section 10.01, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed the notice of such meeting
within 20 days of receipt of such request, then the Company or the Holders of
such series of Securities in the amount above specified may 

 

52

 

determine the time and place
in the City of Las Vegas, Nevada, or in the Borough of Manhattan, The City of
New York, for such meeting and may call such meeting for the purpose of taking
such action, by mailing or causing to be mailed notice thereof as provided in
Section 10.02, or by causing notice thereof to be published at least once
in each of two successive calendar weeks (on any day of the week) in a
newspaper or newspapers printed in the English language, customarily published
at least five days a week and of general circulation in the City of Las Vegas,
Nevada and in the Borough of Manhattan, The City of New York, the first such
publication to be not less than 10 nor more than 60 days prior to the date
fixed for the meeting.

 

SECTION 10.04.                    Who
May Attend and Vote at Meetings.

 

To be entitled to vote at any meeting of
Securityholders, a Person shall (a) be a registered Holder of one or more
Securities, or (b) be a Person appointed by an instrument in writing as proxy
for the registered Holder or Holders of Securities.  The only Persons who shall be entitled to be present or to speak
at any meeting of Securityholders shall be the Persons entitled to vote at such
meeting and their counsel and any representative of the Trustee and its counsel
and any representatives of the Company and its counsel.

 

SECTION
10.05.                    Regulations May Be Made by Trustee;
Conduct of the Meeting; Voting Rights; Adjournment.

 

Notwithstanding any other provision of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Securityholders, in regard to proof of the holding of Securities
and of the appointment of proxies, and in regard to the appointment and duties
of inspectors of votes, and submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think appropriate.  Such regulations may fix a record date and time for determining
the Holders of record of Securities entitled to vote at such meeting, in which
case those and only those Persons who are Holders of Securities at the record
date and time so fixed, or their proxies, shall be entitled to vote at such
meeting whether or not they shall be such Holders at the time of the meeting.

 

The Trustee shall, by an instrument in writing, appoint
a temporary chairman of the meeting, unless the meeting shall have been called
by the Company or by Securityholders as provided in Section 10.03, in
which case the Company or the Securityholders calling the meeting, as the case
may be, shall in like manner appoint a temporary chairman.  A permanent chairman and a permanent secretary
of the meeting shall be elected by vote of the Holders of a majority in
principal amount of the Securities represented at the meeting and entitled to
vote.

 

53

 

At any meeting each Securityholder or proxy shall be
entitled to one vote for each $1,000 principal amount of Securities held or
represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Securities challenged as not
outstanding and ruled by the chairman of the meeting to be not
outstanding.  The chairman of the
meeting shall have no right to vote other than by virtue of Securities held by
him or instruments in writing as aforesaid duly designating him as the Person
to vote on behalf of other Securityholders. 
At any meeting of Securityholders, the presence of Persons holding or
representing any number of Securities shall be sufficient for a quorum.  Any meeting of Securityholders duly called
pursuant to the provisions of Section 10.02 or Section 10.03 may be adjourned
from time to time by vote of the Holders of a majority in aggregate principal
amount of the Securities represented at the meeting and entitled to vote, and
the meeting may be held as so adjourned without further notice.

 

SECTION 10.06.                    Voting
at the Meeting and Record To Be Kept.

 

The vote upon any resolution submitted to any meeting
of Securityholders shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy
and the principal amount of the Securities voted by the ballot.  The permanent chairman of the meeting shall
appoint two inspectors of votes, who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at
the meeting.  A record in duplicate of
the proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to such record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more Persons having knowledge of the facts, setting
forth a copy of the notice of the meeting and showing that such notice was
mailed as provided in Section 10.02 or published as provided in
Section 10.03.  The record shall be
signed and verified by the affidavits of the permanent chairman and the
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.

 

Any record so signed and verified shall be
conclusive evidence of the matters therein stated.

 

SECTION 10.07.                    Exercise
of Rights of Trustee or Securityholders May Not Be Hindered or Delayed by
Call of Meeting.

 

Nothing in this Article Ten contained shall be
deemed or construed to authorize or permit, by reason of any call of a meeting
of Securityholders or any rights expressly or impliedly conferred hereunder to
make such call, any hindrance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Securityholders under any
of the provisions of this Indenture or of the Securities.

 

54

 

ARTICLE ELEVEN

 

REDEMPTION

 

SECTION 11.01.                    Notices
to Trustee.

 

If the Company elects to redeem the Securities
pursuant to any optional redemption provisions thereof, it shall notify the
Trustee of the redemption date and the principal amount of the Securities to be
redeemed.

 

The Company shall give each notice provided for in
this Section in an Officers’ Certificate at least 45 days before the redemption
date (unless a shorter notice period shall be satisfactory to the Trustee),
which notice shall specify the provisions of such Security pursuant to which
the Company elects to redeem such Securities.

 

If the Company elects to reduce the principal amount
of the Securities to be redeemed pursuant to mandatory redemption provisions
thereof, it shall notify the Trustee of the amount of, and the basis for, any such
reduction.  If the Company elects to
credit against any such mandatory redemption Securities it has not previously
delivered to the Trustee for cancellation, it shall deliver such Securities
with such notice.

 

SECTION 11.02.                    Selection
of Securities To Be Redeemed.

 

If less than all of the Securities are to be redeemed,
the Trustee shall select the Securities to be redeemed by a method that
complies with the requirements of any exchange on which the Securities are
listed, or, if the Securities are not listed on an exchange, on a pro rata
basis or by lot.  The Trustee shall make
the selection not more than 75 days and not less than 30 days before the
redemption date from the Securities outstanding and not previously called for
redemption.  Securities and portions
thereof that the Trustee selects shall be in amounts equal to the minimum
authorized denomination for the Securities to be redeemed or any integral
multiple thereof.  Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. 
The Trustee shall notify the Company promptly in writing of the
Securities or portions of Securities to be called for redemption.

 

SECTION 11.03.                    Notice
of Redemption.

 

Except as otherwise provided as to the Securities,
at least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption to each Holder with a copy to the
Trustee whose Securities are to be redeemed.

 

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

 

55

 

(1)           the redemption date;

 

(2)           the redemption price fixed in accordance with the terms of the
Securities to be redeemed, plus accrued interest, if any, to the date fixed for
redemption (the “redemption price”);

 

(3)           if any Security is being redeemed in part, the portion of the principal
amount of such Security to be redeemed and that, after the redemption date,
upon surrender of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion will be issued;

 

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

 

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

 

(6)           that, unless the Company defaults in payment of the redemption price,
interest on Securities called for redemption ceases to accrue on and after the
redemption date;

 

(7)           the paragraph of the Securities pursuant to which such Securities
called for redemption are being redeemed; and

 

(8)           the CUSIP number, if any, of the Securities to be redeemed.

 

At the Company’s request, the Trustee shall give the
notice of redemption in the Company’s name and at its expense; provided,
however, that the Company shall have delivered to the Trustee, at least
45 days prior to the redemption date, an Officers’ Certificate requesting that
the Trustee give such notice and setting forth the information to be stated in
such notice as provided in the preceding paragraph.  The notice mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the Holder
receives such notice.  In any case,
failure to give such notice by mail or any defect in the notice of the Holder
of any Security shall not affect the validity of the proceeding for the redemption
of any other Security.

 

SECTION 11.04.                    Effect
of Notice of Redemption.

 

Once notice of redemption is mailed in accordance
with Section 11.03 hereof, Securities called for redemption become due and
payable on the redemption date for the redemption price.  Upon surrender to the Paying Agent, such
Securities will be paid at the redemption price.

 

56

 

SECTION 11.05.                    Deposit
of Redemption Price.

 

On or before 10:00 a.m., New York City time, on
the redemption date, the Company shall deposit with the Paying Agent (or, if
the Company or any subsidiary is the Paying Agent, shall segregate and hold in
trust) money sufficient to pay the redemption price of all Securities called
for redemption on that date other than Securities which have previously been
delivered by the Company to the Trustee for cancellation.  The Paying Agent shall return to the Company
any money not required for that purpose.

 

SECTION 11.06.                    Securities
Redeemed in Part.

 

Upon surrender of a Security that is redeemed in
part, the Company shall issue and the Trustee shall authenticate for the Holder
at the expense of the Company a new Security of like series equal in principal
amount to the unredeemed portion of the Security surrendered.

 

ARTICLE TWELVE

 

MISCELLANEOUS

 

SECTION 12.01.                    Trust
Indenture Act Controls.

 

If any provision of this Indenture limits,
qualifies, or conflicts with another provision which is required to be included
in this Indenture by the TIA or the TIA as amended after the date hereof, the
required provision shall control.

 

SECTION 12.02.                    Notices.

 

Any notice or communication shall be sufficiently
given if in writing and delivered in Person or mailed by first-class mail
postage prepaid, addressed as follows:

 

if to the Company:

 

Mandalay
Resort Group

3950 Las Vegas Boulevard South

Las Vegas, Nevada 89119

Attention:  General Counsel

 

57

 

if to the Trustee:

 

The
Bank of New York

101 Barclay Street, Floor 8W

New York, New York  10286

Attention:  Corporate Trust Administration

Re:  Mandalay Resort Group

 

The Company or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.

 

Any notice or communication mailed to a
Securityholder shall be mailed by first-class mail, postage prepaid, to such
Holder at such Holder’s address as it appears on the register maintained by the
Registrar and shall be sufficiently given to such Holder if so mailed within
the time prescribed.

 

Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency with
respect to other Securityholders.  If a
notice or communication is mailed in the manner provided above, it shall be
deemed to have been duly given two days after the date of mailing, whether or
not the addressee receives it.

 

SECTION 12.03.                    Communication
by Holders with Other Holders.

 

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

 

SECTION 12.04.                    Certificates
and Opinion as to Conditions Precedent.

 

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

 

(1)           an Officers’ Certificate stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and

 

(2)           an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.

 

58

 

SECTION 12.05.                    Statements
Required in Certificate or Opinion.

 

Each Officers’ Certificate or Opinion of Counsel
with respect to compliance with a condition or covenant provided for in this Indenture
shall include:

 

(1)           a statement that the Person making such Officers’ Certificate or
Opinion of Counsel has read such covenant or condition;

 

(2)           a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers’
Certificate of Opinion of Counsel are based;

 

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

 

(4)           a statement as to whether or not in the opinion of such Person, such
condition or covenant has been complied with; provided, however,
that with respect to matters of fact an Opinion of Counsel may rely on an Officers’
Certificate.

 

SECTION 12.06.                    When
Treasury Securities Disregarded.

 

In determining whether the Holders of the required
principal amount of Securities have concurred in any direction, waiver or
consent, Securities owned by the Company or by an Affiliate shall be
disregarded, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which a Responsible Officer of the Trustee actually knows are so
owned shall be so disregarded.

 

SECTION 12.07.                    Rules
by Paying Agent, Registrar.

 

The Paying Agent or Registrar each may make
reasonable rules for its functions.

 

SECTION 12.08.                    Legal
Holidays.

 

A “Legal Holiday” is a Saturday, a Sunday, a legal
holiday or a day on which banking institutions are not required to be
open.  If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period.

 

59

 

SECTION 12.09.                    Governing
Law.

 

This Indenture and the Securities shall be governed
by and construed in accordance with the laws of the State of New York, without
regard to conflicts of laws principles thereof.

 

SECTION 12.10.                    No
Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any subsidiary.  Any such indenture, loan or debt agreement
may not be used to interpret this Indenture.

 

SECTION 12.11.                    No
Recourse Against Others.

 

A past, present or future director, officer,
employee, stockholder or incorporator, as such, of the Company or any successor
corporation shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of,
or by reason of such obligations or their creation.  Each Securityholder by accepting a Security waives and releases
all such liability.  The waiver and release
are part of the consideration of issuance of the Securities.  The waiver may not be effective to waive
liabilities under the federal securities laws and it is the view of the SEC
that such a waiver is against public policy.

 

SECTION 12.12.                    Successors.

 

All agreements of the Company in this Indenture and
the Securities shall bind its successor. 
All agreements of the Trustee in this Indenture shall bind its
successor.

 

SECTION 12.13.                    Duplicate
Originals.

 

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

 

SECTION 12.14.                    Severability.

 

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

 

60

 

SECTION 12.15.                    Effect
of Headings, Table of Contents, Etc.

 

The Article and Section headings herein
and the table of contents are for convenience only and shall not affect the
construction thereof.

 

61

 

IN WITNESS WHEREOF, the Company and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.

 

	
   

  	
  SIGNATURES

  
	
   

  	
   

  
	
   

  	
  MANDALAY RESORT GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn Schaeffer

  	
   

  
	
   

  	
   

  	
  Name: Glenn Schaeffer

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stacey B. Poindexter

  	
   

  
	
   

  	
   

  	
  Name: Stacey B. Poindexter

  
	
   

  	
   

  	
  Title: 

  

 

 

EXHIBIT A

 

	
  REGISTERED

  PRINCIPAL AMOUNT

  $

  	
   

  	
  CUSIP NO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NO.

  

 

MANDALAY RESORT
GROUP

61⁄2% SERIES A SENIOR 

NOTE DUE 2009

 

THE SECURITY (OR ITS PREDECESSOR) EVIDENCED
HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM.  EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.  THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF MANDALAY RESORT GROUP
(“MANDALAY”) THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b)  IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (c) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF MANDALAY SO REQUESTS), (2) TO MANDALAY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED

 

A-1

 

EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY THE
DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE &
CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE GOVERNING
THIS NOTE.

 

MANDALAY RESORT GROUP, a Nevada corporation (the
“Company,” which term shall include any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
Cede & Co., or registered assigns, the principal sum of
$                     on
July 31, 2009, and to pay interest thereon at the rate of 61⁄2% per annum, until
the entire principal amount hereof is paid or duly provided for.  This Note is one of a duly authorized series
issued by the Company designated as the 61⁄2% Series A Senior Notes due
2009” (herein called the “Notes”).

 

1.             Interest.

 

The Company will pay interest semiannually on
January 31 and July 31 of each year (each, an “Interest Payment
Date”) commencing January 31, 2004. 
Interest on the Notes will accrue from the most recent date to which
interest has been paid, unless the date hereof is a date to which interest has
been paid, in which case from the date of the Note, or, if no interest has been
paid, from July 31, 2003. 
Notwithstanding the foregoing, when there is no existing default in the
payment of interest on the Notes, if the date hereof is after a Record Date, as
that term is defined below, and before the next succeeding Interest Payment
Date, this Note shall bear interest from such Interest Payment Date; provided,
however, that if the Company shall default in the payment of interest
due on such Interest Payment Date, then this 

 

A-2

 

Note shall bear interest
from the next preceding Interest Payment Date to which interest has been paid,
or, if no interest has been paid on the Notes, from July 31, 2003.  Interest will be computed on the basis of a
360-day year of twelve 30-day months.

 

2.             Method
of Payment.

 

The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the January 15 or July 15 preceding the
January 31 or July 31, as the case may be, on which the Interest
Payment Date occurs (each, a “Record Date”). 
Holders must surrender Notes to a Paying Agent to collect principal
payments.  The Company will pay
principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts.  However, the Company may pay principal and
any interest by its check payable in such money.  It may mail an interest check to a holder’s registered address.

 

3.             Paying
Agent and Registrar.

 

Initially, the Trustee will act as Paying Agent and
Registrar.  The Company may change any
Paying Agent, Registrar or co-registrar without notice.  The Company or any of its subsidiaries may
act as Paying Agent, Registrar or co-registrar.

 

4.             Indenture.

 

The Company issued the Notes under an Indenture
dated as of July 31, 2003, between the Company and the Trustee (the
“Indenture”).  The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code 77aaa-77bbbb), as amended, as
in effect on the date of the Indenture. 
The Notes are subject to all such terms and Holders are referred to the
Indenture and such Act for a statement of them.  Terms used herein which are defined in the Indenture shall have
the respective meanings assigned to them in the Indenture.

 

5.             Redemption.

 

a.  Optional
Redemption.  Except as provided below,
the Company may not redeem the Notes prior to maturity.  Prior to maturity, upon not less than 30 nor
more than 60 days’ notice, the Company may redeem the Notes in whole but
not in part, at a redemption price equal to 100% of the principal amount
thereof plus the Make-Whole Premium, together with accrued and unpaid interest
thereon to the applicable redemption date.

 

“Make-Whole-Premium” means, with respect to any Note
at any redemption date, the excess, if any, of (a) the present value of
the sum of the principal amount that would be payable at maturity of such Note
and all remaining interest payments (not including any portion of such payments
of interest accrued as of the redemption date) to and including July

 

A-3

 

31, 2009, discounted on a
semi-annual bond equivalent basis from July 31, 2009 to the redemption
date at a per annum interest rate equal to the sum of the Treasury Yield
(determined on the Business Day immediately preceding the date of such
redemption), plus 50 basis points, over (b) the aggregate principal amount
of the Note being redeemed.

 

“Treasury Yield” means the yield to maturity at the
time of computation of Treasury Securities with a constant maturity (as
compiled by and published in the most recent Federal Reserve Statistical
Release H.15 (519) which has become publicly available at least two business
days prior to the date fixed for redemption (or, if such Statistical Release is
no longer published, any publicly available source of similar data)) most
nearly equal to the then remaining average life of the Notes, provided
that if the average life of the Notes is not equal to the constant maturity of
a Treasury Security for which a weekly average yield is given, the Treasury
yield shall be obtained by linear interpolation (calculated to the nearest
one-twelfth of a year) from the weekly average yields of Treasury Securities
for which such yields are given, except that if the average life of the Notes
is less than one year, the weekly average yield on actually traded Treasury Securities
adjusted to a constant maturity of one year shall be used.

 

b.  Mandatory
Redemption.  The Company will not be
required to make any mandatory sinking fund payments in respect of the Notes.

 

6.             Offers to Purchase.

 

Section 4.12 of the Indenture provides that
upon the occurrence of a Change of Control (as defined in the Indenture) and
subject to further limitations contained therein, the Company will make an
offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.

 

7.             Denominations,
Transfer, Exchange.

 

The Notes are in registered form without coupons in
denominations of $1,000 and in integral multiples of $1,000.  A Holder may transfer or exchange Notes in
accordance with the Indenture.  The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture.

 

8.             Persons
Deemed Owners.

 

The Holder of a Note may be treated as the owner of
it for all purposes.

 

A-4

 

9.             Unclaimed
Money.

 

If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its written request. 
After that, Holders entitled to the money must look to the Company for
payment unless an abandoned property law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.

 

10.           Discharge
Prior to Maturity.

 

Subject to certain conditions, if the Company
deposits with the Trustee money or U.S. Government obligations sufficient to
pay principal of and accrued interest on the Notes to maturity, the Company
will be discharged (to the extent provided in the Indenture) from the Indenture
and the Notes.

 

11.           Amendment,
Supplement, Waiver.

 

Subject to certain exceptions requiring the consent
of the Holders of each of the affected Notes, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding affected by such amendment,
supplement or waiver, and any past default or compliance with any provision as
to the Notes may be waived with the consent of the Holders of a majority in
principal amount of the Notes then outstanding.  Without the consent of any Holder, the Company and the Trustee
may amend or supplement the Indenture of the Notes to, among other things, cure
any ambiguity, defect or inconsistency or to provide that the obligations of
the Company hereunder may be represented solely in the records of the Company
in addition to or in place of the issue of Notes or to make any change that
does not materially adversely affect the rights of any Holder.

 

12.           Restrictive
Covenants.

 

The Notes are general unsecured obligations of the
Company.  The Indenture does not limit
the Company from issuing additional debt under the Indenture or incurring other
unsecured Debt.  It does limit the
ability of the Company and its subsidiaries to grant certain security interests
in their property without equally and ratably securing the Notes and to engage
in certain sales and leaseback transactions, subject to certain important
exceptions described therein.  Once a
year the Company must report to the Trustee with respect to its compliance with
such limitations.

 

A-5

 

13.           Successor
Corporation.

 

When a successor corporation assumes all the
obligations of its predecessor under the Notes and the Indenture, the
predecessor corporation will be released from those obligations.

 

14.           Defaults
and Remedies.

 

An Event of Default is any one of the
following:  (i) failure of the
Company to pay interest when the same becomes due and payable and default
continues for a period of 30 days on the Notes; (ii) failure of the
Company to pay the principal of or premium, if any, on the Notes when due at
maturity, upon redemption, pursuant to an offer to purchase pursuant to the
change of control provision or otherwise by acceleration or otherwise;
(iii) failure of the Company to comply with Section 4.12 in the
Indenture; (iv) failure to perform any other covenant contained in the
Indenture for 30 days after notice (other than a Default under
Section 4.02 or Article Five which Default shall be an Event of
Default without the notice or passage of time specified in this clause);
(v) the occurrence of an event of default, as defined in any one or more
mortgages, indentures or instruments under which there may be issue, or by
which there may be secured or evidenced, any Debt of the Company or a
subsidiary whether such Debt now exists or shall hereafter be created and shall
entitle the holders of such Debt to declare an aggregate principal amount of at
least $10,000,000 of such Debt due and payable, which event of default is not
cured or waived in accordance with the provisions of such instrument, or such
Debt is not discharged, within 30 days after the receipt by the Company of
notice from the Trustee or the Holders of at least 25% in principal amount of
such series of Securities then outstanding of such event of default and
requiring the Company to cause such event of default to be cured or such Debt
to be discharged; and (vi) certain events of bankruptcy, insolvency or
reorganization.  If an Event of Default
(other than certain events of bankruptcy, insolvency or reorganization)
relating to the Notes occurs and is continuing, the Trustee or the Holders of
not less than 25% in principal amount of the Notes then outstanding may declare
all the Notes to be due and payable immediately in accordance with
Section 6.02 of the Indenture. 
Holders may not enforce the Indenture or the Notes except as provided in
the Indenture.  The Trustee may require
security and indemnity satisfactory to it before it enforces the Indenture or
the Notes.  Subject to certain
limitations, Holders of a majority in principal amount of the Notes then
outstanding may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders notice
of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their interests.

 

15.           Trustee
Dealings with Company.

 

The Bank of New York, the Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the 

 

A-6

 

Company or its subsidiaries
or Affiliates, and may otherwise deal with the Company or its subsidiaries or
Affiliates, as if it were not Trustee.

 

16.           No
Recourse Against Others.

 

A past, present or future director, officer,
employee, stockholder or incorporator, as such, of the company or any successor
corporation shall not have any liability for any obligations of the Company
under the Notes or the Indenture or for any claim based on, in respect of, or
by reason of such obligations or their creation.  Each Holder by accepting a Note waives and released all such
liability.  The waiver and release are
part of the consideration for the issue of the Notes.

 

17.           Authentication.

 

This Note shall not be valid until the Trustee signs
the certificate of authentication at the end of this Note.

 

18.           Copies
of the Indenture.

 

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

 

Mandalay Resort Group

3950 Las Vegas Boulevard South

Las Vegas, Nevada 89119

Attention:  General Counsel

 

19.           Abbreviations
and Defined Terms.

 

Customary abbreviations may be used in the name of a
Holder of a Note or an assignee, such as: 
TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).

 

20.           CUSIP
Numbers.

 

Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company will cause
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes.  No representation is made as to
the accuracy of such numbers as printed on the Notes and reliance may be placed
only on the other identification numbers printed hereon.

 

A-7

 

21.           Registration
Rights.

 

Pursuant to a registration rights agreement by and
among the Company and the Initial Purchasers, the Company will be obligated to
consummate an exchange offer pursuant to which the Holder of this Note shall
have the right to exchange this Note for Exchange Securities (as defined in the
Indenture), which have been registered under the Securities Act, in like
principal amount and having terms identical in all material respects as the
Notes.  The Holders of the Notes shall
be entitled to receive certain additional interest payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the registration rights agreement.

 

22.           Governing
Law.

 

This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflict
of laws principles thereof.

 

(Signature Page To Follow)

 

A-8

 

IN WITNESS WHEREOF, the Company has caused this Note
to be duly executed by its duly authorized officers.

 

 

	
   

  	
  SIGNATURES

  
	
   

  	
   

  
	
   

  	
  MANDALAY RESORT GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes of the series designated
“61⁄2% Series A Senior Notes due 2009,” pursuant to the Indenture.

 

 

	
   

  	
  THE BANK OF NEW YORK,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

Date of Authentication:

 

 

ASSIGNMENT FORM

 

If you the Holder want to assign this Note, fill in
the form below and have your signature guaranteed by an Eligible Guarantor
Institution (bank, stock broker, savings and loan association or credit union)
with membership in an approved signature guarantee medallion program pursuant
to Securities and Exchange Commission Rule 17Ad-15:

 

I or we assign and transfer this Note to:

 

 

 

(Print or type name, address and zip code and
social security or tax ID number of assignee)

 

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

 

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Sign
  exactly as your name

  appears on the other side of

  this Note)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  
								

 

In connection with any transfer of this Note
occurring prior to the date which is the earlier of (i) the date of the declaration
by the Commission of the effectiveness of a registration statement under the
Securities Act of 1933, as amended (the “Securities Act”), covering resales of
this Note (which effectiveness shall not have been suspended or terminated at
the date of the transfer) and (ii) the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer:

 

[Check One]

 

(1)    o                   to the Company or a subsidiary thereof; or

 

(2)    o                   pursuant to and in compliance with Rule 144A
under the Securities Act of 1933, as amended; or

 

 

(3)    o                   to an institutional “accredited investor” (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be obtained from
the Trustee); or

 

(4)    o                   pursuant to the exemption from registration
provided by Rule 144 under the Securities Act of 1933, as amended; or

 

(5)    o                   pursuant to an effective registration
statement under the Securities Act of 1933, as amended; or

 

(6)    o                   pursuant to another available exemption from
the registration requirements of the Securities Act of 1933, as amended.

 

and unless the box below is checked, the
undersigned confirms that such Note is not being transferred to an “affiliate”
of the Company as defined in Rule 144 under the Securities Act of 1933, as
amended (an “Affiliate”):

 

o            The transferee is an Affiliate of the
Company.

 

Unless one of the items is checked, the Trustee will
refuse to register any of the Notes evidenced by this certificate in the name
of any Person other than the registered Holder thereof; provided, however,
that if item (3), (4) or (6) is checked, the Company or the Trustee may
require, prior to registering any such transfer of the Notes, in their sole
discretion, such written legal opinions, certifications (including an
investment letter in the case of box (3)) and other information as the Trustee
or the Company has reasonably requested to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, as amended.

 

 

If none of the foregoing items are checked, the
Trustee or Registrar shall not be obligated to register this Note in the name
of any Person other than the Holder hereof unless and until the conditions to
any such transfer of registration set forth herein and in Section 2.16 of
the Indenture shall have been satisfied.

 

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Sign
  exactly as name appears on the

  other side of this Note)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	 

								

 

 

TO
BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

 

The undersigned represents and warrants that it is
purchasing this Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
“qualified institutional buyer” within the meaning of Rule 144A under the
Securities Act of 1933, as amended and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  NOTICE:  To be executed by an executive officer

  

 

 

EXHIBIT B

 

	
  REGISTERED

  PRINCIPAL AMOUNT

  $

  	
   

  	
  CUSIP NO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NO.

  

 

MANDALAY RESORT
GROUP

61⁄2% SERIES B SENIOR

NOTE DUE 2009

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY,
OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF
SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE &
CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE GOVERNING
THIS NOTE.

 

MANDALAY RESORT GROUP, a Nevada corporation (the
“Company,” which term shall include any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
Cede & Co., or registered assigns, the principal sum of
$                       
on July 31, 2009, and to pay interest thereon at the rate of 61⁄2% per
annum, until the entire principal amount hereof is paid or duly provided
for.  This Note is one of a 

 

B-1

 

duly authorized series
issued by the Company designated as the “61⁄2% Series B Senior Notes due
2009” (herein called the “Notes”).

 

1.             Interest.

 

The Company will pay interest semiannually on
January 31 and July 31 of each year (each, an “Interest Payment
Date”) commencing January 31, 2004. 
Interest on the Notes will accrue from the most recent date to which
interest has been paid, unless the date hereof is a date to which interest has
been paid, in which case from the date of the Note, or, if no interest has been
paid, from July 31, 2003. 
Notwithstanding the foregoing, when there is no existing default in the
payment of interest on the Notes, if the date hereof is after a Record Date, as
that term is defined below, and before the next succeeding Interest Payment
Date, this Note shall bear interest from such Interest Payment Date; provided,
however, that if the Company shall default in the payment of interest
due on such Interest Payment Date, then this Note shall bear interest from the
next preceding Interest Payment Date to which interest has been paid, or, if no
interest has been paid on the Notes, from July 31, 2003. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.

 

2.             Method
of Payment.

 

The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the January 15 or July 15 preceding the
January 31 or July 31, as the case may be, on which the Interest
Payment Date occurs (each, a “Record Date”). 
Holders must surrender Notes to a Paying Agent to collect principal
payments.  The Company will pay
principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts.  However, the Company may pay principal and
any interest by its check payable in such money.  It may mail an interest check to a holder’s registered address.

 

3.             Paying
Agent and Registrar.

 

Initially, the Trustee will act as Paying Agent and
Registrar.  The Company may change any
Paying Agent, Registrar or co-registrar without notice.  The Company or any of its subsidiaries may
act as Paying Agent, Registrar or co-registrar.

 

4.             Indenture.

 

The Company issued the Notes under an Indenture
dated as of July 31, 2003, between the Company and the Trustee (the
“Indenture”).  The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code 77aaa-77bbbb), as amended, as
in effect on the date of the Indenture. 
The Notes are subject to all such terms and Holders are referred to the 

 

B-2

 

Indenture and such Act for a
statement of them.  Terms used herein
which are defined in the Indenture shall have the respective meanings assigned
to them in the Indenture.

 

5.             Redemption.

 

a.  Optional
Redemption.  Except as provided below,
the Company may not redeem the Notes prior to maturity.  Prior to maturity, upon not less than 30 nor
more than 60 days’ notice, the Company may redeem the Notes in whole but not
in part, at a redemption price equal to 100% of the principal amount thereof
plus the Make-Whole Premium, together with accrued and unpaid interest thereon
to the applicable redemption date.

 

“Make-Whole-Premium” means, with respect to any Note
at any redemption date, the excess, if any, of (a) the present value of
the sum of the principal amount that would be payable at maturity of such Note
and all remaining interest payments (not including any portion of such payments
of interest accrued as of the redemption date) to and including
July 31, 2009, discounted on a semi-annual bond equivalent basis from
July 31, 2009 to the redemption date at a per annum interest rate equal to
the sum of the Treasury Yield (determined on the Business Day immediately
preceding the date of such redemption), plus 50 basis points, over (b) the
aggregate principal amount of the Note being redeemed.

 

“Treasury Yield” means the yield to maturity at the
time of computation of Treasury Securities with a constant maturity (as compiled
by and published in the most recent Federal Reserve Statistical Release H.15
(519) which has become publicly available at least two business days prior to
the date fixed for redemption (or, if such Statistical Release is no longer
published, any publicly available source of similar data)) most nearly equal to
the then remaining average life of the Notes, provided that if the average
life of the Notes is not equal to the constant maturity of a Treasury Security
for which a weekly average yield is given, the Treasury yield shall be obtained
by linear interpolation (calculated to the nearest one-twelfth of a year) from
the weekly average yields of Treasury Securities for which such yields are
given, except that if the average life of the Notes is less than one year, the
weekly average yield on actually traded Treasury Securities adjusted to a
constant maturity of one year shall be used.

 

b.  Mandatory
Redemption.  The Company will not be
required to make any mandatory sinking fund payments in respect of the Notes.

 

6.             Offers to Purchase.

 

Section 4.12 of the Indenture provides that
upon the occurrence of a Change of Control (as defined in the Indenture) and
subject to further limitations contained therein, the Company will make an
offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.

 

B-3

 

7.             Denominations,
Transfer, Exchange.

 

The Notes are in registered form without coupons in
denominations of $1,000 and in integral multiples of $1,000.  A Holder may transfer or exchange Notes in
accordance with the Indenture.  The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture.

 

8.             Persons
Deemed Owners.

 

The Holder of a Note may be treated as the owner of
it for all purposes.

 

9.             Unclaimed
Money.

 

If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its written request. 
After that, Holders entitled to the money must look to the Company for
payment unless an abandoned property law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.

 

10.           Discharge
Prior to Maturity.

 

Subject to certain conditions, if the Company
deposits with the Trustee money or U.S. Government obligations sufficient to
pay principal of and accrued interest on the Notes to maturity, the Company
will be discharged (to the extent provided in the Indenture) from the Indenture
and the Notes.

 

11.           Amendment,
Supplement, Waiver.

 

Subject to certain exceptions requiring the consent
of the Holders of each of the affected Notes, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding affected by such amendment,
supplement or waiver, and any past default or compliance with any provision as
to the Notes may be waived with the consent of the Holders of a majority in
principal amount of the Notes then outstanding.  Without the consent of any Holder, the Company and the Trustee may
amend or supplement the Indenture of the Notes to, among other things, cure any
ambiguity, defect or inconsistency or to provide that the obligations of the
Company hereunder may be represented solely in the records of the Company in
addition to or in place of the issue of Notes or to make any change that does
not materially adversely affect the rights of any Holder.

 

B-4

 

12.           Restrictive
Covenants.

 

The Notes are general unsecured obligations of the
Company.  The Indenture does not limit
the Company from issuing additional debt under the Indenture or incurring other
unsecured Debt.  It does limit the
ability of the Company and its subsidiaries to grant certain security interests
in their property without equally and ratably securing the Notes and to engage
in certain sales and leaseback transactions, subject to certain important
exceptions described therein.  Once a
year the Company must report to the Trustee with respect to its compliance with
such limitations.

 

13.           Successor
Corporation.

 

When a successor corporation assumes all the
obligations of its predecessor under the Notes and the Indenture, the
predecessor corporation will be released from those obligations.

 

14.           Defaults
and Remedies.

 

An Event of Default is any one of the
following:  (i) failure of the
Company to pay interest when the same becomes due and payable and default
continues for a period of 30 days on the Notes; (ii) failure of the
Company to pay the principal of or premium, if any, on the Notes when due at
maturity, upon redemption, pursuant to an offer to purchase pursuant to the
change of control provision or otherwise by acceleration or otherwise;
(iii) failure of the Company to comply with Section 4.12 in the
Indenture; (iv) failure to perform any other covenant contained in the
Indenture for 30 days after notice (other than a Default under
Section 4.02 or Article Five which Default shall be an Event of
Default without the notice or passage of time specified in this clause);
(v) the occurrence of an event of default, as defined in any one or more
mortgages, indentures or instruments under which there may be issued, or by
which there may be secured or evidenced any Debt of the Company or a subsidiary
whether such Debt now exists or shall hereafter be created and shall entitle
the holders of such Debt to declare an aggregate principal amount of at least
$10,000,000 of such Debt due and payable, which event of default is not cured
or waived in accordance with the provisions of such instrument, or such Debt is
not discharged, within 30 days after the receipt by the Company of notice from
the Trustee or the Holders of at least 25% in principal amount of such series
of Securities then outstanding of such event of default and requiring the
Company to cause such event of default to be cured or such Debt to be
discharged; and (vi) certain events of bankruptcy, insolvency or
reorganization.  If an Event of Default
(other than certain events of bankruptcy, insolvency or reorganization)
relating to the Notes occurs and is continuing, the Trustee or the Holders of
not less than 25% in principal amount of the Notes then outstanding may declare
all the Notes to be due and payable immediately in accordance with
Section 6.02 of the Indenture. 
Holders may not enforce the Indenture or the Notes except as provided in
the Indenture.  The Trustee may require
security and indemnity satisfactory to it before it enforces the Indenture or
the Notes.  Subject to certain
limitations, Holders of a majority in 

 

B-5

 

principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power.  The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests.

 

15.           Trustee
Dealings with Company.

 

The Bank of New York, the Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its subsidiaries or
Affiliates, and may otherwise deal with the Company or its subsidiaries or
Affiliates, as if it were not Trustee.

 

16.           No
Recourse Against Others.

 

A past, present or future director, officer,
employee, stockholder or incorporator, as such, of the company or any successor
corporation shall not have any liability for any obligations of the Company
under the Notes or the Indenture or for any claim based on, in respect of, or
by reason of such obligations or their creation.  Each Holder by accepting a Note waives and released all such
liability.  The waiver and release are
part of the consideration for the issue of the Notes.

 

17.           Authentication.

 

This Note shall not be valid until the Trustee signs
the certificate of authentication at the end of this Note.

 

18.           Copies
of the Indenture.

 

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

 

Mandalay Resort Group

3950 Las Vegas Boulevard South

Las Vegas, Nevada 89119

Attention:  General Counsel

 

19.           Abbreviations
and Defined Terms.

 

Customary abbreviations may be used in the name of a
Holder of a Note or an assignee, such as: 
TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).

 

B-6

 

20.           CUSIP
Numbers.

 

Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company will cause
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes.  No representation is made as to
the accuracy of such numbers as printed on the Notes and reliance may be placed
only on the other identification numbers printed hereon.

 

21.           Governing
Law

 

This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflict
of laws principles thereof.

 

(Signature
Page To Follow)

 

B-7

 

IN WITNESS WHEREOF, the Company has caused this Note
to be duly executed by its duly authorized officers.

 

	
   

  	
  SIGNATURES

  
	
   

  	
   

  
	
   

  	
  MANDALAY RESORT GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes of the series designated
“61⁄2% Series B Senior Notes due 2009,” pursuant to the Indenture.

 

 

	
   

  	
  THE BANK OF NEW YORK,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

 

Date of Authentication:

 

 

ASSIGNMENT FORM

 

If you the Holder want to assign this Note, fill in
the form below and have your signature guaranteed by an Eligible Guarantor
Institution (bank, stock broker, savings and loan association or credit union)
with membership in an approved signature guarantee medallion program pursuant
to Securities and Exchange Commission Rule 17Ad-15:

 

I or we assign and transfer this Note to:

 

 

 

(Print or type name, address and zip code and
social security or tax ID number of assignee)

 

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

 

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Sign
  exactly as your name

  appears on the other side of

  this Note)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  
								

 

 

EXHIBIT C

 

Form of Certificate To Be

Delivered in Connection with

Transfers to Non-QIB Accredited Investors

 

[             ],
[    ]

 

Registrar

[                        ]

 

[                        ]

 

[                        ]

 

Ladies
and Gentlemen:

 

In connection with our proposed purchase of Series A
61⁄2% Senior Notes due 2009 (the “Notes”) of Mandalay Resort Group, a Nevada
corporation (the “Company”), we confirm that:

 

1.             We
have received a copy of the Offering Memorandum (the “Offering Memorandum”),
dated July 22, 2003, relating to the Notes and such other information as
we deem necessary in order to make our investment decision.  We acknowledge that we have read and agreed
to the matters stated in the section entitled “Transfer Restrictions” of
such Offering Memorandum.

 

2.             We
understand that any subsequent transfer of the Notes is subject to certain
restrictions and conditions set forth in the Indenture relating to the Notes
(the “Indenture”) as described in the Offering Memorandum and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the
Notes except in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the “Securities Act”), and all applicable
State securities laws.

 

3.             We
understand that the offer and sale of the Notes have not been registered under
the Securities Act, and that the Notes may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. Persons except as
permitted in the following sentence.  We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell any Notes, we will do so only
(i) to the Company or any subsidiary thereof, (ii) inside the United
States in accordance with Rule 144A under the Securities Act to a “qualified
institutional buyer” (as defined in Rule 144A promulgated under the Securities
Act), (iii) inside the United States to an institutional “accredited investor”
(as defined below) that, prior to such transfer, furnishes (or has furnished on
its behalf by a U.S. 

 

C-1

 

broker-dealer) to the
Trustee (as defined in the Indenture) a signed letter containing certain
representations and agreements relating to the restrictions on transfer of the
Notes (the form of which letter can be obtained from the Trustee),
(iv) outside the United States in accordance with Rule 904 of Regulation S
promulgated under the Securities Act to non-U.S. Persons, (v) pursuant to
the exemption from registration provided by Rule 144 under the Securities Act
(if available), or (vi) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any Person
purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.

 

4.             We
understand that, on any proposed resale of any Notes, we will be required to
furnish to the Trustee and the Company such certification, legal opinions and
other information as the Trustee and the Company may reasonably require to
confirm that the proposed sale complies with the foregoing restrictions.  We further understand that the Notes purchased
by us will bear a legend to the foregoing effect.

 

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

 

6.             We
are acquiring the Notes purchased by us for our account or for one or more
accounts (each of which is an institutional “accredited investor”) as to each
of which we exercise sole investment discretion.

 

C-2

 

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

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

C-3

 

EXHIBIT D

 

Form of Certificate To Be Delivered

in Connection with Transfers

Pursuant to Regulation S

 

[           ],
[    ]

 

[                  ]

[                  ]

[                  ]

[                  ]

 

Re:          Mandalay
Resort Group (the “Company”) Series A 61⁄2% Senior Notes due 2009 (the “Notes”)

 

Ladies
and Gentlemen:

 

In connection with our proposed sale of
$                    
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we
represent that:

 

(1)           the
offer of the Notes was not made to a Person in the United States;

 

(2)           either
(a) at the time the buy offer was originated, the transferee was outside the
United States or we and any Person acting on our behalf reasonably believed that
the transferee was outside the United States, or (b) the transaction was
executed in, on or through the facilities of a designated off-shore securities
market in an offshore transaction and neither we nor any Person acting on our
behalf knows that the transaction has been pre-arranged with a buyer in the
United States;

 

(3)           no
directed selling efforts have been made in the United States in contravention
of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable;

 

(4)           the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act; and

 

(5)           we
have advised the transferee of the transfer restrictions applicable to the
Notes.

 

You, the Company and counsel for the Company are entitled
to rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested 

 

D-1

 

party in any administrative
or legal proceedings or official inquiry with respect to the matters covered
hereby.  Terms used in this certificate
have the meanings set forth in Regulation S.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  

 

D-2Exhibit
4.2

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

 

Dated as of July 31, 2003

 

 

by and among

 

 

MANDALAY RESORT GROUP

 

 

and

 

 

BANC OF AMERICA
SECURITIES LLC 

DEUTSCHE BANK SECURITIES INC.

CITIGROUP GLOBAL MARKETS INC.

CREDIT SUISSE FIRST BOSTON LLC

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

SG COWEN SECURITIES CORPORATION

CREDIT LYONNAIS SECURITIES (USA) INC.

SCOTIA CAPITAL (USA) INC.

BNY CAPITAL MARKETS, INC. 

MIZUHO INTERNATIONAL plc

 

 

 

 

REGISTRATION
RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is made and entered into as of July 31, 2003 by and among MANDALAY
RESORT GROUP, a Nevada corporation (the “Company”), and BANC OF
AMERICA SECURITIES LLC (“Banc of America”), DEUTSCHE BANK SECURITIES
INC., CITIGROUP GLOBAL MARKETS INC., CREDIT SUISSE FIRST BOSTON LLC, MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED, SG COWEN SECURITIES
CORPORATION, CREDIT LYONNAIS SECURITIES (USA) INC., SCOTIA CAPITAL (USA) INC.,
BNY CAPITAL MARKETS, INC., and MIZUHO INTERNATIONAL plc (collectively, the “Initial Purchasers”).

 

This Agreement is made pursuant to the Purchase
Agreement dated July 22, 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 61⁄2% Senior Notes due 2009
(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.

 

 

“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 61⁄2% Senior
Notes due 2009, 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 

 

2

 

requirements of the
Securities Act in connection with any resale of such Exchange Notes.

 

“Indenture” shall mean the Indenture relating
to the Notes dated as of July 31, 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.

 

3

 

“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 incurred 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

 

4

 

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).

 

“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,

 

5

 

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 meaning 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 

 

6

 

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 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.

 

7

 

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 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 

 

8

 

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 information 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 

 

9

 

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 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 

 

10

 

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
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;

 

11

 

(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 thereunder 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;

 

12

 

(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 become
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;

 

13

 

(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
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 

 

14

 

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 “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 

 

15

 

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
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);

 

16

 

(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 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 

 

17

 

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 requirements 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 

 

18

 

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 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

 

19

 

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

 

(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 

 

20

 

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 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 

 

21

 

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
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 

 

22

 

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 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

 

23

 

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 holders 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.

 

24

 

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.

 

(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

 

25

 

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 Schaeffer

  	
   

  
	
   

  	
   

  	
  Name: Glenn Schaeffer

  
	
   

  	
   

  	
  Title: President

  

 

Confirmed and accepted as of the date first above
written:

 

BANC
OF AMERICA SECURITIES LLC 

DEUTSCHE BANK SECURITIES INC.

CITIGROUP GLOBAL MARKETS INC.

CREDIT SUISSE FIRST BOSTON LLC

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

SG COWEN SECURITIES CORPORATION

CREDIT LYONNAIS SECURITIES (USA) INC.

SCOTIA CAPITAL (USA) INC.

BNY CAPITAL MARKETS, INC. 

MIZUHO INTERNATIONAL plc

 

	
  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.

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