Document:

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                                                                     Exhibit 4.5

                           MIKOHN GAMING CORPORATION

                          105,000 Units Consisting of
              $105,000,000 11.875% Senior Secured Notes due 2008
                  and 105,000 Common Stock Purchase Warrants

                              PURCHASE AGREEMENT
                              ------------------

                                                                 August 15, 2001

JEFFERIES & COMPANY, INC.
CIBC WORLD MARKETS CORP.

c/o Jefferies & Company, Inc.
11100 Santa Monica Boulevard
10th Floor
Los Angeles, California 90025

Ladies and Gentlemen:

          Mikohn Gaming Corporation, a Nevada corporation (the "Issuer"), hereby
agrees with you as follows:

          1.   Issuance of Securities.  The Issuer proposes to issue and sell to
Jefferies & Company, Inc. and CIBC World Markets Corp. (each an "Initial
Purchaser" and, together, the "Initial Purchasers"), and the Initial Purchasers
propose to purchase, 105,000 units (the "Units"), each consisting of $1,000
aggregate principal amount at maturity of the Issuer's 11.875% Senior Secured
Notes due 2008, Series A (the "Series A Notes") and one warrant (a "Warrant")
initially exercisable to purchase four shares of the Issuer's common stock, par
value $.10 per share, together with the associated rights ("Common Stock"),
subject to the terms and conditions set forth herein. The Series A Notes will be
issued pursuant to an indenture (the "Indenture"), to be dated as of the Closing
Date (as defined below), among the Issuer, the Guarantors (as defined below) and
Firstar Bank, N.A., as trustee (the "Trustee"). The Series A Notes and the
Series B Notes (as defined below) issuable in exchange therefore are
collectively referred to herein as the "Notes." The Notes will be fully and
unconditionally guaranteed (the "Guarantees") as to payment of principal,
interest, premium, if any, and Liquidated Damages (as defined in the Indenture),
if any, on a senior basis, jointly and severally, by each of the entities listed
on Schedule A hereto (each a "Guarantor" and collectively the "Guarantors").

          The obligations under the Notes and the Guarantees will be secured by
security interests in or pledges of (the "Security Interests") certain assets
(the "Collateral") of the Issuer, the Guarantors and certain of the Issuer's
other subsidiaries (collectively, the "Grantors"), as set forth in the Offering
Circular (as defined below). Such assets will include substantially all of the
assets of the Issuer and the Subsidiaries (as defined below), subject to certain
exceptions and excluding the Excluded Assets (such as, among others, exceptions
for "deposit accounts," as defined in the Uniform Commercial Code of the State
of New York; assets subject to legal, regulatory or contractual restrictions on
pledges which are not subject to Sections 9-406(d), 9-407(a), 9-408(a) or 9-
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409(a) of the Uniform Commercial Code of the State of New York or any other
relevant jurisdiction; and assets subject to the Uniform Commercial Code of the
State of New York which may not be perfected by the filing of a Uniform
Commercial Code financing statement).

     The Warrants will be issued pursuant to a warrant agreement (the "Warrant
Agreement"), to be dated as of the Closing Date, between the Issuer and Firstar
Bank, N.A., as warrant agent (the "Warrant Agent"). The shares of Common Stock
issuable upon exercise of the Warrants are referred to herein, collectively, as
the "Warrant Shares." The Units, the Notes, the Guarantees, the Warrants and the
Warrant Shares are referred to herein, collectively, as the "Securities."
Capitalized terms used but not defined herein shall have the respective meanings
given to such terms in the Indenture or Warrant Agreement, as applicable.

     The Units will be offered and sold to the Initial Purchasers pursuant to an
exemption from the registration requirements under the Securities Act of 1933,
as amended (the "Act"). The Issuer and the Guarantors have prepared a
preliminary offering circular, dated July 31, 2001 (the "Preliminary Offering
Circular"), relating to the offer and sale of the Series A Notes, and a final
offering circular, dated August 15, 2001 (the "Offering Circular"), relating to
the offer and sale of the Units (the "Offering").

     Upon original issuance thereof, and until such time as the same is no
longer required under the Indenture, the Warrant Agreement or the applicable
requirements of the Act, the Units, the Series A Notes, the Warrants and the
Warrant Shares shall bear the following legend:

     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
     SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
     ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
     ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
     NOT SUBJECT TO REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE
     HEREOF AGREES NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR
     TO THE DATE THAT IS TWO YEARS (OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE
     PROVIDED UNDER RULE 144(k) PROMULGATED UNDER THE SECURITIES ACT AS
     PERMITTING RESALES BY NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT
     RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
     DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
     THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) (THE "RESALE
     RESTRICTION TERMINATION DATE") EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
     REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
     SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
     PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY
     BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A)
     THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
     INSTITUTIONAL BUYER

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     TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
     144A, (D) PURSUANT TO OFFERS AND SALES TO FOREIGN PERSONS THAT OCCUR IN
     OFFSHORE TRANSACTIONS AND WITHOUT DIRECTED SELLING EFFORTS WITHIN THE
     MEANINGS OF SUCH TERMS AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT,
     (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
     501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS PURCHASING THE
     SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
     "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR
     FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
     SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
     REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
     AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO
     REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
     INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING
     CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
     COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE
     IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY
     OTHER APPLICABLE JURISDICTION. THE HOLDER OF THIS SECURITY AGREES THAT IT
     WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
     SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
     UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
     DATE.

     2.  Agreements to Sell and Purchase. On the basis of the representations,
warranties and agreements contained herein, and subject to the terms and
conditions hereof, the Issuer shall issue and sell to the Initial Purchasers
(and, in order to induce the Initial Purchasers to purchase the Units, the
Grantors shall grant the Security Interests), and the Initial Purchasers agree,
severally and not jointly, to purchase from the Issuer, the number of Units set
forth opposite the name of such Initial Purchaser on Schedule C hereto at a
purchase price equal to $930.89 per Unit.

     The parties hereto hereby agree that, for Federal income and all other
tax purposes, (i) the issue price per $1,000 stated principal amount of each
Note shall be $944.33 and (ii) the issue price per Warrant shall be $16.56.

     3.  Terms of Offering. The Initial Purchasers have advised the Issuer that
the Initial Purchasers will make offers to sell (the "Exempt Resales") some or
all of the Units purchased by the Initial Purchasers hereunder on the terms set
forth in the Offering Circular, as amended or supplemented, solely to (a)
persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers" as defined in Rule 144A under the Act ("QIBs") purchasing
for such QIB's own account or for the account of another QIB and (b) a limited
number of institutional "accredited investors," as defined in Rule 501(a)(1),
(2), (3) or (7) under the Act ("Accredited Investors" and, together with QIBs,
"Eligible Initial Purchasers").

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     Holders of the Units (including subsequent transferees) will have the
registration rights set forth in the registration rights agreement with respect
to the Notes (the "Note Registration Rights Agreement"), and the registration
rights agreement with respect to the Warrants (the "Warrant Registration Rights
Agreement"), each of which is to be executed on and dated as of the Closing
Date. Pursuant to the Note Registration Rights Agreement and the Warrant
Registration Rights Agreement, as applicable, (a) the Issuer and the Guarantors
will agree, among other things, to file with the Securities and Exchange
Commission (the "Commission") (i) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to, among other things, the
11.875% Senior Secured Notes due 2008, Series B, of the Issuer (the "Series B
Notes"), substantially identical in all respects to the Series A Notes (except
that the Series B Notes shall have been registered pursuant to such registration
statement) to be offered in exchange for the Series A Notes (such offer to
exchange being referred to as the "Registered Exchange Offer") and the
Guarantees thereof, and (ii) under certain circumstances, a shelf registration
statement pursuant to Rule 415 under the Act (the "Note Shelf Registration
Statement") relating to the resale by certain holders of the Series A Notes and
(b) the Issuer will agree, among other things, to file with the Commission,
under the circumstances set forth therein, a shelf registration statement
pursuant to Rule 415 under the Act (the "Warrant Shelf Registration Statement")
relating to the resale of the Warrants and the issuance and resale of the
Warrant Shares.

     In addition, in connection with the Offering, (i) the Issuer shall repay on
the Closing Date with a portion of the proceeds from the Offering all amounts
owed under its existing credit facility with First Source Financial LLP (the
"Existing Credit Facility") and all liens granted under or in connection with
the Existing Credit Facility will be released; (ii) following the Closing Date,
the Issuer anticipates entering into a new credit facility (the "New Credit
Facility"); and (iii) in connection with the New Credit Facility, the Trustee
and the lender under the New Credit Facility shall enter into an Intercreditor
Agreement in a form reasonably satisfactory to the Initial Purchasers, which
form shall be attached as an exhibit to the Indenture.

     This Agreement, the Indenture, the Notes, the Guarantees, the Security
Documents (as defined below), the Warrants, the Warrant Agreement, the Note
Registration Rights Agreement and the Warrant Registration Rights Agreement are
hereinafter sometimes referred to collectively as the "Operative Documents." The
transactions contemplated by the Operative Documents, including without
limitation, (i) the Offering and the application of the proceeds therefrom as
described in the Offering Circular, as amended or supplemented, (ii) the
repayment of the Existing Credit Facility and (iii) the entry into the New
Credit Facility and Intercreditor Agreement, are collectively referred to herein
as the "Transactions."

     On the Closing Date, the Grantors will enter into certain security
agreements, pledge agreements, mortgages and certain other documents, each in a
form reasonably satisfactory to the Initial Purchasers (collectively, the
"Security Documents"), that will provide for the grant of the Security Interests
in the Collateral to the Trustee, as collateral agent (in such capacity, the
"Collateral Agent"), for the benefit of the holders of the Notes. The Security
Interests will secure the payment and performance when due of all of the
obligations of the Issuer, the Guarantors and the Grantors under the Indenture,
the Notes and the Security Documents.

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     4.   Delivery and Payment.  Delivery to the Initial Purchasers of and
payment for the Units shall be made at a closing (the "Closing") to be held at
10:00 a.m., New York City time, on August 22, 2001 (the "Closing Date") at the
offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New
York, New York 10036. The Closing Date and the location of delivery of and the
form of payment for the Units may be varied by agreement between the Initial
Purchasers and the Issuer.

     The Issuer shall deliver to the Initial Purchasers one or more certificates
representing the Units (the "Global Securities") each in definitive form,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), or such other names as such Initial Purchaser may request upon at least
one Business Day's notice to the Issuer, corresponding to the number of Units
sold pursuant to Exempt Resales to QIBs and to Accredited Investors,
respectively, against payment by the Initial Purchasers of the purchase price
therefore by immediately available Federal funds bank wire transfer to such bank
account as the Issuer shall designate to the Initial Purchasers at least two
Business Days prior to the Closing Date. "Business Day" means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close.

     The Global Securities in definitive form shall be made available to the
Initial Purchasers for inspection at the New York offices of Skadden, Arps,
Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036 (or such
other place as shall be acceptable to the Initial Purchasers) not later than
9:30 a.m., New York City time, one Business Day immediately preceding the
Closing Date.

     5.   Agreements of the Issuer and the Guarantors. Each of the Issuer and
the Guarantors hereby agrees:

          (a)  To (i) advise the Initial Purchasers promptly after obtaining
knowledge (and, if requested by the Initial Purchasers, confirm such advice in
writing) of (A) the issuance by any state securities commission of any stop
order suspending the qualification or exemption from qualification of any of the
Securities for offer or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any state securities commission or other
regulatory authority, and (B) the happening of any event that makes any
statement of a material fact made in the Offering Circular untrue or that
requires the making of any additions to or changes in the Offering Circular in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, (ii) use their respective reasonable best
efforts to prevent the issuance of any stop order or order suspending the
qualification or exemption from qualification of any of the Securities under any
state securities or Blue Sky laws, and (iii) if at any time any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of any of the Securities under any
such laws, use their respective reasonable best efforts to obtain the withdrawal
or lifting of such order at the earliest possible time.

          (b)  To (i) furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Issuer, without charge, as many
copies of the Preliminary Offering Circular and the Offering Circular, and any
amendments or supplements thereto as the Initial

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Purchasers may reasonably request and (ii) promptly prepare, upon the Initial
Purchasers' request, any amendment or supplement to the Offering Circular that
the Initial Purchasers deem to be necessary in connection with Exempt Resales
(and the Issuer and the Guarantors hereby consent to the use of the Preliminary
Offering Circular and the Offering Circular, and any amendments and supplements
thereto, by the Initial Purchasers in connection with Exempt Resales).

          (c)  Not to amend or supplement the Offering Circular prior to the
Closing Date or for so long as any Initial Purchaser shall hold any Securities,
unless the Initial Purchasers shall previously have been advised thereof and
shall not have reasonably objected thereto within five Business Days after being
furnished a copy thereof.

          (d)  So long as any Initial Purchaser shall hold any Securities, (i)
if any event shall occur as a result of which, in the reasonable judgment of the
Issuer or the Initial Purchasers, it becomes necessary or advisable to amend or
supplement the Offering Circular in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it
is necessary to amend or supplement the Offering Circular to comply with
Applicable Law (as defined below), forthwith to prepare an appropriate amendment
or supplement to the Offering Circular (in form and substance satisfactory to
the Initial Purchasers) so that as so amended or supplemented, (A) the Offering
Circular will not include an untrue statement of material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and (B) the
Offering Circular will comply with Applicable Law, and (ii) if it becomes
necessary or advisable to amend or supplement the Offering Circular so that the
Offering Circular will contain all of the information specified in, and meet the
requirements of, Rule 144A(d)(4) of the Act, forthwith to prepare an appropriate
amendment or supplement to the Offering Circular (in form and substance
satisfactory to the Initial Purchasers) so that the Offering Circular, as so
amended or supplemented, will contain the information specified in, and meet the
requirements of, such Rule.

          (e)  To cooperate with the Initial Purchasers and the Initial
Purchasers' counsel in connection with the qualification of the Securities under
the securities or Blue Sky laws of such jurisdictions as the Initial Purchasers
may request and continue such qualification in effect so long as reasonably
required for Exempt Resales, and to file such consents to service of process or
other documents as may be necessary in order to effect such qualification;
provided, that neither the Issuer nor any Guarantor shall be required in
connection therewith to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction where it is not now so
qualified or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.

          (f)  Whether or not any of the Transactions are consummated or this
Agreement is terminated, to pay (i) all costs, expenses, fees and taxes incident
to the performance of the obligations of the Issuer and the Guarantors under
this Agreement, including in connection with: (A) the preparation, printing and
distribution of the Preliminary Offering Circular and the Offering Circular and
all amendments and supplements thereto (including, without limitation, financial
statements and exhibits), including the mailing and delivering of copies thereof
to the Initial Purchasers and persons designated by them in the quantities
specified

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herein, and all preliminary and final Blue Sky memoranda and all other
agreements, memoranda, correspondence and other documents prepared and delivered
in connection herewith, (B) the printing, processing and distribution
(including, without limitation, word processing and duplication costs) and
delivery of, and performance under, each of the Operative Documents and any
other agreements or documents in connection with the Offering, or the purchase,
sale or delivery of the Securities, (C) the issuance and delivery of the
Securities, including the fees and expenses of the Trustee, the Warrant Agent
and the Collateral Agent (including fees and expenses of their respective
counsel) and the cost of their respective personnel, and all costs and expenses
related to the delivery of the Securities to the Initial Purchasers and pursuant
to Exempt Resales, including any transfer or other taxes payable thereon, (D)
the qualification of the Securities for offer and sale under the securities or
Blue Sky laws of the several states (including, without limitation, filing fees
and fees and disbursements of the Initial Purchasers' counsel relating to such
registration or qualification and memoranda related thereto), (E) the furnishing
of such copies of the Preliminary Offering Circular and the Offering Circular,
and all amendments and supplements thereto, as may reasonably be requested for
use by the Initial Purchasers, and (F) the preparation of the Securities, (ii)
all fees and expenses of the counsel and accountants of the Issuer and the
Guarantors, (iii) all expenses and listing fees in connection with the
application for quotation of the Units, Notes and Warrants in The Portal Market
("PORTAL") of the National Association of Securities Dealers, Inc., (iv) all
fees and expenses (including fees and expenses of counsel) of the Issuer in
connection with approval of the Securities by DTC for "book-entry" transfer, (v)
all fees charged by rating agencies in connection with the rating of the Notes,
(vi) the costs and charges of any transfer agent, registrar and/or depositary
(including DTC), (vii) all costs and expenses of the Exchange Offer, any Note
Registration Statement and any Warrant Shelf Registration Statement, as set
forth in the Note Registration Rights Agreement and the Warrant Registration
Rights Agreement, and (viii) all fees and expenses (including reasonable fees
and expenses of counsel) incurred by the Initial Purchasers in connection with
the preparation, negotiation and execution of the Operative Documents and the
consummation of the transactions contemplated thereby and all other costs and
expenses incident and necessary to the performance of the obligations of the
Issuer and the Guarantors thereunder for which provision is not otherwise made
in this section.

          (g)  To use the proceeds from the sale of the Units in the manner
described in  the Offering Circular under the caption "Use of Proceeds."

          (h)  To the extent it may lawfully do so, not to insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension, usury or other law, wherever enacted, now or at any time hereafter in
force, against the holders of any Securities or that would prohibit or forgive
the payment of all or any portion of the principal of or interest on the Notes,
or that may affect the covenants or the performance of the Operative Documents
(and, to the extent it may lawfully do so, the Issuer hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not, by
resort to any such law, hinder, delay or impede the execution of any power
granted to the Warrant Agent in the Warrant Agreement, to the Trustee in the
Indenture or to the Collateral Agent in the Security Documents but shall suffer
and permit the execution of every such power as though no such law had been
enacted).

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          (i)  To do and perform all things required to be done and performed
under the Operative Documents prior to and after the Closing Date (including,
without limitation, all things necessary and advisable to obtain (i) the consent
of applicable Governmental Authorities (including, without limitation, under
applicable gaming laws) to the granting or enforcement of the Security Interests
and (ii) on the Closing Date, all termination statements, mortgage releases and
other documents necessary to terminate the Liens (as defined in the Indenture)
with respect to Indebtedness (as defined in the Indenture) that is being repaid
with the net proceeds of the Offering (including without limitation Liens
securing borrowings under the Existing Credit Facility) and to terminate the
Existing Credit Facility).

          (j)  Not to, and to ensure that no affiliate (as defined in Rule
501(b) of the Act) of the Issuer will, sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any "security" (as defined in the Act)
that would be integrated with the sale of the Securities in a manner that would
require the registration under the Act of the sale to the Initial Purchasers or
to the Eligible Initial Purchasers of any of the Securities.

          (k)  For so long as any of the Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the Act,
during any period in which the Issuer and the Guarantors are not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to make available, upon request, to any holder of the
Securities in connection with any sale thereof and any prospective Eligible
Initial Purchaser of such Securities from such holder, the information required
by Rule 144A(d)(4) under the Act.

          (l)  To obtain the approval of DTC for "book entry" transfer of the
Notes and the Warrants as Units and as separate securities, and to comply with
the representation letters of the Issuer to DTC relating to the approval of the
Notes and the Warrants as Units and as separate securities, by DTC for "book
entry" transfer.

          (m)  To use their respective reasonable best efforts to effect the
inclusion of the Units, Notes and Warrants in PORTAL and to use their respective
reasonable best efforts to maintain the listing of the Units, Notes and Warrants
on PORTAL for so long as the Units, Notes and Warrants, respectively, are
outstanding.

          (n)  For so long as any of the Securities are outstanding, and whether
or not required to do so by the rules and regulations of the Commission, (i) to
mail or make generally available as soon as practicable after the end of each
fiscal year to the record holders of the Securities a financial report of the
Issuer and its subsidiaries on a consolidated basis (and a similar financial
report of all unconsolidated subsidiaries, if any), all such financial reports
to include a consolidated balance sheet, a consolidated statement of operations,
a consolidated statement of cash flows and a consolidated statement of
stockholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
the Issuer's independent public accountants and (ii) to mail or make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period

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from the beginning of such year to the close of such quarterly period, together
with comparable information for the corresponding periods of the preceding year.

          (o)  For so long as any of the Securities are held by the Initial
Purchasers, and whether or not required to do so by the rules and regulations of
the Commission, to furnish to the Initial Purchasers as soon as available copies
of all reports or other communications furnished by the Issuer or any of the
Guarantors to its security holders or furnished to or filed with the Commission
or any national securities exchange on which any class of securities of the
Issuer or any of the Guarantors is listed and such other publicly available
information concerning the Issuer and/or its subsidiaries as the Initial
Purchasers may reasonably request.

          (p)  Except in connection with the Registered Exchange Offer or the
filing of the Note Shelf Registration Statement or the Warrant Shelf
Registration Statement, not to, and not to authorize or permit any person acting
on their behalf to, (i) distribute any offering material in connection with the
offer and sale of any of the Securities other than the Preliminary Offering
Circular and the Offering Circular and any amendments and supplements to the
Offering Circular prepared in compliance with Section 5(d) hereof, or (ii)
solicit any offer to buy or offer to sell any of the Securities by means of any
form of general solicitation or general advertising (including, without
limitation, as such terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Act.

          (q)  During the period beginning on the date hereof and ending on the
Closing Date, not to, directly or indirectly, without the prior consent of the
Initial Purchasers, offer, sell, contract to sell, or otherwise dispose (or
announce any offer, sale, grant of any option to purchase or other disposition)
of any securities of the Issuer (including any Common Stock of the Issuer) or
the Guarantors, or any warrants, rights or options to purchase or otherwise
acquire Common Stock of the Issuer or securities of the Issuer or any Guarantor
substantially similar to any of the Securities (other than (i) the Units, (ii)
the Notes and the Guarantees, (iii) the Warrants, (iv) commercial paper issued
in the ordinary course of business), and (v) the issuance of Common Stock to
holders of employee stock options outstanding prior to the date hereof.

          (r)  For so long as the Initial Purchasers shall hold any Securities,
to notify the Initial Purchasers promptly in writing if the Issuer or any of its
Affiliates becomes a party in interest or a disqualified person with respect to
any employee benefit plan. The terms "ERISA," "Affiliates," "party in interest,"
"disqualified person" and "employee benefit plan" shall have the meanings as set
forth in Section 6(bb) hereof.

          (s)  (i) From the date hereof until the Closing, use their respective
reasonable best efforts to obtain a valid and perfected, first priority Security
Interest with respect to each of the assets which is to constitute the
Collateral (other than Excluded Assets) and to obtain all permits, certificates,
authorizations, approvals, consents, licenses and orders, and make all filings,
registrations, declarations or qualifications (collectively, "Consents"),
necessary in connection therewith; (ii) from and after the Closing, use their
respective commercially reasonable efforts to obtain a valid and perfected,
first priority Security Interest with respect to assets of the Issuer and its
subsidiaries which do not constitute Closing Date Collateral (as defined below),
and to obtain all Consents necessary in connection therewith; provided that in
the case of Consents of third parties that are not Governmental Authorities (as
defined below)

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"commercially reasonable efforts" shall not require the Issuer or the Guarantors
to expend money other than the reimbursement of reasonable fees and expenses
related thereto; and (iii) in the event that the Issuer enters into the New
Credit Facility, obtain a valid and perfected, second priority Security Interest
in all of the assets securing the obligations of the Issuer and its subsidiaries
under the New Credit Facility (other than Excluded Assets (as defined in the
Indenture), but excluding from such definition assets subject to liens securing
purchase money indebtedness for which a lien is granted in favor of the lender
under a New Credit Facility) which do not constitute Collateral at the time the
Issuer enters into such New Credit Facility, and to obtain all Consents
necessary in connection therewith.

     6.   Representations and Warranties of the Issuer and the Guarantors.
The Issuer and each of the Guarantors jointly and severally represent and
warrant, as of the date hereof and as of the Closing Date, to the Initial
Purchasers that:

          (a)  The Preliminary Offering Circular as of its date did not, and the
Offering Circular, as of its date does not and as of the Closing Date will not,
and each supplement or amendment thereto as of its date will not, contain any
untrue statement of a material fact or omit to state any material fact (except,
in the case of the Preliminary Offering Circular, for pricing terms and other
financial terms intentionally left blank) necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing representation and warranty made in this
Section 6(a) shall not apply to any statements or omissions made in reliance on
and in conformity with information relating to the Initial Purchasers furnished
in writing to the Issuer and the Guarantors by the Initial Purchasers
specifically for inclusion in the Preliminary Offering Circular or the Offering
Circular. The parties hereto acknowledge that for purposes of this Agreement
(including this Section 6(a) and Section 8 hereof) the only information
furnished in writing to the Issuer and the Guarantors by the Initial Purchasers
specifically for inclusion in the Preliminary Offering Circular or the Offering
Circular is the information set forth (i) on the cover page of the Offering
Memorandum with respect to the price of the Units, (ii) in the third, fourth and
fifth paragraphs on page 117 of the Offering Circular concerning offering the
Units for resale by the Initial Purchasers, (iii) in the sixth paragraph on page
117 of the Offering Circular concerning market-making by the Initial Purchasers,
(iv) in the second full paragraph on page 118 of the Offering Circular
concerning stabilization by the Initial Purchasers and (v) in the third full
paragraph on page 118 of the Offering Circular concerning the affiliation of the
Initial Purchasers and their respective affiliates with the Issuer and its
affiliates (such information described in the immediately preceding clauses (i)
through (v) of this Section 6(a), the "Furnished Information"). No injunction or
order has been issued that either (i) asserts that any of the Transactions is
subject to the registration requirements of the Act or (ii) would prevent or
suspend the issuance or sale of any of the Securities or the use of the
Preliminary Offering Circular, the Offering Circular, or any amendment or
supplement thereto, in any jurisdiction. Each of the Preliminary Offering
Circular and the Offering Circular, as of their respective dates contained, and
the Offering Circular as amended or supplemented as of the Closing Date will
contain, all the information specified in, and meet the requirements of, Rule
144A(d)(4) under the Act. Except as disclosed in the Offering Circular, there
are no related party transactions that would be required to be disclosed in the
Offering Circular if the Offering Circular were a prospectus included in a
registration statement on Form S-1 filed under the Act.

                                      10
<PAGE>

          (b)  When the Notes and the Warrants are issued and delivered pursuant
to this Agreement, none of the Securities will be of the same class (within the
meaning of Rule 144A under the Act) as any security of the Issuer or the
Guarantors that is listed on a national securities exchange registered under
Section 6 of the Exchange Act or that is quoted on a United States automated
inter-dealer quotation system.

          (c)  Each of the Issuer and its subsidiaries (i) has been duly
organized, is validly existing and is in good standing under the laws of its
jurisdiction of organization, (ii) has all requisite power and authority to
conduct and carry on its business and to own, lease, use and operate its
properties and assets as described in the Offering Circular, and (iii) is duly
qualified or licensed to do business and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of such businesses or the ownership or leasing of such properties requires such
qualification or licensing, except where the failure to be so qualified or
licensed and in good standing could not, singly or in the aggregate, have a
material adverse effect on (A) the properties, business, prospects, operations,
earnings, assets, liabilities or condition (financial or otherwise) of the
Issuer and the Guarantors, taken as a whole, (B) the ability of any of the
Issuer and the Guarantors to perform its obligations under any of the Operative
Documents, (C) the enforceability of any of the Security Documents or the
attachment, perfection or priority of any of the Security Interests intended to
be created thereby in any portion of the Collateral or (D) the validity of any
of the Operative Documents or the consummation of any of the Transactions (each,
a "Material Adverse Effect").

          (d)  Immediately following the Closing, (i) the only direct or
indirect subsidiaries of the Issuer will be those entities listed on Schedule B
hereto (collectively, the "Subsidiaries"), and (ii) except as set forth in
Schedule 6(d) of the Schedule of Exceptions attached as Exhibit C hereto (the
"Schedule of Exceptions"), the Issuer will directly or indirectly beneficially
own 100% of the outstanding shares of capital stock or other equity interests of
each Subsidiary, free and clear of Liens, except for Liens securing Indebtedness
under the Credit Agreement (as defined in the Indenture), and all of such shares
of capital stock or other equity interests will be duly authorized and validly
issued, fully paid and nonassessable and not issued in violation of, or subject
to, any preemptive or similar rights. Except as set forth in Schedule 6(d) of
the Schedule of Exceptions, there are no outstanding (x) securities convertible
into or exchangeable for any capital stock of the Issuer or any of the
Subsidiaries, (y) options, warrants or other rights to purchase or subscribe to
capital stock of the Issuer or any of the Subsidiaries or securities convertible
into or exchangeable for capital stock of the Issuer or any of the Subsidiaries
or (z) contracts, commitments, agreements, understandings, arrangements,
undertakings, rights, calls or claims of any kind relating to the issuance of
any capital stock of the Issuer or any of the Subsidiaries, any such convertible
or exchangeable securities or any such options, warrants or rights. Except as
set forth in Schedule 6(d) of the Schedule of Exceptions, immediately following
the Closing, the Issuer will not directly or indirectly own any capital stock or
other equity interest in any person other than the Subsidiaries.

          (e)  All of the outstanding shares of the Issuer's capital stock have
been duly authorized and validly issued, are fully paid and nonassessable, were
issued in compliance with all applicable federal and state securities laws and
all applicable gaming laws and are not subject to, and were not issued in
violation of, any preemptive or similar rights. The authorized capital stock of
the Issuer conforms in all material respects to the description thereof
contained in the

                                      11
<PAGE>

Offering Circular. The table under the caption "Capitalization" in the Offering
Circular (including the footnotes thereto) sets forth, as of its date, (x) the
actual capitalization of the Issuer on a combined basis, and (y) the pro forma
capitalization of the Issuer on a combined basis after giving effect to the
Transactions. Except as set forth in such table, immediately following the
Closing, none of the Issuer or the Subsidiaries will have any liabilities,
absolute, accrued, contingent or otherwise other than (1) liabilities that are
reflected in the Financial Statements (defined below), or (2) liabilities
incurred subsequent to the date thereof in the ordinary course of business,
consistent with past practice, that could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

          (f)  Except as set forth in Schedule 6(f) of the Schedule of
Exceptions, there are no contracts, commitments, agreements, arrangements,
understandings or undertakings of any kind to which the Issuer or any of the
Subsidiaries is a party, or by which any of them is bound, granting to any
person the right to require the Issuer or any Guarantor to file a registration
statement under the Act with respect to any securities of the Issuer or any
Subsidiary or requiring the Issuer or any Subsidiary to include such securities
with the Notes and the Guarantees registered pursuant to any Note Registration
Statement or the Warrants and Warrant Shares registered pursuant to any Warrant
Shelf Registration Statement.

          (g)  Each of the Issuer and the Guarantors has all requisite power and
authority to enter into, deliver and perform its obligations under the Operative
Documents to which it is a party and to consummate the transactions contemplated
thereby. Each of the Operative Documents has been duly and validly authorized by
the Issuer and each Guarantor that is or will be a party thereto, and this
Agreement is, and when executed and delivered on the Closing Date each other
Operative Document will be, a legal, valid and binding obligation of the Issuer
and each Guarantor that is or will be a party hereto or thereto, enforceable
against each such person in accordance with its terms, except to the extent such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general principles of equity (whether considered in a
proceeding in equity or at law). When executed and delivered, each Operative
Document will conform to the description thereof in the Offering Circular. On
the Closing Date, the Indenture will conform to the requirements of the Trust
Indenture Act of 1939, as amended (the "TIA"), applicable to an indenture that
is required to be qualified under the TIA.

          (h)  The Series A Notes have been duly and validly authorized by the
Issuer for issuance and sale to the Initial Purchasers pursuant to this
Agreement and, when executed and authenticated in accordance with the terms of
the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms hereof, will be legal, valid and binding obligations
of the Issuer, enforceable against the Issuer in accordance with their terms,
except to the extent such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general principles of equity
(whether considered in a proceeding in equity or at law). The Series B Notes
have been duly and validly authorized by the Issuer and, when executed,
authenticated and delivered in accordance with the terms of the Indenture and
the Note Registration Rights Agreement, will be legal, valid and binding
obligations of the Issuer, enforceable against the Issuer in accordance with
their terms, except to the extent such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting

                                      12
<PAGE>

creditors' rights generally and by general principles of equity (whether
considered in a proceeding in equity or at law). The Notes rank and will rank on
a parity with all senior indebtedness of the Issuer that is outstanding on the
date hereof or that may be incurred hereafter, and senior to all other
indebtedness of the Issuer that is outstanding on the date hereof or that may be
incurred hereafter.

          (i)  The Guarantee to be endorsed on the Series A Notes by each
Guarantor has been duly authorized by each such Guarantor and, on the Closing
Date, and will have been executed and delivered by each such Guarantor. When the
Series A Notes have been issued, executed and authenticated in accordance with
the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Guarantee of each Guarantor
endorsed thereon will be entitled to the benefits of the Indenture and will be
the valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms, except to the extent such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by general
principles of equity (whether considered in a proceeding in equity or at law).
The Guarantees to be endorsed on the Series A Notes rank and will rank on a
parity with all senior indebtedness of the Guarantors that is outstanding on the
date hereof or that may be incurred hereafter, and senior to all other
indebtedness of the Guarantors that is outstanding on the date hereof or that
may be incurred hereafter.

          (j)  The Guarantee to be endorsed on the Series B Notes by each
Guarantor has been duly authorized by each such Guarantor on the Closing Date,
will have been executed and delivered by each such Guarantor. When the Series B
Notes have been issued, executed and authenticated in accordance with the
Indenture and issued in connection with the Exchange Offer, the Guarantee of
each Guarantor endorsed thereon will be entitled to the benefits of the
Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except to the
extent such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general principles of equity (whether considered in a
proceeding in equity or at law). The Guarantees to be endorsed on the Series B
Notes rank and will rank on a parity with all senior indebtedness of the
Guarantors that is outstanding on the date hereof or that may be incurred
hereafter, and senior to all other indebtedness of the Guarantors that is
outstanding on the date hereof or that may be incurred hereafter.

          (k)  The Warrants have been duly and validly authorized by the Issuer
and, when executed in accordance with the terms of the Warrant Agreement and
delivered to and paid for by the Initial Purchasers in accordance with the terms
hereof, will be legal, valid and binding obligations of the Issuer, enforceable
against the Issuer in accordance with their terms, except to the extent such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general principles of equity (whether considered in a
proceeding in equity or at law). The Warrant Shares have been duly and validly
authorized for issuance by the Issuer and, when issued in accordance with the
terms of the Warrants and the Warrant Agreement, will be validly issued, fully
paid and nonassessable, issued in compliance with all applicable federal and
state securities laws and all applicable gaming laws and not subject to, and not
issued in violation of,

                                      13
<PAGE>

any preemptive or similar rights. The Issuer has reserved an aggregate of
420,000 Warrant Shares for issuance upon exercise of Warrants.

          (l)  Each of the Issuer and each of the Guarantors has duly and
validly authorized the issuance of the Series A Notes, the Guarantees and the
Warrants as Units. The Units conform in all material respects to the description
thereof contained in the Offering Circular.

          (m)  None of the Issuer or the Subsidiaries is (i) in violation of its
respective charter or bylaws (collectively, "Charter Documents"), (ii) in
violation of any applicable federal, state, local or foreign statute, law or
ordinance, or any judgment, decree, rule, regulation or order, including without
limitation, the Nevada Gaming Control Act and the rules and regulations
promulgated thereunder (collectively, "Applicable Law"), of any government,
governmental or regulatory agency or body, court, arbitrator or self-regulatory
organization, domestic or foreign, including without limitation, the Nevada
Gaming Commission, the Nevada State Gaming Control Board, and the Clark County
Liquor and Gaming Licensing Board (each, a "Governmental Authority"), or (iii)
in breach of or default under any bond, debenture, note or other evidence of
indebtedness, indenture, mortgage, deed of trust, lease or any other agreement
or instrument to which any such person is a party or by which any of them or
their respective property is bound (collectively, "Applicable Agreements"),
other than breaches or defaults that could not, singly or in the aggregate, have
a Material Adverse Effect. There exists no condition that, with the passage of
time or otherwise, would constitute a violation of such Charter Documents or
Applicable Laws or a breach of or default under any Applicable Agreement or
result in the imposition of any penalty or the acceleration of any indebtedness,
other than breaches, penalties or defaults that could not, singly or in the
aggregate, have a Material Adverse Effect. All Applicable Agreements are in full
force and effect and are legal, valid and binding obligations, and no default
has occurred or is continuing thereunder, other than such defaults that could
not, singly or in the aggregate, have a Material Adverse Effect.

          (n)  Neither the execution or delivery of the Operative Documents; the
performance by the Issuer or the Guarantors of the Operative Documents; nor the
consummation of the Transactions shall conflict with, violate, constitute a
breach of or a default (with the passage of time or otherwise) under, require
the consent of any person (other than consents already obtained) under, result
in the imposition of a Lien on any assets of any of the Issuer or any of the
Subsidiaries (except pursuant to the Operative Documents), or result in an
acceleration of indebtedness under or pursuant to (i) the Charter Documents of
the Issuer or the Subsidiaries, (ii) any Applicable Agreement, other than such
breaches, violations or defaults that could not, singly or in the aggregate,
have a Material Adverse Effect or (iii) any Applicable Law. After giving effect
to the Transactions, no Default or Event of Default (each, as defined in the
Indenture) will exist.

          (o)  No permit, certificate, authorization, approval, consent, license
or order of, or filing, registration, declaration or qualification with, any
Governmental Authority (collectively, "Permits") and no approval or consent of
any other person, is required in connection with, or as a condition to, the
execution, delivery or performance of any of the Operative Documents or the
consummation of any of the Transactions, other than such Permits (i) as have
been made or obtained on or prior to the Closing Date, (ii) as are not required
to be

                                      14
<PAGE>

made or obtained on or prior to the Closing Date that will be made or obtained
when required, or (iii) the failure of which to make or obtain could not, singly
or in the aggregate, have a Material Adverse Effect.

          (p)  Except as disclosed in the Offering Circular, there is no action,
claim, suit, demand, hearing, notice of violation or deficiency, or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), domestic or foreign (collectively, "Proceedings"), pending or
threatened, that either (i) seeks to restrain, enjoin, prevent the consummation
of, or otherwise challenge any of the Operative Documents or any of the
Transactions, or (ii) could, singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect. None of the Issuer or the Subsidiaries is
subject to any judgment, order, decree, rule or regulation of any Governmental
Authority that could, singly or in the aggregate, have a Material Adverse
Effect.

          (q)  Each of the Issuer and the Subsidiaries has, and is in compliance
with the terms and conditions of, all Permits necessary or advisable to own,
lease, use and operate the properties and to conduct and carry on the businesses
described in the Offering Circular other than those the failure of which to have
could not, singly or in the aggregate, have a Material Adverse Effect. All such
Permits are valid and in full force and effect. No event has occurred which
allows, or after notice or lapse of time would allow, the imposition of any
material penalty, revocation or termination by the issuer thereof or which
results, or after notice or lapse of time would result, in any material
impairment of the rights of the holder of any such Permits. None of the Issuer
or the Subsidiaries has any reason to believe that any issuer is considering
limiting, conditioning, suspending, modifying, revoking or not renewing any such
Permit.

          (r)  Immediately following the Closing, each of the Issuer and the
Subsidiaries (i) will have good and marketable title, free and clear of all
Liens (except for Permitted Liens (as defined in the Indenture)), to all
property and assets described in the Offering Circular as being owned by it and
(ii) will enjoy peaceful and undisturbed possession under all leases to which it
is a party as lessee.

          (s)  Each of the Issuer and the Subsidiaries has all of the assets and
properties necessary or required in, or otherwise material to, the conduct of
the businesses of each of them as currently conducted, and such assets are in
working condition, except where the failure of such assets to be in working
condition could not, singly or in the aggregate, have a Material Adverse Effect.

          (t)  Each of the Issuer and the Subsidiaries maintains insurance
(including self-insurance consistent with prior practice as disclosed in the
Offering Circular) adequately covering its properties, operations, personnel and
businesses against losses and risks in accordance with customary industry
practice. All such insurance is outstanding and duly in force.

          (u)  All material tax returns required to be filed by each of the
Issuer and the Subsidiaries in any jurisdiction (including foreign
jurisdictions) have been filed and all such returns were true, correct and
complete in all material respects, and all taxes, assessments, fees and other
charges (including, without limitation, withholding taxes, penalties and
interest) due or claimed to be due from such entities have been paid, other than
those being contested in good

                                      15
<PAGE>

faith by appropriate proceedings, or those that are currently payable without
penalty or interest and, in each case, for which an adequate reserve or accrual
has been established on the books and records of the Issuer or the applicable
Subsidiary in accordance with GAAP (as defined below). There are no proposed tax
assessments against any of the Issuer and the Subsidiaries that could, singly or
in the aggregate, have a Material Adverse Effect. The charges, accruals and
reserves on the books and records of each of the Issuer and the Subsidiaries in
respect of any tax liability for any tax periods not finally determined are
adequate to meet any assessments of tax for any such period.

          (v)  Each of the Issuer and the Subsidiaries own, or are licensed
under, and have the right to use, all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"Intellectual Property") currently used in, or necessary for the conduct of,
their businesses, free and clear of all Liens, other than Permitted Liens. Other
than any claims that could not, singly or in the aggregate, have a Material
Adverse Effect, no claims have been asserted by any person challenging the use
of any such Intellectual Property by any of the Issuer and the Subsidiaries or
questioning the validity or effectiveness of any license or agreement related
thereto, and there is no valid basis for any such claim. To the knowledge of the
Issuer and the Subsidiaries, the use of such Intellectual Property by the Issuer
and the Subsidiaries will not infringe on the Intellectual Property rights of
any other person.

          (w)  Each of the Issuer and the Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
material transactions are executed in accordance with management's general or
specific authorizations, (ii) material transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles of the United States, consistently applied ("GAAP"), and
to maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorizations and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
material differences.

          (x)  The (i) the audited consolidated financial statements and related
notes of the Issuer and its consolidated subsidiaries contained in the Offering
Circular (the "Audited Financial Statements") and (ii) the unaudited condensed
consolidated financial statements and related notes of the Issuer and its
consolidated subsidiaries contained in the Offering Circular (the "Interim
Financial Statements" and, together with the Audited Financial Statements, the
"Financial Statements") present fairly in material respects the consolidated
financial position, results of operations and cash flows of the Issuer and its
consolidated subsidiaries, as of the respective dates and for the respective
periods to which they apply, and have been prepared in accordance with GAAP and
the requirements of Regulation S-X that would be applicable if the Offering
Circular were a prospectus included in a registration statement on Form S-1
filed under the Act (the "S-X Requirements"). The summary historical financial
data included in the Offering Circular have been prepared on a basis consistent
with that of the Financial Statements and present fairly in all material
respects the consolidated financial position and results of operations of the
Issuer and its consolidated subsidiaries as of the respective dates and for the
respective periods indicated. The pro forma financial statements and related
notes included in the

                                      16
<PAGE>

Offering Circular (w) comply with the S-X Requirements and all other rules and
guidelines of the Commission with respect to pro forma financial statements, (x)
present fairly in all material respects the pro forma financial position,
results of operations and cash flow of the Issuer and its consolidated
subsidiaries as of the dates and for the periods indicated, after giving effect
to the Transactions, (y) have been prepared on a basis consistent with the
Financial Statements, except for the pro forma adjustments specified therein,
and (z) are based on good faith, reasonable estimates and assumptions of the
Issuer. The summary pro forma financial information included in the Offering
Circular have been derived from such pro forma financial statements and present
fairly in all material respects the pro forma consolidated financial position
and results of operations of the Issuer and its consolidated subsidiaries as of
the respective dates and for the respective periods indicated. All other
financial and statistical data included in the Offering Circular are fairly and
accurately presented in all material respects. Deloitte & Touche LLP were
independent public accountants with respect to the Issuer and the Subsidiaries
for fiscal years 1996 through 1999, and Andersen LLP are independent public
accountants with respect to the Issuer and the Subsidiaries for fiscal years
2000 and 2001.

          (y)  Subsequent to the respective dates as of which information is
given in the Offering Circular, except as disclosed in the Offering Circular,
(i) neither the Issuer nor any of the Subsidiaries has incurred any liabilities,
direct or contingent, that are material, singly or in the aggregate, to any of
them, or has entered into any material transactions not in the ordinary course
of business, (ii) there has not been any decrease in the capital stock or any
increase in long-term indebtedness or any material increase in short-term
indebtedness of any of them, or any payment of or declaration to pay any
dividends or any other distribution with respect to any of them, and (iii) there
has not been any material adverse change in the properties, business, prospects,
operations, earnings, assets, liabilities or condition (financial or otherwise)
of the Issuer and the Subsidiaries taken as a whole (each of clauses (i), (ii)
and (iii), a "Material Adverse Change").

          (z)  No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Issuer or any Guarantor that it is considering
imposing) any condition (financial or otherwise) on the Issuer's or any
Guarantor's retaining any rating assigned to the Issuer or any Guarantor or any
securities of the Issuer or any Guarantor, or (ii) has indicated to the Issuer
or any Guarantor that it is considering (A) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned, or (B) any change
in the outlook for any rating of the Issuer or any Guarantor or any securities
of the Issuer or any Guarantor.

          (aa) Immediately following the Closing, after giving effect to the
Transactions, (i) the present fair salable value of the assets of each of the
Issuer and the Subsidiaries will exceed the amount that will be required to be
paid on or in respect of the then existing debts and other liabilities
(including contingent liabilities) of such Person as they become absolute and
matured and (ii) none of the Issuer or the Subsidiaries will have unreasonably
small capital to carry out its businesses as conducted or as proposed to be
conducted. None of the Issuer or the Subsidiaries intends to, or believes that
it will, incur debts beyond its ability to pay such debts as they mature.

                                      17
<PAGE>

          (bb)  Neither the Issuer nor anyone acting on its behalf has (i)
taken, directly or indirectly, any action designed to cause or to result in, or
that has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Issuer to
facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
purchased, or paid anyone any compensation for soliciting purchases of, any of
the Securities or (iii) except as disclosed in the Offering Circular, paid or
agreed to pay to any person any compensation for soliciting another to purchase
any other securities of the Issuer.

          (cc)  Without limiting clause (o) above, no registration under the
Act, and no qualification of the Indenture under the TIA is required for the
sale of the Securities to the Initial Purchasers as contemplated hereby or for
the Exempt Resales, assuming (i) that the purchasers in the Exempt Resales are
Eligible Initial Purchasers, (ii) the accuracy of each Initial Purchaser's
representations contained herein regarding the absence of general solicitation
in connection with the sale of the Securities to the Initial Purchasers and in
the Exempt Resales, and (iii) the accuracy of the representations made by each
Accredited Investor who purchases the Securities pursuant to an Exempt Resale as
set forth in the letters of representation in the form of Annex A to the
Offering Circular. No form of general solicitation or general advertising was
used by the Issuer or any of its affiliates or any of its representatives in
connection with the offer and sale of any of the Securities and or in connection
with Exempt Resales. No securities of the same class as any of the Securities
have been offered, issued or sold by the Issuer or any of its affiliates within
the six-month period immediately prior to the date hereof.

          (dd)  Neither the Issuer nor any of its "Affiliates" is a "party in
interest" or a "disqualified person" with respect to any employee benefit plans,
other than employee benefit plans maintained by, contributed to or sponsored by
the Issuer or any of its Affiliates. No condition exists or event or transaction
has occurred in connection with any employee benefit plan that could result in
the Issuer or any such "Affiliate" incurring any liability, fine or penalty that
could, singly or in the aggregate, have a Material Adverse Effect. With respect
to any employee pension benefit plan that is subject to Title IV of the Employee
Retirement Income Act of 1974, as amended, or the rules and regulations
promulgated thereunder ("ERISA"), (i) the fair market value of the assets of
such employee pension benefit plan equals or exceeds the present value of the
liabilities of such pension plan (as determined in accordance with the actuarial
methods and assumptions set forth in the latest actuarial report for such
employee pension benefit plan), except where the failure to so equal or exceed
would not, singly or in the aggregate, have a Material Adverse Effect and (ii)
there exists no accumulated funding deficiency which could, singly or in the
aggregate, have a Material Adverse Effect. The terms "employee benefit plan,"
"employee pension benefit plan," and "party in interest" shall have the meanings
assigned to such terms in Section 3 of ERISA. The term "Affiliate" shall have
the meaning assigned to such term in Section 407(d)(7) of ERISA, and the term
"disqualified person" shall have the meaning assigned to such term in section
4975 of the Internal Revenue Code of 1986, as amended, or the rules, regulations
and published interpretations promulgated thereunder (collectively the "Code").

          (ee)  None of the Transactions will violate or result in a violation
of Section 7 of the Exchange Act (including, without limitation, Regulation T
(12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12
C.F.R. Part 224) of the Board of Governors of the Federal Reserve System). None
of the Issuer or the Subsidiaries is subject to

                                      18
<PAGE>

regulation, or shall become subject to regulation upon the consummation of the
Transactions, under the Investment Company Act of 1940, as amended, and the
rules and regulations and interpretations promulgated thereunder, or any Federal
or state statute or regulation limiting its ability to incur or assume
indebtedness for borrowed money.

          (ff)  None of the Issuer or the Subsidiaries has dealt with any
broker, finder, commission agent or other person (other than the Initial
Purchasers) in connection with the Offering and none of the Issuer or the
Subsidiaries is under any obligation to pay any broker's fee or commission in
connection with the Offering (other than as disclosed in the Offering Circular).

          (gg)  None of the Issuer or the Subsidiaries is engaged in any unfair
labor practice. Except as disclosed in the Offering Circular, there is (i) no
unfair labor practice complaint or other proceeding pending or, to the knowledge
of any of the Issuer or the Subsidiaries, threatened against any of the Issuer
or the Subsidiaries before the National Labor Relations Board or any state,
local or foreign labor relations board or any industrial tribunal, and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending or threatened, (ii) no strike, labor dispute,
slowdown or stoppage pending or, to the knowledge of any of the Issuer or the
Subsidiaries, threatened against any of the Issuer or the Subsidiaries, and
(iii) no union representation question existing with respect to the employees of
any of the Issuer or the Subsidiaries, and, to any of the Issuer or the
Subsidiaries' knowledge, no union organizing activities are taking place that
could, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

          (hh)  Except as disclosed in the Offering Circular and except as would
not, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (i) the Issuer and the Subsidiaries are in compliance with all
applicable Environmental Laws (as defined below), (ii) the Issuer and the
Subsidiaries have made all filings and provided all notices required under all
Environmental Laws, have all Permits required under all Environmental Laws and
are in compliance with all their requirements, (iii) there is no Environmental
Claim (as defined below) pending or, to the knowledge of any of the Issuer and
the Subsidiaries, threatened under any Environmental Law against any of the
Issuer and the Subsidiaries or any person or entity for whom any of the Issuer
and the Subsidiaries may be liable by law or contract, (iv) no Lien has been
recorded under any Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by any of the Issuer and the
Subsidiaries, (v) none of the Issuer and the Subsidiaries has received notice
that it has been identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA") or any comparable state law, (vi) no property or facility of
any of the Issuer and the Subsidiaries is listed or proposed for listing on the
National Priorities List under CERCLA or listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority and (vii) there are no past, present or,
to the knowledge of any of the Issuer and the Subsidiaries, foreseeable actions,
activities, conditions, events, incidents or circumstances that could form the
basis for any Environmental Claim in the future.

          "Environmental Law" means any Applicable Laws relating to pollution or
protection of the environmental or health or safety or any chemical, material or
substance that is subject to

                                      19
<PAGE>

regulation thereunder. "Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, notices
of responsibility, information requests, Liens, communications and notices of
noncompliance or violation, investigations or Proceedings relating in any way to
any Environmental Law.

          (ii)  No representation or warranty made by any of the Issuer or the
Subsidiaries in any of the Operative Documents was or will be, when made,
inaccurate, untrue or incorrect in any material respect.

          (jj)  The statistical and market-related data included in the Offering
Circular are based on or derived from sources, including the Issuer's own
business experience, which the Issuer and the Guarantors believe to be reliable
and accurate in all material respects.

          (kk)  (i) The security interests and pledges in the Collateral
securing the obligations under the Notes and the Guarantees on the Closing Date,
excluding Excluded Assets (the "Closing Date Collateral"), as of the Closing
Date, are valid and perfected and, to the best knowledge of the Issuer,
constitute first priority security interests in such Closing Date Collateral and
are legal, valid and enforceable Liens on all of the right, title and interest
of the Grantors in the Collateral, and (ii) the Collateral, excluding the
Excluded Assets is subject to no other Liens other than Permitted Liens.

     7.   Representations and Warranties of the Initial Purchasers.  Each of
the Initial Purchasers, severally and not jointly, represents and warrants, as
of the date hereof and as of the Closing Date, that:

          (a)   It is a QIB.

          (b)   It (i) is not acquiring the Units with a view to any
distribution thereof that would violate the Act or the securities laws of any
state of the United States or any other applicable jurisdiction and (ii) will be
soliciting offers for the Units only from, and will be reoffering and reselling
the Units only to (A) persons in the United States whom it reasonably believes
to be QIBs in reliance on the exemption from the registration requirements of
the Act provided by Rule 144A, or (B) a limited number of Accredited Investors
that execute and deliver to the Issuer and the Initial Purchasers a letter
containing certain representations and agreements in the form attached as Annex
A to the Offering Circular.

          (c)   No form of general solicitation or general advertising in
violation of the Act has been or will be used by the Initial Purchasers or any
of its representatives in connection with the offer and sale of any of the
Units.

          (d)   In connection with the Exempt Resales, it will solicit offers to
buy the Units only from, and will offer and sell the Units only to, Eligible
Initial Purchasers who in purchasing such Units, will be deemed to have
represented and agreed that (i) such Eligible Initial Purchaser understands and
acknowledges that the Units have not been registered under the Act or any other
applicable securities law, and that the Units are being offered for resale in
transactions not requiring registration under the Act or any other securities
law, including sales pursuant to Rule 144A under the Act, and may not be
offered, sold or otherwise transferred except in compliance with the
registration requirements of the Act or any other applicable

                                      20
<PAGE>

securities law, pursuant to an exemption therefrom (in each case in compliance
with the conditions for transfer set forth below); (ii) such Eligible Initial
Purchaser is not an "affiliate" (as defined in Rule 144 under the Act) of the
Issuer or acting on behalf of the Issuer; (iii) if such Eligible Initial
Purchaser is a QIB that it is aware that any sale of the Units to it is being
made in reliance on Rule 144A and such acquisition will be for its own account
or for the account of another QIB; (iv) if such Eligible Initial Purchaser is an
Accredited Investor or, if the Units are to be purchased for one or more
accounts ("investor accounts") which are Accredited Investors and for which it
is acting as fiduciary or agent, that in the normal course of its business, it
invests in or purchases securities similar to the Units and it has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of purchasing any of the Units and it is aware
that it (or an investor account) may be required to bear the economic risk of an
investment in the Units for an indefinite period of time and it (or such
account) is able to bear such risk for an indefinite period of time; (v) that
such Eligible Initial Purchaser, by its acceptance of the Units, will offer,
sell or otherwise transfer such Units, prior to the date that is two years (or
such shorter period that may hereafter be provided under Rule 144(k) as
permitting resales of restricted securities by non-affiliates without
restriction) after the later of the original issue date of the Units and the
last date on which the Issuer or any affiliate of the Issuer was the owner of
the Units (or any predecessor of the Units) only (A) to the Issuer, (B) pursuant
to a registration statement which has been declared effective under the Act, (C)
for so long as the Units are eligible for resale pursuant to Rule 144A under the
Act, to a person who the seller reasonably believes is a QIB that purchases for
its own account or the account of a QIB to whom notice is given that the
transfer is being made in reliance on Rule 144A, (D) pursuant to offers and
sales to foreign persons that occur in offshore transactions and without
directed selling efforts within the meanings of such terms as defined in
Regulation S under the Act, (E) to an institutional "accredited investor" within
the meaning of Rule 501 (a)(1), (2), (3) or (7) under the Act that is purchasing
the Units for its own account or the account of such an institutional
"accredited investor," for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution in violation of the Act or
(F) pursuant to another available exemption from the registration requirements
of the Act, subject to the Issuer's and the Trustee's right prior to any such
offer, sale or transfer to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to each of them, and in
each of the foregoing cases, a certificate of transfer in the form appearing on
the Units is completed and delivered by the transferor to the trustee and in
each case in accordance with applicable securities laws of any U.S. state or any
other applicable jurisdiction; and (vi) that such Eligible Initial Purchaser
will deliver to each person to whom it transfers any Units a notice
substantially to the effect of the resale restrictions set forth in clause (v)
above.

          (e)  It has all requisite power and authority to enter into, deliver
and perform its obligations under each of this Agreement, the Note Registration
Rights Agreement and the Warrant Registration Rights Agreement and each of this
Agreement, the Note Registration Rights Agreement and the Warrant Registration
Rights Agreement has been duly and validly authorized by it.

     8.   Indemnification.

          (a)  The Issuer and each Guarantor agree to, jointly and severally,
without limitation as to time, indemnify and hold harmless each Initial
Purchaser and each person, if any,

                                      21
<PAGE>

who controls (within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act) any Initial Purchaser (any of such persons being hereinafter
referred to as a "controlling person"), and the respective officers, directors,
partners, employees, representatives and agents of each Initial Purchaser and
any such controlling person (collectively, the "Purchaser Indemnified Parties"),
to the fullest extent lawful, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, costs of preparation
and reasonable attorneys' fees) and expenses (including, without limitation,
costs and expenses incurred in connection with investigating, preparing,
pursuing or defending against any of the foregoing) (collectively, "Losses"), as
incurred, directly or indirectly caused by, related to, based upon, arising out
of or in connection with (i) any untrue statement or alleged untrue statement of
a material fact contained in the Preliminary Offering Circular or the Offering
Circular (or any amendment or supplement thereto), or (ii) any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, that neither the Issuer
nor any Guarantor shall be liable to any Purchaser Indemnified Party for any
Losses that are based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to such Initial Purchaser furnished in writing to the Issuer by such
Initial Purchaser specifically for inclusion in the Preliminary Offering
Circular or the Offering Circular. The parties hereto agree that the only
information furnished in writing to the Issuer by the Initial Purchasers
specifically for inclusion in the Preliminary Offering Circular or the Offering
Circular is the Furnished Information. The Issuer shall notify the Initial
Purchasers promptly of the institution, threat or assertion of any Proceeding of
which the Issuer or any Subsidiary is aware in connection with the matters
addressed by this Agreement which involves the Issuer, any of the Subsidiaries
or any of the Purchaser Indemnified Parties.

          (b)  If any Proceeding shall be brought or asserted against any person
entitled to indemnification hereunder (an "Indemnified Party"), such Indemnified
Party shall give prompt written notice to the indemnifying party; provided, that
the failure to so notify the indemnifying parties shall not relieve the
indemnifying parties from any obligation or liability except to the extent (but
only to the extent) that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal) that the
indemnifying party has been prejudiced materially by such failure.

          Neither the Issuer nor any of the Subsidiaries shall consent to entry
     of any judgment in or enter into any settlement of any pending or
     threatened Proceeding in respect of which indemnification or contribution
     may be sought hereunder (whether or not any Indemnified Party is a party
     thereto) unless such judgment or settlement includes, as an unconditional
     term thereof, the giving by the claimant or plaintiff to each Indemnified
     Party of a release, in form and substance satisfactory to the Initial
     Purchasers, from all Losses that may arise from such Proceeding or the
     subject matter thereof (whether or not any Indemnified Party is a party
     thereto).

          (c)  Each Initial Purchaser severally agrees to indemnify and hold
harmless each of the Issuer and the Subsidiaries, and the respective officers,
directors, partners, employees, representatives and agents of the Issuer and the
Subsidiaries to the same extent as the foregoing indemnity from the Issuer to
each of the Purchaser Indemnified Parties stated in

                                      22
<PAGE>

Section 8(a), but only with respect to Losses that are caused by an untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to such Initial Purchaser
furnished in writing to the Issuer by such Initial Purchaser specifically for
inclusion in the Preliminary Offering Circular or the Offering Circular. The
parties hereto agree that the only information furnished in writing to the
Issuer by the Initial Purchasers specifically for inclusion in the Preliminary
Offering Circular or the Offering Circular is the Furnished Information.
Notwithstanding the foregoing, any liability of an Initial Purchaser hereunder
shall be limited to an amount not to exceed the excess of the aggregate gross
proceeds received by such Initial Purchaser from the sale of the Units over the
aggregate price at which such Initial Purchaser purchased the Units from the
Issuer.

          (d)  If the indemnification provided for in this Section 8 is
unavailable to an Indemnified Party or is insufficient to hold such Indemnified
Party harmless for any Losses in respect of which this Section 8 would otherwise
apply by its terms (other than by reason of exceptions provided in this Section
8), then each indemnifying party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Issuer and the Subsidiaries, on the one
hand, and the Initial Purchasers, on the other hand, from the Offering or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Issuer and the Subsidiaries, on the one hand, and the Initial Purchasers, on the
other hand, in connection with the actions, statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuer and the Subsidiaries, on the one
hand, and the Initial Purchasers, on the other hand, shall be deemed to be in
the same proportion as the total net proceeds from the Offering (before
deducting expenses) received by the Issuer, and the total discounts and
commissions received by the Initial Purchasers, bear to the total price of the
Units in Exempt Resales as set forth on the cover page of the Offering Circular.
The relative fault of the Issuer and the Subsidiaries, on the one hand, and the
Initial Purchasers, on the other hand, shall be determined by reference to,
among other things, whether any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Issuer or any Subsidiary, on the one hand, or the
Initial Purchasers, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by an Indemnified Party as a
result of any Losses shall be deemed to include any legal or other fees or
expenses incurred by such party in connection with any Proceeding, to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section 8 was available to such party.

          Each party hereto agrees that it would not be just and equitable if
     contribution pursuant to this Section 8(d) were determined by pro rata
     allocation or by any other method of allocation that does not take account
     of the equitable considerations referred to in the immediately preceding
     paragraph. Notwithstanding the provisions of this Section 8(d), no Initial
     Purchaser shall be required to contribute, in the aggregate, any amount in
     excess of the amount by which the total discounts and commissions received
     by such Initial Purchaser with respect to the Units purchased by it exceeds
     the amount of any damages that such Initial Purchaser has otherwise been
     required to pay by reason of such

                                      23
<PAGE>

     untrue or alleged untrue statement or omission or alleged omission. No
     person guilty of fraudulent misrepresentation (within the meaning of
     Section 11(f) of the Act) shall be entitled to contribution from any person
     who was not guilty of such fraudulent misrepresentation.

          (e)  The indemnity and contribution agreements contained in this
Section 8 are in addition to any liability that the Issuer and the Subsidiaries
or the Initial Purchasers may otherwise have to the Indemnified Parties.

     9.   Conditions.

          (a)  The obligation of the Initial Purchasers to purchase the Units
under this Agreement is subject to the satisfaction or waiver of each of the
following conditions:

               (i)    (A) All the representations and warranties of the Issuer
and the Guarantors in this Agreement shall be true and correct in all material
respects (other than representations and warranties with a Material Adverse
Effect qualifier or other materiality qualifier, which shall be true and correct
as written) at and as of the Closing Date after giving effect to the
Transactions with the same force and effect as if made on and as of such date.
On or prior to the Closing Date, each of the Issuer and the Subsidiaries and, to
the knowledge of each of the Issuer and the Subsidiaries, each other party to
the Operative Documents (other than the Initial Purchasers) shall have performed
or complied in all material respects with all of the agreements and satisfied in
all material respects all conditions on their respective parts to be performed,
complied with or satisfied pursuant to the Operative Documents.

                      (B)  The Preliminary Offering Circular as of its date did
not, and the Offering Circular, as of its date did not and as of the Closing
Date does not, and each supplement or amendment thereto as of its date did not,
contain any untrue statement of a material fact or omit to state any material
fact (except, in the case of the Preliminary Offering Circular, for pricing
terms, other financial terms intentionally left blank and other changes in the
structure of the transaction described in the Preliminary Offering Circular
which arose after the date of the Preliminary Offering Circular) necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that the foregoing shall not
apply to any statements or omissions made in reliance on and in conformity with
the Furnished Information.

               (ii)   The Offering Circular shall have been printed and copies
made available to the Initial Purchasers not later than 12:00 noon, New York
City time, on the first Business Day following the date of this Agreement or at
such later date and time as the Initial Purchasers may approve.

               (iii)  No injunction, restraining order or order of any nature by
a Governmental Authority shall have been issued as of the Closing Date that
would prevent or interfere with the consummation of any of the Transactions; and
no stop order suspending the qualification or exemption from qualification of
any of the Securities in any jurisdiction shall have been issued and no
Proceeding for that purpose shall have been commenced or be pending or
contemplated as of the Closing Date.

                                      24
<PAGE>

               (iv)   No action shall have been taken and no Applicable Law
shall have been enacted, adopted or issued that would, as of the Closing Date,
prevent the consummation of any of the Transactions. No Proceeding shall be
pending or threatened other than Proceedings that (A) if adversely determined
could not, singly or in the aggregate, adversely affect the issuance or
marketability of the Securities and (B) could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

               (v)    Since the date as of which information is given in the
Offering Circular, there shall not have been any Material Adverse Change.

               (vi)   The Units, the Notes and the Warrants shall have been
designated PORTAL securities in accordance with the rules and regulations
adopted by the NASD relating to trading in the PORTAL market, and the Notes
shall have received a rating of B and B3 from Standard & Poor's Corporation and
Moody's Investors Services, Inc., respectively.

               (vii)  On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Issuer or any securities of the Issuer (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have
occurred any adverse change, nor shall any notice have been given of any
potential or intended adverse change, in the outlook for any rating of the
Issuer or any securities of the Issuer by any such rating organization and (iii)
no such rating organization shall have given notice that it has assigned (or is
considering assigning) a lower rating to any of the Notes than that on which the
Notes were marketed.

               (viii) The Initial Purchasers shall have received on the Closing
Date (A) a certificate dated the Closing Date, signed by (1) the Chief Executive
Officer, and (2) the principal financial or accounting officer of the Issuer and
each of the Guarantors, on behalf of the Issuer and each of the Guarantors, and
not as an individual, (x) confirming the matters set forth in paragraphs (i),
(iii), (iv), (v), (vii) and (xiii) of this Section 9(a), (B) a certificate,
dated the Closing Date, signed by the Secretary of the Issuer and the
Guarantors, on behalf of the Issuer and the Guarantors, and not as an
individual, certifying such matters as the Initial Purchasers may reasonably
request, and (C) a certificate of solvency, dated the Closing Date, signed by
the principal financial or accounting officer of the Issuer and the Guarantors
substantially in the form previously approved by the Initial Purchasers.

               (ix)   The Initial Purchasers shall have received:

                      (A)  (1) an opinion of Greenberg Traurig, LLP, counsel to
the Issuer, dated the Closing Date, in substantially the form of Exhibit A
hereto, and (2) such other legal opinions of Greenberg Traurig, LLP, counsel to
the Issuer, dated the Closing Date, as the Initial Purchasers or their counsel
may reasonably request, related to the enforceability of the Security Documents
and the creation, validity and perfection of the liens granted under the

                                      25
<PAGE>

Security Documents (including, without limitation, as to the authorization by
the Grantors of the filing of financing statements, the financing statements
being in appropriate form for filing and each Grantor being a registered
organization under the applicable Uniform Commercial Code);

                      (B)  (1) an opinion of Charles H. McCrea, Esq., general
counsel to the Issuer, dated the Closing Date, in the form of Exhibit B hereto,
and (2) such other legal opinions of Charles H. McCrea, Esq., general counsel to
the Issuer, dated the Closing Date, as the Initial Purchasers or their counsel
may reasonably request, related to the enforceability of the Security Documents
and the creation, validity and perfection of the liens granted under the
Security Documents (including, without limitation, as to the authorization by
the Grantors of the filing of financing statements, the financing statements
being in appropriate form for filing and each Grantor being a registered
organization under the applicable Uniform Commercial Code);

                      (C)  such other legal opinions of local counsel to the
Issuer, dated the Closing Date, as the Initial Purchasers or their counsel may
reasonably request, related to the enforceability of the Security Documents and
the creation, validity and perfection of the liens granted under the Security
Documents (including, without limitation, as to the authorization by the
Grantors of the filing of financing statements, the financing statements being
in appropriate form for filing and each Grantor being a registered organization
under the applicable Uniform Commercial Code); and

                      (D)  an opinion, dated the Closing Date, of Skadden, Arps,
Slate, Meagher & Flom LLP, in form and substance reasonably satisfactory to the
Initial Purchasers covering such matters as are customarily covered in such
opinions.

               (x)    The Initial Purchasers shall have received:

                      (A)  with respect to fiscal years 1996 through 1999, from
Deloitte & Touche LLP, independent public accountants with respect to the Issuer
and the Subsidiaries for fiscal years 1996 through 1999, (1) a customary comfort
letter, dated the date of the Offering Circular, in form and substance
reasonably satisfactory to the Initial Purchasers, with respect to the financial
statements and the financial information contained in the Offering Circular as
of and for such fiscal years and any periods therein, and (2) a customary
comfort letter, dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, to the effect that Deloitte & Touche LLP
reaffirms the statements made by it in the letter furnished pursuant to clause
(1) of this paragraph (A), except that the specified date referred to shall be a
date not more than five days prior to the Closing Date, and

                      (B)  with respect to fiscal years 2000 and 2001, from
Andersen LLP, independent public accountants with respect to the Issuer and the
Subsidiaries for fiscal years 2000 and 2001, (1) a customary comfort letter,
dated the date of the Offering Circular, in form and substance reasonably
satisfactory to the Initial Purchasers, with respect to the financial statements
and the financial information contained in the Offering Circular as of and for
such fiscal years and any periods therein, and (2) a customary comfort letter,
dated the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, to the effect that Andersen LLP reaffirms the statements
made by it in the letter furnished pursuant to clause (1) of

                                      26
<PAGE>

this paragraph (B), except that the specified date referred to shall be a date
not more than five days prior to the Closing Date.

               (xi)   The Operative Documents shall have been executed and
delivered by all parties thereto and the Initial Purchasers shall have received
a fully executed original of each Operative Document relating to the Offering.

               (xii)  The Initial Purchasers shall have received copies of all
opinions, certificates, letters and other documents delivered under or in
connection with the Transactions.

               (xiii) Each of the Transactions shall have been consummated on
terms that conform to the description thereof in the Offering Circular. The
terms of each Operative Document shall conform in all material respects to the
description thereof in the Offering Circular.

               (xiv)  The Initial Purchasers shall have received copies of duly
executed payoff letters, UCC-3 termination statements, mortgage releases,
intellectual property releases and other collateral releases and terminations,
each in form and substance satisfactory to the Initial Purchasers evidencing, as
the case may be, (A) the repayment of all outstanding borrowings under the
Existing Credit Facility; (B) the termination of the Existing Credit Facility
and of each other agreement and instrument relating to such borrowings and any
other Indebtedness secured by the Collateral; and (C) the release of each item
of Collateral securing such Indebtedness and the termination of all Liens
created thereunder, and each such payoff letter, release and termination shall
be in full force and effect.

               (xv)   The Collateral Agent shall have received (A) executed
copies of each UCC-1 financing statement signed by the Issuer and each Grantor,
naming the Collateral Agent as a secured party and filed in such jurisdictions
as the Initial Purchasers may reasonably require; (B) bailee letters and
landlord waivers, in form and substance reasonably satisfactory to the Initial
Purchasers, executed by the Issuer or the appropriate Grantors for delivery to
each of the Persons specified in the Security Documents as holding Collateral;
and (C) any other documents required to be delivered to the Collateral Agent
pursuant to the Security Documents.

               (xvi)  Counsel to the Initial Purchasers shall have been
furnished with such documents as they may reasonably require for the purpose of
enabling them to review or pass upon the matters referred to in this Section 9
and in order to evidence the accuracy, completeness or satisfaction in all
material respects of any of the representations, warranties or conditions herein
contained.

               (xvii) The Issuer shall have furnished to the Initial Purchasers
the Security Documents duly executed by the respective Grantors party thereto,
together with:

                      (A)  proper financing statements, each in the form to be
filed on the Closing Date under the Uniform Commercial Code of all jurisdictions
that may be deemed necessary or desirable in order to perfect the liens created
by the Security Documents, covering the Collateral and naming the Collateral
Agent as secured party, which financing statements shall be so filed on the
Closing Date;

                                      27
<PAGE>

                      (B)  proper instruments to be filed in the U.S. Patent and
Trademark Office that may be deemed necessary or desirable in order to perfect
the liens granted on patents and trademarks which liens have been created by the
Security Documents;

                      (C)  contemplated requests for information and lien search
results, listing all effective financing statements filed as of a recent date in
the jurisdictions referred to in the prior subparagraph that name the Issuer or
the Guarantors as debtor, together with copies of such financing statements
(none of which shall cover the Collateral described in the Security Documents;
and

                      (D)  reasonable evidence that all other actions necessary
to perfect and protect the Liens created by the Security Documents have been
taken.

          (b)  The obligations of the Issuer and the Guarantors to sell the
Securities under this Agreement is subject to the satisfaction or waiver of each
of the following conditions:

               (i)    The Initial Purchasers shall have delivered payment to the
Issuer for the Units pursuant to Sections 2 and 4 of this Agreement.

               (ii)   All of the representations and warranties of the Initial
Purchasers in this Agreement shall be true and correct in all material respects
at and as of the Closing Date, with the same force and effect as if made on and
as of such date.

               (iii)  No injunction, restraining order or order of any nature by
a Governmental Authority shall have been issued as of the Closing Date that
would prevent or interfere with the issuance and sale of the Securities; and no
stop order suspending the qualification or exemption from qualification of any
of the Securities in any jurisdiction shall have been issued and no Proceeding
for that purpose shall have been commenced or be pending or contemplated as of
the Closing Date.

     10.  Termination. The Initial Purchasers may terminate this Agreement at
any time prior to the Closing Date by written notice to the Issuer and the
Guarantors if any of the following has occurred:

          (a)  since the date as of which information is given in the Offering
Circular, any material adverse effect or development involving a prospective
adverse effect on the properties, business, prospects, operations, earnings,
assets, liabilities or condition (financial or otherwise), of any of the Issuer
and the Subsidiaries, whether or not arising in the ordinary course of business,
that could, in the Initial Purchasers' judgment, (i) make it impracticable or
inadvisable to proceed with the Offering or delivery of the Securities on the
terms and in the manner contemplated in the Offering Circular or (ii) materially
impair the investment quality of any of the Notes;

          (b)  the failure of the Issuer and the Guarantors to satisfy the
conditions contained in Section 9(a) hereof on or prior to the third Business
Day following the date of this Agreement;

                                      28
<PAGE>

          (c)  any outbreak or escalation of hostilities or other national or
international calamity or crisis or material adverse change in economic
conditions in or the financial markets of the United States or elsewhere, if the
effect of such outbreak, escalation, calamity, crisis or material adverse change
in the economic conditions in or in the financial markets of the United States
or elsewhere could make it, in the Initial Purchasers' judgment, impracticable
or inadvisable to market or proceed with the Offering or delivery of the
Securities on the terms and in the manner contemplated in the Offering Circular
or to enforce contracts for the sale of any of the Securities;

          (d)  the suspension or limitation of trading generally in securities
on the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market or any setting of limitations on prices for securities on any
such exchange or on the Nasdaq National Market;

          (e)  the enactment, publication, decree or other promulgation after
the date hereof of any Applicable Law that in the Initial Purchasers' opinion
materially and adversely affects, or could materially and adversely affect, the
properties, business, prospects, operations, earnings, assets, liabilities or
condition (financial or otherwise) of any of the Issuer and the Subsidiaries;

          (f)  any securities of the Issuer shall have been downgraded or placed
on any "watch list" for possible downgrading by any "nationally recognized
statistical rating organization," as such term is defined for purposes of Rule
431(g)(2) under the Act; or

          (g)  the declaration of a banking moratorium by any Governmental
Authority; or the taking of any action by any Governmental Authority after the
date hereof in respect of its monetary or fiscal affairs that in the Initial
Purchasers' opinion could have a material adverse effect on the financial
markets in the United States or elsewhere.

     The indemnities and contribution and expense reimbursement provisions and
other agreements, representations and warranties of the Issuer and the
Guarantors set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Initial Purchaser, (ii) acceptance of any of the Securities, and payment for
them hereunder, and (iii) any termination of this Agreement. Without limiting
the foregoing, notwithstanding any termination of this Agreement, the Issuer and
the Guarantors shall be jointly and severally liable (i) for all expenses that
they have agreed to pay pursuant to Section 5(f) hereof, and (ii) pursuant to
Section 8 hereof.

     11.  Default by Initial Purchaser.  If either Initial Purchaser shall
fail or refuse to purchase the Units that it has agreed to purchase under this
Agreement on the Closing Date and arrangements for purchase of such Units are
not made within 36 hours of such default, this Agreement shall terminate without
liability on the part of the Issuer, except as otherwise provided in Section 10
hereof, or the non-defaulting Initial Purchaser. Nothing herein shall relieve
the defaulting Initial Purchaser from liability for its default.

                                      29
<PAGE>

     12.  Miscellaneous.

          (a)  Notices given pursuant to any provision of this Agreement shall
be addressed as follows: (i) if to the Issuer or any Guarantor, to 920 Pilot
Road, Las Vegas, NV 89119, Attention: General Counsel, with a copy to Greenberg
Traurig, LLP, 2450 Colorado Avenue, Suite 400 East, Santa Monica, CA 90404,
Attention: Mark R. Moskowitz, Esq. and (ii) if to the Initial Purchasers, to
Jefferies & Company, Inc., 11100 Santa Monica Boulevard, Los Angeles, California
90025, Attention: Jerry M. Gluck, Esq., with a copy to Skadden, Arps, Slate,
Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, California
90071, Attention: Nicholas P. Saggese, Esq. (provided, that any notice pursuant
to Section 8 hereof will be mailed, delivered, telegraphed or telecopied and
confirmed to the party to be notified and its counsel), or in any case to such
other address as the person to be notified may have requested in writing.

          (b)  This Agreement has been and is made solely for the benefit of and
shall be binding upon the Issuer, the Initial Purchasers and, to the extent
provided in Section 8 hereof, the controlling persons, officers, directors,
partners, employees, representatives and agents referred to in Section 8 and
their respective heirs, executors, administrators, successors and assigns, all
as and to the extent provided in this Agreement, and no other person shall
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include a purchaser of any of the Securities
from the Initial Purchasers merely because of such purchase. Notwithstanding the
foregoing, it is expressly understood and agreed that each purchaser who
purchases Securities from the Initial Purchasers is intended to be a beneficiary
of the Issuer's covenants contained in the Note Registration Rights Agreement
and the Warrant Registration Rights Agreement to the same extent as if the
Securities were sold and those covenants were made directly to such purchaser by
the Issuer, and each such purchaser shall have the right to take action against
the Issuer to enforce, and obtain damages for any breach of, those covenants.

          (c)  This Agreement shall be construed and interpreted, and the rights
of the parties shall be determined in accordance with the laws of the State of
New York, including without limitation, Sections 5-1401 and 5-1402 of the New
York General Obligations Laws and New York Civil Practice Laws and Rules 327(b).
The Issuer hereby irrevocably submits to the jurisdiction of any New York state
court sitting in the Borough of Manhattan in the City of New York or any Federal
court sitting in the Borough of Manhattan in the City of New York in respect of
any suit, action or proceeding arising out of or relating to this Agreement, and
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, jurisdiction of the aforesaid courts. The Issuer irrevocably
waives, to the fullest extent it may effectively do so under applicable law,
trial by jury and any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceedings brought in such court
has been brought in an inconvenient forum. The Issuer irrevocably consents, to
the fullest extent it may effectively do so under applicable law, to the service
of process of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to the Issuer at the address set forth herein, such service to become
effective 30 days after such mailing. Nothing herein shall affect the right of
the Initial Purchasers to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against the Issuer in any
other jurisdiction.

                                      30
<PAGE>

          (d)  This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.

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

          (f)  If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

          (g)  This Agreement may be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may be given,
provided that the same are in writing and signed by each of the signatories
hereto.

                       [Signature pages follow this page]

                                      31
<PAGE>

          Please confirm that the foregoing correctly sets forth the agreement
among the Issuer and the Subsidiaries and the Initial Purchasers.

                                               Very truly yours,

                                               MIKOHN GAMING CORPORATION

                                               By:    ____________________
                                               Name:  ____________________
                                               Title: ____________________

                                               CASINO EXCITEMENT, INC.

                                               By:    ____________________
                                               Name:  ____________________
                                               Title: ____________________

                                               GAMES OF NEVADA, INC.

                                               By:    ____________________
                                               Name:  ____________________
                                               Title: ____________________

                                               MGC, INC.

                                               By:    ____________________
                                               Name:  ____________________
                                               Title: ____________________

                                               MIKOHN INTERNATIONAL, INC.

                                               By:    ____________________
                                               Name:  ____________________
                                               Title: ____________________

                                      32
<PAGE>

                                               MIKOHN NEVADA

                                               By:    ____________________
                                               Name:  ____________________
                                               Title: ____________________

                                               PROGRESSIVE GAMES, INC.

                                               By:    ____________________
                                               Name:  ____________________
                                               Title: ____________________

Accepted and Agreed to:

JEFFERIES & COMPANY, INC.

By:    ____________________
Name:  ____________________
Title: ____________________

CIBC WORLD MARKETS CORP.

By:    ____________________
Name:  ____________________
Title: ____________________

                                      33
<PAGE>

                                                                    Schedule A-1
                                                                    ------------
                                  GUARANTORS

                                           State / Country of
Name                                         Incorporation
----                                         -------------

Casino Excitement, Inc.                          Nevada
Games of Nevada, Inc.                            Nevada
MGC, Inc.                                        Nevada
Mikohn International, Inc.                       Nevada
Mikohn Nevada                                    Nevada
Progressive Games, Inc.                         Delaware

                                 Schedule A-1
<PAGE>

                                                                     Schedule B
                                                                     ----------

                                 SUBSIDIARIES

                                                     State / Country of
                                                        Incorporation
Name                                                    -------------
----

Casino Excitement, Inc.                                     Nevada
Games of Nevada, Inc.                                       Nevada
MGC, Inc.                                                   Nevada
Mikohn Europe, BV                                      The Netherlands
Mikohn Foreign Sales Corporation                           Barbados
Mikohn International, Inc.                                  Nevada
Mikohn Nevada                                               Nevada
Mikohn South America, SA (99.7% shareholder)                 Peru
Mikohn Australasia Pty. Ltd.                              Australia
Progressive Games, Inc.                                    Delaware

                                 Schedule B-1
<PAGE>

                                                                      SCHEDULE C
                                                                      ----------

           Initial Purchasers                        Number of Units
------------------------------------------------------------------------

Jefferies & Company, Inc........................         73,500
CIBC World Markets Corp.........................         31,500
   Total........................................        105,000
                                                        =======

                                 Schedule C-1
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------
                   FORM OF OPINION OF GREENBERG TRAURIG, LLP

                                 Schedule A-1
<PAGE>

                                                                       EXHIBIT B
                                                                       ---------
                       FORM OF OPINION OF COMPANY COUNSEL

                                 Schedule B-1
<PAGE>

                                   EXHIBIT A

                            SCHEDULE OF EXCEPTIONS
<PAGE>

                            SCHEDULE OF EXCEPTIONS

     This Schedule of Exceptions is an itemization by Mikohn Gaming Corporation,
          ----------------------
a Nevada corporation (the "Issuer") of those matters which constitute exceptions
to the items set forth in the Purchase Agreement, dated as of August 15, 2001
(the "Purchase Agreement") by and among the Issuer and the Initial Purchasers
(as defined therein). Unless otherwise noted herein, any capitalized term in
this Schedule of Exceptions shall have the same meaning assigned to such term in
     ----------------------
the Purchase Agreement.  The inclusion of any item herein shall not be deemed to
be an admission of any obligation or liability to any third party. Disclosures
made under the heading of one section may apply to or augment disclosures under
one or more other sections, if applicable, and where expressly indicated.
Section headings are provided herein for convenience only. Where the terms of a
contract or other disclosure item have been summarized or described in this
Schedule of Exceptions, such summary or description does not purport to be a
----------------------
complete statement of the material terms of such contract or other item.

Schedule of Exceptions to Purchase
Agreement dated as of August 15, 2001

<PAGE>

                                 Schedule 6(d)
                                 -------------

          (a)   Issuer owns 99.7% of the issued and outstanding shares of Mikohn
South America, S.A.

          (b)   As of the date of the Purchase Agreement, the Issuer had
outstanding warrants to purchase 910,000 shares of its common stock, of which
warrants to purchase 410,000 shares were exercisable. The exercise prices of the
warrants range from $4.56 to $9.13 per share, subject to adjustment. As of the
date of the Purchase Agreement, options to purchase a total of 2,693,840 shares
of the Issuer's common stock were outstanding, of which options to purchase
1,195,922 shares were exercisable. The exercise prices of the vested options
range from $2.75 to $17.75 per share, subject to adjustment.

          (c)   Immediately following the Closing, the Issuer will hold a 50%
ownership interest in Mikohn Australasia Pty. Ltd.

Schedule of Exceptions to Purchase
Agreement dated as of August 15, 2001
<PAGE>

                                 Schedule 6(f)
                                 -------------

Certain registrations may be required: (i) under the Note Registration Rights
Agreement and the Warrant Registration Rights Agreement; (ii) under outstanding
warrants to purchase 910,000 shares of the Issuer's common stock, of which
warrants to purchase 410,000 shares are exercisable as of the date of the
Purchase Agreement; and (iii) with respect to the 1,500,000 shares of the
Issuer's common stock issued on August 10, 2001 in the private placement
described under "Offering Circular Summary - Recent Developments" in the
Offering Circular.

Schedule of Exceptions to Purchase
Agreement dated as of August 15, 2001<PAGE>

                                                                     Exhibit 4.6

                               WARRANT AGREEMENT

                  WARRANT AGREEMENT, dated as of August 22, 2001, by and between
Mikohn Gaming Corporation, a Nevada corporation (the "Company"), and Firstar
Bank, N.A., as warrant agent (the "Warrant Agent").

                                R E C I T A L S
                                - - - - - - - -

                  WHEREAS, the Company proposes to issue warrants (the
"Warrants") initially exercisable to purchase up to four shares of common stock,
par value $.10 per share, of the Company (the "Common Stock" and, the Common
Stock issuable upon exercise of the Warrants being referred to herein as the
"Warrant Shares");

                  WHEREAS, the Warrants are being issued in connection with the
offering (the "Offering") by the Company of 105,000 Units (the "Units"), each
consisting of $1,000 principal amount at maturity of the Company's 11.875%
Senior Secured Notes due 2008, Series A (the "Notes") and one Warrant initially
exercisable to purchase four Warrant Shares at an exercise price of $7.70 per
Warrant Share; and

                  WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act in connection
with the issuance of Warrant Certificates (as defined) and other matters as
provided herein.

                  NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as follows:

SECTION 1. CERTAIN DEFINITIONS.

                  As used in this Agreement, the following terms shall have the
following respective meanings:

                  "144A Global Warrant" means a Global Warrant bearing the
Private Placement Legend.

                  "Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling," "controlled by" and "under
common
<PAGE>

control with"), as used with respect to any Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such specified Person, whether through the ownership
of voting securities, by agreement or otherwise; provided that beneficial
                                                 --------
ownership of 10% or more of the voting securities of a Person shall be deemed to
be control.

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

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

                  "Change of Control" has the meaning set forth in the
Indenture.

                  "Clearstream" means Clearstream Banking societe anonyme,
Luxembourg.

                  "Closing Date" means the date hereof.

                  "Commission" means the Securities and Exchange Commission.

                  "Definitive Warrants" means, individually and collectively,
each of the warrants issued in definitive form in accordance with Sections
3.1(b) and 3.5 hereof, substantially in the form of Exhibit A hereto (but
without the Global Warrant Legend thereon and without the "Schedule of Exchanges
of Interests in the Global Warrant" attached thereto).

                  "Depositary" means, with respect to the Warrants issuable or
issued in whole or in part in global form, the Person specified in Section 3.3
hereof as the Depositary with respect to the Warrants, and any and all
successors thereto appointed as Depositary hereunder and having become such
pursuant to the applicable provision of the Indenture.

                  "Event of Default" has the meaning set forth in the Indenture.

                  "Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, and all successors thereto, as operator of the Euroclear
system.

                                       2
<PAGE>

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

                  "Exercise Date" means the day immediately following the
Separation Date.

                  "Exercise Price" means the purchase price per share of Common
Stock to be paid upon the exercise of each Warrant in accordance with the terms
hereof, which price shall initially be $7.70 per share, subject to adjustment
from time to time pursuant to Section 8 hereof.

                  "Global Warrants" means, individually and collectively, each
of the Warrants issued in global form, in accordance with Sections 3.1(b) and
3.5 hereof, substantially in the form of Exhibit A attached hereto (including
the Global Warrant Legend thereon and the "Schedule of Exchanges of Interests in
the Global Warrant" attached thereto), and registered in the name of, the
Depositary or its nominee.

                  "Global Warrant Legend" means the legend set forth in Section
3.5(g)(ii), which is required to be placed on all Global Warrants issued under
this Warrant Agreement.

                  "Holder" means a Person who is listed as the registered or
record holder of Warrants, Warrant Shares and any other securities issued or
issuable with respect to the Warrants or the Warrant Shares by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.

                  "Indenture" means the indenture, dated the date hereof, by and
among the Company, the Guarantors (as set forth in the Indenture) and Firstar
Bank, N.A., as trustee relating to the Notes.

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

                  "Initial Purchasers" means Jefferies & Company, Inc. and CIBC
World Markets Corp.

                  "Legal Holiday" means a Saturday, a Sunday or any day which is
in the City of New York a legal holiday or a day upon which banking institutions
in the City of New York are required or authorized by law or other governmental
action to close. If a payment date is a Legal Holiday, payment shall be made on
the next

                                       3
<PAGE>

succeeding day that is not a Legal Holiday, and no interest shall accrue on such
payment for the intervening period.

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

                  "Offering" means the offering by the Company of the Units.

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

                  "Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Warrant Agent in form and substance reasonably
acceptable to the Warrant Agent. The counsel may be an employee of or counsel to
the Company, any subsidiary of the Company or the Warrant Agent.

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

                  "Person" means any corporation, individual, limited liability
company, joint stock company, joint venture, partnership, limited liability
partnership, unincorporated association, governmental regulatory entity,
country, state or political subdivision thereof, trust, municipality or other
entity.

                  "Prospectus" means the prospectus included in a Registration
Statement at the time such Registration Statement is declared effective, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments and all material incorporated by
reference into such Prospectus.

                  "Private Placement Legend" means the legend set forth in
Section 3.5(g)(i) to be placed on all Warrants issued under this Warrant
Agreement except where otherwise permitted by the provisions of this Warrant
Agreement.

                  "Purchase Agreement" means that certain purchase agreement,
dated as of August 15, 2001 by and among the Company, the Guarantors (as set
forth in the Purchase Agreement) and the Initial Purchasers pursuant to which
the Company agreed to issue and sell the units, of which the Warrants form a
part, to the Initial Purchasers.

                                       4
<PAGE>

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

                  "Registrable Securities" shall mean the Warrants, the Warrant
Shares and any other securities issued or issuable with respect to the Warrants
or the Warrant Shares by way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization that may not be sold without restriction under federal or state
securities law.

                  "Registration Statement" means "registration statement," as
such term is defined in Section 2(a)(8) of the Securities Act.

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

                  "Regulation S Global Warrant" means a Global Warrant bearing
the Private Placement Legend and the Regulation S Legend.

                  "Regulation S Legend" means the legend set forth in Section
3.5(g)(iv) to be placed on all Registrable Securities issued pursuant to
Regulation S.

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

                  "Restricted Global Warrant" means a Global Warrant bearing the
Private Placement Legend, including, without limitation, the 144A Global Warrant
and the Regulation S Global Warrant.

                  "Restricted Period" means the one-year "distribution
compliance period" as defined in Rule 902(f) of Regulation S.

                  "Rule 144" means Rule 144 under the Securities Act, as such
rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the Commission.

                  "Rule 144A" means Rule 144A under the Securities Act, as such
rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the Commission.

                  "Rule 903" means Rule 903 under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.

                                       5
<PAGE>

                  "Rule 904" means Rule 904 under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.

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

                  "Separation Date" means the earliest of (i) 180 days after the
closing of the Offering, (ii) the date on which a registration statement with
respect to a registered exchange offer for the Notes is declared effective under
the Securities Act, (iii) the date on which a shelf registration statement with
respect to the Notes or the Warrants and Warrant Shares is declared effective
under the Securities Act, (iv) notification of the occurrence of a Change of
Control (as defined in the Indenture) or an Event of Default (as defined in the
Indenture) with respect to the Notes, and (v) such date as the Initial
Purchasers in their sole discretion shall determine (such date being at least
three Business Days after giving written notice to DTC).

                  "Shelf Registration" means a shelf Registration Statement
filed pursuant to Rule 415 under the Securities Act relating to the Registrable
Securities.

                  "Trustee" means the trustee under the Indenture.

                  "Unrestricted Global Warrant" means a Global Warrant
representing a series of Warrants that do not bear the Private Placement Legend.

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

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

                  "Warrant Registration Rights Agreement" means the Warrant
Registration Rights Agreement, dated as of the date hereof, by and among the
Company and the Initial Purchasers, setting forth certain registration
obligations of the Company with respect to the Warrants and the Warrant Shares.

                  All definitions herein (whether set forth herein directly or
by reference to definitions in other documents) shall be equally applicable to
both the singular and the plural forms of the terms defined. The words "hereof,"
"herein" or "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Article and section references are to articles and sections of
this Agreement unless otherwise specified. The term "including" shall mean
"including without limitation."

                                       6
<PAGE>

SECTION 2. APPOINTMENT OF WARRANT AGENT.

           The Company hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions set forth hereinafter in this
Agreement and the Warrant Agent hereby accepts such appointment.

SECTION 3. ISSUANCE OF WARRANTS; WARRANT CERTIFICATES.

     3.1   Form and Dating.

           (a)     General.

           The Warrants shall be substantially in the form of Exhibit A hereto
(the "Warrant Certificates"). The Warrants may have additional notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Warrant shall be dated the date of the countersignature.

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

           (b)     Global and Definitive Warrants.

           Global Warrants shall be substantially in the form of Exhibit A
attached hereto (including the Global Warrant Legend thereon and the "Schedule
of Exchanges of Interests in the Global Warrant" attached thereto). Definitive
Warrants shall be substantially in the form of Exhibit A attached hereto (but
without the Global Warrant Legend thereon and without the "Schedule of Exchanges
of Interests in the Global Warrant" attached thereto).

           Each Global Warrant shall represent such of the outstanding Warrants
as shall be specified therein and each shall provide that it shall represent the
number of outstanding Warrants from time to time endorsed thereon and that the
number of outstanding Warrants represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Warrant to reflect the amount of any increase or
decrease in the number of outstanding Warrants represented thereby shall be made
by the Warrant Agent in

                                       7
<PAGE>

accordance with written instructions given by the Holder thereof as required by
Section 3.5 hereof.

           (c)    Euroclear and Clearstream Procedures Applicable, if Necessary.

           The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests, if any, in any Global Warrant that are held
by Participants through Euroclear or Clearstream.

      3.2  Execution.

           An Officer shall sign the Warrants for the Company by manual or
facsimile signature.

           If the Officer whose signature is on a Warrant no longer holds that
office at the time a Warrant is countersigned, the Warrant shall nevertheless be
valid.

           A Warrant shall not be valid until countersigned by the manual
signature of the Warrant Agent. The signature shall be conclusive evidence that
the Warrant has been properly issued under this Warrant Agreement.

           The Warrant Agent shall, upon a written order of the Company signed
by an Officer (a "Warrant Countersignature Order"), countersign Warrants for
original issue up to the number stated in the recitals hereto.

           The Warrant Agent may appoint an agent acceptable to the Company to
countersign Warrants. Such an agent may countersign Warrants whenever the
Warrant Agent may do so. Each reference in this Warrant Agreement to a
countersignature by the Warrant Agent includes a countersignature by such agent.
Such an agent has the same rights as the Warrant Agent to deal with the Company
or an Affiliate of the Company.

      3.3  Warrant Registrar.

           The Company shall maintain an office or agency where Warrants may be
presented for registration of transfer or for exchange ("Warrant Registrar").
The Warrant Registrar shall keep a register of the Warrants and of their
transfer and exchange. The Company may appoint one or more co-Warrant
Registrars. The term "Warrant Registrar" includes any co-Warrant Registrar. The
Company may change

                                       8
<PAGE>

any Warrant Registrar without notice to any Holder. The Company shall notify the
Warrant Agent in writing of the name and address of any agent not a party to
this Warrant Agreement. If the Company fails to appoint or maintain another
entity as Warrant Registrar, the Warrant Agent shall act as such. The Company or
any of its subsidiaries may act as Warrant Registrar.

               The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Warrants.

               The Company initially appoints the Warrant Agent to act as the
Warrant Registrar with respect to the Global Warrants.

         3.4   Holder Lists.

               The Warrant Agent shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders. If the Warrant Agent is not the Warrant Registrar, the
Company shall promptly furnish to the Warrant Agent at such times as the Warrant
Agent may request in writing, a list in such form and as of such date as the
Warrant Agent may reasonably require of the names and addresses of the Holders.

         3.5   Transfer and Exchange.

               (a)    Transfer and Exchange of Global Warrants.

               A Global Warrant may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Warrants will be exchanged by the Company for Definitive
Warrants if (i) the Company delivers to the Warrant Agent written notice from
the Depositary that it is unwilling or unable to continue to act as Depositary
or that it is no longer a clearing agency registered under the Exchange Act and,
in either case, a successor Depositary is not appointed by the Company within
120 days after the date of such notice from the Depositary, (ii) the Company in
its sole discretion determines that the Global Warrants (in whole but not in
part) should be exchanged for Definitive Warrants which the Company will provide
to the Warrant Agent and delivers a written notice to such effect to the Warrant
Agent or (iii) an Event of Default under the Indenture of which an officer of
the Warrant Agent has actual notice has occurred and is continuing and the
Warrant Registrar has received a request from DTC to issue Definitive Warrants.
Upon the occurrence of any of the events in clauses (i), (ii) or (iii) above of
this Section 3.5(a), Definitive Warrants shall be issued in such names

                                       9
<PAGE>

as the Depositary shall instruct the Warrant Agent in writing. Global Warrants
also may be exchanged or replaced, in whole or in part, as provided in Sections
3.6 and 3.7 hereof. A Global Warrant may not be exchanged for another Warrant
other than as provided in this Section 3.5(a); provided, however, that
                                               --------  -------
beneficial interests in a Global Warrant may be transferred and exchanged as
provided in Section 3.5(b) or (c) hereof.

          (b)  Transfer and Exchange of Beneficial Interests in the Global
Warrants.

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

             (i)    Transfer of Beneficial Interests in the Same Global Warrant.
                    -----------------------------------------------------------
          Beneficial interests in any Restricted Global Warrant may be
          transferred to Persons who take delivery thereof in the form of a
          beneficial interest in the same Restricted Global Warrant in
          accordance with the transfer restrictions set forth in the Private
          Placement Legend. Beneficial interests in any Unrestricted Global
          Warrant may be delivered to Persons who take delivery thereof in the
          form of a beneficial interest in an Unrestricted Global Warrant. No
          written orders or instructions shall be required to be delivered to
          the Warrant Registrar to effect the transfers described in this
          Section 3.5(b)(i).

             (ii)   All Other Transfers and Exchanges of Beneficial Interests
                    ---------------------------------------------------------
          in Global Warrants. In connection with all transfers and exchanges of
          ------------------
          beneficial interests that are not subject to Section 3.5(b)(i) above,
          the transferor of such beneficial interest must deliver to the Warrant
          Registrar either (A) (1) a written order from a Participant or an
          Indirect Participant given to the Depositary in accordance with the
          Applicable Procedures directing the Depositary to credit or cause to
          be credited a beneficial interest in another Global Warrant in an
          amount equal to the beneficial interest to be transferred or exchanged
          and (2) instructions given in accordance with the Applicable
          Procedures containing information regarding the Participant account to
          be credited with such increase or (B) (1) a written order from a
          Participant or an Indirect Participant given to the Depositary in
          accordance

                                       10
<PAGE>

          with the Applicable Procedures directing the Depositary to cause to be
          issued a Definitive Warrant representing the number of Warrants equal
          to the number of Warrants represented by the beneficial interest to be
          transferred or exchanged and (2) instructions given by the Depositary
          to the Warrant Registrar containing information regarding the Person
          in whose name such Definitive Warrant shall be registered. Upon
          effectiveness of the Registration Statement by the Company in
          accordance with Section 3.5(f) hereof, the requirements of this
          Section 3.5(b)(ii) shall be deemed to have been satisfied upon receipt
          by the Warrant Registrar of a certification required by the Company in
          connection with such Registration Statement delivered by the Holder of
          such beneficial interests in the Restricted Global Warrants. Upon
          satisfaction of all of the requirements for transfer or exchange of
          beneficial interests in Global Warrants contained in this Agreement
          and the Warrants or otherwise applicable under the Securities Act, the
          Warrant Agent shall adjust the principal amount of the relevant Global
          Warrant(s) pursuant to Section 3.5(h) hereof.

               (iii)  Transfer of Beneficial Interests to Another Restricted
                      ------------------------------------------------------
          Global Warrant. A beneficial interest in any Restricted Global Warrant
          --------------
          may be transferred to a Person who takes delivery thereof in the form
          of a beneficial interest in another Restricted Global Warrant if the
          transfer complies with the requirements of Section 3.5(b)(ii) hereof
          and the Warrant Registrar receives the following:

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

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

               (iv)   Transfer and Exchange of Beneficial Interests in a
                      --------------------------------------------------
          Restricted Global Warrant for Beneficial Interests in the Unrestricted
          ----------------------------------------------------------------------
     Global Warrant. A beneficial interest in any Restricted Global Warrant may
     --------------
     be exchanged by any holder thereof for a beneficial interest in an
     Unrestricted Global Warrant or transferred to a Person who takes delivery
     thereof in the form of a beneficial interest in an Unrestricted Global
     Warrant if the exchange or transfer complies with the requirements of
     Section 3.5(b)(ii) hereof and:

                                       11
<PAGE>

                    (A)    such transfer is effected pursuant to a Registration
         Statement in accordance with this Agreement; or

                    (B)    the Warrant Registrar receives the following:

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

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

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

         If any such transfer or exchange is effected pursuant to subparagraph
   (B) above of this Section 3.5(b)(iv) at a time when an Unrestricted Global
   Warrant has not yet been issued, the Company shall issue and, upon receipt of
   an Warrant Countersignature Order in accordance with Section 3.2 hereof, the
   Warrant Agent shall countersign one or more Unrestricted Global Warrants
   representing the aggregate number of Warrants equal to the aggregate number
   Warrants represented by the beneficial interests transferred or exchanged
   pursuant to such subparagraph (B) above.

         (c)   Transfer and Exchange of Beneficial Interests for Definitive
Warrants.

               (i)      Beneficial Interests in Restricted Global Warrants to
                        -----------------------------------------------------
   Restricted Definitive Warrants. If any holder of a beneficial interest in a
   ------------------------------

                                       12
<PAGE>

         Restricted Global Warrant proposes to exchange such beneficial interest
         for a Restricted Definitive Warrant or to transfer such beneficial
         interest to a Person who takes delivery thereof in the form of a
         Restricted Definitive Warrant, then, following satisfaction of the
         conditions set forth in Section 3.5(b)(ii) hereof, and upon receipt by
         the Warrant Registrar of the following documentation:

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

                      (B)   if such beneficial interest is being transferred to
              a QIB in accordance with Rule 144A, a certificate from the
              transferor in the form of Exhibit B hereto, including the
              certifications in item (1) thereof;

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

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

                      (E)   if such beneficial interest is being transferred to
              the Company or any of its Subsidiaries, a certificate from the
              transferor in the form of Exhibit B hereto, including the
              certifications in item (3)(b) thereof; or

                      (F)   if such beneficial interest is being transferred
              pursuant to an effective registration statement under the
              Securities Act, a certificate from the transferor in the form of
              Exhibit B hereto, including the certifications in item (3)(c)
              thereof,

              the Warrant Agent shall cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Warrant
Agent, the number of Warrants represented by the Restricted Global Warrant to be

                                       13
<PAGE>

reduced pursuant to Section 3.5(h) hereof by the number of Warrants to be
represented by the Restricted Definitive Warrant, and the Company shall execute,
and the Warrant Agent pursuant to Section 3.2 hereof shall countersign and
deliver to the Person designated in the instructions, one or more Restricted
Definitive Warrants representing the aggregate number of Warrants exchanged or
transferred. Any Restricted Definitive Warrant issued in exchange for a
beneficial interest in a Restricted Global Warrant pursuant to this Section
3.5(c)(i) shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest shall
instruct the Warrant Registrar through written instructions from the Depositary
and the Participant or Indirect Participant. The Warrant Agent shall deliver
such Restricted Definitive Warrants to the Persons in whose names such Warrants
are so registered. Any Restricted Definitive Warrant issued in exchange for a
beneficial interest in a Restricted Global Warrant pursuant to this Section
3.5(c)(i) shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.

          (ii)     Beneficial Interests in Restricted Global Warrants to
                   -----------------------------------------------------
Unrestricted Definitive Warrants. A holder of a beneficial interest in a
--------------------------------
Restricted Global Warrant may exchange such beneficial interest for an
Unrestricted Definitive Warrant or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Warrant, only if the exchange or transfer complies with the requirements of
Section 3.5(b)(ii) hereof and:

                    (A)      such transfer is effected pursuant to the
     Registration Statement in accordance with the Warrant Registration Rights
     Agreement; or

                    (B)      the Warrant Registrar receives the following:

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

                              (2) if the holder of such beneficial interest in a
          Restricted Global Warrant proposes to transfer such beneficial
          interest to a Person who shall take delivery thereof in the form of an
          Unrestricted Definitive Warrant, a certificate

                                       14
<PAGE>

                  from such holder in the form of Exhibit B hereto,
                  including the certifications in item (4) thereof;

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

Upon satisfaction of the conditions set forth above in this paragraph
3.5(c)(ii), the Warrant Agent shall cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Warrant
Agent, the number of Warrants represented by the Restricted Global Warrant to be
reduced pursuant to Section 3.5(h) hereof by the number of Warrants to be
represented by the Unrestricted Definitive Warrant, and the Company shall
execute, and the Warrant Agent pursuant to Section 3.2 hereof shall countersign
and deliver to the Person designated in the instructions, one or more
Unrestricted Definitive Warrants representing the aggregate number of Warrants
exchanged or transferred. Any Unrestricted Definitive Warrant issued in exchange
for a beneficial interest in a Restricted Global Warrant pursuant to this
Section 3.5(c)(ii) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Warrant Registrar through written instructions from
the Depositary and the Participant or Indirect Participant. The Warrant Agent
shall deliver such Unrestricted Definitive Warrants to the Persons in whose
names such Warrants are so registered. Any Unrestricted Definitive Warrant
issued in exchange for a beneficial interest in a Restricted Global Warrant
pursuant to this Section 3.5(c)(i) shall not bear the Private Placement Legend.

         (iii) Beneficial Interests in Unrestricted Global Warrants to
               -------------------------------------------------------
Unrestricted Definitive Warrants. If any Holder of a beneficial interest in an
--------------------------------
Unrestricted Global Warrant proposes to exchange such beneficial interest for a
Definitive Warrant or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Warrant, then, upon
satisfaction of the conditions set forth in Section 3.5(b)(ii) hereof, the
Warrant Agent shall cause the number of Warrants represented by the Unrestricted
Global Warrant to be reduced pursuant to Section 3.5(h) hereof by the number of
Warrants to be represented by the Unrestricted Definitive Warrant, and the
Company shall execute, and the Warrant Agent shall

                                       15
<PAGE>

     countersign and deliver to the Person designated in the instructions, one
     or more Unrestricted Definitive Warrants representing the aggregate number
     of Warrants exchanged or transferred. Any Unrestricted Definitive Warrant
     issued in exchange for a beneficial interest in an Unrestricted Global
     Warrant pursuant to this Section 3.5(c)(iii) shall be registered in such
     name or names and in such authorized denomination or denominations as the
     holder of such beneficial interest shall instruct the Warrant Registrar
     through written instructions from the Depositary and the Participant or
     Indirect Participant. The Warrant Agent shall deliver such Unrestricted
     Definitive Warrants to the Persons in whose names such Warrants are so
     registered. Any Unrestricted Definitive Warrant issued in exchange for a
     beneficial interest in an Unrestricted Global Warrant pursuant to this
     Section 3.5(c)(iii) shall not bear the Private Placement Legend.

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

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

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

                       (B) if such Restricted Definitive Warrant is being
             transferred to a QIB in accordance with Rule 144A, a certificate
             from the transferor in the form of Exhibit B hereto, including the
             certifications in item (1) thereof;

                       (C) if such Restricted Definitive Warrant is being
             transferred to a Non-U.S. Person in an offshore transaction in
             accordance with Rule 903 or Rule 904, a certificate from the
             transferor in the form of Exhibit B hereto, including the
             certifications in item (2) thereof;

                                       16
<PAGE>

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

                       (E) if such Restricted Definitive Warrant is being
             transferred to the Company or any of its Subsidiaries, a
             certificate from the transferor in the form of Exhibit B hereto,
             including the certifications in item (3)(b) thereof; or

                       (F) if such Restricted Definitive Warrant is being
             transferred pursuant to an effective registration statement under
             the Securities Act, a certificate from the transferor in the form
             of Exhibit B hereto, including the certifications in item (3)(c)
             thereof,

     the Warrant Agent shall cancel the Restricted Definitive Warrant, and shall
     cause the number of Warrants represented by the appropriate Restricted
     Global Warrant to be increased pursuant to Section 3.5(h) hereof by an
     amount equal to the aggregate number of Warrants represented by the
     Restricted Definitive Warrant.

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

                      (A)   such transfer is effected pursuant to a Registration
             Statement in accordance with this Agreement; or

                      (B)   the Warrant Registrar receives the following:

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

                            (2)     if the Holder of such Restricted Definitive
             Warrant proposes to transfer such Warrants to a

                                       17
<PAGE>

                  Person who shall take delivery thereof in the form of a
                  beneficial interest in the Unrestricted Global Warrant, a
                  certificate from such Holder in the form of Exhibit B hereto,
                  including the certifications in item (4) thereof;

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

     Upon satisfaction of the conditions of any of the subparagraphs in this
     Section 3.5(d)(ii), the Warrant Agent shall cancel the Restricted
     Definitive Warrant, and shall cause the number of Warrants represented by
     the appropriate Unrestricted Global Warrant to be increased pursuant to
     Section 3.5(h) hereof by an amount equal to the aggregate number of
     Warrants represented by the Restricted Definitive Warrant.

                  (iii) Unrestricted Definitive Warrants to Beneficial Interests
                        --------------------------------------------------------
     in Unrestricted Global Warrants. A Holder of an Unrestricted Definitive
     -------------------------------
     Warrant may exchange such Unrestricted Definitive Warrant for a beneficial
     interest in an Unrestricted Global Warrant or transfer such Unrestricted
     Definitive Warrant to a Person who takes delivery thereof in the form of a
     beneficial interest in an Unrestricted Global Warrant at any time. Upon
     receipt of a written request for such an exchange or transfer from the
     Holder, the Warrant Agent shall cancel the Unrestricted Definitive Warrant,
     and shall cause the number of Warrants represented by the appropriate
     Unrestricted Global Warrant to be increased pursuant to Section 3.5(h)
     hereof by an amount equal to the aggregate number of Warrants represented
     by the Unrestricted Definitive Warrant.

                  (iv)  If any such exchange or transfer from a Definitive
     Warrant to a beneficial interest in an Unrestricted Global Warrant is
     effected pursuant to subparagraphs (ii)(B) or (iii) above of this Section
     3.5(d) at a time when an Unrestricted Global Warrant has not yet been
     issued, the Company shall issue and, upon receipt of an Warrant
     Countersignature Order in accordance with Section 3.2 hereof, the Warrant
     Agent shall countersign one or more Unrestricted Global Warrants
     representing the aggregate number of Warrants equal to the aggregate number
     of Warrants represented by the Definitive Warrants so exchanged or
     transferred.

                                       18
<PAGE>

                  (e)     Transfer and Exchange of Definitive Warrants for
Definitive Warrants.

                          (i)     Upon written request by a Holder of Definitive
         Warrants and such Holder's compliance with the provisions of this
         Section 3.5(e), the Warrant Registrar shall register the transfer or
         exchange of Definitive Warrants. Prior to such registration of transfer
         or exchange, the requesting Holder shall present or surrender to the
         Warrant Registrar the Definitive Warrants duly endorsed or accompanied
         by a written instruction of transfer in form satisfactory to the
         Warrant Registrar duly executed by such Holder or by its attorney, duly
         authorized in writing. In addition, the requesting Holder shall provide
         any additional certifications, documents and information, as
         applicable, required pursuant to the following provisions of this
         Section 3.5(e).

                          (ii)    Restricted Definitive Warrants to Restricted
                                  --------------------------------------------
         Definitive Warrants. Any Restricted Definitive Warrant may be
         -------------------
         transferred to and registered in the name of a Person who takes
         delivery thereof in the form of a Restricted Definitive Warrant if the
         transfer complies with the requirements of Section 3.5(b)(ii) hereof
         and the Warrant Registrar receives the following:

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

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

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

                          (iii) Restricted Definitive Warrants to Unrestricted
                                ----------------------------------------------
         Definitive Warrants. Any Restricted Definitive Warrant may be exchanged
         -------------------
         by the Holder thereof for an Unrestricted Definitive Warrant or
         transferred to a Person who takes delivery thereof in the form of an
         Unrestricted Definitive Warrant if the transfer complies with the
         requirements of Section 3.5(b)(ii) hereof and:

                                       19
<PAGE>

                      (A)     any such transfer is effected pursuant to the
             Registration Statement in accordance with the Warrant Registration
             Rights Agreement; or

                      (B)     the Warrant Registrar receives the following:

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

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

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

                (iv)  Unrestricted Definitive Warrants to Unrestricted
                      ------------------------------------------------
      Definitive Warrants. A Holder of an Unrestricted Definitive Warrant may
      -------------------
     transfer such Unrestricted Definitive Warrant to a Person who takes
     delivery thereof in the form of an Unrestricted Definitive Warrant. Upon
     receipt of a written request to register such a transfer, the Warrant
     Registrar shall register the Unrestricted Definitive Warrant pursuant to
     the instructions from the Holder thereof.

                (f)   Registration Statement.

                Upon the effectiveness of a Registration Statement and sales of
Warrants in connection therewith, the Company shall issue and, upon receipt of a
Warrant Countersignature Order in accordance with Section 3.2, the Warrant Agent
shall countersign (i) one or more Unrestricted Global Warrants representing the
number of Warrants equal to the number of Warrants represented by the beneficial
interests in the Restricted Global Warrants sold under such Registration
Statement and (ii) the number of Unrestricted Definitive Warrants equal to the
number of

                                       20
<PAGE>

Restricted Definitive Warrants sold under such Registration Statement.
Concurrently with the issuance of such Warrants, the Warrant Agent shall cause
the number of Warrants represented by the applicable Restricted Global Warrants
to be reduced accordingly pursuant to Section 3.5(h) hereof, and the Company
shall execute and the Warrant Agent shall countersign and deliver to the Persons
designated by the Holders of Definitive Warrants so accepted Definitive Warrants
in the appropriate amount.

                  (g)      Legends.

                  The following legends shall appear on the reverse of all
 Global Warrants and all Definitive Warrants issued under this Warrant Agreement
 unless specifically stated otherwise in the applicable provisions of this
 Warrant Agreement.

                           (i)      Private Placement Legend.
                                    ------------------------

                                    (A)  Except as permitted by subparagraph (B)
                  of this Section 3.5(g), each Global Warrant and each
                  Definitive Warrant (and all Warrants issued in exchange
                  therefor or substitution thereof) shall bear a legend in
                  substantially the following form:

                           "THIS SECURITY AND THE SECURITIES ISSUABLE UPON
                  EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
                  ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
                  INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
                  ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
                  DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
                  TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
                  THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES
                  NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR
                  TO THE DATE THAT IS TWO YEARS (OR SUCH SHORTER PERIOD THAT MAY
                  HEREAFTER BE PROVIDED UNDER RULE 144(k) UNDER THE SECURITIES
                  ACT AS PERMITTING RESALES BY NON-AFFILIATES OF RESTRICTED
                  SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE
                  ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
                  COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
                  SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) (THE "RESALE
                  RESTRICTION TERMINATION DATE") EXCEPT (A) TO THE COMPANY, (B)

                                       21
<PAGE>

                  PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
                  EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
                  SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
                  THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
                  "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
                  PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
                  QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
                  TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
                  TO OFFERS AND SALES TO FOREIGN PERSONS THAT OCCUR IN OFFSHORE
                  TRANSACTIONS AND WITHOUT DIRECTED SELLING EFFORTS WITHIN THE
                  MEANINGS OF SUCH TERMS AS DEFINED IN REGULATION S UNDER THE
                  SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
                  WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER
                  THE SECURITIES ACT THAT IS PURCHASING THE SECURITY FOR ITS OWN
                  ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
                  "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
                  VIEW TO, OR FOR OFFER OF SALE IN CONNECTION WITH, ANY
                  DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F)
                  PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
                  REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
                  AND THE WARRANT AGENT'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
                  TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
                  CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
                  OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF
                  TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED
                  AND DELIVERED BY THE TRANSFEROR TO THE WARRANT AGENT AND IN
                  EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY
                  U.S. STATE OR ANY OTHER APPLICABLE JURISDICTION. THE HOLDER OF
                  THIS SECURITY AGREES THAT IT WILL DELIVER TO EACH PERSON TO
                  WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
                  THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON
                  THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
                  TERMINATION DATE."

                                    (B)  Notwithstanding the foregoing, any
                   Global Warrant or Definitive Warrant issued pursuant to
                   subparagraphs

                                       22
<PAGE>

                  (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii),
                  (e)(iii) or (f) of this Section 3.5 (and all Warrants issued
                  in exchange therefor or substitution thereof) shall not bear
                  the Private Placement Legend.

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

                       "THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS
       DEFINED IN THE WARRANT AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE
       IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
       TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE
       WARRANT AGENT MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
       TO SECTION 3.5 OF THE WARRANT AGREEMENT, (II) THIS GLOBAL WARRANT MAY BE
       EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.5(a) OF THE
       WARRANT AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE DELIVERED TO THE
       WARRANT AGENT FOR CANCELLATION PURSUANT TO SECTION 3.8 OF THE WARRANT
       AGREEMENT AND (IV) THIS GLOBAL WARRANT MAY BE TRANSFERRED TO A SUCCESSOR
       DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."

                  (iii)  Unit Legend. Each Warrant issued prior to the
       Separation Date shall bear a legend in substantially the following form:

                  "THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY
       ISSUED AS PART OF AN ISSUANCE OF 105,000 UNITS (THE "UNITS"), EACH OF
       WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT AT MATURITY OF THE 11.875%
       SENIOR SECURED NOTES DUE 2008, SERIES A, OF THE COMPANY (THE "NOTES") AND
       ONE WARRANT INITIALLY ENTITLING THE HOLDER THEREOF TO PURCHASE FOUR
       SHARES OF COMMON STOCK, PAR VALUE $.10 PER SHARE, OF THE COMPANY.

                  PRIOR TO THE EARLIEST OF (I) 180 DAYS AFTER THE CLOSING OF THE
       OFFERING OF THE UNITS, (II) THE DATE ON WHICH A REGISTRATION STATEMENT
       WITH RESPECT TO A REGISTERED EXCHANGE OFFER FOR THE NOTES IS DECLARED
       EFFECTIVE UNDER THE ACT, (III) THE DATE ON WHICH A SHELF REGISTRATION
       STATEMENT WITH RESPECT TO THE NOTES OR THE WARRANTS AND WARRANT SHARES IS
       DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (IV) NOTIFICATION OF

                                       23
<PAGE>

       THE OCCURRENCE OF A CHANGE OF CONTROL OR AN EVENT OF DEFAULT (AS DEFINED
       IN THE INDENTURE GOVERNING THE NOTES (THE "INDENTURE")), WITH RESPECT TO
       THE NOTES, AND (V) SUCH DATE AS THE INITIAL PURCHASERS (AS DEFINED IN THE
       INDENTURE) (OR THEIR RESPECTIVE SUCCESSORS OR ASSIGNS) IN THEIR SOLE
       DISCRETION SHALL DETERMINE, THE WARRANTS EVIDENCED BY THIS CERTIFICATE
       MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE
       TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE NOTES."

                  (iv)   Regulation S Legend. Each Warrant that is a Registrable
       Security and issued pursuant to Regulation S shall bear the following
       legend on the reverse thereof:

                  "THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
       THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
       AS AMENDED (THE "SECURITIES ACT") AND THE SECURITIES EVIDENCED BY THIS
       CERTIFICATE MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON
       UNLESS REGISTERED UNDER THE SECURITIES ACT, OR AN EXEMPTION FROM SUCH
       REGISTRATION IS AVAILABLE. IN ORDER TO EXERCISE THE SECURITIES EVIDENCED
       BY THIS CERTIFICATE, THE HOLDER MUST FURNISH TO THE COMPANY AND THE
       WARRANT AGENT EITHER (A) A WRITTEN CERTIFICATION THAT IT IS NOT A U.S.
       PERSON AND THE WARRANT IS NOT BEING EXERCISED ON BEHALF OF A U.S. PERSON
       OR (B) A WRITTEN OPINION OF COUNSEL TO THE EFFECT THAT THE SECURITIES
       DELIVERED UPON EXERCISE OF THIS SECURITY HAVE BEEN REGISTERED UNDER THE
       SECURITIES ACT OR THAT THE DELIVERY OF SUCH SECURITIES IS EXEMPT FROM THE
       REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. TERMS IN THIS LEGEND
       HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
       ACT."

                  (h)      Cancellation and/or Adjustment of Global Warrants.

                  At such time as all beneficial interests in a particular
Global Warrant have been exercised or exchanged for one or more Definitive
Warrants or a particular Global Warrant has been exercised, redeemed,
repurchased or canceled in whole and not in part, each such Global Warrant shall
be returned to or retained and canceled by the Warrant Agent in accordance with
Section 3.8 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Warrant is exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial

                                       24
<PAGE>

interest in another Global Warrant or a Definitive Warrant, the number of
Warrants represented by such Global Warrant shall be reduced accordingly and an
endorsement shall be made on such Global Warrant by the Warrant Agent or by the
Depositary at the written direction of the Depositary to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Warrant or a Definitive Warrant is being exchanged for or transferred to
a Person who will take delivery thereof in the form of a beneficial interest in
a Global Warrant, the number of Warrants represented by the Global Warrant in
which such beneficial interest is received shall be increased accordingly and an
endorsement shall be made on such Global Warrant by the Warrant Agent or by the
Depositary at the written direction of the Depositary to reflect such increase.

                  (i)      General Provisions Relating to Transfers and
                           Exchanges.

                           (i) To permit registrations of transfers and
         exchanges, the Company shall execute and the Warrant Agent shall
         countersign Global Warrants and Definitive Warrants upon the Company's
         order or at the Warrant Registrar's request.

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

                           (iii) All Global Warrants and Definitive Warrants
         issued upon any registration of transfer or exchange of beneficial
         interests in Global Warrants or of Definitive Warrants shall be the
         duly authorized, executed and issued warrants for Common Stock of the
         Company, not subject to any preemptive rights, and entitled to the same
         benefits under this Warrant Agreement as the Global Warrants or
         Definitive Warrants surrendered upon such registration of transfer or
         exchange.

                           (iv)  Prior to due presentment for the registration
         of a transfer of any Warrant, the Warrant Agent and the Company may
         deem and treat the Person in whose name any Warrant is registered as
         the absolute owner of such Warrant for all purposes and neither the
         Warrant Agent nor the Company shall be affected by notice to the
         contrary.

                           (v)   The Warrant Agent shall countersign Global
         Warrants and Definitive Warrants in accordance with the provisions of
         Section 3.2 hereof.

                                       25
<PAGE>

                  (j)      Facsimile Submissions to Warrant Agent.

                  All certifications, certificates and Opinions of Counsel
required to be submitted to the Warrant Registrar pursuant to this Section 3.5
to effect a registration of transfer or exchange may be submitted by facsimile
with the original to follow immediately thereafter.

                  The Warrant Registrar shall not be responsible for confirming
the truth or accuracy of representations made in any such certifications or
certificates. As to any Opinions of Counsel delivered pursuant to this Section
3.5, the Warrant Registrar may rely upon, and be fully protected in relying
upon, such opinions.

         3.6      Replacement Warrants.

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

                  Every replacement Warrant is an additional warrant of the
 Company and shall be entitled to all of the benefits of this Warrant Agreement
 to the same extent as the Warrant surrendered to the Warrant Agent for such
 replacement Warrant.

         3.7      Temporary Warrants.

                  Until certificates representing Warrants are ready for
 delivery, the Company may prepare and the Warrant Agent, upon receipt of a
 Warrant Countersignature Order, shall issue temporary Warrants. Temporary
 Warrants shall be substantially in the form of certificated Warrants but may
 have variations that the Company considers appropriate for temporary Warrants
 and as shall be reasonably acceptable to the Warrant Agent. Without
 unreasonable delay, the Company shall prepare and the Warrant Agent shall
 countersign definitive Warrants in exchange for temporary Warrants.

                  Holders of temporary Warrants shall be entitled to all of the
 benefits of this Warrant Agreement equally and proportionately with all other
 Warrants duly issued hereunder.

                                       26
<PAGE>

         3.8      Cancellation.

                  Subject to Section 3.5(h) hereof, the Company at any time may
deliver Warrants to the Warrant Agent for cancellation. The Warrant Registrar
shall forward to the Warrant Agent any Warrants surrendered to them for
registration of transfer, exchange or exercise. The Warrant Agent and no one
else shall cancel all Warrants surrendered for registration of transfer,
exchange, exercise, replacement or cancellation and shall destroy canceled
Warrants (subject to the record retention requirement of the Exchange Act).
Certification of the destruction of all canceled Warrants shall be delivered to
the Company. The Company may not issue new Warrants to replace Warrants that
have been exercised or that have been delivered to the Warrant Agent for
cancellation.

SECTION 4. SEPARATION OF WARRANTS; TERMS OF WARRANTS; EXERCISE OF WARRANTS.

                  (a) The Notes and Warrants will not be separately transferable
until the Separation Date. Subject to the terms of this Agreement, each Holder
shall have the right, which may be exercised during the period commencing at the
opening of business on the Exercise Date and until 5:00 p.m., New York City
time, on the Expiration Date (as defined below) (the "Exercise Period"), to
receive from the Company the number of fully paid and nonassessable Warrant
Shares which the Holder may at the time be entitled to receive on exercise of
such Warrants and payment of the Exercise Price (i) through a "cashless"
exercise in accordance with Section 4(g) hereof; (ii) in cash, by wire transfer
or by certified or official bank check payable to the order of the Company; or
(iii) by a combination thereof, in each case, equal to the Exercise Price then
in effect for such Warrant Shares; provided that Holders shall be able to
                                   --------
exercise their Warrants only if a Registration Statement relating to the Warrant
Shares is then in effect, or the exercise of such Warrants is exempt from the
registration requirements of the Securities Act, and such securities are
qualified for sale or exempt from qualification under the applicable securities
laws of the states in which the various Holders of the Warrants or other Persons
to whom it is proposed that the Warrant Shares be issued on exercise of the
Warrants reside. Each Warrant not exercised prior to 5:00 p.m., New York City
time, on August 15, 2008 (the "Expiration Date") shall become void and all
rights thereunder and all rights in respect thereof under this agreement shall
cease as of such time. No adjustments as to dividends will be made upon exercise
of the Warrants.

                  (b) In order to exercise all or any of the Warrants
represented by a Warrant Certificate, the holder thereof must deliver to the
Warrant Agent at its corporate trust office set forth in Section 15 hereof the
Warrant Certificate and the form of election to purchase on the reverse thereof
duly filled in and signed, which signature shall be medallion guaranteed by an
institution which is a member of a

                                       27
<PAGE>

Securities Transfer Association recognized signature guarantee program, and upon
payment to the Warrant Agent for the account of the Company of the Exercise
Price, which is set forth in the form of Warrant Certificate attached hereto as
Exhibit A, as adjusted as herein provided, for the number of Warrant Shares in
respect of which such Warrants are then exercised. Payment of the aggregate
Exercise Price shall be made (i) in cash, by wire transfer or by certified or
official bank check payable to the order of the Company, (ii) through a
"cashless" exercise in accordance with Section 4(g) hereof, or (iii) by a
combination thereof.

                  (c) Subject to the provisions of Section 5 hereof, upon
compliance with Sections 4(a) and (b) above, the Warrant Agent shall deliver or
cause to be delivered with all reasonable dispatch, to or upon the written order
of the Holder and in such name or names as the Holder may designate, a
certificate or certificates for the number of whole Warrant Shares issuable upon
the exercise of such Warrants, together with cash delivered by the Company in
lieu of fractional shares as provided in Section 9 hereof; provided that if any
                                                           --------
consolidation, merger or lease or sale of assets is proposed to be effected by
the Company as described in Section 8(m) hereof, or a tender offer or an
exchange offer for shares of Common Stock shall be made, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Warrant Agent
shall, as soon as possible, but in any event not later than three Business Days
thereafter, deliver or cause to be delivered the full number of Warrant Shares
issuable upon the exercise of such Warrants in the manner described in this
sentence or other securities or property to which such Holder is entitled
hereunder, together with cash as provided in Section 9 hereof. Such certificate
or certificates shall be deemed to have been issued, and any Person so
designated to be named therein shall be deemed to have become a Holder of record
of such Warrant Shares, as of the date of the surrender of such Warrants and
payment of the Exercise Price.

                  (d) The Warrants shall be exercisable, at the election of the
Holders thereof, either in full or from time to time in part, at any time during
the Exercise Period. If less than all the Warrants represented by a Definitive
Warrant are exercised, such Definitive Warrant shall be surrendered and a new
Definitive Warrant of the same tenor and for the number of Warrants which were
not exercised shall be executed by the Company and delivered to the Warrant
Agent and the Warrant Agent shall countersign the new Definitive Warrant,
registered in such name or names as may be directed in writing by the Holder,
and shall deliver the new Definitive Warrant to the Person or Persons entitled
to receive the same. The Warrant Agent shall make such notations on the Schedule
of Exchange of Interests of Global Warrants to each Global Warrant as are
required to reflect any change in the number of Warrants represented by such
Global Warrant resulting from any exercise in accordance with the terms hereof.

                                       28
<PAGE>

                  (e) All Warrant Certificates surrendered upon exercise of
 Warrants shall be cancelled by the Warrant Agent in accordance with Section 3.8
 hereof. Such cancelled Warrant Certificates shall then be disposed of by the
 Warrant Agent in a manner satisfactory to the Company in accordance with
 Section 3.8 hereof. The Warrant Agent shall account promptly to the Company
 with respect to Warrants exercised and concurrently pay to the Company all
 monies received by the Warrant Agent for the purchase of the Warrant Shares
 through the exercise of such Warrants.

                  (f) The Warrant Agent shall keep copies of this Agreement and
 any notices given or received hereunder available for inspection by the Holders
 during normal business hours at its office. The Company shall supply the
 Warrant Agent from time to time with such numbers of copies of this Agreement
 as the Warrant Agent may request.

                  (g) A Holder shall have the right to exercise the Warrants
 through a "cashless" exercise, subject to compliance with this Section 4,
 without any payment in cash or by certified or official bank check, in which
 event the Company shall issue to such Holder a number of Warrant Shares
 computed using the formula:

                                                  N x (M - E)
                                            X = --------------
                                                      M

 where:

                  X   =   the number of Warrant Shares to be issued to such
                          Holder.

                  N   =   the number of Warrant Shares issuable upon exercise of
                          the Warrants being exercised by such Holder.

                  M   =   the Current Market Price (as defined herein) per share
                          of Common Stock on the exercise date.

                  E   =   the Exercise Price.

 SECTION 5. PAYMENT OF TAXES.

                  The Company will pay all documentary stamp taxes attributable
 to the initial issuance of Warrant Shares upon the exercise of Warrants;
 provided that the Company shall not be required to pay any tax or taxes which
 may be payable in respect of any transfer involved in the issue of any Warrant
 Certificates or any certificates for Warrant Shares in a name other than that
 of the Holder of a Warrant

                                       29
<PAGE>

 Certificate surrendered upon the exercise of a Warrant, and the Company shall
 not be required to issue or deliver such Warrant Certificates unless or until
 the Person or Persons requesting the issuance thereof shall have paid to the
 Company the amount of such tax or shall have established to the satisfaction of
 the Company that such tax has been paid.

 SECTION 6. RESERVATION OF WARRANT SHARES.

                  (a) The Company will at all times reserve and keep available,
 free from preemptive rights, out of the aggregate of its authorized but
 unissued Common Stock or its authorized and issued Common Stock held in its
 treasury, for the purpose of enabling it to satisfy any obligation to issue
 Warrant Shares upon exercise of Warrants, the maximum number of shares of
 Common Stock which may then be deliverable upon the exercise of all outstanding
 Warrants.

                  (b) The Company or, if appointed, the transfer agent for the
 Common Stock (the "Transfer Agent") and every subsequent transfer agent for any
 shares of the Company's capital stock issuable upon the exercise of any of the
 rights of purchase represented by the Warrants will be irrevocably authorized
 and directed at all times to reserve such number of authorized shares as shall
 be required for such purpose. The Company will keep a copy of this Agreement on
 file with the Transfer Agent and with every subsequent transfer agent for any
 shares of the Company's capital stock issuable upon the exercise of the rights
 of purchase represented by the Warrants. The Warrant Agent is hereby
 irrevocably authorized to requisition from time to time from such Transfer
 Agent the stock certificates required to honor outstanding Warrants upon
 exercise thereof in accordance with the terms of this Agreement. The Company
 will supply such Transfer Agent with duly executed certificates for such
 purposes and will provide or otherwise make available any cash which may be
 payable as provided in Section 9 hereof. The Company will furnish such Transfer
 Agent a copy of all notices of adjustments, and certificates related thereto,
 transmitted to each Holder pursuant to Section 10 hereof.

                  (c) Before taking any action which would cause an adjustment
 pursuant to Section 8 hereof to reduce the Exercise Price below the then par
 value (if any) of the Warrant Shares, the Company will take any and all
 corporate action which may, in the opinion of its counsel (which may be counsel
 employed by the Company), be necessary in order that the Company may validly
 and legally issue fully paid and nonassessable Warrant Shares at the Exercise
 Price as so adjusted.

                  (d) The Company covenants that all Warrant Shares which may be
 issued upon exercise of Warrants will, upon issue, be fully paid,
 nonassessable, free of preemptive rights and free from all taxes, liens,
 charges and security interests with respect to the issuance thereof, and issued
 in compliance with all applicable federal and state securities laws and all
 applicable gaming laws.

                                       30
<PAGE>

 SECTION 7. OBTAINING STOCK EXCHANGE LISTINGS.

                  The Company will from time to time take all action which may
 be necessary so that the Warrant Shares, immediately upon their issuance upon
 the exercise of Warrants, will be listed on the principal securities exchanges,
 automated quotation systems or other markets within the United States of
 America, if any, on which other shares of Common Stock are then listed, if any.

 SECTION 8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES ISSUABLE.

                  The Exercise Price and the number of Warrant Shares issuable
 upon the exercise of each Warrant are subject to adjustment from time to time
 upon the occurrence of the events enumerated in this Section 8. For purposes of
 Section 8 and Section 10, "Common Stock" means shares now or hereafter
 authorized of any class of common stock of the Company and any other stock of
 the Company, however designated, that has the right (subject to any prior
 rights of any class or series of preferred stock) to participate in any
 distribution of the assets or earnings of the Company without limit as to per
 share amount.

                  (a) Adjustment for Change in Capital Stock.

                  If the Company (i) pays a dividend or makes a distribution on
 its Common Stock in shares of its Common Stock, (ii) subdivides its outstanding
 shares of Common Stock into a greater number of shares, (iii) combines its
 outstanding shares of Common Stock into a smaller number of shares, (iv) makes
 a distribution on its Common Stock in shares of its capital stock other than
 Common Stock or (v) issues by reclassification of its Common Stock any shares
 of its capital stock, then the Exercise Price in effect immediately prior to
 such action shall be proportionately adjusted so that the Holder of any Warrant
 thereafter exercised may receive the aggregate number and kind of shares of
 capital stock of the Company which such Holder would have owned immediately
 following such action if such Warrant had been exercised immediately prior to
 such action.

                  The adjustment pursuant to this Section 8(a) shall become
 effective immediately after the record date in the case of a dividend or
 distribution and immediately after the effective date in the case of a
 subdivision, combination or reclassification. If, after an adjustment, a Holder
 of a Warrant upon exercise of it may receive shares of two or more classes of
 capital stock of the Company, the Company shall determine, in good faith, the
 allocation of the adjusted Exercise Price between such classes of capital stock
 and shall notify the Warrant Agent of such determination. After such
 allocation, the Exercise Price with respect to, and the number of underlying
 shares of, each class of capital stock shall thereafter be subject

                                       31
<PAGE>

 to adjustment on terms comparable to those applicable to Common Stock in this
 Section 8. The adjustment pursuant to this Section 8(a) shall be made
 successively whenever any event listed above shall occur.

                  (b) Adjustment for Rights Issue.

                  If the Company distributes any rights, options or warrants to
 all holders of its Common Stock entitling them for a period expiring within 45
 days after the record date mentioned below to purchase shares of Common Stock
 at a price per share less than the Current Market Price per share on that
 record date, the Exercise Price shall be adjusted in accordance with the
 formula:

                                                  N x P
                                              O+ -------
                                                    M
                                        E' = E x -------
                                                   O+ N

 where:
                  E'  =   the adjusted Exercise Price.

                  E   =   the current Exercise Price.

                  O   =   the number of shares of Common Stock outstanding on
                          the record date.

                  N   =   the number of additional shares of Common Stock
                          issuable pursuant to such rights, options or warrants.

                  P   =   the price per share of the additional shares.

                  M   =   the Current Market Price per share of Common Stock on
                          the record date.

                  The adjustment pursuant to this Section 8(b) shall be made
 successively whenever any such rights, options or warrants are issued and shall
 become effective immediately after the record date for the determination of
 stockholders entitled to receive the rights, options or warrants. If at the end
 of the period during which such rights, options or warrants are exercisable,
 not all rights, options or warrants shall have been exercised, the Exercise
 Price shall be immediately readjusted to what it would have been if "N" in the
 above formula had been the number of shares actually issued.

                  (c) Adjustment for Other Distributions.

                                       32
<PAGE>

                  If the Company distributes to all holders of its Common Stock
 any of its assets or debt securities or any rights or warrants to purchase debt
 securities of the Company, the Exercise Price shall be adjusted in accordance
 with the formula:

                                               M - F
                                      E'= E x -------
                                                 M

 where:

                  E'  =   the adjusted Exercise Price.

                  E   =   the current Exercise Price.

                  M   =   the Current Market Price per share of Common Stock on
                          the record date mentioned below.

                  F   =   the fair market value on the record date of the
                          assets, securities, rights or warrants to be
                          distributed in respect of one share of Common Stock as
                          determined in good faith by the Board of Directors of
                          the Company (the "Board of Directors").

                  The adjustment pursuant to this Section 8(c) shall be made
 successively whenever any such distribution is made and shall become effective
 immediately after the record date for the determination of stockholders
 entitled to receive the distribution.

                  This Section 8(c) does not apply to cash dividends or cash
 distributions paid out of consolidated current or retained earnings as shown on
 the books of the Company prepared in accordance with generally accepted
 accounting principles. Also, this Section 8(c) does not apply to rights,
 options or warrants referred to in Section 8(b) hereof.

                  (d) Adjustment for Common Stock Issue.

                  If the Company issues shares of Common Stock for a
 consideration per share less than the Current Market Price per share on the
 date the Company fixes the offering price of such additional shares, the
 Exercise Price shall be adjusted in accordance with the formula:

                                                  P
                                              O+ ---
                                                  M
                                      E'= E x --------
                                                  A

                                       33
<PAGE>

 where:

                  E'  =   the adjusted Exercise Price.

                  E   =   the then current Exercise Price.

                  O   =   the number of shares outstanding immediately prior to
                          the issuance of such additional shares.

                  P   =   the aggregate consideration received for the issuance
                          of such additional shares.

                  M   =   the Current Market Price per share of Common Stock on
                          the date of issuance of such additional shares.

                  A   =   the number of shares outstanding immediately after the
                          issuance of such additional shares.

                  The adjustment pursuant to this Section 8(d) shall be made
 successively whenever any such issuance is made, and shall become effective
 immediately after such issuance.

                  This subsection (d) does not apply to:

                                 (1)    any of the transactions described in
                      subsections (a), (b) and (c) of this Section 8,

                                 (2)    the exercise of Warrants, or the
                      conversion or exchange of other securities convertible or
                      exchangeable for Common Stock, the issuance of which
                      caused an adjustment to be made under Section 8(e),

                                 (3)    Common Stock issued to the Company's
                      employees, directors or consultants (or employees,
                      directors or consultants of its Affiliates) under bona
                      fide employee benefit plans adopted by the Board of
                      Directors and approved by the holders of Common Stock when
                      required by law, if such Common Stock would otherwise be
                      covered by this subsection (d) (but only to the extent
                      that the aggregate number of shares excluded hereby and
                      issued after the date of this Warrant Agreement, together
                      with the number of shares issuable upon conversion of the
                      securities described in clause (e)(2) below, shall not
                      exceed 10% of the Common Stock

                                       34
<PAGE>

                      outstanding at the time of the adoption of each such plan,
                      exclusive of anti-dilution adjustments thereunder),

                                 (4)    Common Stock issued to stockholders of
                      any Person which merges with the Company, or with a
                      subsidiary of the Company (in proportion to such
                      stockholders' stock holdings of such Person immediately
                      prior to such merger, upon such merger), provided that if
                      such Person is an Affiliate of the Company, the Board of
                      Directors shall have obtained a fairness opinion from a
                      nationally recognized investment banking, appraisal or
                      valuation firm, which is not an Affiliate of the Company,
                      stating that the consideration received in such merger is
                      fair to the Company from a financial point of view,

                                 (5)    the issuance of shares of Common Stock
                      pursuant to rights, options or warrants which were
                      originally issued in a Non-Affiliate Sale (as defined
                      below) together with one or more other securities as part
                      of a unit at a price per unit,

                                 (6)    shares of Common Stock issued upon
                      exercise of any option granted or warrant issued prior to
                      the date of this Warrant Agreement and, with respect to
                      any option granted or warrant issued after the date of
                      this Warrant Agreement at an exercise price not less than
                      Current Market Price per share on the date of such grant
                      or issuance, shares of Common Stock issued upon exercise
                      thereof, or

                                 (7)    shares of Common Stock issued in a bona
                      fide public offering pursuant to a firm commitment
                      underwriting; provided that the issue price of such shares
                                    --------
                      is at least equal to 80% of the then Current Market Price
                      per share of Common Stock.

                  (e) Adjustment for Convertible Securities Issue.

                  If the Company issues any securities (i) convertible into
 Common Stock or (ii) exercisable or exchangeable for Common Stock (other than
 securities issued in transactions described in subsections (b) and (c) of this
 Section 8) for a consideration per share of Common Stock initially deliverable
 upon conversion, exercise or exchange of such securities less than the Current
 Market Price per share of such Common Stock on the date of issuance of such
 securities, the Exercise Price shall be adjusted in accordance with this
 formula:

                                       35
<PAGE>

                                                  P
                                              O+ ---
                                                  M
                                      E'= E x -------
                                               O+ D
 where:

                  E'  =   the adjusted Exercise Price.

                  E   =   the then current Exercise Price.

                  O   =   the number of shares outstanding immediately prior to
                          the issuance of such securities.

                  P   =   the aggregate consideration received for the issuance
                          of such securities.

                  M   =   the Current Market Price per share of Common Stock on
                          the date of issuance of such securities.

                  D   =   the maximum number of shares deliverable upon
                          conversion or in exchange for such securities at the
                          initial conversion or exchange rate.

                  The adjustment pursuant to this Section 8(e) shall be made
 successively whenever any such issuance is made, and shall become effective
 immediately after such issuance.

                  If all of the Common Stock deliverable upon conversion,
 exercise or exchange of such securities has not been issued when such
 securities are no longer outstanding, then the Exercise Price shall promptly be
 readjusted to the Exercise Price which would then be in effect had the
 adjustment upon the issuance of such securities been made on the basis of the
 actual number of shares of Common Stock issued upon conversion or exchange of
 such securities.

                  This subsection (e) does not apply to:

                                 (1)    convertible securities issued to
                      stockholders of any Person which merges with the Company,
                      or with a subsidiary of the Company (in proportion to such
                      stockholders' stock holdings of such Person immediately
                      prior to such merger), upon such merger, provided that if
                      such Person is an Affiliate of the Company, the Board of
                      Directors shall have obtained a fairness opinion from a
                      nationally

                                       36
<PAGE>

                      recognized investment banking, appraisal or valuation
                      firm, which is not an Affiliate of the Company, stating
                      that the consideration received in such merger is fair to
                      the Company from a financial point of view,

                                 (2)    securities convertible into, exercisable
                      or exchangeable for shares of Common Stock issued to
                      employees, directors or consultants of the Company or its
                      Affiliates under bona fide employee benefit plans adopted
                      by the Board of Directors and approved by the holders of
                      Common Stock, when required by law (but only to the extent
                      the aggregate number of shares of Common Stock to be
                      issued upon the conversion, exercise or exchange of such
                      securities, together with the number of shares issued as
                      described in clause (d)(3) above, shall not exceed 10% of
                      the Common Stock outstanding at the time of adoption of
                      each such plan, exclusive of anti-dilution adjustments
                      thereunder),

                                 (3)    any of the transactions described in
                      subsections (a), (b) and (c) of this Section 8, or

                                 (4)    shares of Common Stock issued in a bona
                      fide public offering pursuant to a firm commitment
                      underwriting; provided that the issue price of such shares
                                    --------
                      is at least equal to 80% of the then Current Market Price
                      per share of Common Stock.

                  (f) Consideration Received.

                  For purposes of any computation respecting consideration
 received pursuant to subsections (d) and (e) of this Section 8, the following
 shall apply:

                      (i)     in the case of the issuance of shares of Common
         Stock for cash, the consideration shall be the amount of such cash,
         provided that in no case shall any deduction be made for any
         commissions, discounts or other expenses incurred by the Company for
         any underwriting of the issue or otherwise in connection therewith;

                      (ii)    in the case of the issuance of shares of Common
         Stock for a consideration in whole or in part other than cash, the
         consideration other than cash shall be deemed to be the fair market
         value thereof as determined in good faith by the Board of Directors
         (irrespective of the accounting treatment thereof), whose determination
         shall be conclusive for all purposes, and described in a Board
         resolution which shall be filed with the Warrant Agent;

                                       37
<PAGE>

                      (iii)   in the case of the issuance of securities
         convertible into or exercisable or exchangeable for shares, the
         aggregate consideration received therefor shall be deemed to be the
         consideration received by the Company for the issuance of such
         securities plus the additional minimum consideration, if any, to be
         received by the Company upon the conversion, exercise or exchange
         thereof (the consideration in each case to be determined in the same
         manner as provided in clauses (i) and (ii) of this subsection (f)); and

                      (iv)    in the case of the issuance of shares of Common
         Stock pursuant to rights, options or warrants which rights, options or
         warrants were originally issued together with one or more other
         securities as part of a unit at a price per unit, the consideration
         shall be deemed to be the fair value of such rights, options or
         warrants at the time of issuance thereof as determined in good faith by
         the Board of Directors whose determination shall be conclusive and
         described in a Board resolution which shall be filed with the Warrant
         Agent plus the additional minimum consideration, if any, to be received
         by the Company upon the exercise, conversion or exchange thereof (as
         determined in the same manner as provided in clauses (i) and (ii) of
         this subsection (f)).

                  (g) Current Market Price.

                  The "Current Market Price" per security at any date of
 determination shall be the average daily Market Price during the period of the
 most recent 20 days, ending on such date, on which the national securities
 exchanges were open for trading, except that if such security is not then
 listed or admitted to trading on any national securities exchange or quoted on
 a national quotation system or in the over-the-counter market, the Current
 Market Price shall be the Market Price on such date as set forth in paragraph
 (iii) of the definition thereof below.

                  "Market Price" per security at any date of determination shall
 be the amount per security, equal to:

                      (i)     the last sale price of such security on such date
         or, if no such sale takes place on such date, the average of the
         closing bid and asked prices thereof on such date, in each case as
         officially reported on the principal national securities exchange on
         which such security is then listed or admitted to trading, or

                      (ii)    if such security is not then listed or admitted
         to trading on any national securities exchange but is quoted on a
         national quotation system or in the over-the-counter market, the
         average of the closing bid and

                                       38
<PAGE>

         asked prices of such security on such date as shown by such quotation
         system, or

                      (iii)   if such security is not then listed or admitted
         to trading on any national securities exchange or quoted on a national
         quotation system or in the over-the-counter market, the Fair Value (as
         defined below) per security at such date of determination.

                  In Sections 8(d) and (e) hereof, "Fair Value" per security at
 any date of determination shall be (i) in connection with an issuance and sale
 by the Company to a party that is not an Affiliate of the Company in an arm's-
 length transaction (a "Non-Affiliate Sale"), the price per security at which
 such security is sold and (ii) in connection with any issuance and sale by the
 Company to an Affiliate of the Company, (A) the last price per security at
 which such security was issued or sold in a Non-Affiliate Sale within the
 three-month period preceding such date of determination or (B) if clause (A) is
 not applicable, the fair market value of such security determined in good faith
 by (1) a majority of the Board of Directors, including a majority of the
 Disinterested Directors, and approved in a Board resolution delivered to the
 Warrant Agent, or (2) a nationally recognized investment banking, appraisal or
 valuation firm, which is not an Affiliate of the Company, in each case, taking
 into account all factors deemed relevant by the Board of Directors or such
 investment banking, appraisal or valuation firm. Notwithstanding the foregoing,
 any sale to the Initial Purchasers (or any successors thereto) pursuant to an
 underwritten public offering registered under the Securities Act shall be
 deemed to be and treated as a Non-Affiliate Sale.

                  In Sections 8(b) and (c) hereof, the "Fair Value" per security
 at any date of determination shall be (A) the last price per security at which
 such security was issued and sold by the Company in a Non-Affiliate Sale within
 the three-month period preceding such date of determination or (B) if clause
 (A) is not applicable, the fair market value of such security determined in
 good faith by (1) a majority of the Board of Directors, including a majority of
 the Disinterested Directors, and approved in a Board resolution delivered to
 the Warrant Agent, or (2) a nationally recognized investment banking, appraisal
 or valuation firm, which is not an Affiliate of the Company, in each case,
 taking into account all factors deemed relevant by the Board of Directors or
 such investment banking, appraisal or valuation firm.

                  For purposes of this Section 8(g), "Disinterested Director"
 means, in connection with any issuance of securities that gives rise to a
 determination of the Fair Value thereof, each member of the Board of Directors
 who is not an officer, employee, director or other Affiliate of the party to
 whom the Company is proposing to issue the securities giving rise to such
 determination.

                                       39
<PAGE>

                  For purposes of this Section 8(g), "Affiliate" of any
specified Person means (A) any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified
Person and (B) any director, officer or employee of such specified Person. For
purposes of this definition "control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common control with") as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise.

                  (h)      When De Minimis Adjustment May Be Deferred.

                  No adjustment in the Exercise Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the Exercise
Price. Any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 8
shall be made to the nearest cent or to the nearest 1/100th of a share, as the
case may be, it being understood that no such rounding shall be made under
Section 8(p).

                  (i)      When No Adjustment Required.

                  No adjustment need be made for a transaction referred to in
 Section 8(a), (b), (c), (d) or (e) hereof, if Warrant Holders are to
 participate (without being required to exercise their Warrants) in the
 transaction on a basis and with written notice that the Board of Directors
 determines to be fair and appropriate in light of the basis and notice on which
 holders of Common Stock participate in the transaction. No adjustment need be
 made for (i) rights to purchase Common Stock pursuant to a Company plan for
 reinvestment of dividends or interest, (ii) a change in the par value or no par
 value of the Common Stock, or (iii) the adoption of a plan commonly referred to
 as a "Stockholders' Rights Plan" which provides for the issuance of rights to
 acquire shares of capital stock upon the occurrence of some event that is not
 within the control of the rights holders, or the issuance of rights under such
 plan; provided that the issuance of capital stock pursuant to such rights shall
 require adjustment to the Exercise Price and number of shares of Common Stock
 purchasable upon the exercise of each Warrant as set forth in this Agreement.
 To the extent the Warrants become convertible into cash, no adjustment need be
 made thereafter as to the cash. Interest will not accrue on the cash.

                  (j)      Notice of Adjustment.

                  Whenever the Exercise Price is adjusted, the Company shall
 provide the notices required by Section 10 hereof.

                  (k)      Voluntary Reduction.

                                       40
<PAGE>

                  The Company from time to time may reduce the Exercise Price by
any amount for any period of time, if the period is at least 20 days and if the
reduction is irrevocable during the period; provided that in no event may the
Exercise Price be less than the par value of a share of Common Stock. Whenever
the Exercise Price is reduced, the Company shall mail to Warrant Holders and the
Warrant Agent a notice of the reduction. The Company shall mail the notice at
least 15 days before the date the reduced Exercise Price takes effect. The
notice shall state the reduced Exercise Price and the period in which it will be
in effect. A reduction of the Exercise Price does not change or adjust the
Exercise Price otherwise in effect for purposes of Sections 8(a), (b), (c), (d)
and (e) hereof.

                  (l)      Notice of Certain Transactions.

                  If (i) the Company takes any action that would require an
 adjustment in the Exercise Price pursuant to Section 8(a), (b), (c), (d) or (e)
 hereof and if the Company does not arrange for Warrant Holders to participate
 pursuant to Section 8(i) hereof, (ii) the Company takes any action that would
 require a supplemental Warrant Agreement pursuant to Section 8(m) hereof or
 (iii) there is a liquidation or dissolution of the Company, then the Company
 shall mail to Warrant Holders a notice stating the proposed record date for a
 dividend or distribution or the proposed effective date of a subdivision,
 combination, reclassification, consolidation, merger, transfer, lease,
 liquidation or dissolution. The Company shall mail the notice at least 15 days
 before such date. Failure to mail the notice or any defect in it shall not
 affect the validity of the transaction.

                  (m)      Reorganization of Company.

                  If the Company consolidates or merges with or into, or
 transfers or leases all or substantially all its assets to, any Person, upon
 consummation of such transaction the Warrants shall automatically become
 exercisable for the kind and amount of securities, cash or other assets which
 the Holder of a Warrant would have owned immediately after the consolidation,
 merger, transfer or lease if the Holder had exercised the Warrant immediately
 before the effective date of the transaction with notice thereof to the Warrant
 Agent. Concurrently with the consummation of such transaction, the corporation
 formed by or surviving any such consolidation or merger if other than the
 Company, or the Person to which such transfer or lease shall have been made,
 shall enter into a supplemental Warrant Agreement so providing and further
 providing for adjustments which shall be as nearly equivalent as may be
 practical to the adjustments provided for in this Section 8(m). The successor
 Company shall mail to Warrant Holders and the Warrant Agent a written notice
 describing the supplemental Warrant Agreement. If the issuer of securities
 deliverable upon exercise of Warrants under the supplemental Warrant Agreement
 is an affiliate of the formed, surviving, transferee or lessee corporation,
 that issuer shall

                                       41
<PAGE>

join in the supplemental Warrant Agreement. If this Section 8(m) applies,
Sections 8(a), (b), (c), (d) and (e) hereof do not apply.

                  (n)      Company Determination Final.

                  Any determination that the Company or the Board of Directors
 must make pursuant to Section 8(a), (b), (c), (d), (e), (f), (g), (h) or (i)
 hereof is conclusive.

                  (o)      Warrant Agent's Disclaimer.

                  The Warrant Agent has no duty to determine when an adjustment
 under this Section 8 should be made, how it should be made or what it should
 be. The Warrant Agent has no duty to determine whether any provisions of a
 supplemental Warrant Agreement under Section 8(m) hereof are correct. The
 Warrant Agent makes no representation as to the validity or value of any
 securities or assets issued upon exercise of Warrants. The Warrant Agent shall
 not be responsible for the Company's failure to comply with this Section 8.

                  (p)      When Issuance or Payment May Be Deferred.

                  In any case in which this Section 8 shall require that an
 adjustment in the Exercise Price be made effective as of a record date for a
 specified event, the Company may, with notice thereof to the Warrant Agent,
 elect to defer until the occurrence of such event (i) issuing to the Holder of
 any Warrant exercised after such record date the Warrant Shares and other
 capital stock of the Company, if any, issuable upon such exercise based on the
 Exercise Price prior to such adjustment over and above the Warrant Shares and
 other capital stock of the Company, if any, issuable upon such exercise on the
 basis of the adjusted Exercise Price and (ii) paying to such Holder any amount
 in cash in lieu of a fractional share pursuant to Section 9 hereof; provided
                                                                     --------
 that the Company shall deliver to such Holder a due bill or other appropriate
 instrument evidencing such Holder's right to receive such additional Warrant
 Shares, other capital stock and cash upon the occurrence of the event requiring
 such adjustment.

                  (q)      Adjustment in Number of Shares.

                  Upon each adjustment of the Exercise Price pursuant to this
 Section 8 (other than pursuant to Sections 8(a)(iv) and (v) and Section 8(c)),
 each Warrant outstanding prior to the making of the adjustment in the Exercise
 Price shall thereafter evidence the right to receive, upon payment of the
 adjusted Exercise Price, that number of shares of Common Stock (calculated to
 the nearest hundredth) obtained from the following formula:

                                       42
<PAGE>

                           N' = N x E
                                   --
                                   E'

where:

              N'   =   the adjusted number of Warrant Shares issuable upon
                       exercise of a Warrant by payment of the adjusted Exercise
                       Price.

              N    =   the number of Warrant Shares previously issuable upon
                       exercise of a Warrant by payment of the Exercise Price
                       prior to adjustment.

              E'   =   the adjusted Exercise Price.

              E    =   the Exercise Price prior to adjustment.

              Upon each adjustment of the Exercise Price pursuant to Sections
8(a)(iv) and (v) and Section 8(c), each Warrant outstanding prior to the making
of the adjustment in the Exercise Price shall thereafter evidence the right to
receive, upon payment of the adjusted Exercise Price, the amount and kind of
securities which such Holder would have owned immediately following such
dividend, distribution or issuance if such Warrant had been exercised
immediately prior to such action.

              (r)  Form of Warrants.

              Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants,
Warrants issued prior to or after such adjustment may continue to express the
same price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.

 SECTION 9.   FRACTIONAL INTERESTS.

              The Company shall not be required to issue fractional Warrant
Shares on the exercise of Warrants. If more than one Warrant shall be presented
for exercise in full at the same time by the same Holder, the number of full
Warrant Shares which shall be issuable upon the exercise thereof shall be
computed on the basis of the aggregate number of Warrant Shares purchasable on
exercise of the Warrants so presented. If any fraction of a Warrant Share would,
except for the provisions of this Section 9, be issuable on the exercise of any
Warrants (or specified portion thereof), the Company shall pay an amount in cash
equal to (i) the Market Price per Warrant Share, as determined on the day
immediately preceding the date the Warrant is

                                       43
<PAGE>

presented for exercise, multiplied by (ii) such fraction of a Warrant Share,
computed to the nearest whole U.S. cent.

 SECTION 10.     NOTICES TO WARRANT HOLDERS.

          (a)    Upon any adjustment of the Exercise Price pursuant to Section 8
hereof, the Company shall promptly thereafter (i) cause to be filed with the
Warrant Agent a certificate of a firm of independent public accountants of
recognized standing selected by the Board of Directors of the Company (who may
be the regular auditors of the Company) setting forth the Exercise Price after
such adjustment and setting forth in reasonable detail the method of calculation
and the facts upon which such calculations are based and setting forth the
number of Warrant Shares (or portion thereof) issuable after such adjustment in
the Exercise Price, upon exercise of a Warrant and payment of the adjusted
Exercise Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to each
of the Holders of Warrants at the address appearing on the Warrant register for
each such Holder written notice of such adjustment by first-class mail, postage
prepaid. Where appropriate, such notice may be given in advance and included as
a part of the notice required to be mailed under the other provisions of this
Section 10.

          (b)    In case:

                 (i)    the Company shall authorize the issuance to all holders
         of shares of Common Stock of rights, options or warrants to subscribe
         for or purchase shares of Common Stock or of any other subscription
         rights or warrants;

                 (ii)   the Company shall authorize the distribution to all
         holders of shares of Common Stock of evidences of its indebtedness or
         assets (other than dividends or cash distributions paid out of
         consolidated current or retained earnings as shown on the books of the
         Company prepared in accordance with generally accepted accounting
         principles or dividends payable in shares of Common Stock or
         distributions referred to in Section 8(a) hereof);

                 (iii)  of any consolidation or merger to which the Company is a
         party and for which approval of any stockholders of the Company is
         required, or of the conveyance, lease or other transfer of the
         properties and assets of the Company substantially as an entirety, or
         of any reclassification or change of Common Stock issuable upon
         exercise of the Warrants (other than a change in par value, or from par
         value to no par value, or from no par value to par value, or as a
         result of a subdivision or combination), or a tender offer or exchange
         offer for shares of Common Stock;

                                       44
<PAGE>

                       (iv)  of the voluntary or involuntary dissolution,
         liquidation or winding up of the Company; or

                       (v)   the Company proposes to take any action (other
         than actions of the character described in Section 8(a) hereof) which
         would require an adjustment of the Exercise Price pursuant to Section 8
         hereof;

then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the Holders of Warrants at such Holder's address
appearing on the Warrant register, at least 20 days (or 10 days in any case
specified in clauses (i) or (ii) above) prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, by first-class mail, postage prepaid, a written notice stating (x)
the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, (y) the initial expiration date set forth in any tender offer or
exchange offer for shares of Common Stock, or (z) the date on which any such
consolidation, merger, conveyance, lease, transfer, dissolution, liquidation or
winding up is expected to become effective or consummated, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange such shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, conveyance,
lease, transfer, dissolution, liquidation or winding up. The failure to give the
notice required by this Section 10 or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant, consolidation,
merger, conveyance, lease, transfer, dissolution, liquidation or winding up, or
the vote upon any action.

          (c)    Nothing contained in this Agreement or in any of the
Warrant Certificates shall be construed as conferring upon the Holders of
Warrants the right to vote or to consent or to receive notice as stockholders in
respect of the meetings of stockholders or the election of directors of the
Company or any other matter, or any rights whatsoever as stockholders of the
Company.

SECTION  11.     MERGER, CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT.

          (a)    Any Person into which the Warrant Agent may be merged or
with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any Person
succeeding to the business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such Person
would be eligible for appointment as a successor warrant agent under the
provisions of Section 13 hereof. In case at the time such successor to the
Warrant Agent shall succeed to the agency

                                       45
<PAGE>

created by this Agreement, and in case at that time any of the Warrant
Certificates shall have been countersigned but not delivered, any such successor
to the Warrant Agent may adopt the countersignature of the original Warrant
Agent; and in case at that time any of the Warrant Certificates shall not have
been countersigned, any successor to the Warrant Agent may countersign such
Warrant Certificates either in the name of the predecessor Warrant Agent or in
the name of the successor to the Warrant Agent; and in all such cases such
Warrant Certificates shall have the full force and effect provided in the
Warrant Certificates and in this Agreement.

                  (b) In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent whose name has been changed
may adopt the countersignature under its prior name, and in case at that time
any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its prior name or in
its changed name, and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and in this
Agreement.

SECTION 12.       WARRANT AGENT.

                  The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of
which the Company and the Holders of Warrants, by their acceptance thereof,
shall be bound:

                  (a) The statements contained herein and in the Warrant
Certificates shall be taken as statements of the Company, and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates except as otherwise provided herein.

                  (b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this Agreement
or in the Warrant Certificates to be complied with by the Company.

                  (c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder of
any Warrant Certificate in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or the advice of
such counsel.

                  (d) The Warrant Agent shall incur no responsibility to the
Company or to any holder of any Warrant Certificate for any action taken in
reliance on any Warrant Certificate, certificate of shares, adjustments,
determination, notice,

                                       46
<PAGE>

resolution, waiver, consent, order, certificate, or other paper, document or
instrument believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.

                  (e) The Company agrees to pay to the Warrant Agent reasonable
 compensation (which shall include the reasonable fees and expenses of its
 counsel) for all services rendered by the Warrant Agent in the execution,
 administration, preparation, delivery and amendment of this Agreement, and to
 reimburse the Warrant Agent for all expenses, taxes and governmental charges
 and other charges of any kind and nature incurred by the Warrant Agent in the
 execution, administration, preparation, delivery and amendment of this
 Agreement. The Company shall indemnify the Warrant Agent against any and all
 losses, liabilities or expenses incurred by it arising out of or in connection
 with the acceptance or administration of its duties under this Warrant
 Agreement, including the costs and expenses of enforcing this Warrant Agreement
 against the Company and defending itself against any claim (whether asserted by
 the Company or any Holder or any other Person) or liability in connection with
 the exercise or performance of any of its powers or duties hereunder, except to
 the extent any such loss, liability or expense may be attributable to its gross
 negligence or wilful misconduct. The indemnity provided in this Agreement shall
 survive the termination of this Agreement and the resignation or removal of the
 Warrant Agent. The costs and expenses incurred in enforcing this right of
 indemnification shall be paid by the Company. The Warrant Agent shall notify
 the Company promptly of any claim for which it may seek indemnity. Failure by
 the Warrant Agent to so notify the Company shall not relieve the Company of its
 obligations hereunder. The Company shall defend the claim and the Warrant Agent
 shall cooperate in the defense. The Warrant Agent may have separate counsel and
 the Company shall pay the reasonable fees and expenses of such counsel. The
 Company need not pay for any settlement made without its consent, which consent
 shall not be unreasonably withheld.

                  (f) The Warrant Agent shall be under no obligation to
 institute any action, suit or legal proceeding or to take any other action
 likely to involve expense unless the Company or one or more Holders of Warrants
 shall furnish the Warrant Agent with reasonable security and indemnity for any
 costs and expenses which may be incurred, but this provision shall not affect
 the power of the Warrant Agent to take such action as it may consider proper,
 whether with or without any such security or indemnity. All rights of action
 under this Agreement or under any of the Warrants may be enforced by the
 Warrant Agent without the possession of any of the Warrant Certificates or the
 production thereof at any trial or other proceeding relative thereto, and any
 such action, suit or proceeding instituted by the Warrant Agent shall be
 brought in its name as Warrant Agent and any recovery of judgment shall be for
 the ratable benefit of the Holders of the Warrants, as their respective rights
 or interests may appear.

                                       47
<PAGE>

                  (g) Except as otherwise prohibited by law, the Warrant Agent,
and any stockholder, director, officer or employee of it, may buy, sell or deal
in any of the Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though it were not Warrant Agent under this Agreement. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for the Company or
for any other Person.

                  (h) The Warrant Agent shall act under this Agreement solely as
agent for the Company, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which it
may do or refrain from doing in connection with this Agreement except for its
own negligence or bad faith.

                  (i) The Warrant Agent shall not at any time be under any duty
or responsibility to any Holder of any Warrant Certificate to make or cause to
be made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.

                  (j) The Warrant Agent, in its capacity as Warrant Registrar,
shall have all the rights, powers, privileges, exculpation, protections, and
indemnities as are provided to the Warrant Agent under this Agreement.

SECTION 13.       CHANGE OF WARRANT AGENT.

                  The Warrant Agent may resign as Warrant Agent at any time
following 30 days written notice thereof to the Company. If the Warrant Agent
shall become incapable of acting as Warrant Agent, the Company shall appoint a
successor to such Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after it has been notified in writing of
such incapacity by the Warrant Agent or by any Holder of a Warrant, then the
Holder of any Warrant may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Pending appointment of a
successor to such Warrant Agent, either by the Company or by such a court, the
duties of the Warrant Agent shall be carried out by the Company. The Holders of
a majority of the unexercised Warrants shall be entitled at any time to remove
the Warrant Agent and

                                       48
<PAGE>

appoint a successor to such Warrant Agent. Such successor to the Warrant Agent
need not be approved by the Company or the former Warrant Agent. After
appointment, the successor to the Warrant Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Warrant Agent without further act or deed; provided that the former Warrant
Agent shall deliver and transfer to the successor to the Warrant Agent any
property at the time held by it hereunder and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Failure to give
any notice provided for in this Section 13, however, or any defect therein,
shall not affect the legality or validity of the appointment of a successor to
the Warrant Agent.

SECTION 14.       REPORTS.

           (a)    Whether or not required by the rules and regulations of
the Commission, so long as any Warrants are outstanding, the Company shall
furnish to the Warrant Agent and the Holders of Warrants (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the Commission on Forms 10-Q and 10-K if the Company were required to file
such Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual information
only, a report thereon by the Company's certified independent and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports. In addition, whether or
not required by the rules and regulations of the Commission, the Company shall
file a copy of all such information and reports with the Commission for public
availability (unless the Commission shall not accept such a filing) and make
such information available to securities analysts and prospective investors upon
request.

           (b)    The Company shall provide the Warrant Agent with a sufficient
number of copies of all such reports that the Warrant Agent may be required to
deliver to the Holders of the Warrants under this Section 14.

SECTION 15.       NOTICES TO COMPANY AND WARRANT AGENT.

           All notices, demands and other communications provided for or
permitted under this Agreement to be given or made by the Warrant Agent or by
the Holder of any Warrant to or on the Company shall be made in writing by hand-
delivery, certified first-class mail, return receipt requested, next-day air
courier or facsimile as follows (until another address is filed in writing by
the Company with the Warrant Agent):

                  Mikohn Gaming Corporation
                  920 Pilot Road
                  Las Vegas, NV 89119

                                      49
<PAGE>

                  Attention: General Counsel
                  Facsimile: (702) 896-2461

           With a copy to:

                  Greenberg Traurig, LLP
                  2450 Colorado Avenue, Suite 400 East
                  Santa Monica, CA 90404
                  Attention: Mark R. Moskowitz, Esq.
                  Facsimile: (310) 586-7800

           In case the Company shall fail to maintain such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.

           All notices, demands and other communications provided for or
permitted under this Agreement to be given or made by the Company or by the
Holder(s) of any Warrant to the Warrant Agent shall be made in writing by
hand-delivery, certified first-class mail, return receipt requested, next-day
air courier or facsimile as follows (until another address is filed in writing
by the Warrant Agent with the Company):

                  Firstar Bank, N.A.
                  101 East 5/th/ Street
                  St. Paul, MN 55101
                  Facsimile: (651) 229-6415
                  Attention: Corporate Trust Department

       All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; one Business Day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.

SECTION 16.       SUPPLEMENTS AND AMENDMENTS.

           The Company and the Warrant Agent may from time to time supplement or
amend this Agreement without the approval of any Holders of in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not in any way adversely affect the interests of the Holders

                                      50
<PAGE>

of Warrants. Any amendment or supplement to this Agreement that has an adverse
effect on the interests of the Holders of Warrants shall require the written
consent of the Holders of a majority of the then outstanding Warrants (excluding
Warrants held by the Company or any of its affiliates (as such term is defined
in Rule 405 under the Securities Act). The consent of each Holder of Warrants
affected shall be required for any amendment pursuant to which the Exercise
Price would be increased or the number of Warrant Shares purchasable upon
exercise of Warrants would be decreased (other than pursuant to adjustments
provided in this Agreement). Upon receipt of a certificate from the appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 16, and such supplement or
amendment does not change the Warrant Agent's duties, liabilities or
obligations, the Warrant Agent shall execute such supplement or amendment.

SECTION 17.       SUCCESSORS.

           All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder including, without
limitation and without the need for an express assignment, subsequent Holders.

SECTION 18.       TERMINATION.

           This Agreement shall terminate at 5:00 p.m., New York City time on
the Expiration Date. Notwithstanding the foregoing, this Agreement will
terminate on any earlier date if all Warrants have been exercised. The
provisions of Section 12 shall survive such termination.

SECTION 19.       GOVERNING LAW.

           THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL
PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN NEW YORK.

SECTION 20.       BENEFITS OF THIS AGREEMENT.

           Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Warrant Agent and the Holders of Warrants any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the

                                      51
<PAGE>

Holders of Warrants. The Company agrees that the Holders of the Warrants shall
be third-party beneficiaries to the agreements made hereunder by the Company and
each Holder shall have the right to enforce such agreements directly to the
extent it deems enforcement necessary or advisable to protect its rights
hereunder.

SECTION 21.       COUNTERPARTS.

           This Agreement may be executed in any number of counterparts and each
 of such counterparts shall for all purposes be deemed to be an original, and
 all such counterparts shall together constitute but one and the same
 instrument.

                    [Signature page follows this page]

                                      52
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.

                                            MIKOHN GAMING CORPORATION

                                            By:_________________________________
                                                  Name:
                                                  Title:

                                            FIRSTAR BANK, N.A., as Warrant Agent

                                            By:_________________________________
                                                  Name:
                                                  Title:

                               Warrant Agreement
<PAGE>

                                   EXHIBIT A

                         [Form of Warrant Certificate]

                                                       105,000 Warrants
No. 1                                                  CUSIP No. 59862K116

                              Warrant Certificate

                           MIKOHN GAMING CORPORATION

                  This Warrant Certificate certifies that Cede & Co., or its
registered assigns, is the registered holder of Warrants, expiring August 15,
2008 (the "Warrants"), to purchase common stock, par value $.10 per share (the
"Common Stock"), of Mikohn Gaming Corporation, a Nevada corporation (the
"Company"). Each Warrant initially entitles the registered holder upon exercise
at any time from 9:00 a.m., New York City time, on the date immediately
following the Separation Date (as defined in the Warrant Agreement) (the
"Exercise Date") until 5:00 p.m., New York City time, on August 15, 2008, the
Expiration Date, to receive from the Company four fully paid and nonassessable
shares of Common Stock (the "Warrant Shares") at the initial exercise price (the
"Exercise Price") of $7.70 per share payable upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the
Warrant Agent, subject to the conditions set forth herein and in the Warrant
Agreement referred to on the reverse hereof. The Exercise Price and number of
Warrant Shares issuable upon exercise of the Warrants are subject to adjustment
upon the occurrence of certain events set forth in the Warrant Agreement.

                  No Warrant may be exercised after 5:00 p.m., New York City
time, on the Expiration Date, and to the extent not exercised by such time
Warrants shall become void.

                  Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.

                  This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant
Agreement.

                  This Warrant Certificate shall be governed by and construed in
with the laws of the State of New York applicable to contracts made
and to be performed in New York.

                                      A-1
<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be signed below.

Dated: August 22, 2001
                                            MIKOHN GAMING CORPORATION

                                            By:________________________________
                                               Name:
                                               Title:

Countersigned:
FIRSTAR BANK, N.A.
as Warrant Agent

By:______________________________
   Authorized Signature

                                      A-2
<PAGE>

                       [Reverse of Warrant Certificate]

                  [Unit Legend. Each Warrant issued prior to the Separation Date
shall bear the following legend on the reverse thereof:]

         THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS PART
         OF AN ISSUANCE OF 105,000 UNITS (THE "UNITS"), EACH OF WHICH CONSISTS
                                               -----
         OF $1,000 PRINCIPAL AMOUNT AT MATURITY OF THE 11.875% SENIOR SECURED
         NOTES DUE 2008, SERIES A, OF THE COMPANY (THE "NOTES") AND ONE WARRANT
                                                        -----
         INITIALLY ENTITLING THE HOLDER THEREOF TO PURCHASE FOUR SHARES OF
         COMMON STOCK, PAR VALUE $.10 PER SHARE, OF THE COMPANY.

         PRIOR TO THE EARLIEST OF (I) 180 DAYS AFTER THE CLOSING OF THE OFFERING
         OF THE UNITS, (II) THE DATE ON WHICH A REGISTRATION STATEMENT WITH
         RESPECT TO A REGISTERED EXCHANGE OFFER FOR THE NOTES IS DECLARED
         EFFECTIVE UNDER THE ACT, (III) THE DATE ON WHICH A SHELF REGISTRATION
         STATEMENT WITH RESPECT TO THE NOTES OR THE WARRANTS AND WARRANT SHARES
         IS DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (IV) NOTIFICATION OF
         THE OCCURRENCE OF A CHANGE OF CONTROL OR AN EVENT OF DEFAULT (AS
         DEFINED IN THE INDENTURE GOVERNING THE NOTES (THE "INDENTURE")), WITH
                                                            ---------
         RESPECT TO THE NOTES, AND (V) SUCH DATE AS THE INITIAL PURCHASERS (AS
         DEFINED IN THE INDENTURE) (OR THEIR RESPECTIVE SUCCESSORS OR ASSIGNS)
         IN THEIR SOLE DISCRETION SHALL DETERMINE, THE WARRANTS EVIDENCED BY
         THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM,
         BUT MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE NOTES.

                  [Global Warrant Legend. Each Global Warrant shall bear the
 following legend on the reverse thereof.]

         THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
         WARRANT AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE IN CUSTODY FOR
         THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
         ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE WARRANT AGENT
         MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
         3.5 OF THE WARRANT AGREEMENT, (II) THIS GLOBAL WARRANT MAY BE

                                      A-3
<PAGE>

         EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.5(a) OF THE
         WARRANT AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE DELIVERED TO THE
         WARRANT AGENT FOR CANCELLATION PURSUANT TO SECTION 3.8 OF THE WARRANT
         AGREEMENT AND (IV) THIS GLOBAL WARRANT MAY BE TRANSFERRED TO A
         SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

                  [Private Placement Legend: Each Warrant issued pursuant to an
exemption from the registration requirements of the Securities Act shall bear
the following legend on the reverse thereof:]

         THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
         SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
         AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
         THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
         REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
         OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
         SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE
         HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
         SELL OR OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE THAT IS TWO
         YEARS (OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE
         144(k) UNDER THE SECURITIES ACT AS PERMITTING RESALES BY NON-AFFILIATES
         OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE
         ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR
         ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
         PREDECESSOR OF SUCH SECURITY) (THE "RESALE RESTRICTION TERMINATION
         DATE") EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
         STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
         (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
         RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES
         IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
         PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
         INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
         MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
         FOREIGN PERSONS THAT OCCUR IN OFFSHORE TRANSACTIONS AND WITHOUT
         DIRECTED SELLING EFFORTS

                                      A-4
<PAGE>

         WITHIN THE MEANINGS OF SUCH TERMS AS DEFINED IN REGULATION S UNDER THE
         SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
         THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
         THAT IS PURCHASING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
         OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
         AND NOT WITH A VIEW TO, OR FOR OFFER OF SALE IN CONNECTION WITH, ANY
         DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
         ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
         SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE WARRANT AGENT'S RIGHT
         PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN
         OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
         SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A
         CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
         COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE WARRANT AGENT AND IN
         EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S.
         STATE OR ANY OTHER APPLICABLE JURISDICTION. THE HOLDER OF THIS SECURITY
         AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
         TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS
         LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
         RESTRICTION TERMINATION DATE.

                  [Regulation S Legend. Each Warrant that is a Registrable
Security and issued pursuant to Regulation S shall bear the following legend on
the reverse thereof:]

         THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
         SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
         AMENDED (THE "SECURITIES ACT"), AND THE SECURITIES EVIDENCED BY THIS
         CERTIFICATE MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON
         UNLESS REGISTERED UNDER THE SECURITIES ACT, OR AN EXEMPTION FROM SUCH
         REGISTRATION IS AVAILABLE. IN ORDER TO EXERCISE THE SECURITIES
         EVIDENCED BY THIS CERTIFICATE, THE HOLDER MUST FURNISH TO THE COMPANY
         AND THE WARRANT AGENT EITHER (A) A WRITTEN CERTIFICATION THAT IT IS NOT
         A U.S. PERSON AND THE WARRANT IS NOT BEING EXERCISED ON BEHALF OF A
         U.S. PERSON OR (B) A WRITTEN OPINION OF COUNSEL TO THE EFFECT

                                      A-5
<PAGE>

         THAT THE SECURITIES DELIVERED UPON EXERCISE OF THIS SECURITY HAVE BEEN
         REGISTERED UNDER THE SECURITIES ACT OR THAT THE DELIVERY OF SUCH
         SECURITIES IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
         SECURITIES ACT. TERMS IN THIS LEGEND HAVE THE MEANINGS GIVEN TO THEM BY
         REGULATION S UNDER THE SECURITIES ACT.

                  The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring at 5:00 p.m., New York City time,
on the Expiration Date, entitling the holder on exercise to receive shares of
Common Stock, and are issued or to be issued pursuant to a Warrant Agreement,
dated as of August 22, 2001 (the "Warrant Agreement"), duly executed and
delivered by the Company to Firstar Bank, N.A., as warrant agent (the "Warrant
Agent"), which Warrant Agreement is hereby incorporated by reference in and made
a part of this instrument and is hereby referred to for a description of the
rights, limitation of rights, obligations, duties and immunities thereunder of
the Warrant Agent, the Company and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants. A copy of
the Warrant Agreement may be obtained by the holder hereof upon written request
to the Company.

                  Warrants may be exercised at any time on or after 9:00 a.m.,
 New York City time, on the Exercise Date and on or before 5:00 p.m., New York
 City time, on the Expiration Date, provided that holders shall be able to
 exercise their Warrants only if a Registration Statement relating to the
 exercise of the Warrants is then in effect, or the exercise of such Warrants is
 exempt from the registration requirements of the Securities Act of 1933, as
 amended (the "Securities Act"), and such securities are qualified for sale or
 exempt from qualification under the applicable securities laws of the states in
 which the various holders of the Warrants or other Persons to whom it is
 proposed that the Warrant Shares be issued on exercise of the Warrants reside.
 In order to exercise all or any of the Warrants represented by this Warrant
 Certificate, the holder must deliver to the Warrant Agent at its New York
 corporate trust office set forth in Section 15 of the Warrant Agreement this
 Warrant Certificate and the form of election to purchase included in this
 Warrant Certificate duly filled in and signed, which signature shall be
 medallion guaranteed by an institution which is a member of one of the
 following recognized signature guarantee programs: (i) The Securities Transfer
 Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion
 Program (MNSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such
 other guarantee program acceptable to the Warrant Agent, and payment to the
 Warrant Agent for the account of the Company of the Exercise Price, as adjusted
 as provided in the Warrant Agreement, for the number of Warrant Shares in
 respect of which such Warrant is then exercised.

                                      A-6
<PAGE>

          The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may subject to certain
conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement. No
adjustment shall be made for any dividends on any Common Stock issuable upon
exercise of this Warrant.

          Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.

          Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.

          The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, or any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.

                                      A-7
<PAGE>

                        [Form of Election to Purchase]

                   (To Be Executed Upon Exercise Of Warrant)

          The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive _____________ shares of
Common Stock and herewith tenders payment for such shares to the order of Mikohn
Gaming Corporation, in the amount of $__________ in accordance with the terms
hereof. The undersigned requests that a certificate for such shares be
registered in the name of _______________, whose address is __________________
and that such shares be delivered to ___________, whose address is
____________________________. If said number of shares is less than all of the
shares of Common Stock purchasable upon exercise of the Warrant(s) represented
by this Warrant Certificate, the undersigned requests that a new Warrant
Certificate representing the number of Warrants exercisable for the remaining
balance of such shares be registered in the name of ______________________,
whose address is ____________________, and that such Warrant Certificate be
delivered to _______________________________ whose address is
____________________.

                                                       _________________________
                                                       Signature

Date: _____________________

      ____________________________________________
      Signature Guaranteed*

*NOTICE: The Signature must be guaranteed by an Institution which is a member of
one of the following recognized signature Guarantee Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or
(iv) such other guarantee program acceptable to the Trustee.

                                      A-8
<PAGE>

                   [To Be Included Only On Global Warrants]

                      SCHEDULE OF EXCHANGES OF INTERESTS
                              OF GLOBAL WARRANTS

The following exchanges of a part of this Global Warrant have been made:

<TABLE>
<CAPTION>
                Amount of                                Number of
               Decrease in                           Warrants in this
                Number of         Amount of          Global Warrant       Signature of
               Warrants in     Increase in Number    Following Such        Authorized
   Date of     this Global    of Warrants in this      Decrease or         Officer of
   Exchange      Warrant        Global Warrant           Increase         Warrant Agent
---------------------------------------------------------------------------------------
<S>            <C>            <C>                    <C>                  <C>
</TABLE>

                                      A-9
<PAGE>

                                   EXHIBIT B

                        FORM OF CERTIFICATE OF TRANSFER

Mikohn Gaming Corporation
920 Pilot Road
Las Vegas, NV 89119
Facsimile: (702) 896-2461
Attention: General Counsel

Firstar Bank, N.A.
101 East 5/th/ Street
St. Paul, MN 55101
Facsimile: (651) 229-6415
Attention: Corporate Trust Department

          Re: Warrants

               Reference is hereby made to the Warrant Agreement, dated as of
August 22, 2001 (the "Warrant Agreement"), between Mikohn Gaming Corporation, as
issuer (the "Company"), and Firstar Bank N.A., as warrant agent. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Warrant Agreement.

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

                            [CHECK ALL THAT APPLY]

          1.   [_]  Check if Transferee will take delivery of a beneficial
                    ------------------------------------------------------
interest in the 144A Global Warrant or a Definitive Warrant Pursuant to Rule
----------------------------------------------------------------------------
144A. The Transfer is being effected pursuant to and in accordance with Rule
----
144A under the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Warrant is being transferred to a Person that
the Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Warrant for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction

                                      B-1
<PAGE>

meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Warrant Agreement, the transferred beneficial interest or Definitive Warrant
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Warrant and/or the Definitive
Warrant and in the Warrant Agreement and the Securities Act.

          2.   [_]  Check if Transferee will take delivery of a beneficial
                    ------------------------------------------------------
interest in the Regulation S Global Warrant or a Definitive Warrant pursuant to
-------------------------------------------------------------------------------
Regulation S. The Transfer is being effected pursuant to and in accordance with
------------
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a Person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Warrant Agreement, the transferred beneficial interest or
Definitive Warrant will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Warrant and/or
the Definitive Warrant and in the Warrant Agreement and the Securities Act.

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

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

                                      or

                                      B-2
<PAGE>

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

                                      or

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

     4.   [_]  Check if Transferee will take delivery of a beneficial interest
               ---------------------------------------------------------------
in an Unrestricted Global Warrant or of an Unrestricted Definitive Warrant.
--------------------------------------------------------------------------

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

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

     (c)  [_]  Check if Transfer is Pursuant to Other Exemption. (i) The
     Transfer is being effected pursuant to and in compliance with an exemption
     from the registration requirements of the Securities Act other than Rule
     144, Rule 903 or Rule 904 and in compliance with the transfer restrictions

                                      B-3
<PAGE>

     contained in the Warrant Agreement and any applicable blue sky securities
     laws of any State of the United States and (ii) the restrictions on
     transfer contained in the Warrant Agreement and the Private Placement
     Legend are not required in order to maintain compliance with the Securities
     Act. Upon consummation of the proposed Transfer in accordance with the
     terms of the Warrant Agreement, the transferred beneficial interest or
     Definitive Warrant will not be subject to the restrictions on transfer
     enumerated in the Private Placement Legend printed on the Restricted Global
     Warrants or Restricted Definitive Warrants and in the Warrant Agreement.

                     [Signature page follows this page]

                                      B-4
<PAGE>

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

                                                     [Insert Name of Transferor]

                                                     By:________________________
                                                         Name:
                                                         Title:

Dated: _________________

                                      B-5
<PAGE>

                      ANNEX A TO CERTIFICATE OF TRANSFER

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

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

            (a)   [_]    a beneficial interest in the:

                  (i)    [_]     144A Global Warrant, or

                  (ii)   [_]     Regulation S Global Warrant; or

            (b)   [_]     a Restricted Definitive Warrant.

     2. After the Transfer the Transferee will hold:

                                        [CHECK ONE]

            (a)   [_]     a beneficial interest in the:

                  (i)     [_]    144A Global Warrant, or

                  (ii)    [_]    Regulation S Global Warrant, or

                  (ii)    [_]    Unrestricted Global Warrant; or

            (b)   [_]      a Restricted Definitive Warrant; or

            (c)   [_]      an Unrestricted Definitive Warrant,

            in accordance with the terms of the Warrant Agreement.

                                      B-6
<PAGE>

                                   EXHIBIT C

                        FORM OF CERTIFICATE OF EXCHANGE

Mikohn Gaming Corporation
920 Pilot Road
Las Vegas, NV 89119
Facsimile: (702) 896-2461
Attention: General Counsel

Firstar Bank, N.A.
101 East 5/th/ Street
St. Paul, MN 55101
Facsimile: (651) 229-6415
Attention: Corporate Trust Department

          Re: Warrants
                             (CUSIP ____________)

                  Reference is hereby made to the Warrant Agreement, dated as of
August 22, 2001 (the "Warrant Agreement"), between Mikohn Gaming Corporation, as
issuer (the "Company"), and Firstar Bank, N.A., as warrant agent. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Warrant Agreement.

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

        1.        Exchange of Restricted Definitive Warrants or Beneficial
                  --------------------------------------------------------
Interests in a Restricted Global Warrant for Unrestricted Definitive Warrants or
--------------------------------------------------------------------------------
Beneficial Interests in an Unrestricted Global Warrant
------------------------------------------------------

         (a)      [_]   Check if Exchange is from beneficial interest in a
         Restricted Global Warrant to beneficial interest in an Unrestricted
         Global Warrant. In connection with the Exchange of the Owner's
         beneficial interest in a Restricted Global Warrant for a beneficial
         interest in an Unrestricted Global Warrant in an equal principal
         amount, the Owner hereby certifies (i) the beneficial interest is being
         acquired for the Owner's own account without transfer, (ii) such
         Exchange has been effected in compliance with the transfer restrictions
         applicable to the Global Warrants and pursuant to and in accordance
         with the United States Securities Act of 1933, as amended (the

                                      C-1
<PAGE>

         "Securities Act"), (iii) the restrictions on transfer contained in the
         Warrant Agreement and the Private Placement Legend are not required in
         order to maintain compliance with the Securities Act and (iv) the
         beneficial interest in an Unrestricted Global Warrant is being acquired
         in compliance with any applicable blue sky securities laws of any state
         of the United States.

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

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

         (d)      [_]   Check if Exchange is from Restricted Definitive Warrant
         to Unrestricted Definitive Warrant. In connection with the Owner's
         Exchange of a Restricted Definitive Warrant for an Unrestricted
         Definitive Warrant, the Owner hereby certifies (i) the Unrestricted
         Definitive Warrant is being acquired for the Owner's own account
         without transfer, (ii) such Exchange has been effected in compliance
         with the transfer restrictions applicable to Restricted Definitive
         Warrants and pursuant to and in accordance with the Securities Act,
         (iii) the restrictions on transfer contained in the Warrant Agreement
         and the Private Placement Legend are not required in order to maintain
         compliance with the Securities Act and (iv) the

                                      C-2
<PAGE>

         Unrestricted Definitive Warrant is being acquired in compliance with
         any applicable blue sky securities laws of any state of the United
         States.

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

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

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

                      [Signature page follows this page]

                                      C-3
<PAGE>

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

                                                [Insert Name of Transferor]

                                                By:____________________________
                                                   Name:
                                                   Title:

Dated: _________________

                                      C-4

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