Document:

Exhibit 4.1

 

MTR
GAMING GROUP, INC.

as Issuer,

THE
GUARANTORS NAMED HEREIN

$125,000,000

9% Senior
Subordinated Notes

due June 1, 2012

_____________

INDENTURE

Dated as
of May 25, 2006

_____________

Wells
Fargo Bank, N.A.

as
Trustee

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  ARTICLE I
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  	
   

  
	
  SECTION 1.2

  	
   

  	
  INCORPORATION BY
  REFERENCE OF TIA

  	
   

  	
  28

  	
   

  
	
  SECTION 1.3

  	
   

  	
  RULES OF
  CONSTRUCTION

  	
   

  	
  28

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II THE
  SECURITIES

  	
   

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
   

  	
  FORM AND DATING

  	
   

  	
  29

  	
   

  
	
  SECTION 2.2

  	
   

  	
  EXECUTION AND
  AUTHENTICATION

  	
   

  	
  30

  	
   

  
	
  SECTION 2.3

  	
   

  	
  REGISTRAR, PAYING AGENT
  AND DEPOSITARY

  	
   

  	
  30

  	
   

  
	
  SECTION 2.4

  	
   

  	
  PAYING AGENT TO HOLD
  MONEY IN TRUST

  	
   

  	
  31

  	
   

  
	
  SECTION 2.5

  	
   

  	
  HOLDER LISTS

  	
   

  	
  31

  	
   

  
	
  SECTION 2.6

  	
   

  	
  TRANSFER AND EXCHANGE

  	
   

  	
  31

  	
   

  
	
  SECTION 2.7

  	
   

  	
  REPLACEMENT NOTES

  	
   

  	
  46

  	
   

  
	
  SECTION 2.8

  	
   

  	
  OUTSTANDING NOTES

  	
   

  	
  46

  	
   

  
	
  SECTION 2.9

  	
   

  	
  TREASURY NOTES

  	
   

  	
  47

  	
   

  
	
  SECTION 2.10

  	
   

  	
  TEMPORARY NOTES

  	
   

  	
  47

  	
   

  
	
  SECTION 2.11

  	
   

  	
  CANCELLATION

  	
   

  	
  47

  	
   

  
	
  SECTION 2.12

  	
   

  	
  DEFAULTED INTEREST

  	
   

  	
  47

  	
   

  
	
  SECTION 2.13

  	
   

  	
  CUSIP NUMBERS

  	
   

  	
  48

  	
   

  
	
  SECTION 2.14

  	
   

  	
  ISSUANCE OF ADDITIONAL
  NOTES

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III
  REDEMPTION

  	
   

  	
  49

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
   

  	
  OPTIONAL REDEMPTION

  	
   

  	
  49

  	
   

  
	
  SECTION 3.2

  	
   

  	
  NOTICES TO TRUSTEE

  	
   

  	
  49

  	
   

  
	
  SECTION 3.3

  	
   

  	
  SELECTION OF NOTES TO
  BE REDEEMED

  	
   

  	
  50

  	
   

  
	
  SECTION 3.4

  	
   

  	
  NOTICE OF REDEMPTION

  	
   

  	
  50

  	
   

  
	
  SECTION 3.5

  	
   

  	
  EFFECT OF NOTICE OF
  REDEMPTION

  	
   

  	
  51

  	
   

  
	
  SECTION 3.6

  	
   

  	
  DEPOSIT OF REDEMPTION
  PRICE

  	
   

  	
  51

  	
   

  
	
  SECTION 3.7

  	
   

  	
  NOTES REDEEMED IN PART

  	
   

  	
  52

  	
   

  
	
  SECTION 3.8

  	
   

  	
  REGULATORY REDEMPTION

  	
   

  	
  52

  	
   

  
	
  SECTION 3.9

  	
   

  	
  NO MANDATORY REDEMPTION

  	
   

  	
  53

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV
  COVENANTS

  	
   

  	
  53

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
   

  	
  PAYMENT OF NOTES

  	
   

  	
  53

  	
   

  
	
  SECTION 4.2

  	
   

  	
  MAINTENANCE OF OFFICE
  OR AGENCY

  	
   

  	
  53

  	
   

  
	
  SECTION 4.3

  	
   

  	
  LIMITATION ON
  RESTRICTED PAYMENTS

  	
   

  	
  54

  	
   

  
	
  SECTION 4.4

  	
   

  	
  CORPORATE AND PARTNERSHIP
  EXISTENCE

  	
   

  	
  56

  	
   

  
	
  SECTION 4.5

  	
   

  	
  PAYMENT OF TAXES AND
  OTHER CLAIMS

  	
   

  	
  56

  	
   

  
	
  SECTION 4.6

  	
   

  	
  MAINTENANCE OF
  PROPERTIES AND INSURANCE

  	
   

  	
  56

  	
   

  
	
  SECTION 4.7

  	
   

  	
  COMPLIANCE CERTIFICATE;
  NOTICE OF DEFAULT

  	
   

  	
  57

  	
   

  

 i
 

 

 

	
  SECTION 4.8

  	
   

  	
  REPORTS

  	
   

  	
  57

  	
   

  
	
  SECTION 4.9

  	
   

  	
  LIMITATION ON
  STATUS AS INVESTMENT COMPANY

  	
   

  	
  58

  	
   

  
	
  SECTION 4.10

  	
   

  	
  LIMITATION ON
  TRANSACTIONS WITH AFFILIATES

  	
   

  	
  58

  	
   

  
	
  SECTION 4.11

  	
   

  	
  LIMITATION ON
  INCURRENCE OF ADDITIONAL INDEBTEDNESS

  	
   

  	
  59

  	
   

  
	
  SECTION 4.12

  	
   

  	
  LIMITATIONS ON
  DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES

  	
   

  	
  60

  	
   

  
	
  SECTION 4.13

  	
   

  	
  LIMITATION ON
  SALES OF ASSETS AND SUBSIDIARY STOCK

  	
   

  	
  62

  	
   

  
	
  SECTION 4.14

  	
   

  	
  REPURCHASE OF
  NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL

  	
   

  	
  66

  	
   

  
	
  SECTION 4.15

  	
   

  	
  WAIVER OF STAY,
  EXTENSION OR USURY LAWS

  	
   

  	
  68

  	
   

  
	
  SECTION 4.16

  	
   

  	
  LIMITATION ON
  LIENS SECURING INDEBTEDNESS

  	
   

  	
  68

  	
   

  
	
  SECTION 4.17

  	
   

  	
  LIMITATIONS ON
  LINES OF BUSINESS

  	
   

  	
  69

  	
   

  
	
  SECTION 4.18

  	
   

  	
  SALE-LEASEBACK
  TRANSACTIONS

  	
   

  	
  69

  	
   

  
	
  SECTION 4.19

  	
   

  	
  PRESQUE ISLE
  DOWNS COVENANTS

  	
   

  	
  69

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V
  SUCCESSOR CORPORATION

  	
   

  	
  70

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
   

  	
  LIMITATION ON
  MERGER, SALE OR CONSOLIDATION

  	
   

  	
  70

  	
   

  
	
  SECTION 5.2

  	
   

  	
  SUCCESSOR
  CORPORATION SUBSTITUTED

  	
   

  	
  71

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI
  EVENTS OF DEFAULT AND REMEDIES

  	
   

  	
  71

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
   

  	
  EVENTS OF
  DEFAULT

  	
   

  	
  71

  	
   

  
	
  SECTION 6.2

  	
   

  	
  ACCELERATION OF
  MATURITY DATE; RESCISSION AND ANNULMENT

  	
   

  	
  73

  	
   

  
	
  SECTION 6.3

  	
   

  	
  COLLECTION OF
  INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE

  	
   

  	
  73

  	
   

  
	
  SECTION 6.4

  	
   

  	
  TRUSTEE
  MAY FILE PROOFS OF CLAIM

  	
   

  	
  74

  	
   

  
	
  SECTION 6.5

  	
   

  	
  TRUSTEE
  MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES

  	
   

  	
  74

  	
   

  
	
  SECTION 6.6

  	
   

  	
  PRIORITIES

  	
   

  	
  75

  	
   

  
	
  SECTION 6.7

  	
   

  	
  LIMITATION ON
  SUITS

  	
   

  	
  75

  	
   

  
	
  SECTION 6.8

  	
   

  	
  UNCONDITIONAL
  RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST

  	
   

  	
  76

  	
   

  
	
  SECTION 6.9

  	
   

  	
  RIGHTS AND
  REMEDIES CUMULATIVE

  	
   

  	
  76

  	
   

  
	
  SECTION 6.10

  	
   

  	
  DELAY OR OMISSION
  NOT WAIVER

  	
   

  	
  76

  	
   

  
	
  SECTION 6.11

  	
   

  	
  CONTROL BY
  HOLDERS

  	
   

  	
  77

  	
   

  
	
  SECTION 6.12

  	
   

  	
  WAIVER OF
  EXISTING OR PAST DEFAULT

  	
   

  	
  77

  	
   

  
	
  SECTION 6.13

  	
   

  	
  UNDERTAKING FOR
  COSTS

  	
   

  	
  77

  	
   

  
	
  SECTION 6.14

  	
   

  	
  RESTORATION OF
  RIGHTS AND REMEDIES

  	
   

  	
  78

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII
  TRUSTEE

  	
   

  	
  78

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
   

  	
  DUTIES OF
  TRUSTEE

  	
   

  	
  78

  	
   

  
	
  SECTION 7.2

  	
   

  	
  RIGHTS OF
  TRUSTEE

  	
   

  	
  79

  	
   

  

 

 ii
 

 

 

	
  SECTION 7.3

  	
   

  	
  INDIVIDUAL
  RIGHTS OF TRUSTEE

  	
   

  	
  80

  	
   

  
	
  SECTION 7.4

  	
   

  	
  TRUSTEE’S
  DISCLAIMER

  	
   

  	
  80

  	
   

  
	
  SECTION 7.5

  	
   

  	
  NOTICE OF
  DEFAULT

  	
   

  	
  81

  	
   

  
	
  SECTION 7.6

  	
   

  	
  REPORTS BY
  TRUSTEE TO HOLDERS

  	
   

  	
  81

  	
   

  
	
  SECTION 7.7

  	
   

  	
  COMPENSATION AND
  INDEMNITY

  	
   

  	
  82

  	
   

  
	
  SECTION 7.8

  	
   

  	
  REPLACEMENT OF
  TRUSTEE

  	
   

  	
  83

  	
   

  
	
  SECTION 7.9

  	
   

  	
  SUCCESSOR
  TRUSTEE BY MERGER, ETC.

  	
   

  	
  84

  	
   

  
	
  SECTION 7.10

  	
   

  	
  ELIGIBILITY;
  DISQUALIFICATION

  	
   

  	
  84

  	
   

  
	
  SECTION 7.11

  	
   

  	
  PREFERENTIAL
  COLLECTION OF CLAIMS AGAINST COMPANY.

  	
   

  	
  84

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII
  LEGAL DEFEASANCE AND COVENANT DEFEASANCE AND SATISFACTION AND DISCHARGE

  	
   

  	
  84

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
   

  	
  OPTION TO EFFECT
  LEGAL DEFEASANCE OR COVENANT DEFEASANCE

  	
   

  	
  84

  	
   

  
	
  SECTION 8.2

  	
   

  	
  LEGAL DEFEASANCE
  AND DISCHARGE

  	
   

  	
  84

  	
   

  
	
  SECTION 8.3

  	
   

  	
  COVENANT
  DEFEASANCE

  	
   

  	
  85

  	
   

  
	
  SECTION 8.4

  	
   

  	
  CONDITIONS TO
  LEGAL OR COVENANT DEFEASANCE

  	
   

  	
  85

  	
   

  
	
  SECTION 8.5

  	
   

  	
  DEPOSITED CASH
  AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS
  PROVISIONS

  	
   

  	
  87

  	
   

  
	
  SECTION 8.6

  	
   

  	
  REPAYMENT TO THE
  COMPANY

  	
   

  	
  87

  	
   

  
	
  SECTION 8.7

  	
   

  	
  REINSTATEMENT

  	
   

  	
  88

  	
   

  
	
  SECTION 8.8

  	
   

  	
  SATISFACTION AND
  DISCHARGE

  	
   

  	
  88

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX
  AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
   

  	
  89

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.1

  	
   

  	
  SUPPLEMENTAL
  INDENTURES WITHOUT CONSENT OF HOLDERS

  	
   

  	
  89

  	
   

  
	
  SECTION 9.2

  	
   

  	
  AMENDMENTS,
  SUPPLEMENTAL INDENTURES AND WAIVERS WITH CONSENT OF HOLDERS

  	
   

  	
  90

  	
   

  
	
  SECTION 9.3

  	
   

  	
  COMPLIANCE WITH
  TIA

  	
   

  	
  92

  	
   

  
	
  SECTION 9.4

  	
   

  	
  REVOCATION AND
  EFFECT OF CONSENTS

  	
   

  	
  92

  	
   

  
	
  SECTION 9.5

  	
   

  	
  NOTATION ON OR
  EXCHANGE OF NOTES

  	
   

  	
  92

  	
   

  
	
  SECTION 9.6

  	
   

  	
  TRUSTEE TO SIGN
  AMENDMENTS, ETC.

  	
   

  	
  93

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X
  GUARANTEE

  	
   

  	
  93

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.1

  	
   

  	
  GUARANTEE

  	
   

  	
  93

  	
   

  
	
  SECTION 10.2

  	
   

  	
  EXECUTION AND
  DELIVERY OF GUARANTEE

  	
   

  	
  95

  	
   

  
	
  SECTION 10.3

  	
   

  	
  CERTAIN
  BANKRUPTCY EVENTS

  	
   

  	
  95

  	
   

  
	
  SECTION 10.4

  	
   

  	
  LIMITATION ON
  MERGER OF SUBSIDIARIES AND RELEASE OF GUARANTORS

  	
   

  	
  96

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI
  SUBORDINATION

  	
   

  	
  96

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.1

  	
   

  	
  AGREEMENT TO
  SUBORDINATE

  	
   

  	
  96

  	
   

  

 

 iii
 

 

 

	
  SECTION 11.2

  	
   

  	
  LIQUIDATION;
  DISSOLUTION; BANKRUPTCY

  	
   

  	
  97

  	
   

  
	
  SECTION 11.3

  	
   

  	
  DEFAULT ON
  DESIGNATED SENIOR DEBT

  	
   

  	
  97

  	
   

  
	
  SECTION 11.4

  	
   

  	
  ACCELERATION OF
  NOTES

  	
   

  	
  99

  	
   

  
	
  SECTION 11.5

  	
   

  	
  WHEN
  DISTRIBUTION MUST BE PAID OVER

  	
   

  	
  99

  	
   

  
	
  SECTION 11.6

  	
   

  	
  NOTICE BY THE
  COMPANY

  	
   

  	
  99

  	
   

  
	
  SECTION 11.7

  	
   

  	
  SUBROGATION

  	
   

  	
  100

  	
   

  
	
  SECTION 11.8

  	
   

  	
  RELATIVE RIGHTS

  	
   

  	
  100

  	
   

  
	
  SECTION 11.9

  	
   

  	
  SUBORDINATION
  MAY NOT BE IMPAIRED BY THE COMPANY OR GUARANTORS

  	
   

  	
  100

  	
   

  
	
  SECTION 11.10

  	
   

  	
  DISTRIBUTION OR
  NOTICE TO REPRESENTATIVE

  	
   

  	
  100

  	
   

  
	
  SECTION 11.11

  	
   

  	
  RIGHTS OF
  TRUSTEE AND PAYING AGENT

  	
   

  	
  101

  	
   

  
	
  SECTION 11.12

  	
   

  	
  AUTHORIZATION TO
  EFFECT SUBORDINATION

  	
   

  	
  101

  	
   

  
	
  SECTION 11.13

  	
   

  	
  AMENDMENTS

  	
   

  	
  102

  	
   

  
	
  SECTION 11.14

  	
   

  	
  TRUSTEE NOT
  FIDUCIARY FOR HOLDERS OF SENIOR DEBT

  	
   

  	
  102

  	
   

  
	
  SECTION 11.15

  	
   

  	
  RIGHTS OF
  TRUSTEE AS HOLDER OF SENIOR DEBT; PRESERVATION OF TRUSTEE’S RIGHTS

  	
   

  	
  102

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII
  MISCELLANEOUS

  	
   

  	
  103

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.1

  	
   

  	
  TIA CONTROLS

  	
   

  	
  103

  	
   

  
	
  SECTION 12.2

  	
   

  	
  NOTICES

  	
   

  	
  103

  	
   

  
	
  SECTION 12.3

  	
   

  	
  COMMUNICATIONS
  BY HOLDERS WITH OTHER HOLDERS

  	
   

  	
  104

  	
   

  
	
  SECTION 12.4

  	
   

  	
  CERTIFICATE AND
  OPINION AS TO CONDITIONS PRECEDENT

  	
   

  	
  104

  	
   

  
	
  SECTION 12.5

  	
   

  	
  STATEMENTS
  REQUIRED IN CERTIFICATE OR OPINION

  	
   

  	
  104

  	
   

  
	
  SECTION 12.6

  	
   

  	
  RULES BY
  TRUSTEE, PAYING AGENT, REGISTRAR

  	
   

  	
  105

  	
   

  
	
  SECTION 12.7

  	
   

  	
  LEGAL HOLIDAYS

  	
   

  	
  105

  	
   

  
	
  SECTION 12.8

  	
   

  	
  GOVERNING LAW

  	
   

  	
  105

  	
   

  
	
  SECTION 12.9

  	
   

  	
  NO ADVERSE
  INTERPRETATION OF OTHER AGREEMENTS

  	
   

  	
  106

  	
   

  
	
  SECTION 12.10

  	
   

  	
  NO RECOURSE
  AGAINST OTHERS

  	
   

  	
  106

  	
   

  
	
  SECTION 12.11

  	
   

  	
  SUCCESSORS

  	
   

  	
  106

  	
   

  
	
  SECTION 12.12

  	
   

  	
  DUPLICATE
  ORIGINALS

  	
   

  	
  106

  	
   

  
	
  SECTION 12.13

  	
   

  	
  SEVERABILITY

  	
   

  	
  106

  	
   

  
	
  SECTION 12.14

  	
   

  	
  TABLE OF
  CONTENTS, HEADINGS, ETC.

  	
   

  	
  106

  	
   

  
	
  SECTION 12.15

  	
   

  	
  QUALIFICATION OF
  INDENTURE

  	
   

  	
  107

  	
   

  
	
  SECTION 12.16

  	
   

  	
  REGISTRATION
  RIGHTS

  	
   

  	
  107

  	
   

  
	
  EXHIBIT A

  	
   

  	
  FORM OF
  NOTE

  	
   

  	
  A-1

  	
   

  
	
  EXHIBIT B

  	
   

  	
  FORM OF
  CERTIFICATE OF TRANSFER

  	
   

  	
  B-1

  	
   

  
	
  EXHIBIT C

  	
   

  	
  FORM OF
  CERTIFICATE OF EXCHANGE

  	
   

  	
  C-1

  	
   

  
	
  EXHIBIT D

  	
   

  	
  FORM OF
  CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

  	
   

  	
  D-1

  	
   

  

 

 iv
 

 

CROSS-REFERENCE
TABLE*

	
  TIA Section

  	
   

  	
   

  	
   

  	
  Indenture Section

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  7.8, 7.10

  
	
  (b)

  	
   

  	
  7.8, 7.10, 12.2

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.5

  
	
  (b)

  	
   

  	
  12.3

  
	
  (c)

  	
   

  	
  12.3

  
	
  313(a)

  	
   

  	
  7.6

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  7.6, 7.7

  
	
  (c)

  	
   

  	
  7.5, 7.6, 12.2

  
	
  (d)

  	
   

  	
  7.6.

  
	
  314(a)

  	
   

  	
  4.7, 4.8, 12.2

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  12.4

  
	
  (c)(2)

  	
   

  	
  12.4

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  12.5

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.1(b)

  
	
  (b)

  	
   

  	
  7.5, 12.2

  
	
  (c)

  	
   

  	
  7.1(a)

  
	
  (d)

  	
   

  	
  7.1(c)

  
	
  (e)

  	
   

  	
  6.13

  
	
  316(a)(last sentence)

  	
   

  	
  2.9

  
	
  (a)(1)(A)

  	
   

  	
  6.12

  
	
  (a)(1)(B)

  	
   

  	
  6.11

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.8

  
	
  (c)

  	
   

  	
  9.4

  
	
  317(a)(1)

  	
   

  	
  6.3

  
	
  (a)(2)

  	
   

  	
  6.4

  
	
  (b)

  	
   

  	
  2.4

  
	
  318(a)

  	
   

  	
  12.1

  
	
  (c)

  	
   

  	
  12.1

  

N.A. means not applicable

This Cross-Reference table shall not, for any purpose,
be deemed to be part of this Indenture.

 v

INDENTURE, dated as of May 25, 2006, by and among
MTR Gaming Group, Inc., a Delaware corporation (the “Company”), the Guarantors (as defined
below) and Wells Fargo Bank, N.A., as trustee (the “Trustee”).

Each party hereto agrees as follows for the benefit of
each other party and for the equal and ratable benefit of the Holders of the
Company’s 9% Series A Senior Subordinated Notes due 2012 and the 9% Series B
Senior Subordinated 2012 Notes due 2012 to be exchanged for the 9% Series A
Senior Subordinated Notes due 2012.

ARTICLE I

DEFINITIONS AND
INCORPORATION BY REFERENCE

SECTION 1.1                                                  DEFINITIONS

“144A Global Note” means one or
more Global Notes bearing the Private Placement Legend that will be issued in
an aggregate amount of denominations equal in total to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.

“501 Global Note” means one or more
Global Notes bearing the Private Placement Legend that will be issued in an
aggregate amount of denominations equal in total to the outstanding principal
amount of the Notes sold to Institutional Accredited Investors.

“Acceleration Notice” shall have
the meaning specified in Section 6.2.

“Acquired Indebtedness” means
Indebtedness (including Disqualified Capital Stock) of any Person existing at
the time such Person becomes a Subsidiary of the Company, including by
designation, or is merged or consolidated into or with the Company or one of
its Subsidiaries.

“Acquisition” means the purchase or
other acquisition of any Person or all or substantially all the assets of any
Person by any other Person, whether by purchase, merger, consolidation or other
transfer, and whether or not for consideration.

“Additional Notes” means additional
Notes having identical terms and conditions to the Notes issued on the Issue
Date that may be issued pursuant to this Indenture after the Issue Date, other
than pursuant to an Exchange Offer or otherwise in exchange for or in
replacement of outstanding Notes.

“Affiliate” of any specified Person
means any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person. For
purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling,” “controlled
by” and “under common control
with”), as used with respect to any Person, will mean (a) 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 or (b) beneficial
ownership of 10%

 

 

or more of the voting securities of such Person.
Notwithstanding the foregoing, “Affiliate” shall not include Wholly Owned
Subsidiaries.

“Affiliate Transaction” shall have
the meaning specified in Section 4.10.

“Agent” means any Registrar, Paying
Agent or co-Registrar.

“Applicable Procedures” means, with
respect to any transfer or exchange of or for beneficial interests in any
Global Note, the rules and procedures of the Depositary, Euroclear and
Clearstream that apply to such transfer or exchange at the relevant time.

“Asset Sale” shall have the meaning
specified in Section 4.13.

“Asset Sale Offer” shall have the
meaning specified in Section 4.13.

“Asset Sale Offer Amount” shall
have the meaning specified in Section 4.13.

“Asset Sale Offer Period” shall
have the meaning specified in Section 4.13.

“Asset Sale Offer Price” shall have
the meaning specified in Section 4.13.

“Attributable Indebtedness” in
respect of a sale-leaseback transaction means, at the time of determination,
the present value of the obligation of the lessee for net rental payments
during the remaining term of the lease included in such sale-leaseback
transaction including any period for which such lease has been extended or may,
at the option of the lessor, be extended. Such present value shall be
calculated using a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP.

“Authentication Order” shall have
the meaning specified in Section 2.2.

“Average Life” means, as of the
date of determination, with respect to any security or instrument, the quotient
obtained by dividing (1) the sum of the products (a) of the number of
years from the date of determination to the date or dates of each successive
scheduled principal (or redemption) payment of such security or instrument and (b) the
amount of each such respective principal (or redemption) payment by (2) the
sum of all such principal (or redemption) payments.

“Bankruptcy Law” means Title 11,
U.S. Code, or any similar Federal, state or foreign law for the relief of
debtors.

“Beneficial Owner” or “beneficial owner” for purposes of the
definition of Change of Control and Affiliate has the meaning attributed to it
in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect
on the Issue Date), whether or not otherwise applicable.

“Board of Directors” means, with
respect to any Person, the board of directors of such Person (or if such Person
is not a corporation, the equivalent board of managers or members or body
performing similar functions for such Person) or any committee of the board of
directors of such Person (or if such Person is not a corporation, any committee
of

 2
 

 

 

the equivalent board of managers or members or body
performing similar functions for such Person) authorized, with respect to any
particular matter, to exercise the power of the board of directors of such
Person (or if such Person is not a corporation, the equivalent board of
managers or members or body performing similar functions for such Person).

“Board Resolution” means, with
respect to any Person, a duly adopted resolution of the Board of Directors of
such Person.

“Broker-Dealer” means any
broker-dealer that receives Exchange Notes for its own account in the Exchange
Offer in exchange for Notes that were acquired by such broker-dealer as a
result of market-making or other trading activities.

“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 other
government action to close.

“Capitalized Lease Obligation” means,
as to any Person, the obligations of such Person under a lease that are
required to be classified and accounted for as capital lease obligations under
GAAP and, for purposes of this definition, the amount of such obligations at
any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP.

“Capital Stock” means, (i) with
respect to any Person that is a corporation, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock issued by such Person, (ii) with respect to a Person that is a
limited liability company, any and all membership interests in such Person, and
(iii) with respect to any other Person, any and all partnership, joint
venture or other equity interests of such Person.

“Cash” or “cash” means such coin or currency of the
United States of America as at the time of payment shall be legal tender for
the payment of public or private debts.

“Cash
Equivalent” means:

(a)           securities
issued or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided, that the full faith and credit of the United
States of America is pledged in support thereof);

(b)           time
deposits, certificates of deposit, bankers’ acceptances and commercial paper
issued by the parent corporation of any domestic commercial bank of recognized
standing having capital and surplus in excess of $500,000,000;

(c)           commercial
paper issued by others rated at least A-2 or the equivalent thereof by
S&P or at least P-2 or the equivalent thereof by Moody’s;

(d)           repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in (a) and (b) above entered into with any
financial institution meeting the qualifications specified in (b) above;
or

 3
 

 

 

(e)           money
market funds, substantially all of the assets of which constitute Cash Equivalents
of the kinds described in (a) through (d) of this definition.

and
in the case of each of (a), (b), and (c) maturing within one year after
the date of acquisition.

“Change
of Control” means:

(a)           any Person
becomes the Beneficial Owner, directly or indirectly, of more than 35% of the
aggregate voting power of the Voting Equity Interests of the Company;

(b)           the
Continuing Directors cease for any reason to constitute a majority of the
Company’s Board of Directors then in office;

(c)           the
Company adopts a plan of liquidation; or

(d)           any merger
or consolidation of the Company with or into another Person or the merger of
another Person with or into the Company, or the sale of all or substantially
all of the assets of the Company to another Person, if the securities of the
Company that are outstanding immediately prior to such transaction and which
represent 100% of the aggregate voting power of the Voting Equity Interests of
the Company are changed into or exchanged for cash, securities or property,
unless pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of the
transferee(s) or surviving Person(s) that represent, immediately
after such transaction, a majority of the aggregate voting power of the Voting
Equity Interests of the transferee(s) or surviving Person(s).

As
used in this definition, “Person” (including any group that is deemed to be a “Person”)
has the meaning given by Section 13(d) of the Exchange Act, whether
or not applicable.

“Change of Control Offer” shall
have the meaning specified in Section 4.14.

“Change of Control Offer Period” shall
have the meaning specified in Section 4.14.

“Change of Control Purchase Date” shall
have the meaning specified in Section 4.14.

“Change of Control Purchase Price” shall
have the meaning specified in Section 4.14.

“Clearstream” means Clearstream
International S.A., or its successors, as operators of the Clearstream system.

“Code” means the Internal Revenue
Code of 1986, as amended.

“Commission” means the Securities
and Exchange Commission.

 4
 

 

 

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

“consolidated” means, with respect to the Company, the
consolidation of the accounts of its Subsidiaries with the accounts of the
Company, all in accordance with GAAP; provided,
that “consolidated” will not
include consolidation of the accounts of any Unrestricted Subsidiary with the
accounts of the Company.

“Consolidated Coverage Ratio” of
any Person on any date of determination (the “Transaction
Date”) means the ratio, on a pro
forma basis, of (a) the aggregate amount of Consolidated EBITDA
of such Person attributable to continuing operations and businesses (exclusive
of amounts attributable to operations and businesses permanently discontinued
or disposed of) for the Reference Period to (b) the aggregate Consolidated
Fixed Charges of such Person (exclusive of amounts attributable to operations
and businesses permanently discontinued or disposed of, but only to the extent
that the obligations giving rise to such Consolidated Fixed Charges would no
longer be obligations contributing to such Person’s Consolidated Fixed Charges
subsequent to the Transaction Date) during the Reference Period; provided, that for purposes of such
calculation:

(a)           Acquisitions
which occurred during the Reference Period or subsequent to the Reference
Period and on or prior to the Transaction Date shall be assumed to have occurred
on the first day of the Reference Period without regard to the effect of clause
(c) of the definition of “Consolidated Net Income;”

(b)           transactions
giving rise to the need to calculate the Consolidated Coverage Ratio shall be
assumed to have occurred on the first day of the Reference Period without
regard to the effect of clause (c) of the definition of “Consolidated Net
Income;”

(c)           the
incurrence of any Indebtedness (including issuance of any Disqualified Capital
Stock) during the Reference Period or subsequent to the Reference Period and on
or prior to the Transaction Date (and the application of the proceeds therefrom
to the extent used to refinance or retire other Indebtedness (other than
Indebtedness incurred under any revolving credit agreement or similar
facility)) shall be assumed to have occurred on the first day of the Reference
Period; and

(d)           the
Consolidated Fixed Charges of such Person attributable to interest on any
Indebtedness or dividends on any Disqualified Capital Stock bearing a floating
interest (or dividend) rate shall be computed on a pro forma basis as if the average rate in effect from the
beginning of the Reference Period to the Transaction Date had been the
applicable rate for the entire period, provided
that if such Person or any of its Subsidiaries is a party to an Interest Swap
or Hedging Obligation (which shall remain in effect for the 12-month
period immediately following the Transaction Date) that has the effect of
fixing the interest rate on the date of computation, then such rate (whether
higher or lower) shall be used.

“Consolidated EBITDA” means, with
respect to any Person, for any period, the Consolidated Net Income of such
Person for such period adjusted to add thereto (to the 

 5
 

 

extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of:

(a)           consolidated
income tax expense;

(b)           consolidated
depreciation and amortization expense;

(c)           consolidated
Fixed Charges;

(d)           all other
non-cash charges that were deducted in determining Consolidated Net Income for
such period, (i) including, but not limited to, charges attributable to
the grant, exercise or repurchase of options for or shares of Qualified Capital
Stock to or from employees of such Person and its Consolidated Subsidiaries,
but (ii) excluding non-cash charges that require an accrual of or a
reserve for cash charges for any future periods and normally occurring accruals
such as reserves for accounts receivable, and less non-cash items that were
added back in determining Consolidated Net Income for such period, other than
the accrual of revenue in the ordinary course of business; provided, that consolidated income tax
expense and depreciation and amortization of a Subsidiary that is a less than
Wholly Owned Subsidiary shall only be added to the extent of the equity
interest of such Person in such Subsidiary; and

(e)           pre-opening
expenses, calculated and classified as such in accordance with GAAP, incurred
in connection with the opening of new facilities including, but not limited to,
the Presque Isle Downs Project.

“Consolidated Fixed Charges” of any
Person means, for any period, the aggregate amount (without duplication and
determined in each case in accordance with GAAP) of:

(a)           interest
expensed or capitalized, paid, accrued, or scheduled to be paid or accrued
(including, in accordance with the following sentence, interest attributable to
Capitalized Lease Obligations) of such Person and its Consolidated Subsidiaries
during such period, including (1) original issue discount and non-cash
interest payments or accruals on any Indebtedness, (2) the interest
portion of all deferred payment obligations, and (3) all commissions,
discounts and other fees and charges owed with respect to bankers’ acceptances
and letters of credit financings and currency and Interest Swap and Hedging
Obligations, in each case to the extent attributable to such period; and

(b)           the amount
of dividends accrued or payable (or guaranteed) by such Person or any of its
Consolidated Subsidiaries in respect of Preferred Stock (other than by
Subsidiaries of such Person to such Person or to such Person’s Wholly Owned
Subsidiaries).

For
purposes of this definition, (x) interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
in reasonable good faith by the Company to be the rate of interest implicit in
such Capitalized Lease Obligation in accordance with GAAP and (y) interest
expense attributable to any Indebtedness represented by the guarantee by such
Person or a Subsidiary of such Person of an obligation of another Person shall
be deemed to be the interest expense attributable to the Indebtedness
guaranteed.

 

 6
 

 

 

“Consolidated Net Income” means,
with respect to any specified Person for any period, the net income (or loss)
of such specified Person and its Consolidated Subsidiaries (determined on a
consolidated basis in accordance with GAAP) for such period, adjusted to
exclude (only to the extent included in computing such net income (or loss) and
without duplication):

(a)           all gains
(but not losses) which are either extraordinary (as determined in accordance
with GAAP) or are unusual and nonrecurring (including any gain from the sale or
other disposition of assets outside the ordinary course of business or from the
issuance or sale of any Capital Stock),

(b)           the net
income, if positive, of any specified Person, other than a Consolidated
Subsidiary, in which such specified Person or any of its Consolidated
Subsidiaries has an interest, except to the extent of the amount of any
dividends or distributions actually paid in cash to such specified Person or a
Consolidated Subsidiary of such specified Person during such period, but in any
case not in excess of such specified Person’s pro
rata share of such specified Person’s net income for such period,

(c)           the net
income or loss of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition,

(d)           the net
income, if positive, of any of such specified Person’s Consolidated Subsidiaries
to the extent that the declaration or payment of dividends or similar
distributions is not at the time permitted by operation of the terms of its
charter or bylaws or any other agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Consolidated
Subsidiary, and

(e)           the net
income of, and all dividends and distributions from, any Unrestricted
Subsidiary.

“Consolidated Net Worth” of any
Person at any date means the aggregate consolidated stockholders’ equity of
such Person (plus amounts of equity attributable to Preferred Stock) and its
Consolidated Subsidiaries, as would be shown on the consolidated balance sheet
of such Person prepared in accordance with GAAP, adjusted to exclude (to the
extent included in calculating such equity), (a) the amount of any such
stockholders’ equity attributable to Disqualified Capital Stock or treasury
stock of such Person and its Consolidated Subsidiaries, (b) all upward
revaluations and other write-ups in the book value of any asset of such Person
or a Consolidated Subsidiary of such Person subsequent to the Issue Date, and (c) all
investments in Subsidiaries that are not Consolidated Subsidiaries and in
Persons that are not Subsidiaries.

“Consolidated Subsidiary” means,
for any Person, each Subsidiary of such Person (whether now existing or
hereafter created or acquired) the financial statements of which are
consolidated for financial statement reporting purposes with the financial
statements of such Person in accordance with GAAP.

 “Continuing
Directors” means during any period of 12 consecutive months
after the Issue Date, individuals who at the beginning of any such 12-month
period constituted the

 

 7
 

 

Board of Directors of the Company (together with any
new directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved, including new directors designated in or provided for
in an agreement regarding the merger, consolidation or sale, transfer or other
conveyance, of all or substantially all of the assets of the Company, if such
agreement was approved by a vote of such majority of directors).

“contractually subordinate” means subordinated in right of payment by its
terms or the terms of any document or instrument or instrument relating
thereto.

“Corporate Trust Office” means the
principal office of the Trustee at which at any time its corporate trust
business shall be administered, which office at the date hereof is specified in
Section 12.2, or such other address as the Trustee may designate from time
to time by notice to the Holders and the Company, or the principal corporate
trust office of any successor Trustee (or such other address as a successor
Trustee may designate from time to time by notice to the Holders and the
Company).

 “Covenant
Defeasance” shall have the meaning specified in Section 8.3.

“Credit Agreement” means the Fifth
Amended and Restated Credit Agreement, expected to be entered into shortly
after the Issue Date, by and among the Company, certain of its Subsidiaries,
Wells Fargo Bank, N.A., as Agent Bank, and the other Lenders party thereto (or,
if the Company does not enter into such Fifth Amended and Restated Credit
Agreement, the Fourth Amended and Restated Credit Agreement, dated as of December 27,
2005, by and among the Company, certain of its Subsidiaries, Wells Fargo Bank,
N.A., as Agent Bank, and the other Lenders party thereto (the “Existing Credit Agreement”) or such other credit agreement
entered into by the Company after the Issue Date as a replacement of the
Existing Credit Agreement), including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, as such
credit agreement and/or related documents may be amended, restated,
supplemented, renewed, replaced or otherwise modified from time to time whether
or not with the same agent, trustee, representative lenders or holders, and,
subject to the proviso to the next succeeding sentence, irrespective of any
changes in the terms and conditions thereof. Without limiting the generality of
the foregoing, the term “Credit Agreement”
shall include agreements in respect of Interest Swap and Hedging Obligations
with lenders (or Affiliates thereof) party to the Credit Agreement and shall
also include any amendment, amendment and restatement, renewal, extension,
restructuring, supplement or modification to any Credit Agreement and all
refundings, refinancings and replacements of any Credit Agreement, including
any credit agreement:

(a)           extending
the maturity of any Indebtedness incurred thereunder or contemplated thereby;

 8
 

 

(b)           adding or
deleting borrowers or guarantors thereunder, so long as borrowers and issuers
include one or more of the Company and its Subsidiaries and their respective
successors and assigns;

(c)           increasing
the amount of Indebtedness incurred thereunder or available to be borrowed
thereunder; provided, that on the
date such Indebtedness is incurred it would not be prohibited by Section 4.11;
or

(d)           otherwise
altering the terms and conditions thereof in a manner not prohibited by the terms
of this Indenture.

“Custodian” means any receiver,
trustee, assignee, liquidator, sequestrator or similar official under any
Bankruptcy Law.

“Debt Incurrence Ratio” shall have
the meaning specified in Section 4.11.

“Default” means any event that is or
with the passage of time or the giving of notice or both would be an Event of
Default.

“Defaulted Interest” shall have the
meaning specified in Section 2.12.

“Definitive Notes” means one or
more certificated Notes registered in the name of the Holder thereof and issued
in accordance with Section 2.6, in the form of Exhibit A hereto
except that such Note shall not include the Global Note Legend, the Reg S
Temporary Global Note Legend or the information called for by footnote 8
thereof.

“Depositary” means, with respect to
the Notes issuable or issued in whole or in part in global form, the person
specified in Section 2.3 as the Depositary with respect to the Notes,
until a successor shall have been appointed and become such pursuant to the
applicable provision of this Indenture, and thereafter “Depositary” shall mean
or include such successor.

“Designated Senior Debt” means:

(1)           any Indebtedness outstanding under
the Credit Agreement;

(2)           Indebtedness under any outstanding
Senior Notes and Senior Note Guarantees; and

(3)           after payment in full of the
Indebtedness referred to in clauses (1) and (2) of this definition,
any other Senior Debt of the Company or the Guarantors permitted to be incurred
under this Indenture that, at the date of determination, has an aggregate
principal amount outstanding of at least $25,000,000 and has been specifically
designated by the Company in the instrument evidencing or governing such Senior
Debt as “Designated Senior Debt” for purposes of this Indenture.

“Disqualified Capital Stock” means
with respect to any Person, (a) Equity Interests of such Person that, by
its terms or by the terms of any security into which it is convertible, 

 9
 

 

exercisable or exchangeable, is, or upon the happening
of an event or the passage of time or both would be, required to be redeemed or
repurchased by such Person or any of its Subsidiaries, in whole or in part, on
or prior to 91 days following the Stated Maturity of the Notes and (b) any
Equity Interests of any Subsidiary of such Person other than any common equity
with no preferences, privileges, and no redemption or repayment provisions. Notwithstanding
the foregoing, any Equity Interests that would constitute Disqualified Capital
Stock solely because the holders thereof have the right to require the Company
to repurchase such Equity Interests upon the occurrence of a change of control
or an asset sale shall not constitute Disqualified Capital Stock if the terms
of such Equity Interests provide that the Company may not repurchase or redeem
any such Equity Interests pursuant to such provisions prior to the Company’s
purchase of the Notes as are required to be purchased pursuant to Section 4.13
or Section 4.14.

“Distribution Compliance Period” means
the 40-day restricted period, as defined in Rule 903(b)(3) under
the Securities Act.

“DTC” shall have the meaning
specified in Section 2.3.

“Equity Interests” means Capital
Stock and all warrants, options or other rights to acquire Capital Stock (but
excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).

“Euroclear” means Euroclear Bank,
or its successors, as operators of the Euroclear system.

“Event of Default” shall have the
meaning specified in Section 6.1.

“Event of Loss” means, with respect
to any property or asset, (a) any loss, destruction or damage of such
property or asset, (b) any condemnation, seizure or taking, by exercise of
the power of eminent domain or otherwise, of such property or asset, or
confiscation or requisition of the use of such property or asset or (c) any
settlement in lieu of clause (b) above.

“Excess Proceeds” shall have the
meaning specified in Section 4.13.

“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder.

“Exchange Notes” means 9% Senior
Subordinated Notes due 2012, Series B, of the Company, including the
guarantees endorsed thereon, identical in all respects to the Series A
Notes and the Guarantees, except for references to series and restrictive
legends, issued pursuant to an Exchange Offer.

“Exchange Offer” means an offer
that may be made by the Company pursuant to the Registration Rights Agreement
to exchange Exchange Notes for Series A Notes.

“Exchange Offer Registration Statement” shall
have the meaning set forth in the Registration Rights Agreement.

 10
 

 

“Exempted Affiliate Transaction” means
(a) customary employee and non-executive director compensation
arrangements approved by a majority of independent (as to such transactions)
members of the Board of Directors of the Company, (b) dividends permitted
under the terms of Section 4.3 and payable, in form and amount, on a pro rata basis to all holders of common
stock of the Company, and (c) transactions solely between or among the
Company and any of its Consolidated Subsidiaries or solely among Consolidated
Subsidiaries of the Company, in each case, that are Guarantors.

“Existing Indebtedness” means the
Indebtedness of the Company and its Subsidiaries (other than Indebtedness under
the Credit Agreement) in existence on the Issue Date (after giving effect to
the transactions contemplated hereby), reduced to the extent such amounts are
repaid, refinanced or retired.

“FF&E Financing”
means Purchase Money Indebtedness and Capital Lease Obligations, the proceeds
of which are used solely by the
Company and its Subsidiaries to acquire or lease, respectively, furniture,
fixtures and equipment (including Gaming Equipment) in the ordinary course of
business for use in Gaming Facilities.

“Future Gaming Facility” means (i) any
Gaming Facility owned or operated, or to be owned or operated, by the Company
or its Subsidiaries after the Issue Date but which is not owned or operated by
the Company or its Subsidiaries on the Issue Date and (ii) Presque Isle
Downs, Inc.

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

“Gaming Authority”  means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States federal government, any foreign government, any state,
province or city or other political subdivision or otherwise, whether now or
hereafter in existence, or any officer or official thereof, or any other
agency, in each case, with authority to regulate any gaming or racing operation
(or proposed gaming or racing operation) owned, managed or operated by the
Company and its subsidiaries.

“Gaming Equipment” means slot machines,
table games and other gaming equipment permitted to be installed under
applicable Gaming Laws governing the Gaming Facility in which such Gaming
Equipment will be installed, and any related signage, accessories, surveillance
and peripheral equipment.

“Gaming Facility” means any gaming
or parimutuel wagering establishment and other property or assets directly
ancillary thereto or used in connection therewith, including any building,
restaurant, hotel, theater, parking facilities, retail shops, land, golf
courses and

 11
 

 

other recreation and entertainment facilities, vessel,
barge, ship and equipment, owned or operated by the Company or its
Subsidiaries.

“Gaming FF&E Financing” means
FF&E Financing, the proceeds of which are used solely by the Company and its
Subsidiaries to acquire or lease Gaming Equipment to be installed in Future
Gaming Facilities.

“Gaming Law” means the provisions
of any gaming or racing laws or regulations of any jurisdiction or
jurisdictions to which any of the Company and its subsidiaries is, or may at
any time after the date of this Indenture, be subject.

“Gaming License” means any Permit
required to own, lease, operate or otherwise conduct gaming or racing
activities of the Company and its Subsidiaries.

“Global Notes” means one or more
Notes issued under this Indenture, in the form of Exhibit A hereto that
includes the Global Note Legend and the information called for by footnote 8
thereof, that is deposited with or on behalf of and registered in the name of
the Depositary or its nominee.

“Global Note Legend” means the
legend set forth in Section 2.6(g)(2), which is required to be placed on
all Global Notes issued under this Indenture.

“Guarantee” shall have the meaning
provided in Section 10.1.

“Guarantor” means each of the
Company’s present and future Subsidiaries that at the time are guarantors of
the Notes in accordance with this Indenture.

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

“Immaterial Subsidiary” means, as of any date of determination,
any Subsidiary of the Company that (a) has total assets as of such date
with a fair market value not in excess of $250,000, (b) conducted no
business during, and has no revenue for, the Reference Period, (c) has no
Indebtedness as of such date; provided, however, that a Subsidiary will not be considered to be an
Immaterial Subsidiary if it, directly or indirectly, guarantees or otherwise
provides direct credit support for any Indebtedness of the Company and (d) is
not a licensee under, and does not otherwise hold, a Gaming License; and provided further that if more than one Subsidiary is deemed an Immaterial
Subsidiary pursuant to this definition, all Immaterial Subsidiaries shall be
considered to be a single consolidated subsidiary for purposes of determining
whether the conditions specified above are satisfied.

“incur” or “incurrence” shall have the meaning
specified in Section 4.11.

“Incurrence Date” shall have the
meaning specified in Section 4.11.

“Indebtedness” of any specified
Person means, without duplication,

 12
 

 

(a)           all
liabilities and obligations, contingent or otherwise, of such specified Person,
to the extent such liabilities and obligations would appear as a liability upon
the consolidated balance sheet of such specified Person in accordance with
GAAP, (1) in respect of borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such specified Person or only to a
portion thereof), (2) evidenced by bonds, notes, debentures or similar
instruments, (3) representing the balance deferred and unpaid of the
purchase price of any property or services, except (other than accounts payable
or other obligations to trade creditors which have remained unpaid for greater
than 60 days past their original due date) those incurred in the ordinary
course of its business that would constitute ordinarily a trade payable to
trade creditors;

(b)           all
liabilities and obligations, contingent or otherwise, of such specified Person (1) evidenced
by bankers’ acceptances or similar instruments issued or accepted by banks, (2) relating
to any Capitalized Lease Obligation, or (3) evidenced by a letter of
credit or a reimbursement obligation of such specified Person with respect to
any letter of credit;

(c)           all net
obligations of such specified Person under Interest Swap and Hedging
Obligations;

(d)           all
liabilities and obligations of others of the kind described in any of the
preceding clauses (a), (b) and (c) that such specified Person
has guaranteed or provided credit support or that are otherwise its legal
liability or which are secured by any assets or property of such specified
Person;

(e)           any and
all deferrals, renewals, extensions, refinancing and refundings (whether direct
or indirect) of, or amendments, modifications or supplements to, any liability
of the kind described in any of the preceding clauses (a), (b), (c) or
(d), or this clause (e), whether or not between or among the same parties;
and

(f)            all
Disqualified Capital Stock of such specified Person (measured at the greater of
its voluntary or involuntary maximum fixed repurchase price plus accrued and
unpaid dividends).

For
purposes hereof, the “maximum fixed repurchase price” of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the terms hereof, and if such
price is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined in reasonable good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock.

The
amount of any Indebtedness outstanding as of any date shall be (1) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount, but the accretion of original issue discount in accordance with
the original terms of Indebtedness issued with an original issue discount will not
be deemed to be an incurrence and (2) the 

 13
 

 

principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.

“Indenture” means this Indenture,
as amended or supplemented from time to time in accordance with the terms
hereof.

“Indirect Participant” means any
entity that, with respect to DTC, clears through or maintains a direct or
indirect, custodial relationship with a Participant.

“Initial Purchasers” means
Jefferies & Company, Inc. and Wells Fargo Securities, LLC.

“Institutional Accredited Investor” means
an institution that is an “accredited investor” as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act, who is not also a QIB.

“Interest Payment Date” means the
stated due date of an installment of interest on the Notes.

“Interest Record Date” means an Interest
Record Date specified in the Notes, whether or not such date is a Business Day.

“Interest Swap and Hedging Obligation” means
any obligation of any Person pursuant to any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
exchange agreement, currency exchange agreement or any other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency values, including, without limitation, any arrangement whereby,
directly or indirectly, such Person is entitled to receive from time to time
periodic payments calculated by applying either a fixed or floating rate of
interest on a stated notional amount in exchange for periodic payments made by
such Person calculated by applying a fixed or floating rate of interest on the
same notional amount.

“Investment”
by any specified Person in any other Person (including an
Affiliate) means (without duplication):

(a)           the
acquisition (whether by purchase, merger, consolidation or otherwise) by such
specified Person (whether for cash, property, services, securities or
otherwise) of Equity Interests, Capital Stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other Person or any agreement to make any such
acquisition;

(b)           the making
by such specified Person of any deposit with, or advance, loan or other
extension of credit to, such other Person (including the purchase of property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such other Person) or any commitment to
make any such advance, loan or extension (but excluding accounts receivable,
endorsements for collection or deposits arising in the ordinary course of
business);

 14
 

 

(c)           other than
guarantees of Indebtedness of the Company or any Guarantor to the extent
permitted by Section 4.11, the entering into by such specified Person of
any guarantee of, or other credit support or contingent obligation with respect
to, Indebtedness or other liability of such other Person;

(d)           the making
of any capital contribution by such specified Person to such other Person; and

(e)           the
designation by the Board of Directors of the Company of any Person to be an
Unrestricted Subsidiary.

The
Company shall be deemed to make an Investment in an amount equal to the fair
market value of the net assets of any subsidiary of the Company (or, if neither
the Company nor any of its Subsidiaries has theretofore made an Investment in
such subsidiary, in an amount equal to the
Investments being made), at the time that such subsidiary is designated an
Unrestricted Subsidiary, and any property transferred to an Unrestricted
Subsidiary from the Company or a Subsidiary of the Company shall be deemed an
Investment valued at its fair market value at the time of such transfer. The
Company or any of its Subsidiaries shall be deemed to have made an Investment
in a Person that is or was a Subsidiary of the Company or a Guarantor if, upon
the issuance, sale or other disposition of any portion of the Company’s or any
of its Subsidiary’s ownership in the Capital Stock of such Person, such Person
ceases to be a Subsidiary of the Company or a Guarantor, as applicable. The
fair market value of each Investment shall be measured at the time made or
returned, as applicable.

“Issue Date” means the date of
first issuance of the Notes under this Indenture except that for purposes of Section 4.3,
“Issue Date” means March 25, 2003,
the date of first issuance of the Senior Notes.

“Junior Security” means any Qualified Capital Stock and any
Indebtedness of the Company or a Guarantor, as applicable, that is
contractually subordinated in right of payment to Senior Debt at least to the
same extent as the Notes or the Guarantees, as applicable, and has no scheduled
installment of principal due, by redemption, sinking fund payment or otherwise,
on or prior to the Stated Maturity of the Notes.

“Legal Defeasance” shall have the
meaning specified in Section 8.2.

“Legal Holiday” shall have the
meaning specified in Section 12.7.

“Lien” means, with respect to any
asset, any mortgage, charge, pledge, lien (statutory or otherwise), privilege,
security interest, hypothecation or other encumbrance upon or with respect to
such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction, real or personal, movable or immovable, now owned or
hereafter acquired.

 15
 

 

“Liquidated Damages” means all
liquidated damages then owing pursuant to the Registration Rights Agreement.

 “Moody’s” means
Moody’s Investors Service, Inc. and its successors.

“Net Cash Proceeds” means the
aggregate amount of cash or Cash Equivalents received (a) by the Company
in the case of a sale of Qualified Capital Stock and (b) by the Company
and its Subsidiaries in respect of an Asset Sale or an Event of Loss
(including, in the case of an Event of Loss, the insurance proceeds, but
excluding any liability insurance proceeds payable to the Trustee for any loss,
liability or expense incurred by it),

(a)           plus, in
the case of an issuance of Qualified Capital Stock upon any exercise, exchange
or conversion of securities (including options, warrants, rights and
convertible or exchangeable debt) of the Company that were issued for cash
after the Issue Date, the amount of cash originally received by the Company
upon the issuance of such securities (including options, warrants, rights and
convertible or exchangeable debt),

(b)           less, in
each case, the sum of all payments, fees and commissions and reasonable and
customary expenses (including, without limitation, the fees and expenses of
legal counsel and investment banking fees and expenses but excluding costs and
expenses payable to an Affiliate of the Company) incurred in connection with
such Asset Sale or sale of Qualified Capital Stock or Event of Loss, and

(c)           less, in
the case of an Asset Sale only, the amount (estimated reasonably and in good
faith by the Company) of income, franchise, sales and other applicable taxes
required to be paid by the Company or any of its respective Subsidiaries in
connection with such Asset Sale in the taxable year that such sale is consummated
or in the immediately succeeding taxable year, the computation of which shall
take into account the reduction in tax liability resulting from any available
operating losses and net operating loss carryovers, tax credits and tax credit
carryforwards, and similar tax attributes.

“Notes” means, collectively (a) the
Series A Notes, (b) the Exchange Notes, when and if issued as
provided in the Registration Rights Agreement, and (c) the Additional
Notes (if any).

“Notes Custodian” means the
Trustee, as custodian with respect to the Notes in global form, or any
successor entity thereto.

“Obligation” means any principal,
premium or interest payment, or monetary penalty, or damages, due by the
Company or any Guarantor under the terms of the Notes or this Indenture,
including any Liquidated Damages due pursuant to the terms of the Registration
Rights Agreement.

“Offering” means the offering of
the Notes by the Company.

“Officer” means, with respect to
the Company or any Guarantor, the Chief Executive Officer, the President, any
Vice President, the Chief Financial Officer, the Treasurer, the Controller, or
the Secretary of the Company or such Guarantor.

 16
 

 

“Officers’ Certificate” means, with
respect to the Company or any Guarantor, a certificate signed by two Officers
or by an Officer and an Assistant Secretary of the Company or such Guarantor
and otherwise complying with the requirements of Sections 12.4 and 12.5.

“Opinion of Counsel” means a
written opinion from legal counsel who is reasonably acceptable to the Trustee
complying with the requirements of Sections 12.4 and 12.5.

“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).

“Paying Agent” shall have the
meaning specified in Section 2.3.

“Permit” means any license, permit,
franchise, finding of suitability, registration, filing, order, declaration,
qualification, approval, consent, certificate or other authorization.

“Permitted
Indebtedness” means that:

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

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

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

(d)           (1) the
Company may incur Indebtedness owed to (borrowed from) any Guarantor, (2) any
Guarantor may incur Indebtedness owed to (borrowed from) any other Guarantor or
the Company and (3) any Subsidiary of the Company may incur Indebtedness
owed to (borrowed from) any Guarantor or the Company; provided, that (x) in
the case of Indebtedness of the Company, such obligations shall be unsecured
and contractually subordinated in all respects to the Company’s obligations
pursuant to the Notes and any event that causes such Guarantor no longer to be
a Guarantor (including by designation to be an Unrestricted Subsidiary) shall
be deemed to be a new incurrence by the Company of such Indebtedness and any
guarantor thereof subject to the provisions of Section 4.11, (y) in
the case of Indebtedness of a Guarantor, such obligations shall be unsecured
and contractually subordinated in all respects to such Guarantor’s obligations
pursuant to such Guarantor’s Guarantee and any event that causes the Guarantor
lender no longer to be a Guarantor (including a designation as an Unrestricted
Subsidiary) shall be deemed to be a new incurrence by such Guarantor borrower
of such Indebtedness and any guarantor thereof 

 17
 

 

subject to the provisions of Section 4.11, and (z) in
the case of Indebtedness of a Subsidiary pursuant to clause (3) such obligations
shall be unsecured and any event that causes the Guarantor lender no longer to
be a Guarantor (including a designation as an Unrestricted Subsidiary) shall be
deemed to be a new incurrence by such Subsidiary borrower of such Indebtedness
and any guarantor thereof subject to the provisions of Section 4.11;

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

(f)            FF&E
Financing; provided, that the
aggregate principal amount of such Indebtedness (including any Permitted
Refinancing Indebtedness and any other Indebtedness incurred to repay, redeem,
discharge, retire, defease, refund, refinance or replace any Indebtedness
pursuant to this clause (f)) outstanding at any time (excluding any Gaming
FF&E Financing incurred pursuant to this clause (f)) does not exceed $20,000,000.

“Permitted
Investment” means:

(a)           any
Investment in any of the Notes;

(b)           any
Investment in Cash Equivalents;

(c)           intercompany
notes to the extent permitted under clause (1) or (2) of clause (d) of
the definition of “Permitted Indebtedness”;

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

(e)           other
Investments in any Person or Persons, provided, that after giving pro forma effect to each such Investment, the aggregate
amount of all such Investments made on and after the Issue Date pursuant to
this clause (e) that are outstanding (after giving effect to any such
Investments or any portions thereof that are returned to the Company or the
Guarantor that made such prior Investment, without restriction, in cash on or
prior to the date of any such calculation, but only up to the amount of the
Investment made under this clause (e)) in such Person or Persons at any time
does not in the aggregate exceed $5,000,000 (measured by the value attributed
to the Investment at the time made or returned, as applicable);

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

 18
 

 

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

(h)           any
Investment (including an Investment in a joint venture) made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with Section 4.13; and

(i)            the
contribution by the Company or any of its Subsidiaries of Undeveloped Land to a
joint venture to which the Company or any of its Subsidiaries is a party,
provided, that (x) the amount of such contribution attributable to the
amount or value of any Investments in, or capital expenditures or other
payments with respect to, or development of or improvement on, such Undeveloped
Land after the Issue Date (other than the payment of the purchase price for
Undeveloped Land under contract on the Issue Date, in accordance with the
contract as in effect on the Issue Date, without giving effect to any
amendment, supplement or modification thereof) shall not constitute a Permitted
Investment pursuant to this clause (i), and (y) any Investments in, or
capital expenditures or other payments with respect to, such joint venture
after the Issue Date shall not constitute a Permitted Investment pursuant to
this clause (i).

“Permitted
Lien” means:

(a)           Liens
existing on the Issue Date;

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

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

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

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

 19
 

 

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

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

(h)           Liens
arising from Purchase Money Indebtedness permitted to be incurred pursuant to
clause (a) of Section 4.11 provided
such Liens relate solely to the property which is subject to such
Purchase Money Indebtedness;

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

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

(k)           Liens on
the registered mark “Speakeasy Casino,” arising from the licensing of such
registered mark in connection with the sale of the Reno Property;

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

(m)          Liens
securing Indebtedness incurred under the Credit Agreement in accordance with Section 4.11.

“Person” or “person” means
any individual, corporation, limited liability company, joint stock company,
joint venture, partnership, limited liability partnership, association,
unincorporated organization, trust, governmental regulatory entity, country,
state, agency or political subdivision thereof, municipality, county, parish or
other entity.

“Plans and Specifications”
means all plans, specifications, design documents, schematic drawings and
related items for the design, architecture and construction of the Presque Isle
Downs Project in existence on the Issue Date, and any further such plans,
specifications, design documents, schematic drawings and related items which
are generally consistent with the overall plan for the Presque Isle Downs
Project as of the Issue Date.

 20
 

 

“Preferred Stock” means
any Equity Interest of any class or classes of a Person (however designated)
which is preferred as to payments of dividends, or as to distributions upon any
liquidation or dissolution, over Equity Interests of any other class of such
Person.

“Presque Isle Downs Project” means the Presque Isle Downs
gaming, horseracing and entertainment facility in Erie, Pennsylvania, as
described in “Offering Circular Summary—Properties—Presque Isle Downs” in the
Offering Circular dated May 22, 2006 for the offering of the Notes.

“Private Placement Legend” means the
legend set forth in Section 2.6(g)(1) to be placed on all Notes
issued under this Indenture except where specifically stated otherwise by the
provisions of this Indenture.

“principal” of any Indebtedness
means the principal of such Indebtedness.

“property” means any right or
interest in or to property or assets of any kind whatsoever, whether real,
personal or mixed and whether tangible, intangible, contingent, direct or
indirect.

“Pro Forma” or “pro forma” shall have the meaning set
forth in Regulation S-X of the Securities Act, unless otherwise specifically
stated herein.

“Purchase Money Indebtedness” of
any Person means any Indebtedness of such Person to any seller or other Person
incurred solely to finance the acquisition (including in the case of a Capitalized
Lease Obligation, the lease), construction, installation or improvement of any
after acquired real or personal tangible property which, in the reasonable good
faith judgment of the Company’s Board of Directors, is directly related to a
Related Business of the Company and its Subsidiaries and which is incurred
substantially concurrently with such acquisition, construction, installation or
improvement and is secured only by the assets so financed.

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

“Qualified Capital Stock” means,
with respect to any Person, any Capital Stock of such Person that is not
Disqualified Capital Stock.

“Qualified Equity Offering” means
an underwritten public offering for cash, pursuant to a registration statement
filed with the Commission in accordance with the Securities Act, of Qualified
Capital Stock of the Company.

“Qualified
Exchange” means:

(a)           Any legal
defeasance, redemption, retirement, repurchase or other acquisition of Capital
Stock or Indebtedness of the Company issued on or after the Issue Date with the
Net Cash Proceeds received by the Company from the substantially concurrent
sale of its Qualified Capital Stock (other than to a Subsidiary of the
Company); or

 21
 

 

(b)           any
issuance of Qualified Capital Stock of the Company in exchange for any Capital
Stock or Indebtedness of the Company issued on or after the Issue Date.

“Recourse Indebtedness” means
Indebtedness (a) as to which the Company or one of its Subsidiaries (1) provides
credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (2) is directly or indirectly liable
(as a guarantor or otherwise), or (3) constitutes the lender, or (b) a
default with respect to which (including any rights that the holders thereof
may have to take enforcement action against an Unrestricted Subsidiary) would
permit (upon notice, lapse of time or both) a holder of any other Indebtedness
of the Company or any of its Subsidiaries (other than the Notes and Guarantees)
to declare a default on such other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its stated maturity.

“Redemption Date,” when used with
respect to any Note to be redeemed, means the date fixed for such redemption pursuant
to Article III of this Indenture.

“Redemption Price,” when used with
respect to any Note to be redeemed, means the redemption price for such
redemption pursuant to Article III of this Indenture, which shall include,
without duplication, in each case, accrued and unpaid interest and Liquidated
Damages, if any, to the Redemption Date.

“Reference Period” with regard to
any Person means the four full fiscal quarters (or such lesser period during
which such Person has been in existence) ended immediately preceding any date
upon which any determination is to be made pursuant to the terms of the Notes
or this Indenture.

“Refinancing Indebtedness” means
Indebtedness (including Disqualified Capital Stock) (a) issued in exchange
for, or the proceeds from the issuance and sale of which are used substantially
concurrently to repay, redeem, defease, refund, refinance, discharge or
otherwise retire for value, in whole or in part, or (b) constituting an
amendment, modification or supplement to, or a deferral or renewal of ((a) and
(b) above are, collectively, a “Refinancing”),
any Indebtedness (including Disqualified Capital Stock) in a principal amount
or, in the case of Disqualified Capital Stock, liquidation preference, not to
exceed (after deduction of reasonable and customary fees and expenses incurred
in connection with the Refinancing plus the amount of any premium paid in
connection with such Refinancing) the lesser of (1) the principal amount
or, in the case of Disqualified Capital Stock, liquidation preference, of the
Indebtedness (including Disqualified Capital Stock) so Refinanced and (2) if
such Indebtedness being Refinanced was issued with an original issue discount,
the accreted value thereof (as determined in accordance with GAAP) at the time
of such Refinancing; provided,
that (A) such Refinancing Indebtedness shall only be used to refinance
outstanding Indebtedness (including Disqualified Capital Stock) of such Person
issuing such Refinancing Indebtedness, (B) such Refinancing Indebtedness
shall (x) not have an Average Life shorter than the Indebtedness
(including Disqualified Capital Stock) to be so refinanced at the time of such
Refinancing and (y) in all respects, be no less contractually subordinated
or junior, if applicable, to the rights of Holders of the Notes than was the
Indebtedness (including Disqualified Capital Stock) to be refinanced, (C) such
Refinancing Indebtedness shall have a final stated maturity or redemption date,
as applicable, no earlier 

 22
 

 

than the final stated maturity or redemption date, as
applicable, of the Indebtedness (including Disqualified Capital Stock) to be so
refinanced or, if sooner, 91 days after the Stated Maturity of the Notes, and (D) such
Refinancing Indebtedness shall be secured (if secured) in a manner no more adverse
to the Holders of the Notes than the terms of the Liens (if any) securing such
refinanced Indebtedness, including, without limitation, the amount of
Indebtedness secured shall not be increased.

“Reg S Permanent Global Note” means
one or more permanent Global Notes bearing the Private Placement Legend, that
will be issued in an aggregate amount of denominations equal in total to the
outstanding principal amount of the Reg S Temporary Global Note upon
expiration of the Distribution Compliance Period.

“Reg S Temporary Global Note” means
one or more temporary Global Notes bearing the Private Placement Legend and the
Reg S Temporary Global Note Legend, issued in an aggregate amount of
denominations equal in total to the outstanding principal amount of the Notes
initially sold in reliance on Rule 903 of Regulation S.

“Reg S Temporary Global Note Legend” means
the legend set forth in Section  2.6(g)(3), which is required to be placed
on all Reg S Temporary Global Notes issued under this Indenture.

“Registrar” shall have the meaning
specified in Section 2.3.

“Registration Rights Agreement” means
the Registration Rights Agreement, dated as of the Issue Date, by and among the
Company and the other parties named on the signature pages thereof, as
such agreement may be amended, modified or supplemented from time to time.

“Regulation S” means Regulation S
promulgated under the Securities Act, as it may be amended from time to time,
and any successor provision thereto.

“Regulation S Global Note” means a
Reg S Temporary Global Note or a Reg S Permanent Global Note, as the
case may be.

“Related Business” means the
business conducted (or proposed to be conducted) by the Company and its
Subsidiaries as of the Issue Date and any and all businesses that in the
reasonable good faith judgment of the Board of Directors of the Company are
materially related businesses.

“Reno Property” means the
hotel/casino property in Reno, Nevada previously owned by Speakeasy Gaming of
Reno, Inc. and sold pursuant to the Purchase Agreement, dated as of February 20,
2003, by and between R R, LLC, a Nevada limited liability company, and
Speakeasy Gaming of Reno, Inc.

“Representative” means the Trustee or any trustee, agent or
representative for any Senior Debt.

 23
 

 

“Restricted Definitive Note” means one
or more Definitive Notes bearing the Private Placement Legend.

“Restricted Global Note” means one
or more Global Notes bearing the Private Placement Legend; provided, that in no case shall an
Exchange Note issued in accordance with this Indenture and the terms of the
Registration Rights Agreement be a Restricted Global Note.

“Restricted Investment” means, in
one or a series of related transactions, any Investment, other than other
Permitted Investments.

“Restricted Payment” means, with
respect to any Person:

(a)           the
declaration or payment of any dividend or other distribution in respect of
Equity Interests of such Person;

(b)           any
payment (except to the extent with Qualified Capital Stock) on account of the
purchase, redemption or other acquisition or retirement for value of Equity
Interests of such Person;

(c)           other than
with the proceeds from the substantially concurrent sale of, or in exchange
for, Refinancing Indebtedness, any purchase, redemption, or other acquisition
or retirement for value of, any payment in respect of any amendment of the
terms of or any defeasance of, any Subordinated Indebtedness, directly or
indirectly, by such Person or a Subsidiary of such Person prior to the
scheduled maturity, any scheduled repayment of principal, or scheduled sinking
fund payment, as the case may be, of such Indebtedness; and

(d)           any
Restricted Investment by such Person;

provided, however, that the term “Restricted
Payment” does not include (1) any dividend, distribution or other payment
on or with respect to Equity Interests of an issuer to the extent payable
solely in shares of Qualified Capital Stock of such issuer, or (2) any
dividend, distribution or other payment to the Company, or to any of the
Guarantors, by the Company or any of its Subsidiaries and any Investment in any
Guarantor by the Company or any Subsidiary of the Company.

“Rule 144A” means Rule 144A
promulgated under the Securities Act, as it may be amended from time to time,
and any successor provision thereto.

“S&P” means Standard &
Poor’s, a division of The McGraw-Hill Companies, and its successors.

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

“Senior Debt” means, with respect
to the Company or any of the Guarantors, as applicable, as of the applicable
date of determination:

 24
 

 

(1)          any Indebtedness then outstanding
under the Credit Agreement;

(2)          Indebtedness under any then
outstanding Senior Notes and Senior Note Guarantees;

(3)          any then outstanding Indebtedness of
the Company or such Guarantor, as the case may be, otherwise permitted to be
incurred under the terms of this Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it shall not be senior in
right of payment to any Indebtedness of the Company or such Guarantor, as the
case may be; and

(4)          all Obligations with respect to the
items listed in the preceding clauses (1), (2) and (3).

Notwithstanding
anything to the contrary in the preceding, Senior Debt will not include:

(a)           any
liability for federal, state, local or other taxes owed or owing by the Company
or the Guarantors;

(b)           any
Indebtedness of the Company to any of its Subsidiaries or other Affiliates of
the Company;

(c)           any trade
payables; or

(d)           the portion
of any Indebtedness that is incurred in violation of this Indenture.

“Senior
Note Guarantees” means the guarantees by the
Guarantors of the Company’s obligations under the Senior Notes in accordance
with the Senior Notes Indenture.

“Senior Note Indenture” means the
indenture, dated as of March 25, 2003, as amended and supplemented as of
the Issue Date, among the Company, the Guarantors and the Trustee, governing
the Senior Notes.

“Senior
Notes” means the 93⁄4% Senior Notes due 2010 issued by
the Company.

“Series A Notes” means the 9% Series A
Senior Subordinated Notes due 2012, as supplemented from time to time in
accordance with the terms hereof, issued under this Indenture.

 “Shelf
Registration Statement” shall have the meaning set forth in
the Registration Rights Agreement.

“Significant Subsidiary” shall have
the meaning provided under Regulation S-X of the Securities Act, as in effect
on the Issue Date.

 25
 

 

“Special Record Date” for payment
of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 2.12.

“Stated Maturity,” when used with
respect to any Note, means June 1, 2012.

“Subordinated Indebtedness” means
Indebtedness of the Company or a Guarantor that is contractually subordinated
to the Notes or such Guarantee, as applicable, in any respect.

“subsidiary,” with respect to any
Person, means (1) a corporation a majority of whose Equity Interests with
voting power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such Person, by such Person and one or more
Subsidiaries of such Person or by one or more Subsidiaries of such Person, and (2) any
other Person (other than a corporation) in which such Person, one or more
Subsidiaries of such Person, or such Person and one or more Subsidiaries of
such Person, directly or indirectly, at the date of determination thereof has a
majority ownership interest, or (3) a partnership in which such Person or
a Subsidiary of such Person is, at the time, a general partner and in which
such Person, directly or indirectly, at the date of determination thereof has a
majority ownership interest. Unless the context requires otherwise, “subsidiary,”
with respect to any Person, means each direct and indirect subsidiary of such
Person.

“Subsidiary,”  with respect to a Person, means any subsidiary
of such Person that is not an Unrestricted Subsidiary.

“TIA” means the Trust Indenture Act
of 1939, as amended, (15 U.S. Code §§ 77aaa-77bbbb) as in effect on
the date of the execution of this Indenture, except as provided in Section 9.3.

“Track Business Contingent Earnout Payment,”
is as defined in the Agreement and Plan of Merger, entered into as of December 23,
2002, by and among the Company, Racing Acquisition, Inc., an Ohio
corporation and a wholly owned subsidiary of the Company, and Scioto Downs, Inc.,
an Ohio corporation, as such agreement is in effect on the Issue Date, without
giving effect to any amendment, supplement or modification thereof.

“Transfer Restricted Notes” means
Global Notes and Definitive Notes that bear or are required to bear the Private
Placement Legend; provided, that
in no case shall an Exchange Note issued in accordance with this Indenture and
the terms and provisions of the Registration Rights Agreement be a Transfer
Restricted Note.

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

“Trust Officer” means, when used
with respect to the Trustee, any officer within the corporate trust department
of the Trustee, including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any other officer of
the Trustee who customarily performs functions similar to those performed by
the Persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is 

 

 26
 

 

referred because of such person’s knowledge of and
familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.

“Undeveloped Land” means all land
owned or under contract by the Company and its Subsidiaries in Hancock County,
West Virginia on the Issue Date, other than the 215 acres constituting the
Mountaineer Racetrack & Gaming Resort and the 170 acres constituting
Mountaineer’s Woodview golf course excluding, in each case, any Investments in,
or capital expenditures or other payments with respect to (other than the
payment of the purchase price for Undeveloped Land under contract on the Issue
Date, in accordance with the contract as in effect on the Issue Date, without
giving effect to any amendment, supplement or modification thereof), or
development of or improvements on, such Undeveloped Land after the Issue Date.

“Unrestricted Definitive Note” means
one or more Definitive Notes that do not bear and are not required to bear the
Private Placement Legend.

“Unrestricted Global Note” means
one or more permanent Global Notes representing a series of Notes that does not
bear and is not required to bear the Private Placement Legend.

“Unrestricted Subsidiary” means:

(a)           Three
Rivers Gaming, Inc, a Pennsylvania corporation; Keystone State Development, Inc.,
a Pennsylvania corporation; Mountaineer Magic, Inc. , a West Virginia
corporation; Speakeasy Gaming of Nevada, Inc., a Nevada corporation;
Speakeasy Gaming of Reno, Inc., a Nevada corporation; Speakeasy Fremont
Street Experience, Inc., a Nevada Corporation; RacelineBet, Inc., an
Oregon corporation, Excal Energy Operating, Inc. , a Ohio corporation; Mid-America
Racing, Inc. an Ohio corporation; Excal Energy Corporation, a Michigan
corporation; Jackson Trotting Association, LLC, a Michigan limited liability
company; and Crystal Exploration Co., Inc., a Michigan corporation;

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

(c)           any
subsidiary of an Unrestricted Subsidiary.

 27
 

 

The
Company’s Board of Directors may designate any Unrestricted Subsidiary to be a
Subsidiary, provided, that (1) no
Default or Event of Default is existing or will occur as a consequence thereof
and (2) immediately after giving effect to such designation, on a pro forma basis, the Company could incur
at least $1.00 of Indebtedness pursuant to the Debt Incurrence Ratio of Section 4.11.
Each such designation shall be evidenced by filing with the Trustee a certified
copy of the resolution giving effect to such designation and an Officers’
Certificate certifying that such designation complied with the foregoing
conditions.

“U.S. Government Obligations” means
direct non-callable obligations of, or noncallable obligations guaranteed by,
the United States of America for the payment of which obligation or guarantee
the full faith and credit of the United States of America is pledged.

“Voting Equity Interests” means
Equity Interests which at the time are entitled to vote in the election of, as
applicable, directors, members or partners generally.

“Wholly Owned Subsidiary,” with respect to a Person, means a Subsidiary of such Person all the
Equity Interests of which (other than directors’ qualifying shares) are owned
by such Person or one or more Wholly Owned Subsidiaries of such Person or a
combination thereof.

SECTION 1.2                                                  INCORPORATION BY REFERENCE OF TIA

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

“indenture securities” means
the Notes.

“indenture securityholder” means
a Holder.

“indenture to be qualified” means
this Indenture.

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

“obligor” on the
indenture securities means the Company, each Guarantor and any other obligor on the Notes.

All other terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
Commission rule and not otherwise defined herein have the TIA meanings
assigned to them thereby.

SECTION 1.3                                                  RULES OF CONSTRUCTION

Unless the context otherwise requires:

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

 28

 

(b)           an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;

(c)           “or” is
not exclusive;

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

(e)           provisions
apply to successive events and transactions;

(f)            “herein,”
“hereof,” “hereto” and other words of similar import refer to this Indenture as
a whole and not to any particular Article, Section or other subdivision;

(g)           references
to Sections or Articles means reference to such Section or Article in
this Indenture, unless stated otherwise; and

(h)           references
to sections of or rules under the Securities Act and the Exchange Act
shall be deemed to include substitute, replacement or successor sections or rules adopted
by the Commission from time to time.

ARTICLE II

THE SECURITIES

SECTION 2.1                                                  FORM AND DATING

(a)           General.
The Notes and the Trustee’s certificate of authentication shall be
substantially in the form of Exhibit A hereto; provided, that the form of the Exchange Notes shall include
such variations as expressly required by the Registration Rights Agreement. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its issuance
and shall show the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.

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

(b)           Global
Notes. Notes issued in global form shall be substantially in the form of Exhibit A
attached hereto (including the Global Note Legend thereon and the “Schedule of
Exchanges of Interests in the Global Note” attached thereto). Notes issued in
definitive form shall be substantially in the form of Exhibit A attached
hereto (but without the Global Note Legend thereon and without the “Schedule of
Exchanges of Interests in the Global Note” attached thereto). Each Global Note
shall represent such of the outstanding

 29
 

 

Notes as shall be specified therein and each shall
provide that it shall represent the aggregate principal amount of outstanding
Notes from time to time endorsed thereon and that the aggregate principal
amount of outstanding Notes represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the aggregate principal amount of outstanding Notes represented thereby
shall be made by the Trustee or the Notes Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.6.

(c)           Euroclear
and Clearstream Procedures Applicable. The provisions of the “Operating
Procedures of the Euroclear System” and “Terms and Conditions Governing Use of
Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer
Handbook” of Clearstream in effect at the relevant time shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are
held by Participants through Euroclear or Clearstream.

SECTION 2.2                                                  EXECUTION AND AUTHENTICATION

Two Officers shall sign the Notes for the Company by
manual or facsimile signature. In the case of Definitive Notes, such signatures
may be imprinted or otherwise reproduced on such Notes. If an Officer whose
signature is on a Note no longer holds that office at the time a Note is authenticated,
the Note shall nevertheless be valid. A Note shall not be valid until
authenticated by the manual signature of the Trustee. The signature shall be
conclusive evidence that the Note has been authenticated under this Indenture. The
Trustee shall, upon a written order of the Company signed by an Officer (an “Authentication Order”), authenticate Notes
for issuance up to the aggregate principal amount stated in such Authentication
Order; provided, that Notes
authenticated for issuance on the Issue Date shall not exceed $125,000,000 in
aggregate principal amount. The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Notes. An authenticating agent may
authenticate Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with
Holders or an Affiliate of the Company.

SECTION 2.3                                                  REGISTRAR, PAYING AGENT AND
DEPOSITARY

The Company shall maintain (i) an office or
agency where Notes may be presented for registration of transfer or for
exchange (“Registrar”) and (ii) an
office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company may
appoint one or more co-registrars and one or more additional paying agents. The
term “Registrar” includes any co-registrar and the term “Paying Agent” includes
any additional paying agent. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company shall notify the Trustee in
writing of the name and address of any Agent not a party to this Indenture. If
the Company fails to appoint or maintain an entity other than the Trustee as
either Registrar or Paying Agent, the Trustee shall act as such. The Company or
any of its Subsidiaries may act as Paying Agent or Registrar. The Company
initially appoints The

 30
 

 

Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as Registrar and Paying Agent
and to act as Notes Custodian with respect to the Global Notes.

SECTION 2.4                                                  PAYING AGENT TO HOLD MONEY IN TRUST

The Company shall require each Paying Agent other than
the Trustee to agree in writing that the Paying Agent will hold in trust for
the benefit of Holders or the Trustee all money held by the Paying Agent for
the payment of principal of, or premium, interest or Liquidated Damages, if any,
on, the Notes and will notify the Trustee of any default by the Company in
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Subsidiary of the Company) shall have no further liability for the
money. If the Company or a Subsidiary of the Company acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the
Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.

SECTION 2.5                                                  HOLDER LISTS

The Trustee shall preserve, in as current a form as is
reasonably practicable, the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA §312(a). If the
Trustee is not the Registrar, the Company shall furnish, or shall cause the
Registrar (if other than the Company or a Subsidiary of the Company) to
furnish, to the Trustee at least seven Business Days before each Interest
Payment Date and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of the Holders of Notes, and the Company shall
otherwise comply with TIA §312(a).

SECTION 2.6                                                  TRANSFER AND EXCHANGE

(a)           Transfer
and Exchange of Global Notes. A Global Note may not be transferred except
as a whole 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 Notes will be exchanged by the Company
for Definitive Notes if (i) the Company delivers to the Trustee notice
from the Depositary that (x) the Depositary is unwilling or unable to
continue to act as Depositary for the Global Notes and the Company thereupon
fails to appoint a successor Depositary within 90 days or (y) the
Depositary is no longer a clearing agency registered under the Exchange Act, (ii) the
Company, in its sole discretion, determines that the Global Notes (in whole but
not in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee or (iii) upon request of the Trustee
or Holders of a majority of the aggregate principal amount of outstanding Notes
if there shall have occurred and be continuing a Default or Event of Default
with respect to the Notes; provided,
that in no event shall the Reg S Temporary Global Note be exchanged by the
Company for Definitive Notes prior to (x) the

 31
 

 

expiration of the Distribution Compliance Period and (y) the
receipt by the Registrar of any certificate identified by the Company and its
counsel to be required pursuant to Rule 903 or Rule 904 under the
Securities Act. Upon the occurrence of any of the preceding events in (i), (ii) or
(iii) above, Definitive Notes shall be issued in such names as the
Depositary shall instruct the Trustee. Global Notes also may be exchanged or
replaced, in whole or in part, as provided in Sections 2.7 and 2.10. Every
Note authenticated and delivered in exchange for, or in lieu of, a Global Note
or any portion thereof, pursuant to this Section 2.6 or Section 2.7
or 2.10, shall be authenticated and delivered in the form of, and shall be, a
Global Note. A Global Note may not be exchanged for another Note other than as
provided in this Section 2.6(a), however, beneficial interests in a Global
Note may be transferred and exchanged as provided in Section 2.6(b), (c) or
(f).

(b)           Transfer
and Exchange of Beneficial Interests in the Global Notes. The transfer and
exchange of beneficial interests in the Global Notes shall be effected through
the Depositary, in accordance with the provisions of this Indenture and the
Applicable Procedures. Beneficial interests in the Restricted Global Notes
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 Notes also shall require compliance with either
subparagraph (1) or (2) below, as applicable, as well as one or
more of the other following subparagraphs, as applicable:

(1)           Transfer
of Beneficial Interests in the Same Global Note. Beneficial interests in
any Restricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Restricted Global Note
in accordance with the transfer restrictions set forth in the Private Placement
Legend; provided, however, that prior to the expiration of
the Distribution Compliance Period, transfers of beneficial interests in the
Reg S Temporary Global Note may not be made to a U.S. person (as such term
is defined in Regulation S) or for the account or benefit of a U.S. person
(other than an Initial Purchaser). Beneficial interests in any Unrestricted
Global Note may be transferred to Persons who take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.6(b)(1), but the Company or the
Trustee may request an Opinion of Counsel.

(2)           All
Other Transfers and Exchanges of Beneficial Interests in Global Notes
(including for Definitive Notes). In connection with all transfers and
exchanges of beneficial interests that are not subject to Section 2.6(b)(1) above,
the transferor of such beneficial interest must deliver to the Registrar either
(A) (1) an 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 Note 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) an order from a Participant or
an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive

 32
 

 

Note in an amount equal to the beneficial interest to
be transferred or exchanged and (2) instructions given by the Depositary
to the Registrar containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange referred
to in (B)(1) above; provided,
that in no event shall Definitive Notes be issued upon the transfer or exchange
of beneficial interests in the Reg S Temporary Global Note prior to (x) the
expiration of the Distribution Compliance Period and (y) the receipt by
the Registrar of any certificates identified by the Company or its counsel to
be required pursuant to Rule 903 and Rule 904 under the Securities
Act. Upon consummation of an Exchange Offer by the Company in accordance with Section 2.6(f),
the requirements of this Section 2.6(b)(2) shall be deemed to have
been satisfied upon receipt by the Registrar of the instructions contained in
the Letter of Transmittal delivered by the Holder of such beneficial interests
in the Restricted Global Notes. Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes contained in
this Indenture and the Notes or otherwise applicable under the Securities Act,
the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant
to Section 2.6(h).

(3)           Transfer
of Beneficial Interests to Another Restricted Global Note. A beneficial
interest in any Restricted Global Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another Restricted
Global Note if the transfer complies with the requirements of Section 2.6(b)(2) above
and the Registrar receives the following:

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

(B)           if
the transferee will take delivery in the form of a beneficial interest in the
501 Global Note, then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (3)(d) thereof; or

(C)           if
the transferee will take delivery in the form of a beneficial interest in the
Reg S Temporary Global Note or the Reg S Permanent Global Note, then
the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof.

(4)           Transfer
and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial
Interests in an Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any holder thereof for a beneficial
interest in an Unrestricted Global Note or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of Section 2.6(b)(2) above
and:

(A)          such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and Section 2.6(f), and the holder
of the beneficial interest to be transferred, in the case of an exchange, or

 33
 

 

the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal that it
is not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;

(B)           such
transfer is effected pursuant to the Shelf Registration Statement in accordance
with the Registration Rights Agreement and a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
is delivered by the transferor;

(C)           such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement and
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof, is delivered by the
transferor; or

(D)          the
Registrar receives the following:  (1) if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial interest in an Unrestricted
Global Note, 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 Note 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 Note, 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 (D), an Opinion of Counsel in form, and from
legal counsel, reasonably acceptable to the Registrar and 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.

If any such transfer is effected pursuant to
subparagraph (B) or (D) above at a time when an Unrestricted
Global Note has not yet been issued, the Company shall issue and, upon receipt
of an Authentication Order in accordance with Section 2.2, the Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Note.

(c)           Transfer
and Exchange of Beneficial Interests for Definitive Notes. Transfer and
exchange of beneficial interests in the Global Notes for Definitive Notes shall
be made subject to compliance with this Section 2.6(c), and the requesting
Holder shall provide any certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section 2.6(c).
Upon receipt of such applicable documentation, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Note or
Unrestricted Global Note, as applicable, to be reduced accordingly pursuant to Section 2.6(h),
and the Company shall execute and, upon receipt of an Authentication Order

 34
 

 

pursuant to Section 2.2, the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Restricted Definitive Note or an Unrestricted Definitive Note, as applicable,
in the appropriate principal amount. Any Definitive Note issued in exchange for
a beneficial interest in a Global Note pursuant to this Section 2.6(c) 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
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Definitive Notes are so registered.

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

(A)          if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note, 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
under the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;

(C)           if
such beneficial interest is being transferred to a non-U.S. person (as such
term is defined in Regulation S) in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2) thereof;

(D)          if
such beneficial interest is being transferred to an Institutional Accredited
Investor in reliance on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B) and (C) above,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)(d) thereof,
if applicable; or

(E)           if
such beneficial interest is being transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof.

Any
Restricted Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.6(c)(1) shall bear
the Private Placement Legend and shall be subject to all restrictions on
transfer contained therein.

(2)           Beneficial
Interests in Restricted Global Notes to Unrestricted Definitive Notes. A
holder of a beneficial interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may transfer such
beneficial interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note only if:

 35
 

 

(A)          such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and Section 2.6(f), and the holder
of such beneficial interest, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of Transmittal that
it is not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;

(B)           such
transfer is effected pursuant to the Shelf Registration Statement in accordance
with the Registration Rights Agreement and a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
is delivered by the transferor;

(C)           such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement and
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof, is delivered by the
transferor; or

(D)          the
Registrar receives the following:  (1) if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for an Unrestricted Definitive Note, 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 Note proposes to transfer
such beneficial interest to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, 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 (D), an Opinion of
Counsel in form, and from legal counsel, reasonably acceptable to the Registrar
and 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.

Beneficial
interests in an Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a Restricted
Definitive Note.

(3)           Beneficial
Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If
any holder of a beneficial interest in an Unrestricted Global Note proposes to
exchange such beneficial interest for an Unrestricted Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note, then such holder shall satisfy the
applicable conditions set forth in Section 2.6(b)(2). Any Unrestricted
Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.6(c)(3) shall
not bear the Private Placement Legend.

(4)           Transfer
or Exchange of Reg S Temporary Global Notes. Notwithstanding the other
provisions of this Section 2.6, a beneficial interest in the Reg S
Temporary Global Note may not be (A) exchanged for a Definitive Note prior
to (x) the expiration of the Distribution Compliance Period (unless such
exchange is

 36
 

 

approved by the Company, does not require an
investment decision on the part of the Holder thereof and does not violate the
provisions of Regulation S) and (y) the receipt by the Registrar of any
certificates identified by the Company or its counsel to be required pursuant
to Rule 903(b)(3)(ii)(B) under the Securities Act or (B) transferred
to a Person who takes delivery thereof in the form of a Definitive Note prior
to the events set forth in clause (A) above or unless the transfer is
pursuant to an exemption from the registration requirements of the Securities
Act other than Rule 903 or Rule 904.

(d)           Transfer
and Exchange of Definitive Notes for Beneficial Interests. Transfer and
exchange of Definitive Notes for beneficial interests in the Global Notes shall
be made subject to compliance with this Section 2.6(d), and the requesting
Holder shall provide any certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section 2.6(d).
Upon receipt from such Holder of such applicable documentation and the
surrender to the Registrar of the Definitive Notes duly endorsed or accompanied
by a written instruction of transfer in form satisfactory to the Registrar,
duly executed by such Holder or by its attorney, duly authorized in writing,
the Registrar shall register the transfer or exchange of the Definitive Notes. The
Trustee shall cancel such Definitive Notes so surrendered and cause the
aggregate principal amount of the applicable Restricted Global Note or
Unrestricted Global Note, as applicable, to be increased accordingly pursuant
to Section 2.6(h).

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

(A)          if
the Holder of such Restricted Definitive Note proposes to exchange such Note
for a beneficial interest in a Restricted Global Note, 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 Note is being transferred to a QIB in accordance
with Rule 144A under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1) thereof;

(C)           if
such Restricted Definitive Note is being transferred to a non-U.S. person in an
offshore transaction in accordance with Rule 903 or Rule 904 under
the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof; or

(D)          if
such Restricted Definitive Note is being transferred to an Institutional
Accredited Investor in accordance with Regulation D under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(d) thereof;

 37
 

 

the
Trustee shall cancel the Restricted Definitive Note and increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above,
the 144A Global Note, in the case of clause (C) above, the Regulation
S Global Note and in the case of clause (D) above, the 501 Global
Note.

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

(A)          such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and Section 2.6(f), and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Company;

(B)           such
transfer is effected pursuant to the Shelf Registration Statement in accordance
with the Registration Rights Agreement and a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
is delivered by the transferor;

(C)           such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement and
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof, is delivered by the
transferor; or

(D)          the
Registrar receives the following:  (1) if
the Holder of such Restricted Definitive Notes proposes to exchange such Notes
for a beneficial interest in the Unrestricted Global Note, 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 Notes proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of a beneficial interest in the Unrestricted
Global Note, 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 (D), an Opinion of Counsel
in form, and from legal counsel, reasonably acceptable to the Registrar and 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.

(3)           Unrestricted
Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A
Holder of an Unrestricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer such Definitive

 38
 

 

Notes to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note at any time.

If
any such exchange or transfer from a Definitive Note to a beneficial interest
is effected pursuant to subparagraphs (2)(B), (2)(D) or (3) of
this Section 2.6(d) at a time when an Unrestricted Global Note has
not yet been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.2, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of Definitive Notes so transferred.

(e)           Transfer
and Exchange of Definitive Notes for Definitive Notes. Upon request by a
Holder of Definitive Notes and such Holder’s compliance with the provisions of
this Section 2.6(e), the Registrar shall register the transfer or exchange
of Definitive Notes. Prior to such registration of transfer or exchange, the
requesting Holder shall present or surrender to the Registrar the Definitive
Notes duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by its attorney,
duly authorized in writing. The Trustee shall cancel any such Definitive Notes
so surrendered, and the Company shall execute and, upon receipt of an
Authentication Order pursuant to Section 2.2, the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Restricted Definitive Note or an Unrestricted Definitive Note, as applicable,
in the appropriate principal amount. Any Definitive Note issued pursuant to
this Section 2.6(e) 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 Registrar through instructions from the Depositary
and the Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Definitive Notes are so
registered. In addition, the requesting Holder shall provide any additional
certifications, documents and information, as applicable, required pursuant to
the following provisions of this Section 2.6(e).

(1)           Restricted
Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive
Note may be transferred to and registered in the name of Persons who take
delivery thereof in the form of a Restricted Definitive Note if the Registrar
receives the following:

(A)          if
the transfer will be made to a QIB pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate 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, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof;

(C)           if
such beneficial interest is being transferred to an Institutional Accredited
Investor in reliance on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (A) and (B) above,
then the transferor must deliver a certificate to the effect set forth in Exhibit B
hereto,

 39
 

 

including the certifications, certificates and Opinion
of Counsel required by item (3)(d) thereof, if applicable; or

(D)          if
such beneficial interest is being transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof, must be
delivered by the transferor.

(2)           Restricted
Definitive Notes to Unrestricted Definitive Notes. Any Restricted
Definitive Note may be exchanged by the Holder thereof for an Unrestricted
Definitive Note or transferred to a Person or Persons who take delivery thereof
in the form of an Unrestricted Definitive Note if:

(A)          such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and Section 2.6(f), and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Company;

(B)           any
such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement and a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof, is delivered by the transferor;

(C)           any
such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement and
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof, is delivered by the
transferor; or

(D)          the
Registrar receives the following:  (1) if
the Holder of such Restricted Definitive Notes proposes to exchange such Notes
for an Unrestricted Definitive Note, 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 Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, 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 (D), an Opinion of Counsel
in form, and from legal counsel, reasonably acceptable to the Registrar and 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.

(3)           Unrestricted
Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted
Definitive Notes may transfer such Notes to a Person who takes delivery thereof
in the form of an Unrestricted Definitive Note. Upon receipt of

 40
 

 

a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Notes pursuant to the instructions
from the Holder thereof.

(f)            Exchange
Offer. Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.2 and an Opinion of
Counsel for the Company as to certain matters discussed in this Section 2.6(f),
the Trustee shall authenticate (i) one or more Unrestricted Global Notes
in an aggregate principal amount equal to the sum of (A) the principal
amount of the beneficial interests in the Restricted Global Notes exchanged or
transferred for beneficial interests in Unrestricted Global Notes in connection
with the Exchange Offer pursuant to Section 2.6(b)(4) and (B) the
principal amount of Restricted Definitive Notes exchanged or transferred for
beneficial interests in Unrestricted Global Notes in connection with the
Exchange Offer pursuant to Section 2.6(d)(2), in each case tendered for
acceptance by Persons that certify in the applicable Letters of Transmittal
that (x) they are not Broker-Dealers, (y) they are not participating
in a distribution of the Exchange Notes and (z) they are not affiliates
(as defined in Rule 144) of the Company, and accepted for exchange in the
Exchange Offer, and (ii) Unrestricted Definitive Notes in an aggregate
principal amount equal to the sum of (A) the principal amount of the
Restricted Definitive Notes exchanged or transferred for Unrestricted
Definitive Notes in connection with the Exchange Offer pursuant to Section 2.6(e)(2) and
(B) Restricted Global Notes exchanged or transferred for Unrestricted
Definitive Notes in connection with the Exchange Offer pursuant to Section 2.6(c)(2),
in each case tendered for acceptance by Persons that certify in the applicable
Letters of Transmittal that (x) they are not Broker-Dealers, (y) they
are not participating in a distribution of the Exchange Notes and (z) they
are not affiliates (as defined in Rule 144) of the Company, and accepted
for exchange in the Exchange Offer. Concurrently with the issuance of such
Notes, the Trustee shall cancel any Definitive Notes so surrendered and shall
cause the aggregate principal amount of the applicable Restricted Global Notes
to be reduced accordingly, and the Company shall execute and, upon receipt of
an Authentication Order pursuant to Section 2.2, the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.

The Opinion of Counsel for the Company referenced
above shall state that:

(A)          the
issuance and sale of the Exchange Notes by the Company have been duly
authorized and, when executed by the Company and authenticated by the Trustee
in accordance with the provisions of this Indenture and delivered in exchange
for Series A Notes in accordance with this Indenture and the Exchange
Offer, the Exchange Notes will be entitled to the benefits of this Indenture
and will be valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as the enforceability
thereof may be limited by (x) bankruptcy, fraudulent transfer, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to or affecting creditors’ rights generally and (y) principles of equity
(regardless of whether enforceability is considered in equity or at law); and

 41
 

 

(B)           when
the Exchange Notes are issued and executed by the Company and authenticated by
the Trustee in accordance with the provisions of this Indenture and delivered
in exchange for Series A Notes in accordance with this Indenture and the
Exchange Offer, the Guarantees by the Guarantors endorsed thereon will be
entitled to the benefits of this Indenture and will be the valid and binding
obligations of the Guarantors, enforceable against the Guarantors in accordance
with their terms, except as the enforceability thereof may be limited by (x) bankruptcy,
fraudulent transfer, insolvency, reorganization, moratorium or similar laws now
or hereafter in effect relating to or affecting creditors’ rights generally and
(y) principles of equity (regardless of whether enforceability is
considered in equity or at law).

(g)           Legends.
The following legends shall appear on the face of all Global Notes and
Definitive Notes issued under this Indenture unless specifically stated
otherwise in the applicable provisions of this Indenture.

(1)           Private
Placement Legend.

(A)          Except
as permitted by subparagraph (B) below, each Global Note and each
Definitive Note (and all Notes issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:

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 (1) REPRESENTS THAT (X) IT
IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (Y) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, OR (Z) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR”
WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS TWO YEARS (OR SUCH OTHER
PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) UNDER THE
SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES BY NON-AFFILIATES
WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE
ISSUER OR ANY SUBSIDIARIES OF THE

 42
 

 

ISSUER, (B) PURSUANT TO
A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THIS SECURITY IS 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 UNDER THE SECURITIES ACT 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 UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS 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 ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E), OR (F) 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.

(B)           Notwithstanding
the foregoing, any Global Note or Definitive Note issued pursuant to
subparagraphs (b)(4), (c)(2), (c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or (f) to
this Section 2.6 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement Legend.

(2)           Global
Note Legend. To the extent required by the Depositary, each Global Note
shall bear legends in substantially the following forms:

THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) 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 TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF
THE INDENTURE, (III) THIS

 43
 

 

GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11
OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR 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. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

(3)           Reg S
Temporary Global Note Legend. To the extent required by the Depositary,
each Reg S Temporary Global Note shall bear a legend in substantially the
following form:

THE
RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH
HOLDER HOLDS THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT
INTEREST FROM ACCRUING ON THIS NOTE.

(h)           Cancellation
and/or Adjustment of Global Notes. At such time as all beneficial interests
in a particular Global Note have been exchanged for Definitive Notes or a
particular Global Note has been redeemed, repurchased or cancelled in whole and
not in part, each such Global Note shall be returned to or retained and
cancelled by the Trustee in accordance with Section 2.11. At any time
prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note shall be reduced
accordingly and

 44
 

 

an endorsement may be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee 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 Note, such other Global Note shall be increased accordingly
and an endorsement may be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

(i)            General
Provisions Relating to Transfers and Exchanges.

(1)           To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Global Notes and Definitive Notes upon receipt
of an Authentication Order.

(2)           No
service charge shall be made to a holder of a beneficial interest in a Global
Note or to a Holder of a Definitive Note 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
(other than any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.7, 4.13 and 4.14).

(3)           The
Registrar shall not be required to register the transfer of or exchange any
Note selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.

(4)           All
Global Notes and Definitive Notes issued upon any registration of transfer or
exchange of Global Notes or Definitive Notes shall be the valid obligations of
the Company, evidencing the same Indebtedness, and entitled to the same
benefits under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.

(5)           The
Company shall not be required (A) to issue, to register the transfer of or
to exchange any Notes during a period beginning at the opening of business 15
days before the day of any selection of Notes for redemption under Section 3.3
and ending at the close of business on the day of selection, (B) to
register the transfer of or to exchange any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part or (C) to register the transfer of or to exchange a Note between an
Interest Record Date and the next succeeding Interest Payment Date.

(6)           Prior
to due presentment for the registration of a transfer of any Note, the Trustee,
any Agent and the Company may deem and treat the Person in whose name any Note
is registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Notes and for all other purposes,
and none of the Trustee, any Agent or the Company shall be affected by notice
to the contrary.

(7)           The
Trustee shall authenticate Global Notes and Definitive Notes in accordance with
the provisions of Section 2.2.

 45
 

 

(8)           All
certifications, certificates and Opinions of Counsel required to be submitted
to the Registrar pursuant to this Section 2.6 to effect a registration of
transfer or exchange may be submitted by facsimile.

Notwithstanding anything herein to the contrary, as to
any certifications and certificates delivered to the Registrar pursuant to this
Section 2.6, the Registrar’s duties shall be limited to confirming that
any such certifications and certificates delivered to it are in the form of
Exhibits B, C and D attached hereto. The Registrar shall not be responsible
for confirming the truth or accuracy of representations made in any such
certifications or certificates.

SECTION 2.7                                                  REPLACEMENT NOTES

If any mutilated Note is surrendered to the Trustee or
the Company and the Trustee and the Company receive evidence (which evidence
may be from the Trustee) to their satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee’s
requirements are met. If required by the Trustee or the Company, an affidavit
of lost certificate and/or an indemnity bond or other indemnity must be
supplied by the Holder that is sufficient in the judgment of the Trustee and
the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note. Every
replacement Note is an additional obligation of the Company and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.

SECTION 2.8                                                  OUTSTANDING NOTES

The Notes outstanding at any time are all the Notes
authenticated by the Trustee (including any Note represented by a Global Note)
except for those cancelled by it or at its direction, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this Section 2.8
as not outstanding. Except as set forth in Section 2.9, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company
holds the Note. If a Note is replaced pursuant to Section 2.7, such Note,
together with the Guarantee of that particular Note endorsed thereon, ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.1,
it ceases to be outstanding and interest (and Liquidated Damages, if any) on it
ceases to accrue. If the Paying Agent (other than the Company, a Subsidiary of
the Company or an Affiliate of any thereof) holds, on a redemption date or the
maturity date, money sufficient to pay Notes payable on that date, then on and
after that date such Notes shall be deemed to be no longer outstanding and
shall cease to accrue interest (and Liquidated Damages, if any).

 46
 

 

SECTION 2.9                                                  TREASURY NOTES

In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by the Company, or by any Affiliate of the Company, shall be
considered as though not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes that a Trust Officer of the Trustee actually knows are
so owned shall be so disregarded.

SECTION 2.10                                            TEMPORARY NOTES

Until certificates representing Notes are ready for
delivery, the Company may prepare, and the Trustee, upon receipt of an
Authentication Order, shall authenticate, temporary Notes. Temporary Notes
shall be substantially in the form of Definitive Notes but may have variations
that the Company considers appropriate for temporary Notes and as shall be
reasonably acceptable to the Trustee. Without unreasonable delay, the Company
shall prepare, and the Trustee shall authenticate, Definitive Notes in exchange
for temporary Notes. Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.

SECTION 2.11                                            CANCELLATION

The Company at any time may deliver Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee, or, at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Company or an Affiliate of the Company), and no
one else, shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall dispose of cancelled
Notes in accordance with its procedures for the disposition of cancelled
securities in effect as of the date of such disposition (subject to the record
retention requirement of the Exchange Act). Certification of the disposition of
all cancelled Notes shall be delivered to the Company. The Company may not
issue new Notes to replace Notes that it has paid or that have been delivered
to the Trustee for cancellation.

SECTION 2.12                                            DEFAULTED INTEREST

Any interest (or Liquidated Damages, if any) on any
Note which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date, plus, to the extent lawful, any interest payable on the
defaulted interest (or Liquidated Damages, if any) at the rate and in the
manner provided in Section 4.1 and in the Note (herein called “Defaulted Interest”), shall forthwith
cease to be payable to the registered Holder on the relevant Interest Record
Date, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in paragraph (a) or (b) below:

(a)           The
Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Notes are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee and the Paying Agent
in writing of the amount of Defaulted Interest proposed to be paid on each Note
and the date of the proposed

 47
 

 

payment,
and at the same time the Company shall deposit with the Paying Agent an amount
of cash equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements reasonably satisfactory to the
Paying Agent for such deposit prior to the date of the proposed payment, such
cash when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as provided in this paragraph (a). Thereupon
the Paying Agent shall fix a “Special Record
Date” for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Paying Agent of the notice
of the proposed payment. The Paying Agent shall promptly notify the Company and
the Trustee of such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder at its address as it appears in the Note register
maintained by the Registrar not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the persons in whose names the Notes (or their respective
predecessor Notes) are registered on such Special Record Date and shall no
longer be payable pursuant to the following paragraph (b).

(b)           The
Company may make payment of any Defaulted Interest in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee and the Paying Agent of
the proposed payment pursuant to this clause, such manner shall be deemed
practicable by the Trustee and the Paying Agent.

Subject to the foregoing provisions of this Section 2.12,
each Note delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to interest
(and Liquidated Damages, if any) accrued and unpaid, and to accrue, which were
carried by such other Note.

SECTION 2.13                                            CUSIP NUMBERS

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

SECTION 2.14                                            ISSUANCE OF ADDITIONAL NOTES

The Company may, subject to Section 4.11 and
applicable law, issue Additional Notes under this Indenture. The Notes issued
on the Issue Date and any

 48

 

Additional Notes subsequently issued shall be treated
as a single class for all purposes under this Indenture.

ARTICLE III

REDEMPTION

SECTION 3.1                                                  OPTIONAL REDEMPTION

(a)           Except as
set forth in clause (b) of this Section 3.1, the Company shall
not have the right to redeem any Notes pursuant to this Section 3.1 prior
to June 1, 2009. The Notes will be redeemable for cash at the option of
the Company, in whole or in part, at any time on or after June 1, 2009, at
the following redemption prices (expressed as percentages of the principal
amount) if redeemed during the 12-month period commencing June 1 of
the years indicated below, in each case, together with accrued and unpaid
interest and Liquidated Damages, if any, thereon to the Redemption Date:

	
  Year

  	
   

  	
   

  	
   

  	
  Percentage

  	
   

  
	
  2009

  	
   

  	
  104.500

  	
  %

  
	
  2010

  	
   

  	
  102.250

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)           Notwithstanding
the provisions of clause (a) of this Section 3.1, at any time or
from time to time prior to June 1, 2009, upon a Qualified Equity Offering
for cash, up to 35% of the aggregate principal amount of the Notes issued
pursuant to this Indenture may be redeemed at the option of the Company within
90 days of such Qualified Equity Offering, with cash received by the Company,
from the Net Cash Proceeds of such Qualified Equity Offering, at a redemption
price equal to 109.000% of the principal amount thereof, together with accrued
and unpaid interest and Liquidated Damages, if any, thereon to the Redemption
Date; provided, however, that
immediately following such redemption not less than 65% of the aggregate
principal amount of the Notes issued pursuant to this Indenture on the Issue
Date remain outstanding.

(c)           Any
redemption pursuant to this Section 3.1 shall be made pursuant to the
provisions of Sections 3.2 through 3.7.

SECTION 3.2                                                  NOTICES TO TRUSTEE

If the Company elects to redeem Notes pursuant to Section 3.1,
it shall notify the Trustee and the Paying Agent in writing of the Redemption
Date and the principal amount of Notes to be redeemed and whether it wants the
Paying Agent to give notice of redemption to the Holders.

If the Company elects to reduce the principal amount
of Notes to be redeemed pursuant to Section 3.1 by crediting against any
such redemption Notes it has not previously

 49
 

 

delivered to the Trustee and the Paying Agent for
cancellation, it shall so notify the Trustee, in the form of an Officers’
Certificate, and the Paying Agent of the amount of the reduction and deliver
such Notes with such notice.

The Company shall give each notice to the Trustee and
the Paying Agent provided for in this Section 3.2 at least 15 days before
the date on which the notice of redemption is to be given (unless a shorter
notice shall be satisfactory to the Trustee and the Paying Agent). Any such
notice may be cancelled at any time prior to notice of such redemption being
mailed to any Holder and shall thereby be void and of no effect.

SECTION 3.3                                                  SELECTION OF NOTES TO BE REDEEMED

If less than all of the Notes are to be redeemed at
any time, the Trustee shall select the Notes or portions thereof to be redeemed
among the Holders of the Notes in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed
or, if the Notes are not so listed, on a pro
rata basis, by lot or in accordance with any other method the
Trustee considers fair and appropriate.

The Trustee shall make the selection from the Notes
outstanding and not previously called for redemption and shall promptly notify
the Company and the Paying Agent in writing of the Notes selected for
redemption and, in the case of any Note selected for partial redemption, the
principal amount thereof to be redeemed. Notes in denominations of $1,000 may
be redeemed only in whole. The Trustee may select for redemption portions
(equal to $1,000 or any integral multiple thereof) of the principal of Notes
that have denominations larger than $1,000. Provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called for
redemption.

SECTION 3.4                                                  NOTICE OF REDEMPTION

At least 30 days, but not more than 60 days, prior to
the Redemption Date, the Company shall mail a notice of redemption by first
class mail, postage prepaid, to the Trustee, the Paying Agent and each Holder
whose Notes are to be redeemed. At the Company’s request delivered at least 15
days prior to the date on which such notice is to be given (unless a shorter
period shall be acceptable to the Paying Agent), the Paying Agent shall give
the notice of redemption in the Company’s name and at the Company’s expense. Such
request shall set forth the information to be stated in such notice as provided
in this section. Each notice for redemption shall identify the Notes to be
redeemed and shall state:

(a)           the
Redemption Date;

(b)           the
Redemption Price, including accrued and unpaid interest and Liquidated Damages,
if any, to be paid upon such redemption;

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

(d)           that Notes
called for redemption must be surrendered to the Paying Agent at the address
specified in such notice to collect the Redemption Price;

 50
 

 

(e)           that,
unless (1) the Company defaults in its obligation to deposit with the
Paying Agent cash which through the scheduled payment of principal and interest
(and Liquidated Damages, if any) in respect thereof in accordance with their
terms shall provide the amount to fund the Redemption Price in accordance with Section 3.6
or (2) such redemption payment is prohibited, interest (and Liquidated
Damages, if any) on Notes called for redemption ceases to accrue on and after
the Redemption Date and the only remaining right of the Holders of such Notes
is to receive payment of the Redemption Price, including accrued and unpaid
interest (and Liquidated Damages, if any) to the Redemption Date, upon
surrender to the Paying Agent of the Notes called for redemption and to be
redeemed;

(f)            if any
Note is being redeemed in part, the portion of the principal amount, equal to
$1,000 or any integral multiple thereof, of such Note to be redeemed and that,
on and after the Redemption Date, and upon surrender of such Note, a new Note
or Notes in aggregate principal amount equal to the unredeemed portion thereof
shall be issued;

(g)           if less
than all the Notes are to be redeemed, the identification of the particular
Notes (or portion thereof) to be redeemed, as well as the aggregate principal
amount of such Notes to be redeemed and the aggregate principal amount of Notes
to be outstanding after such partial redemption;

(h)           the CUSIP
number of the Notes to be redeemed; and

(i)            that the
notice is being sent pursuant to this Section 3.4 and pursuant to the
optional redemption provisions of Section 3.1.

SECTION 3.5                                                  EFFECT OF NOTICE OF REDEMPTION

Once notice of redemption is mailed in accordance with
Section 3.4, Notes called for redemption become due and payable on the
Redemption Date and at the Redemption Price, including accrued and unpaid
interest (and Liquidated Damages, if any) to the Redemption Date. Upon
surrender to the Trustee or Paying Agent, such Notes called for redemption
shall be paid at the Redemption Price, including interest and Liquidated
Damages, if any, accrued and unpaid to the Redemption Date; provided, that if the Redemption Date is
on or after an Interest Record Date and is on or before the associated Interest
Payment Date, any accrued and unpaid interest and Liquidated Damages, if any,
due on such Interest Payment Date shall be paid on such Interest Payment Date
to the Person in whose name a Note is registered at the close of business on such
Interest Record Date.

SECTION 3.6                                                  DEPOSIT OF REDEMPTION PRICE

On or prior to the Redemption Date, the Company shall
deposit with the Paying Agent (other than the Company or an Affiliate of the
Company) cash sufficient to pay the Redemption Price of all Notes to be
redeemed on such Redemption Date (other than Notes or portions thereof called
for redemption on that date that have been delivered by the Company to the
Trustee for cancellation). The Paying Agent shall promptly return to the
Company any cash so deposited which is not required for that purpose upon the
written request of the Company.

 51
 

 

If the Company complies with the preceding
paragraph and payment of the Notes called for redemption is not prohibited
for any reason, interest (and Liquidated Damages, if any) on the Notes to be
redeemed shall cease to accrue on the applicable Redemption Date, whether or
not such Notes are presented for payment. Notwithstanding anything herein to
the contrary, if any Note surrendered for redemption in the manner provided in
the Notes shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall
(and Liquidated Damages, if any) continue to accrue and be paid from the
Redemption Date until such payment is made on the unpaid principal, and, to the
extent lawful, on any interest not paid on such unpaid principal, in each case
at the rate and in the manner provided in Section 4.1 and the Note.

SECTION 3.7                                                  NOTES REDEEMED IN PART

Upon surrender of a Note that is to be redeemed in
part, the Company shall execute, and the Trustee shall authenticate and deliver
to the Holder, without service charge to the Holder, a new Note or Notes equal
in principal amount to the unredeemed portion of the Note surrendered.

SECTION 3.8                                                  REGULATORY REDEMPTION

Notwithstanding any provision hereof, if any Gaming
Authority requires that a Holder or beneficial owner of Notes must be licensed,
qualified or found suitable under any applicable Gaming Law and such Holder or
beneficial owner fails to apply for a license, qualification or a finding of
suitability within 30 days after being requested to do so by the Gaming
Authority (or such lesser period that may be required by such Gaming
Authority), or if such Holder or such beneficial owner is not so licensed,
qualified or found suitable, the Company shall have the right, at its option, (1) to
require such Holder or beneficial owner to dispose of such Holder’s or
beneficial owner’s Notes within 30 days of receipt of notice of such finding by
the applicable Gaming Authority or such earlier date as may be ordered by such
Gaming Authority or (2) to call for the redemption (a “Required Regulatory Redemption”) of the
Notes of such Holder or beneficial owner at the principal amount thereof or, if
required by such Gaming Authority, the lesser of (a) the price at which
such Holder or beneficial owner acquired the Notes, and (b) the fair
market value of such Notes on the Redemption Date, together with, in either
case, accrued and unpaid interest and, if permitted by such Gaming Authority,
Liquidated Damages, to the earlier of the Redemption Date or such earlier date
as may be required by such Gaming Authority or the date of the finding of
unsuitability by such Gaming Authority, which may be less than 30 days
following the notice of redemption, if so ordered by such Gaming Authority. The
Company shall notify the Trustee in writing of any such redemption as soon as
practicable and the Redemption Price of each Note to be redeemed.

The Holder or beneficial owner applying for a license,
qualification or a finding of suitability must pay all costs of the licensure
and investigation for such qualification or finding of suitability. The Company
is not required to pay or reimburse any Holder of the Notes or beneficial owner
who is required to apply for such license, qualification or finding of
suitability for the costs of the licensure and investigation for such

 52
 

 

qualification or finding of suitability. Such expense
will, therefore, be the obligation of such Holder or beneficial owner.

SECTION 3.9                                                  NO MANDATORY REDEMPTION

The Company shall not be required to make mandatory
redemption payments with respect to the Notes (except for a Required Regulatory
Redemption and any offer to repurchase Notes that the Company is required to
make in accordance with the provisions of Sections 4.13 and 4.14 below). The
Notes shall not have the benefit of any sinking fund.

ARTICLE II

COVENANTS

SECTION 4.1                                                  PAYMENT OF NOTES

The Company shall pay the principal of and interest
(and Liquidated Damages, if any) on the Notes on the dates and in the manner
provided herein and in the Notes. An installment of principal of or interest
(or Liquidated Damages, if any) on the Notes shall be considered paid on the
date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds for the benefit of the Holders (on or before
11:00 a.m. New York City time to the extent necessary to provide the funds
to the Depositary in accordance with the Depositary’s procedures) on that date
cash deposited and designated for and sufficient to pay the installment.

The Company shall pay interest on overdue principal
and on overdue installments of interest (and Liquidated Damages, if any) at the
rate specified in the Notes compounded semi-annually, to the extent lawful.

SECTION 4.2                                                  MAINTENANCE OF OFFICE OR AGENCY

The Company and the Guarantors shall maintain an
office or agency where Notes may be presented or surrendered for payment, where
Notes may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company and the Guarantors in respect of the
Notes and this Indenture may be served. The Company and the Guarantors shall
give prompt written notice to the Trustee and the Paying Agent of the location,
and any change in the location, of such office or agency. If at any time the
Company and the Guarantors shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee and the Paying Agent with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee set forth in Section 12.2.

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

 53
 

 

The City of New York, for such purposes. The Company
and the Guarantors shall give prompt written notice to the Trustee and the
Paying Agent of any such designation or rescission and of any change in the
location of any such other office or agency. The Company hereby initially
designates the Corporate Trust Office of the Trustee as such office.

SECTION 4.3                                                  LIMITATION ON RESTRICTED PAYMENTS

The Company and the Guarantors shall not, and neither
the Company nor the Guarantors shall permit any of their respective
Subsidiaries to, directly or indirectly, make any Restricted Payment if, after
giving effect on a pro forma
basis to such Restricted Payment:

(a)           a Default
or an Event of Default shall have occurred and be continuing;

(b)           the
Company is not permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Debt Incurrence Ratio in Section 4.11; or

(c)           the
aggregate amount of all Restricted Payments made by the Company and its
Subsidiaries, including after giving effect to such proposed Restricted
Payment, on and after the Issue Date, would exceed, without duplication, the
sum of:

(1)           50% of the
Company’s aggregate Consolidated Net Income for the period (taken as one
accounting period), commencing on the first day of the fiscal quarter in which
the Issue Date occurs, to and including the last day of the fiscal quarter
ended immediately prior to the date of each such calculation for which the
Company’s consolidated financial statements are required to be delivered to the
Trustee or, if sooner, filed with the Commission (or, in the event Consolidated
Net Income for such period is a deficit, then minus 100% of such deficit); plus

(2)           the
aggregate Net Cash Proceeds received by the Company from the sale of its
Qualified Capital Stock (other than (i) to one of the Company’s
Subsidiaries, (ii) to the extent applied in connection with a Qualified
Exchange or, to avoid duplication, otherwise given credit for in any provision
of this paragraph (2) or paragraph (3) below (iii) used as
consideration to make a Permitted Investment), after the Issue Date; plus

(3)           except in
each case, in order to avoid duplication, to the extent any such payment or
proceeds have been included in the calculation of Consolidated Net Income, an
amount equal to the net reduction in Investments (other than returns of or from
Permitted Investments) in any Person (including an Unrestricted Subsidiary)
resulting from cash distributions on or cash repayments of any Investments,
including payments of interest on Indebtedness, dividends, repayments of loans
or advances, or other distributions or other transfers of assets, in each case
to the Company or any Subsidiary of the Company or from the Net Cash Proceeds
from the sale of any such Investment or from redesignations of Unrestricted
Subsidiaries as Subsidiaries (valued in each case as provided in the definition
of “Investments”), not to exceed, in each case, the amount of Investments
previously made by the Company or any Subsidiary of the Company in such Person,
including, if applicable, such Unrestricted Subsidiary, less the cost of
disposition; plus

 54
 

 

(4)           $5,000,000.

The foregoing clauses (b) and (c) of
the first paragraph of this Section 4.3, however, shall not prohibit:

(a)           repurchases,
redemptions, or other retirements or acquisitions of Capital Stock from the
Company’s employees, directors or managers (or their heirs or estates) or
employees or directors or managers (or their heirs or estates) of its
Subsidiaries upon the death, disability or termination of employment or
pursuant to the terms of any subscription, stockholder or other agreement or
plan in effect on the Issue Date in an aggregate amount pursuant to this clause
(a) to all employees, directors or managers (or their heirs or estates)
not to exceed (i) $250,000 per fiscal year on and after the Issue Date, or
(ii) $1,000,000 in the aggregate pursuant to this clause (a);

and
the provisions of the first paragraph of this Section 4.3 shall not
prohibit:

(b)           the repurchase
of Equity Interests of the Company upon the exercise of stock options
representing the exercise price thereof;

(c)           any
dividend, distribution or other payment by any of the Company’s Subsidiaries on
its Equity Interests that is paid pro rata to all
holders of such Equity Interests;

(d)           a
Qualified Exchange;

(e)           the
payment of any dividend on Qualified Capital Stock within 60 days after the
date of its declaration if such dividend could have been made on the date of
such declaration in compliance with the foregoing provisions;

(f)            Track
Business Contingent Earnout Payments; or

(g)           so long as
clause (1) of first paragraph of this Section 4.3 is satisfied,
Restricted Payments not otherwise permitted pursuant to this covenant in an
aggregate amount pursuant to this clause (g) not to exceed $30,000,000
since the Issue Date.

The full amount of any Restricted Payment made
pursuant to the foregoing clauses (a), (c), (e), (f) and (g) (but not
pursuant to clause (b) or (d)) of the immediately preceding sentence,
however, will be counted as Restricted Payments made for purposes of the
calculation of the aggregate amount of Restricted Payments available to be made
referred to in clause (3) of the first paragraph of this Section 4.3.

For purposes of this Section 4.3, the amount of
any Restricted Payment made or returned, if other than in cash, shall be the
fair market value thereof, as determined in the reasonable good faith judgment
of the Company’s Board of Directors, unless stated otherwise, at the time made
or returned, as applicable. Additionally, within 5 days of each Restricted
Payment, the Company shall deliver an Officers’ Certificate to the Trustee
describing in reasonable detail the nature of such Restricted Payment, stating
the amount of such Restricted Payment, stating in reasonable detail the
provisions of this Indenture

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pursuant to which such Restricted Payment was made and
certifying that such Restricted Payment was made in compliance with the terms
of this Indenture.

SECTION 4.4                                                  CORPORATE AND PARTNERSHIP EXISTENCE

Except as otherwise permitted by Section 4.13, Article V
or Section 10.4, the Company and the Guarantors shall do or cause to be
done all things necessary to preserve and keep in full force and effect their
respective corporate, partnership or other organizational existence, as the
case may be, and the corporate, partnership or other organizational existence,
as the case may be, of each of their Subsidiaries in accordance with the
respective organizational documents of each of them and the material rights
(charter and statutory) and material corporate franchises of the Company, the
Guarantors and each of their respective Subsidiaries; provided, however, that neither the
Company nor any Guarantor shall be required to preserve, with respect to
themselves, any right or franchise, and with respect to any of their respective
Subsidiaries, any such existence, right or franchise, if (a) the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and (b) the loss thereof is not
adverse in any material respect to the Holders.

SECTION 4.5                                                  PAYMENT OF TAXES AND OTHER CLAIMS

The Company and the Guarantors shall, and each of the
Company and the Guarantors shall cause each of their Subsidiaries to, pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to
taxes) levied or imposed upon the Company, any Guarantor or any of their
Subsidiaries or any of their respective properties and assets and (b) all
material lawful claims, whether for labor, materials, supplies or services,
which have become due and payable and which by law have or may become a Lien
upon the property and assets of the Company, any Guarantor or any of their
Subsidiaries; provided, however,
that neither the Company nor any Guarantor shall be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which disputed amounts adequate reserves
have been established in accordance with GAAP.

SECTION 4.6                                                  MAINTENANCE OF PROPERTIES AND
INSURANCE

The Company and the Guarantors shall cause all
material properties used or useful in the conduct of their business and the
business of each of their Subsidiaries to be maintained and kept in good
condition, repair and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as
in their reasonable judgment may be necessary, so that the business carried on
in connection therewith may be properly conducted at all times; provided, however, that nothing in this Section 4.6
shall prevent the Company or any Guarantor from discontinuing any operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is (a)(i) in the judgment of the Board of
Directors of the Company, desirable in the

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conduct of the business of the Company and (ii) not
adverse in any material respect to the Holders or (b) otherwise permitted
under Section 4.13.

The Company and the Guarantors shall provide, or cause
to be provided, for themselves and each of their Subsidiaries, insurance
(including appropriate self-insurance) against loss or damage of the kinds
that, in the reasonable, good faith opinion of the Board of Directors of the
Company, is adequate and appropriate for the conduct of the business of the
Company, the Guarantors and such Subsidiaries in a prudent manner, with (except
for self-insurance) reputable insurers or with the government of the United
States of America or an agency or instrumentality thereof, in such amounts,
with such deductibles, and by such methods as shall be customary, in the
reasonable, good faith opinion of the Company and adequate and appropriate for
the conduct of the business of the Company, the Guarantors and such
Subsidiaries in a prudent manner for entities similarly situated in the
industry.

SECTION 4.7                                                  COMPLIANCE CERTIFICATE; NOTICE OF
DEFAULT

(a)           The
Company shall deliver to the Trustee within 120 days after the end of its
fiscal year an Officers’ Certificate, one of the signers of which shall be the
principal executive, principal financial or principal accounting officer of the
Company, complying with TIA §314(a)(4) and stating that a review of its
activities and the activities of its Subsidiaries, if any, during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed and fulfilled
its obligations under this Indenture (without regard to notice requirements or
grace periods) and further stating, as to each such Officer signing such
certificate, whether or not the signer knows of any failure by the Company, any
Guarantor or any Subsidiary of the Company to comply with any conditions or
covenants in this Indenture and, if such signer does know of such a failure to
comply, the certificate shall describe such failure with particularity. The
Officers’ Certificate shall also notify the Trustee should the relevant fiscal
year end on any date other than the current fiscal year end date.

(b)           The
Company shall, so long as any of the Notes are outstanding, deliver to the
Trustee, promptly upon becoming aware of any Default or Event of Default, an
Officers’ Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto. The
Trustee shall not be deemed to have knowledge of any Default, any Event of
Default or any such fact unless one of its Trust Officers receives written
notice thereof from the Company or any of the Holders.

SECTION 4.8                                                  REPORTS

Whether or not the Company is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, so long as
any Notes are outstanding, the Company will deliver to the Trustee and deliver
or cause to be delivered, to each Holder, within 5 days after the Company is or
would have been (if it were subject to such reporting obligations) required to
file such with the Commission, (i) annual and quarterly financial
statements substantially equivalent to financial statements that would have
been required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Company is or would have been required to file such
Forms, including in each case, together with a Management’s

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Discussion and Analysis of Financial Condition and
Results of Operations which would be so required, and including, with respect
to annual information only, a report thereon by the Company’s certified
independent public accountants as would be so required, and (ii) all
information that would be required to be contained in a filing with the
Commission on Form 8-K if the Company is or would have been required
to file such reports. From and after the time the Company files a registration
statement with the Commission with respect to the Notes, the Company will file
with the Commission the annual, quarterly and other reports which the Company
is required to file with the Commission at such time as are required to be
filed. The Company’s reporting obligations
with respect to clauses (i) and (ii) above shall be satisfied in the
event the Company files such reports with the Commission on EDGAR and delivers
a copy of such reports to the Trustee, unless the Commission will not accept
such filings.

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

For so long as any Transfer Restricted Notes remain
outstanding, the Company shall make available (which shall include filings by
EDGAR) to all Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act.

SECTION 4.9                                                  LIMITATION ON STATUS AS INVESTMENT
COMPANY

Neither the Company nor any of its Subsidiaries shall
become required to register as an “investment company” (as that term is defined
in the Investment Company Act of 1940, as amended), or from otherwise becoming
subject to regulation under the Investment Company Act.

SECTION 4.10                                            LIMITATION ON TRANSACTIONS WITH
AFFILIATES

The Company and the Guarantors shall not, and neither
the Company nor the Guarantors shall permit any of their respective
Subsidiaries to, on or after the Issue Date, directly or indirectly, sell,
lease, transfer or otherwise dispose of any of their respective properties or
assets to, or purchase any property or assets from, or enter into or suffer to
exist any contract, agreement, understanding, loan, advance, guarantee,
arrangement or transaction with, or for the benefit of, any Affiliate (each of
the foregoing, an “Affiliate Transaction”),
or any series of related Affiliate Transactions (other than Exempted Affiliate
Transactions):

(a)           unless it
is determined that the terms of such Affiliate Transaction(s) are fair and
reasonable to the Company, and no less favorable to the Company than could have
been obtained in an arm’s length transaction with a non-Affiliate,

(b)           if
involving consideration to either party of $2,000,000 or more, unless such
Affiliate Transaction(s) has been approved by a majority of the members of
the

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Company’s Board of Directors that are disinterested in
such transaction (except as provided in clause (c) of this Section 4.10),
and

(c)           if
involving consideration to either party of $5,000,000 or more (or if no members
of the Company’s Board of Directors are disinterested in such transaction)
unless the Company, prior to the consummation thereof, obtains a written
favorable opinion as to the fairness of such transaction(s) to the Company
from a financial point of view from an independent investment banking firm of
national reputation in the United States or, if pertaining to a matter for
which such investment banking firms do not customarily render such opinions, an
appraisal or valuation firm of national reputation in the United States.

Within 5 days of any Affiliate Transaction(s) involving
consideration to either party of $2,000,000 or more, the Company shall deliver
to the Trustee an Officers’ Certificate addressed to the Trustee certifying
that such Affiliate Transaction(s) complied with clauses (a), (b) and
(c) of this Section 4.10, as applicable.

SECTION 4.11                                            LIMITATION ON INCURRENCE OF
ADDITIONAL INDEBTEDNESS

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

Notwithstanding the
foregoing if:

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

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

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

(a)           if no
Event of Default shall have occurred and be continuing, the Company’s
incurrence or the incurrence by any Guarantor of Indebtedness in an aggregate
amount incurred and outstanding at any time pursuant to this paragraph (a) (plus
any

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Refinancing Indebtedness incurred to retire, defease,
refinance, replace or refund such Indebtedness) of up to $10,000,000; and

(b)           the
Company’s incurrence or the incurrence by any Guarantor of Indebtedness
pursuant to the Credit Agreement in an aggregate amount incurred and
outstanding at any time pursuant to this paragraph (b) (plus any
Refinancing Indebtedness incurred to retire, defease, refinance, replace or
refund such Indebtedness) of up to $85,000,000, minus the amount of any such
Indebtedness (1) retired with the Net Cash Proceeds from any Asset Sale or
Event of Loss applied to permanently reduce the outstanding amounts or the
commitments with respect to such Indebtedness pursuant to Section 4.13 or (2) assumed
by a transferee in an Asset Sale.

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

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

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

SECTION 4.12                                            LIMITATIONS ON DIVIDENDS AND OTHER
PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES

The Company and the Guarantors shall not, and neither
the Company nor the Guarantors shall permit any of their respective
Subsidiaries to, directly or indirectly, incur or

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suffer to exist any consensual restriction on the
ability of any Subsidiary of the Company (i) to pay dividends or make
other distributions to or on behalf of, (ii) to pay any obligation to or
on behalf of, (iii) to otherwise transfer assets or property to or on
behalf of, or (iv) to make or pay loans or advances to or on behalf of,
the Company or any of its Subsidiaries, except:

(a)           restrictions
imposed by the Notes or this Indenture or by the Company’s Senior Debt or other
Indebtedness (which may also be guaranteed by the Guarantors) ranking pari passu with the Notes or the
Guarantees, as applicable; provided,
that such restrictions are no more restrictive in any material respect than
those imposed by this Indenture and the Notes;

(b)           restrictions
imposed by applicable law;

(c)           existing
restrictions under Existing Indebtedness;

(d)           restrictions
under any Acquired Indebtedness not incurred in violation of this Indenture or
any agreement (including any Equity Interest) relating to any property, asset,
or business acquired by the Company or any of its Subsidiaries, which
restrictions in each case existed at the time of acquisition, were not put in
place in connection with or in anticipation of such acquisition and are not
applicable to any Person, other than the Person acquired, or to any property,
asset or business, other than the property, assets and business so acquired;

(e)           any
restriction imposed by Indebtedness incurred under the Credit Agreement
incurred pursuant to Section 4.11; provided,
that such restriction or requirement is no more restrictive in any material
respect than that imposed by the Credit Agreement as of the Issue Date;

(f)            restrictions
with respect solely to any of the Company’s Subsidiaries imposed pursuant to a
binding agreement which has been entered into for the sale or disposition of
all of the Equity Interests or assets of such Subsidiary; provided, that such restrictions apply
solely to the Equity Interests or assets of such Subsidiary which are being
sold;

(g)           restrictions
on transfer contained in Purchase Money Indebtedness not incurred in violation
of this Indenture; provided, that
such restrictions relate only to the transfer of the property acquired with the
proceeds of such Purchase Money Indebtedness; and

(h)           in
connection with and pursuant to permitted refinancings, the replacement of
restrictions imposed pursuant to clauses (a), (c), (d) or (g) or
this clause (h) of this Section 4.12 that are not more
restrictive in any material respect than those being replaced and do not apply
to any other Person or assets than those that would have been covered by the
restrictions in the Indebtedness so refinanced.

Notwithstanding the foregoing, (i) there may
exist customary provisions restricting subletting or assignment of any lease or
restricting disposition or distribution of assets or property in joint venture
agreements, asset sale agreements, stock sale agreements

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and other similar agreements, in each case entered
into in the ordinary course of business, consistent with industry practice and (ii) any
asset subject to a Lien which is not prohibited to exist with respect to such
asset pursuant to the terms of this Indenture may be subject to customary
restrictions on the transfer or disposition thereof pursuant to such Lien.

SECTION 4.13                                            LIMITATION ON SALES OF ASSETS AND
SUBSIDIARY STOCK

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

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

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

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

For purposes of clause (a) of the preceding
sentence, total consideration received means the total consideration received
for such Asset Sales minus the amount of (i) Purchase Money Indebtedness
secured solely by the assets sold and assumed by a transferee; provided, that the Company is and its
Subsidiaries are fully released from obligations in connection therewith and (ii) property
that within 30 days of such Asset Sale is converted into cash or Cash
Equivalents; provided, that such
cash and Cash Equivalents shall be treated as Net Cash Proceeds attributable to
the original Asset Sale for which such property was received.

Within 360 days following such Asset Sale, Net Cash
Proceeds therefrom shall be:

(a)           (i) used
to retire Purchase Money Indebtedness secured by the asset which was the
subject of the Asset Sale, or (ii) used to retire and permanently reduce
Indebtedness incurred under the Credit Agreement and other Senior Debt;
provided, that in the case of a revolver or similar arrangement that makes
credit available, such commitment is permanently reduced by such amount; or

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(b)           invested
in assets and property (other than notes, bonds, obligations and securities,
except in connection with the acquisition of a Subsidiary which is a Guarantor
in a Related Business) which in the reasonable good faith judgment of the
Company’s Board of Directors will immediately constitute or be a part of a
Related Business of the Company or such Subsidiary (if it continues to be a
Subsidiary) immediately following such transaction.

All Net Cash Proceeds from an Event of Loss shall be
used as follows: (1) first, the Company shall use such Net Cash Proceeds
to the extent deemed necessary or appropriate to rebuild, repair, replace or
restore the assets subject to such Event of Loss with comparable assets and (2) then,
to the extent any Net Cash Proceeds from an Event of Loss are not used as
described in the preceding clause (a), all such remaining Net Cash Proceeds
shall be reinvested or used as provided in the immediately preceding clause (a) or
(b).

The accumulated Net Cash Proceeds from Asset Sales not
applied as set forth in clauses (a) and (b) of the immediately
preceding paragraph and the accumulated Net Cash Proceeds from any Event of
Loss not applied as set forth in clauses (1) and (2) of the
immediately preceding paragraph shall constitute “Excess Proceeds.” Pending the final application of any Net
Cash Proceeds, the Company may temporarily reduce revolving credit borrowings
or otherwise invest or use for general corporate purposes (other than
Restricted Payments that are not solely Restricted Investments) the Net Cash
Proceeds in any manner that is not prohibited by this Indenture.

When the Excess Proceeds equal or exceed $5,000,000,
the Company shall offer to repurchase the Notes, together with any other
Indebtedness ranking on a parity with the Notes and with similar provisions
requiring the Company to make an offer to purchase such Indebtedness with the
proceeds from such Asset Sale pursuant to a cash offer (subject only to
conditions required by applicable law, if any), pro rata in proportion to the respective principal amounts
of such Indebtedness (or accreted values in the case of Indebtedness issued
with an original issue discount) and the Notes (the “Asset Sale Offer”) at a purchase price of 100% of the
principal amount (or accreted value in the case of Indebtedness issued with an
original issue discount) (the “Asset Sale
Offer Price”) together with accrued and unpaid interest and
Liquidated Damages, if any, to the date of payment. The Asset Sale Offer shall
remain open for at least 20 Business Days following its commencement (the “Asset Sale Offer Period”).

Upon expiration of the Asset Sale Offer Period, the
Company shall apply an amount equal to the Excess Proceeds (the “Asset Sale Offer Amount”) plus an amount
equal to accrued and unpaid interest and Liquidated Damages, if any, to the
purchase of all Indebtedness properly tendered in accordance with the
provisions of this covenant (on a pro rata
basis if the Asset Sale Offer Amount is insufficient to purchase all
Indebtedness so tendered) at the Asset Sale Offer Price (together with accrued
and unpaid interest and Liquidated Damages, if any, to the date of payment). To
the extent that the aggregate amount of Notes and such other pari passu Indebtedness tendered pursuant
to an Asset Sale Offer is less than the Asset Sale Offer Amount, the Company
may use any remaining Net Cash Proceeds as otherwise permitted by this
Indenture. Following the consummation of each Asset Sale Offer in accordance
with the provisions of this Section 4.13, the Excess Proceeds amount shall
be reset to zero.

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

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

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

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

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

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

(6)           the Company may and its Subsidiaries
may exchange any property or assets for property or assets of the type set forth
in clause (b) of the third paragraph above; and

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

Any Asset Sale Offer shall be made in compliance with
all applicable laws, rules, and regulations, including, if applicable,
Regulation 14E of the Exchange Act and the rules and regulations
thereunder and all other applicable Federal and state securities laws. To the
extent that the provisions of any securities laws or regulations conflict with
the provisions of this Section 4.13, the Company’s compliance or the
compliance of any of the Company’s Subsidiaries with such laws and regulations
shall not in and of itself cause a breach of the Company’s obligations under
this Section 4.13.

If the payment date in connection with an Asset Sale
Offer hereunder is on or after an Interest Record Date and on or before the
associated Interest Payment Date, any accrued and unpaid interest (and
Liquidated Damages, if any) due on such Interest Payment Date will be paid on
such Interest Payment Date to the Person in whose name a Note is registered at
the close of business on such Interest Record Date.

Notice of an Asset Sale Offer shall be sent, on or
prior to the commencement of the Asset Sale Offer, by first-class mail, by the
Company to each Holder at its registered address, with a copy to the Trustee. The
notice to the Holders shall contain all information,

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instructions and materials required by applicable law
or otherwise material to such Holders’ decision to tender Notes pursuant to the
Asset Sale Offer. The notice, which (to the extent consistent with this
Indenture) shall govern the terms of an Asset Sale Offer, shall state:

(a)           that the
Asset Sale Offer is being made pursuant to such notice and this Section 4.13;

(b)           the Asset
Sale Offer Amount, the Asset Sale Offer Price (including the amount of accrued
but unpaid interest (and Liquidated Damages, if any)), and the date of
purchase;

(c)           that any
Note or portion thereof not tendered or accepted for payment will continue to
accrue interest (and Liquidated Damages, if any) if interest (and Liquidated
Damages, if any) is then accruing;

(d)           that,
unless the Company defaults in depositing cash with the Paying Agent (which may
not for purposes of this Section 4.13, notwithstanding anything in this
Indenture to the contrary, be the Company or any Affiliate of the Company) in
accordance with the last paragraph of this Section 4.13, any Note, or
portion thereof, accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest (and Liquidated Damages, if any) on and after the
payment date in connection with an Asset Sale;

(e)           that
Holders electing to have a Note, or portion thereof, purchased pursuant to an
Asset Sale Offer will be required to surrender their Note, with the form
entitled “Option of Holder to Elect Purchase” on the reverse of the Note
completed, to the Paying Agent (which may not for purposes of this Section 4.13,
notwithstanding any other provision of this Indenture, be the Company or any
Affiliate of the Company) at the address specified in the notice;

(f)            that
Holders will be entitled to withdraw their elections, in whole or in part, if
the Paying Agent receives, prior to the expiration of the Asset Sale Offer, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Notes the Holder is withdrawing and a statement
containing a facsimile signature and stating that such Holder is withdrawing
its election to have such principal amount of the Notes purchased;

(g)           that if
Indebtedness in an aggregate principal amount in excess of the aggregate
principal amount of Notes to be acquired pursuant to the Asset Sale Offer is
tendered and not withdrawn, the Company shall purchase such Indebtedness on a pro rata basis in proportion to the respective principal
amounts (or accreted values in the case of Indebtedness issued with an original
issue discount) thereof  (with such
adjustments as may be deemed appropriate by the Company so that only Notes in
denominations of $1,000 or integral multiples of $1,000 shall be acquired);

(h)           that
Holders whose Notes were purchased only in part will be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered; and

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(i)            the
circumstances and relevant facts regarding such Asset Sale.

On or before the date of purchase, the Company shall (i) accept
for payment Notes or portions thereof properly tendered pursuant to the Asset
Sale Offer (on a pro rata basis if required
pursuant to clause (g) of the immediately preceding paragraph), (ii) deposit
with the Paying Agent cash sufficient to pay the Asset Sale Offer Price for all
Notes or portions thereof so accepted and (iii) deliver to the Trustee
Notes so accepted together with an Officers’ Certificate setting forth the
Notes or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail or deliver to Holders of Notes so accepted payment in an
amount equal to the Asset Sale Offer Price for such Notes, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new Note
equal in principal amount to any unpurchased portion of the Note surrendered. Any
Notes not so accepted shall be promptly mailed or delivered by the Company to
the Holder thereof.

SECTION 4.14                                            REPURCHASE OF NOTES AT THE OPTION OF
THE HOLDER UPON A CHANGE OF CONTROL

(a)           In the
event that a Change of Control has occurred, each Holder of Notes will have the
right, at such Holder’s option, pursuant to an offer (subject only to
conditions required by applicable law, if any) by the Company (the “Change of Control Offer”), to require the
Company to repurchase all or any part of such Holder’s Notes (provided, that the principal amount of
such Notes must be $1,000 or an integral multiple thereof) on a date (the “Change of Control Purchase Date”) that is
no later than 30 Business Days after the occurrence of such Change of Control,
at a cash price equal to 101% of the principal amount thereof (the “Change of Control Purchase Price”),
together with accrued and unpaid interest and Liquidated Damages, if any, to
the Change of Control Purchase Date.

The
Change of Control Offer shall be made within 10 Business Days following a
Change of Control and shall remain open for at least 20 Business Days following
its commencement (the “Change of Control Offer Period”). Upon expiration of the
Change of Control Offer Period, the Company promptly shall purchase all Notes
properly tendered in response to the Change of Control Offer.

(b)           In the
event that, pursuant to this Section 4.14, the Company shall be required
to commence a Change of Control Offer, the Company shall follow the procedures
set forth in this Section 4.14 as follows:

(1)           The
Company shall provide the Trustee and the Paying Agent with written notice of
the Change of Control Offer at least three Business Days before the
commencement of any Change of Control Offer.

(2)           On
or before the commencement of any Change of Control Offer, the Company or the
Trustee (upon the request and at the expense of the Company) shall send, by
first-class mail, a notice to each of the Holders, which (to the extent
consistent with this Indenture) shall govern the terms of the Change of Control
Offer and shall state:

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(A)          that
the Change of Control Offer is being made pursuant to this Section 4.14
and that all Notes, or portions thereof, tendered will be accepted for payment;

(B)           the
Change of Control Purchase Price (including the amount of accrued but unpaid
interest (and Liquidated Damages, if any)) and the Change of Control Purchase
Date;

(C)           that
any Note, or portion thereof, not tendered or accepted for payment will
continue to accrue interest (and Liquidated Damages, if any);

(D)          that,
unless the Company defaults in depositing cash with the Paying Agent in
accordance with the penultimate paragraph of this Section 4.14, or
such payment is prevented for any reason, any Note, or portion thereof,
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest (and Liquidated Damages, if any) on and after the Change of
Control Purchase Date;

(E)           that
Holders electing to have a Note, or portion thereof, purchased pursuant to a
Change of Control Offer will be required to surrender the Note, with the form
entitled “Option of Holder to Elect Purchase” on the reverse of the Note
completed, to the Paying Agent (which may not for purposes of this Section 4.14,
notwithstanding anything in this Indenture to the contrary, be the Company or
any Affiliate of the Company) at the address specified in the notice prior to
the expiration of the Change of Control Offer;

(F)           that
Holders will be entitled to withdraw their election, in whole or in part, if
the Paying Agent receives, prior to the expiration of the Change of Control
Offer, a facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Notes the Holder is withdrawing and a statement
containing a facsimile signature and stating that such Holder is withdrawing
its election to have such principal amount of Notes purchased;

(G)           that
Holders whose Notes are purchased only in part will be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered; and

(H)          a
brief description of the events resulting in such Change of Control.

(3)           On
or before the Change of Control Purchase Date, the Company shall:

(A)          accept for
payment Notes or portions thereof properly tendered and not validly withdrawn
pursuant to the Change of Control Offer;

(B)           deposit
with the Paying Agent an amount in cash sufficient to pay the Change of Control
Purchase Price (together with accrued and unpaid interest

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and Liquidated Damages,
if any, to the Change of Control Purchase Date) of all Notes so tendered; and

(C)           deliver to
the Trustee the Notes so accepted together with an Officers’ Certificate
listing the Notes or portions thereof being purchased by the Company.

The Paying Agent promptly shall pay the Holders of
Notes so accepted an amount equal to the Change of Control Purchase Price
(together with accrued and unpaid interest and Liquidated Damages, if any, to
the Change of Control Purchase Date), and the Trustee promptly will
authenticate and deliver to such Holders a new Note equal in principal amount
to any unpurchased portion of the Note surrendered. Any Notes not so accepted
will be delivered promptly by the Company to the Holder thereof. The Company
publicly will announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Purchase Date.

Any Change of Control Offer shall be made in
compliance with all applicable laws, rules and regulations, including, if
applicable, Regulation 14E under the Exchange Act and the rules thereunder
and all other applicable Federal and state securities laws. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.14, the Company’s compliance or compliance by
any of the Guarantors with such laws and regulations shall not in and of itself
cause a breach of their obligations under this Section 4.14.

If the Change of Control Purchase Date is on or after
an Interest Record Date and on or before the associated Interest Payment Date,
any accrued and unpaid interest (and Liquidated Damages, if any) due on such
Interest Payment Date will be paid to the Person in whose name a Note is
registered at the close of business on such Interest Record Date.

SECTION 4.15                                            WAIVER OF STAY, EXTENSION OR USURY
LAWS

Each of the Company and the Guarantors covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law which would
prohibit or forgive the Company or any Guarantor from paying all or any portion
of the principal of, premium of, or interest (or Liquidated Damages, if any) on
the Notes as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) each of the
Company and the Guarantors hereby expressly waives all benefit or advantage of
any such law and covenants that it shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been
enacted.

SECTION 4.16                                            LIMITATION ON LIENS SECURING
INDEBTEDNESS

The Company and the Guarantors shall not, and neither
the Company nor the Guarantors shall permit any of their respective
Subsidiaries to, directly or indirectly, incur, or suffer to exist any Lien of
any kind, other than Permitted Liens, upon any of their respective

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assets (including, without limitation, all real,
tangible or intangible property) now owned or acquired on or after the date of
this Indenture, or upon any income or profits therefrom, or convey any right to
receive income or profits therefrom.

SECTION 4.17                                            LIMITATIONS ON LINES OF BUSINESS

Neither the Company nor any of its Subsidiaries shall
directly or indirectly engage to any substantial extent in any line or lines of
business activity other than that which, in the reasonable good faith judgment
of the Company’s Board of Directors, is a Related Business.

SECTION 4.18                                            SALE-LEASEBACK TRANSACTIONS

The Company and the Guarantors will not, and will not
permit any of their respective Subsidiaries to, enter into any sale-leaseback
transaction; provided that the
Company and its Subsidiaries may enter into a sale-leaseback transaction if:

(a)           the
Company or such Subsidiary could have (a) incurred Indebtedness in an
amount equal to the Attributable Indebtedness relating to such sale-leaseback
transaction under the Debt Incurrence Ratio in the second paragraph of Section 4.11
and (b) incurred a Lien to secure such Indebtedness pursuant to the
covenant described in Section 4.16;

(b)           the gross
cash proceeds of such sale-leaseback transaction are at least equal to the fair
market value, as determined in the reasonable good faith judgment of the
Company’s Board of Directors and set forth in an Officers’ Certificate
delivered to the Trustee, of the property that is the subject of such
sale-leaseback transaction; and

(c)           the transfer
of assets in such sale-leaseback transaction is permitted by, and the Company
applies the proceeds of such transaction in compliance with, Section 4.13.

SECTION 4.19                                            PRESQUE ISLE DOWNS COVENANTS

(a)           The
Company and the Guarantors shall, and the Company and the Guarantors shall
cause the Company’s Subsidiaries to, use the amount of net proceeds from the
issuance of the Notes solely as follows: (i) to repay on the Issue Date
all then outstanding borrowings under the Credit Agreement, (ii) to use
substantially all of such net proceeds to complete construction of the Presque
Isle Downs Project, including, without limitation, to pay the slots license fee
due to the Commonwealth of Pennsylvania, if and when such facility receives a
slots license, and (iii), to the extent that any amounts of net proceeds are
not needed for the uses set forth in clauses (i) and (ii), for general
corporate purposes.

(b)           The Company and the Guarantors
shall, and the Company and the Guarantors shall cause the Company’s Subsidiaries
to, use commercially reasonable best efforts to construct the Presque Isle
Downs Project with diligence and continuity in a good and workmanlike manner
substantially in accordance with the Plans and Specifications in existence on
the Issue Date. The Company and the Guarantors shall, and the Company and the
Guarantors shall cause the Company’s Subsidiaries to, use their commercially reasonable 

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best efforts to obtain all Gaming Licenses, and all other
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits or registrations from or with any Gaming Authority or other
governmental authority that are necessary for the design, development,
construction, equipping and operation of the Presque Isle Downs Project.

ARTICLE V

SUCCESSOR CORPORATION

SECTION 5.1                                                  LIMITATION ON MERGER, SALE OR
CONSOLIDATION

The Company shall not consolidate with or merge with
or into another Person or, directly or indirectly, sell, lease, convey or
transfer all or substantially all of its assets (such amounts to be computed on
a consolidated basis), whether in a single transaction or a series of related
transactions, to another Person or group of affiliated Persons, unless:

(a)           either (1) the
Company is the Surviving Person or (2) the resulting, surviving or
transferee Person is a corporation organized under the laws of the United
States, any state thereof or the District of Columbia and expressly assumes by
supplemental indenture all of the Company’s Obligations in connection with the
Notes, this Indenture and the Registration Rights Agreement;

(b)           no Default
or Event of Default shall exist or shall occur immediately after giving effect
on a pro forma basis to such
transaction;

(c)           unless
such transaction is solely the merger of the Company and one of the Company’s
previously existing Wholly Owned Subsidiaries which is also a Guarantor for the
purpose of reincorporation into another jurisdiction and which transaction is
not for the purpose of evading this provision and not in connection with any
other transaction, immediately after giving effect to such transaction on a pro forma basis, the Consolidated Net Worth of the
resulting, surviving or transferee Person is at least equal to the Company’s
Consolidated Net Worth immediately prior to such transaction;

(d)           unless
such transaction is solely the merger of the Company and one of the Company’s
previously existing Wholly Owned Subsidiaries which is also a Guarantor for the
purpose of reincorporation into another jurisdiction and which transaction is
not for the purpose of evading this provision and not in connection with any
other transaction, immediately after giving effect to such transaction on a pro forma basis, the resulting, surviving
or transferee Person would immediately thereafter be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio;
and

(e)           each
Guarantor shall have, if required by the terms of this Indenture, confirmed in
writing that its Guarantee shall apply to the Obligations of the Company or the
resulting, surviving or transferee Person in accordance with the Notes, this
Indenture and the Registration Rights Agreement.

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For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise) of all or substantially all of the properties
and assets of one or more of the Company’s Subsidiaries, the Company’s interest
in which constitutes all or substantially all of the Company’s properties and
assets, shall be deemed to be the transfer of all or substantially all of the
Company’s properties and assets.

SECTION 5.2                                                  SUCCESSOR CORPORATION SUBSTITUTED

In the event of any transaction (other than a lease or
transfer of less than all of the assets of the Company) in accordance with Section 5.1
in which the Company is not the surviving Person, the resulting, surviving or
transferee Person shall succeed to and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such resulting, surviving or transferee Person had been named therein as
the Company.

ARTICLE VI

EVENTS OF DEFAULT AND
REMEDIES

SECTION 6.1                                                  EVENTS OF DEFAULT

“Event of Default,”
wherever used herein, means any one of the following events (whatever reason
for such Event of Default and whether it shall be caused voluntarily or
involuntarily or effected, without limitation, by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body)

(a)           the
Company’s failure to pay any installment of interest (or Liquidated Damages, if
any) on the Notes as and when the same becomes due and payable and the
continuance of any such failure for 30 days;

(b)           the
Company’s failure to pay all or any part of the principal, or premium, if any,
on the Notes when and as the same becomes due and payable at maturity,
redemption, by acceleration or otherwise, including, without limitation,
payment of the Change of Control Purchase Price or the Asset Sale Offer Price,
on Notes validly tendered and not properly withdrawn pursuant to a Change of
Control Offer or Asset Sale Offer, as applicable;

(c)           the
Company’s failure or the failure by any of the Guarantors or any of the Company’s
Subsidiaries to observe or perform any other covenant or agreement contained in
the Notes or this Indenture and, except for the provisions under Sections 
4.13 and 4.14, and Article V, the continuance of such failure for a period
of 30 days after written notice is given to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes outstanding;

(d)           a decree,
judgment, or order by a court of competent jurisdiction shall have been entered
adjudicating the Company, any of the Guarantors or any of the Company’s 

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Significant
Subsidiaries as bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization of the Company, any of the Guarantors or any of
the Company’s Significant Subsidiaries under any bankruptcy or similar law, and
such decree or order shall have continued undischarged and unstayed for a
period of 60 days; or a decree, judgment or order of a court of competent
jurisdiction appointing a receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency for the Company, any of the Guarantors, any of the
Company’s Significant Subsidiaries, or any substantial part of the property of
any such Person, or for the winding up or liquidation of the affairs of any
such Person, shall have been entered, and such decree, judgment, or order shall
have remained in force undischarged and unstayed for a period of 60 days;

(e)           the
Company, any of the Guarantors or any of the Company’s Significant Subsidiaries
shall institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization under any bankruptcy or
similar law or similar statute, or shall consent to the filing of any such
petition, or shall consent to the appointment of a custodian, receiver,
liquidator, trustee, or assignee in bankruptcy or insolvency of it or any
substantial part of its assets or property, or shall make a general assignment
for the benefit of creditors, or shall admit in writing its inability to pay
its debts generally as they become due, or take any corporate action in
furtherance of any of the foregoing;

(f)            a default occurs (after giving effect to any
waivers, amendments, applicable grace periods or any extension of any maturity
date) in the Company’s Indebtedness or the Indebtedness of any of the
Guarantors or any of the Company’s Subsidiaries with an aggregate amount
outstanding in excess of $10,000,000 (1) resulting from the failure to pay
principal of or interest on such Indebtedness, or (2) if as a result of
such default, the maturity of such Indebtedness has been accelerated prior to
its stated maturity;

(g)           final
unsatisfied judgments not covered by insurance aggregating in excess of
$10,000,000, at any one time rendered against the Company, any of the
Guarantors or any of the Company’s Subsidiaries and not stayed, bonded or
discharged within 60 days;

(h)           any
Guarantee of a Guarantor ceases to be in full force and effect or becomes
unenforceable or invalid or is declared null and void (other than in accordance
with the terms of the Guarantee and this Indenture) or any Guarantor denies or
disaffirms its Obligations under its Guarantee; and

(i)            the suspension or loss (excluding any voluntary
termination of such rights in connection with a sale, lease or closure of a
site (other than the Mountaineer Racetrack & Gaming Resort), provided
that such sale, lease or closure was otherwise permitted by, and complied with
the provisions of, this Indenture) of the Company’s, any of the Guarantors’ or
any of the Company’s Subsidiaries’ legal right to operate slot machines or to
conduct other gaming operations (other than parimutuel wagering) and such
suspension or loss continues for more than 90 consecutive days or for 120 days
within any consecutive 180-day period.

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SECTION 6.2                                                  ACCELERATION OF MATURITY DATE;
RESCISSION AND ANNULMENT

If an Event of Default occurs and is continuing (other
than an Event of Default specified in Section 6.1(d) or Section 6.1(e) relating
to the Company, any of the Guarantors or any of the Company’s Significant
Subsidiaries), then in every such case, unless the principal of all of the
Notes shall have already become due and payable, either the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes then
outstanding, by notice in writing to the Company (and to the Trustee if such
notice is given by Holders) (an “Acceleration
Notice”), may declare all principal, premium (if any), and accrued
interest (and Liquidated Damages, if any) thereon to be due and payable
immediately.

If an Event of Default specified in Section 6.1(d) or
Section 6.1(e), relating to the Company, any of the Guarantors or any of
the Company’s Significant Subsidiaries occurs, all principal and accrued
interest (and Liquidated Damages, if any) thereon will be immediately due and
payable on all outstanding Notes without any declaration or other act on the
part of the Trustee or the Holders. The Holders of a majority in aggregate
principal amount of the Notes, by written notice to the Trustee, may rescind
any acceleration and its consequences if the rescission would not conflict with
any judgment or decree and if all existing Events of Default (other than the
non-payment of the principal, premium, if any, and interest and Liquidated
Damages, if any, on the Notes that have become due solely because of such
acceleration) have been cured or waived as provided in Section 6.12.

SECTION 6.3                                                  COLLECTION OF INDEBTEDNESS AND SUITS
FOR ENFORCEMENT BY TRUSTEE

The Company covenants that if an Event of Default in
payment of principal, premium, interest or Liquidated Damages specified in
clause (a) or (b) of Section 6.1 occurs and is continuing,
the Company shall, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Notes, the whole amount then due and payable on such Notes
for principal, premium (if any), and interest (and Liquidated Damages, if any),
and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any), and on any overdue
interest (and Liquidated Damages, if any), at the rate borne by the Notes, and,
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including compensation to, and expenses,
disbursements and advances of the Trustee and its agents and counsel and all
other amounts due the Trustee under Section 7.7.

If the Company fails to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an express
trust in favor of the Holders, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same against the Company or any
other obligor upon the Notes and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or any
other obligor upon the Notes, wherever situated.

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If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the
rights of the Holders by such appropriate judicial proceedings as the Trustee
shall deem most effective to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.

SECTION 6.4                                                  TRUSTEE MAY FILE PROOFS OF
CLAIM

In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any other
obligor upon the Notes or the property of the Company or of such other obligor
or their creditors, the Trustee (irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any, or interest
(and Liquidated Damages, if any)) shall be entitled and empowered, by
intervention in such proceeding or otherwise to take any and all actions under
the TIA, including

(a)           to file
and prove a claim for the whole amount of principal (and premium, if any) and
interest (and Liquidated Damages, if any) owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee and its agent and counsel and all other amounts due the Trustee under Section 7.7)
and of the Holders allowed in such judicial proceeding, and

(b)           to collect
and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same;

and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 7.7.

Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 6.5                                                  TRUSTEE MAY ENFORCE CLAIMS
WITHOUT POSSESSION OF NOTES

All rights of action and claims under this Indenture
or the Notes may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the 

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production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust in favor of the Holders, and any recovery
of judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee and its agents and counsel
and all other amounts due the Trustee under Section 7.7, be for the
ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.

SECTION 6.6                                                  PRIORITIES

Any money collected by the Trustee pursuant to this Article VI
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal,
premium (if any), or interest (or Liquidated Damages, if any), upon
presentation of the Notes and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

FIRST:  To the
Trustee in payment of all amounts due pursuant to Section 7.7;

SECOND:  To the
Holders in payment of the amounts then due and unpaid for principal of, premium
(if any), and interest (and Liquidated Damages, if any) on, the Notes in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Notes for principal, premium (if any), and interest
(and Liquidated Damages, if any), respectively; and

THIRD:  To the
Company, the Guarantors or such other Person as may be lawfully entitled
thereto, the remainder, if any, each as their respective interests may appear.

The Trustee may, but shall not be obligated to, fix a
record date and payment date for any payment to the Holders under this Section 6.6.

SECTION 6.7                                                  LIMITATION ON SUITS

No Holder of any Note shall have any right to order or
direct the Trustee to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless

(a)           such
Holder has previously given written notice to the Trustee of a continuing Event
of Default;

(b)           the
Holders of not less than 25% in aggregate principal amount of then outstanding
Notes shall have made written request to the Trustee to institute proceedings
in respect of such Event of Default in its own name as Trustee hereunder;

(c)           such
Holder or Holders have offered to the Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities to be incurred
or reasonably probable to be incurred in compliance with such request;

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(d)           the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and

(e)           no
direction inconsistent with such written request has been given to the Trustee
during such 60-day period by the Holders of a majority in aggregate
principal amount of the outstanding Notes;

it
being understood and intended that no one or more Holders shall have any right in
any manner whatsoever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holders, or
to obtain or to seek to obtain priority or preference over any other Holders or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all the Holders.

SECTION 6.8                                                  UNCONDITIONAL RIGHT OF HOLDERS TO
RECEIVE PRINCIPAL, PREMIUM AND INTEREST

Notwithstanding any other provision of this Indenture,
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of, and premium (if any),
and interest (and Liquidated Damages, if any) on, such Note on the Stated
Maturity (and, in the case of redemption, the Redemption Price on the
applicable Redemption Date; in the case of a Change of Control, the Change of
Control Purchase Price on the Change of Control Purchase Date; and in the case
of an Asset Sale, the Asset Sale Offer Price on the relevant purchase date) and
to institute suit for the enforcement of any such payment after such respective
dates, and such rights shall not be impaired without the consent of such
Holder.

SECTION 6.9                                                  RIGHTS AND REMEDIES CUMULATIVE

Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.7,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every right
and remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

SECTION 6.10                                            DELAY OR OMISSION NOT WAIVER

No delay or omission by the Trustee or by any Holder
of any Note to exercise any right or remedy arising upon any Event of Default
shall impair the exercise of any such right or remedy or constitute a waiver of
any such Event of Default. Every right and remedy given by this Article VI
or by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.

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SECTION 6.11                                            CONTROL BY HOLDERS

The Holder or Holders of a majority in aggregate
principal amount of then outstanding Notes shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred upon the Trustee, provided, that:

(a)           such
direction shall not be in conflict with any applicable rule of law or with
this Indenture;

(b)           the
Trustee shall not determine that the action so directed would be unjustly
prejudicial to the Holders not taking part in such direction; and

(c)           the
Trustee may take any other action deemed proper by the Trustee which is not inconsistent
with such direction.

SECTION 6.12                                            WAIVER OF EXISTING OR PAST DEFAULT

Subject
to Section 6.8, the Holders of a majority in principal amount of the
outstanding Notes by written notice to the Company and to the Trustee, may, on
behalf of all Holders, waive any existing or past Default or Event of Default
hereunder and its consequences under this Indenture, except a Default (i) in
the payment of principal of, premium, if any, Liquidated Damages, if any, or
interest on any Note not yet cured as specified in clauses (a) and (b) of
Section 6.1 or (ii) in respect of a covenant or provision hereof
which, under Article IX, cannot be modified or amended without the consent
of the Holder of each outstanding Note affected, unless all such affected
Holders agree, in writing, to waive such Default.

Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Default or impair the exercise of any right arising
from such Default or Event of Default.

SECTION 6.13                                            UNDERTAKING FOR COSTS

All parties to this Indenture agree, and each Holder
of any Note by its acceptance thereof shall be deemed to have agreed, that in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken, suffered or omitted to be
taken by it as Trustee, any court may in its discretion require the filing by
any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees and expenses, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 6.13
shall not apply to any suit instituted by the Company, to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in aggregate principal amount of the
outstanding Notes, or to any suit instituted by any Holder for enforcement of
the payment of principal of, or premium (if 

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any), or interest (or Liquidated Damages, if any) on,
any Note on or after the Stated Maturity (or, in the case of redemption, on or
after the Redemption Date).

SECTION 6.14                                            RESTORATION OF RIGHTS AND REMEDIES

If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every case,
subject to any determination in such proceeding, the Company, the Guarantors,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.

ARTICLE VII

TRUSTEE

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

SECTION 7.1                                                  DUTIES OF TRUSTEE

(a)           If an
Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent Person would exercise
or use under the circumstances in the conduct of its own affairs.

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

(1)           the
Trustee need perform only those duties as are specifically set forth in this
Indenture and no others, and no covenants or obligations shall be implied in or
read into this Indenture which are adverse to the Trustee, and

(2)           in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. However, in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).

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

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(1)           this
paragraph (c) does not limit the effect of paragraph (b) of this
Section 7.1;

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

(3)           the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.11.

(d)           No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or to take or omit to take any action under this Indenture
or at the request, order or direction of the Holders or in the exercise of any
of its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

(e)           Every
provision of this Indenture that in any way relates to the Trustee is subject
to Sections 7.1 and 7.2.

(f)            The
Trustee shall not be liable for interest on any assets received by it except as
the Trustee may agree in writing with the Company (including without limitation
to the extent the Trustee receives funds prior to the interest payment date in
order to comply with the provisions of Section 4.1). Assets held in trust
by the Trustee need not be segregated from other assets except to the extent
required by law.

SECTION 7.2                                                  RIGHTS OF TRUSTEE

Subject to Section 7.1:

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

(b)           Before the
Trustee acts or refrains from acting, it may consult with counsel and may
require an Officers’ Certificate or an Opinion of Counsel, which shall conform
to Sections 12.4 and 12.5. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such certificate or
advice of counsel.

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

(d)           The
Trustee shall not be liable for any action it or its agent takes or omits to
take in good faith which it reasonably believes to be authorized or within its
rights or powers conferred upon it by this Indenture; provided, however, that the Trustee’s
conduct does not constitute willful misconduct or gross negligence.

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(e)           The
Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, notice,
request, direction, consent, order, bond, debenture or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.

(f)            The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the
Holders, pursuant to the provisions of this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby.

(g)           Unless
otherwise specifically provided for in this Indenture, any demand, request,
direction or notice from the Company or any Guarantor shall be sufficient if
signed by an Officer of the Company or such Guarantor, as applicable.

(h)           The
Trustee shall have no duty to inquire as to the performance of the Company’s or
any Guarantor’s covenants in Article IV or as to the performance by any
Agent of its duties hereunder. In addition, the Trustee shall not be deemed to
have knowledge of any Default or Event of Default except (i) any Event of
Default occurring pursuant to Sections 6.1(a), 6.1(b) and 4.1, or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.

(i)            Whenever
in the administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an Officers’
Certificate, an Opinion of Counsel, or both.

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

SECTION 7.3                                                  INDIVIDUAL RIGHTS OF TRUSTEE

The Trustee in its individual or any other capacity
may become the owner or pledgee of Notes and may otherwise deal with the
Company, any Guarantor, any of their Subsidiaries, or their respective
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.

SECTION 7.4                                                  TRUSTEE’S DISCLAIMER

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

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Trustee’s certificate of authentication, or the use or
application of any funds received by a Paying Agent other than the Trustee.

SECTION 7.5                                                  NOTICE OF DEFAULT

If a Default or an Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Holder notice of the uncured Default or Event of Default within 90 days after
such Default or Event of Default occurs.

SECTION 7.6                                                  REPORTS BY TRUSTEE TO HOLDERS

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

The Company shall promptly notify the Trustee in
writing if the Notes become listed on any stock exchange or automatic quotation
system or of any delisting thereof.

A copy of each report at the time of its mailing to
Holders shall be mailed to the Company and filed with the Commission and each
stock exchange, if any, on which the Notes are listed.

To the extent requested by the Company and at the
Company’s expense, the Trustee will provide any Gaming Authority with:

(a)           copies of
all notices, reports and other written communications that the Trustee gives to
the Holders;

(b)           a list of
all of the Holders promptly after the original issuance of the Notes and
periodically thereafter if the Company so directs;

(c)           notice of
any Default or Event of Default under this Indenture, any acceleration of the
Indebtedness evidenced by the Notes, or the institution of any legal actions or
proceedings before any court or governmental authority in respect of a Default
or Event of Default;

(d)           notice of
the removal or resignation of the Trustee within five Business Days of the
effectiveness thereof;

(e)           notice of
any transfer or assignment of rights under this Indenture known to the Trustee
within five Business Days of the effectiveness thereof;

(f)            a copy of
any amendment to the Notes, the Guarantees or this Indenture within five
Business Days of the effectiveness thereof; and

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(g)           such other
information and documentation that may be requested by any Gaming Authority or
as otherwise required by applicable law.

SECTION 7.7                                                  COMPENSATION AND INDEMNITY

The Company and the Guarantors jointly and severally
agree to pay to the Trustee from time to time such compensation for its
services as the Company and the Trustee shall from time to time agree in
writing. The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company and the Guarantors
shall reimburse the Trustee upon request for all reasonable disbursements,
expenses and advances incurred or made by it in accordance with this Indenture.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee’s agents, accountants, experts and counsel.

The Company and the Guarantors jointly and severally
agree to indemnify each of the Trustee (in its capacity as Trustee) and each
predecessor Trustee and each of its officers, directors, attorneys-in-fact and
agents for, and hold it harmless against, any claim, demand, expense (including
but not limited to reasonable compensation, disbursements and expenses of the
Trustee’s agents and counsel), loss or liability incurred by it without
negligence or bad faith on the part of the Trustee, arising out of or in
connection with the acceptance and the administration of this trust and its
rights or duties hereunder, including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for which
it may seek indemnity; provided, however,
that any failure to so notify the Company shall not relieve the Company or any
Guarantor of its indemnity obligations hereunder. The Company and the
Guarantors shall defend the claim and the Trustee shall provide reasonable
cooperation at the Company’s and the Guarantors’ expense in the defense. The
Trustee may have separate counsel and the Company and the Guarantors shall pay
the reasonable fees and expenses of such counsel; provided, that the Company and the Guarantors will not be
required to pay such fees and expenses if they assume the Trustee’s defense and
if the Trustee is advised by counsel that there is no conflict of interest
between the Company and the Guarantors and the Trustee in connection with such
defense. The Company and the Guarantors need not pay for any settlement made
without their written consent, which shall not be unreasonably withheld. The
Company and the Guarantors need not reimburse any expense or indemnify against
any loss or liability to the extent incurred by the Trustee through its
negligence, bad faith or willful misconduct.

To secure the Company’s and the Guarantors’ payment
obligations in this Section 7.7, the Trustee shall have a lien prior to
the Notes on all assets held or collected by the Trustee, in its capacity as
Trustee, except assets held in trust to pay principal and premium, if any, of
or interest on particular Notes.

When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.1(d) or (e) occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.

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The Company’s and the Guarantors’ obligations under
this Section 7.7 and any lien arising hereunder shall survive the
resignation or removal of the Trustee, the discharge of the Company’s and the
Guarantors’ obligations pursuant to Article VIII and any rejection or
termination of this Indenture under any Bankruptcy Law.

SECTION 7.8                                                  REPLACEMENT OF TRUSTEE

The Trustee may resign by so notifying the Company in
writing. The Holder or Holders of a majority in aggregate principal amount of
the outstanding Notes may remove the Trustee by so notifying the Company and
the Trustee in writing and may appoint a successor trustee with the Company’s
consent. The Company may remove the Trustee if:

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

(b)           the
Trustee is adjudged bankrupt or insolvent;

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

(d)           the
Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee. Within one year after the successor Trustee takes
office, the Holder or Holders of a majority in principal amount of the Notes
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.

A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company. Immediately
after that and provided that all sums owing to the retiring Trustee provided
for in Section 7.7 have been paid, the retiring Trustee shall transfer all
property held by it as trustee to the successor Trustee, subject to the lien,
if any, provided in Section 7.7, the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder.

If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring Trustee (at
the Company’s cost and expense), the Company or the Holder or Holders of at
least 10% in aggregate principal amount of the outstanding Notes may petition
any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee fails to comply with Section 7.10,
any Holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.

Notwithstanding replacement of the Trustee pursuant to
this Section 7.8, the Company’s and the Guarantors’ obligations under Section 7.7
shall continue for the benefit of the retiring Trustee.

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SECTION 7.9                                                  SUCCESSOR TRUSTEE BY MERGER, ETC.

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

SECTION 7.10                                            ELIGIBILITY; DISQUALIFICATION

The Trustee shall at all times satisfy the
requirements of TIA § 310(a)(1), (2) and (5). The Trustee shall have
a combined capital and surplus of at least $25,000,000, as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA § 310(b).

SECTION 7.11                                            PREFERENTIAL COLLECTION OF CLAIMS
AGAINST COMPANY.

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

ARTICLE VIII

LEGAL DEFEASANCE AND
COVENANT DEFEASANCE

AND SATISFACTION AND DISCHARGE

SECTION 8.1                                                  OPTION TO EFFECT LEGAL DEFEASANCE OR
COVENANT DEFEASANCE

The Company may elect to have Section 8.2, at the
Company’s option and at any time, or Section 8.3, at the Company’s option
and at any time, of this Indenture applied to all outstanding Notes and Guarantees
upon compliance with the conditions set forth below in this Article VIII.

SECTION 8.2                                                  LEGAL DEFEASANCE AND DISCHARGE

Upon the Company’s exercise under Section 8.1 of
the option applicable to this Section 8.2, the Company and the Guarantors,
as applicable, shall, subject to the satisfaction of the applicable conditions
set forth in Section 8.4, be deemed to have been discharged from their
respective obligations with respect to all outstanding Notes and Guarantees on
the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose,
Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the Notes, and this Indenture
shall cease to be of further effect as to all outstanding Notes and Guarantees,
except as to be deemed to be “outstanding” only for the purposes of the
Sections of this Indenture referred to in (a) and (b) below, and the
Company and the Guarantors shall be deemed to have satisfied all other of their
respective obligations under such Notes, such Guarantees and this Indenture
(and the Trustee, on demand of and at the expense of the 

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Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: 
(a) the rights of Holders of outstanding Notes to receive payments
in respect of the principal of, premium, if any, and interest (and Liquidated
Damages, if any) on such Notes when such payments are due from the trust fund
described in Section 8.5, (b) the Company’s obligations with respect
to such Notes under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.10, 4.2,
4.4, 4.9, 4.15, 8.5, 8.6 and 8.7 and Article XI, and (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company’s
and the Guarantors’ obligations in connection therewith. Subject to compliance
with this Article VIII, the Company may exercise its option under this Section 8.2
notwithstanding the prior exercise of its option under Section 8.3 with
respect to the Notes.

SECTION 8.3                                                  COVENANT DEFEASANCE

Upon the Company’s exercise under Section 8.1 of
the option applicable to this Section 8.3, the Company and the Guarantors,
as applicable, shall, subject to the satisfaction of the applicable conditions
set forth in Section 8.4, be released from their respective obligations
under the covenants contained in Sections 4.3, 4.6, 4.8, 4.10, 4.11, 4.12,
4.13, 4.14, 4.16, 4.17, 4.18 and 4.19, Article V and the third and fourth
paragraphs of Section 10.1(a) with respect to the outstanding Notes
on and after the date the conditions set forth below are satisfied
(hereinafter, “Covenant Defeasance”),
and the Notes shall thereafter be deemed not “outstanding” for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed “outstanding” for all other purposes hereunder. For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Notes, neither the Company nor any Guarantor need comply with and shall have
any liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under Section 6.1(c),
but, except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby. In addition, upon the Company’s exercise under Section 8.1
of the option applicable to this Section 8.3, and subject to Section 8.4,
(x) Sections 6.1(f) through 6.1(h) shall not constitute
Events of Default with respect to the Notes to the extent such events occur
thereafter and (y) Sections 6.1(k) and 6.1(l) hereof shall not
constitute Event of Defaults to the extent they occur after the 91st day
following the occurrence of the Company’s exercise of Covenant Defeasance; provided, however that for all other
purposes as set forth herein, such Covenant Defeasance provisions shall be
effective.

SECTION 8.4                                                  CONDITIONS TO LEGAL OR COVENANT DEFEASANCE

The following shall be the conditions to the
application of either Section 8.2 or 8.3 to the outstanding Notes:

(a)           The
Company shall irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders of the Notes, U.S. legal tender, U.S. Government Obligations or
a combination thereof, in such amounts as will be sufficient, in the written
opinion of a 

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nationally
recognized firm of independent public accountants, to pay the principal of,
premium, if any, and interest (and Liquidated Damages, if any) on such Notes on
the stated date for payment or any redemption date thereof (and the Company must specify whether the Notes
are being defeased to Stated Maturity or a particular redemption date), and
the Trustee must have, for the benefit of Holders of the Notes, a valid,
perfected, exclusive security interest in such trust;

(b)           in the
case of Legal Defeasance, the Company shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably satisfactory to the Trustee
confirming that:  (A) the Company
has received from, or there has been published by the Internal Revenue Service,
a ruling or (B) since the date of this Indenture, there has been a change
in the applicable federal income tax law, in either case to the effect that,
Holders of Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;

(c)           in the
case of Covenant Defeasance, the Company shall have delivered to the Trustee an
Opinion of Counsel reasonably satisfactory to such Trustee confirming that
Holders of Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;

(d)            (1) no
Default or Event of Default shall have occurred and be continuing on the date
of the deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit) and (2) no Event of
Default relating to bankruptcy or insolvency may occur at any time from the
date of the deposit to the 91st calendar day thereafter (it being understood
that the condition shall not be deemed satisfied until the expiration of such
period);

(e)           such Legal
Defeasance or Covenant Defeasance may not result in a breach or violation of,
or constitute a default under any other material agreement or instrument (other
than this Indenture) to which the Company, any of the Guarantor’s or any of the
Company’s Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;

(f)            the
Company shall have delivered to the Trustee an Officers’ Certificate stating
that the deposit was not made by the Company with the intent to hinder, delay
or defraud any other of creditors of the Company; and

(g)           the
Company shall have delivered to the Trustee (1) an Officers’ Certificate
stating that the conditions set forth in clauses (a) through (f) above
have been satisfied and (2) an Opinion of Counsel stating that the conditions
set forth in clauses (a) (with respect to the validity and perfection of
the security interest), (b), (c) and (e) above have been satisfied.

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The Defeasance will be effective on the day on which
all of the applicable conditions above have been satisfied.

If the amount deposited with the Trustee to effect a
Covenant Defeasance are insufficient to pay the principal of, premium, if any,
and interest (and Liquidated Damages, if any) on the Notes when due, or if any
court enters an order directing the repayment of the deposit to the Company or
otherwise making the deposit unavailable to make payments under the Notes when
due, or if any court enters an order avoiding the deposit of money or otherwise
requires the payment of the money so deposited to the Company or to a fund for
the benefit of its creditors, then (so long as the insufficiency exists or the
order remains in effect) the obligations of the Company and the Guarantors
under this Indenture and the Notes will be revived and the Covenant Defeasance
will be deemed not to have occurred.

SECTION 8.5                                                  DEPOSITED CASH AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS

Subject to Section 8.6, all cash and U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section 8.5,
the “Paying Agent”) pursuant to Section 8.4
in respect of the outstanding Notes shall be held in trust and applied by the
Paying Agent, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any other Paying Agent as
the Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest (and
Liquidated Damages, if any), but such money need not be segregated from other
funds except to the extent required by law.

The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 8.4 or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Notes.

SECTION 8.6                                                  REPAYMENT TO THE COMPANY

(a)           Anything
in this Article VIII to the contrary notwithstanding, the Trustee or the
Paying Agent shall deliver or pay to the Company from time to time upon the
request of the Company any cash or U.S. Government Obligations held by it as
provided in Section 8.4 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under Section 8.4(a)),
are in excess of the amount thereof that would then be required to be deposited
to effect an equivalent Legal Defeasance or Covenant Defeasance.

(b)           Subject to
applicable laws relating to abandoned property, any cash and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee or any
Paying Agent, or then held by the Company, in trust for the payment of the
principal of, premium, if any, or interest (and Liquidated Damages, if any) on
any Note and 

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remaining
unclaimed for two years after such principal, and premium, if any, or interest
(and Liquidated Damages, if any) has become due and payable shall be paid to
the Company on its request; and the Holder of such Note shall thereafter look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

SECTION 8.7                                                  REINSTATEMENT

If the Trustee or Paying Agent is unable to apply any
cash or U.S. Government Obligations in accordance with Section 8.2 or 8.3,
as the case may be, of this Indenture by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company’s and the Guarantors’ obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.2 or 8.3 until such time as the Trustee
or Paying Agent is permitted to apply such money in accordance with
Sections 8.2 and 8.3, as the case may be; provided,
however, that, if the Company makes any payment of principal of,
premium, if any, or interest (and Liquidated Damages, if any) on any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
cash or U.S. Government Obligations held by the Trustee or Paying Agent.

SECTION 8.8                                                  SATISFACTION AND DISCHARGE

The
Company may terminate its obligations and the obligations of the Guarantors
under this Indenture, the Notes and the Guarantees (except as described below)
when:

(a)           all the Notes previously authenticated and
delivered (except lost, stolen or destroyed Notes which have been replaced and
Notes for whose payment money has theretofore been deposited with the Trustee
or the paying agent in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or a Guarantor) have been delivered to the
Trustee for cancellation; or

(b)           (1) 
the Company has given irrevocable and unconditional notice of redemption for
all of the outstanding Notes under Article III, or all outstanding Notes
have otherwise become due and payable, and the Company has irrevocably
deposited or caused to be deposited with the Trustee an amount of money
sufficient to pay and discharge the entire Indebtedness (including all
principal, premium, if any, and accrued interest, and Liquidated Damages, if
any) on all outstanding Notes,

(2)           the
Company has irrevocably deposited or caused to be irrevocably deposited with
the Trustee funds in an amount sufficient to pay and discharge the entire
Indebtedness on the Notes not theretofore delivered to the Trustee for 

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cancellation, for principal of, and interest and Liquidated
Damages, if any, on the Notes to the date of redemption or maturity, as the
case may be, together with irrevocable instructions from the Company directing
the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be,

(3)           each
of the Company and the Guarantors has paid all other sums payable by it under
this Indenture, the Notes and the Guarantees,

(4)           no
Default or Event of Default shall have occurred and be continuing on the date
of such deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit),

(5)           such
deposit shall not result in a breach or violation of, or constitute a default
under, any material agreement or instrument (other than this Indenture) to
which the Company, any of the Guarantors or any of the Company’s Subsidiaries
are a party or by which the Company, any of the Guarantors or any of the
Company’s Subsidiaries are bound, and

(6)           the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel confirming the satisfaction of all conditions set forth in clauses (1) through
(5) above.

ARTICLE IX

AMENDMENTS, SUPPLEMENTS
AND WAIVERS

SECTION 9.1                                                  SUPPLEMENTAL INDENTURES WITHOUT
CONSENT OF HOLDERS

Notwithstanding Section 9.2 hereof, without the
consent of any Holder, the Company, the Guarantors and the Trustee may amend,
modify or supplement this Indenture, the Notes or the Guarantees:

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

(b)           to provide for uncertificated Notes in addition to
or in place of certificated Notes;

(c)           to provide
for the assumption of any of the Company’s or the Guarantors’ obligations to
Holders in the case of a merger or consolidation or a sale of all or
substantially all of the Company’s assets in accordance with this Indenture;

(d)           to
evidence the release of any Guarantor permitted to be released under the terms
of this Indenture or to evidence the addition of any new Guarantor in
accordance with Article X;

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(e)           to comply
with requirements of the Commission in order to effect or maintain the
qualification of this Indenture under the TIA;

(f)            to comply
with applicable Gaming Laws;

(g)           to comply
with the provisions of DTC, Euroclear or Clearstream or the Trustee with
respect to the provisions of this Indenture and the Notes relating to transfers
and exchanges of Notes or beneficial interests therein; or

(h)           to make
any change that would provide any additional rights or benefits to the Holders
or that does not adversely affect the rights of any Holder of Notes under this
Indenture, the Notes, the Guarantees or the Registration Rights Agreement.

SECTION 9.2                                                  AMENDMENTS, SUPPLEMENTAL INDENTURES
AND WAIVERS WITH CONSENT OF HOLDERS

Except as expressly stated otherwise in this Section 9.2,
and subject to Sections 6.8 and 6.12, the Company, the Guarantors and the
Trustee may amend, supplement or otherwise modify this Indenture, the Notes and
the Guarantees, with the consent of the Holders of a majority in aggregate
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, the Notes), and, subject to Sections 6.8 and 6.12, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest or Liquidated Damages
(if any) on the Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture,
the Notes and the Guarantees may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes (including
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, the Notes).

Subject to Sections 6.8 and 6.12, and except as stated
otherwise in this Section 9.2, the Holders of a majority in aggregate
principal amount of the Notes then outstanding may waive compliance in a
particular instance by the Company, any Guarantor or any Subsidiary of the
Company with any provision of this Indenture or the Notes.

It being understood that, except as expressly stated
otherwise in the following paragraph, Sections 4.13 and 4.14 may be amended,
waived or modified in accordance with the first two paragraphs of this Section 9.2.

Without the consent of each Holder affected, an
amendment, supplement, modification or waiver may not (with respect to any
Notes held by a non-consenting Holder):

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

(2)           change the
Stated Maturity on any Note;

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(3)           reduce the
principal of, or any premium (including redemption premium but not including
any redemption premium relating to Sections 4.13 and 4.14) on, any Note;

(4)           reduce the
rate of or change the time for payment of interest (or Liquidated Damages, if
any), including Defaulted Interest, on any Note;

(5)           waive a
Default or Event of Default in the payment of principal of, or premium, if any,
interest or Liquidated Damages, if any, on any Note (except a rescission of
acceleration of the Notes by the Holders of a majority in aggregate principal
amount of the Notes and a waiver of the payment default that resulted from such
acceleration);

(6)           alter any
provisions with respect to the redemption of the Notes or waive any redemption
payment with respect to any Note (other than provisions relating to or payments
required by Sections 4.13 and 4.14);

(7)           reduce the
Change of Control Purchase Price or the Asset Sale Offer Price after the
corresponding Asset Sale or Change of Control has occurred;

(8)           change the
coin or currency in which the principal of, or premium, if any, interest or
Liquidated Damages, if any, on any Note is payable;

(9)           impair the
right to institute suit for the enforcement of payment of the principal of, or
premium, if any, interest or Liquidated Damages, if any, on any Note on or
after the Stated Maturity (or on or after the Redemption Date);

(10)         make any
change in the provisions of this Indenture relating to waivers of past Defaults
with respect to, or the rights of Holders to receive, scheduled payments of
principal of or premium, if any, interest or Liquidated Damages, if any, on the
Notes;

(11)         modify or
change any provision of this Indenture affecting the ranking of the Notes or
any Guarantee in a manner adverse to the Holders;

(12)         release any
Guarantor from any of its obligations under its Guarantee or this Indenture
other than in compliance with this Indenture; or

(13)         make any
changes in the foregoing amendment, supplement and waiver provisions.

It shall not be necessary for the consent of the
Holders under this Section 9.2 to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.

After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.

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After an amendment, supplement or waiver under this Section 9.2
or under Section 9.4 becomes effective, it shall bind each Holder.

In connection with any amendment, supplement or waiver
under this Article IX, the Company may, but shall not be obligated to,
offer to any Holder who consents to such amendment, supplement or waiver, or to
all Holders, consideration for such Holder’s consent to such amendment,
supplement or waiver.

SECTION 9.3                                                  COMPLIANCE WITH TIA

Every amendment, waiver or supplement of this
Indenture or the Notes shall comply with the TIA as then in effect.

SECTION 9.4                                                  REVOCATION AND EFFECT OF CONSENTS

Until an amendment, waiver or supplement becomes
effective, a consent to it by a Holder is a continuing consent by the Holder
and every subsequent Holder of a Note or portion of a Note that evidences the
same debt as the consenting Holder’s Note, even if notation of the consent is
not made on any Note. However, any such Holder or subsequent Holder may revoke
the consent as to its Note or portion of its Note by written notice to the
Company or the Person designated by the Company as the Person to whom consents
should be sent if such revocation is received by the Company or such Person
before the date on which the Trustee receives an Officers’ Certificate
certifying that the Holders of the requisite principal amount of Notes have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.

The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to consent to
any amendment, supplement or waiver, which record date shall be the date so
fixed by the Company notwithstanding the provisions of the TIA. If a record
date is fixed, then notwithstanding the last sentence of the immediately
preceding paragraph, those Persons who were Holders at such record date, and
only those Persons (or their duly designated proxies), shall be entitled to
revoke any consent previously given, whether or not such Persons continue to be
Holders after such record date.

After an amendment, supplement or waiver becomes
effective, it shall bind every Holder, unless it makes a change described in
any of clauses (1) through (13) of Section 9.2, in which case,
the amendment, supplement or waiver shall bind only each Holder of a Note who
has consented to it and every subsequent Holder of a Note or portion of a Note
that evidences the same debt as the consenting Holder’s Note; provided, that any such waiver shall not
impair or affect the right of any Holder to receive payment of principal and
premium of and interest (and Liquidated Damages, if any) on a Note, on or after
the respective dates set for such amounts to become due and payable expressed
in such Note, or to bring suit for the enforcement of any such payment on or
after such respective dates.

SECTION 9.5                                                  NOTATION ON OR EXCHANGE OF NOTES

If an amendment, supplement or waiver changes the
terms of a Note, the Trustee may require the Holder of the Note to deliver it
to the Trustee or require the Holder

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to put an appropriate notation on the Note. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Any failure to
make the appropriate notation or to issue a new Note shall not affect the
validity of such amendment, supplement or waiver.

SECTION 9.6                                                  TRUSTEE TO SIGN AMENDMENTS, ETC.

The Trustee shall sign any amendment or supplemental
indenture authorized pursuant to this Article IX if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If such amendment or supplement does adversely
affect the rights, duties, liabilities or immunities of the Trustee, the
Trustee may, but need not, sign it. In executing any amendment or supplemental
Indenture, the Trustee shall be entitled to receive indemnity reasonably satisfactory
to it and to receive and shall be fully protected in relying upon, an Officers’
Certificate and an Opinion of Counsel stating that the execution of such
amendment or supplemental indenture is authorized or permitted by this
Indenture.

ARTICLE X

GUARANTEE

SECTION 10.1                                            GUARANTEE

(a)           Each of
the Guarantors shall, jointly and severally, irrevocably and unconditionally
guarantee, on a senior subordinated unsecured basis (the “Guarantee”), to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability against
the Company and any other Guarantors of this Indenture, the Notes or the
obligations of the Company under this Indenture or the Notes, that:  (x) the principal of and premium (if
any), and interest (and Liquidated Damages, if any) on the Notes will be paid
in full when due, whether at Stated Maturity or an Interest Payment Date, by
acceleration, call for redemption, upon a Change of Control Offer, upon an
Asset Sale Offer or otherwise; (y) all other obligations of the Company to
the Holders or the Trustee under this Indenture or the Notes will be promptly
paid in full or performed, all in accordance with the terms of this Indenture
and the Notes; and (z) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at maturity, by acceleration, call for
redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise; provided, however,
that, with respect to the Exchange Offer, prior approval by the Nevada Gaming
Authorities of such Guarantee is obtained. Failing payment when due of any
amount so guaranteed for whatever reason, each Guarantor shall be obligated to
pay the same before failure so to pay becomes an Event of Default. Each
Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.

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If the Company or a Guarantor defaults in the payment
of the principal of, premium, if any, or interest (or Liquidated Damages, if
any) on, the Notes when and as the same shall become due, whether upon
maturity, acceleration, call for redemption, upon a Change of Control Offer,
upon an Asset Sale Offer or otherwise, without the necessity of action by the
Trustee or any Holder, each Guarantor shall be required, jointly and severally,
to promptly make such payment in full.

The Company shall cause each of its Subsidiaries
(other than Immaterial Subsidiaries) that is formed or acquired after the date
hereof and each of its subsidiaries that becomes a Subsidiary (other than an
Immaterial Subsidiary) after the date hereof, in each case, concurrently upon
becoming a Subsidiary (other than an Immaterial Subsidiary), to become a
Guarantor hereunder and execute and deliver to the Trustee a supplemental
indenture as provided pursuant to the terms of this Indenture. If, however, a
Subsidiary that was an Immaterial Subsidiary ceases to be an Immaterial
Subsidiary, upon ceasing to be an Immaterial Subsidiary, it shall be required
to become a Guarantor and guarantee, on a joint and several basis with the
other Guarantors, all principal, premium, if any, interest and Liquidated
Damages (if any) on the Notes in accordance with the terms hereof.

Notwithstanding anything herein to the contrary, if
any of the Company’s Subsidiaries that is not a Guarantor guarantees any of the
Company’s other Indebtedness or any other Indebtedness of any of its
Subsidiaries, or the Company or any of its Subsidiaries, individually or
collectively, pledges more than 65% of the Voting Equity Interests of such
Subsidiary to a United States lender to secure Indebtedness of the Company or
Indebtedness of any Guarantor, then such Subsidiary must become a Guarantor in
accordance with the terms hereof.

(b)           Each
Guarantor hereby agrees to the fullest extent permitted by applicable law, that
its obligations with regard to this Guarantee shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any delays in
obtaining or realizing upon or failures to obtain or realize upon collateral,
the recovery of any judgment against the Company, any action to enforce the
same or any other circumstances that might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor hereby waives, to
the fullest extent permitted by applicable law, diligence, presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company or right to require the prior disposition of the assets of the Company
to meet its obligations, protest, notice and all demands whatsoever and
covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.

(c)           If any
Holder or the Trustee is required by any court or otherwise to return to either
the Company or any Guarantor, or any Custodian or similar official acting in
relation to either the Company or such Guarantor, any amount paid by either the
Company or such Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor agrees that it will not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. Each Guarantor 

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further
agrees that, as between such Guarantor, on the one hand, and the Holders and
the Trustee, on the other hand, (i) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Section 6.2 for the
purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration as to the Company of the obligations
guaranteed hereby, and (ii) in the event of any declaration of
acceleration of those obligations as provided in Section 6.2, those
obligations (whether or not due and payable) will forthwith become due and
payable by each of the Guarantors for the purpose of this Guarantee.

(d)           It is the
intention of each Guarantor and the Company that the obligations of each
Guarantor hereunder shall be in, but not in excess of, the maximum amount
permitted by applicable law. Accordingly, if the obligations in respect of the
Guarantee would be annulled, avoided or subordinated to the creditors of any
Guarantor by a court of competent jurisdiction in a proceeding actually pending
before such court as a result of a determination both that such Guarantee was
made by such Guarantor without fair consideration and, immediately after giving
effect thereto, such Guarantor was insolvent or unable to pay its debts as they
mature or left with an unreasonably small capital, then the obligations of such
Guarantor under such Guarantee shall be reduced by such court if and to the extent
such reduction would result in the avoidance of such annulment, avoidance or
subordination; provided, however,
that any reduction pursuant to this paragraph shall be made in the smallest
amount as is strictly necessary to reach such result. For purposes of this
paragraph, “fair consideration”, “insolvency”, “unable to pay its debts as they
mature”, “unreasonably small capital” and the effective times of reductions, if
any, required by this paragraph shall be determined in accordance with
applicable law.

SECTION 10.2                                            EXECUTION AND DELIVERY OF GUARANTEE

Each Guarantor shall, by virtue of such Guarantor’s
execution and delivery of an indenture supplement pursuant to Section 10.1,
be deemed to have signed on each Note issued hereunder the notation of guarantee
set forth on the form of the Notes attached hereto as Exhibit A to the
same extent as if the signature of such Guarantor appeared on such Note.

The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
guarantee set forth in Section 10.1 on behalf of each Guarantor. The
notation of a guarantee set forth on any Note shall be null and void and of no
further effect with respect to the guarantee of any Guarantor which, pursuant
to Section 10.4, is released from such Guarantee.

SECTION 10.3                                            CERTAIN BANKRUPTCY EVENTS

Each Guarantor hereby covenants and agrees, to the
fullest extent that it may do so under applicable law, that in the event of the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, such Guarantor shall not file (or join in any filing of), or otherwise
seek to participate in the filing of, any motion or request seeking to stay or
to prohibit (even temporarily) execution on the Guarantee and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under Section 362
or 105 of the United States Bankruptcy Code or otherwise.

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SECTION 10.4                                            LIMITATION ON MERGER OF SUBSIDIARIES
AND RELEASE OF GUARANTORS

No Guarantor shall consolidate or merge with or into
(whether or not such Guarantor is the surviving Person) another Person unless,
subject to the provisions of the following paragraph and the other
provisions of this Indenture, (1) the Person formed by, resulting from or
surviving any such consolidation or merger (if other than such Guarantor) (a) expressly
assumes all the obligations of such Guarantor pursuant to a supplemental
indenture in form reasonably satisfactory to the Trustee, pursuant to which
such Person shall unconditionally guarantee, on a senior subordinated unsecured
basis, all of such Guarantor’s obligations under such Guarantor’s Guarantee on
the terms set forth herein; and (b) delivers to the Trustee an Opinion of
Counsel that such supplemental indenture and guarantee have been duly
authorized, executed and delivered and that each of such documents and the
Indenture constitutes a legal, valid, binding and enforceable obligation of
such Person, in each case subject to customary qualifications; and (2) immediately
before and immediately after giving effect to such transaction on a pro forma basis, no Default or Event of
Default shall have occurred or be continuing.. The provisions of this Section 10.4
shall not apply to the merger of any Guarantors with and into each other or
with or into the Company.

Upon the sale or disposition (whether by merger, stock
purchase, Asset Sale, sale or transfer of all of the Equity Interests or
otherwise) of a Guarantor (as an entirety) to a Person which is not, and is not
required to become, a Guarantor, or the designation of a Subsidiary as an
Unrestricted Subsidiary, which transaction is otherwise in compliance with this
Indenture (including, without limitation, the provisions of Section 4.14),
such Guarantor will be deemed released from its obligations under its Guarantee
of the Notes and under the Registration Rights Agreement; provided, however, that any such release
shall occur only to the extent that all obligations of such Guarantor under all
of its guarantees of, and under all of its pledges of assets or other security
interests that secure, any of the Company’s Indebtedness or any Indebtedness of
any other of the Company’s Subsidiaries shall also terminate upon such release,
sale or transfer and none of its Equity Interests are pledged for the benefit
of any holder of any of the Company’s Indebtedness or any Indebtedness of any
of the Company’s Subsidiaries.

ARTICLE XI

SUBORDINATION

SECTION 11.1                                            AGREEMENT TO SUBORDINATE

Each of the Company and the Guarantors agrees, and
each Holder by accepting a Note agrees, that the Indebtedness evidenced by the
Notes and the Guarantees is subordinated in right of payment, to the extent and
in the manner provided in this Article XI, to the prior payment in full of
all Senior Debt (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed) of the Company and the Guarantors, and that
the subordination is for the benefit of the holders of Senior Debt.

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SECTION 11.2                                            LIQUIDATION; DISSOLUTION; BANKRUPTCY

Upon any distribution of the assets of the Company or
any of the Guarantors upon any dissolution, winding up, total or partial
liquidation or reorganization of the Company or such Guarantor, whether
voluntary or involuntary, in bankruptcy, insolvency, receivership or a similar
proceeding or upon assignment for the benefit of creditors or any marshalling
of assets or liabilities:

(1)   the holders
of all of the Company’s or such Guarantor’s Senior Debt, as applicable, shall
first be entitled to receive payment in full in cash or Cash Equivalents (or
have such payment duly provided for) or otherwise to the extent holders accept
satisfaction of amounts due by settlement in other than cash or Cash
Equivalents before the Holders are entitled to receive any payment on account
of any Obligation in respect of the Notes, including the principal of, or
premium, if any, or interest (or
Liquidated Damages, if any) on the Notes, or on account of the redemption provisions
of the Notes or any repurchases of Notes, in any such case, other than (i) payments
made with Junior Securities, and (ii) payments made from the trusts
created for the benefit of the Holders pursuant to Article VIII; and

(2)   until all
Obligations with respect to Senior Debt (as provided in the immediately
preceding clause (1)) are paid in full, any payment or distribution of the
Company’s or such Guarantor’s assets of any kind or character from any source,
whether in cash, property or securities (other than (i) payments made with
Junior Securities, and (ii) payments made from the trusts created for the
benefit of the Holders pursuant to Article VIII) to which the Holders or
the Trustee on behalf of the Holders would be entitled (by set-off or
otherwise), but for this Article XI, shall be paid by the liquidating
trustee or agent or other Person making such a payment or distribution directly
to the holders of such Senior Debt or their representative to the extent
necessary to make payment in full (or have such payment duly provided for) on
all such Senior Debt remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Debt.

SECTION 11.3                                            DEFAULT ON DESIGNATED SENIOR DEBT

(a)           The
Company and the Guarantors shall not, and shall not permit any Subsidiary of
the Company to, make payment (by set-off or otherwise), as applicable, on
account of any Obligation in respect of the Notes, including the principal of,
or premium, if any, or interest (or Liquidated Damages, if any) on the Notes,
or on account of the redemption provisions of the Notes or any repurchases of
Notes, for cash or property (other than (i) payments made with Junior
Securities, and (ii) payments made from the trusts created for the benefit
of the Holders pursuant to Article VIII):

(1)           upon
the maturity of any of Designated Senior Debt of the Company or such Guarantor
by lapse of time, acceleration (unless waived) or otherwise, unless and until
all principal of, premium, if any, and the interest on such Designated Senior
Debt are first paid in full in cash or Cash Equivalents (or such payment is
duly 

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provided for) or otherwise to the extent holders accept
satisfaction of amounts due by settlement in other than cash or Cash
Equivalents, or

(2)           in the event of default in the
payment of any principal of, premium, if any, or interest on Designated Senior
Debt of the Company or such Guarantor, as applicable, when it becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
acceleration, declaration or otherwise (a “Payment
Default”), unless and until
such Payment Default has been cured or waived or otherwise has ceased to exist.

(b)           Upon (1) the
happening of an event of default other than a Payment Default that permits the
holders of Designated Senior Debt to declare such Designated Senior Debt to be
due and payable and (2) written notice of such event of default given to
the Company and the Trustee by any holder of Designated Senior Debt or such
holder’s representative (a “Payment Blockage
Notice”), then, unless and until such event of default has been cured
or waived or otherwise has ceased to exist, no payment (by set-off or
otherwise) may be made by or on behalf of the Company or any Guarantor which is
an obligor under such Designated Senior Debt on account of any Obligation in
respect of the Notes, including the principal of, or premium, if any, or
interest (or Liquidated Damages, if any) on the Notes, or on account of the
redemption provisions of the Notes or any repurchases of Notes, in any such
case, other than (i) payments made with Junior Securities, and (ii) payments
made from the trusts created for the benefit of the Holders pursuant to Article VIII.

(c)           Notwithstanding the foregoing, unless the Designated Senior Debt
in respect of which such event of default exists has been declared due and
payable in its entirety within 179 days after the Payment Blockage Notice
is delivered as set forth above (the “Payment
Blockage Period”) (and such declaration has not been rescinded or
waived), at the end of the Payment Blockage Period, the Company and the Guarantors
shall be required to pay all sums not previously paid to the Holders during the
Payment Blockage Period due to the foregoing prohibitions and to resume all
other payments as and when due on the Notes.

(d)           Any
number of Payment Blockage Notices may be given; provided, however,
that:

(1)           not
more than one Payment Blockage Notice shall be given within a period of any 360
consecutive days, and

(2)           no
non-payment default that existed upon the date of such Payment Blockage Notice
or the commencement of such Payment Blockage Period (whether or not such event
of default is on the same issue of Designated Senior Debt) shall be made the
basis for the commencement of any subsequent Payment Blockage Period unless
such default has been cured or waived for a period of not less than 90
consecutive days.

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(e)           Notwithstanding the foregoing, the Company
shall be permitted to repurchase, redeem, repay or prepay any or all of the
Notes to the extent required to do so by any Gaming Authority, as described
under Section 3.8.

SECTION 11.4                                            ACCELERATION OF NOTES

If payment of the Notes is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior Debt of
the acceleration.

SECTION 11.5                                            WHEN DISTRIBUTION MUST BE PAID OVER

(a)           In the
event that, notwithstanding the foregoing provisions of this Article XI,
any payment or distribution of the Company’s or any Guarantor’s assets (other
than Junior Securities) shall be received by the Trustee or the Holders at a
time when such payment or distribution is prohibited by the foregoing
provisions, such payment or distribution shall be held in trust for the benefit
of the holders of such Senior Debt, and upon the proper written request from a
Representative, shall be paid or delivered by the Trustee or such Holders, as
the case may be, to the holders of such Senior Debt remaining unpaid or
unprovided for or to their representative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments evidencing
any of such Senior Debt may have been issued, ratably as directed by the
Company or a Representative, according to the aggregate principal amounts
remaining unpaid on account of such Senior Debt held or represented by each,
for application to the payment of all such Senior Debt remaining unpaid, to the
extent necessary to pay or to provide for the payment of all such Senior Debt
in full in cash or Cash Equivalents or otherwise to the extent holders accept
satisfaction of amounts due by settlement in other than cash or Cash
Equivalents after giving effect to any concurrent payment or distribution to
the holders of such Senior Debt.

(b)           With
respect to the holders of Senior Debt, the Trustee undertakes to perform only
such obligations on the part of the Trustee as are specifically set forth in
this Article XI, and no implied covenants or obligations with respect to
the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall
be entitled by virtue of this Article XI, except if such payment is made
as a result of the willful misconduct or gross negligence of the Trustee.

SECTION 11.6                                            NOTICE BY THE COMPANY

The Company and the Guarantors shall promptly notify
the Trustee and the Paying Agent of any facts known to the Company or any of
the Guarantors that would cause a payment of any Obligations with respect to
the Notes to violate this Article XI, but failure to give such notice
shall not affect the subordination of the Notes to the Senior Debt as provided
in this Article XI.

 99
 

 

SECTION 11.7                                            SUBROGATION

After all Senior Debt is paid in full and until the
Notes are paid in full, Holders of Notes shall be subrogated (equally and
ratably with all other Indebtedness that is pari passu with
the Notes) to the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions otherwise payable to
the Holders of Notes have been applied to the payment of Senior Debt. A
distribution made under this Article XI to holders of Senior Debt that
otherwise would have been made to Holders of Notes is not, as between the
Company and Holders, a payment by the Company on the Notes.

SECTION 11.8                                            RELATIVE RIGHTS

This Article XI
defines the relative rights of Holders of Notes and holders of Senior Debt.
Nothing in this Indenture or the Notes shall:

(a)           affect the
obligation of the Company or the Guarantors, which is absolute and
unconditional, to pay, when due, principal of, or premium, if any, and interest
(and Liquidated Damages, if any) on the Notes in accordance with the terms of
this Indenture and the Notes;

(b)           prevent
the occurrence of any Default or Event of Default under this Indenture or limit
the rights of the Trustee or any Holder to pursue any other rights or remedies
with respect to the Notes.

(c)           affect the
relative rights of Holders of Notes and creditors of the Company and the
Guarantors other than their rights in relation to holders of Senior Debt; or

(d)           prevent
the Trustee or any Holder of Notes from exercising its available remedies upon
a Default or Event of Default, subject to the rights of holders and owners of
Senior Debt to receive distributions and payments otherwise payable to Holders
of Notes.

If the Company fails because of this Article XI
to pay the principal of, or premium, if any,
or interest (or Liquidated Damages, if any) on a Note on the due date,
the failure is still a Default or Event of Default.

SECTION 11.9                                            SUBORDINATION MAY NOT BE
IMPAIRED BY THE COMPANY OR GUARANTORS

No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or the Guarantors or any Holder or by
the failure of the Company or the Guarantors or any Holder to comply with this
Indenture.

SECTION 11.10                                      DISTRIBUTION OR NOTICE TO
REPRESENTATIVE

Whenever a distribution is to be made or a notice
given to holders of Senior Debt, the distribution may be made and the notice
given to their Representative.

 100
 

 

Upon any payment or distribution of assets of the
Company or any of the Guarantors referred to in this Article XI, the
Trustee and the Holders of Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction or upon any certificate of
such Representative or of the liquidating trustee or agent or other Person
making any distribution to the Trustee or to the Holders of Notes for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article XI.

SECTION 11.11                                      RIGHTS OF TRUSTEE AND PAYING AGENT

Notwithstanding the provisions of this Article XI
or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment or distribution by the Trustee, and the Trustee and the Paying Agent
may continue to make payments on the Notes, unless the Trustee shall have
received at its Corporate Trust Office at least five Business Days prior to the
date of such payment written notice of facts that would cause the payment of
any Obligations with respect to the Notes to violate this Article XI. Only
the Company or a Representative may give the notice. Nothing in this Article XI
shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.7.

The Trustee in its individual or any other capacity
may hold Senior Debt with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.

The Trustee shall not be
responsible for any costs, expenses, damages or other liabilities arising
(directly or indirectly) as a result of (i) any filing of a claim or proof
of debt by holders of Designated Senior Indebtedness (or their Representative)
or (ii) any right of holders of Designated Senior Indebtedness (or their
Representative) to file any such claim or proof of debt, in any such case in
accordance with the second paragraph of Section 11.12.

SECTION 11.12                                      AUTHORIZATION TO EFFECT
SUBORDINATION

A Holder by its acceptance of a Note agrees to be
bound by this Article XI and authorizes and expressly directs the Trustee,
on such Holder’s behalf, to take such action as may be necessary or appropriate
to effectuate the subordination between the Holders and the holders of Senior
Debt as provided in this Article XI and appoints the Trustee as
attorney-in-fact for any and all such purposes.

If the Trustee does not file a proper proof of claim
in the form required in such proceeding (a “proper proof of claim”) prior to 15
days before the expiration of the time to file a proof of claim in such
proceeding, then the holders of Designated Senior Debt (or their
Representative) are hereby authorized to have the right to file and are (or is)
hereby authorized to file, in the name of the Trustee, a proof of claim for and
on behalf of the Holders; provided that (i) if the holders of the Designated
Senior Debt (or their Representative) file any proof of claim as contemplated
above and the Trustee shall 

 101
 

 

subsequently file a proper proof of claim in such
proceeding before the expiration of the time to file a proof of claim in such
proceeding, such subsequent proper proof of claim filed by the Trustee shall supersede
any such proof of claim theretofore filed by the holders of the Designated
Senior Debt (or their Representative), and such proof of claim theretofore
filed by the holders of the Designated Senior Debt (or their Representative)
shall thereupon be deemed to be withdrawn, and (ii) the foregoing
provisions of this paragraph shall not be construed to authorize the holders of
the Designated Senior Debt (or their Representative) to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes, or to authorize the
holders of the Designated Senior Debt (or their Representative) to vote in
respect of the claim of any Holder in any such proceeding. This paragraph is
intended solely to permit the holders of Designated Senior Debt to preserve
their “turnover right” pursuant to the applicable subordination provisions in
this Article XI in circumstances where a proper proof of claim has not
been filed by the Trustee before the expiration of the time to file a proof of
claim in a bankruptcy proceeding, and nothing herein is intended to impair the
rights of the Trustee under Section 6.6 and Section 7.7.

SECTION 11.13                                      AMENDMENTS

The provisions of this Article XI shall not be
amended or modified without the written consent of the holders of all Senior
Debt.

SECTION 11.14                                      TRUSTEE NOT FIDUCIARY FOR HOLDERS OF
SENIOR DEBT

The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Debt and shall not be liable to any such holders
if the Trustee shall in good faith mistakenly pay over or distribute to Holders
of Notes or to the Company or to any other person cash, property or securities
to which any holders of Senior Debt shall be entitled by virtue of this Article or
otherwise. With respect to the holders of Senior Debt, the Trustee undertakes
to perform or to observe only such of its covenants or obligations as are
specifically set forth in this Article XI and no implied covenants or
obligations with respect to holders of Senior Debt shall be read into this
Indenture against the Trustee.

SECTION 11.15                                      RIGHTS OF TRUSTEE AS HOLDER OF
SENIOR DEBT; PRESERVATION OF TRUSTEE’S RIGHTS

The Trustee or any authenticating agent in its
individual capacity shall be entitled to all the rights set forth in this Article XI
with respect to any Senior Debt which may at any time be held by it, to the
same extent as any other holder of Senior Debt, and nothing in this Indenture
shall deprive the Trustee or any authenticating agent of any of its rights as
such holder.

Nothing in this Article XI shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.7.

 102
 

 

ARTICLE XII

MISCELLANEOUS

SECTION 12.1                                            TIA CONTROLS

If any provision of this Indenture limits, qualifies,
or conflicts with the duties imposed by operation of the TIA, the imposed
duties, upon qualification of this Indenture under the TIA, shall control.

SECTION 12.2                                            NOTICES

Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if
made:  (a) by personal delivery, (b) by
facsimile (with confirmation of transmission), (c) by recognized overnight
courier guaranteeing next day delivery or (d) by registered or certified
mail, postage prepaid, return receipt requested, and addressed as follows:

If to the Company or any
Guarantor:

MTR Gaming Group, Inc.

State Route 2, South 

P.O. Box 358 

Chester, West Virginia  26034

Facsimile No.: (304) 387-2167

Attention:  Chief Financial Officer

with a copy to:

Ruben &
Aronson, LLP 

3299 K Street, N.W., Suite 403

Washington, D.C. 20007

Facsimile No.: (202) 965-3700

Attention:  Robert L. Ruben

If to the Trustee:

Wells Fargo Bank, N.A.

Corporate Trust Services

213 Court Street - Suite 703

Middletown, CT 06457

Facsimile No.:  (860) 704-6219

Attention:  Corporate Trust Department

Any party by notice to each other party may designate
additional or different addresses as shall be furnished in writing by such party.
Any notice or communication to any party shall be deemed to have been given or
made as of (a) the date so delivered, if personally delivered; (b) when
receipt is acknowledged, if sent by facsimile; (c) the next 

 103
 

 

Business Day after timely delivery to a recognized
overnight courier, if sent by such courier guaranteeing next day delivery; and (d) five
Business Days after mailing if sent by registered or certified mail, postage
prepaid (except that a notice of change of address shall not be deemed to have
been given until actually received by the addressee).

Any notice or communication mailed to a Holder shall
be mailed to him by first class mail or other equivalent means at its address
as it appears on the registration books of the Registrar and shall be
sufficiently given to him if so mailed within the time prescribed.

Failure to mail a notice or communication to a Holder
or any defect in it shall not affect its sufficiency with respect to other
Holders. If a notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.

SECTION 12.3                                            COMMUNICATIONS BY HOLDERS WITH OTHER
HOLDERS

Holders may communicate pursuant to TIA § 312(b) with
other Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA § 312(c).

SECTION 12.4                                            CERTIFICATE AND OPINION AS TO
CONDITIONS PRECEDENT

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

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

(2)           an
Opinion of Counsel (in form and substance reasonably satisfactory to the
Trustee) stating that, in the opinion of such counsel, all such conditions
precedent have been met.

SECTION 12.5                                            STATEMENTS REQUIRED IN CERTIFICATE
OR OPINION

Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall include:

(1)           a
statement that the Person making such certificate or opinion has read such
covenant or condition;

(2)           a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

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

 104
 

 

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

SECTION 12.6                                            RULES BY TRUSTEE, PAYING AGENT,
REGISTRAR

The Trustee may make reasonable rules for action
by or at a meeting of Holders. The Paying Agent or Registrar may make
reasonable rules for its functions.

SECTION 12.7                                            LEGAL HOLIDAYS

“Legal Holiday”
means a Saturday, a Sunday or a day on which banking institutions in New York,
New York are authorized or obligated by law or executive order to close. If a
payment date (including a Redemption Date) is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest (or Liquidated Damages, if any) shall accrue for the
intervening period.

SECTION 12.8                                            GOVERNING LAW

THIS INDENTURE, THE GUARANTEES AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW AND RULE 327(b) OF THE NEW YORK CIVIL
PRACTICE LAWS AND RULES. EACH OF THE COMPANY AND THE GUARANTORS 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 INDENTURE AND THE
NOTES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF
THE COMPANY AND THE GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH 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 PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS
OR OTHERWISE PROCEED AGAINST THE COMPANY AND THE GUARANTORS IN ANY OTHER
JURISDICTION.

 105
 

 

SECTION 12.9                                            NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS

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

SECTION 12.10                                      NO RECOURSE AGAINST OTHERS

No direct or indirect stockholder, employee, officer
or director, as such, past, present or future of the Company, the Guarantors or
any successor entity shall have any personal liability in respect of the
obligations of the Company or the Guarantors under this Indenture or the Notes
solely by reason of his, her or its status as such stockholder, employee,
officer or director; provided,
that this Section 12.10 shall in no way limit the obligation of any
Guarantor pursuant to any Guarantee of the Notes. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of the Notes.

SECTION 12.11                                      SUCCESSORS

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

SECTION 12.12                                      DUPLICATE ORIGINALS

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

SECTION 12.13                                      SEVERABILITY

In case any one or more of the provisions in this
Indenture or in the Notes or in the Guarantees shall be held invalid, illegal
or unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions shall not in any way be affected or impaired thereby, it
being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.

SECTION 12.14                                      TABLE OF CONTENTS, HEADINGS, ETC.

The Table of Contents, Cross-Reference Table and
headings of the Articles, Sections and other subdivisions of this Indenture
have been inserted for convenience of reference only, are not to be considered
a part hereof and shall in no way modify or restrict any of the terms or
provisions hereof.

 106
 

 

SECTION 12.15                                      QUALIFICATION OF INDENTURE

The Company shall qualify this Indenture under the TIA
in accordance with the terms and conditions of the Registration Rights
Agreement and shall pay all costs and expenses (including attorneys’ fees for
the Company and the Trustee) incurred in connection therewith, including, but
not limited to, costs and expenses of qualification of this Indenture and the
Notes and printing this Indenture and the Notes. The Trustee shall be entitled
to receive from the Company any such Officers’ Certificates, Opinions of
Counsel or other documentation as it may reasonably request in connection with
any such qualification of this Indenture under the TIA.

SECTION 12.16                                      REGISTRATION RIGHTS

Certain Holders of the Notes may be entitled to
certain registration rights with respect to such Notes pursuant to, and subject
to the terms of, the Registration Rights Agreement.

[signature pages follow]

 107

SIGNATURES

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the date first written above.

	
  ISSUER:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MTR GAMING GROUP, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GUARANTORS:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MOUNTAINEER PARK, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRESQUE ISLE DOWNS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPEAKEASY GAMING OF LAS VEGAS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  

 

 

 

	
  

  	
   

  	
  SCIOTO DOWNS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPEAKEASY GAMING OF FREMONT, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JACKSON RACING, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MTR HARNESS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WELLS FARGO BANK, N.A., as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joseph O’Donnell

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Joseph O’Donnell

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT
A

[FORM OF NOTE]

MTR GAMING GROUP, INC.

9% [SERIES A] [SERIES B](1) SENIOR
SUBORDINATED NOTE

DUE 2012

	
  

  	
  CUSIP No.:                       

  
	
  No.

  	
            $______________

  

 

MTR Gaming Group, Inc., a Delaware corporation
(the “Company,” which term includes any successors under the Indenture
hereinafter referred to), for value received, hereby promises to pay to               ,
or registered assigns, the principal sum of          
dollars, on June 1, 2012.

Interest
Payment Dates:  June 1 and December 1,
commencing December 1, 2006.

Interest
Record Dates:  May 15 and November 15.

Reference
is made to the further provisions of this Note on the reverse side, which will,
for all purposes, have the same effect as if set forth at this place.

[signature pages follow]

(1)             Series
A should be replaced with Series B in the Exchange Notes.

 A-1
 

 

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

	
  

  	
   

  	
  MTR GAMING GROUP, INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  John Bittner

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  

 

Dated:

 A-2
 

 

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

This is one of the Notes described in the Indenture
hereinafter referred to.

	
  

  	
   

  	
  WELLS FARGO BANK, N.A.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  

 

Dated:

 A-3
 

 

 

(Back of Note)

9% [Series A] [Series B](2) Senior Notes due
2012

[THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) 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 TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF
THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.](3)

[UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR 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. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](4)

[THE
RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS
AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS SPECIFIED IN
THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS
OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE CASH
PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER 

(2)             Series
A should be replaced with Series B in the Exchange Notes.

(3)             To
be included only on Global Notes deposited with DTC as Depositary.

(4)             To
be included only on Global Notes deposited with DTC as Depositary.

 A-4
 

 

HOLDS
THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE.](5)

[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 (1) REPRESENTS THAT (X) IT IS A “QUALIFIED INSTITUTIONAL BUYER”
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (Y) IT IS A NON-U.S.
PURCHASER AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (Z) IT IS AN
INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES
TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS
TWO YEARS (OR SUCH OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE
144(k) UNDER THE SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED
SECURITIES BY NON-AFFILIATES WITHOUT RESTRICTION) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE ISSUER OR ANY SUBSIDIARIES OF THE ISSUER, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS 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 UNDER THE
SECURITIES ACT 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 UNDER THE SECURITIES ACT, (D) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS 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 

(5)             To
be included only on Reg S Temporary Global Notes.

 A-5
 

 

ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E), OR
(F) 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.](6)

Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.

1.     Interest.
MTR Gaming Group, Inc., a Delaware corporation (the “Company”),
promises to pay interest on the principal amount of this Note at 9% per annum
from the Issue Date until maturity and shall pay the Liquidated Damages, if
any, payable pursuant to Section 4 of the Registration Rights Agreement
referred to below. The Company will pay interest and Liquidated Damages, if
any, semi-annually in arrears on June 1 and December 1 of each year,
or if any such day is not a Business Day, on the next succeeding Business Day
(each an “Interest Payment Date”). Interest on the
Notes will accrue from the most recent date to which interest has been paid or
provided for or, if no interest has been paid, from the Issue Date; provided, that if there is no existing Default in the
payment of interest, and if this Note is authenticated between an Interest
Record Date (defined below) referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further,
that the first Interest Payment Date shall be December 1, 2006. The
Company shall pay interest on overdue principal and premium, if any, from time
to time on demand at the rate then in effect; it shall pay interest on overdue
installments of interest and Liquidated Damages, if any (without regard to any
applicable grace periods), from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.

2.             Method of Payment.
The Company will pay interest on the Notes (except Defaulted Interest) and
Liquidated Damages, if any, to the Persons who are registered Holders of Notes
at the close of business on May 15 or November 15 next preceding the
Interest Payment Date (each an “Interest Record Date”),
even if such Notes are cancelled after such Record Date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture
(as defined below) with respect to Defaulted Interest. The Notes will be
payable as to principal, premium, if any, interest and Liquidated Damages, if
any, at the office or agency of the Company maintained for such purpose, or, at
the option of the Company, payment of interest and Liquidated Damages, if any,
may be made by check mailed to the Holders at their addresses set forth in the
register of Holders, and provided, that
payment by wire transfer of immediately available funds to an account within
the United States will be required with respect to principal of and interest,
premium, if any, and Liquidated Damages, if any, on all Global Notes. Such
payment shall be in such 

(6)             To
be included only on Transfer Restricted Notes.

 

 A-6
 

 

coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.

3.             Paying Agent and Registrar.
Initially, Wells Fargo Bank, N.A., the Trustee under the Indenture, will act as
Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.

4.             Indenture. The
Company issued the Notes under an Indenture dated as of May 25, 2006 (the “Indenture”), by and among the Company, the Guarantors and
the Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the “TIA”). The
Notes are subject to all such terms, and Holders are referred to the Indenture
and the TIA for a statement of such terms.

5.             Optional Redemption.

(a)           Except as set forth
in clause (b) of this Section 5, the Company shall not have the
right to redeem any Notes pursuant to this Section 5 prior to June 1,
2009. The Notes will be redeemable for cash at the option of the Company, in
whole or in part, at any time on or after June 1, 2009, at the following
redemption prices (expressed as percentages of the principal amount) if
redeemed during the 12-month period commencing June 1 of the years
indicated below, in each case, together with accrued and unpaid interest and
Liquidated Damages, if any, thereon to the Redemption Date:

	
  Year

  	
   

  	
   

  	
   

  	
  Percentage

  	
   

  
	
  2009

  	
   

  	
  104.500

  	
  %

  
	
  2010

  	
   

  	
  102.250

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)           Notwithstanding the
provisions of clause (a) of this Section 5, at any time or from
time to time prior to June 1, 2009, upon a Qualified Equity Offering for
cash, up to 35% of the aggregate principal amount of the Notes originally
issued pursuant to the Indenture may be redeemed at the option of the Company
within 90 days of such Qualified Equity Offering, with cash received by the
Company, from the Net Cash Proceeds of such Qualified Equity Offering, at a
redemption price equal to 109.000% of the principal amount thereof, together
with accrued and unpaid interest and Liquidated Damages, if any, thereon to the
Redemption Date; provided, however,
that immediately following such redemption not less than 65% of the aggregate
principal amount of the Notes originally issued pursuant to the Indenture on
the Issue Date remain outstanding.

(c)           Notice of redemption
will be mailed by first class mail at least 30 days but not more than 60 days
before the Redemption Date to each Holder whose Notes are to be redeemed at its
registered address. Notes in denominations larger than $1,000 may be redeemed
in part but only in integral multiples of $1,000, unless all of the Notes held
by a Holder are to be redeemed. On and after the Redemption Date, interest (and
Liquidated 

 A-7
 

 

Damages, if
any) ceases to accrue on Notes or portions thereof called for redemption unless
the Company defaults in such payments due on the Redemption Date.

If the Redemption Date is on or after an Interest
Record Date and is on or before the associated Interest Payment Date, any
accrued and unpaid interest and Liquidated Damages, if any, due on such
Interest Payment Date shall be paid on such Interest Payment Date to the Person
in whose name a Note is registered at the close of business on such Interest
Record Date.

Any
redemption of Notes pursuant to this Section 5 shall be made in
accordance with the provisions of Sections 3.1 through 3.7 of the
Indenture.

6.             Mandatory Redemption.
The Company shall not be required to make mandatory redemption payments with
respect to the Notes. The Notes shall not have the benefit of any sinking fund.

7.             Regulatory Redemption.
Notwithstanding any provision hereof, if any Gaming Authority requires that a
Holder or beneficial owner of Notes must be licensed, qualified or found
suitable under any applicable Gaming Law and such Holder or beneficial owner
fails to apply for a license, qualification or a finding of suitability within
30 days after being requested to do so by the Gaming Authority (or such lesser
period that may be required by such Gaming Authority), or if such Holder or
such beneficial owner is not so licensed, qualified or found suitable, the Company
shall have the right, at its option, (1) to require such Holder or
beneficial owner to dispose of such Holder’s or beneficial owner’s Notes within
30 days of receipt of notice of such finding by the applicable Gaming Authority
or such earlier date as may be ordered by such Gaming Authority or (2) to
call for the redemption (a “Required Regulatory
Redemption”) of the Notes of such Holder or beneficial owner at the
principal amount thereof or, if required by such Gaming Authority, the lesser
of (a) the price at which such Holder or beneficial owner acquired the
Notes, and (b) the fair market value of such Notes on the Redemption Date,
together with, in either case, accrued and unpaid interest and, if permitted by
such Gaming Authority, Liquidated Damages, to the earlier of the Redemption
Date or such earlier date as may be required by such Gaming Authority or the
date of the finding of unsuitability by such Gaming Authority, which may be
less than 30 days following the notice of redemption, if so ordered by such
Gaming Authority. The Company shall notify the Trustee in writing of any such
redemption as soon as practicable and the Redemption Price of each Note to be
redeemed.

The Holder or
beneficial owner applying for a license, qualification or a finding of
suitability must pay all costs of the licensure and investigation for such
qualification or finding of suitability. The Company is not required to pay or
reimburse any Holder of the Notes or beneficial owner who is required to apply
for such license, qualification or finding of suitability for the costs of the
licensure and investigation for such qualification or finding of suitability.
Such expense will, therefore, be the obligation of such Holder or beneficial
owner.

 A-8
 

 

8.             Offers to Purchase.

(a)           Change of Control. In the event that a Change of Control has
occurred, each Holder of Notes will have the right, at such Holder’s option,
pursuant to an offer (subject only to conditions required by applicable law, if
any) by the Company (the “Change of Control Offer”),
to require the Company to repurchase all or any part of such Holder’s Notes (provided, that the principal amount of such Notes must be
$1,000 or an integral multiple thereof) on a date (the “Change of
Control Purchase Date”) that is no later than 30 Business Days after
the occurrence of such Change of Control, at a cash price equal to 101% of the
principal amount thereof (the “Change of Control Purchase
Price”), together with accrued and unpaid interest and Liquidated
Damages, if any, to the Change of Control Purchase Date.

The
Change of Control Offer shall be made within 10 Business Days following a
Change of Control and shall remain open for at least 20 Business Days following
its commencement (the “Change of Control Offer Period”). Upon expiration of the
Change of Control Offer Period, the Company promptly shall purchase all Notes
properly tendered in response to the Change of Control Offer.

On or
before the Change of Control Purchase Date, the Company shall (i) accept
for payment Notes or portions thereof properly tendered and not validly
withdrawn pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent an amount in cash sufficient to pay the Change of Control Purchase
Price (together with accrued and unpaid interest and Liquidated Damages, if
any, to the Change of Control Purchase Date) of all Notes so tendered and (iii) deliver
to the Trustee the Notes so accepted together with an Officers’ Certificate
listing the Notes or portions thereof being purchased by the Company. The Paying
Agent promptly shall pay the Holders of Notes so accepted an amount equal to
the Change of Control Purchase Price (together with accrued and unpaid interest
and Liquidated Damages, if any, to the Change of Control Purchase Date), and
the Trustee promptly will authenticate and deliver to such Holders a new Note
equal in principal amount to any unpurchased portion of the Note surrendered. Any
Notes not so accepted will be delivered promptly by the Company to the Holder
thereof. The Company publicly will announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Purchase
Date.

Any
repurchase of Notes pursuant to this Section 8(a) shall be made in
accordance with the provisions of Section 4.14 of the Indenture.

(b)           Asset Sale. Except as otherwise set forth
in Section 4.13 of the Indenture, the Company and the Guarantors shall
not, and neither the Company nor the Guarantors shall permit any of their
respective Subsidiaries to, in one or a series of related transactions, convey,
sell, transfer, assign or otherwise dispose of, directly or indirectly, any of
their property, business or assets, including by merger or consolidation (in
the case of a Guarantor or one of the Company’s Subsidiaries or Unrestricted
Subsidiaries), and including any sale or other transfer or issuance of any
Equity Interests of any of the Company’s Subsidiaries or Unrestricted
Subsidiaries, whether by the Company or one of its Subsidiaries or Unrestricted
Subsidiaries or through the issuance, sale or transfer of Equity Interests by 

 A-9
 

 

any of the
Company’s Subsidiaries or Unrestricted Subsidiaries and including any
sale-leaseback transaction (any of the foregoing, an “Asset Sale”), unless, with respect to any
Asset Sale or related series of Asset Sales involving securities, property or
assets with an aggregate fair market value in excess of $2,000,000: (a) at
least 75% of the total consideration for such Asset Sale or series of related
Asset Sales consists of cash or Cash Equivalents, (b) no Default or Event
of Default shall have occurred and be continuing at the time of, or would occur
after giving effect, on a pro forma
basis, to, such Asset Sale, and (c) the Company’s Board of Directors
determines in reasonable good faith that the Company will receive or such
Subsidiary will receive, as applicable, fair market value for such Asset Sale. For
purposes of clause (a) of the preceding sentence, total consideration
received means the total consideration received for such Asset Sales minus the
amount of (i) Purchase Money Indebtedness secured solely by the assets
sold and assumed by a transferee; provided,
that the Company is and its Subsidiaries are fully released from obligations in
connection therewith and (ii) property that within 30 days of such Asset
Sale is converted into cash or Cash Equivalents; provided,
that such cash and Cash Equivalents shall be treated as Net Cash Proceeds
attributable to the original Asset Sale for which such property was received.

Within 360 days following such Asset Sale, Net Cash
Proceeds therefrom shall be (a) (i) used to retire Purchase Money
Indebtedness secured by the asset which was the subject of the Asset Sale, or (ii) used
to retire and permanently reduce Indebtedness incurred under the Credit
Agreement and other Senior Debt; provided, that in the case of a revolver or
similar arrangement that makes credit available, such commitment is permanently
reduced by such amount; or (b) invested in assets and property (other than
notes, bonds, obligations and securities, except in connection with the
acquisition of a Subsidiary which is a Guarantor in a Related Business) which
in the reasonable good faith judgment of the Company’s Board of Directors will
immediately constitute or be a part of a Related Business of the Company or
such Subsidiary (if it continues to be a Subsidiary) immediately following such
transaction. All Net Cash Proceeds from an Event of Loss shall be used as
follows: (1) first, the Company shall use such Net Cash Proceeds to the
extent deemed necessary or appropriate to rebuild, repair, replace or restore
the assets subject to such Event of Loss with comparable assets and (2) then,
to the extent any Net Cash Proceeds from an Event of Loss are not used as
described in the preceding clause (a), all such remaining Net Cash Proceeds
shall be reinvested or used as provided in the immediately preceding clause (a) or
(b).

The accumulated Net Cash Proceeds from Asset Sales not
applied as set forth in clauses (a) and (b) of the immediately
preceding paragraph and the accumulated Net Cash Proceeds from any Event of
Loss not applied as set forth in clauses (1) and (2) of the
immediately preceding paragraph shall constitute “Excess Proceeds.” Pending the final application of any Net
Cash Proceeds, the Company may temporarily reduce revolving credit borrowings
or otherwise invest or use for general corporate purposes (other than
Restricted Payments that are not solely Restricted Investments) the Net Cash
Proceeds in any manner that is not prohibited by the Indenture. When the Excess
Proceeds equal or exceed $5,000,000, the Company shall offer to repurchase the
Notes, together with any other Indebtedness ranking on a parity with the Notes
and with similar provisions requiring the Company to make an offer to purchase
such Indebtedness with the proceeds from such Asset Sale pursuant to a cash
offer (subject only to conditions required by applicable law, if any), pro rata in proportion to the respective
principal amounts of such Indebtedness (or accreted 

 A-10
 

 

values in the case of Indebtedness issued with an
original issue discount) and the Notes (the “Asset
Sale Offer”) at a purchase price of 100% of the principal amount (or
accreted value in the case of Indebtedness issued with an original issue
discount) (the “Asset Sale Offer Price”)
together with accrued and unpaid interest and Liquidated Damages, if any, to
the date of payment. The Asset Sale Offer shall remain open for at least 20
Business Days following its commencement (the “Asset
Sale Offer Period”). Upon expiration of the Asset Sale Offer Period,
the Company shall apply an amount equal to the Excess Proceeds (the “Asset Sale Offer Amount”) plus an amount
equal to accrued and unpaid interest and Liquidated Damages, if any, to the
purchase of all Indebtedness properly tendered in accordance with the
provisions of this covenant (on a pro rata
basis if the Asset Sale Offer Amount is insufficient to purchase all
Indebtedness so tendered) at the Asset Sale Offer Price (together with accrued
and unpaid interest and Liquidated Damages, if any, to the date of payment). To
the extent that the aggregate amount of Notes and such other pari passu Indebtedness tendered pursuant
to an Asset Sale Offer is less than the Asset Sale Offer Amount, the Company
may use any remaining Net Cash Proceeds as otherwise permitted by the
Indenture. Following the consummation of each Asset Sale Offer in accordance
with the provisions of this Section 7(b), the Excess Proceeds amount shall
be reset to zero.

Any repurchase of Notes pursuant to this Section 8(b) shall
be made in accordance with the provisions of Section 4.13 of the
Indenture.

9.             Denominations, Transfer,
Exchange. The Notes are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. The transfer of Notes
may be registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or portion
of a Note selected for redemption, except for the unredeemed portion of any
Note being redeemed in part. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between an Interest Record Date and the
corresponding Interest Payment Date.

10.           Persons
Deemed Owners. The registered Holder of a Note may be treated as its
owner for all purposes.

11.           Amendment,
Supplement and Waiver. Subject to certain exceptions, the Company,
the Guarantors and the Trustee may amend, supplement or otherwise modify the
Indenture, the Notes and the Guarantees, with the consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, the Notes), and, subject to certain
exceptions, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium, if any, or
interest or Liquidated Damages (if any) on the Notes, except a payment default
resulting from an acceleration that has been rescinded) or compliance with any
provision of the Indenture, the Notes and the Guarantees may be waived with the
consent of the Holders of a 

 A-11
 

 

majority in aggregate principal amount of the then
outstanding Notes (including consents obtained in connection with a purchase
of, or tender offer or exchange offer for, the Notes).

Notwithstanding the immediately preceding paragraph,
the Company, the Guarantors and the Trustee may amend, modify or supplement the
Indenture, the Notes or the Guarantees, without the consent of any Holder: (a) to
cure any ambiguity, defect, or inconsistency; (b) to provide for uncertificated Notes in addition to or in place of
certificated Notes; (c) to provide for the assumption of any of the
Company’s or the Guarantors’ obligations to Holders in the case of a merger or
consolidation or a sale of all or substantially all of the Company’s assets in
accordance with the Indenture; (d) to evidence the release of any
Guarantor permitted to be released under the terms of the Indenture or to
evidence the addition of any new Guarantor in accordance with the Indenture; (e) to
comply with requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the TIA; 
(f) to comply with applicable Gaming Laws; (g) to comply with
the provisions of DTC, Euroclear or Clearstream or the Trustee with respect to
the provisions of the Indenture and the Notes relating to transfers and
exchanges of Notes or beneficial interests therein; or (h) to make any
change that would provide any additional rights or benefits to the Holders or
that does not adversely affect the rights of any Holder of Notes under the
Indenture, the Notes, the Guarantees or the Registration Rights Agreement.

Notwithstanding the foregoing, without the consent of
each Holder affected, an amendment, supplement, modification or waiver may not
(with respect to any Notes held by a non-consenting Holder):  (1) reduce the principal amount of Notes
whose Holders must consent to an amendment, supplement, modification or waiver;
(2) change the Stated Maturity on any Note; (3) reduce the principal
of, or any premium (including redemption premium but not including any
redemption premium relating to Sections 4.13 and 4.14 of the Indenture) on, any
Note; (4) reduce the rate of or change the time for payment of interest
(or Liquidated Damages, if any), including Defaulted Interest, on any Note; (5) waive
a Default or Event of Default in the payment of principal of, or premium, if
any, interest or Liquidated Damages, if any, on any Note (except a rescission
of acceleration of the Notes by the Holders of a majority in aggregate
principal amount of the Notes and a waiver of the payment default that resulted
from such acceleration); (6) alter any provisions with respect to the
redemption of the Notes or waive any redemption payment with respect to any
Note (other than provisions relating to or payments required by Sections 4.13
and 4.14 of the Indenture); (7) reduce the Change of Control Purchase
Price or the Asset Sale Offer Price after the corresponding Asset Sale or
Change of Control has occurred; (8) change the coin or currency in which
the principal of, or premium, if any, interest or Liquidated Damages, if any,
on any Note is payable; (9) impair the right to institute suit for the
enforcement of payment of the principal of, or premium, if any, interest or
Liquidated Damages, if any, on any Note on or after the Stated Maturity (or on
or after the Redemption Date); (10) make any change in the provisions of
the Indenture relating to waivers of past Defaults with respect to, or the
rights of Holders to receive, scheduled payments of principal of or premium, if
any, interest or Liquidated Damages, if any, on the Notes; (11) modify or
change any provision of the Indenture affecting the ranking of the Notes or any
Guarantee in a manner adverse to the Holders; (12) release any Guarantor from
any of its obligations under its Guarantee or the Indenture other than in
compliance with the Indenture; or (13) make any changes in the foregoing
amendment, supplement and waiver provisions.

 A-12
 

 

12.           Defaults and Remedies. The Indenture
provides that each of the following constitutes an Event of Default:

(i)            the
Company’s failure to pay any installment of interest (or Liquidated Damages, if
any) on the Notes as and when the same becomes due and payable and the
continuance of any such failure for 30 days;

(ii)         the
Company’s failure to pay all or any part of the principal of, or premium, if
any, on the Notes when and as the same becomes due and payable at maturity,
redemption, by acceleration or otherwise, including, without limitation,
payment of the Change of Control Purchase Price or the Asset Sale Offer Price
on Notes validly tendered and not properly withdrawn pursuant to a Change of
Control Offer or Asset Sale Offer, as applicable;

(iii)          the
Company’s failure or the failure by any of Subsidiaries to observe or perform
any other covenant or agreement contained in the Notes or the Indenture and,
except for the provisions under Sections 4.13 and 4.14, and Article V
of the Indenture, the continuance of such failure for a period of 30 days after
written notice is given to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Notes outstanding;

(iv)          a
decree, judgment, or order by a court of competent jurisdiction shall have been
entered adjudicating the Company, any of the Guarantors or any of the Company’s
Significant Subsidiaries as bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization of the Company, any of the Guarantors
or any of the Company’s Significant Subsidiaries under any bankruptcy or
similar law, and such decree or order shall have continued undischarged and
unstayed for a period of 60 days; or a decree, judgment or order of a court of
competent jurisdiction appointing a receiver, liquidator, trustee, or assignee
in bankruptcy or insolvency for the Company, any of the Guarantors or any of
the Company’s Significant Subsidiaries, or any substantial part of the property
of any such Person, or for the winding up or liquidation of the affairs of any
such Person, shall have been entered, and such decree, judgment, or order shall
have remained in force undischarged and unstayed for a period of 60 days;

(v)           the
Company, any of the Guarantors or any of the Company’s Significant Subsidiaries
shall institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization under any bankruptcy or
similar law or similar statute, or shall consent to the filing of any such
petition, or shall consent to the appointment of a custodian, receiver, liquidator,
trustee, or assignee in bankruptcy or insolvency of it or any substantial part
of its assets or property, or shall make a general assignment for the benefit
of creditors, or shall admit in writing its inability to pay its debts
generally as they become due, or take any corporate action in furtherance of
any of the foregoing;

(vi)          a
default occurs (after giving effect to any waivers, amendments, applicable
grace periods or any extension of any maturity date) in the Company’s
Indebtedness or the Indebtedness of any of the Guarantors or any of the Company’s

 A-13
 

 

Subsidiaries with an aggregate amount outstanding in excess of
$10,000,000 (a) resulting from the failure to pay principal of or interest
on such Indebtedness, or (b) if as a result of such default, the maturity
of such Indebtedness has been accelerated prior to its stated maturity;

(vii)         unsatisfied
judgments not covered by insurance aggregating in excess of $10,000,000 at any
one time rendered against the Company, any of the Guarantors or the Company’s
Subsidiaries and not stayed, bonded or discharged within 60 days after such
judgment became final and nonappealable; and

(viii)        the
suspension or loss (excluding any voluntary termination of such rights in
connection with a sale, lease or closure of a site, provided that such sale,
lease or closure was otherwise permitted by, and complied with the provisions
of, the Indenture) of the Company’s, any of the Guarantors’ or any of the
Company’s Subsidiaries’ legal right to operate slot machines or to conduct
other gaming operations (other than parimutuel wagering) and such suspension or
loss continues for more than 90 consecutive days or for 120 days within any
consecutive 180-day period.

13.           Trustee
Dealings with Company. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee.

14.           No Recourse
Against Others. No direct or indirect stockholder, employee, officer
or director, as such, past, present or future of the Company, the Guarantors or
any successor entity shall have any personal liability in respect of the
obligations of the Company or the Guarantors under the Indenture or the Notes
solely by reason of his, her or its status as such stockholder, employee,
officer or director; provided, that
this Section 14 shall in no way limit the obligation of any Guarantor
pursuant to any Guarantee of the Notes. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.

15.           Authentication.
This Note shall not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent.

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

17.           Additional
Rights of Holders of Transfer Restricted Notes.(7)  In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Transfer Restricted Notes shall have
all the rights set forth in the Registration Rights Agreement dated as of the
date of the Indenture, by and among the Company, the Guarantors and the Initial
Purchasers (the “Registration Rights Agreement”).

(7)           To be included only
on Transfer Restricted Notes.

 A-14
 

 

18.           CUSIP
Numbers. Pursuant to a recommendation promulgated by the Committee
on Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Notes, and the Trustee shall use CUSIP numbers in notices
of redemption as a convenience to Holders. No representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers.

19.           Notation of
Guarantee. As more fully set forth in the Indenture, each of the
Guarantors from time to time, in accordance with the provisions of the
Indenture, shall jointly and severally, irrevocably and unconditionally
guarantee, on a senior subordinated unsecured basis, in accordance with Article X
of the Indenture, to each Holder of a Note authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability against the Company and any other Guarantors of the
Indenture, the Notes or the obligations of the Company under the Indenture or
the Notes, that:  (x) the principal
of and premium (if any), and interest (and Liquidated Damages, if any) on the
Notes will be paid in full when due, whether at Stated Maturity or an Interest
Payment Date, by acceleration, call for redemption, upon a Change of Control
Offer, upon an Asset Sale Offer or otherwise; (y) all other obligations of
the Company to the Holders or the Trustee under the Indenture or the Notes will
be promptly paid in full or performed, all in accordance with the terms of the
Indenture and the Notes; and (z) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at maturity, by acceleration, call for
redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise. Such Guarantees shall cease to apply, and shall be null and void,
with respect to any Guarantor who, pursuant to Article X of the Indenture,
is released from its Guarantee or whose Guarantee otherwise ceases to be
applicable pursuant to the terms of the Indenture.

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

20.           Governing
Law. THE INDENTURE, THE GUARANTEES AND THE NOTES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW AND RULE 327(b) OF THE NEW YORK CIVIL
PRACTICE LAWS AND RULES.

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

MTR Gaming Group, Inc.

State Route 2, South

P.O. Box 358

Chester, West Virginia  26034

Attention:  Chief Financial Officer

Facsimile: (304) 387-2167

 A-15
 

 

Assignment
Form

To assign this
Note, fill in the form below: (I) or (we) assign and transfer this Note to

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                                                                                                              

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

Date:                                                       Your
Signature:  _____________________________
                                                                (Sign
exactly as your name appears on the face of this Note)

Signature
Guarantee*

*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-16
 

 

Option of Holder
to Elect Purchase

If
you want to elect to have this Note purchased by the Company pursuant to Section 4.13
or 4.14 of the Indenture, check the box below:

o   Section 4.13                                                  o   Section 4.14

If
you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.13 or Section 4.14 of the Indenture, state the
amount you elect to have purchased (in denominations of $1,000 only, except if
you have elected to have all of your Notes purchased):  $            

Date:                                                                                       Your
Signature:                                                                    
                                                                                        (Sign
exactly as your name appears on the Note)

Tax
Identification No.:                  

Signature
Guarantee*

 

 

 

*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-17
 

 

 

SCHEDULE
OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)

The
following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been made:

	
  Date of Exchange

  	
   

  	
   

  	
   

  	
  Amount of decrease in

  Principal Amount

  of this Global Note

  	
   

  	
  Amount of increase

  in Principal Amount

  of this Global Note

  	
   

  	
  Principal Amount

  of this Global Note

  following such

  decrease

  (or increase)

  	
   

  	
  Signature of 

  authorized officer 

  of Trustee or Note 

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(8)             To
be included only on Global Notes

 A-18
 

 

 

GUARANTEE

The Guarantors listed below (hereinafter referred to
as the “Guarantors,” which term
includes any successors or assigns under the Indenture, dated the date hereof
(the “Indenture”), among MTR
Gaming Group, Inc., a Delaware corporation (the “Company”), Wells Fargo Bank, N.A., as
trustee (the “Trustee”), and any
additional Guarantors, relating to the Company’s 9% Senior Subordinated Notes
due 2012 (the “Notes”)), jointly
and severally, irrevocably and unconditionally guarantee, in accordance with Article X
of the Indenture, that:  (i) the
principal of and premium (if any), and interest (and Liquidated Damages, if
any) on the Notes will be paid in full when due, whether at Stated Maturity or
an Interest Payment Date, by acceleration, call for redemption, upon a Change
of Control Offer, upon an Asset Sale Offer or otherwise; (ii) all other
obligations of the Company to the Holders or the Trustee under the Indenture or
the Notes will be promptly paid in full or performed, all in accordance with
the terms of the Indenture and the Notes; and (iii) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration, call for redemption, upon a Change of Control Offer, upon an Asset
Sale Offer or otherwise; provided, however,
that, with respect to the Exchange Offer, prior approval by the Nevada Gaming
Authorities of such Guarantee is obtained. The Guarantors also jointly and
severally, irrevocably and unconditionally guarantee, the payment of any
and all costs and expenses (including attorneys’ fees) incurred by the Trustee
in enforcing any rights under this Guarantee.

The obligations of each Guarantor to the Holders and
to the Trustee pursuant to this Guarantee and the Indenture are expressly set
forth in Article X of the Indenture and reference is hereby made to the
Indenture for the precise terms of this Guarantee.

No direct or indirect stockholder, employee, officer
or director, as such, past, present or future, of any of the Guarantors, or any
successor entity, shall have any personal liability in respect of the
obligations of any Guarantors under this Guarantee or the Indenture solely by
reason of his, her or its status as such stockholder, employee, officer or
director; provided, that this
provision shall in no way limit the obligation of any Guarantor pursuant to
this Guarantee.

This is a continuing Guarantee and shall remain in
full force and effect and shall be binding upon each Guarantor and its
successors and assigns until full and final payment of all of the Company’s
obligations under the Notes and the Indenture or until released or legally
defeased in accordance with the Indenture and shall inure to the benefit of the
successors and assigns of the Trustee and the Holders, and, in the event of any
transfer or assignment of rights by any Holder or the Trustee, the rights and
privileges herein conferred upon that party shall automatically extend to and
be vested in such transferee or assignee, all subject to the terms and
conditions hereof. This is a Guarantee of payment and not of collectibility.

This Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Note upon which this
Guarantee is noted shall have been 

 A-19
 

 

executed by the Trustee under the Indenture by the
manual signature of one of its authorized officers.

The obligations of each Guarantor under this Guarantee
shall be limited to the extent necessary to insure that it does not constitute
a fraudulent conveyance under applicable law.

THE
TERMS OF ARTICLE X OF THE INDENTURE IS INCORPORATED HEREIN BY REFERENCE.

Capitalized terms used herein have the same meanings
given in the Indenture unless otherwise indicated.

[signature page follows]

 

 A-20

 

IN WITNESS WHEREOF, each of the Guarantors has caused
this instrument to be duly executed.

Dated:  

	
  ISSUER:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MTR GAMING GROUP, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GUARANTORS:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MOUNTAINEER PARK, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRESQUE ISLE DOWNS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPEAKEASY GAMING OF LAS VEGAS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  

 

 

 

	
  

  	
   

  	
  SCIOTO DOWNS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPEAKEASY GAMING OF FREMONT, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JACKSON RACING, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MTR HARNESS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WELLS FARGO BANK, N.A., as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Joseph O’Donnell

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

MTR Gaming Group, Inc.

State Route 2, South 

P.O. Box 358 

Chester, West Virginia  26034

Attention:  Chief Financial Officer

Wells Fargo Bank,
N.A.

Corporate Trust Services

213 Court Street - Suite 703

Middletown, CT 06457

Facsimile No.:  (860) 704-6219

Attention:  Corporate Trust Department

Re:          9% Senior Subordinated Notes due 2012

Ladies
and Gentlemen:

Reference
is hereby made to the Indenture, dated as of May 25, 2006 (the “Indenture”), by and among MTR Gaming Group, Inc.,
as issuer (the “Company”), the
Guarantors and Wells Fargo Bank, N.A., as trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.                 ,
(the “Transferor”) owns and
proposes to transfer the Note[s] or interest[s] in such Note[s] specified in
Annex A hereto, in the principal amount of $           
in such Note[s] or interest[s] (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.             o            Check if
Transferee will take delivery of a beneficial interest in the 144A Global Note
or a Definitive Note 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
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note 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 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 Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.

 B-1
 

 

2.             o            Check if
Transferee will take delivery of a beneficial interest in the Regulation S
Global Note or a Definitive Note 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 Distribution Compliance 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) and the interest transferred will
be held immediately thereafter through Euroclear or Clearstream. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Regulation S Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.

3.             o            Check
and complete if Transferee will take delivery of a beneficial interest in a
Definitive Note 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 Notes and Restricted Definitive Notes 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)           o            Such Transfer is being effected
pursuant to and in accordance with Rule 144 under the Securities Act; or

(b)           o            Such Transfer is being effected to
the Company or a subsidiary thereof; or

(c)           o            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; or

(d)           o            Such Transfer is being effected to
an Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A, Rule 144
or Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D under
the Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or Restricted
Definitive Note and the requirements of the exemption claimed, which
certification is 

 B-2
 

 

supported by (1) a certificate executed
by the Transferee in a form of Exhibit D to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached to
this certification and provided to the Company, which has confirmed its
acceptability), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the Definitive Note will be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the
Definitive Notes and in the Indenture and the Securities Act.

4.             o            Check if
Transferee will take delivery of a beneficial interest in an Unrestricted
Global Note or of an Unrestricted Definitive Note.

(a)           o            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 Indenture
and any applicable blue sky securities laws of any State of the United States
and (ii) the restrictions on transfer contained in the Indenture 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 Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture and the Securities
Act.

(b)           o            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 Indenture and any applicable blue sky securities laws of any
State of the United States and (ii) the restrictions on transfer contained
in the Indenture 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 Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture and the Securities Act.

(c)           o            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 contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the
Indenture 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 Indenture, the transferred
beneficial interest or Definitive Note will not be subject to 

 B-3
 

 

the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.

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

_______________________________                                        Dated:  _______________________________

_______________________________

[Insert Name of Transferor]

 

By:  ____________________________

Name:

Title:

 B-4
 

 

 

ANNEX A TO CERTIFICATE OF TRANSFER

	
  1.

  	
  The Transferor owns and
  proposes to transfer the following:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
  (a)

  	
  o

  	
  a beneficial interest in the:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  o

  	
   

  	
  144A Global Note, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  o

  	
   

  	
  501 Global Note, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  o

  	
   

  	
  Reg S Global Note; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  o

  	
  a Restricted Definitive Note.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  After the Transfer the
  Transferee will hold:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CHECK ONE]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  o

  	
  a beneficial interest in the:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  o

  	
  144A Global Note, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  o

  	
  501 Global Note, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  o

  	
  Reg S Global Note,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)

  	
  o

  	
  Unrestricted Global Note;
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  o

  	
  a Restricted Definitive Note; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  o

  	
  an Unrestricted Definitive Note,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  in accordance with the terms of the Indenture.

  
										

 

 B-5

 

EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

MTR Gaming Group, Inc.

State Route 2, South 

P.O. Box 358 

Chester, West Virginia  26034

Attention:  Chief Financial Officer

Wells Fargo Bank,
N.A.

Corporate Trust Services

213 Court Street - Suite 703

Middletown, CT 06457

Facsimile No.:  (860) 704-6219

Attention:  Corporate Trust Department

Re:          9% Senior Subordinated Notes due 2012

Ladies
and Gentlemen:

Reference is hereby made to the Indenture, dated as of
May 25, 2006 (the “Indenture”),
by and among MTR Gaming Group, as issuer (the “Company”),
the Guarantors party thereto and Wells Fargo Bank, N.A., as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.

               ,
(the “Owner”) owns and proposes
to exchange the Note[s] or interest[s] in such Note[s] specified herein, in the
principal amount of $            
in such Note[s] or interest[s] (the “Exchange”).
In connection with the Exchange, the Owner hereby certifies that:

1.             Exchange of Restricted Definitive
Notes or Beneficial Interests in a Restricted Global Note for Unrestricted
Definitive Notes or Beneficial Interests in an Unrestricted Global Note.

(a)           o            Check if Exchange is from
beneficial interest in a Restricted Global Note to beneficial interest in an
Unrestricted Global Note. In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Note for a beneficial
interest in an Unrestricted Global Note 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 Restricted
Global Notes and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the “Securities Act”),
(iii) the restrictions on transfer contained in the Indenture 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 Note is being acquired in compliance with any applicable blue sky
securities laws of any State of the United States.

 C-1
 

 

(b)           o            Check if Exchange is from beneficial interest in a Restricted Global
Note to Unrestricted Definitive Note. In connection with the
Exchange of the Owner’s beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the
Definitive Note 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 Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any
applicable blue sky securities laws of any State of the United States.

(c)           o            Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the
Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in
an Unrestricted Global Note, 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 Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in
the Indenture 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)           o            Check if Exchange is from Restricted Definitive Note to Unrestricted
Definitive Note. In connection with the Owner’s Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note 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 Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any State of the United States.

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

(a)           o            Check if Exchange is from beneficial interest in a Restricted Global
Note to Restricted Definitive Note. In connection with the
Exchange of the Owner’s beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that (i) the Restricted Definitive Note 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 Notes 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 Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer 

 C-2
 

 

enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.

(b)           o            Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the
Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in
the:  [CHECK ONE] o 144A
Global Note, o Reg S
Global Note, or o Rule 501
Global Note with an equal principal amount, 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 Notes 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
Indenture, the beneficial interest issued will be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.

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

___________________________

[Insert Name of Owner]

By:  _______________________

Name:

Title:

Dated:  ____________________

 C-3

 

EXHIBIT D

FORM OF CERTIFICATE FROM ACQUIRING

INSTITUTIONAL ACCREDITED INVESTOR

MTR Gaming Group, Inc.

State Route 2, South 

P.O. Box 358 

Chester, West Virginia  26034

Attention:  Chief Financial Officer

Wells Fargo Bank,
N.A.

Corporate Trust Services

213 Court Street - Suite 703

Middletown, CT 06457

Facsimile No.:  (860) 704-6219

Attention:  Corporate Trust Department

Re:          9% Senior Subordinated Notes due 2012

Ladies
and Gentlemen:

Reference is hereby made to the Indenture, dated as of
May 25, 2006 (the “Indenture”),
by and among MTR Gaming Group, as issuer (the “Company”),
the Guarantors and Wells Fargo Bank, N.A., as trustee (the “Trustee”). Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

In connection with our proposed purchase of $         
aggregate principal amount of:  (a) a
beneficial interest in a Global Note, or (b) a Definitive Note, we confirm
that:

1.             We understand and acknowledge that the Notes
have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any other applicable securities law,
and may not be offered, sold or otherwise transferred except in compliance with
the registration requirements of the Securities Act or any other applicable
securities law or pursuant to an exemption therefrom and in each case in
compliance with the conditions for transfer set forth below.

2.             We
are not an affiliate (as defined in Rule 144 under the Securities Act) of
the Company or acting on behalf of the Company.

3.             We
are an institutional “accredited investor” under the Securities Act within the
meaning of subparagraph (a) (1), (2), (3) or (7) of Rule 501
under the Securities Act (“Rule 501”)
and, if the Notes are to be purchased for one or more accounts (“investor accounts”) for which we are acting as fiduciary or
agent, each such investor account is an institutional “accredited investor” on
a like basis. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of purchasing the
Notes and invest in or purchase securities similar to the Notes in the normal
course of our business. We and any investor accounts for which we are acting
are each aware 

 D-1
 

 

that we may be required, and are each able,
to bear the economic risk of our or its investment in the Notes for an
indefinite period of time, including the risk of an entire loss of our or such
investor account’s investment in the Notes.

4.             We
are purchasing the Notes for our own account, or for one or more investor
accounts for which we are acting as a fiduciary or agent, in each case for
investment, and not with a view to, or for offer or sale in connection with,
any distribution thereof in violation of the Securities Act, subject to any
requirement of law that the disposition of our property or the property of such
investor account or accounts be at all times within our or their control and
subject to our or their ability to resell such Notes pursuant to Rule 144A
under the Securities Act (“Rule 144A”),
Regulation S under the Securities Act or any exemption from registration
available under the Securities Act.

5.             We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Notes to offer, sell or otherwise transfer such Notes prior to the
date which is two years (or such other period that may hereafter be provided
under Rule 144(k) under the Securities Act as permitting resales of
restricted securities by non-affiliates without restriction) after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Notes (or any predecessor
thereto) (the “Resale Restriction Termination Date”)
only (a) to the Company or any subsidiary of the Company, (b) pursuant
to a registration statement that has been declared effective under the
Securities Act, (c) for so long as the Notes are eligible for resale
pursuant to Rule 144A to a person we reasonably believe is a “qualified
institutional buyer” as defined in Rule 144A (a “QIB”)
that purchases for its own account or for the account of a QIB and to whom
notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant
to offers and sales to non-U.S. persons that occur outside the United States in
accordance with Regulation S under the Securities Act, (e) to an
institutional “accredited investor” within the meaning of subparagraph (a) (1),
(2), (3) or (7) of Rule 501 that is acquiring the Notes 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 in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or
accounts be at all times within our or their control and in each case in
compliance with applicable securities laws of any U.S. state or any other
applicable jurisdiction. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. If any resale or other
transfer of the Notes is proposed to be made pursuant to clause (e) above
prior to the Resale Restriction Termination Date, the transferor shall deliver
a letter from the transferee substantially in the form of this letter to the
Company and the Trustee, which shall provide, among other things, that the transferee
is an institutional “accredited investor” within the meaning of subparagraph (a) (1),
(2), (3) or (7) of Rule 501 and that it is acquiring such Notes
for investment purposes and not for distribution in violation of the Securities
Act. Each purchaser acknowledges that the Company and the Trustee reserve the
right prior to the offer, sale or other transfer made prior to the Resale
Termination Date pursuant to clause (d), (e) or (f) above to require
the delivery of an opinion of counsel, certifications and/or other information
satisfactory to each of them.

 D-2
 

 

6.             We understand that the Notes will
be delivered in registered form only and that the certificates delivered to us
in respect of the Notes will contain a legend substantially to the following
effect:

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 (1) REPRESENTS THAT (X) IT
IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (Y) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, OR (Z) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR”
WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS TWO YEARS (OR SUCH OTHER
PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) UNDER THE
SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES BY NON-AFFILIATES
WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE
ISSUER OR ANY SUBSIDIARIES OF THE ISSUER, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THIS SECURITY IS 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 UNDER THE SECURITIES ACT 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 UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL “ACCREDITED INVESTOR,” FOR
INVESTMENT PURPOSES AND NOT 

 D-3
 

 

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 ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E), OR (F) 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.

7.             If we are acquiring any of the
Notes as a fiduciary or agent for one or more investor accounts, we represent
that we have sole investment discretion with respect to each such account and
we have full power to make the foregoing acknowledgments, representations,
warranties and agreements on behalf of each such investor account.

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

_______________________________                                                        Dated: __________________, ____

[Insert Name of Accredited Investor]

By:  ___________________________

Name:

Title:

 D-4Exhibit
4.2

 

MTR GAMING GROUP, INC.

$125,000,000
9% Senior Subordinated Notes due 2012

PURCHASE
AGREEMENT

May 22, 2006

JEFFERIES & COMPANY, INC.

WELLS FARGO SECURITIES, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, California  90025

Ladies and Gentlemen:

Each of MTR Gaming Group, Inc., a Delaware
corporation (the “Company”), and
each Guarantor (as defined below) hereby agrees with you as follows:

1.     Issuance of
Securities. The Company
proposes to issue and sell to the initial purchasers listed on Schedule 1
hereto (each, an “Initial Purchaser”
and, together, the “Initial Purchasers”),
and the Initial Purchasers propose to purchase, $125,000,000 aggregate
principal amount of the Company’s 9% Senior Subordinated Notes due 2012, Series A
(the “Series A Notes”). 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 Company, the Guarantors, and Wells Fargo Bank, N.A., as
trustee (the “Trustee”). The Series A
Notes and the Series B Notes (as defined below), each with the Guarantee
(as defined below) endorsed thereon, are collectively referred to herein as the
“Notes.”

Each of the entities listed on Schedule 2
hereto and any future subsidiary guarantors party to the Indenture (such
entities and such future subsidiary guarantors, each a “Guarantor” and collectively the “Guarantors”) will fully and unconditionally
guarantee on a senior subordinated unsecured basis the obligations under the Notes
and the Indenture (the “Guarantees”),
including the payment of principal, interest, premium, if any, and Liquidated
Damages (as defined in the Time of Sale Information and the Final Offering
Circular, as such terms are defined below), if any, on the Notes. The Company
and the Guarantors are sometimes collectively referred to herein as the “Company Entities.”

 

The Series A Notes 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 Company and the Guarantors have
prepared (i) a preliminary offering circular, dated May 12, 2006 (the
“Preliminary Offering Circular”),
and (ii) a pricing term sheet attached hereto as Schedule 3, which
includes pricing terms and other information with respect to the Notes (the “Pricing Term Sheet”), in each case,
relating to the offer and sale of the Series A Notes (the “Offering”). The Preliminary Offering
Circular and the Pricing Term Sheet are together referred to herein as the “Time of Sale Information.”  Promptly after execution of this Agreement,
the Company and the Guarantors shall prepare a final offering circular, dated May 22,
2006 (the “Final Offering Circular”),
relating to the Offering.

Upon original issuance thereof, and until such time as
the same is no longer required under the Indenture or the applicable
requirements of the Act, the Series A Notes 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 (1) REPRESENTS
THAT (X) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), (Y) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, OR (Z) IT IS AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT IS TWO YEARS (OR SUCH
OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) UNDER
THE SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES BY
NON-AFFILIATES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO
THE ISSUER OR ANY SUBSIDIARIES OF THE ISSUER, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THIS 

 2
 

 

SECURITY IS 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 UNDER THE SECURITIES ACT 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 UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS 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 ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E), OR (F) 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.

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 Company shall issue and
sell to each of the Initial Purchasers (and, in order to induce the Initial
Purchasers to purchase the Series A Notes, the Guarantors shall enter into
the Guarantees), and each of the Initial Purchasers, severally and not jointly,
shall purchase from the Company, the principal amount of Series A Notes
set forth opposite the name of such Initial Purchaser on Schedule 1
hereto. The purchase price for the Series A Notes shall be 98.5% of the
principal amount thereof.

3.     Terms of
Offering. The Initial
Purchasers have advised the Company that the Initial Purchasers will make
offers to sell (the “Exempt Resales”)
the Series A Notes purchased by the Initial Purchasers hereunder on the
terms set forth in the Time of Sale Information, solely to persons whom the
Initial Purchasers reasonably believe to be (a) ”qualified institutional 

 3
 

 

buyers,”
as defined in Rule 144A under the Act (“QIBs”),
(b) persons permitted to purchase Series A Notes in offshore
transactions in reliance upon Regulation S under the Act (each, a “Regulation S Purchaser”) or (c) a
limited number of institutional “accredited investors,” as defined in Rule 501(a)(1),
(2), (3) or (7) under the Act that make certain representations and
warranties to the Company and the Initial Purchasers as set forth in the
Accredited Investor Letter attached as Annex A to the Preliminary Offering
Circular (“Accredited Investors”
and, collectively with QIBs and Regulation S Purchasers, “Eligible Purchasers”).

Holders of the Series A
Notes (including subsequent transferees) will have the registration rights set
forth in the registration rights agreement (the “Registration Rights Agreement”), to be executed on and dated
as of the Closing Date. Pursuant to the Registration Rights Agreement, the
Company and the Guarantors will agree, among other things, to file with the
Securities and Exchange Commission (the “Commission”)
under the circumstances set forth therein (a) a registration statement
under the Act (the “Exchange Offer
Registration Statement”) relating to, among other things, the 9% Senior Subordinated Notes due 2012, Series B,
of the Company (the “Series B Notes”),
identical in all material respects to the Series A Notes, including with
respect to the Guarantees thereof (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 (b) under
certain circumstances, a shelf registration statement pursuant to Rule 415
under the Act (the “Shelf Registration
Statement”) relating to the resale by certain holders of the Series A
Notes.

In connection with the Offering, the Company obtained
consents (the “Consent Solicitation”)
from the holders of the Company’s 93⁄4% Senior Notes due 2010 (the “Senior Notes”) to the adoption of certain proposed amendments
(the “Proposed Amendments”) to the
indenture governing the Senior Notes, to permit the issuance of the Notes and
additional borrowings under the New Credit Facility (as defined below), as more
fully described in the Consent Solicitation Statement dated April 18, 2006
(as supplemented, the “Statement”),
and the Letter of Consent, dated April 18, 2006 (as supplemented, the “Letter of Consent”), and the other documents related to the
Consent Solicitation (such other documents, collectively with the Statement and
the Letter of Consent, the “Consent Documents”).
On May 17, 2006, the Company and the Guarantors entered into a
supplemental indenture with Wells Fargo Bank, N.A., the trustee for the Senior
Notes, to effectuate the Proposed Amendments (the “Supplemental Indenture”). The Consent Solicitation, the
Proposed Amendments, and the transactions contemplated by the Consent Documents
and the Supplemental Indenture (including, without limitation, the payment of
the Consent Fee (as defined in the Statement) and the Proposed Amendments
becoming effective and operative), together with any and all other actions
required to be taken, and transactions required to be entered into, by the
Company and the Guarantors to consummate the Consent Solicitation and make
effective and operative the Proposed Amendments on or prior to the Closing
Date, are referred to herein collectively as the “Consent Transactions.”

 4
 

 

In addition, in connection with the Offering, (i) the
Company shall repay on the Closing Date with a portion of the proceeds from the
Offering all amounts owed under its Fourth Amended and Restated Credit
Agreement with Wells Fargo Bank, N.A. (the “Existing
Credit Facility”); and (ii) concurrently with or shortly after
the Closing Date, the Company expects to enter into a Fifth Amended and
Restated Credit Agreement with Wells Fargo Bank, N.A. (the “New Credit Facility”).

This Agreement, the
Indenture, the Registration Rights Agreement, the Notes, the Guarantees, the
Supplemental Indenture and the Consent Documents collectively are referred to
herein as the “Operative Documents.”  The New Credit Facility, together with the
Operative Documents and all other documents or instruments executed by either
of the Company or any of the Subsidiaries in connection with the transactions
contemplated thereby or by the Operative Documents, collectively are referred
to herein as the “Transaction Documents.”  The transactions contemplated by the
Transaction Documents, including, without limitation, the Offering and the
application of the proceeds therefrom as described in the Time of Sale
Information and the Final Offering Circular (including the repayment of all amounts owed under the Existing
Credit Facility), the issuance and
sale of the Notes in accordance with this Agreement, the Consent Transactions
and the borrowing (if any) under the New Credit Facility, collectively are
referred to herein as the “Transactions.”

4.     Delivery and
Payment. Delivery to the
Initial Purchasers of and payment for the Series A Notes shall be made at
a Closing (the “Closing”) to be
held at 9:00 a.m., New York City time, on May 25, 2006, (such time
and date, the “Closing Date”) at
the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South
Grand Avenue, Suite 3400, Los Angeles, California 90071. The Closing Date
and the location of delivery of and the form of payment for the Series A
Notes may be varied by agreement between the Initial Purchasers and the
Company.

The Company shall deliver
to the Initial Purchasers one or more certificates representing the Series A
Notes (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 the Initial Purchasers may request upon at least two
Business Day’s notice to the Company, in an amount corresponding to the
aggregate principal amount of the Series A Notes sold pursuant to Exempt
Resales to QIBs and to Accredited Investors, respectively, in each case against
payment by the Initial Purchasers of the purchase price therefor by immediately
available Federal funds bank wire transfer to such bank account as the Company
shall designate to the Initial Purchasers at least two Business Days prior to
the Closing. “Business Day” means
any day other than a Saturday, a Sunday or a day on which banking institutions
in The City of New York or at a place of payment are authorized by law,
regulation or executive order to remain closed.

The Global Securities in
definitive form shall be made available to the Initial Purchasers for
inspection at the offices of Skadden, Arps, Slate, Meagher & Flom LLP,
300 South Grand Avenue, Suite 3400, Los Angeles, California 90071 (or such other place as shall be 

 5
 

 

acceptable
to the Initial Purchasers) not later than the close of business, New York
City time, one Business Day immediately preceding the Closing Date.

5.     Agreements of the Company Entities. Each
of the Company Entities, jointly and severally, hereby agrees:

(a)           Certain
Events. 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 Series A Notes
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 Time of Sale Information or the Final Offering Circular untrue
or that requires the making of any additions to or changes in the Time of Sale
Information or the Final Offering Circular in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading, (ii) use its best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption from qualification of
any of the Notes 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 Series A Notes under any such laws, use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time.

(b)           Offering Circular. At any time prior to the completion of the
resale by the Initial Purchasers of all of the Series A Notes pursuant to
Exempt Resales, to (i) furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company, without charge, as many
copies of the Preliminary Offering Circular, the Pricing Term Sheet and the
Final Offering Circular, and any amendments or supplements thereto, as the
Initial Purchasers may reasonably request, and (ii) promptly prepare, upon
the Initial Purchasers’ request, any amendment or supplement to the Preliminary
Offering Circular, the Pricing Term Sheet and/or the Final Offering Circular
that the Initial Purchasers deem may be necessary in connection with Exempt
Resales (and the Company Entities hereby consent, subject to the Initial
Purchasers’ compliance with their representations and warranties set forth in Section 7,
to the use of each of the Preliminary Offering Circular, the Pricing Term Sheet
and the Final Offering Circular, and any amendments and supplements thereto, by
the Initial Purchasers in connection with Exempt Resales).

(c)           Final
Offering Circular; Notice of Amendment or Supplement. As promptly as practicable following
the execution and delivery of this Agreement, to prepare and deliver to the
Initial Purchasers the Final Offering Circular, which shall consist of the
Preliminary Offering Circular as modified only by the information contained in
the Pricing Term Sheet, and the Company shall use its reasonable best 

 6
 

 

efforts to so prepare and deliver the Final
Offering Circular no later than the second business day following the date
hereof. Not to
amend or supplement the Preliminary Offering Circular, the Pricing Term Sheet
or the Final Offering Circular prior to the Closing Date, or at any time prior
to the completion of the resale by the Initial Purchasers of all of the Series A
Notes, unless the Initial Purchasers shall previously have been advised thereof
and shall not have objected thereto within three Business Days after being
furnished a copy thereof.

(d)           Preparation
of Amendments and Supplements.
At any time prior to the completion of the resale by the Initial Purchasers of
all of the Series A Notes pursuant to Exempt Resales, (i) if any
event shall occur as a result of which, in the reasonable judgment of the
Company or the Initial Purchasers or their respective counsel, it becomes
necessary or advisable to amend or supplement the Time of Sale Information or
the Final Offering Circular in order to make the statements therein, in the
light of the circumstances under which they were made and when such Time of
Sale Information or Final Offering Circular, respectively, is delivered to an
Eligible Purchaser, not misleading, or if it is necessary to amend or
supplement the Time of Sale Information or the Final Offering Circular to
comply with Applicable Law (as defined below), forthwith to prepare an
appropriate amendment or supplement to the Time of Sale Information or the
Final Offering Circular, as the case may be (in form and substance satisfactory
to the Initial Purchasers), so that as so amended or supplemented, (A) the
Time of Sale Information and the Final Offering Circular, as the case may be,
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 and when such Time of Sale
Information or Final Offering Circular, as the case may be, is so delivered,
not misleading, and (B) the Time of Sale Information and the Final
Offering Circular, as the case may be, will comply with Applicable Law, and (ii) if
it becomes necessary or advisable to amend or supplement the Time of Sale Information
or the Final Offering Circular so that the Time of Sale Information and the
Final Offering Circular, as the case may be, will contain all of the
information specified in, and meet the requirements of, Rule 144A(d)(4) under
the Act, forthwith to prepare an appropriate amendment or supplement to the
Time of Sale Information or the Final Offering Circular, as the case may be,
(in form and substance satisfactory to the Initial Purchasers), so that the
Time of Sale Information or the Final Offering Circular, as the case may be, as
so amended or supplemented, will contain the information specified in, and meet
the requirements of, such Rule.

(e)           Qualification
of Securities. Prior to the
completion of the resale by the Initial Purchasers of all of the Series A
Notes pursuant to Exempt Resales, to cooperate with the Initial Purchasers and
the Initial Purchasers’ counsel in connection with the qualification of the Series A
Notes 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 

 7
 

 

service of process or other documents as may be
necessary in order to effect such qualification; provided, that none of the Company Entities shall be
required in connection therewith to file any general consent to service of
process or to register or qualify as a foreign corporation in any jurisdiction
where it is not now so qualified or to subject itself to general taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.

(f)            Costs
and Expenses. 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 and in connection with
the performance of the obligations of the Company Entities under this
Agreement, including:  (A) the
preparation, printing and distribution of the Preliminary Offering Circular,
the Pricing Term Sheet and the Final Offering Circular and all amendments and
supplements thereto (including, without limitation, financial statements and
exhibits), and all preliminary and final Blue Sky memoranda and all other
agreements, memoranda, correspondence and other documents prepared and delivered
in connection herewith (including the furnishing of copies of the foregoing to
the Initial Purchasers and such other persons as the Initial Purchasers may
designate), (B) the printing, processing and distribution (including,
without limitation, word processing and duplication costs) and delivery of, and
performance under, each of the Transaction Documents and any other agreements
or documents in connection with the Transactions, (C) the preparation,
issuance and delivery of the Notes, including the fees and expenses of the
Trustee (including reasonable fees and expenses of its counsel) and the cost of
their respective personnel, and all costs and expenses related to the delivery
of the Notes to the Initial Purchasers and pursuant to Exempt Resales, including
any transfer or other taxes payable thereon (but in no event income taxes of
the Initial Purchasers), and (D) the qualification of the Notes for offer
and sale under the securities or Blue Sky laws of the several states
(including, without limitation, filing fees and reasonable fees and
disbursements of the Initial Purchasers’ counsel relating to such registration
or qualification and the preparation of memoranda related thereto, subject to
the terms of the engagement letter dated April 17, 2006 between Jefferies &
Company, Inc. and the Company); (ii) all fees and expenses of the
counsel and accountants of the Company Entities; (iii) all expenses and
listing fees in connection with the application for quotation of the Series A
Notes in The Portal Market (“PORTAL”) of the National Association of Securities
Dealers, Inc. (the “NASD”); (iv) all fees and expenses
(including fees and expenses of counsel) of the Company in connection with
approval of the Notes 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 Registered Exchange Offer, the
Exchange Offer Registration Statement and any Shelf Registration Statement, as
set forth in the Registration Rights Agreement; (viii) all fees and
expenses (including reasonable fees and expenses of counsel, subject to any
limitations set forth in the engagement letter between the Company and the
Initial Purchasers) incurred by the Initial Purchasers in connection with the
preparation, negotiation and execution of the 

 8
 

 

Transaction Documents and the consummation of the
Transactions; and (ix) all other costs and expenses incident and necessary
to the performance of the obligations of the Company Entities for which
provision is not otherwise made in this section.

(g)           Use
of Proceeds. To use its
reasonable best efforts to use the proceeds from the sale of the Series A
Notes in the manner described in each of the Time of Sale Information and the
Final Offering Circular under the caption “Use of Proceeds.”

(h)           Waiver
of Certain Laws. 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, 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 Indenture (and, to the extent it may lawfully do so, the Company 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 Trustee in the Indenture but shall suffer and
permit the execution of every such power as though no such law had been
enacted).

(i)            Integration. Not to, and to ensure that no affiliate (as
defined in Rule 501(b) under the Act) of any of the Company Entities
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 Series A Notes in a manner that would require the
registration under the Act of the sale to the Initial Purchasers or of the
offers or sales of Series A Notes pursuant to Exempt Resales.

(j)            Rule 144A
Information. For so long as
any of the Series A Notes remain outstanding, during any period in which
the Company is 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 Notes in connection with any
sale thereof and any prospective Eligible Purchaser of such Notes from such
holder, the information required by Rule 144A(d)(4) under the Act.

(k)           DTC. To obtain the approval of DTC for “book
entry” transfer of the Notes, and to comply with the representation letter of
the Company
and the Guarantors to DTC
relating to the approval of the Notes by DTC for “book entry” transfer.

(l)            PORTAL. To use its best efforts to effect the
inclusion of the Series A Notes for trading in PORTAL and to use its best
efforts to maintain the inclusion of the Series A Notes for trading in
PORTAL for so long as the Series A Notes are outstanding.

 9
 

 

(m)          
Reporting Requirements. For
so long as any of the Notes are outstanding, and whether or not required to do
so by the rules and regulations of the Commission, (i) to furnish to
the Trustee and deliver or cause to be delivered to the holders of the Notes
and the Initial Purchasers, within 15 days after the Company is or would have
been required to file such with the Commission, (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 for each 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 independent
certified public accountants and (B) all information that would be
required to be contained in a filing with the Commission on Form 8-K
if the Company were required to file such reports, and (ii) from and after
the time the Exchange Offer Registration
Statement or the Shelf Registration Statement (or other registration statement
under the Act with respect to the Notes) is filed with the Commission, to file
such information with the Commission so long as the Commission will accept such
filings.

(n)           No
Selling Efforts or General Solicitation. Except in connection with the Registered Exchange Offer or the filing
of the Shelf Registration Statement, not to, and not to authorize or permit any
person acting on its behalf to, (i) distribute any offering material,
including without limitation, any roadshow materials, in connection with the
offer and sale of the Series A Notes (collectively, “Supplemental Offering Material”) other than
(A) the Preliminary Offering Circular, the Pricing Term Sheet and the
Final Offering Circular and any amendments and supplements thereto prepared in
compliance with Section 5(d) and (B) any Supplemental Offering
Material listed on Schedule 4 hereto, or (ii) solicit any offer to
buy or offer to sell the Series A Notes 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.

(o)           No Similar Offerings.
Not to, and to ensure that no affiliate (as defined in Rule 501(b) of
the Act) of the Company 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 Series A Notes in a manner that
would require the registration under the Act of the sale to the Initial
Purchasers or to the Eligible Purchasers of the Series A Notes.

(p)           ERISA. At any time prior to the completion of the
resale by the Initial Purchasers of the Series A Notes, to notify the
Initial Purchasers promptly in writing if any of the Company Entities or any of
their Affiliates becomes a party in interest or a disqualified person with
respect to any employee benefit plan, other than any plan set forth in Schedule
6(kk) hereto, and to identify such plans. The terms “ERISA,” 

 10
 

 

“Affiliates,” “party in interest,” “disqualified
person” and “employee benefit plan” shall have the meanings as set forth in Section 6(kk)
hereof.

(q)           Performance
of Agreements. To comply
with all of its agreements set forth in the Transaction Documents in all
material respects, and to use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under the Operative
Documents by it prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Series A Notes and the Guarantees.

6.     Representations
and Warranties of the Company Entities. Each of the Company Entities, jointly and severally, represents and
warrants to the Initial Purchasers that:

(a)           Offering
Circular. (i) Neither
the Time of Sale Information, nor any individual Supplemental Offering Material
when considered together with the Time of Sale Information, in each case, as of
the Applicable Time (as defined below) contained, (ii) the Final Offering
Circular, as of its date did not, and as of the Closing Date will not, contain
and (iii) each amendment or supplement thereto as of its date will not
contain, in each case, any untrue statement of a material fact or omit to state
any material fact 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
Company by the Initial Purchasers specifically for inclusion in the Time of
Sale Information or the Final Offering Circular. The parties hereto acknowledge
that for purposes of this Agreement (including this Section 6(a) and Section 8)
the only information furnished in writing to the Company by the Initial
Purchasers specifically for inclusion in the Time of Sale Information or the
Final Offering Circular is the information set forth (i) on the cover page of
the Final Offering Circular and in the Pricing Term Sheet with respect to the
price of the Notes, (ii) in the third paragraph on page 132 of the
Preliminary Offering Circular and the Final Offering Circular concerning
offering the Notes for resale by the Initial Purchasers, (iii) in the
fifth, sixth and seventh sentences of the fourth paragraph on page 132 of
the Preliminary Offering Circular and the Final Offering Circular concerning
market-making by the Initial Purchasers, (iv) in the carryover paragraph
from page 132 to 133 of the Preliminary Offering Circular and the Final
Offering Circular concerning stabilization by the Initial Purchasers and (v) in
the first and second full paragraphs on page 133 of the Preliminary
Offering Circular and the Final Offering Circular concerning the affiliation of
the Initial Purchasers and their respective affiliates with the Company and its
affiliates (such information described in the immediately preceding clauses (i) through
(v) of this Section 6(a), the “Furnished Information”).
The Time of Sale Information, as of the Applicable Time, contained, and the
Final Offering Circular, as of its date, contained, and, as of the Closing Date
and as amended or supplemented, will contain, all of the information specified
in, and meet the requirements of, Rule 144A(d)(4) under the Act.

 11

 

Each of the Transaction Documents, as executed and
delivered, and each of the Transactions conforms to the description thereof in
each of the Time of Sale Information and the Final Offering Circular. “Applicable Time” means 1:15 p.m. (New
York city time) as of the date of this Agreement.

(b)           144A
Eligibility. When the Series A
Notes and the Guarantees are issued and delivered pursuant to this Agreement,
neither the Series A Notes nor the Subsidiary Guarantees will be of the
same class (within the meaning of Rule 144A under the Act) as any security
of the Company or the Guarantors that is listed on a national securities
exchange registered under Section 6 of the Exchange Act or that is quoted
in a United States automated inter-dealer quotation system.

(c)           Due
Organization; Good Standing.
Each of the Company Entities (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 each of the Time of Sale Information and the Final
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 its business or the ownership,
leasing, use or operation of its properties and assets requires such
qualification or licensing, except where the failure to be so qualified or
licensed would not, singly or in the aggregate, have a material adverse effect
on (A) the properties, business, operations, earnings, assets, liabilities
or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, (B) the ability of any of the Company Entities to
perform its obligations under any of the Transaction Documents or (C) the
validity of any of the Transaction Documents or the consummation of any of the
Transactions (each, a “Material
Adverse Effect”).

(d)           Subsidiaries. Immediately following the Closing, the only
subsidiaries of the Company will be the direct or indirect subsidiaries of the
Company listed on Schedule 6(d) hereto (collectively, the “Subsidiaries” and each, a “Subsidiary”) and the
Company, except as otherwise set forth on Schedule 6(d) hereto,
will directly own 100% of the outstanding shares of capital stock in each
Subsidiary, in each case, free and clear of all Liens (as defined in each of
the Time of Sale Information and the Final Offering Circular), except Permitted
Liens (as defined in each of the Time of Sale Information and the Final
Offering Circular). Except as disclosed in each of the Time of Sale Information
and the Final Offering Circular, there are no outstanding (i) securities
convertible into or exchangeable for any capital stock of any of the Company
Entities or any of the Subsidiaries, (ii) options, warrants or other
rights to purchase or subscribe for any capital stock or any securities
convertible into or exchangeable for any capital stock of any of the Company
Entities or (iii) contracts, commitments, agreements, understandings,
arrangements, undertakings, rights, calls or claims of any kind relating to the
issuance of any capital stock of any of the Company Entities or any of the 

 12
 

 

Subsidiaries, any such convertible or exchangeable
securities or any such options, warrants or rights. Except as set forth above,
immediately following the Closing, none of the Company Entities will directly
or indirectly own any capital stock of or other equity interest in any person.

(e)           Capitalization. All of the outstanding shares of capital
stock of each of the Company and each of the Subsidiaries have been duly
authorized, are validly issued, fully paid and nonassessable, and were not
issued in violation of, and are not subject to, any preemptive or similar
rights. The table under the caption “Capitalization” in each of the Time of
Sale Information and the Final Offering Circular (including the footnotes
thereto) sets forth, as of its date, the pro forma capitalization of the
Company and the Subsidiaries, on a consolidated basis, after giving effect to
the Transactions. Immediately following the Closing, except as set forth in
such table, neither of the Company nor any of the Subsidiaries will have any
liabilities, absolute, accrued, contingent or otherwise other than:  (i) liabilities that are reflected in
the Company Financial Statements (as defined below), (ii) loans made under
the New Credit Facility or (iii) liabilities incurred subsequent to December 31,
2005, in the ordinary course of business, consistent with past practice, that
would not, singly or in the aggregate, have a Material Adverse Effect.

(f)            No
Other Registration Rights. Except
for this Agreement and the Registration Rights Agreement and, except for
agreements between the Company and its directors, officers and employees
relating to the registration of shares underlying stock options granted in the
ordinary course of the Company’s business, there are no contracts, commitments,
agreements, arrangements, understandings or undertakings of any kind to which
any of the Company Entities or any of the Subsidiaries is a party, or by which
any of them is bound, granting to any person the right (i) to require
either of the Company or any Subsidiary to file a registration statement under
the Act with respect to any securities of either of the Company of any
Subsidiary or requiring either of the Company or any Subsidiary to include such
securities with the Notes registered pursuant to any registration statement, or
(ii) to purchase or offer to purchase any securities of any of the Company
Entities or any of their respective affiliates.

(g)           Power
and Authority. Each of the
Company Entities has all requisite power and authority to execute and deliver,
and to perform its obligations under, the Transaction Documents to which it is
a party and to consummate the Transactions.

(h)           Authorization
of this Agreement. This
Agreement and the Transactions contemplated hereby (including, without
limitation, the Offering and the issuance and sale of the Notes in accordance
with this Agreement) have been duly authorized by each of the Company Entities,
and this Agreement has been validly executed and delivered by, and is the
legal, valid and binding obligation of, each of the Company Entities,
enforceable against each of the Company Entities in accordance with 

 13
 

 

its terms, except that (i) such enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors’ rights generally, (ii) any rights of acceleration and the
availability of equitable remedies may be subject to general principles of
equity (whether considered in a proceeding in equity or at law), and (iii) the
enforceability of the provisions of Section 8 providing for the
indemnification of or contribution to a party with respect to a liability may
be limited if such provisions violate or are contrary to public policy under
applicable law.

(i)            Authorization
of Indenture. The Indenture
and the Transactions contemplated thereby have been duly authorized by each of
the Company and the Guarantors and, on the Closing Date, the Indenture will
have been validly executed and delivered by, and will be the legal, valid and
binding obligation of, each of the Company and the Guarantors, enforceable against
each of the Company and the Guarantors in accordance with its terms, except
that (i) such enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights generally and (ii) any
rights of acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a proceeding in
equity or at law). 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.

(j)            Authorization
of Registration Rights Agreement. The Registration Rights Agreement and the Transactions contemplated
thereby have been duly authorized by each of the Company and the Guarantors
and, on the Closing Date, the Registration Rights Agreement will have been
validly executed and delivered by, and will be the legal, valid and binding
obligation of, each of the Company and the Guarantors, enforceable against each
of the Company and the Guarantors in accordance with its terms, except that (i) such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally, (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law), and (iii) the enforceability of the provisions of Section 8
thereof providing for the indemnification of or contribution to a party with
respect to a liability may be limited if such provisions violate or are
contrary to public policy under applicable law.

(k)           Authorization
of Series A Notes. The Series A
Notes have been duly authorized by the Company for issuance and sale to the
Initial Purchasers pursuant to this Agreement and, on the Closing Date, will
have been validly executed, authenticated, issued and delivered by the Company
in accordance with the terms of this Agreement and the Indenture. When the Series A
Notes have been issued, 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 of this Agreement, the Series A Notes will be
legal, valid and binding obligations of the Company, entitled to the benefits 

 14
 

 

of the Indenture and enforceable against the Company
in accordance with their terms, except to the extent that (i) such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law). The Series A Notes rank and will rank junior to all Senior Debt
(as defined in each of the Time of Sale Information and the Final Offering
Circular) of the Company that is outstanding on the date hereof or that may be
incurred hereafter and senior to all Subordinated Indebtedness (as defined in each
of the Time of Sale Information and the Final Offering Circular) of the Company
that is outstanding on the date hereof or that may be incurred hereafter.

(l)            Authorization
of Series B Notes. The Series B
Notes have been duly authorized by the Company and, when issued in the
Registered Exchange Offer, (A) will have been validly executed,
authenticated, issued and delivered in accordance with the terms of the
Indenture, the Registration Rights Agreement and the Registered Exchange Offer
and (B) will be legal, valid and binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against the Company
in accordance with their terms, except to the extent that (i) such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law). The Series B Notes rank and will rank junior to all Senior Debt
of the Company that is outstanding on the date hereof or that may be incurred
hereafter and senior to all Subordinated Indebtedness of the Company that is
outstanding on the date hereof or that may be incurred hereafter.

(m)          
Authorization of Guarantees of Series A Notes. 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, will have been validly executed and delivered by each such
Guarantor in accordance with the terms of the Indenture. When the Series A
Notes have been issued, 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 of this Agreement, the Guarantee of each Guarantor
endorsed on the Series A Notes will be the legal, valid and binding
obligation of each such Guarantor, enforceable against each such Guarantor in
accordance with its terms, except to the extent that (i) such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
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 junior to all Senior Debt of the Guarantors that is outstanding on the
date hereof or that may be incurred hereafter and senior to all Subordinated

 15
 

 

Indebtedness of the Guarantors that is outstanding
on the date hereof or that may be incurred hereafter.

(n)           Authorization
of Guarantees of Series B Notes. The Guarantee to be endorsed on the Series B Notes by each
Guarantor has been duly authorized by each such Guarantor and, when the Series B
Notes are issued, will have been validly executed and delivered by each such
Guarantor in accordance with the terms of the Indenture, the Registration
Rights Agreement and the Registered Exchange Offer. When the Series B
Notes have been issued, executed and authenticated in accordance with the terms
of the Registered Exchange Offer and the Indenture, the Guarantee of each
Guarantor endorsed on the Series B Notes will be the legal, valid and
binding obligation of each such Guarantor, enforceable against each such
Guarantor in accordance with its terms, except to the extent that (i) such
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law). The Guarantees to be endorsed on the Series B Notes will rank
junior to all Senior Debt of the Guarantors that is outstanding on the date
hereof or that may be incurred hereafter and senior to all Subordinated
Indebtedness of the Guarantors that is outstanding on the date hereof or that
may be incurred hereafter.

(o)           Authorization
of the New Credit Facility.
The New Credit Facility and the Transactions contemplated thereby have been
duly authorized by the Company and each Guarantor party thereto, and when the
New Credit Facility is entered into, the New Credit Facility will have been
validly executed and delivered by the Company and each Guarantor party thereto.
When the New Credit Facility has been executed and delivered by the Company and
each Guarantor party thereto, and assuming the due authorization, execution and
delivery of the New Credit Facility by parties thereto other than the Company
and the Guarantors party thereto, the New Credit Facility will be the legal,
valid and binding obligation of, the Company and each Guarantor party thereto,
enforceable against the Company and each Guarantor party thereto in accordance
with its terms, except that (i) such enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors’ rights
generally and (ii) any rights of acceleration and the availability of
equitable remedies may be subject to general principles of equity (whether
considered in a proceeding in equity or at law).

(p)           Authorization of
Consent Documents. The Supplemental Indenture has been duly
authorized, executed and delivered by each of the Company and the Guarantors,
and the Proposed Amendments and the other Consent Transactions have been duly
authorized by the Company and each of the Guarantors, as applicable, and the
Supplemental Indenture constitutes the legal, valid and binding obligation of,
the Company and each of the Guarantors, enforceable against the Company and the
Guarantors in accordance with its terms, except that (i) such
enforceability may be 

 16
 

 

limited by applicable bankruptcy, insolvency or
similar laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law).

(q)           No
Violation. The Company is
not in violation of its certificate of incorporation or bylaws (the “Company Charter Documents”), and none of the Guarantors is in
violation of its certificate of incorporation or bylaws (the “Guarantor Charter Documents” and, collectively with the Company Charter
Documents, the “Charter
Documents”). Neither the
Company nor any of the Subsidiaries is (i) in violation of any federal,
state, local or foreign statute, law or ordinance, or any judgment, decree,
rule, regulation or order, including, without limitation, the West Virginia
Racetrack Video Lottery Act, the West Virginia Racing Act, the Nevada Gaming
Control Act, the Pennsylvania Racing Act, the Pennsylvania Race Horse
Development and Gaming Act, the Minnesota Pari-Mutuel Horse Racing Act, the Ohio
Revised Code Horse Racing Law, the Michigan Horse Racing Law, and the Federal
Interstate Horse Racing Act, in each case including the rules and
regulations promulgated thereunder (collectively, “Applicable Law”), of
any government, governmental or regulatory agency or body (including, without
limitation, the West Virginia Lottery Commission, the West Virginia Racing
Commission, the Nevada Gaming Commission, the Nevada Gaming Control Board, the
Pennsylvania State Horse Racing Commission, the Pennsylvania Gaming Control
Board, the Minnesota Racing Commission, the Ohio State Racing Commission, the
Michigan Office of Racing Commissioner, or other applicable gaming or racing
authority (each, a “Gaming/Racing
Authority”)), court,
arbitrator or self-regulatory organization, domestic or foreign (each, a “Governmental Authority”), other than violations that would not,
singly or in the aggregate, have a Material Adverse Effect, or (ii) 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
any of their respective property is bound (collectively, “Applicable Agreements”), other than breaches or defaults that
would not, singly or in the aggregate, have a Material Adverse Effect. There
exists no condition that, with the passage of time or otherwise, would (x) constitute
a violation of such Charter Documents or Applicable Laws or (y) constitute
a breach of or default under any Applicable Agreement or (z) result in the
imposition of any penalty or the acceleration of any indebtedness, other than,
in the case of the immediately preceding clauses (y) and (z), such
breaches, penalties or defaults that would 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 would not,
singly or in the aggregate, have a Material Adverse Effect.

(r)            No
Conflict.
None of the execution,
delivery or performance of any of the Transaction Documents, nor the compliance
with the terms and provisions 

 17
 

 

thereof, nor the consummation of any of the
Transactions shall conflict with, violate, constitute a breach of or a default
(with the passage of time or otherwise) under, result in the imposition of a
Lien on any assets or capital stock of or membership interests in either of the
Company or any of the Subsidiaries (except as created by the Indenture), or
result in an acceleration of indebtedness under or pursuant to, (i) the
Charter Documents, (ii) any Applicable Agreement or (iii) any
Applicable Law. After giving effect to the Transactions, no Default or Event of
Default (each, as defined in each of the Time of Sale Information and the Final
Offering Circular) will exist.

(s)           Permits. No permit, certificate, authorization,
approval, consent, license or order of, or filing, registration, declaration or
qualification with, any Governmental Authority or any other person
(collectively, “Permits”) is required in connection with, or as a
condition to, the execution, delivery or performance of any of the Transaction
Documents, the compliance with the terms and provisions thereof or the
consummation of any of the Transactions, other than (i) such Permits as
have been made or obtained on or prior to the Closing Date, which Permits are
in full force and effect on the Closing Date, (ii) the filing and approval
of (A) the Exchange Offer Registration Statement and, if required by the
Registration Rights Agreement, the Shelf Registration Statement and (B) the
Guarantee of the Series B Notes by Speakeasy Gaming of Las Vegas, Inc.
and Speakeasy Gaming of Fremont, Inc., with the Nevada Gaming Commission
and the Nevada Gaming Control Board, (iii) the order of the Commission
declaring the Exchange Offer Registration Statement or the Shelf Registration
Statement, as the case may be, effective (the Permits described in clause (ii) and
(iii) of this Section 6(s), collectively, the “Post-Closing Permits”) and (iv) such Permits the failure of
which to make or obtain would not, singly or in the aggregate, have a Material
Adverse Effect.

(t)            No Proceedings. Except as disclosed in each of the Time of
Sale Information and the Final Offering Circular, there is no action, claim,
suit, demand, hearing, notice of violation or deficiency, or proceeding
(including, without limitation, any investigation or partial proceeding, such
as a deposition), domestic or foreign (collectively, “Proceedings”), pending or, to the knowledge of the
Company Entities, threatened (i) either with respect to any of the Company
Entities in connection with, or that seeks to restrain, enjoin, prevent the
consummation of, or otherwise challenge, any of the Transaction Documents or
any of the Transactions, or (ii) that could, singly or in the aggregate,
have a Material Adverse Effect. None of the Company Entities 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. No
injunction or order has been issued and no Proceeding is pending or, to the
knowledge of the Company Entities, threatened that (i) asserts that the
offer, sale and delivery of the Series A Notes and the Guarantees to the
Initial Purchasers pursuant to this Agreement or the initial resale of the Series A
Notes and the Guarantees by the Initial Purchasers in the manner contemplated
by this Agree­ment is subject to the registration requirements of the Act, or (ii) would
prevent or suspend the issuance or sale of the Notes, including the Exempt
Resales, or the 

 18
 

 

use of the Time of Sale
Information, the Final Offering Circular, or any amendment or supplement
thereto, in any jurisdiction.

(u)           Regulated Persons. Each of the Company Entities and each of
their respective directors, members, managers, officers, employees and agents
(each of the Company Entities and each of such other persons, a “Regulated Person” and, collectively, the “Regulated Persons”) has, and is in compliance with the terms
and conditions of, all Permits (including, without limitation, Permits with
respect to engaging in gaming and/or racing operations, as applicable), necessary
or advisable to own, lease, use and operate the properties and assets and to
conduct and carry on the businesses described in each of the Time of Sale
Information and the Final Offering Circular, other than (i) such Permits
the failure of which to have would not, singly or in the aggregate, have a
Material Adverse Effect and (ii) Post-Closing Permits. All such Permits
are valid and in full force and effect. Each of the Regulated Persons is in
compliance with the terms and conditions of all Permits (including, without
limitation, Permits with respect to engaging in gaming and/or racing
operations, as applicable) necessary or advisable to own, lease, use and
operate the properties and assets and to conduct and carry on the businesses
described in each of the Time of Sale Information and the Final Offering
Circular, other than where such failure to be in compliance would not, singly
or in the aggregate, have a Material Adverse Effect. None of the execution,
delivery or performance of any of the Transaction Documents, nor the compliance
with the terms and provisions thereof, nor the consummation of any of the
Transactions will allow or result in, and no event has occurred which allows or
results in, or after notice or lapse of time would allow or result in, the
imposition of any material penalty under, or the revocation or termination of,
any such Permit or any material impairment of the rights of the holder of any
such Permit. None of the Company Entities has any reason to believe that any
issuer is considering limiting, conditioning, suspending, modifying, revoking
or not renewing any such Permit.

(v)           No Investigations of Regulated Persons. To the knowledge of the Company Entities, (i) no
Governmental Authority is investigating any Regulated Person, and (ii) there
is no basis for any of the Gaming/Racing Authorities to deny the renewal of the
current Permits held by any of the Regulated Persons, except for ordinary
course investigations.

(w)          Title to Assets. Immediately following the Closing, each of
the Company and the Subsidiaries (i) will have good and marketable title,
free and clear of all Liens (other than Permitted Liens), to all property and
assets described in each of the Time of Sale Information and the Final Offering
Circular as being owned by it, (ii) will enjoy peaceful and undisturbed
possession under all leases to which it is a party as lessee and (iii) will
hold a valid leasehold interest with respect to each such lease.

 19

 

(x)            Sufficiency and Condition of
Assets. The assets of each
of the Company and the Subsidiaries include 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 as proposed to be
conducted, and such assets are in working condition, except where the failure
of such assets to be in working condition would not, singly or in the
aggregate, have a Material Adverse Effect.

(y)           Insurance. Each of the Company and the Subsidiaries
maintains reasonably adequate insurance 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.

(z)            Real Property. No condemnation, eminent domain, or similar
proceeding exists, is pending or, to the knowledge of the Company Entities, is
threatened, with respect to or that could affect any properties or assets of
either of the Company or any of the Subsidiaries, except for such proceedings
as would not, singly or in the aggregate, have a Material Adverse Effect. Other
than as set forth in Schedule 6(z), no owned real property of either of
the Company or any of the Subsidiaries is subject to any sales contract, option,
right of first refusal or similar agreement or arrangement with any third party.
There is no real property currently under contract or subject to an option in
favor of any of the Company or any of the Subsidiaries, except for (i) real
property which the failure of the Company or any of the Subsidiaries to
acquire, would not, singly or in the aggregate, have a Material Adverse Effect,
and (ii) the real property listed on Schedule 6(z) hereto.

(aa)         Related Party Transactions. Except as adequately disclosed in each of
the Time of Sale Information and the Final Offering Circular, there are no
material related party transactions between any of the Company Entities and (i) any
director (or nominee for election as a director) or executive officer of any of
the Company Entities, (ii) any beneficial or record owner of more than
five percent of any class of the Company’s voting securities or (iii) any
member of the immediate family of any of the foregoing persons.

(bb)         Taxes. All tax returns required to be filed by
either of the Company or by any of the Subsidiaries in any jurisdiction
(including foreign jurisdictions) have been filed and, when filed, all such
returns were accurate 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 either of the Company or
from any of the Subsidiaries have been paid, other than those being contested
in good 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 Company or the
Subsidiaries, as applicable, in accordance with generally accepted accounting
principles of the United

 20
 

 

States, consistently applied
(“GAAP”). There are no actual or proposed
additional tax assessments for any tax period against either of the Company or
against any of 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 the Company and the Subsidiaries, as applicable, in respect of any
tax liability for any tax periods not finally determined are adequate to meet
any assessments of tax or re-assessments of additional tax for any such period.

(cc)         Intellectual Property. Other than as would not, singly or in the
aggregate, have a Material Adverse Effect, the Company and the Subsidiaries
own, possess 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. To the knowledge of the Company Entities, no
claims have been asserted by any person challenging the use of any such
Intellectual Property by any of the Company or 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, and the use of such Intellectual
Property by the Company and the Subsidiaries will not infringe on the
Intellectual Property rights of any other person.

(dd)         Accounting Controls. Except as disclosed in each of the Time of
Sale Information and the Final Offering Circular, each of the Company 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 authorization, (ii) material
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP, and to maintain asset accountability, (iii) access
to assets is permitted only in accordance with management’s general or specific
authorization, 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.

(ee)         Financial Statements. The audited historical consolidated
financial statements and related notes of the Company and the Subsidiaries
contained in each of the Time of Sale Information and the Final Offering
Circular (the “Company
Audited Financial Statements”)
and the unaudited condensed consolidated financial statements and related notes
of the Company and the Subsidiaries contained in each of the Time of Sale
Information and the Final Offering Circular (the “Company Interim Financial Statements” and, together with the Company Audited Financial Statements, the “Company Financial Statements”) present fairly the consolidated financial
position, results of operations and cash flows of the Company and the
Subsidiaries, as of the respective dates and for the respective periods to
which they apply, and have been

 21
 

 

prepared in accordance with
GAAP consistently applied throughout the periods involved and the requirements
of Regulation S-X that would be applicable if the Preliminary Offering Circular
or the Final Offering Circular, as the case may be, 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 each of the Time of Sale Information and the Final Offering
Circular for the Company and the Subsidiaries have been prepared on a basis
consistent with that of the Company Financial Statements and present fairly the
financial position and results of operations of the Company and the
Subsidiaries, on a consolidated basis, as of the respective dates and for the
respective periods indicated.

All other financial,
statistical and market and industry related data included in each of the Time
of Sale Information and the Final Offering Circular are fairly and accurately
presented in all material respects and are based on or derived from sources the
Company believe to be reliable and accurate. Ernst & Young LLP are
independent public accountants with respect to the Company.

(ff)           No Material Adverse Change. Subsequent to the respective dates as of
which information is given in each of the Time of Sale Information and the
Final Offering Circular, except as adequately disclosed in each of the Time of
Sale Information and the Final Offering Circular, (i) neither of the
Company 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 material increase in
long-term indebtedness or any material increase in short-term indebtedness of
any of the Company or the Subsidiaries, or any payment of or declaration to pay
any dividends or any other distribution with respect to any of the Company or
the Subsidiaries (other than dividends or distributions between the Company and
any of the Guarantors), 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 Company and the
Subsidiaries taken as a whole (each of clauses (i), (ii) and (iii), a “Material Adverse Change”). Except as disclosed in each of the Time
of Sale Information and the Final Offering Circular, there is no event that has
occurred or that is reasonably likely to occur which, if it were to occur,
could reasonably be expected, singly or in the aggregate, to have a Material
Adverse Effect or result in a Material Adverse Change.

(gg)         Ratings. 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 either of the Company or any
Guarantor that it is considering imposing) any condition (financial or
otherwise) on the Company’s or any Guarantor’s retaining any rating assigned to
any securities of either of the Company or any Guarantor, or (ii) has
indicated to either of the Company or any Guarantor that it is considering (A) the

 22
 

 

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 any securities of either of the Company
or any Guarantor.

(hh)         Solvency. Each of the Company and each Guarantor is
incurring its respective indebtedness under the Series A Notes and the
Guarantees for proper purposes and in good faith. Immediately before and after
giving effect to the issuance of the Series A Notes, (i) the assets
of the Company and the Subsidiaries (including the Guarantors), considered as a
whole and as a going concern, at a fair valuation, will exceed the sum of their
debts, taken as a whole; (ii) the present fair salable value of the assets
of the Company and the Subsidiaries (including the Guarantors), considered as a
whole and as a going concern, will exceed the amount required to pay their
liability on their debts, taken as a whole; (iii) the Company will have
adequate capital with which to conduct its present and anticipated businesses;
and (iv) neither the Company nor any Guarantor will intend to incur or
believe or reasonably should believe that it will incur debts beyond its
ability to pay as those debts become due. The Company is not aware of any
reason why it would be inappropriate to consider, for purposes of clauses (i) and
(ii) above, the Company and the Subsidiaries as a going concern. For
purposes of this paragraph, “debts” includes contingent and unliquidated debts.

(ii)           No Solicitation. Neither of the Company nor any of their affiliates
nor anyone acting on their 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 the Notes or to facilitate the sale or resale of any of the
Notes, (ii) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, any of the Notes, or (iii) paid or agreed to pay
to any person any compensation for soliciting another to purchase any other
securities of either of the Company.

(jj)           No Registration. Without limiting clause (s) above, no
registration under the Act, and no qualification of the Indenture under the TIA
is required for the sale of the Series A Notes and the Guarantees to the
Initial Purchasers as contemplated hereby or for the Exempt Resales, assuming (i) that
the purchasers in the Exempt Resales are Eligible Purchasers, (ii) the
accuracy of the Initial Purchasers’ representations contained in Section 7,
and (iii) the accuracy of the representations made by each Accredited
Investor who purchases the Series A Notes pursuant to an Exempt Resale as
set forth in the letter of representation in the form of Annex A to the
Preliminary Offering Circular. No form of general solicitation or general
advertising (including, without limitation, as such terms are defined in
Regulation D under the Act) was used by either of the Company or any of their
respective affiliates or any of their respective representatives in connection
with the offer and sale of any of the Series A Notes or in connection with
Exempt Resales. No securities of the same class as the Series A Notes have
been offered,

 23
 

 

issued or sold by either of
the Company or any of their respective affiliates within the six-month period
immediately prior to the date hereof.

(kk)         ERISA. Except as set forth in Schedule 6(kk)
hereto, neither of the Company nor any of their respective “Affiliates”
maintains a plan that is intended to qualify under Section 401(a) of
the Code, or is a “party in interest” or a “disqualified person” with respect
to any employee benefit plans. No condition exists or event or transaction has
occurred in connection with any employee benefit plan that could result in
either of the Company or any such “Affiliate” incurring any liability, fine or
penalty that could, singly or in the aggregate, have a Material Adverse Effect.
Neither of the Company nor any trade or business under common control with the
Company (for purposes of Section 414(c) of the Code) maintains 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”).

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”).

(ll)           Investment Company Act and Other Federal
Regulations. None of the
Company nor any of the Subsidiaries has taken, and none of them will take, any
action that may cause this Agreement or the issuance of the Series A Notes
to, and 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). Neither of the
Company or any of the Subsidiaries is subject to regulation, or shall become
subject to regulation upon the consummation of the Offering and sale of the Series A
Notes and the application of the net proceeds thereof as described in each of
the Time of Sale Information and the Final Offering Circular, or the
consummation of any of the other Transactions, under the Investment Company Act
of 1940, as amended, and the rules and regulations and interpretations
promulgated thereunder, or under any other Federal or state statute or regulation
limiting its ability to incur or assume indebtedness for borrowed money.

(mm)       No
Brokers. Neither of the
Company nor any of the Subsidiaries has dealt with any broker, finder,
commission agent or other person (other than the Initial Purchasers) in connection
with the Transactions and neither of the Company or any of the Subsidiaries is
under any obligation to pay any broker’s fee or commission in connection

 24
 

 

with the Transactions (other
than commissions and fees to the Initial Purchasers as set forth in each of the
Time of Sale Information and the Final Offering Circular).

(nn)         No Labor Disputes. To the knowledge of the Company Entities,
none of the Company Entities  is engaged
in any unfair labor practice. There is (i) no unfair labor practice complaint
or other proceeding pending or, to the knowledge of the Company Entities,
threatened against either of the Company or any of 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,
to the knowledge of the Company Entities, threatened, (ii) no strike,
labor dispute, slowdown or stoppage pending or, to the knowledge of the
Company Entities, threatened against either of the Company or any of the
Subsidiaries, and (iii) no union representation question existing with
respect to the employees of either of the Company or any of the Subsidiaries,
and, to the knowledge of the Company Entities, no union organizing activities
are taking place that, in the case of each of clauses (i), (ii) and (iii) above,
would, singly or in the aggregate, have a Material Adverse Effect.

(oo)         Environmental Laws. Except as disclosed in each of the Time of
Sale Information and the Final Offering Circular or as otherwise would not,
singly or in the aggregate, have a Material Adverse Effect or otherwise require
disclosure in the Time of Sale Information or the Final Offering Circular, (i) neither
of the Company nor any of the Subsidiaries has been or is in violation of any
federal, state or local laws and regulations relating to pollution or
protection of human health or the environment, including, without limitation,
laws and regulations relating to emissions, discharges, releases or threatened
releases of toxic or hazardous substances, materials or wastes, or petroleum
and petroleum products (“Materials
of Environmental Concern”),
or otherwise relating to the protection of human health and safety, or the use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, “Environmental Laws”),
which violation includes, but is not limited to, noncompliance with, or lack
of, any permits or other environmental authorizations; (ii) there are no
circumstances, either past, present or that are reasonably foreseeable, that
may lead to any such violation in the future; (iii) neither of the Company
nor any of the Subsidiaries has received any communication (written or oral),
whether from a Governmental Authority or otherwise, alleging any such
violation; (iv) there is no pending or, to the knowledge of the Company
Entities, threatened claim, action, investigation, notice (written or oral) or
other Proceeding by any person or entity alleging potential liability of either
of the Company or any of the Subsidiaries (or against any person or entity for
whose acts or omissions the Company or any of the Subsidiaries is or may
reasonably be expected to be liable, either contractually or by operation of
law) for investigatory, cleanup, or other response costs, or natural resources
or property damages, or personal injuries, attorney’s fees or penalties
relating to (A) the presence, or release into the environment, of any
Materials of Environmental Concern at any location, or (B)

 25
 

 

circumstances forming the
basis of any violation or potential violation, of any Environmental Law
(collectively, “Environmental
Claims”); and (v) there
are no past or present actions, activities, circumstances, conditions, events
or incidents that could form the basis of any Environmental Claim.

Each of the
Company and the Subsidiaries, as the Company reasonably believes to be
necessary and appropriate, (i) has conducted a review of the effect of
Environmental Laws on the business, operations and properties of each of the
Company and the Subsidiaries, in the course of which, or as a result of which,
the Company has identified and evaluated associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for cleanup, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities,
and any potential liabilities to third parties); and (ii) has conducted,
as necessary and appropriate, environmental investigations of, and, in any
case, has reviewed reasonably available information regarding, the business,
properties and operations of each of the Company and the Subsidiaries, and of
other properties within the vicinity (consistent with ASTM or other applicable
industry standards with respect to such offsite properties) of their business,
properties and operations, as the Company reasonably believes to be necessary
and appropriate for the circumstances of each such property and operation; on
the basis of such reviews, investigations and inquiries, the Company has
reasonably concluded that any costs and liabilities associated with such
matters would not have, singularly or in the aggregate, a Material Adverse
Effect or otherwise require disclosure in the Time of Sale Information or the
Final Offering Circular.

(pp)         Directed Selling Efforts. None of the Company Entities nor any of
their respective affiliates or any person acting on its or their behalf (other
than the Initial Purchasers, as to whom the Company Entities make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act (“Regulation S”) with
respect to the Series A Notes or the Guarantees.

(qq)         Offshore Transactions. The Series A Notes offered and sold in
reliance on Regulation S have been and will be offered and sold only in
offshore transactions, as such term is defined in Regulation S (“Offshore Transactions”).

(rr)           No Plan or Scheme. The sale of the Series A Notes
pursuant to Regulation S is not part of a plan or scheme to evade the
registration provisions of the Act.

(ss)         Regulation S Offering Restrictions. The 
Company Entities and their respective affiliates and all persons acting
on their behalf (other than the Initial Purchasers, as to whom the Company
Entities make no representation) have complied with and will comply with the
offering restrictions requirements of Regulation S in connection with the
offering of the Series A Notes outside the United States.

 26
 

 

(tt)           Restricted Period. The Series A Notes sold in reliance on
Regulation S will be represented upon issuance by a temporary global security
that may not be exchanged for definitive securities until the expiration of the
40-day restricted period referred to in Rule 903(b)(3) of the
Act and only upon certification of beneficial ownership of such Series A
Notes by non-U.S. persons or U.S. persons who purchased such Series A
Notes in transactions that were exempt from the registration requirements of
the Act.

(uu)         Disclosure Controls. Each of the Company and the Subsidiaries has
established and maintains and evaluates “disclosure controls and procedures”
(as such term is defined in Rule 13a-15 and 15d-15 under the
Exchange Act) and “internal control over financial reporting” (as such term is
defined in Rule 13a-15 and 15d-15 under the Exchange Act). Such
disclosure controls and procedures are designed to ensure that material
information relating to the Company, including its consolidated subsidiaries,
is made known to the Company’s Chief Executive Officer and Chief Financial
Officer by others within those entities, and, except as disclosed in each of
the Time of Sale Information and the Final Offering Circular, such disclosure
controls and procedures are effective to perform the functions for which they
were established. The Company’s independent auditors and board of directors
have been advised of: (i) all significant deficiencies, if any, in the design
or operation of internal controls which could adversely affect any of the
Company’s and the Subsidiaries’ ability to record, process, summarize and
report financial data; and (ii) all fraud, if any, whether or not
material, that involves management or other employees who have a role in any of
the Company’s or the Subsidiaries’ internal controls. All material weaknesses,
if any, in internal controls have been identified to the Company’s and the
Subsidiaries’ independent auditors. Since the date of the most recent
evaluation of such disclosure controls and procedures and internal controls,
there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses. The
principal executive officers (or their equivalents) and principal financial
officers (or their equivalents) of each of the Company and the Subsidiaries
have made all certifications required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and any related rules and
regulations promulgated by the Commission, and the statements contained in each
such certification are complete and correct. The Company, the Subsidiaries and
the Company’s directors and officers are each in compliance in all material
respects with all applicable effective provisions of the Sarbanes-Oxley Act and
the rules and regulations of the Commission promulgated thereunder.

(vv)         Representations and Warranties. Each certificate signed by any officer of
any of the Company Entities and delivered to the Initial Purchasers or counsel
for the Initial Purchasers in connection with the Transactions shall be deemed
to be a representation and warranty by such Company Entities to the Initial
Purchasers as to the matters covered thereby.

 27
 

 

7.     Representations and Warranties of the Initial Purchasers. Each
Initial Purchaser, severally but not jointly, represents and warrants to the
Company and the Guarantors that:

(a)           QIB. It is a QIB with such knowledge and experience in financial and
business matters as is necessary in order to evaluate the merits and risks of
an investment in the Series A Notes.

(b)           Eligible Purchasers. It (i) is not acquiring the Series A
Notes 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 Series A
Notes only from, and will be reoffering and reselling the Series A Notes
only to, persons in the United States whom it reasonably believes to be (A) QIBs
in reliance on the exemption from the registration requirements of the Act
provided by Rule 144A under the Act, (B) Accredited Investors that
execute and deliver to each of the Company and the Initial Purchasers a letter
containing certain representations and agreements in the form attached as Annex
A to the Preliminary Offering Circular or (C) Regulation S Purchasers in
Offshore Transactions in reliance upon Regulation S under the Act.

(c)           No General Solicitation. No form of general solicitation or general
advertising within the meaning of Section 502(c) of the Act has been
or will be used by the Initial Purchasers or any of their respective
representatives in connection with the offer and sale of any of the Series A
Notes.

(d)           Representations of Eligible Purchasers. In connection with the Exempt Resales, it
will solicit offers to buy the Series A Notes only from, and will offer
and sell the Series A Notes only to, persons whom it reasonably believes
to be Eligible Purchasers, who, in purchasing such Series A Notes, will be
deemed to have represented and agreed that (i) if such Eligible Purchaser
is a QIB that it is purchasing the Series A Notes for its own account or
for the account of another QIB; (ii) such Series A Notes have not
been registered under the Act or any other applicable securities law, and may
not be offered, sold or otherwise transferred prior to the date which is two
years (or such other period that may hereafter be provided under Rule 144(k) under
the Act as permitting resales of restricted securities by non-affiliates
without restriction) after the later of the original issue date of the Series A
Notes and the last date on which the Company or any affiliate of the Company
was the owner of the Series A Notes (or any predecessor of the Series A
Notes) only (A) to the Company pursuant to the indenture governing the
Notes, (B) pursuant to a registration statement which has been declared
effective under the Act, (C) for so long as the Series A Notes 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 under the Act, (D) outside the

 28
 

 

United States in an Offshore
Transaction in accordance with Rule 904 under the Act, (E) to an
institutional “accredited investor” within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Act that is acquiring the Series A
Notes 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 (E) pursuant
to another available exemption from the registration requirements of the Act,
subject to the Company’s and the Trustee’s right prior to any such offer, sale
or transfer pursuant to clause (E) or (F) above 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 Series A Notes 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 (iii) that the holder will, and each subsequent holder
is required to, notify any purchaser from it of the Series A Notes of the
resale restrictions set forth in clause (ii) above.

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

(f)            Directed Selling Efforts. Such Initial Purchaser and its affiliates
or any person acting on its or their behalf have not engaged and will not
engage in any directed selling efforts within the meaning of Regulation S with
respect to the Series A Notes or the Guarantees.

(g)           Offshore Transactions. The Series A Notes offered and sold by
such Initial Purchaser pursuant hereto in reliance on Regulation S have been
and will be offered and sold by such Initial Purchaser only in Offshore
Transactions.

(h)           No Plan or Scheme. The sale of the Series A Notes offered
and sold by such Initial Purchaser pursuant hereto in reliance on Regulation S
is not part of a plan or scheme to evade the registration provisions of the
Act.

(i)            Regulation S Offering Restrictions. Such Initial Purchaser has not offered or
sold and will not offer or sell the Series A Notes in the United States or
to, or for the benefit or account of, a U.S. Person (other than a distributor),
in each case, as defined in Rule 902 under the Act (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the later
of the commencement of the offering of the Series A Notes pursuant hereto and
the Closing Date, other than in accordance with Regulation S of the Act or
another exemption from the registration requirements of the Act. During such 40-day
restricted period, such Initial Purchaser will not cause any advertisement with
respect to the Series A Notes (including any “tombstone” advertisement) to
be

 29
 

 

published in any newspaper
or periodical or posted in any public place and will not issue any circular
relating to the Series A Notes, except such advertisements as permitted by
and include the statements required by Regulation S.

(j)            Notice
Required. At or prior to
confirmation of a sale of Series A Notes by it to any distributor, dealer
or person receiving a selling concession, fee or other remuneration during the
40-day restricted period referred to in Rule 903(b)(3) under
the Act, such Initial Purchaser will send to such distributor, dealer or person
receiving a selling concession, fee or other remuneration a confirmation or
notice to substantially the following effect:

“The Series A Notes covered hereby have not
been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered and sold within
the United States or to, or for the account or benefit of, U.S. persons (i) as
part of your distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the Offering and the Closing Date,
except in either case in accordance with Regulation S under the Securities Act
(or Rule 144A under the Securities Act or to institutional “accredited
investors,” as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act) in transactions that are exempt from the registration
requirements of the Securities Act), and in connection with any subsequent sale
by you of the Series A Notes covered hereby in reliance on Regulation S
during the period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you must deliver a
notice to substantially the foregoing effect. Terms used above have the
meanings assigned to them in Regulation S.”

(k)           Regulation
S Security. The Series A
Notes offered and sold in reliance on Regulation S will be represented upon
issuance by a global security that may not be exchanged for definitive
securities until the expiration of the 40-day restricted period referred
to in Rule 903(b)(3) of the Act and only upon certification of
beneficial ownership of such Series A Notes by non-U.S. persons or U.S.
persons who purchased such Series A Notes in transactions that were exempt
from the registration requirements of the Act.

8.     Indemnification.

(a)           Indemnification
of Initial Purchasers. Each
of the Company Entities shall, jointly and severally, without limitation as to
time, indemnify and hold harmless each of the Initial Purchasers and each
person, if any, who controls (within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act) any of the Initial

 30
 

 

Purchasers (any of such persons being hereinafter
referred to as a “controlling
person”), and the respective
officers, directors, partners, employees, representatives and agents of any of
the Initial Purchasers and any such controlling person (collectively, with the
Initial Purchasers 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 Time of Sale Information, the Final Offering Circular or any Supplemental
Offering Material or, in each case, 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 of the Company nor any
Guarantor shall be liable under the indemnity provided in this Section 8(a) 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 the Furnished Information. The parties hereto agree
that the only information furnished in writing to the Company by the Initial
Purchasers specifically for inclusion in the Time of Sale Information, the
Final Offering Circular or any Supplemental Offering Material or any amendment
or supplement thereto is the Furnished Information. The Company shall notify
the Initial Purchasers promptly of the institution, threat or assertion of any
Proceeding of which either of the Company or any Subsidiary is aware in
connection with the matters addressed by this Agreement which involves either
of the Company, any of the Subsidiaries or any of the Purchaser Indemnified
Parties.

(b)           Actions
Against Parties; Notification.
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 party or parties from which such
indemnification is sought (the “Indemnifying
Parties” and each, an “Indemnifying Party”); provided, that the
failure to so notify the Indemnifying Parties shall not relieve any of 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 such
Indemnifying Party has been prejudiced materially by such failure.

The Indemnifying Parties
shall have the right, exercisable by giving written notice to an Indemnified
Party, within 20 Business Days after receipt of written notice from such
Indemnified Party of such Proceeding, to assume, at their expense, the defense
of any such Proceeding; provided, that an Indemnified Party shall have the
right to employ separate counsel in any such Proceeding and to participate in
the defense

 31
 

 

thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party or parties unless: (i) the
Indemnifying Parties have agreed to pay such fees and expenses; (ii) the
Indemnifying Parties shall have failed promptly to assume the defense of such
Proceeding or shall have failed to employ counsel reasonably satisfactory to
such Indemnified Party; or (iii) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and one
or more Indemnifying Parties (or any affiliates or controlling persons of any
of the Indemnifying Parties), and such Indemnified Party shall have been
advised by counsel that there may be one or more defenses available to such
Indemnified Party that are in addition to, or in conflict with, those defenses
available to the indemnifying party or such affiliate or controlling person (in
which case, if such Indemnified Party notifies the Indemnifying Parties in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Parties, the Indemnifying Parties shall not have the right to
assume the defense thereof and the reasonable fees and expenses of such counsel
shall be at the expense of the Indemnifying Parties; it being understood, however,
that, the Indemnifying Parties shall not, in connection with any one such
Proceeding or separate but substantially similar or related Proceedings in the
same jurisdiction, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for
such Indemnified Party).

None of the
Indemnifying Parties shall, without the prior written consent of the
Indemnified Party, 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
reasonably satisfactory to the Indemnified Party, 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)           Indemnification
of the Company Entities. Each
of the Initial Purchasers shall, severally but not jointly, indemnify and hold
harmless each of the Company Entities and each of their controlling persons and
the respective members, managers, officers, directors, partners, employees,
representatives and agents of the Company Entities and any such controlling
person to the same extent as the foregoing indemnity from the Company Entities
to each of the Purchaser Indemnified Parties stated in 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 the Furnished Information. The parties hereto agree that the only
information furnished in writing to the Company by the Initial Purchasers
specifically for inclusion in the Time of Sale Information, the Final Offering
Circular or any Supplemental Offering Material or any amendment or supplement
thereto is the Furnished Information. Notwithstanding the foregoing, any
liability of an Initial Purchaser hereunder shall be

 32
 

 

limited to an amount not to exceed the excess (such
excess, the “Aggregate
Amount”) of (i) the
aggregate gross proceeds received by such Initial Purchaser from the sale of
the Series A Notes over (ii) the sum of (A) the aggregate price
at which such Initial Purchaser purchased the Series A Notes from the
Company and (B) the amount of any Losses that such Initial Purchaser or
such Initial Purchaser’s  Purchaser
Indemnified Parties otherwise have been required to pay by reason of such
untrue or alleged untrue statement of such omission or alleged omission.

(d)           Contribution. 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 Company 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 Company Entities, 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
Company Entities, 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 Company Entities,
on the one hand, and the total discounts and commissions received by the
Initial Purchasers, on the other hand, bear to the total price of the Series A
Notes in Exempt Resales as set forth on the cover page of the Final
Offering Circular. The relative fault of the Company Entities, 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 Company 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

 33
 

 

8(d), the Initial
Purchasers shall not be required to contribute, in the aggregate, any amount in
excess of the Aggregate Amount. 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)           Nonexclusive
Remedy. The indemnity and
contribution agreements contained in this Section 8 are in addition to any
liability that any of the Indemnifying Parties may otherwise have to the
Indemnified Parties, and do not limit in any way rights or remedies which may
otherwise be available at law or in equity.

9.     Conditions.

(a)           Conditions to Obligations of Initial
Purchasers. The obligations
of the Initial Purchasers to purchase the Series A Notes under this
Agreement are subject to the satisfaction or waiver of each of the following
conditions:

(i)            Representations
and Warranties of Company Entities. All the representations and
warranties of each of the Company Entities in this Agreement and in each of the
Transaction Documents to which it is a party 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 Company and the Subsidiaries and, to
the knowledge of the Company Entities, each other party to the Transaction
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.

(ii)           Contents
of Offering Circular. (i) Neither the Time of Sale Information,
nor any individual Supplemental Offering Material when considered together with
the Time of Sale Information, in each case, as of the Applicable Time,
contained, (ii) the Final Offering Circular, as of its date did not and,
without giving effect to any amendment or supplement thereto, as of the Closing
Date does not, contain, and (iii) each amendment or supplement thereto as
of its date did not contain, any untrue statement of a material fact or omit to
state any material fact 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 by the Company in reliance on and in
conformity with the Furnished Information.

(iii)          Availability
of Offering Circular. The Final Offering Circular shall have been
printed and copies made available to the Initial Purchasers as required by Section 5(c).

 34

 

(iv)          No
Injunction. 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 Series A
Notes and the Guarantees or the consummation of any of the Transactions; and no
stop order suspending the qualification or exemption from qualification of any
of the Series A Notes in any jurisdiction shall have been issued and no
Proceeding for that purpose shall have been commenced or be pending or
contemplated.

(v)           No
Proceedings. 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 would not, singly or in the aggregate, adversely affect the issuance
or marketabil­ity of the Series A Notes, and (B) would not, singly or
in the aggregate, have a Material Adverse Effect.

(vi)          No
Material Adverse Change. Since the date as of which information is
given in the Time of Sale Information (without giving effect to any amendment
thereto or supplement thereto), there shall not have been any Material Adverse
Change.

(vii)         PORTAL.
The Notes shall have (A) been designated PORTAL securities in accordance
with the rules and regulations adopted by the NASD relating to trading in
the PORTAL market, and (B) received a rating of “B-” and “BBB” from
Standard & Poor’s Corporation and Moody’s Investors Services, Inc.,
respectively.

(viii)        Maintenance
of Rating. As of the Closing Date, (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 any securities of either of the Company (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 change, nor shall any notice have been given of any potential or
intended change, in the outlook for any rating of any securities of either of
the Company 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 the Notes than that on which the Notes were
marketed.

(ix)           Officers’,
Secretary’s and Solvency Certificates. The Initial Purchasers shall
have received on the Closing Date (A) certificates dated the Closing Date,
signed by (1) the Chief Executive Officer, and (2) the principal
financial or 

 35
 

 

accounting officer of each
of the Company Entities, on behalf of such Company Entity, confirming the
matters set forth in paragraphs (i), (ii), (iv), (v), (vi), (viii)  and
(xiv) of this Section 9(a), (B) a certificate, dated the Closing
Date, signed by the (1) Chief Executive Officer and (2) the principal
financial or accounting officer of each of the Company Entities, on behalf of
each such Company Entity, stating that the industry, statistical and
market-related data included in each of the Time of Sale Information and the
Final Offering Circular has been reviewed by such persons and, to the best
knowledge of such persons, subject to the risks and limitations described in
each of the Time of Sale Information and the Final Offering Circular, is true
and accurate in all material respects and is based on or derived from sources
which the Company believe to be reliable and accurate, which certificate shall
be in form and substance satisfactory to counsel for the Initial Purchasers, (C) a
certificate, dated the Closing Date, signed by the Secretary of each of the
Company Entities, certifying such matters as the Initial Purchasers may
reasonably request, and (D) a certificate of solvency, dated the Closing
Date, signed by the principal financial or accounting officer of the Company
Entities substantially in the form previously approved by the Initial
Purchasers.

(x)            Opinions
of Counsel. The Initial Purchasers shall have received, a favorable
opinion (in form and substance satisfactory to the Initial Purchasers and
counsel to the Initial Purchasers), dated the Closing Date, of each of the
following:  (A) Ruben &
Aronson, LLP, special counsel to the Company Entities, containing opinions
substantially to the effect of the opinions set forth in Exhibit A
hereto; (B) Turner & Johns, PLLC, special West Virginia counsel
to Mountaineer Park, Inc., containing the opinions substantially to the
effect of the opinions set forth in Exhibit B hereto; (C) Jones
Vargas, special Nevada counsel to Speakeasy Gaming of Las Vegas, Inc. and
Speakeasy Gaming of Fremont, Inc. containing the opinions substantially to
the effect of the opinions set forth in Exhibit C hereto; (D) Stevens &
Lee, special Pennsylvania counsel to Presque Isle Downs, Inc., containing
the opinions substantially to the effect of the opinions set forth in Exhibit D
hereto; (E) Crabbe, Brown & James, LLP, special Ohio counsel to
Scioto Downs, Inc., containing the opinions substantially to the effect of
the opinions set forth in Exhibit E hereto; and (F) Warner,
Norcross & Judd, LLP, special Michigan counsel to Jackson Racing, Inc.,
containing the opinions substantially to the effect of the opinions set forth
in Exhibit F hereto; (G) Fredrikson & Byron, P.A.,
special Minnesota counsel to MTR Harness, Inc., containing the opinions
substantially to the effect of the opinions set forth in Exhibit G
hereto; and (H) Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to the Initial Purchasers.

(xi)           Accountants’
Comfort Letters. The Initial Purchasers shall have received from
Ernst & Young LLP, independent public accountants with respect to the
Company, (1) a customary comfort letter, dated as of the date of this
Agreement, in form and substance satisfactory to the Initial Purchasers,
containing the information and statements of the type ordinarily included in
accountants’ “comfort letters,” with respect to the financial statements of the
Company and the Subsidiaries and certain financial 

 36
 

 

information with respect to
the Company and the Subsidiaries contained in the Time of Sale Information and (2) a
customary “bring-down comfort letter,” dated the Closing Date, in form and
substance satisfactory to the Initial Purchasers, to the effect that Ernst &
Young LLP reaffirms the statements made in its letter furnished pursuant to
clause (1) above with respect to such financial statements and certain
financial information contained in the Time of Sale Information and the Final
Offering Circular, except that the specified date referred to shall be a date
not more than five days prior to the Closing Date. 

(xii)          Execution
and Delivery of Documents. 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.

(xiii)         Additional
Transaction Documents. The Initial Purchasers or their counsel shall
have received copies of all opinions, certificates, letters and other documents
delivered under or in connection with the Operative Documents.

(xiv)        Consummation
of Transactions. Each of the Transactions shall have been
consummated on terms that conform to the description thereof in each of the
Time of Sale Information and the Final Offering Circular. The terms of each
Document shall conform in all material respects to the description thereof in
each of the Time of Sale Information and the Final Offering Circular.

(xv)         Permits.
All Permits required to be obtained from, and all notices or declarations
required to be made with, any Gaming/Racing Authority or other Governmental
Authority to permit the issuance and sale of the Series A Notes and the
Guarantees in accordance with the terms of, and in the aggregate principal
amount set forth in, this Agreement shall have been obtained and made, in each
case free of any conditions other than those set forth in this Agreement; and
all Permits (other than the Post-Closing Permits) required to be obtained from,
and all notices or declarations required to be made with, any Gaming/Racing
Authority or other Governmental Authority to consummate the other Transactions
contemplated by the Transaction Documents shall have been obtained and made, in
each case free of any conditions other than those set forth in such Transaction
Documents or as described in each of the Time of Sale Information and the Final
Offering Circular.

(xvi)        Consent Solicitation.
Pursuant to the Consent Solicitation, (A) the Company shall have received
validly delivered (and not validly revoked) consents to the Proposed
Amendments, (B) the Company and the Guarantors shall have executed the
Supplemental Indenture and paid the Consent Fee (as defined in the Statement)
to all persons entitled to receive the Consent Fee under the Consent Documents
and (C) the Proposed Amendments shall have become effective and operative.

(xvii)       Credit Agreement Amendment.
The Company shall have 

 37
 

 

received the written consent
of the Requisite Lenders (as defined in the Existing Credit Facility) to the
issuance of the Notes.

(xviii)      Additional
Documents. 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 and satisfaction of the
representations, warranties and conditions contained in this Agreement.

(b)           Conditions to the Company’s and the Guarantors’ Obligations.
The obligations of the Company to sell, and the obligations of the Guarantors to guarantee, the Series A
Notes under this Agreement are subject to the satisfaction or waiver of each of
the following conditions:

(i)            Payment.
The Initial Purchasers shall have delivered payment to the Company for the Series A
Notes pursuant to Sections 2 and 4 of this Agreement and shall have complied in
all material respects with all other obligations and agreements required to be
complied with by it hereunder on or prior to the Closing Date.

(ii)           Representations and Warranties. 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
Injunctions. 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 Series A
Notes; and no stop order suspending the qualification or exemption from
qualification of any of the Series A Notes 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. This Agreement shall become effective upon
the execution and delivery of this Agreement by the parties hereto. The Initial
Purchasers may terminate this Agreement at any time prior to the Closing Date
by written notice to the Company if any of the following has occurred:

(a)           Material
Adverse Effect. Since the
date as of which information is given in the Time of Sale Information, any
Material Adverse Effect or any Material Adverse Change that could, in the
Initial Purchasers’ judgment, (i) make it impracticable or inadvisable to
proceed with the Offering or delivery of the Series A Notes, including the
Exempt Resales, on the terms and in the manner contemplated in the Time of Sale
Information or (ii) materially impair the investment quality of the Notes.

 38
 

 

(b)           Failure
to Satisfy Conditions. The
failure of any of the Company Entities to satisfy the conditions contained in Section 9(a) on
or prior to the Closing Date.

(c)           Outbreak
of Hostilities. Any outbreak
or escalation of hostilities, any declaration of war by the United States, any
other calamity, emergency or crisis, any material adverse change in economic
conditions in or the financial markets of the United States or elsewhere or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which could make it, in the Initial Purchasers’ judgment,
impracticable or inadvisable to market or proceed with the offering or delivery
of the Series A Notes on the terms and in the manner contemplated in the
Time of Sale Information or to enforce contracts for the sale of any of the Series A
Notes.

(d)           Suspension
of Trading. 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)           Enactment
of Adverse Law. 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 either of the Company or any of the Subsidiaries.

(f)            Downgrade
of Securities. 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 any of the Company Entities
or any securities of any of the Company Entities (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 change, nor shall any notice have been given of any
potential or intended change, in the outlook for any rating of any of the
Company Entities or any securities of any of the Company Entities (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 the
Notes than that on which the Notes were marketed.

(g)           Banking
Moratorium. 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 

 39
 

 

Purchasers’ opinion could have a material adverse
effect on the financial markets in the United States or elsewhere.

The respective
indemnities, contribution and expense reimbursement provisions and agreements,
and representations, warranties and other statements of the Company Entities
and the Initial Purchasers 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 the Initial Purchasers or any of the Company
Entities, or any of their respective officers, directors, members or managers
or any of their respective controlling persons, (ii) acceptance of the
Notes, and payment for them hereunder, and (iii) any termination of this
Agreement (including, without limitation, any termination pursuant to this Section 10).
Without limiting the foregoing, notwithstanding any termination of this
Agreement, the Company Entities shall be and shall remain jointly and severally
liable (i) for all expenses that they have agreed to pay pursuant to Section 5(f),
and (ii) pursuant to Section 8.

11.    Default of Initial Purchasers. If one of the Initial Purchasers defaults in its obligations to
purchase Notes hereunder and the aggregate principal amount of the Notes that
such defaulting Initial Purchaser agreed but failed to purchase does not exceed
10% of the total principal amount of the Notes, the non-defaulting Initial
Purchaser may make arrangements satisfactory to the Company for the purchase of
such Notes by other persons, including the non-defaulting Initial Purchaser,
but if no such arrangements are made by the Closing Date, the non-defaulting
Initial Purchaser shall be obligated to purchase the Notes that such defaulting
Initial Purchaser agreed but failed to purchase. If one Initial Purchaser so
defaults and the aggregate principal amount of the Notes with respect to which
such default occurs exceeds 10% of the total principal amount of the Notes and
arrangements satisfactory to the non-defaulting Initial Purchaser and the
Company for the purchase of such Notes by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on
the part of the non-defaulting Initial Purchaser or the Company, except as
provided in Section 10 hereof. As used in this Agreement, the term “Initial
Purchaser” includes any person substituted for an Initial Purchaser under this Section 9.
Nothing herein will relieve a defaulting Initial Purchaser from liability for
its default.

12.   Miscellaneous.

(a)           Notices. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: 
(i) if to any of the Company Entities, to MTR Gaming Group, Inc.,
State Route 2 South, P.O. Box 358, Chester, West Virginia 26034, facsimile
number (304) 387-8302, Attention: Chief Financial Officer, with a copy to
Ruben & Aronson, LLP, 4800 Montgomery Lane, Suite 150, Bethesda,
Maryland 20814, facsimile number (301) 951-9636, Attention: Robert L.
Ruben, Esq., and (ii) if to the Initial Purchasers, c/o Jefferies &
Company, Inc., 520 Madison Avenue, 12th Floor, New York, New York 10022,
Attention:  Lloyd Feller, Esq., with
a copy to Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand
Avenue, Suite 3400, Los Angeles, 

 40
 

 

California 90071, facsimile number (213) 687-5600,
Attention:  Nicholas P. Saggese, Esq.
(provided, that any notice pursuant to Section 8
hereof will be mailed, delivered, telegraphed or sent by facsimile 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)           Successors
and Assigns. This Agreement
has been and is made solely for the benefit of and shall be binding upon each
of the Company Entities, the Initial Purchasers and, to the extent provided in Section 8,
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 Series A Notes from the Initial
Purchasers merely because of such purchase. Notwithstanding the foregoing, it
is expressly understood and agreed that each purchaser who purchases Series A
Notes from the Initial Purchasers is intended to be a beneficiary of the
Company’s covenants contained in the Registration Rights Agreement to the same
extent as if the Notes were sold and those covenants were made directly to such
purchaser by the Company, and each such purchaser shall have the right to take
action against the Company to enforce, and obtain damages for any breach of,
those covenants.

(c)           GOVERNING
LAW. 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 RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAWS AND
RULES. EACH OF THE COMPANY ENTITIES 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, TO THE EXTENT PERMITTED BY LAW, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE COMPANY
ENTITIES 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.
EACH OF THE 

 41
 

 

COMPANY ENTITIES 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 COMPANY OR SUCH GUARANTOR, AS THE CASE MAY BE, 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 ANY OF THE COMPANY ENTITIES IN ANY
OTHER JURISDICTION.

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

(e)           Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. When a reference is made in this Agreement to a Section,
paragraph, subparagraph, Schedule or Exhibit, such reference shall mean a
Section, paragraph, subparagraph, Schedule or Exhibit to this Agreement
unless otherwise indicated.

(f)            Interpretation. The words “include,” “includes,” and “including” when used
in this Agreement shall be deemed in each case to be followed by the words “without limitation.”  The
phrases “the date of this Agreement,” “the date hereof,”
and terms of similar import, unless the context otherwise requires, shall be
deemed to refer to May 22, 2006. The words “hereof,” “herein,” “herewith,”  “hereby” and “hereunder” and words
of similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
phrase “to the knowledge of the
Company Entities” means the
actual knowledge, after due inquiry, of any of the directors or officers of any
of the Company Entities. Unless the context otherwise requires, defined terms
shall include the singular and plural and the conjunctive and disjunctive forms
of the terms defined.

(g)           Severability. 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 

 42
 

 

terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.

(h)           Amendment. 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.

(i)            No Advisory or
Fiduciary Relationship. The Company acknowledges and agrees that (a) the
purchase and sale of the Notes pursuant to this Agreement, including the
determination of the public offering price of the Notes and any related
discounts and commissions, is an arm’s-length commercial transaction between
the Company, on the one hand, and the Initial Purchasers, on the other hand, (b) in
connection with the offering contemplated hereby and the process leading to
such transaction each Initial Purchaser is and has been acting solely as a
principal and is not the agent or fiduciary of the Company, or its
stockholders, creditors, employees or any other party, (c) no Initial
Purchaser has assumed or will assume an advisory or fiduciary responsibility in
favor of the Company with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether such Initial Purchaser has
advised or is currently advising the Company on other matters) and no Initial
Purchaser has any obligation to the Company with respect to the offering
contemplated hereby except the obligations expressly set forth in this
Agreement, (d) the Initial Purchasers and their respective affiliates may
be engaged in a broad range of transactions that involve interests that differ
from those of the Company, and (e) the Initial Purchasers have not
provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed appropriate.

[signature
pages follow]

 43

 

Please confirm that the foregoing correctly sets forth
the agreement between the Company and the Initial Purchasers.

Very truly yours,

	
  ISSUER:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MTR GAMING GROUP, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
   Edson R.
  Arneault 

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GUARANTORS:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MOUNTAINEER PARK, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
   Edson R.
  Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRESQUE ISLE DOWNS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
   Edson R.
  Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  

 

 Purchase Agreement Page S-1
 

 

 

	
  

  	
   

  	
  SPEAKEASY GAMING OF LAS VEGAS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SCIOTO DOWNS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SPEAKEASY GAMING OF FREMONT, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JACKSON RACING, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MTR HARNESS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edson Arneault

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Edson R. Arneault

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 Purchase Agreement Page S-2
 

 

 

	
  ACCEPTED AND AGREED TO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JEFFERIES & COMPANY, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Christian Morris

  	
   

  	
   

  
	
   

  	
  Name:

  	
   Christian
  Morris

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WELLS FARGO SECURITIES, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Andrew J. McCarthy

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Andrew J. McCarthy

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  	
   

  

 

 Purchase Agreement Page S-3

 

EXHIBIT A

FORM OF
OPINION OF RUBEN & ARONSON, LLP

May 25, 2006

Jefferies & Company, Inc.

Wells Fargo Securities, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, CA  90025

Re:         MTR
Gaming Group, Inc.

9% Senior Subordinated Notes due 2012

Ladies
and Gentlemen:

We have acted as securities counsel to (i) MTR
Gaming Group, Inc., a Delaware corporation (the “Company”), (ii) Mountaineer
Park, Inc., a West Virginia corporation (“Mountaineer”), (iii) Speakeasy
Gaming of Las Vegas, Inc., a Nevada corporation (“Speakeasy Vegas”), (iv) Presque
Isle Downs, Inc., a Pennsylvania corporation (“PDI”), (v) (v) Speakeasy
Gaming of Fremont, Inc., a Nevada corporation (“Speakeasy Fremont”), (vi) Scioto
Downs, Inc., an Ohio corporation (“Scioto”), (vii) Jackson Racing, Inc.,
a Michigan corporation (“Jackson”), and (viii) MTR-Harness, Inc., a
Minnesota corporation (“MTR-Harness”), in connection with the Purchase
Agreement dated as of May 22, 2006 (the “Purchase Agreement”) entered into
by and among the Company, Mountaineer, Speakeasy Vegas, PDI, Speakeasy Fremont,
Scioto, Jackson, MTR-Harness, Jefferies & Company, Inc. (“Jefferies”),
and Wells Fargo Securities, LLC (“Wells”) pursuant to which the Company is
selling to Jefferies and Wells $125,000,000 aggregate principal amount of MTR’s
9% Series A Senior Subordinated Notes due 2012, including the Guarantees
endorsed thereon. This opinion is being delivered pursuant to Section 9(a)(x)(A) of
the Purchase Agreement. All capitalized terms used herein and not otherwise
defined herein, shall have the meanings set forth in the Purchase Agreement.

In connection with this opinion we have examined and
reviewed (a) the Purchase Agreement dated as of May 22, 2006; (b) the
Indenture dated as of May 25, 2006; (c) the Time of Sale Information;
(d) the Final Offering Circular dated May 22, 2006; (e) the
Notes, including the Guarantees thereon dated May 25, 2006; (f) the
Registration Rights Agreement dated May 25, 2006; (g) the
Supplemental Indenture dated as of May 17, 2006; (h) the Consent
Documents; (i) the Articles of Incorporation and Bylaws of each of the
Company Entities, in each case, as amended to date, certified by the respective
Secretary of each such Company; (j) certificates from the Delaware
Secretary of State indicating that the Company is a Delaware corporation in
good standing as of May 24, 2006; and (k) a certificate of the
Secretary of the Company attesting to the validity of, and attaching copies of
resolutions adopted by the Board of Directors of the 

 

Company authorizing the execution, delivery and performance of the
Documents (as defined below) to which they are a party, signed by each of the
members of the Board of Directors. The documents set forth in items (a) through
(k) above are referred to herein collectively as the “Documents.”

In making such examination and review, we have
assumed the genuineness of all signatures (other than the signatures of
officers signing on behalf of the Company Entities), the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. We have also assumed the valid
authorization, execution and delivery of each of the Documents by each party
thereto (other than the Company Entities), and we have assumed, where
applicable, that each such other party has been duly organized, is validly
existing and in good standing under its jurisdiction of organization and possess
the corporate or other organization power to perform its obligations thereunder.
We have made such inquiries of fact and law as we believed necessary and
appropriate in giving our opinions. We have made reasonable inquiry of the
Company with respect thereto, and nothing has come to our attention that leads
us to believe we are not justified in making our assumptions set forth in this
opinion.

With respect to matters of law of the States of
Nevada, West Virginia, Pennsylvania, Ohio, Michigan, and Minnesota, unless
otherwise stated herein, we have relied upon the opinions (which have been
provided to you) of Jones Vargas, Nevada counsel to Speakeasy Vegas and
Speakeasy Fremont; Turner & Johns, PLLC, West Virginia counsel to
Mountaineer; Stevens & Lee, Pennsylvania counsel to PDI; Crabbe, Brown &
James, LLP, Ohio counsel to Scioto, Warner, Norcross & Judd LLP,
Michigan counsel to Jackson; and Fredrikson Byron, P.A., Minnesota counsel to
MTR-Harness (collectively, “Local Counsel”).

Based on the foregoing and subject to the
assumptions, qualifications and limitations set forth herein, we are of the
opinion that:

1.           Due Organization; Good Standing of the Company.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and 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 each of the Time of Sale
Information and the Final Offering Circular. The Company 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 its
business or the ownership, leasing, use or operation of its properties and
assets requires such qualification or licensing.

2.           Outstanding Shares and Interests. All of
the outstanding shares of capital stock in the Company have been duly
authorized, are validly issued, fully paid and nonassessable, and were not
issued in violation of, and are not subject to, any preemptive or similar
rights.

 

3.           Power and Authority. The Company has all
requisite power and authority to execute, deliver and perform its obligations
under the Documents to which it is a party and to consummate the Transactions contemplated
thereby.

4.           Subsidiaries. Immediately following the
Closing, the only subsidiaries of the Company will be the direct and indirect
subsidiaries of the Company listed on Schedule 6(d) to the Purchase
Agreement and (ii) except as set forth on Schedule 6(d) to the
Purchase Agreement, the Company will directly own 100% of the outstanding
shares of capital stock of each Subsidiary, in each case, free and clear of all
Liens, except for Liens securing loans made under the Existing Credit Facility,
the New Credit Facility and Permitted Liens.

5.           No Other Obligations to Issue Certain Securities.
To our knowledge, except as disclosed in each of the Time of Sale Information
and Final Offering Circular, there are no outstanding (i) securities
convertible into or exchangeable for any capital stock of any of the Company
Entities, (ii) options, warrants or other rights to purchase or subscribe
for any capital stock, or any securities convertible into or exchangeable for
any capital stock of any of the Company Entities or (iii) contracts,
commitments, agreements, understandings, arrangements, undertakings, rights,
calls or claims of any kind relating to the issuance of any capital stock of
any of the Company Entities, any such convertible or exchangeable securities or
any such options, warrants or rights, except commitments of the Company or
Company Entities to cause the Company to issue options to certain employees and
non-employee directors pursuant to employment or engagement agreements in
effect on the Issue Date. To our knowledge, except as set forth above, none of
the Company Entities owns, directly or indirectly, any capital stock of or
equity interest in any person, except that Scioto, Mid-America Racing
Association, Inc., and Jackson Trotting Association, LLC own 790 shares,
760 shares, and 975 shares, respectively, of Wagering Insurance North America,
Ltd.

6.           No Other Registration Rights. To our
knowledge, except for the Purchase Agreement, the Registration Rights
Agreement, and agreements between the Company and its directors and officers
relating to the registration of shares underlying stock options granted in the
ordinary course of the Company’s business, there are no contracts, commitments,
agreements, arrangements, understandings or undertakings of any kind to which
any of the Company Entities is a party, or by which any of them is bound,
granting to any person the right (i) to require the Company or any
Subsidiary to file a registration statement under the Act with respect to any
securities of the Company or any Subsidiary or requiring the Company or any
Subsidiary to include such securities with the Notes and the Guarantees
registered pursuant to any registration statement, or (ii) to purchase or
offer to purchase any securities of any of the Company Entities or any of their
respective affiliates, it being understood that from time to time the Company
may deem it advisable to repurchase its common stock from any Disqualified
Holder as that term is defined in the Company’s Articles of Incorporation or may
be required by Gaming/Racing Authorities (as defined in the Purchase Agreement)
to repurchase the Company’s securities from any holder deemed unsuitable by
such Gaming/Racing Authorities.

7.           Valid, Binding and Enforceability.

 

(a) Purchase
Agreement. The Purchase Agreement and the Transactions contemplated
thereby (including without limitation the Offering and the issuance and sale of
the Notes in accordance with the Purchase Agreement, and the execution of the
Supplemental Indenture) have been duly authorized, validly executed and
delivered by the Company, and, assuming the due authorization, execution and
delivery of the Purchase Agreement by the Initial Purchasers, is the legal,
valid and binding obligation of the Company and each of the Guarantors, enforceable
against the Company and each of the Guarantors in accordance with its terms,
except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer or similar laws and (ii) any
rights of acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a proceeding in
equity or at law).

(b) Indenture.
The Indenture and the Transactions contemplated thereby have been duly
authorized by the Company, and the Indenture has been validly executed and
delivered by the Company, and, assuming the due authorization, execution and
delivery of the Indenture by the Trustee, is the legal, valid and binding
obligation of the Company and each of the Guarantors, and is enforceable
against the Company and each of the Guarantors in accordance with its terms,
except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer or similar laws and (ii) any
rights of acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a proceeding in
equity or at law). The Indenture conforms 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.

(c) Registration
Rights Agreement. The Registration Rights Agreement and the
Transactions contemplated thereby have been duly authorized, validly executed
and delivered by the Company, and, assuming the due authorization, execution
and delivery of the Registration Rights Agreement by the Initial Purchasers, is
the legal, valid and binding obligation of the Company and each of the
Guarantors, enforceable against the Company and each of the Guarantors in
accordance with its terms, except that (i) such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent transfer or similar
laws and (ii) any rights of acceleration and the availability of equitable
remedies may be subject to general principles of equity (whether considered in
a proceeding in equity or at law).

(d) Series A
Notes. The Series A Notes have been duly authorized by the
Company for issuance and sale to the Initial Purchasers pursuant to the
Purchase Agreement and have been validly executed and delivered by the Company
and, when authenticated by the Trustee in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers in accordance
with the terms of the Purchase Agreement, the Series A Notes will be the
legal, valid and binding obligations of the Company, entitled to the benefits
of the Indenture and enforceable against the Company in accordance with their
terms, except that (i) such enforceability may be limited by applicable bankruptcy,
insolvency or similar laws and (ii) any 

 

rights of acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a proceeding in
equity or at law).

(e) Series B
Notes. The Series B Notes have been duly authorized by the
Company and, when issued and executed by the Company and authenticated by the
Trustee in accordance with the terms of the Indenture and delivered in the
Registered Exchange Offer in exchange for the Series A Notes, the Series B
Notes will have been validly executed and delivered and will be the legal,
valid and binding obligation of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency or similar laws and (ii) any rights of acceleration
and the availability of equitable remedies may be subject to general principles
of equity (whether considered in a proceeding in equity or at law).

(f) Guarantees
of Series A Notes. The Guarantee to be endorsed on the Series A
Notes by each Guarantor, when the Series A Notes have been authenticated
by the Trustee in accordance with the terms of the Indenture and delivered to
and paid for by the Initial Purchasers in accordance with the terms of the
Purchase Agreement, will be the legal, valid and binding obligation of each
such Guarantor, enforceable against each such Guarantor in accordance with its
terms, except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer or similar laws and (ii) any
rights of acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a proceeding in
equity or at law).

(g) Guarantees
of Series B Notes. The Guarantee to be endorsed on the Series B
Notes by each Guarantor, when the Series B Notes have been issued and
executed by the Company and authenticated by the Trustee in accordance with the
terms of the Indenture (and the Guarantees of the Series B Notes by
Speakeasy Vegas and Speakeasy Fremont have been approved by the Nevada Gaming
Control Board and the Nevada Gaming Commission as set forth in the opinion of
Jones Vargas, special Nevada Counsel, delivered to the Initial Purchasers
pursuant to the Purchase Agreement) and delivered in exchange for the Series A
Notes in accordance with the terms of the Indenture, the Registration Rights
Agreement and the Registered Exchange Offer, will be the legal, valid and
binding obligation of each such Guarantor, enforceable against each such
Guarantor in accordance with its terms, except that (i) such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
transfer or similar laws and (ii) any rights of acceleration and the
availability of equitable remedies may be subject to general principles of
equity (whether considered in a proceeding in equity or at law).

(h) Transaction
Documents. Each of the Transactions has been duly authorized by each
of the Company Entities party thereto. The Supplemental Indenture has been duly
executed and delivered by each of the Company Entities party thereto and is the
legal, valid and binding obligation of each of the Company Entities party
thereto, enforceable against each of the Company Entities party thereto in
accordance with its terms, except that (i) such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent transfer or 

 

similar laws and (ii) any rights of acceleration and the
availability of equitable remedies may be subject to general principles of
equity (whether considered in a proceeding in equity or at law).

8.           No Violation. To our knowledge, none of
the Company Entities is (i) in material violation of any Applicable Law,
or (ii) in material breach of or material default under any Applicable
Agreement.

9.           No Conflict. To our knowledge, none of the
execution, delivery or performance of any of the Documents, nor the compliance
with the terms and provisions thereof, nor the consummation of any of the
Transactions will conflict with, violate, constitute a material breach of or a
material default (with the passage of time or otherwise) under, result in the
imposition of a Lien on any assets or capital stock of or membership interests
in either of the Company or any of the Guarantors, or result in an acceleration
of indebtedness pursuant to, (i) any Applicable Agreements or (iii) any
Applicable Law. To our knowledge, after giving effect to the Transactions, no
Default or Event of Default (each, as defined in the Indenture) will exist.

10.         Permits.

(a) No Permit is required in connection with,
or as a condition to, the execution, delivery or performance of the Documents,
the compliance with the terms and provisions thereof or the consummation of any
of the Transactions, other than (i) such Permits as have been made or
obtained on or prior to the Closing Date, which Permits are in full force and
effect on the Closing Date, (ii) the order of the Commission declaring the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
the case may be, effective, (iii) as set forth in the Purchase Agreement,
or the Time of Sale Information; and (iv) such Permits as have been set
forth in the opinions of any Local Counsel delivered to the Initial Purchasers
pursuant to the Purchase Agreement.

(b) To our knowledge, the Company has, and is
in material compliance with the terms and conditions of, all Permits necessary
or advisable to own, lease, use and operate the properties and assets and to
conduct and carry on the businesses described in each of the Time of Sale
Information and the Final Offering Circular other than those the failure of
which to have would not, singly or in the aggregate, have a Material Adverse
Effect. To our knowledge, except as described in each of the Time of Sale
Information and the Final Offering Circular, the Company has not received
notice that any entity is challenging or considering limiting, conditioning,
suspending, modifying, revoking or not renewing any such Permit.

(c) Except as described in each of the Time of
Sale Information and the Final Offering Circular, none of the execution,
delivery or performance of any of the Documents, nor the compliance with the
terms and provisions thereof, nor the consummation of any of the Transactions
will allow or result in, and, to our knowledge, no event has occurred which
allows or results in, or after notice or lapse of time would allow or result
in, the imposition of any material penalty under, or the revocation or
termination of, any such Permit or any material impairment of the rights of the
holder of any such Permit.

 

(d) Our opinions in this paragraph 10 expressly exclude Permits with respect
to the operation of gaming, racing, lottery and the sale of alcohol as to which
we refer you to the opinions of Local Counsel.

11.         No Proceedings.

(a) To our knowledge, there is no Proceeding
pending or threatened either (i) with respect to any of the Company
Entities in connection with, or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge, any of the Documents or any of the
Transactions, or (ii) except as described in each of the Time of Sale
Information and the Final Offering Circular, that could, singly or in the
aggregate, have a Material Adverse Effect.

(b) To our knowledge, no injunction or order
has been issued and there is no Proceeding pending or, threatened that (i) asserts
that the offer, sale and delivery of the Series A Notes and the Guarantees
to the Initial Purchasers pursuant to the Purchase Agreement or the initial
resale of the Series A Notes and the Guarantees by the Initial Purchasers
in the manner contemplated by the Purchase Agreement are subject to the
registration requirements of the Act, or (ii) would prevent or suspend the
issuance or sale of the Notes or the use of the Preliminary Offering Circular,
the Pricing Term Sheet or the Final Offering Circular, or any amendment or
supplement thereto, in any jurisdiction. With respect to our opinion in this
Paragraph 11(b), we have assumed that purchasers of the Notes are either
qualified institutional buyers as defined in Rule 144A under the
Securities Act, institutional accredited investors within the meaning of Rule 501(a)(1),
(2), (3), or (7) of the Securities Act, or, with respect to purchasers
acquiring the Notes pursuant to the transaction exemption provided by
Regulation S under the Securities Act, non-U.S. persons as defined in
Regulation S.

12.         Related Party Transactions. Except as
adequately disclosed in each of the Time of Sale Information or the Final
Offering Circular, to our knowledge, there are no related party transactions
that would be required to be disclosed in the Time of Sale Information or the
Final Offering Circular if the Time of Sale Information or the Final Offering
Circular, respectively, were a prospectus included in a registration statement
on Form S-1 filed under the Act.

13.         No Registration. It is not necessary in
connection with the offer, sale and delivery of the Series A Notes and the
Guarantees to the Initial Purchasers pursuant to the Purchase Agreement or the
initial resale of the Series A Notes and the Guarantees by the Initial
Purchasers in the manner contemplated by the Purchase Agreement and described
in each of the Time of Sale Information and the Final Offering Circular, to
register such sales or resales of the Series A Notes and the Guarantees
under the Act, and it is not necessary, prior to the Registered Exchange Offer
or the effectiveness of the Shelf Registration Statement to qualify the
Indenture under the TIA.

 

14.         Rule 144A Eligibility. Except for the
Company’s Common Stock, $.00001 Par Value, and the Company’s Contingent Earnout
Participation Rights issued to certain former holders of the common stock of
Scioto, there are no securities of any Company Entity registered under the
Exchange Act or listed on a national securities exchange registered under Section 6
of the Exchange Act or quoted in a United States automated inter-dealer
quotation system. The Series A Notes are eligible for resale pursuant to Rule 144A
under the Act, provided that such notes are offered for resale and are resold
in the manner described in the Time of Sale Information.

15.         Investment Company Act. None of the
Company or any of the Guarantors is subject to regulation, or shall become
subject to regulation solely by reason of the consummation of the Transactions,
under the Investment Company Act of 1940, as amended, and the rules and
regulations and interpretations promulgated thereunder, or under any other
Federal or state statute or regulation limiting its ability to incur or assume
indebtedness for borrowed money.

16.         Offering Circular. Each of the Documents
conforms in all material respects to the descriptions thereof contained in each
of the Time of Sale Information and the Final Offering Circular. The
information in each of the Time of Sale Information and the Final Offering
Circular under the headings “Offering Circular Summary—The Offering,” “Certain
Transactions,” “Business—Properties,” “Business—Litigation,” “Description of
Certain Indebtedness,” “Description of Notes,” “Regulation and Licensing—IRS
Regulations and Currency Transaction Reporting,” “Regulation and
Licensing—Compliance with Other Laws,” “Regulation and Licensing—Environmental
Matters,” “Plan of Distribution” and “Notice to Investors” has been reviewed by
us and, to the extent that it constitutes statements or matters of law,
summaries of legal matters, summaries or descriptions of securities,
instruments, agreements or other documents, summaries of proceedings, or legal
conclusions, it is correct in all material respects.

We have participated in conferences with officers
and other representatives of the Company Entities, counsel for the Company
Entities, representatives of the independent accountants of the Company,
representatives of the Initial Purchasers and counsel for the Initial
Purchasers, at which the contents of each of the Time of Sale Information and
the Final Offering Circular and related matters were discussed. Although we are
not passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Time of Sale
Information or the Final Offering Circular and, except as set forth above, have
made no independent check or verification thereof, nothing has come to our
attention which leads us to believe that (i) the Time of Sale Information,
as of the Applicable Time, (ii) the Final Offering Circular, as of its
date and as of the date hereof, and (iii) any amendment or supplement
thereto, as of its date and as of the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading.

 

The foregoing opinions are further subject to the
following qualifications and limitations:

a)                                      Our opinions are limited to the laws of the
States of Delaware and New York, and the federal laws of the United States, and
no opinion is expressed as to any matter governed by the laws of any other
state or jurisdiction. The opinions expressed herein are based on the
applicable Delaware and New York laws, rules and regulations and the
federal laws of the United States in effect as of the date hereof;

b)                                     Our opinions are limited to the matters
stated herein and no opinion is implied or may be inferred beyond the matters
expressed herein;

c)                                      Our opinions are given as of this date and we
assume no obligation to update to reflect any facts or circumstances which may
hereafter come to our attention or any change in any laws or regulations which
may hereafter occur;

d)                                     As used in this opinion, the phrase “to our
knowledge” means the knowledge of the attorneys of this firm who have
represented the Company Entities in this transaction, without independent
inquiry, except as obtained in this representation and except as expressly
noted in this opinion letter; and

Our opinions are also subject to the following
assumptions, qualifications and limitations:

e)                                      Our opinions are limited by the effect and
possible unenforceability of contractual provisions providing for choice of
governing law or jurisdiction;

f)                                        Our opinions are limited by the possible
unenforceability of provisions requiring indemnification for, or providing
exculpation, release or exemption for liability for, action or inaction, to the
extent such action or inaction involves negligent or willful misconduct, or to
the extent otherwise contrary to federal or state securities laws or public
policy;

g)                                     Our opinions are limited by the possible
unenforceability of provisions that waivers or consents by a party may not be
given effect unless in writing or in compliance with particular requirements,
or that a person’s course of dealing, course of performance, or the lack or
failure or delay in taking action may constitute a waiver of related rights or
provisions, or that one or more waivers may not under certain circumstances
constitute a waiver of other matters of the same kind;

h)                                     Our opinions are limited by the possible
unenforceability of provisions permitting modifications or amendments of an
agreement only in writing;

 

i)                                         Our opinions are limited by the possible
unenforceability of provisions stating that the provisions of an agreement are
severable;

j)                                         Our opinions are limited by the possible
unenforceability of provisions that are against public policy;

k)                                      Our opinions are limited by the possible
unenforceability of provisions permitting the exercise, under certain
circumstances, of rights without notice or without providing opportunity to
cure failures to perform;

l)                                         Our opinions are limited by the
unenforceability under certain circumstances of provisions to the effect that
failure to exercise or delay in exercising rights or remedies will not operate
as a waiver of the right or remedy;

m)                                   Our opinions are limited based on statutes or
on public policy limiting a person’s right to waive the benefits of statutory
provisions or common law right; and

n)                                     Our opinions are limited based on the effect
of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws affecting the rights and remedies of
creditors.

Our opinions are also subject to the following
assumptions:

(i)                                     The factual information contained in the
material which we have reviewed is accurate and complete and contains no
material omission or misrepresentations;

(ii)                                  That all laws and regulations that we have
reviewed are valid;

(iii)                               All permits issued or other actions taken by
State or Federal governments are valid and supported by proper authority; and

(iv)                              That the original executed Documents will be
in the form submitted to us for our review, and will be completed and conformed
in a full, accurate, and consistent manner.

This opinion letter is given solely for your
benefit, and your respective successors and assigns, in connection with the
transactions referred to herein and may not be relied upon by any other party
without the prior written consent of this firm.

Very
truly yours,

Ruben &
Aronson, LLP

 

EXHIBIT B

FORM OF
OPINION OF TURNER & JOHNS, PLLC

May 25, 2006

Jefferies &
Company, Inc.

Wells Fargo Securities, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, CA  90025

Ladies and
Gentlemen:

We
are special West Virginia counsel to Mountaineer Park, Inc., a West
Virginia corporation (the “West Virginia Guarantor”), and have acted in such
capacity in connection with the Purchase Agreement, the other Operative
Documents (as defined below) and the transactions relating to the Offering
and the application of the proceeds therefrom as described in each of the Time of Sale Information and the Final
Offering Circular and the issuance and sale of the Notes in accordance
with the Purchase Agreement (the “Transaction”). This opinion is delivered to
you at the request of the West Virginia Guarantor pursuant to Section 9(a)(x)(B) of
the Purchase Agreement for the reliance of the Initial Purchasers.

All
capitalized terms which are used herein, and which are not otherwise defined
herein, shall have the meaning set forth in the Purchase Agreement. We have
made such investigations of law as we have deemed necessary or advisable for
the purpose of this opinion, and we have reviewed the following documents all
dated as of May 25, 2006, unless otherwise indicated:  (i) the Purchase Agreement dated May 22,
2006; (ii) the Indenture; (iii) the Registration Rights Agreement; (iv) the
form of the Series A Notes; (v) the Supplemental Indenture; (vi) the
Consent Documents; and (vii) the Guarantee as it relates to the
West Virginia Guarantor (the “Operative Documents”). We also have reviewed
the Time of Sale Information and the Final Offering Circular, dated May 22,
2006.

In
rendering the opinions set forth herein, we have further (i) made such
inquiries, and reviewed such other documents, as we deemed appropriate under
the circumstances; (ii) reviewed the Certificate of Good Standing issued
by the State of West Virginia as of
[            ],
2006; and (iii) reviewed the contracts listed on Schedule I hereto (the “Contracts”).

In
making such examination and review, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such copies. We
have also assumed the valid authorization, execution and delivery (other than
the West Virginia Guarantor) of each Operative Document by

 

each party
thereto, and we have assumed, where applicable, that each such other party has
been duly organized, is validly existing and in good standing under its
jurisdiction of organization and possesses the corporate or other organization
power to perform its obligations thereunder. As to various questions of fact
material to our opinion, we have relied upon an Opinion Certificate of an
officer of the West Virginia Guarantor and have assumed that such Certificate
and the representations contained therein continue to remain true and complete
as of the date of this opinion.

In
basing the opinions and other matters set forth herein on “our knowledge,” the
words “our knowledge” and similar language signify that, in the course of our
representation of the West Virginia Guarantor in matters with respect of which
we have been engaged by the West Virginia Guarantor as special counsel, no
information has come to our attention that would give us actual knowledge or
actual notice that any such opinions or other matters are not accurate or that
any of the foregoing documents, certificates and information on which we have
relied are not accurate and complete. Except as otherwise stated herein, we
have undertaken no independent investigation or verification of such matters. The
words “our knowledge” and similar language used herein are intended to be
limited to the knowledge of the lawyers within our Firm who have provided
substantive legal advice to the West Virginia Guarantor in connection with this
Transaction, without independent investigation.

Based
on the foregoing and subject to the qualifications, limitations and assumptions
set forth herein, we are of the opinion that:

1.           Due
Organization; Good Standing of the West Virginia Guarantor. The West
Virginia Guarantor is a corporation duly organized, validly existing and in
good standing under the laws of the State of West Virginia, and 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 each of the Time
of Sale Information and the Final Offering Circular. The West Virginia
Guarantor 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 its business or the ownership, leasing, use or operation of
its properties and assets require such qualification or licensing.

2.           Outstanding
Shares and Interests. All of the outstanding shares of capital stock
in the West Virginia Guarantor have been duly authorized, are validly issued,
fully paid and non-assessable, and were not issued in violation of, and are not
subject to, any preemptive or similar rights.

3.           Power
and Authority. The West Virginia Guarantor has all requisite power
and authority to execute, deliver and perform its obligations under the
Operative Documents to which it is a party and to consummate the Transactions
contemplated thereby.

4.           Authorization,
Execution and Delivery. The Purchase Agreement and the other
Operative Documents to which the West Virginia Guarantor is a party and the
Transactions

 

contemplated
thereby (including, without limitation, the Offering and the issuance and sale
of the Notes in accordance with the Purchase Agreement, and the execution
of the Supplemental Indenture) have been duly authorized by the
West Virginia Guarantor, and the Purchase Agreement and each of the other
Operative Documents to which the West Virginia Guarantor is a party have been
validly executed and delivered by the West Virginia Guarantor.

5.           No
Violation. To our knowledge, the West Virginia Guarantor is not (i) in
violation of its Charter Documents, (ii) any Contract, or (iii) in
material violation of any corporate, lottery or horse racing law of the State
of West Virginia.

6.           No
Conflict. To our knowledge, none of the execution, delivery or
performance of any of the Operative Documents, nor the compliance with the
terms and provisions thereof, nor the consummation of any of the Transactions
will conflict with, violate, constitute a breach of or a default (with the
passage of time or otherwise) under, result in the imposition of any Lien on
any of the assets of the West Virginia Guarantor (except as created by the
Indenture) or result in an acceleration of indebtedness pursuant to any
Contract.

7.           Permits.

(a) No
Permit (including without limitation any Permit of the West Virginia
Gaming/Racing Authorities) is required under Applicable Law of the State of
West Virginia in connection with, or as a condition to, the execution, delivery
or performance of any of the Operative Documents, the compliance with the terms
and provisions thereof or the consummation of any of the Transactions, other
than such Permits as have been made or obtained on or prior to the Closing
Date, which Permits are in full force and effect on the Closing Date.

(b) To
our knowledge, each of the Regulated Persons has and  is in compliance with the terms and
conditions of, all Permits with respect to engaging in lottery and horse racing
operations necessary or advisable under Applicable Law of the State of
West Virginia to own, lease, use and operate the properties and to conduct
and carry on the businesses described in each of the Time of Sale Information and the Final 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 with respect to engaging in
lottery and horse racing operations are valid and in full force and effect. To
our knowledge, no Regulated Person has received notice that any entity is
considering limiting, conditioning, suspending, modifying, revoking or not
renewing any such Permit with respect to engaging in lottery and horse racing
operations. To our knowledge, no Governmental Authority of the State of West
Virginia is investigating any Regulated Person.

(c) None
of the execution, delivery or performance of any of the Operative Documents,
nor the compliance with the terms and provisions thereof, nor the consummation
of any of the Transactions will allow or result in, and, to our knowledge, no
event has occurred which allows or results in, or after notice or lapse of time
would allow or result in,

 

the imposition of
any material penalty under, or the revocation or termination of, any such
permit or any material impairment of the rights of the holder of any such
Permit.

8.           No
Proceedings. There is no Proceeding before or by any Governmental
Authority of the State of West Virginia pending or, to our knowledge,
threatened either (i) with respect to the West Virginia Guarantor in
connection with, or that 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, have a Material
Adverse Effect.

9.           Real
Property. To our knowledge, no condemnation, eminent domain, or
similar proceeding before or by any Governmental Authority exists, is pending
or to our knowledge, threatened, with respect to or that could affect, any
properties or assets of the West Virginia Guarantor, except those
acquisitions in lieu of condemnation by the West Virginia Department of
Transportation, Division of Highways, which are described in Schedule 6(z) attached
to the Purchase Agreement.

10.         Offering
Circular. The information in each of the Time of Sale Information and the Final Offering Circular under the
headings “Risk Factors — Risks Related to this Offering and the Notes — You may
be required to sell your Notes if any gaming authority finds you unsuitable to
hold them,” “Risk Factors — Risks Related To Our Business — We are subject to
extensive regulation by gaming and racing authorities,” “Risk Factors — Risks
Related To Our Business — We will continue to depend on Mountaineer for the
vast majority of our revenues, and therefore, 
any risks faced by our Mountaineer operations will have a material
impact on our results of operations,” “ Regulation and Licensing — West
Virginia Racing and Gaming Regulation,” “ Regulation and Licensing — IRS
Regulations and Currency Transaction Reporting,” “Regulation and Licensing —
Restrictions on Share Ownership and Transfer” and  “Regulation and Licensing — Compliance With
Other Laws” has been reviewed by us and, to the extent that it constitutes
statements or matters of law, summaries of legal matters, summaries or
descriptions of securities, instruments, agreements or other documents,
summaries of proceedings, or legal conclusions, it is correct in all material
respects.

The
opinions set forth above are subject to the following qualifications and
limitations:

(1)          The effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other
similar laws affecting the rights and remedies of creditors.

(2)          The effect of general principles of
equity, whether applied by a court of law or equity.

(3)          The effect and possible
unenforceability of contractual provisions of providing for choice of governing
law or jurisdiction.

 

(4)          The possible unenforceability of
provisions requiring indemnification for, or providing exculpation, release or
exemption for liability for, action or inaction, to the extent such action or
inaction involves negligent or willful misconduct, or to the extent otherwise
contrary to public policy.

(5)          The effect of judicial decisions that
may permit the introduction of extrinsic evidence to modify the terms or the
interpretation of an agreement.

(6)          The possible unenforceability of
provisions that waivers or consents by a party may not be given effect unless
in writing or in compliance with particular requirements, or that a person’s
course of dealing, course of performance, or the lack or failure or delay in
taking action may constitute a waiver of related rights or provisions, or that
one or more waivers may not under certain circumstances constitute a waiver of
other matters of the same kind.

(7)          The possible unenforceability of
provisions permitting modifications or amendments of an agreement only in
writing.

(8)          The possible unenforceability of
provisions stating that the provisions of an agreement are severable.

(9)          The possible unenforceability of
provisions that are against public policy.

(10)        The possible unenforceability of
provisions permitting the exercise, under certain circumstances, of rights
without notice or without providing opportunity to cure failures to perform.

(11)        The effect of cause of dealing, course
of performance, or the like, that would modify the terms of any agreement or
the respective rights or obligations of the parties under an agreement.

(12)        We express no opinion regarding federal
or state securities laws of any jurisdiction.

(13)        We express no opinion as to the laws of
any jurisdiction other than the laws of the State of West Virginia and the laws
of the United States of America. To the extent that any documents referred to
herein are governed by and construed in accordance with the laws of a
jurisdiction other than the State of West Virginia, we have assumed that the
laws of such jurisdiction are the same as the laws of the State of West
Virginia.

(14)        We assume no obligation to supplement
this opinion if any applicable laws change after the date hereof or if we
become aware of any facts that might change the opinions expressed herein after
the date hereof.

 

Further,
certain provisions contained in the Operative Documents may be unenforceable in
whole or in part to the extent any such provision may contravene the public
policy of the State of West Virginia.

The
opinions expressed herein are solely for your use in connection with the
Transactions contemplated by the Operative Documents. This opinion may not be
relied on by any other person or in connection with any other matter without
our prior written consent. The opinions expressed herein are limited to the
matters set forth herein, and no other opinion should be inferred beyond the matters
expressly stated.

Very truly yours,

TURNER &
JOHNS, PLLC

 
  

Schedule
I

MOUNTAINEER
PARK, INC. CONTRACTS

1.           Agreement dated January 10, 2004
, between Mountaineer Park, Inc. and the Mountaineer Park Horsemen’s
Benevolent and Protective Association, Inc.

2.           Agreement dated January 7, 2004,
between Mountaineer Park, Inc. and Racetrack Employees Union Local No. 101.

3.           Master Lease Agreement dated January 31,
2000, by and between Mountaineer Park, Inc., and PNC Leasing, LLC.

4.           Master Equipment Lease Agreement
dated November 12, 2001, between Mountaineer Park, Inc. and National
City Leasing Corporation.

5.           Equipment Lease dated December 16,
2002, between Mountaineer Park, Inc. and BB&T Leasing Corporation.

 

EXHIBIT
C

FORM OF
OPINION OF JONES VARGAS

May 25, 2006

JEFFERIES &
COMPANY, INC.

WELLS FARGO SECURITIES, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard, 10th floor

Los Angeles, California 90025

Re:         MTR
Gaming Group, Inc.

$125,000,0009% Senior Subordinated Notes due 2012

Ladies and
Gentlemen:

We
have acted as Nevada counsel to Speakeasy Gaming of Las Vegas, Inc. (“SGLV”)
and Speakeasy Gaming of Fremont, Inc. (“SGFI”) (collectively, the “Nevada
Guarantors”) and special Nevada counsel to MTR Gaming Group, Inc., a
Delaware corporation (“MTR” or the “Company”), in connection with that certain
Purchase Agreement dated as of May 22, 2006 (the “Purchase Agreement”),
pursuant to the terms of which MTR is issuing and selling to Jefferies &
Company, Inc. and Wells Fargo Securities, LLC (the “Initial Purchasers”)
$125,000,000 aggregate principal amount at maturity of MTR’s 9% Senior
Subordinated Notes due 2012, Series A, including the Guarantees endorsed
thereon (the “Notes”). This opinion is delivered to you at the request of the
Nevada Guarantors pursuant to Section 9(a)(x)(c) of the Purchase
Agreement for reliance by the Initial Purchasers.

All
capitalized terms which are used herein, and which are not otherwise defined
herein, shall have the meanings which are set forth in the Purchase Agreement. For
purposes of this letter, the following terms have the following meanings: (i) Nevada
Gaming Laws means, collectively, the Nevada Gaming Control Act and the NGC
Regulations, (ii) NGC Regulations means the regulations adopted by the
Commission under the Nevada Gaming Control Act, and (iii) Gaming
Commission means the Nevada Gaming Commission.

We
have been furnished with and have examined originals or copies, certified or
otherwise identified to our satisfaction, of all the documents, records,
reports, and certificates specifically described below, and have relied thereon
with respect to questions of fact material to our opinions. Although we have
not independently verified information obtained from third persons, we have no
current actual knowledge of any factual information which would lead us to form
legal opinions different from those expressed herein. These records, documents,
and reports and certificates include drafts of the following:

(a)           The
Purchase Agreement dated as of May 22, 2006;

 

(b)           The
Indenture dated as of May 25, 2006;

(c)           The
Final Offering Circular dated as of May 22, 2006;

(d)           The
Time of Sale Information;

(e)           The
Notes, including the Guarantees endorsed thereon dated as of May 25, 2006;

(f)            The
Registration Rights Agreement dated as of May 25, 2006;

(g)           The
Supplemental Indenture dated as of May 17, 2006;

(h)           The
Consent Documents (as defined in the Purchase Agreement);

(i)            The
Articles of Incorporation and Bylaws of each of the Nevada Guarantors, in each
case, as amended to date, certified by the respective President and Secretary
of each of the Nevada Guarantors;

(j)            Certificates
from the Nevada Secretary of State indicating that each of the Nevada
Guarantors is a Nevada corporation in good standing;

(k)           A
certificate from the Nevada Secretary of State indicating that the Company is a
foreign corporation in good standing;

(l)            A
certificate of the Secretary of each of 
SGLVI and SGFI attesting to the validity of, and attaching copies of
resolutions adopted by the respective Boards of Directors of SGLVI and SGFI
authorizing the execution, delivery and performance of the Documents (as
defined below) to which they are parties, signed by each member of the
respective Boards of Directors; and

(m)          A
certificate of the Secretary of the Company attesting to certain matters of
fact.

The
documents set forth in items (a) through (h) above are referred to
herein collectively as the “Documents.”

Whenever
any opinion or confirmation set forth in this letter is qualified by the words “to
our knowledge” or by other words of similar meaning, such words mean the actual
current awareness by lawyers in the Primary Lawyer Group (as defined below) of
factual matters such lawyers recognize as being relevant to the opinion or
confirmation so qualified. The term “Primary Lawyer Group,” as used in this
letter, means the lawyer who signs this opinion, the lawyer within this firm
having supervisory responsibility for this firm’s relationship with MTR and the
Nevada Guarantors, and every other lawyer in this firm who participated in the
representation of MTR and the Nevada Guarantors in connection with the
transaction 

 

contemplated by
the Documents. We have not undertaken any independent investigation to
determine the existence or absence of such facts, and no inference as to our
knowledge of the existence or absence of such facts should be drawn from our
representation of MTR or the Nevada Guarantors.

Assumptions:

In rendering this
opinion, we have assumed, with your permission, and without independent
investigation:

(i)                                     the
authenticity of all documents submitted to us as originals and the conformity
to authentic genuine originals of all documents submitted to us as certified,
conformed or photostatic copies, whether signed or unsigned;

(ii)                                  that
each party to the Documents other than the Nevada Guarantors, and each party
constituting such party other than Nevada Guarantors: (a) is duly
organized, validly existing, and in good standing under the laws of the state
of its organization, (b) has full power, authority, and legal right under
the laws of the state of its organization and its organizational documents to
execute and deliver, and observe and perform its obligations under the
Documents, (c) has taken all actions necessary to authorize the execution
and delivery of, and to carry out and consummate the transactions contemplated
to be performed on its part by, the Documents, and (d) has duly executed
and delivered each of the Documents to which it is a party, and such Documents
constitute the legal, valid and binding obligation of the parties thereto,
enforceable in accordance with their terms;

(iii)                               the
necessary legal capacity and competence of all natural persons;

(iv)                              the
genuineness of all signatures;

(v)                                 that
the Documents accurately and completely describe and contain the mutual
understandings of the parties thereto, and that there are no oral or written
statements or agreements among the parties to the Documents, or between any two
or more of them, that modify, amend, or vary any of the terms of the Documents
or that would have an effect on the opinions rendered herein;

(vi)                              that
the original executed Documents will be in the form submitted to us for our
review, and will be completed and conformed in a full, accurate, and consistent
manner;

(vii)                           all
representations and warranties made by any party in any of the 

 

Documents as to factual matters are and, upon
execution and delivery of the Documents will be, true, complete and correct in
all relevant respects, and all material conditions precedent to the
effectiveness of the Documents have been appropriately satisfied or waived;

(viii)                        to the
extent the real property of the Nevada Guarantors shall be used for the
operation of gaming, no enforcement of, or foreclosure of, or any other resort
to a security interest in “gaming devices” or in the proceeds from the
operation of a “gaming device,” “game,” “race book” or “sports pool,” or in a “security”
issued by the Nevada Guarantors (as such terms are defined in the Nevada Gaming
Laws), including the stock or other equity securities of the Nevada
Guarantors  and any other affiliate or
subsidiary that holds or obtains a Nevada gaming license or that becomes
registered with the Gaming Commission and is subject to the provisions of NGC
Regulation 15, shall occur without first securing the approvals required by the
Nevada Gaming Laws;

(ix)                                to
the extent the real property of the Nevada Guarantors shall be used for the
operation of gaming, no acquisition of control (as defined in NGC Regulation
16.010(3) and as governed by NGC Regulation 16.200) of Nevada Guarantors,
and any other affiliate or subsidiary that holds or obtains a Nevada gaming
license or that becomes registered with the Nevada Gaming Authorities and is
subject to the provisions of NGC Regulation 15, by any of the Trustee, the
Initial Purchasers, or the Eligible Purchasers due to the exercise of rights
pursuant to the transfer or assignment of a security of, or leases held by the
Nevada Guarantors or any affiliate or subsidiary, the taking of possession of
or operation of the premises of a gaming licensee, or the collection of or
receipt of rents and profits from a gaming licensee, in each case after an
Event of Default (as defined in the Indenture), shall occur without first
securing the approvals required by the Nevada Gaming Laws;

(x)                                   none
of the Trustee, the Initial Purchasers or any Eligible Purchaser shall take
dominion over any premises of the Nevada Guarantors while or if such premises
continue to be used for gaming purposes without first obtaining the approvals
required by the Nevada Gaming Laws;

(xi)                                none
of the Trustee, the Initial Purchasers or any Eligible Purchaser shall exercise
“significant influence” (as set forth in NGC Regulation 16.400) over the
activities of a gaming licensee without first securing the approvals required
by the Nevada Gaming Laws; and

(xii)                             notices,
if necessary, shall be given by the Nevada Guarantors pursuant to NGC
Regulations 3.020 and 8.130 within the time limits required by those Regulations.

 

We
have also assumed that the Nevada Guarantors will not in the future take any
discretionary action (including the decision not to act) permitted by the
Transaction Documents that would require any registration with, consent or
approval of, or notice to, or other action to, with or by, any Nevada
governmental authority or regulatory body.

Opinions:

Based
on the foregoing, and such other investigation as we have deemed appropriate
for these opinions, and subject to the limitations, assumptions, and
qualifications set forth herein, we are of the opinion that:

1.    Each of the Nevada Guarantors is a
corporation duly organized, validly existing and, based solely on the Good
Standing Certificates, in good standing under the laws of the State of Nevada
and has all requisite corporate power and authority under its Charter Documents
and the Nevada corporation law to conduct and carry on its business and to own,
lease, use and operate its properties and assets as described in each of the
Time of Sale Information and the Final
Offering Circular.

2.    Each of the Nevada Guarantors has all
requisite corporate power and authority under its Charter Documents and the
Nevada corporation law to execute, deliver and perform its obligations under
the Documents to which it is a party and to consummate the Transactions
contemplated thereby.

3.    The Documents to which the Nevada Guarantors
are a party and the Transactions contemplated thereby (including without
limitation the Offering and the issuance and sale of the Notes in accordance
with the Purchase Agreement, and the execution of the Supplemental Indenture)
have been duly authorized by each of the Nevada Guarantors, and the Documents
to which the Nevada Guarantors are a party have been validly executed and
delivered by each of the Nevada Guarantors.

4.    To our knowledge, none of the Nevada
Guarantors is (i) in violation of its Charter Documents, (ii) in
violation of any Applicable Law of the State of Nevada, or (iii) in breach
of or default under any Applicable Agreement.

5.    None of the execution, delivery or
performance of any of the Documents, nor the compliance with the terms and
provisions thereof, nor the consummation of any of the Transactions will
conflict with, violate, constitute a breach of or a default (with the passage
of time or otherwise) under, result in the imposition of a Lien (as defined in
the Indenture) on any assets of the Nevada Guarantors (except as created by the
Indenture) or result in an acceleration of indebtedness pursuant to, (i) its
Charter Documents, (ii) to our knowledge, any Applicable Agreements; or (iii) any
Applicable Law of the State of Nevada.

 

6.    (a)           No
Permit (including without limitation any Permit of the Nevada Gaming
Authorities or under Nevada Gaming Law) is required under Applicable Law of the
State of Nevada in connection with, or as a condition to, the execution,
delivery or performance of any of the Documents, the compliance with the terms
and provisions thereof or the consummation of any of the Transactions, other
than (i) such Permits as have been made or obtained on or prior to the
Closing Date, which Permits, to our knowledge, are in full force and effect on
the Closing Date and (ii) any Permits required to be obtained from the
Gaming Commission approving the Registered Exchange Offer (including the
Guarantee of the Series B Notes by SGLV and SGFI).

(b)           Each of the Nevada Guarantors has,
and, to our knowledge, is in compliance with the terms and conditions of, all
Permits (including, without limitation, Permits with respect to engaging in
gaming operations, but excluding, for purposes of this Section 6(b), those
Permits the failure of which to have could not, singly or in the aggregate,
have a Material Adverse Effect) necessary or advisable under Applicable Law of
the State of Nevada to own, lease, use and operate the properties and to
conduct and carry on the businesses described in each of the Time of Sale
Information and the Final Offering Circular. All such Permits are valid and in
full force and effect. To our knowledge, no Nevada Guarantor has received
notice that any entity is considering limiting, conditioning, suspending,
modifying, revoking or not renewing any such Permit. To our knowledge, no
Governmental Authority of the State of Nevada is investigating any Nevada Guarantor.

(c)          None of the execution, delivery or
performance of any of the Documents, nor the compliance with the terms and
provisions thereof, nor the consummation of any of the Transactions, will allow
or result in, and, to our knowledge, no event has occurred which allows or
results in, or after notice or lapse of time would allow or result in, the
imposition of any material penalty under, or the revocation or termination of,
any such Permit or any material impairment of the rights of the holder of any
such Permit, except for the approval of the Registered Exchange Offer
(including the Guarantee of the Series B Notes by SGLV and SGFI)
delineated in the Registration Rights Agreement by the Nevada State Gaming
Control Board and the Gaming Commission.

7.    There is no Proceeding before or by any
Governmental Authority of the State of Nevada pending or, to our knowledge,
threatened either (i) with respect to any of the Nevada Guarantors in
connection with, or that seeks to restrain, enjoin, prevent the consummation of
or otherwise challenge any of the Documents or any of the Transactions, or (ii) could,
singly or in the aggregate have a Material Adverse Effect.

8.    To our knowledge, no condemnation, eminent
domain, or similar proceeding before or by any Governmental Authority exists,
is pending or is threatened, with respect to or that could affect, any
properties or assets of the Nevada Guarantors.

9.    The information in each of the Time of Sale
Information and the Final Offering
Circular under the headings “Risk Factors—Risks Related to this Offering
and the Notes—You may be required to sell your Notes if any gaming authority
finds you unsuitable to hold them,” 

 

“Risk Factors—
Risks Related to Our Business—We are subject to extensive regulation by gaming
and racing authorities,” “Regulation and Licensing—Nevada Gaming Regulation,” “Regulation
and Licensing—IRS Regulations and Currency Transaction Reporting,” “Regulation
and Licensing—Impact of Resort Hotel Legislation” and “Regulation and
Licensing—Compliance with Other Laws” has been reviewed by us and, to the
extent that it constitutes statements or matters of law, summaries of legal
matters, summaries or descriptions of securities, instruments, agreements or
other documents, summaries of proceedings, or legal conclusions, it is correct
in all material respects with respect to the Nevada Gaming Laws.

Limitations and
Qualifications:

The
opinions expressed in this letter are subject to, limited, and qualified by the
following:

(a)                                  Limitations
on the right of a creditor, secured party or beneficiary to exercise rights and
remedies or to impose penalties for late payments or other defaults if it is
determined that (i) the defaults are not material, the penalties bear no
reasonable relation to the damage suffered as a result of the delinquencies or
defaults, or it cannot be demonstrated that the enforcement of the restrictions
or burdens is reasonably necessary for the protection of such creditor, secured
party or beneficiary, or (ii) the enforcement of the covenants or provisions
under the circumstances would violate such creditor’s implied covenant of good
faith and fair dealing;

(b)                                 The
effect of federal securities laws;

(c)                                  The
unenforceability under certain circumstances of provisions to the effect that
failure to exercise or delay in exercising rights or remedies will not operate
as a waiver of the right or remedy;

(d)                                 The
unenforceability under certain circumstances of provisions indemnifying, or
prospectively releasing, a party against liability for its own wrongful acts or
where the release or indemnification is contrary to public policy; and

(e)                                  Limitations
based on statutes or on public policy limiting a person’s right to waive the
benefits of statutory provisions or common law rights.

We
express no opinion as to:

(1)                                  The
ability of SGLV, SGFI or any affiliate or subsidiary to assign, transfer,
encumber, or to create or perfect a security interest in any business, liquor,
gaming or other license or approval granted by a Nevada state or local
political subdivision;

 

(2)                                  The
enforceability under Nevada law of a contractual provision which purports to
waive trial by jury, the assertion of counterclaims in an action, or the
consolidation of actions;

(3)                                  Title
to any property or the priority of any lien or security interest;

(4)                                The
reasonableness of any late charge or liquidated damages;

(5)                                  Any
attachment to, or document to which reference is made in, any of the Documents
(except for references to other Documents);

(6)                                  The
effectiveness of any provision requiring consents, modifications or waivers to
be in writing;

(7)                                  The
unenforceability under certain circumstances of provisions expressly or by
implication waiving broadly or vaguely stated rights, unknown future rights,
defenses to obligations, or rights granted by laws, where such waivers are
against public policy or prohibited by law;

(8)                                  The
effectiveness of any provision purporting to require that litigation and other
proceedings with respect to the Documents only be prosecuted in certain
jurisdictions; and

(9)                                  The
effect on the Documents of the covenant of good faith and fair dealing which is
impliedly contained in all contracts entered into in the State of Nevada.

We
are admitted to practice in the State of Nevada, and our opinion is limited to
matters under or involving the laws of the State of Nevada (except for
securities or Blue Sky laws on which we express no opinion). We express no
opinion as to matters under or involving the laws of any jurisdiction other
than the laws of the State of Nevada as those laws presently exist.

This
opinion is rendered to the Initial Purchasers, and their respective successors
and assigns, in connection with the transactions referred to herein and may not
be relied on in any other context; nor may it be relied on by any other Person.
This opinion may not be quoted nor may copies hereof be furnished to any other
Person without the prior written consent of the undersigned, except that the
Initial Purchasers and their respective successors and assigns, and may furnish
a copy hereof:  (i) to their
respective in-house and independent auditors and attorneys; (ii) to any
Governmental Authority or authority having regulatory jurisdiction over any of
the Initial Purchasers, or their respective successors and assigns; (iii) pursuant
to order or legal process of any court or Governmental Authority; (iv) in
connection with any legal action to which any of the Initial Purchasers, or
their successors and assigns, are a party arising out of the transactions
referred to above.

This
letter is issued in the State of Nevada and by issuing this letter the law firm
of Jones 

 

Vargas shall not
be deemed to be transacting business in any other state. Furthermore, by
issuing this letter the law firm of Jones Vargas does not consent to the
jurisdiction of any state but the State of Nevada and any claim or cause of
action arising out of the opinions expressed herein must be brought in the
State of Nevada.

The
opinions expressed in this letter are based upon the law in effect on the date
hereof, and we assume no obligation to revise or supplement the opinion should
such law be changed by legislative action, judicial decision or otherwise.

Respectfully submitted,

JONES VARGAS

 

EXHIBIT D

FORM OF OPINION OF
STEVENS & LEE

May 25, 2006

Jefferies &
Company, Inc.

Wells Fargo Securities, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, CA  90025

Re:                   Purchase
Agreement (the “Purchase Agreement”) dated as of May 22, 2006, by
and among MTR Gaming Group, Inc., a Delaware corporation (the “Company”),
the Guarantors party thereto, and Jefferies & Company, Inc. and
Wells Fargo Securities, LLC (collectively, the “Initial Purchasers”)

Ladies and Gentlemen:

We have acted as special
Pennsylvania counsel to Presque Isle Downs, Inc., a Pennsylvania
corporation (the “Pennsylvania Guarantor”), in connection with its role
as a Guarantor pursuant to the Purchase Agreement and in particular with its
execution and delivery of the following documents:

13.           the Purchase Agreement;

14.           the Indenture dated as of May 25, 2006;

15.           the Registration Rights Agreement dated as of May 25,
2006; and

16.           the Guarantee dated as of May 25, 2006.

The documents described
in the foregoing clauses (a) through (d) are collectively
referred to herein as the “Operative Documents.”  Unless otherwise indicated, capitalized terms
used but not defined herein shall have the respective meanings set forth in the
Purchase Agreement. This opinion is furnished to you pursuant to Section 9(a)(x)(D) of
the Purchase Agreement.

In connection with this
opinion, we have examined each Operative Document, or a copy thereof, signed by
each of the Company Entities party thereto.

In connection with this
opinion, we have also reviewed: (a) the Time of Sale Information; (b) the
Final Offering Circular; (c) the Articles of Incorporation and By-Laws of
the Pennsylvania Guarantor, in each case as amended through the date hereof,
certified as true, correct and complete by the corporate secretary of the
Pennsylvania Guarantor; (d) a subsistence certificate dated May 16,
2006 issued by the Secretary of State of the Commonwealth with 

 

respect to the
Pennsylvania Guarantor; (e) a certificate of the corporate secretary of
the Pennsylvania Guarantor attesting to the validity of, and attaching copies
of, resolutions adopted by the board of directors of the Pennsylvania Guarantor
authorizing, among other things, the Pennsylvania Guarantor’s execution,
delivery and performance of the Operative Documents; and (f) the stock
ledger of the Pennsylvania Guarantor in the form submitted to us by the
corporate secretary of the Pennsylvania Guarantor together with a certificate
certifying as to, among other things, the number of issued and outstanding
shares of the capital stock of the Pennsylvania Guarantor, the number of shares
of such capital stock held by the sole shareholder of the Pennsylvania
Guarantor, and other matters relating to the capitalization of the Pennsylvania
Guarantor.

The opinions hereinafter
expressed are subject to the following qualifications, limitations, assumptions
and exceptions:

(a)           We have assumed the genuineness of
all signatures other than those of the officers of the Pennsylvania Guarantor,
the legal capacity of all natural persons executing the Operative Documents,
the authenticity of all documents submitted to us as originals and the
conformity of all documents submitted to us as copies to the originals thereof.
As to the accuracy of various factual matters material to our opinion, we have
relied, without independent investigation or verification, upon the
representations and warranties of the Company Entities (including the
Pennsylvania Guarantor) contained in the Operative Documents, copies of which
have been delivered to you, and, as to certain matters, certificates, letters,
telegrams or statements of public officials.

(b)           As special counsel to the
Pennsylvania Guarantor, we are only engaged to render substantive attention to
specific matters and express no opinion on any matter on which the Pennsylvania
Guarantor has not engaged us to render substantive legal advice.

(c)           This opinion is based upon (A) the
laws of the Commonwealth of Pennsylvania (the “Commonwealth”) as now in
effect, and we express no opinion on the laws of any other jurisdiction (state
or federal) and (B) such laws of the Commonwealth that in our experience
are normally applicable to transactions of the type contemplated by the
Operative Documents.

(d)           It is to be understood that the
rights of the Initial Purchasers and the Holders (as defined in the Indenture)
with respect to the validity, enforceability or binding nature of the Operative
Documents may be limited or otherwise affected by applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent transfer and other similar
laws affecting creditors’ rights generally heretofore or hereafter enacted and
that their validity, enforcement or binding nature may also be subject to the
exercise of judicial discretion in the application of general principles of
equity in appropriate cases (regardless of whether enforcement is sought in
equity or at law). We also express no opinion with respect to the 

 

enforceability
of the Operative Documents to the extent that such enforceability may be
limited by:  (a) the effect of
certain laws and judicial decisions limiting on constitutional or public policy
grounds:  (i) the remedy of
self-help or similar rights and remedies contained in the Operative Documents;
and (ii) various waivers of rights and defenses set forth in the Operative
Documents, including the right to trial by jury; or (b) the application of
a standard of “good faith” or “commercial reasonableness” to any decisions,
actions or conduct at any time on the part of the Initial Purchasers and the
Holders.

(e)           We have assumed that (a) each of
the parties (other than the Pennsylvania Guarantor) to the Operative Documents
is duly organized, validly existing and in good standing under the laws of all
jurisdictions where it is conducting its businesses or otherwise required to be
so qualified, and has full power and authority to execute, deliver and perform
its duties under the Operative Documents, (b) the Operative Documents
executed by each party (other than the Pennsylvania Guarantor) have been duly
authorized, executed and delivered by, and, subject to the qualifications
listed in clause (iv) above, constitute legal, valid and binding
agreements of, such party, (c) no consent, approval, authorization,
declaration or filing by or with any Governmental Authority is required for the
valid execution and delivery of the Operative Documents by any party (other
than the Pennsylvania Guarantor), and (d) each party (other than the
Pennsylvania Guarantor) has acted and will act in good faith and will seek
to enforce its rights and remedies under the Operative Documents in a
commercially reasonable manner.

(f)            It is to be understood that the
enforcement of guaranty and/or security documents entered into by entities to
support the obligations of their affiliates has generally required a showing
that such affiliated entities are economically integrated and interdependent
and that the party guarantying, and/or granting liens to secure the obligations
of its affiliate has derived significant economic benefit in connection with
its having entered into such guaranty and/or security documents. Accordingly,
we have assumed that the business and affairs of the Pennsylvania Guarantor are
sufficiently integrated and interdependent with the business and affairs of the
Company and that the Pennsylvania Guarantor has derived a sufficient economic
benefit from the transactions in connection with which the Operative Documents
have been executed and delivered such that a court called upon to enforce the
Operative Documents would enforce the Pennsylvania Guarantor’s obligations
under the Operative Documents in accordance with their terms.

(g)           We have assumed that the proceeds of
the Notes have been disbursed in whole or in part to the Company or in
accordance with the Company’s instructions.

 

(h)           We express no opinion as to the
validity or enforceability of any of the following provisions in any of the
Operative Documents:  (a) self-help
provisions; (b) provisions declaring that failure to exercise or delay in
exercising rights or remedies will not impair or operate as a waiver of or
acquiescence to any such right or remedy; (c) provisions precluding
modification, waiver, discharge or termination of the Operative Documents or
any provision thereof by oral agreement or through conduct, custom, course of
performance, action or dealing; (d) provisions imposing increased interest
rates upon delinquency in payment or the occurrence of a Default or an Event of
Default (as defined in the Indenture), liquidated damages or prepayment premiums,
to the extent any of the above are deemed to be penalties or forfeitures; (e) provisions
purporting to require (or which may be construed to require) waiver of the
obligations of good faith, fair dealing, diligence or reasonableness; (f) provisions
purporting to grant the Initial Purchasers or the Holders the right to declare
an event of default or exercise rights or remedies under the Operative
Documents (including acceleration of the interest payments) for certain
breaches; (g) provisions purporting to prohibit or restrict (or that may
be construed to prohibit or restrict) the Pennsylvania Guarantor from curing
any breach on its part; (h) provisions releasing, exculpating or exempting
a party from, or requiring indemnification of a party for, liability for its
own action or inaction, to the extent the action or inaction involves
negligence, recklessness, willful misconduct or unlawful misconduct, or to the
extent such release, exculpation, exemption or indemnification is contrary to
the public policy of the Commonwealth or any applicable law; (i) provisions
purporting to limit judicial discretion regarding the determination of damages
and entitlement to attorneys’ fees, costs, expenses or other items which are
unreasonable in nature or amount; (j) provisions purporting to waive
equitable rights or remedies or any right afforded under any statute,
constitutional provision or applicable law; (k) provisions purporting to
assign, or permit the assignment of the right, title and interest of any party
in and to any of its leases, licenses, permits, warranties, contracts or
approvals as against any other party to the Operative Documents to the extent
that the consent or approval of such other party is required for any such
assignment and has not been obtained; (l) provisions regarding the
severability of any provision judicially determined to be unenforceable to the
extent any such unenforceable provision is, or is integrally related to, an
essential part of the agreed exchange; (m) provisions purporting to establish
(or may be construed to establish) evidentiary standards or burdens of proof; (n) provisions
purporting to waive any notice requirements; (o) provisions waiving the
right to a trial by jury; (p) provisions purporting to constitute a waiver
prohibited under the laws of the Commonwealth; (q) provisions regarding
forum selection; (r) provisions purporting to consent to jurisdiction,
venue or manner of service of process; (s) provisions regarding
arbitration; (t) provisions relating to conflicts of laws; (u) provisions
relating to the effects of law which may be enacted in the future; (v) provisions
appointing or purporting to appoint the Initial Purchasers or any Holder as the
attorney-in-fact of the Pennsylvania Guarantor; (w) provisions 

 

purporting to
require the payment or reimbursement of fees, costs, expenses, or other amounts
which are unreasonable in nature or amount; and (x) provisions purporting
to limit the liability of any party for its negligent acts or omissions.

(i)            With respect to Opinion 2 below, we
have relied upon the above-described certificate of the corporate secretary of
the Pennsylvania Guarantor with respect to the capitalization of and related
matters concerning the Pennsylvania Guarantor.

(j)            With
respect to Opinion 8 below, we express no opinion on the effects, or
prospective effects, material or otherwise, of any events on the business of
the Pennsylvania Guarantor. In addition, we express no opinion with respect to
any specific reservation of rights of the Pennsylvania legislature.

Based upon and subject to
the foregoing, and subject to the qualifications, limitations, assumptions and
exceptions set forth herein, it is our opinion that:

Due
Incorporation; Subsistence of the Pennsylvania Guarantor. The Pennsylvania Guarantor is a corporation
duly incorporated and presently subsisting under the laws of the Commonwealth
and has all requisite corporate power to conduct and carry on its business and
to own, lease, use and operate its properties and assets as it is now being
conducted.

Outstanding
Shares and Interests. All
of the outstanding shares of capital stock in the Pennsylvania Guarantor have
been duly authorized, are validly issued, fully paid and nonassessable, and, to
our knowledge, were not issued in violation of, and are not subject to, any
preemptive rights.

Power
and Authority. The
Pennsylvania Guarantor has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Operative Documents.

Authorization,
Execution and Delivery. All
necessary corporate action has been taken to authorize the execution, delivery
and performance by the Pennsylvania Guarantor of the Purchase Agreement and the
other Operative Documents, and the Purchase Agreement and each of the other
Operative Documents have been validly executed and delivered by the
Pennsylvania Guarantor.

No
Conflict. Neither the
execution or delivery of the Operative Documents nor the performance by the
Pennsylvania Guarantor of its obligations thereunder, will conflict with,
violate, constitute a breach of or a default (with the passage of time or
otherwise) under, result in the imposition of a lien on any assets of the
Pennsylvania Guarantor (except those liens, if any, as may be created or
permitted by the Indenture) or result in an acceleration of indebtedness
pursuant to: (i) its Guarantor Charter Documents; or (ii) any
Applicable Law of the Commonwealth.

 

Permits.
Except as otherwise
disclosed in each of the Time of Sale Information and the Final Offering
Circular, no Permit (including without limitation any Permit of the
Pennsylvania State Horse Racing Commission or under the Pennsylvania Race Horse
Industry Reform Act) is required under Applicable Law of the Commonwealth in
connection with, or as a condition to, the execution, delivery or performance
by the Pennsylvania Guarantor of any of the Operative Documents, other than
such Permits as have been granted or obtained on or prior to the Closing Date,
which Permits, to our knowledge, without independent investigation, inquiry or
verification, are in full force and effect on the Closing Date.

No Proceedings. To
our knowledge, except as otherwise disclosed in each of the Time of Sale
Information and the Final Offering Circular, there is no Proceeding before or
by any Governmental Authority of the Commonwealth pending or
threatened with respect to the Pennsylvania Guarantor (i) in
connection with, or that seeks to restrain, enjoin, prevent the consummation of
or otherwise challenge any of the Operative Documents, or (ii) which
would, singly or in the aggregate, have a material adverse effect upon the
properties, business, earnings, assets, liabilities and financial condition of
the Company and its Subsidiaries taken as a whole.

Offering
Circular. We have
reviewed the information in each of the Time of Sale Information and the Final
Offering Circular under the headings “Risk Factors — Risks Related to
this Offering and the Notes — You may be required to sell your Notes
if any gaming authority finds you unsuitable to hold them,” “Risk Factors — Risks
Related to Our Business — We are subject to extensive regulation by
gaming and racing authorities,” “Regulation and Licensing—Pennsylvania
Racing and Gaming Regulation,” and “Regulation and Licensing — Compliance
with Other Laws” and, to the extent that such information relates or pertains
solely to the Pennsylvania Guarantor or any Applicable Law of the Commonwealth
in effect as of the date hereof, and such information constitutes
statements  of law or legal conclusions,
such information is, subject, however, in all respects, to the
caveats and qualifications set forth in each of the Time of Sale Information
and the Final Offering Circular relating to such information, correct in all
material respects.

In basing the opinions
set forth herein on “our knowledge,” the words “our knowledge” mean that, in
the course of our representation of the Pennsylvania Guarantor, no information
has come to our attention which would give us actual (as opposed to
constructive) knowledge that such opinions are not accurate or that any of the
foregoing documents, agreements, instruments, certificates and corporate
records upon which we have relied are not accurate and complete. Except as
otherwise stated herein, we have undertaken no independent investigation,
inquiry or verification of any matters as to which our opinion is
qualified as being to “our knowledge.” 
The words “our knowledge” are further limited to the actual (as opposed
to constructive) knowledge of the lawyers within our Firm who have worked on
the matters specifically referenced in this opinion in the introductory
paragraph on behalf of the Pennsylvania Guarantor or who have given substantive
legal attention to the representation of the Pennsylvania Guarantor.

The opinions herein are
given as of the date hereof. We assume no obligation to update or supplement
any of the opinions to reflect any facts or circumstances which may hereafter
come to our attention or any changes in laws which may hereafter occur.

 

This opinion is
furnished by us solely for your benefit and may not be relied upon by any other
person. This opinion may not be used, circulated, quoted or otherwise
referred to for any purposes other than the Transactions contemplated by the
Operative Documents.

This opinion is
limited to the matters set forth herein. No opinion may be inferred or implied
beyond the matters expressly stated herein, and our opinions expressed in this
opinion must be read in conjunction with the assumptions, limitations,
exceptions and qualifications set forth in this opinion.

Very Truly Yours,

STEVENS & LEE

 

EXHIBIT E

FORM OF
OPINION OF CRABBE, BROWN & JAMES, LLP

May 25, 2006

Ladies and Gentlemen:

We have acted as counsel to MTR Gaming Group, Inc.,
a Delaware corporation (“MTR Gaming Group”), and Scioto Downs, Inc., an Ohio
corporation (the “Ohio Guarantor”),
in connection with the transactions contemplated by the Purchase Agreement,
dated as of May 22, 2006, by and among Jefferies & Company, Inc.,
Wells Fargo Securities, LLC, MTR Gaming Group, Inc., the Ohio Guarantors
and the other guarantors signatory therein (the “Purchase Agreement”).

In order to render the opinions expressed herein, we
have made such inquiries of the Ohio Guarantor as we have considered
appropriate and we have examined executed copies of the following documents,
each dated as of May 25, 2006, unless stated otherwise:

1.    the
Purchase Agreement dated as of May 22, 2006;

2.    the
Indenture;

3.    the
Registration Rights Agreement;

4.    the form
of the Series A Notes;

5.    the
Guarantee as it relates to the Ohio Guarantor;

6.    the
Supplemental Indenture dated as of May 17, 2006; and

7.    the
Consent Documents (as defined in the Purchase Agreement).

Except when specifically referred to by name, each
of the Purchase Agreement, the Indenture, the Registration Rights Agreement,
the form of the Series A Notes, the Guarantee as it relates to the Ohio
Guarantor, the Supplemental Indenture, and the Consent Documents are referred
to collectively herein as the “Documents.”  Any
terms capitalized herein but not defined herein shall have the same meaning as
given to such terms in the Purchase Agreement.

We have reviewed either originals, certified copies,
or copies otherwise authenticated to our satisfaction of the organizational
documents of the Ohio Guarantor, including the Ohio Guarantor’s Articles of
Incorporation and By-Laws and Code of Regulations (collectively, the “Organizational Documents”), the Time of Sale Information and the Final Offering Circular, dated May 22,
2006. We have made such inquiry and investigation and examined such other and
additional writings, certificates, statutes, authorizations and other matters
as we have deemed 

 

necessary and appropriate for the purpose of rendering the opinions of
this firm as set forth in this letter.

In giving this opinion letter, we have relied upon a
fact certificate executed by the Ohio Guarantor (the “Certificate”). We
have no knowledge inconsistent with the Certificate and we have no reason to
believe that further independent investigation of the representations in the
Certificate would in any way cause us to alter this opinion. We have conducted
such investigations of law as we deemed necessary or appropriate with respect
to the opinions expressed herein. Except to the extent expressly set forth
herein, we have not undertaken any independent investigations to determine the
existence or absence of facts, none having been expected or requested of us,
and no inference as to our knowledge of the existence or absence of such facts
should be drawn from our representation of the Ohio Guarantor.

We have also relied upon the representations and
warranties as to factual matters contained in and made pursuant to the
Documents and have further assumed that (i) each statement and
representation contained in the Documents, to the extent any such statement or
representation materially affects the enforceability of or performance under
the Documents, is accurate and contains all statements of material fact
necessary to prevent it, and the Documents generally, from being misleading. We
have assumed that the Documents present an accurate description of the Ohio
Guarantor and the business of the Ohio Guarantor that are the subject of the
Documents, and we have no knowledge that the description of the Ohio Guarantor,
or the description of the business of the Ohio Guarantor are inaccurate in any
material respect.

Based upon the foregoing, but in each case subject
to the limitations and qualifications hereinafter set forth, we are of the
opinion that as of the date hereof:

1.    Due Organization; Good Standing of  the Ohio Guarantors. The Ohio
Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio and 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 each of the Time of Sale
Information and the Final Offering Circular. To our knowledge, the Ohio
Guarantor 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 its business or the ownership, leasing, use or operation of
its properties and assets requires such qualification or licensing.

2.    Outstanding Shares and Interests. All of
the outstanding shares of capital stock in the Ohio Guarantor have been duly
authorized, are validly issued, fully paid and nonassessable, and were not
issued in violation of, and are not subject to, any preemptive or similar
rights.

3.    Power and Authority. The Ohio Guarantor
has all requisite power and authority to execute, deliver and perform its
obligations under the Documents to which it is a party and to consummate the
Transactions contemplated thereby.

 

4.    Authorization, Execution and Delivery. The
Purchase Agreement and the other Operative Documents to which Ohio Guarantor is
a party and the Transactions contemplated thereby (including without limitation
the Offering and the issuance and sale of the Notes in accordance with the
Purchase Agreement and the execution of the Supplemental Indenture) have been
duly authorized by the Ohio Guarantor, and the Purchase Agreement and each of
the other Operative Documents to which the Ohio Guarantor is a party have been
validly executed and delivered by the Ohio Guarantor.

5.    No Violation. To our knowledge, the Ohio
Guarantor is not (i) in violation of its Organizational Documents, (ii) in
violation of any Applicable Law of the State of Ohio, or (iii) in breach
of or default under any Applicable Agreement.

6.    No Conflict. To our knowledge, none of the
execution, delivery or performance of any of the Documents, nor the compliance
with the terms and provisions thereof, nor the consummation of any of the
Transactions will conflict with, violate, constitute a breach of or a default
(with the passage of time or otherwise) under, result in the imposition of a
Lien on any assets of the Ohio Guarantor (except as created by the Indenture)
or result in an acceleration of indebtedness pursuant to, (i) its
Organizational Documents, (ii) any Applicable Agreements; or (iii) any
Applicable Law of the State of Ohio.

7.    No Proceedings. To our knowledge, there is
no Proceeding before or by any Governmental Authority of the State of Ohio
pending or, to our knowledge after due inquiry, threatened either (i) with
respect to the Ohio Guarantor in connection with, or that seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge any of the Operative
Documents any of the Transactions, or (ii) could, singly or in the
aggregate have a Material Adverse Effect.

8.    Offering Circular. The information in each
of the Time of Sale Information and the Final Offering Circular under the
headings “Risk Factors—Risks Related to this Offering the Notes—You may be
required to sell your Notes if any gaming authority finds you unsuitable to hold
them,” “Risk Factors—Risks Related To Our Business—We are subject to extensive
regulation by gaming and racing authorities,” “Regulation and Licensing—Ohio
Racing Regulations” and “Regulation and Licensing—Compliance with Other Laws”
has been reviewed by us and, to the extent that it constitutes statements or
matters of law, summaries of legal matters, summaries or descriptions of
securities, instruments, agreements or other documents, summaries of
proceedings, or legal conclusions, it is correct in all material respects.

The opinions expressed herein are made subject to
and are qualified by the following:

a.    We have
assumed the genuineness of all signatures (other than the Ohio Guarantor) on
the executed documents that we have examined, the authenticity of all documents
submitted to us as originals, the conformity of copies of documents submitted
to us to the corresponding original documents, and the authenticity of all
originals of such copies;

 

b.    We
express no opinion as to any documents not enumerated in this letter as the
Documents nor as to any documents referenced in the Documents or of record in
any jurisdiction, unless the same are expressly referred to herein as being
opined upon;

d.    In basing
the opinions and other matters set forth herein on “our knowledge”, the words “our
knowledge” signify that, after due inquiry, including obtaining and reviewing
the Certificate, no information has come to our attention during the course of
our representation of the Ohio Guarantor that would give us actual knowledge or
actual notice that any such opinions or other matters are not accurate or that
any of the documents or certificates on which we have relied are not accurate
and complete. As to questions of fact material to our opinion, we have relied
upon the Certificate, certificates of public officials, and representations of
the Ohio Guarantor contained in the Documents;

e.    With
respect to the opinion regarding good standing expressed in paragraph 1 hereof,
we have relied solely upon current certificate of good standing from the
appropriate state agency;

f.     We
express no opinion as to legal matters governed by laws other than those of the
State of Ohio and the federal laws of the United States, except as otherwise
stated herein, all as currently in effect;

h.    Except as
expressly stated herein, we express no opinion as to the United States
Bankruptcy Code, state insolvency, liquidation or fraudulent conveyance
statutes or laws of similar import;

i.     The
opinions expressed herein are subject to applicable laws in effect from time to
time relating to bankruptcy, insolvency, reorganization, receivership,
moratorium, assignment for the benefit of creditors and other laws affecting
creditors’ rights generally, including, without limitation, such laws regarding
fraudulent transfers, fraudulent conveyances, preferences, avoidance, automatic
stay and turnover;

j.     The
opinions expressed herein are stated as of the date hereof and are limited to
the matters expressly addressed herein. No other opinion is implied or may be inferred
from the opinions expressly set forth herein. The opinions expressed herein are
based solely upon facts of which we are aware and upon laws which are in effect
as of the date hereof. We assume no obligation to supplement this opinion if
any applicable laws change after the date hereof or if we become aware of any
facts that might change this opinion after the date hereof;

k.    The
opinions expressed herein also are qualified to the extent that the remedy of
specific performance or of any other equitable remedy may be unavailable in a
jurisdiction or may be withheld or limited as a matter of judicial discretion;
for example, if the exercise of such remedy is predicated upon a breach which
the court concludes is not material, or if such remedy is deemed to be in the
nature of a penalty;

 

l.     Provisions
relating to liability limitations, waivers of remedies or statutory rights may
not be enforceable;

m.   We express
no opinion as to the reasonableness of any late charge or liquidated damages;

n.    The
rights and remedies contained in the Documents are subject to limitations
imposed by general principles of equity upon the specific enforceability of any
of  the remedies, covenants or other
provisions of such documents or instruments, and upon the availability of
injunctive relief or other equitable remedies and the application  of general principles of equity and public
policy (regardless of whether enforcement is considered in proceedings at law
or in equity). These principles of equity include without limitation the
following:

i.            principles
governing the availability of specific performance, injunctive relief or other
traditional equitable remedies, which generally place the award of such
remedies, subject to certain guidelines, in the discretion of the court to
which application for such relief is made;

ii.           principles
affording traditional equitable defenses (e.g., waiver, laches and estoppel) as
applied to a party seeking enforcement;

iii.          a
requirement of good faith and fair dealing in the performance and enforcement
of an agreement on the part of a party seeking enforcement after the agreement
has been entered into;

iv.          the
reasonableness of the enforcing party’s conduct or of enforcing a particular
provision, after the agreement has been entered into, in light of the
circumstances existing at the time of such conduct or attempted enforcement;

v.           the
materiality of any breach;

vi.          impracticability
or impossibility of performance at the time of attempted enforcement; and

vii.         unconscionability,
as applied to the enforcing party’s conduct after the agreement is entered into
and at or before the time of attempted enforcement.

The opinions stated herein are rendered solely for
the benefit of the Jefferies & Company, Inc., Wells Fargo
Securities, LLC and their legal counsel, Skadden, Arps, Slate, Meagher &
Flom LLP, and may not be quoted to, relied on by, or communicated to any other
person or entity or used for any other purpose without our prior written
consent. Similarly, the original or copies of this opinion letter may not be
delivered to any other person or entity without our prior written consent,
which consent shall not be unreasonably withheld.

Very truly yours,

CRABBE, BROWN & JAMES, LLP

 

EXHIBIT
F

FORM OF
OPINION OF WARNER NORCROSS & JUDD LLP

May 25, 2006

Jefferies &
Company, Inc.

Wells Fargo Securities, LLC

c/o Jeffries & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, California  90025

Ladies and
Gentlemen:

MTR
Gaming Group, Inc. (“MTR”) has
requested that we furnish this opinion to you in connection with a Purchase
Agreement dated May 22, 2006 (“Purchase Agreement”)
among MTR, you (as the Initial Purchasers) and the entities identified in, and
party to, the Purchase Agreement as Guarantors, including Jackson Raceway, Inc.,
a Michigan corporation (“Michigan Guarantor”).
Each capitalized term that this opinion letter uses but does not define has the
meaning that the Purchase Agreement gives it.

We
have examined forms of the following documents (collectively called “Note Documents”):

·                  An
executed copy of the Purchase Agreement, which we received on May   ,
2006, by electronic mail from Ruben & Aronson, LLP.

·                  An
executed copy of the Indenture dated May 25, 2006, among MTR, the
Guarantors and Wells Fargo Bank, N.A., as Trustee, with respect to MTR’s
issuance of its 9% Senior Subordinated Notes due June 1, 2012, in the
aggregate principal amount of up to $125,000,000, which we received on May   ,
2006 by electronic mail from Ruben & Aronson, LLP (“Indenture”).

·                  An
executed copy of the Registration Rights Agreement dated May 25, 2006,
among MTR, the Initial Purchasers and Guarantors which we received on May   ,
2006 by electronic mail from Ruben & Aronson, LLP (“Registration Rights Agreement”).

  
  
  
 

 

·                  Executed
copies of the Notes, together with the Guarantee of the Michigan Guarantor,
which we received on May   , 2006, by electronic mail from Ruben &
Aronson, LLP.

We
have also examined the following documents:

·                  Certificate
dated May 12, 2006, issued by the Michigan Department of Labor and
Economic Growth (“Department”)
certifying as to the documents on file in the Department with respect to the
Michigan Guarantor and as to the good standing of the Michigan Guarantor in the
State of Michigan (“Good Standing Certificate”).

·                  Certificate
dated May 12, 2006, issued by the Department with respect to the Articles
of Incorporation of the Michigan Guarantor (“Articles
Certificate”).

·                  Certificate
dated May   , 2006, signed by                 ,
as the               
of the Michigan Guarantor, certifying as to the bylaws of the Michigan
Guarantor, the adoption of certain resolutions by the board of directors of the
Michigan Guarantor and as to the incumbency of certain officers of the Michigan
Guarantor (“Officer’s Certificate”).

·                  Certificate
dated May   , 2006, signed by John W. Bittner, Jr., as the
Chief Financial Officer of MTR, certifying as to the issuance of shares of the
capital stock of the Michigan Guarantor (“Shares Certificate”).

In
our examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals and the conformity to authentic original documents of all
documents submitted to us as certified or photostatic copies.

Any
reference in this opinion letter to our knowledge means the actual knowledge of
the attorney who has signed this letter and each attorney in this firm who has
been actively involved in reviewing the Note Documents or in preparing this
opinion letter and William C. Fulkerson, who is this firm’s engagement partner
with respect to MTR and the Michigan Guarantor, and those attorneys have not
made any investigation of or inquiry as to those matters with respect to which
this opinion letter states that we do or do not have knowledge.

Subject
to the assumptions, limitations and qualifications set forth in this letter, we
express the following opinions:

1.             The
Michigan Guarantor is a corporation duly incorporated and validly
existing under the laws of the State of Michigan and has all requisite
corporate power to conduct and carry on business and to own, lease, use and
operate properties and assets.

2.             All of
the outstanding shares of capital stock of the Michigan Guarantor 

  
  
  
 

 

have
been duly authorized, are validly issued, fully paid and nonassessable.

3.             The
outstanding shares of capital stock of the Michigan Guarantor were not issued
in violation of, and are not subject to, (1) any preemptive rights under
either the Michigan Guarantor’s articles of incorporation or bylaws or under
the Michigan Business Corporation Act or (2) any preemptive rights created
by any contract of which we have knowledge.

4.             The Michigan Guarantor has corporate power
and authority to execute, deliver and perform its obligations under the Note
Documents.

5.             All
necessary corporate action has been taken to authorize the Michigan Guarantor’s
execution, delivery and performance of the Note Documents, and the Michigan
Guarantor has duly executed the Note Documents.

6.             We do not
have knowledge that the Michigan Guarantor is either in violation of its
Guarantor Charter Documents or in violation of a law of the State of Michigan.

7.             The
Michigan Guarantor’s execution, delivery and performance of the Note Documents
will not conflict with, violate or constitute a breach of or a default (with
the passage of time or otherwise) under either its Guarantor Charter Documents
or a law of the State of Michigan.

8.             The
Michigan Guarantor’s execution, delivery or performance of a Note Document will
not result in the imposition of a lien on an asset of the Michigan Guarantor
(except a lien created by a Note Document) or result in an acceleration of
indebtedness pursuant to either its Guarantor Charter Documents or a law of the
State of Michigan.

9.             We do not
have knowledge that either the Michigan Guarantor or any of its directors,
officers or employees has received notice that a Governmental Authority is
considering limiting, conditioning, suspending, modifying, revoking or not
renewing a Permit.

10.           We do not
know of any requirement of Michigan law that a Permit be obtained in connection
with, or as a condition to, the Michigan Guarantor’s execution, delivery or
performance of any of the Note Documents.

11.           We do not
have knowledge that the Michigan Guarantor’s execution, delivery or performance
of a Note Document, its compliance with the terms and provisions of a Note
Document or the consummation of a Transaction would allow or result in or,
after notice or lapse of time, would allow or result in, the imposition of a
material penalty under, or the revocation or termination of, a Permit.

12.           We do not have knowledge that there is a
Proceeding, before or by a Governmental Authority of the State of Michigan,
pending or threatened against the Michigan Guarantor, either (1) that
seeks to restrain, enjoin, prevent the consummation of or otherwise 

  
  
  
 

 

challenge
a Note Document or (2) that we believe, if decided adversely, would have a
Material Adverse Effect.

13.           We have
reviewed the information in each of the Time
of Sale Information and the Final Offering Circular under the headings “Risk
Factors—Risks Related to this Offering and the Notes—You may be required to
sell your Notes if any gaming authority finds you unsuitable to hold them,” “Risk
Factors— Risks Related to Our Business—We are subject to extensive regulation
from gaming and racing authorities” (exclusive of the subparagraph entitled “Taxation”),
“Regulation and Licensing—Michigan Racing Regulation,” and “Regulation and Licensing—Compliance
with Other Laws” and, to the extent that such information relates or pertains
to the Michigan Guarantor or to a law of the State of Michigan in effect as of
the date of this opinion letter, and such information constitutes statements or
matters of law, summaries of legal matters, summaries of proceedings or legal
conclusions, we do not have knowledge that it is not correct in any material
respect.

The
opinions expressed above are subject to the following assumptions, limitations
and qualifications:

A.          We do not express an opinion as to
laws, statutes, rules, or regulations other than the laws, statutes, rules and
regulations of the State of Michigan (excluding municipal and other local
ordinances, codes and regulations). We note, however, that the Note Documents
provide that they are governed by the laws of the State of New York. In
addition, our opinions are limited to laws, rules and regulations that in
our experience would generally be recognized as applying both to (1) business
entities doing business in Michigan, without regard to the activities in which
they are engaged, and (2) transactions of the types provided for in the
Note Documents. For example, except as expressly set forth in paragraphs 9, 10
and 11 above, we do not express an opinion as to laws or regulations that
require a business entity to obtain a license or meet other requirements in
order to engage in certain activities.

B.           We have assumed that the statements
contained in the Articles Certificate, the Good Standing Certificate, the
Officer’s Certificate and the Shares Certificate are true and correct as of the
date of this opinion letter.

C.           We have assumed that MTR owns all of
the issued and outstanding capital stock of the Michigan Guarantor.

D.          Our opinions are subject to (1) the
effect of generally applicable bankruptcy, insolvency, fraudulent transfer or
conveyance, reorganization, arrangement, moratorium and other similar laws and (2) limitations
that are imposed by the effect of general principles of equity (regardless of
whether enforcement is considered in proceedings at law or in equity).

E.           Our opinion as to the due
incorporation and valid existence of the Michigan Guarantor in good standing in
Michigan is based solely upon the Good Standing 

  
  
  
 

 

Certificate and
the Articles Certificate.

F.           We do not give an opinion as to the
enforceability of any provision of any Note Document.

Our
opinions are matters of professional judgment and are not a guaranty of’
results. This opinion may be relied upon by the Initial Purchasers and by
successors and assignees of the Initial Purchasers, in connection with the Note
Documents, and may not be relied upon by any other person, party or entity, or
for any other purpose, without our prior written consent. The opinions that we
express above are as of the date of this opinion letter only, and we do not
assume an obligation to update or supplement those opinions to reflect a fact
or circumstance that in the future comes to our attention or a change in law
that in the future occurs or becomes effective. This opinion letter is limited
to the matters set forth in it, and no opinions are intended to be implied or
may be inferred beyond those that are expressly stated above.

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WARNER NORCROSS & JUDD LLP

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  James H. Breay

  
	
   

  	
   

  	
   

  	
   

  	
  A Partner

  

 

  
  
  

 

EXHIBIT
G

FORM OF
OPINION OF FREDRIKSON &
BYRON, P.A.

 

May 25, 2006

Jefferies &
Company, Inc.

Wells Fargo Securities, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, CA  90025

Ladies and
Gentlemen:

We have acted as Minnesota
special counsel to MTR-Harness, Inc., a Minnesota corporation (the “Minnesota
Guarantor”), in connection with its role as a guarantor pursuant to the
terms of that certain Purchase Agreement dated as of May 22, 2006, by and
among Jefferies & Company, Inc., Wells Fargo Securities, LLC, MTR
Gaming Group, Inc. (“MTR Gaming”), the Minnesota Guarantor, and the other
guarantors signatory therein (the “Purchase Agreement”), under the terms of
which MTR Gaming is issuing and selling $125,000,000 principal amount of MTR
Gaming’s 9% Senior Subordinated Notes due 2012 (the “Notes”) to Jefferies &
Company, Inc. and Wells Fargo Securities, LLC (the “Initial Purchasers”).

Our opinion is given pursuant to Section 9(a)(x)(G) of
the Purchase Agreement. Capitalized terms
not otherwise defined in this opinion letter have the same meanings as in the
Purchase Agreement.

As
to various matters of fact material to this opinion, we have relied on
certificates, statements and representations of the Minnesota Guarantor or its
officers or directors. We have also examined and relied on the following
documents: (i) the Purchase Agreement; (ii) the Indenture; and (iii) the
Guarantee as it relates to the Minnesota Guarantor (collectively the “Guarantor
Documents”). In addition we have also examined and relied  upon the following additional documents: (iv) certificates
from the Minnesota Secretary of State indicating that the Minnesota Guarantor
is a Minnesota company in good standing as of May 16, 2006; (v) the
Articles of Incorporation and Bylaws of the Minnesota Guarantor, each as
amended to date as presented to us by the Minnesota Guarantor; (vi) a
certificate of the Secretary of the Minnesota Guarantor, attesting to the
validity of, and attaching copies of resolutions of the Board of Directors of
the Minnesota Guarantor, dated May 19, 2006, signed by the sole Director; (vii) the
Member Control Agreement of North Metro Harness Initiative, LLC, dated June 8,
2004, by and between Southwest Casino and Hotel Corp., the Minnesota Guarantor,
and MTR Gaming, as presented to us by the Minnesota Guarantor; and (viii) the
information in the Final Offering 

 

Circular
referenced in Paragraph 7 of this opinion letter, as presented to us by the
Minnesota Guarantor.  We have not
independently or through third parties verified such representations,
certificates, documents or statements or made any independent investigation as
to the existence of agreements, instruments, corporate records, other
documents, proceedings, orders, judgments, or decrees by which the Minnesota
Guarantor or any of its properties may be bound or which may otherwise affect
the Minnesota Guarantor.

References
in this opinion to “our knowledge,” “our awareness,” “our attention,” “known to
us,” “the best of our knowledge” or the like mean: that in the course of the
actions described in the preceding sentences of this paragraph no information
has come to the attention of Daniel A. Yarano, Timothy R. Nelson, Ryan C.
Brauer, John E. Drawz or Jay M. Quam, the attorneys in our firm who have
principally represented the Minnesota Guarantor in connection with the
transactions contemplated by the Purchase Agreement or who have otherwise done
substantive legal work for the Minnesota Guarantor, that gives such attorney
present conscious awareness that any of the opinions set forth herein are not
accurate; that we have not undertaken any independent investigation or
verification of such matters; and that no inference as to our knowledge with
respect to such matters should be drawn from the fact of our representation of
the Minnesota Guarantor.

Our
opinion is limited solely to the present substantive law of the State of
Minnesota (excluding its conflict of laws
principles) as such law presently exists and has been interpreted as of the
date hereof. We express no opinion as to the laws of any county,
municipality, other state or other jurisdiction or the laws of the United
States of America.

For
purposes of this opinion, we have assumed, among other things, the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to
us as copies, and that the information in the certificates, representations,
and statements referred to above remains true and complete as of the date
hereof. In examining documents, we have
assumed that parties executing the same, other than the Minnesota Guarantor,
have all necessary power to enter into and perform all of their
obligations thereunder and that such parties have duly executed and delivered
such documents. We have also assumed, as to each such party, the due
authorization by all requisite action of the execution, delivery and
performance of such documents by such parties and that such documents are
legal, valid, binding on and enforceable against such parties in accordance
with their respective terms. We have also assumed that each natural person
executing any of the documents and agreements involved in the matters covered
by this opinion has the capacity and is legally competent to do so. We have
assumed that each of the documents and
agreements involved in any matter covered by this opinion letter accurately
describes the mutual understanding of the parties as to all matters contained
therein and that no other agreements or understandings exist between the
parties relating to the transactions contemplated by such document or
agreement.

Based
upon and subject to the foregoing, and subject to the qualifications set forth
herein, it is our opinion as of this date that:

 

1.               The Minnesota Guarantor is a
corporation duly incorporated and validly existing as a corporation in good
standing under the laws of the State of Minnesota.

2.             The
Minnesota Guarantor has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Guarantor Documents.

3.             All
necessary corporate action has been taken on the part of the Minnesota
Guarantor to authorize the execution, delivery and performance by the Minnesota
Guarantor of the Guarantor Documents, and the Guarantor Documents have been
validly executed and delivered by the Minnesota Guarantor.

4.             To our
knowledge, the execution, delivery and performance by the Minnesota Guarantor
of any of the Guarantor Documents will not violate, constitute a breach of or a
default (with the passage of time or otherwise) under, result in the imposition
of a lien on any assets of the Minnesota Guarantor (except as may be created by
the Guarantor Documents) or result in an acceleration of indebtedness of the
Minnesota Guarantor pursuant to: (i) the Articles of Incorporation or
Bylaws of the Minnesota Guarantor; (ii) the Member Control Agreement of
North Metro Harness Initiative, LLC, dated June 8, 2004, by and between
Southwest Casino and Hotel Corp., the Minnesota Guarantor, and MTR Gaming; or (iii) any
law of the State of Minnesota, assuming compliance with the matters referenced
in clause (ii) of Paragraph 5.

5.             To
our knowledge, no Permit required from any Governmental Authority of the
State of Minnesota (including without limitation any permit of the Minnesota
Racing Commission or under the Minnesota Pari-Mutuel Horse Racing Act,
including the rules and regulations promulgated thereunder) is required on
the part of the Minnesota Guarantor under the laws of the State of Minnesota in
connection with, or as a condition to, the execution, delivery or performance
by the Minnesota Guarantor of any of the Guarantor Documents, other than (i) such
Permits of the Minnesota Guarantor as have been granted or obtained on or prior
to the date hereof, which Permits, to our knowledge, are in full force and
effect on the date hereof and (ii) any Permits of the Minnesota Guarantor
required to be obtained from Minnesota Racing Commission approving the
Registered Exchange Offer.

To our knowledge, the execution, delivery or performance by
the Minnesota Guarantor of the Guarantor Documents, the compliance with the
terms and provisions thereof by the Minnesota Guarantor, and the consummation
of the Guarantor’s obligations under the Guarantor Documents will not allow or
result in, or after notice or lapse of time will not allow or result in, the
imposition of any material penalty under, or the  revocation or termination of, any Permit
identified in (i) above or any material impairment of the rights of the
holder of any such Permit.

6.             Except for the challenge to the Minnesota
Racing Commission license granted to the Minnesota Guarantor as described in
Appellate Case No. A05-471 and the Petition for Discretionary Review
thereof, District Court File No C3-04-12118, Appellate Case No. A05-1743,
and the Final Offering Circular, to our knowledge there are no legal
proceedings before or 

 

by any
Governmental Authority of the State of Minnesota pending or threatened either (i) with
respect to the Minnesota Guarantor in connection with, or that seeks to
restrain, enjoin, prevent the consummation by or otherwise challenge the
Minnesota Guarantor’s performance of the Guarantor Documents, or (ii) to
which the Minnesota Guarantor is a party.

7.               We have reviewed the information in the Final Offering Circular under the
headings “Business—North Metro Harness,” “Regulation and Licensing—Minnesota
Racing and Card Room Regulation” and the first two paragraphs under the
heading “Business—Litigation” and, only to the extent that such information
relates and pertains to the Minnesota Guarantor and any law of the State of
Minnesota in effect as of the date hereof and also constitutes statements or
matters of law, summaries of legal matters, summaries of Minnesota proceedings,
or legal conclusions, it is correct in all material respects as to the law of
the State of Minnesota.

Our
opinions expressed above are specifically subject to the following additional
limitations, exceptions, qualifications and assumptions:

(A) Our opinions with regard to the Guarantor
Documents and transactions contemplated thereby are limited to laws,
regulations and authorities that in our experience are normally applicable to
transactions of the type contemplated in such documents. We express no opinion
as to the effect of, or compliance with, any laws or regulations applicable to
the transactions contemplated by such documents because of the beneficial
ownership interest of any party thereto in the Minnesota Guarantor or the
nature of the business of any party thereto other than the Minnesota Guarantor.
We express no opinion as to the existence of, or compliance with laws
concerning, conflicts of interest or fiduciary duties of any directors or
officers of the Minnesota Guarantor in connection with such agreements and the
transactions contemplated thereby, and, with your consent, we have assumed for
purposes of the opinions stated herein that such agreements and the
transactions contemplated thereby are fair and reasonable to the Minnesota
Guarantor. Also, we express no statements or opinion as to the compliance by
any entity or person with any federal, state or foreign securities laws in
connection with the transactions contemplated by the Guarantor Documents.

(B)  Our opinions stated in paragraph 1 above are
given in reliance upon a good standing certificate received from the Office of
the Secretary of State of Minnesota, and we give no opinion with respect to the
tax good standing of the Minnesota Guarantor.

This
opinion letter is rendered as of the date first written above solely for your
benefit in connection with the Closing under the Purchase Agreement and may not
be delivered to, quoted or relied upon by any person other than you, or for any
other purpose, without our prior written consent. Our opinions are expressly
limited to the matters set forth above, and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Minnesota
Guarantor or any other entity or person. We assume no obligation to advise you
of facts, 

 

circumstances,
events, developments, or changes or developments in law that hereafter may be
brought to our attention and that may alter, affect or modify the opinions
expressed herein.

	
   

  	
   

  	
   

  
	
  

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FREDRIKSON & BYRON, P.A.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its: Vice President

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