Document:

Exhibit 10.1

 

THIRD MODIFICATION AGREEMENT

 

THIS THIRD MODIFICATION
AGREEMENT (this “Agreement”) is made effective as of July 22, 2009, by and
among (a) TESSCO TECHNOLOGIES INCORPORATED, a Delaware corporation (“TESSCO”),
TESSCO SERVICE SOLUTIONS, INC., a Delaware corporation, TESSCO INCORPORATED, a
Delaware corporation, TESSCO COMMUNICATIONS INCORPORATED,
a Delaware
corporation, WIRELESS SOLUTIONS INCORPORATED, a Maryland corporation, TESSCO
BUSINESS SERVICES, LLC, a Delaware limited liability company, TESSCO INTEGRATED
SOLUTIONS, LLC, a Delaware limited liability company, and GW SERVICE SOLUTIONS,
INC., a Delaware corporation (the aforementioned entities, including TESSCO,
being hereinafter called collectively the “Borrowers”); (b) SUNTRUST BANK and WACHOVIA BANK,
NATIONAL ASSOCIATION, as Lenders (in such capacity, the “Lenders”); and (c) SUNTRUST
BANK, as Administrative Agent (in such capacity, the “Agent”).

 

RECITALS

 

Pursuant to a Credit
Agreement dated as of May 31, 2007 by and among the Borrowers and other
then existing borrowers, the Lenders, and the Agent (as the same may from time
to time be amended, restated, supplemented, or otherwise modified, the “Credit
Agreement”), the Lenders agreed to make available to the Borrowers and
other then existing borrowers a
revolving credit
facility pursuant to which the Lenders would make loans and other credit
accommodations (collectively, the “Loans”) to or for the benefit of the Borrowers
and other then existing borrowers in an aggregate principal amount not to exceed
$50,000,000 at any one time outstanding (as increased or decreased, the “Revolving Credit Facility”). The Borrowers’ obligation to repay
the Loans with interest is evidenced by the Borrowers’ Revolving Credit Note
dated May 31, 2007 from the Borrowers made payable to the Lenders in the
principal amount of up to $50,000,000 (as the same may from time to time be
amended, restated, supplemented, or otherwise modified, the “Note”).

 

As used herein, the term “Loan Documents” means collectively, the Credit Agreement, the Note,
and all other documents now or hereafter executed and delivered by the
Borrowers or any other party or parties to evidence, secure, or guarantee, or
in connection with, the Revolving Credit Facility.

 

Pursuant to a First
Modification Agreement dated as of June 30, 2008, the parties agreed to make
certain changes to the Credit Agreement.

 

Pursuant to a Second
Modification Agreement dated as of November 26,
2008, the parties
agreed to amend certain financial covenants and make certain other changes to
the Credit Agreement.

 

With the knowledge and
consent of the Lenders, certain previously existing borrowers engaged in an
internal restructuring (the “Internal Restructuring”) which resulted in TESSCO
Integrated Solutions, L.P., a Delaware limited partnership, being converted into
a Delaware limited liability company, now known as TESSCO Integrated Solutions,
LLC, and pursuant to which TESSCO Supply Chain Services, LLC and TESSCO Product
Solutions, LLC, each a Delaware limited liability company, each merged into
TESSCO Service Solutions, Inc., a Delaware corporation, thereby
terminating the existence of the two limited liability companies.

 

The Borrowers have now
requested that the Lenders and the Agent (a) decrease the maximum
principal amount of the Revolving Credit Facility, (b) modify certain
financial covenants, and (c) make certain additional modifications to the
Loan Documents (including modifications providing for the extension of the term
of the Revolving Credit Facility), and the Lenders and the Agent have agreed to
do so, subject to and upon the terms and conditions hereinafter set forth.

 

 

AGREEMENTS

 

Now, therefore, in
consideration of the premises and the mutual agreements herein contained, and
for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:

 

1.                                                 Recitals; Defined Terms. The parties hereto acknowledge that the above
Recitals are true and correct and agree that the same are incorporated herein.
Unless the context clearly indicates otherwise, each term used in this
Agreement which is defined in the Recitals shall have the meaning given to such
term in the Recitals, and each capitalized term used herein which is not
otherwise defined herein shall have the meaning given to such term in the
Credit Agreement.

 

2.                                                 Decrease in Principal
Amount of Revolving
Credit Facility. The Lender hereby agrees to decrease the aggregate
principal amount which may be advanced and be outstanding under the Revolving Credit Facility from
$50,000,000 to $35,000,000. The Revolving Credit Facility, as decreased, shall
be disbursed to the Borrowers subject to and in accordance with the terms of
the Credit Agreement, as amended hereby and shall be evidenced by and repaid in
accordance with the provisions of the Note, as amended hereby. As used in the
Credit Agreement and each of the other Loan Documents, the term “Revolving
Credit Facility”
shall mean the Revolving Credit Facility as decreased to a maximum of
$35,000,000 at any one time outstanding. The Borrowers, jointly and severally,
promise to pay to the Lender, at the times and in the manner set forth in the
Note, as amended hereby, the principal amount of the Revolving Credit Facility,
as decreased, or so much thereof as shall be advanced and remain outstanding,
together with interest as set forth in the Note.

 

3.                                                 Amendments to
Credit Agreement.

 

(a)                                            Effective as of the date hereof, the
definition of “Aggregate Commitment” appearing in Section 1.1 of the Credit Agreement is hereby deleted, and the
following is inserted in lieu thereof:

 

““Aggregate
Commitment” means
the aggregate amount of the Lenders’ Commitments hereunder, as such amount may he reduced or modified at any time or
from time to time pursuant to the terms hereof. As of July 22, 2009, the
Aggregate Commitment shall be Thirty-Five Million Dollars ($35,000,000).”

 

(b)                                           Effective as of the date hereof, the
definition of “Applicable Margin” appearing in Section 1.1 of the Credit Agreement is hereby deleted, and the
following is inserted in lieu thereof:

 

““Applicable
Margin” shall mean (a) the margin added to the Libor Index to obtain the interest rate for the outstanding Loans under the
Revolving Credit Facility, and (b) the margin used to calculate the Unused
Availability Fee, all as hereinafter provided. The Applicable Margin for each
fiscal quarter shall be determined by reference to the Borrowers, ratio of
Funded Debt to EBITDA as of the end of the fiscal quarter immediately preceding
the delivery of the applicable Officer’s Compliance Certificate as follows:

 

	
   

  	
   

  	
  Funded Debt to

  	
   

  	
   

  	
   

  	
  Unused

  	
   

  
	
  Level

  	
   

  	
  EBITDA

  	
   

  	
  Applicable Margin

  	
   

  	
  Availability Fee

  	
   

  
	
  I

  	
   

  	
  Greater than or equal
  to 2.0 to 1.0

  	
   

  	
  3.25

  	
  %

  	
  .500

  	
  %

  
	
  II

  	
   

  	
  Greater than or equal
  to I.5 to 1.0 but
  less than 2.0
  to 1.0

  	
   

  	
  3.00

  	
  %

  	
  .375

  	
  %

  
	
  III

  	
   

  	
  Greater than or equal
  to 1.0 to 1.0 but less than 1.5 to 1.0

  	
   

  	
  2.50

  	
  %

  	
  .250

  	
  %

  
	
  IV

  	
   

  	
  Less than 1.0 to 1.0

  	
   

  	
  2.25

  	
  %

  	
  .250

  	
  %

  

 

2

 

Adjustments, if any, in
the Applicable Margin shall be made by the Agent on the tenth (10th) Business
Day after receipt by the Agent of quarterly financial statements for the
Borrowers and their Subsidiaries and the accompanying Officer’s Compliance
Certificate setting forth the ratio of Funded Debt to EBITDA of the Borrowers
and their Subsidiaries as of the most recent fiscal quarter end. Subject to Section 4.1(d),
in the event the Borrowers fail to deliver such financial statements and
certificate within the time required by Section 7.2 hereof, the Applicable
Margin shall be the highest Applicable Margin set forth above until the
delivery of such financial statements and certificate. As of July 22,
2009, the Applicable Margin is at Level IV.

 

(c)                                                Effective as of the date hereof, the
definition of “Borrowing Base” appearing in Section 1.1 of the
Credit Agreement is hereby amended by deleting the number “$15,000,000”
appearing in subsection (b) thereof and substituting in lieu thereof the
number “$10,500,000”.

 

(d)                                               Effective as of the effective date of
this Agreement, the definition of “L/C Commitment” appearing in Section 1.1
of the Credit Agreement is hereby deleted, and the following is inserted in
lieu thereof:

 

““L/C Commitment” Three
Million Five Hundred Thousand Dollars ($3,500,000).”

 

(e)                                                Effective as of the effective date of
this Agreement, the following definition is hereby added to Section 1.1:

 

““Unused Availability
Fee” shall have the meaning given to such term in Section 4.2.”

 

(f)                                                  Effective as of the effective date of
this Agreement, the date “May 30, 2010” appearing in Section 2.6
is hereby deleted, and the date “May 31, 2012” is hereby inserted in lieu
thereof. The Scheduled Maturity Date of the Revolving Credit Facility is hereby
extended accordingly.

 

(g)                                               Effective as of the effective date of
this Agreement, existing Section 4.1(c) is hereby deleted, and
the following is inserted in lieu thereof:

 

“[Intentionally Deleted]”

 

(h)                                               Effective as of the effective date of
this Agreement, existing Section 4.2(b) is hereby deleted, and
the following is inserted in lieu thereof:

 

“(b) Unused
Availability Fee. At the end of each fiscal quarter of the Borrowers, and
on the Termination Date, the Borrowers shall pay to the Agent, in arrears, for
the ratable benefit of the Lenders, a facility fee equal to the Applicable
Margin per annum on the daily unused portion of the Credit Facility for the
previous quarter. For purposes of the calculation of this fee, outstanding

 

3

 

L/C obligations will be
treated as outstanding Loans.”

 

(i)                                     Effective as of the effective date of
this Agreement, Section 9.1 of the Credit Agreement is hereby deleted, and the
following is inserted in lieu thereof:

 

From and including September 30,
2009, through the Scheduled Maturity Date, as measured at the end of each of
the Borrowers’ fiscal quarters, maintain a combined Tangible Net Worth of not
less than $47,000,000; provided, however, that (a) in the event
that, during fiscal year 2011, the Borrowers make a goodwill payment in
connection with its purchase of the non-cash assets and business of TerraWave
Solutions, Ltd, and/or Giga Wave Technologies Limited, commencing on first
measurement date following such payment, the Borrowers’ minimum Tangible Net
Worth requirement shall be reduced by the lesser of the amount of such payment
or $3,000,000; and (b) commencing on March 31, 2012, the Borrower’s
minimum Tangible Net Worth requirement shall be increased by an amount equal to
fifty percent (50%) of the Borrowers’ combined net income after applicable
taxes for the year ending March 31, 2012.

 

(j)            Effective as of the effective date
of this Agreement, Sections 9.4 and 9.5 of the Credit Agreement are hereby
deleted, and the following is inserted in lieu thereof:

 

“SECTION 9.4 Maximum Funded
Debt/EBITDA. Maintain a ratio of (a) Funded Debt, as measured at the end of
each of the Borrowers’ fiscal quarters, to (b) EBITDA, as measured at the
end of each of the Borrowers’ fiscal quarters on a trailing four-quarter basis,
of no more than 2.50:1:00.

 

(k)                                  Effective as of the effective date of
this Agreement, Section 10.7 of the Credit Agreement is hereby deleted, and the
following is inserted in lieu thereof:

 

SECTION 10.7. Limitations
on Dividends and Distributions. Declare or pay any dividends upon any of its capital
stock; purchase, redeem, retire or otherwise acquire, directly or indirectly,
any shares of its capital stock, or make any distribution of cash, property or
assets among the holders of shares of its capital stock, or make any change in
its capital structure: provided that, (a) any Subsidiary (including any Subsidiary
that is also a Borrower) may pay cash dividends to any of the Borrowers, (b) the
Borrowers may pay additional cash dividends not to exceed $2,500,000 in the
aggregate during any 12-month period so long as after giving effect to any such
dividends, no Event of Default shall occur as a result thereof, and (c) the
Borrowers may purchase up to $25,000,000 of their issued and outstanding stock
in the aggregate during the term of the Credit Facility, of which as of July 20,
2009, $13,303,920 has been repurchased.

 

(l)                                     Effective as of the effective date of
this Agreement, Schedule 1 to the Credit Agreement is hereby deleted, and the
following is inserted in lieu thereof:

 

4

 

Schedule 1

 

(Lenders and
Commitments)

 

	
  LENDER

  	
   

  	
  COMMITMENT

  PERCENTAGE

  	
   

  	
  COMMITMENT

  	
   

  
	
  SunTrust
  Bank

  	
   

  	
  70

  	
  %

  	
  $

  	
  24,500,000

  	
   

  
	
  120
  East Baltimore Street

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Baltimore,
  Maryland 21202

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attn:
  Gregory Farno, Sr. Vice President

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone
  No. 410-986-1673

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telecopy
  No. 410-986-1927

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia
  Bank, National Association

  	
   

  	
  30

  	
  %

  	
  $

  	
  10,500,000

  	
   

  
	
  7
  St. Paul Street, 2nd Floor

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Baltimore,
  Maryland 21202

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attn:
  Lucy C. Campbell, Vice President

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone
  No.: 410-332-5242

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telecopy
  No. 410-539-0136

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(m)                               The parties to the Credit Agreement
acknowledge the occurrence of the Internal Restructuring and that the borrowers
party to the Credit Agreement and the Note are now the Borrowers.

 

4.                                                 Amendments to Note.

 

(a)                                      The reference in the first full paragraph
of the Note to “TESSCO Integrated Solutions, L.P., a Delaware limited
partnership” is hereby deleted and in lieu thereof is inserted “TESSCO
Integrated Solutions, LLC, a Delaware limited liability company”, and the
references in the first full paragraph of the Note to “TESSCO Supply Chain
Services, LLC” and “TESSCO Product Solutions, LLC” are hereby deleted.

 

(b)                                     Effective as of the date hereof, the
number “$50,000,000” appearing in the upper lefthand corner of the Note is
hereby deleted, and the number “$35,000,000” is hereby inserted in lieu
thereof.

 

(c)                                      Effective as of the date hereof, the
phrase “FIFTY MILLION DOLLARS ($50,000,000)” appearing in the first paragraph
of the Note is hereby deleted, and the phrase “THIRTY-FIVE MILLION DOLLARS
($35,000,000)” is hereby inserted in lieu thereof.

 

(d)                                     Effective as of the date of this Agreement, the second
sentence of Section 3 of the Note is hereby deleted, and the following is
inserted in lieu thereof:

 

“The entire unpaid
principal balance of this Note, together with all accrued and unpaid interest
thereon, shall be due and payable on the Scheduled Maturity Date.”

 

5

 

5.                                            Representations and Warranties. In order to induce the Lenders and the Agent
to enter into this Agreement, the Borrowers represent and warrant to the
Lenders and the Agent that as of the date hereof (a) no Event of Default
exists under the provisions of the Loan Documents, (b) except as to
matters of which the Borrowers have advised the Agent in a writing and which
have been acknowledged by the Agent, all of the representations and warranties
of the Borrowers in the Loan Documents are true and correct on the date hereof
as if the same were made on the date hereof (provided that any representation
or warranty that speaks “as of the Closing Date” or as of any other specific
date shall continue to speak as of such date, notwithstanding), (c) no
material adverse change has occurred in the business, financial condition,
prospects or operations of the Borrowers since the date of the most recent
financial statement of the Borrowers furnished to the Lenders and the Agent in
accordance with the provisions of the Loan Documents, and (d) this
Agreement constitutes the legal, valid and binding obligation of the Borrowers,
jointly and severally enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors’ rights in general and the
availability of equitable remedies. If any of the foregoing representations and
warranties shall prove to be false, incorrect or misleading in any material
respect, the Lenders and the Agent may, in their absolute and sole discretion,
declare that a default has occurred and exists under the provisions of the Loan
Documents, and the Lenders and the Agent shall he entitled to all of the rights
and remedies set forth in the Loan Documents as the result of the occurrence of
such default.

 

6.                                            Ratification
and No Novation.
The Borrowers hereby ratify and confirm all of their obligations, liabilities
and indebtedness under the provisions of the Credit Agreement, the Note, and
the other Loan Documents, as the same may be amended and modified by this
Agreement. The Lenders, the Agent, and the Borrowers agree that it is their
intention that nothing herein shall be construed to extinguish, release or
discharge or constitute, create or effect a novation of, or an agreement to
extinguish any of the obligations, indebtedness and liabilities of the
Borrowers or any other party under the provisions of the Loan Documents. The
Borrowers agree that all of the provisions of the Credit Agreement and the
other Loan Documents shall remain and continue in full force and effect as the
same may be modified and amended by this Agreement. In the event of any
conflict between the provisions of this Agreement and the provisions of the
Loan Documents, the provisions of this Agreement shall control.

 

7.                                            Fees, Costs and
Expenses. In consideration of the agreement of
the Lenders to enter into this Agreement, (a) the Borrowers shall pay to
the Agent on the date hereof, for the ratable benefit of the Lenders, an amendment
fee in the amount of $175,000, and (b) the Borrowers reasonably shall pay
to the Agent and the Lenders on demand all costs and expenses both now and
hereafter paid or incurred with respect to the preparation, negotiation,
execution, administration and enforcement of this Agreement and all documents
related thereto, including, without limitation, reasonable attorney’s fees and
expenses, recording costs and costs of record searches.

 

8.                                            Applicable Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Maryland.

 

9.                                            Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Lenders, the Agent, and the Borrowers, and their respective
successors and assigns.

 

[Remainder of Page Intentionally
Left Blank]

 

6

 

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

 

	
  WITNESS:

  	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO TECHNOLOGIES
  INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  David M. Young

  	
   

  	
  By:

  	
  /s/ Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO SERVICE SOLUTIONS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  David M. Young

  	
   

  	
  By:

  	
  /s/ Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  David M. Young

  	
   

  	
  By:

  	
  /s/ Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO COMMUNICATIONS
  INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  David M. Young

  	
   

  	
  By:

  	
  /s/ Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WIRELESS SOLUTIONS
  INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  David M. Young

  	
   

  	
  By:

  	
  /s/ Robert B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President

  

 

7

 

	
   

  	
   

  	
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SUNTRUST BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [ILLEGIBLE]

  	
   

  	
  By:

  	
  /s/ Gregory Farno

  
	
   

  	
   

  	
   

  	
  Gregory
  Farno

  
	
   

  	
   

  	
   

  	
  Senior
  Vice President

  

 

8Exhibit
4.1

 

MTR GAMING GROUP, INC.

as Issuer

 

THE GUARANTORS NAMED HEREIN

 

12.625% Senior Secured Notes

due July 15, 2014

 

 

Indenture

 

Dated as of August 12, 2009

 

 

Wilmington Trust FSB

 

as Trustee

 

and

 

Collateral Agent

 

 

 

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

  	
  33

  
	
  SECTION 1.3

  	
  RULES
  OF CONSTRUCTION

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE II THE SECURITIES

  	
  34

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
  FORM AND
  DATING

  	
  34

  
	
  SECTION 2.2

  	
  EXECUTION
  AND AUTHENTICATION

  	
  35

  
	
  SECTION 2.3

  	
  REGISTRAR,
  PAYING AGENT AND DEPOSITARY

  	
  35

  
	
  SECTION 2.4

  	
  PAYING
  AGENT TO HOLD MONEY IN TRUST

  	
  36

  
	
  SECTION 2.5

  	
  HOLDER
  LISTS

  	
  36

  
	
  SECTION 2.6

  	
  TRANSFER
  AND EXCHANGE

  	
  36

  
	
  SECTION 2.7

  	
  REPLACEMENT
  NOTES

  	
  49

  
	
  SECTION 2.8

  	
  OUTSTANDING
  NOTES

  	
  49

  
	
  SECTION 2.9

  	
  TREASURY
  NOTES

  	
  50

  
	
  SECTION 2.10

  	
  TEMPORARY
  NOTES

  	
  50

  
	
  SECTION 2.11

  	
  CANCELLATION

  	
  50

  
	
  SECTION 2.12

  	
  DEFAULTED
  INTEREST

  	
  51

  
	
  SECTION 2.13

  	
  CUSIP
  NUMBERS

  	
  51

  
	
  SECTION 2.14

  	
  ISSUANCE
  OF ADDITIONAL NOTES

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REDEMPTION

  	
  52

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
  OPTIONAL
  REDEMPTION

  	
  52

  
	
  SECTION 3.2

  	
  NOTICES
  TO TRUSTEE

  	
  52

  
	
  SECTION 3.3

  	
  SELECTION
  OF NOTES TO BE REDEEMED

  	
  53

  
	
  SECTION 3.4

  	
  NOTICE
  OF REDEMPTION

  	
  53

  
	
  SECTION 3.5

  	
  EFFECT
  OF NOTICE OF REDEMPTION

  	
  54

  
	
  SECTION 3.6

  	
  DEPOSIT
  OF REDEMPTION PRICE

  	
  54

  
	
  SECTION 3.7

  	
  NOTES
  REDEEMED IN PART

  	
  55

  
	
  SECTION 3.8

  	
  [RESERVED]

  	
  55

  
	
  SECTION 3.9

  	
  REGULATORY
  REDEMPTION

  	
  55

  
	
  SECTION 3.10

  	
  MANDATORY
  REDEMPTION

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV COVENANTS

  	
  56

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
  PAYMENT
  OF NOTES

  	
  56

  
	
  SECTION 4.2

  	
  MAINTENANCE
  OF OFFICE OR AGENCY

  	
  56

  
	
  SECTION 4.3

  	
  LIMITATION
  ON RESTRICTED PAYMENTS

  	
  57

  
	
  SECTION 4.4

  	
  CORPORATE
  AND PARTNERSHIP EXISTENCE

  	
  59

  
	
  SECTION 4.5

  	
  PAYMENT
  OF TAXES AND OTHER CLAIMS

  	
  59

  
	
  SECTION 4.6

  	
  MAINTENANCE
  OF PROPERTIES AND INSURANCE

  	
  60

  

 

i

 

	
  SECTION 4.7

  	
  COMPLIANCE
  CERTIFICATE; NOTICE OF DEFAULT

  	
  60

  
	
  SECTION 4.8

  	
  REPORTS

  	
  61

  
	
  SECTION 4.9

  	
  LIMITATION
  ON STATUS AS INVESTMENT COMPANY

  	
  62

  
	
  SECTION 4.10

  	
  LIMITATION
  ON TRANSACTIONS WITH AFFILIATES

  	
  62

  
	
  SECTION 4.11

  	
  LIMITATION
  ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND DISQUALIFIED CAPITAL STOCK

  	
  62

  
	
  SECTION 4.12

  	
  LIMITATIONS
  ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES

  	
  64

  
	
  SECTION 4.13

  	
  LIMITATION
  ON SALE OF ASSETS AND SUBSIDIARY STOCK

  	
  65

  
	
  SECTION 4.14

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

  	
  70

  
	
  SECTION 4.15

  	
  WAIVER
  OF STAY, EXTENSION OR USURY LAWS

  	
  72

  
	
  SECTION 4.16

  	
  LIMITATION
  ON LIENS SECURING INDEBTEDNESS

  	
  72

  
	
  SECTION 4.17

  	
  LIMITATIONS
  ON LINES OF BUSINESS

  	
  72

  
	
  SECTION 4.18

  	
  SALE-LEASEBACK
  TRANSACTIONS

  	
  73

  
	
  SECTION 4.19

  	
  GAMING
  LICENSES

  	
  73

  
	
   

  	
   

  	
   

  
	
  ARTICLE V SUCCESSOR CORPORATION

  	
  73

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
  LIMITATION
  ON MERGER, SALE OR CONSOLIDATION

  	
  73

  
	
  SECTION 5.2

  	
  SUCCESSOR
  CORPORATION SUBSTITUTED

  	
  74

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI EVENTS OF DEFAULT AND REMEDIES

  	
  74

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
  EVENTS
  OF DEFAULT

  	
  74

  
	
  SECTION 6.2

  	
  ACCELERATION
  OF MATURITY DATE; RESCISSION AND ANNULMENT

  	
  77

  
	
  SECTION 6.3

  	
  COLLECTION
  OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE

  	
  77

  
	
  SECTION 6.4

  	
  TRUSTEE
  MAY FILE PROOFS OF CLAIM

  	
  78

  
	
  SECTION 6.5

  	
  TRUSTEE
  MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES

  	
  78

  
	
  SECTION 6.6

  	
  PRIORITIES

  	
  79

  
	
  SECTION 6.7

  	
  LIMITATION
  ON SUITS

  	
  79

  
	
  SECTION 6.8

  	
  UNCONDITIONAL
  RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST

  	
  80

  
	
  SECTION 6.9

  	
  RIGHTS
  AND REMEDIES CUMULATIVE

  	
  80

  
	
  SECTION 6.10

  	
  DELAY
  OR OMISSION NOT WAIVER

  	
  80

  
	
  SECTION 6.11

  	
  CONTROL
  BY HOLDERS

  	
  80

  
	
  SECTION 6.12

  	
  WAIVER
  OF EXISTING OR PAST DEFAULT

  	
  81

  
	
  SECTION 6.13

  	
  UNDERTAKING
  FOR COSTS

  	
  81

  
	
  SECTION 6.14

  	
  RESTORATION
  OF RIGHTS AND REMEDIES

  	
  81

  
	
  SECTION 6.15

  	
  EXERCISE
  OF REMEDIES BY COLLATERAL AGENT

  	
  82

  

 

ii

 

	
  ARTICLE VII TRUSTEE

  	
  82

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
  DUTIES
  OF TRUSTEE

  	
  82

  
	
  SECTION 7.2

  	
  RIGHTS
  OF TRUSTEE

  	
  83

  
	
  SECTION 7.3

  	
  INDIVIDUAL
  RIGHTS OF TRUSTEE

  	
  84

  
	
  SECTION 7.4

  	
  TRUSTEE’S
  DISCLAIMER

  	
  84

  
	
  SECTION 7.5

  	
  NOTICE
  OF DEFAULT

  	
  84

  
	
  SECTION 7.6

  	
  REPORTS
  BY TRUSTEE TO HOLDERS

  	
  85

  
	
  SECTION 7.7

  	
  COMPENSATION
  AND INDEMNITY

  	
  85

  
	
  SECTION 7.8

  	
  REPLACEMENT
  OF TRUSTEE

  	
  87

  
	
  SECTION 7.9

  	
  SUCCESSOR
  TRUSTEE BY MERGER, ETC.

  	
  88

  
	
  SECTION 7.10

  	
  ELIGIBILITY;
  DISQUALIFICATION

  	
  88

  
	
  SECTION 7.11

  	
  PREFERENTIAL
  COLLECTION OF CLAIMS AGAINST COMPANY

  	
  88

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE AND
  SATISFACTION AND DISCHARGE

  	
  89

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
  OPTION
  TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE

  	
  89

  
	
  SECTION 8.2

  	
  LEGAL
  DEFEASANCE AND DISCHARGE

  	
  89

  
	
  SECTION 8.3

  	
  COVENANT
  DEFEASANCE

  	
  89

  
	
  SECTION 8.4

  	
  CONDITIONS
  TO LEGAL OR COVENANT DEFEASANCE

  	
  90

  
	
  SECTION 8.5

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

  	
  91

  
	
  SECTION 8.6

  	
  REPAYMENT
  TO THE COMPANY

  	
  92

  
	
  SECTION 8.7

  	
  REINSTATEMENT

  	
  92

  
	
  SECTION 8.8

  	
  SATISFACTION
  AND DISCHARGE

  	
  93

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
  94

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1

  	
  SUPPLEMENTAL
  INDENTURES WITHOUT CONSENT OF HOLDERS

  	
  94

  
	
  SECTION 9.2

  	
  AMENDMENTS,
  SUPPLEMENTAL INDENTURES AND WAIVERS WITH CONSENT OF HOLDERS

  	
  95

  
	
  SECTION 9.3

  	
  COMPLIANCE
  WITH TIA

  	
  97

  
	
  SECTION 9.4

  	
  REVOCATION
  AND EFFECT OF CONSENTS

  	
  97

  
	
  SECTION 9.5

  	
  NOTATION
  ON OR EXCHANGE OF NOTES

  	
  98

  
	
  SECTION 9.6

  	
  TRUSTEE
  TO SIGN AMENDMENTS, ETC.

  	
  98

  
	
   

  	
   

  	
   

  
	
  ARTICLE X COLLATERAL AND SECURITY

  	
  99

  
	
   

  	
   

  	
   

  
	
  SECTION 10.1

  	
  SECURITY
  INTEREST

  	
  99

  
	
  SECTION 10.2

  	
  INTERCREDITOR
  AGREEMENT

  	
  99

  
	
  SECTION 10.3

  	
  ORDER
  OF APPLICATION

  	
  99

  
	
  SECTION 10.4

  	
  RELEASE
  OF LIENS ON COLLATERAL

  	
  100

  

 

iii

 

	
  SECTION 10.5

  	
  RELEASE
  OF LIENS IN RESPECT OF NOTES

  	
  101

  
	
  SECTION 10.6

  	
  ADDITIONAL
  PARITY LIEN DEBT

  	
  101

  
	
  SECTION 10.7

  	
  RELATIVE
  RIGHTS

  	
  102

  
	
  SECTION 10.8

  	
  SENIOR
  RANKING OF PERMITTED PRIORITY LIEN DEBT

  	
  102

  
	
  SECTION 10.9

  	
  AMENDMENTS
  OF SECURITY DOCUMENTS

  	
  103

  
	
  SECTION 10.10

  	
  FURTHER
  ASSURANCES; INSURANCE

  	
  104

  
	
  SECTION 10.11

  	
  COMPLIANCE
  WITH TRUST INDENTURE ACT

  	
  105

  
	
  SECTION 10.12

  	
  COLLATERAL
  AGENT

  	
  106

  
	
  SECTION 10.13

  	
  REPLACEMENT
  OF COLLATERAL AGENT

  	
  106

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI GUARANTEE

  	
  107

  
	
   

  	
   

  	
   

  
	
  SECTION 11.1

  	
  GUARANTEE

  	
  107

  
	
  SECTION 11.2

  	
  EXECUTION
  AND DELIVERY OF GUARANTEE

  	
  109

  
	
  SECTION 11.3

  	
  CERTAIN
  BANKRUPTCY EVENTS

  	
  109

  
	
  SECTION 11.4

  	
  LIMITATION
  ON MERGER OF SUBSIDIARIES AND RELEASE OF GUARANTORS

  	
  109

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII MISCELLANEOUS

  	
  110

  
	
   

  	
   

  	
   

  
	
  SECTION 12.1

  	
  TIA
  CONTROLS

  	
  110

  
	
  SECTION 12.2

  	
  NOTICES

  	
  110

  
	
  SECTION 12.3

  	
  COMMUNICATIONS
  BY HOLDERS WITH OTHER HOLDERS

  	
  111

  
	
  SECTION 12.4

  	
  CERTIFICATE
  AND OPINION AS TO CONDITIONS PRECEDENT

  	
  112

  
	
  SECTION 12.5

  	
  STATEMENTS
  REQUIRED IN CERTIFICATE OR OPINION

  	
  112

  
	
  SECTION 12.6

  	
  RULES
  BY TRUSTEE, PAYING AGENT, REGISTRAR

  	
  112

  
	
  SECTION 12.7

  	
  LEGAL
  HOLIDAYS

  	
  112

  
	
  SECTION 12.8

  	
  GOVERNING
  LAW

  	
  113

  
	
  SECTION 12.9

  	
  NO
  ADVERSE INTERPRETATION OF OTHER AGREEMENTS

  	
  113

  
	
  SECTION 12.10

  	
  NO
  RECOURSE AGAINST OTHERS

  	
  113

  
	
  SECTION 12.11

  	
  SUCCESSORS

  	
  114

  
	
  SECTION 12.12

  	
  DUPLICATE
  ORIGINALS

  	
  114

  
	
  SECTION 12.13

  	
  SEVERABILITY

  	
  114

  
	
  SECTION 12.14

  	
  TABLE
  OF CONTENTS, HEADINGS, ETC.

  	
  114

  
	
  SECTION 12.15

  	
  QUALIFICATION
  OF INDENTURE

  	
  114

  
	
  SECTION 12.16

  	
  REGISTRATION RIGHTS

  	
  114

  

 

	
  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)

  	
   

  	
  7.10

  
	
  (b) 

  	
   

  	
  7.10

  
	
  (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) 

  	
   

  	
  7.6, 10.11

  
	
  (c) 

  	
   

  	
  7.6

  
	
  (d) 

  	
   

  	
  N.A.

  
	
  314(a) 

  	
   

  	
  4.7, 4.8, 12.2

  
	
  (b)

  	
   

  	
  10.11

  
	
  (c) 

  	
   

  	
  12.4

  
	
  (d) 

  	
   

  	
  10.11

  
	
  (e) 

  	
   

  	
  12.5

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.1(b)

  
	
  (b)

  	
   

  	
  7.5

  
	
  (c)

  	
   

  	
  7.1(a)

  
	
  (d)

  	
   

  	
  7.1(c)

  
	
  (e)

  	
   

  	
  6.13

  
	
  316(a)(1)

  	
   

  	
  6.11, 6.12

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.8

  
	
  (c)

  	
   

  	
  2.12

  
	
  317(a)(1)

  	
   

  	
  6.3

  
	
  (a)(2)

  	
   

  	
  6.4

  
	
  (b)

  	
   

  	
  2.4

  
	
  318(a)

  	
   

  	
  12.1

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (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 August 12,
2009, by and among MTR Gaming Group, Inc., a Delaware corporation (the “Company”), the Guarantors (as defined below) and Wilmington
Trust FSB, as trustee (the “Trustee”) and
as collateral agent, (the “Collateral Agent”).

 

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 12.625% Senior Secured Notes due 2014:

 

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.

 

1

 

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

 

“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
of (a) 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
Code” means Title 11, United States Code entitled “Bankruptcy”, as
now and hereafter in effect, or any successor statute.

 

“Bankruptcy
Law” means the Bankruptcy Code and 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 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 

 

2

 

if
such Person is not a corporation, the equivalent board of managers or members
or body performing similar functions for 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

 

(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.

 

3

 

“Change of
Control” means:

 

(a)           the direct
or indirect sale, lease, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets of the Company and its
subsidiaries taken as a whole to any Person other than a Principal or a Related
Party of a Principal;

 

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

 

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

 

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

 

(e)           the
Company consolidates with, or merges with or into, any Person other than a
Principal or a Related Party of a Principal, or any Person other than a
Principal or a Related Party of a Principal consolidates with, or merges with
or into, the Company, in any such event pursuant to a transaction in which any
of the outstanding Voting Equity Interests of the Company or such other Person
is converted into or exchanged for cash, securities or other property, other
than any such transaction where the Voting Equity Interests of the Company
outstanding immediately prior to such transaction constitute or are converted
into or exchanged for a majority of the outstanding shares of the Voting Equity
Interests of such surviving or transferee Person (immediately after giving
effect to such transaction).

 

“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 Banking S.A., or its successors, as operators of the
Clearstream system.

 

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

 

“Collateral”
means all properties and assets at any time owned or acquired by the Company or
any Guarantor, except:

 

(1)                                  Excluded Assets;

 

(2)                                  any properties and assets in which the Collateral Agent is
required to release its Liens pursuant to Section 10.4;

 

4

 

(3)                                  any properties and assets that no longer secure any Note
Obligations pursuant to Section 10.5; and

 

any properties or assets
that no longer secure the Secured Obligations pursuant to Section 5.1 of
the Intercreditor Agreement.

 

“Commission”
means the Securities and Exchange Commission.

 

“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 the
Subsidiaries with those 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
and dispositions of assets, or of any company, division, operating unit,
segment or group of related assets, 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;

 

(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;

 

(c)           the
incurrence or discharge 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;

 

(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 

 

5

 

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;

 

(e)           any Person
that is a Subsidiary on the Transaction Date will be deemed to have been a
Subsidiary at all times during the Reference Period; and

 

(f)            any
Person that is not a Subsidiary on the Transaction Date will be deemed not to
have been a Subsidiary at any time during such Reference Period.

 

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

 

(a)           consolidated
income tax expense; plus

 

(b)           consolidated
depreciation and amortization expense; plus

 

(c)           consolidated
Fixed Charges; plus

 

(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,
and consolidated amortization expense or impairment charges recorded in
connection with the application of Financial Accounting Standard No. 142 “Goodwill
and Other Intangibles” and Financial Accounting Standard No. 144 “Accounting
for the Impairment or Disposal of Long Lived Assets,” 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; plus

 

(e)           reasonable
legal, accounting, financing, consulting, advisory and other out-of-pocket fees
and expenses incurred in connection with debt financings, equity financings,
acquisitions, recapitalizations, Investments, restructurings and/or
divestitures (including, without limitation, the offering of the Notes)
permitted pursuant to the Indenture whether or not such transactions are
consummated; plus

 

(f)            the
amount of any non-recurring non-cash restructuring charges or reserves plus up
to an aggregate of $10,000,000 of other non-recurring restructuring charges or
reserves incurred since the Issue Date; plus

 

(g)           pre-opening
expenses, calculated and classified as such in accordance with GAAP, incurred
in connection with the opening of new facilities; plus

 

(h)           up to
$3,000,000 of charges incurred since the Issue Date in connection with the
promotion of the gaming or racing industry, less

 

(i)            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; 

 

6

 

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 the
Company in such Subsidiary.

 

“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 the Company to the Company or to the Company’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.

 

“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
and 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 or loss 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, 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 

 

7

 

agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Consolidated Subsidiary,

 

(d)           the
cumulative effect of a change in accounting principles,

 

(e)           non-cash
gains and losses attributable to movement in the mark-to-market valuation of
Interest Swap and Hedging Obligations pursuant to Financial Accounting
Standards Board Statement No. 133,

 

(f)            any
non-cash compensation expense recorded from grants of stock appreciation or
similar rights, stock options, restricted stock or other rights,

 

(g)           any net
after-tax gains or losses attributable to the early extinguishment or
conversion of Indebtedness, and

 

(h)           net income
or losses from discontinued operations.

 

“Consolidated
Secured Leverage Ratio” means, as of any date of determination, the
ratio of total consolidated secured Indebtedness of the Company and its
Subsidiaries as of such date to the Consolidated EBITDA of the Company for the
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date of determination, with
such adjustments as are consistent with the adjustment provisions set forth in
the definition of Consolidated Coverage Ratio.

 

“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.

 

“Consolidated
Tangible Assets” means, with respect to any Person, the consolidated
total assets of such Person and its Subsidiaries less all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other
similar intangibles properly classified as intangibles in accordance with GAAP,
all as shown on the most recent balance sheet for such Person and computed 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 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.

 

8

 

“Core Gaming
Assets” means (a) all or substantially all of the property and
assets associated with the Company’s operations (excluding Non-Core Land) at (i) Mountaineer
Casino, Racetrack & Resort in Chester, West Virginia; (ii) Presque
Isle Downs & Casino in Erie, Pennsylvania; and (iii) Scioto Downs
in Columbus, Ohio, and (b) the Equity Interests of any subsidiary that,
directly or indirectly, owns or controls any of the property, assets or
operations referred to in clauses (a)(i) through (a)(iii) of this
definition.

 

“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), in either case which shall be located
in the Borough of Manhattan, The City of New York.

 

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

 

“Credit
Agreement” means (a) that certain Fifth Amended and Restated
Credit Agreement dated as of September 22, 2006 by and among the Company
and certain of its subsidiaries, as borrowers, Wells Fargo Bank, National
Association, as agent bank, swingline lender and letter of credit issuer, and
the lenders referenced therein, or (b) any other credit agreement entered
into by the Company, including any related notes, guarantees and collateral
documents executed in connection therewith, as such credit agreement, related
note, guarantee and/or collateral document has been or 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 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;

 

(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 Section 4.16;
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.

 

9

 

“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.

 

“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.

 

“Disqualified
Capital Stock” means with respect to any Person, Equity Interests of
such Person that, by its terms or by the terms of any security into which it is
convertible, 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; provided that any Capital
Stock that would constitute Disqualified Capital Stock solely because the
holders thereof have the right to require the Company to repurchase such
Capital Stock upon the occurrence of a Change of Control, Asset Sale or Event
of Loss shall not constitute Disqualified Capital Stock if the terms of such
Capital Stock (and all such securities into which it is convertible,
exercisable or exchangeable) provide that the Company may not repurchase or
redeem such Capital Stock (and all such securities into which it is
convertible, exercisable or exchangeable) pursuant to such provisions prior to
compliance by the Company pursuant to Section 4.13 or Section 4.14.

 

“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 S.A./N.V., 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.

 

10

 

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

 

“Exchange
Notes” means 12.625% Senior Secured Notes due 2014 of the Company,
including the guarantees endorsed thereon, identical in all respects to the
Senior Secured 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 Senior Secured
Notes.

 

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

 

“Excluded
Assets” means each of the following;

 

(1)                                  any property or asset, including Gaming Licenses and Gaming
Equipment, but only to the extent that the grant of a Lien under the Security
Documents in such property or asset is prohibited by applicable law, rule or
regulation or requires any consent of any governmental authority or Gaming
Authority not obtained pursuant to applicable law, rule or regulation;
provided that such property or asset will be an Excluded Asset only to the
extent and for so long as the consequences specified above will result and will
cease to be an Excluded Asset and will become subject to the Lien granted under
the Security Documents, immediately and automatically, at such time as such
consequences will no longer result;

 

(2)                                  any lease, license, contract or agreement to which the Company
or any Guarantor is a party, and any of its rights or interest thereunder, if
and to the extent that a security interest is prohibited by or in violation of (i) any
applicable law, rule or regulation, or (ii) a term, provision or
condition of any such lease, license, contract or agreement (unless such law,
rule, regulation, term, provision or condition would be rendered ineffective
with respect to the creation of the security interest under the Security
Documents pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York
Uniform Commercial Code (or any successor provision or provisions) of any
relevant jurisdiction or any other applicable law (including the Bankruptcy
Code) or principles of equity); provided however that the Collateral will
include (and such security interest shall attach) immediately at such time as
the contractual or legal prohibition shall no longer be applicable and to the
extent severable, will attach immediately to any portion of such lease,
license, contract or agreement not subject to the prohibitions specified in (i) or
(ii) above; provided further that the exclusions referred to in this
clause (2) shall not include any products or proceeds of any such lease,
license, contract or agreement;

 

(3)                                  any motor vehicles, vessels and aircraft, or other property
subject to a certificate of title statute of any jurisdiction;

 

11

 

(4)                                  assets or property subject to purchase money liens or capital
leases permitted to be incurred under the Secured Debt Documents, to the extent
a lien on such assets or property is not permitted under the terms of the
documents governing such purchase money liens, purchase money indebtedness or
capital leases to be created to secure any Obligations;

 

(5)                                  all “securities” of any of the Company’s “affiliates” (as the
terms “securities” and “affiliates” are used in Rule 3-16 of Regulation
S-X under the Securities Act);

 

(6)                                  Equity Interests in any joint venture with a third party that
is not an Affiliate, to the extent a pledge of such Equity Interests is
prohibited by the documents governing such joint venture;

 

(7)                                  any “intent-to-use” application for registration of a
trademark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C.
§ 1051, prior to the filing of a “Statement of Use” pursuant to Section 1(d) of
the Lanham Act or an “Amendment to Allege Use” pursuant to Section 1(c) of
the Lanham Act with respect thereto, solely to the extent, if any, that, and
solely during the period, if any, in which, the grant of a security interest
therein would impair the validity or enforceability of any registration that
issues from such intent-to-use application under applicable federal law;

 

(8)                                  any Non-Core Land; and

 

(9)                                  all cash (except to the extent constituting proceeds from
Collateral) and deposit accounts, including monies and other funds on account
for taxes owed to the Commonwealth of Pennsylvania under Chapter 14 of the
Pennsylvania Race Horse Development and Gaming Act, 4 Pa. Cons. Stat. Ann. §
1101 et seq.

 

“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 and customary indemnity arrangements for directors and officers, (b) transactions
permitted under Section 4.3, (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,
and (d) the issuance and sale of Capital Stock to Affiliates and the
granting of registration rights with respect thereto.

 

“Existing
Indebtedness” means the Indebtedness of the Company and its
Subsidiaries in existence on the Issue Date, reduced to the extent such amounts
are repaid, refinanced or retired.

 

“Fair Market
Value” means, solely for purposes of the covenant described under Section 4.13,
with respect to an Asset Sale of Non-core Land, the value that would be paid by
a willing buyer to an unaffiliated willing seller in a transaction not
involving distress or necessity of either party.

 

“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, 

 

12

 

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) gaming operations initially conducted
following the Issue Date at a Gaming Facility owned or operated by the Company
as a result of the approval of additional permitted gaming activities by the
applicable Gaming Authorities.

 

“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 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 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.

 

13

 

“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.

 

“Guarantee”
shall have the meaning provided in Section 11.1.

 

“Guarantor”
means each of the Company’s present and future Subsidiaries, other than
Immaterial 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
that has total assets as of such date with a fair market value not in excess of
$250,000, 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,

 

(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;

 

14

 

(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 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 Goldman, Sachs & Co. and Deutsche Bank
Securities Inc.

 

“Insolvency
or Liquidation Proceeding” means:

 

(1)                                  any voluntary or involuntary case or proceeding under the
Bankruptcy Code with respect to the Company or any Guarantor;

 

(2)                                  any other voluntary or involuntary insolvency, reorganization
or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding with respect to the Company
or any Guarantor or with respect to a material portion of the Company’s or any
Guarantor’s assets;

 

15

 

(3)                                  any liquidation, dissolution, reorganization or winding up of
the Company or any Guarantor whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy; or

 

(4)                                  any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company or any Guarantor.

 

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

 

“Intercreditor
Agreement” means the Collateral Agency and Intercreditor Agreement,
dated as of August 12, 2009, by and between MTR Gaming Group, Inc.,
the other First Lien Borrowers (defined therein), the First Lien Administrative
Agent (defined therein), the Second Lien Trustee (defined therein) and the
Second Lien Collateral Agent (defined therein).

 

“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 specified 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);

 

16

 

(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 (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 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.

 

“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.

 

“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),

 

17

 

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),

 

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

 

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.

 

“Non-Core
Land” means each of the following parcels of land, each of which is
immaterial to the Company’s gaming operations and as to which the Company has
no intention to develop:

 

(a)           the
255.896 acre parcel of land known as the “Quarry Parcel” in Hancock, West
Virginia;

 

(b)           the 162.79
acre parcel of land known as the “Woodview Golf Course” in Hancock, West
Virginia;

 

(c)           the 14
acre parcel of land known as the “Downs Property” in Erie, Pennsylvania;

 

(d)           the 23
acre parcel of land known as the “International Paper” site in Erie,
Pennsylvania;

 

(e)           the 130
acre parcel of land known as the “Troyer Parcel” in Erie, Pennsylvania;

 

(f)            the
82.373 acre parcel of land known as the “Green Shingle” in Erie, Pennsylvania;

 

(g)           the
approximately 395 acre portion of the land known as the “Original Mountaineer
Parcel” which is located to the east of State Route 2 site in Hancock, West
Virginia;

 

(h)           the 97.706
acre parcel of land known as the “Coldwell Parcel” in Hancock, West Virginia;

 

18

 

(i)            the 0.42
acre parcel of land known as the “Frye Parcel” in Hancock, West Virginia;

 

(j)            the
78.215 acre parcel of land known as the “Hazel Parcel” in Hancock, West
Virginia;

 

(k)           the
69.09323 acre parcel of land known as the “Kource Parcel” site in Hancock, West
Virginia;

 

(l)            the 1.755
acre parcel of land known as the “Glover/Daily Double Parcel” in Hancock, West
Virginia;

 

(m)          the 6.788
acre parcel of land known as the “Jusczak Parcel” in Hancock, West Virginia;

 

(n)           the
13.8765 acre parcel of land known as the “J&T Parcel” in Hancock, West
Virginia;

 

(o)           the 109.01
acre parcel of land known as the “LSW Sanitation Parcel” in Hancock, West
Virginia;

 

(p)           the 0.92
acre parcel of land known as the “Smith Parcel” in Hancock, West Virginia;

 

(q)           the 69.076
acre parcel of land known as the “Watson Parcel” site in Hancock, West
Virginia;

 

(r)            the 6.65
acre parcel of land known as the “Phillips Parcel” in Hancock, West Virginia;

 

(s)           the 108.8
acre parcel of land known as the “Stevens Parcel” in Hancock, West Virginia;

 

(t)            the 4.84
acre parcel of land known as the “Baird Parcel” in Hancock, West Virginia;

 

(u)           the 234.99
and 79.67 acre parcels of land known as the “Logan/Realm Parcels” in Hancock,
West Virginia;

 

(v)           the
approximately 0.955 acre parcel of land known as the “Jefferson School Parcel”
in Hancock, West Virginia;

 

(w)          the 1.95
acre parcel of land known as the “Carter Parcel” in Hancock, West Virginia;

 

(x)            the
approximately 1 acre parcel of land known as the “Hoit Parcel” in Hancock, West
Virginia;

 

19

 

(y)           the 0.084
acre parcel of land known as the “Maffeo Parcel” in Erie, Pennsylvania; and

 

(z)            the 37.11
acre parcel of land known as the “Mara Parcel” in Franklin County, Ohio.

 

“Note
Obligations” means the Notes and any Obligations in respect thereof.

 

“Notes”
means, collectively (a) the Senior Secured 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.

 

“Obligations”
means any principal, interest (including all interest accrued thereon after the
commencement of any Insolvency or Liquidation Proceeding at the rate, including
any applicable post-default rate, specified in the Secured Debt Documents, even
if such interest is not enforceable, allowable or allowed as a claim in such
proceeding), premium, fees, indemnifications, reimbursements, expenses and
other liabilities due under the documentation governing any Indebtedness.

 

“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.

 

“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.

 

“Parity Lien
Debt” means:

 

(a)           the Notes
initially issued by the Company under the Indenture; and

 

(b)           additional
Indebtedness (including letters of credit and reimbursement obligations with
respect thereto) of the Company or any Guarantor secured by Liens on Collateral
that was permitted to be incurred and so secured under this Indenture;
provided, in the case of additional Indebtedness referred to in this clause
(b), that:

 

(i)                                     on or before the date on which such Indebtedness is incurred
by the Company or such Guarantor, as applicable, such Indebtedness is
designated by the Company, in an Officers’ Certificate delivered to the
Collateral Agent, as “Parity Lien Debt”; provided, that no 

 

20

 

Indebtedness
may be designated as both Parity Lien Debt and Permitted Priority Lien Debt;
and

 

(ii)                                  the collateral agent or other representative with respect to
such Indebtedness, the Collateral Agent, the Trustee, the Permitted Priority
Lien Debt Collateral Agent, the Company and each applicable Guarantor have duly
executed and delivered the Intercreditor Agreement (or a joinder to the
Intercreditor Agreement).

 

“Parity Lien
Debt Obligations” means Parity Lien Debt and all other Obligations
in respect thereof.

 

“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 Issue Date and related Exchange Notes and
Guarantees 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 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 

 

21

 

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 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;

 

(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 the greater of (x) $20,000,000
and (y) 4.5% of Consolidated Tangible Assets of the Company;

 

(g)           Indebtedness
incurred by the Company or any Subsidiary to finance the acquisition,
development or construction of any Future Gaming Facility or any Gaming
Facility at which gaming operations are not conducted on the Issue Date, but
are conducted following the Issue Date as a result of the approval of
additional gaming activities by the applicable Gaming Authority; provided that (i) the
ratio of the aggregate principal amount of such Indebtedness to the aggregate
principal amount of cash contributions made to the equity capital of the
Company or such Subsidiary or the proceeds from the sale of Capital Stock of
the Company or such Subsidiary (other than (a) Capital Stock that requires
the payment of dividends or distributions thereon in cash or in any form other
than shares of such Capital Stock or common stock of the Company or such
subsidiary or (b) Capital Stock that is disqualified Capital Stock), in
each case, after the Issue Date does not exceed 3.0 to 2.0, and (ii) such
Indebtedness is incurred within 180 days after the making of such cash
contributions or sale of such Capital Stock; and

 

(h)           Existing
Indebtedness and any Guarantees thereof, including any Refinancing Indebtedness
with respect thereto.

 

“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”;

 

22

 

(d)           any
Investment by the Company or any Guarantor in (a) the Company or a
Guarantor or (b) 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 the greater of (x) $10,000,000 and (y) 2.25% of
Consolidated Tangible Assets of the Company (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;

 

(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;

 

(i)            Investments
by the Company or any of its Subsidiaries in an amount not to exceed $3,000,000
since the Issue Date; provided, that the consideration given by the Company or
such Subsidiary for such Investments consist solely of Non-Core Land; and

 

(j)            Investments
in any joint venture in an amount not to exceed $5,000,000 since the Issue
Date.

 

“Permitted
Lien” means:

 

(a)           Liens held
by the Collateral Agent securing the Notes and the Guarantees issued on the
Issue Date;

 

(b)           Liens
securing (i) Permitted Priority Lien Debt in an aggregate principal amount
not to exceed the Permitted Priority Lien Debt Cap and (ii) all related
Permitted Priority Lien Debt Obligations;

 

(c)           Liens
existing on the Issue Date;

 

(d)           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 

 

23

 

proceedings, if adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP;

 

(e)           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 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;

 

(f)            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;

 

(g)           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;

 

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

 

(i)            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;

 

(j)            Liens
arising from FF&E Financing and Purchase Money Indebtedness permitted to be
incurred pursuant to Section 4.11 provided such
Liens relate solely to the property which is subject to such FF&E Financing
or such Purchase Money Indebtedness;

 

(k)           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;

 

(l)            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;

 

(m)          judgment
Liens not giving rise to an Event of Default so long as such Lien is adequately
bonded and any appropriate legal proceedings which may have been duly initiated
for the review of such judgment have not been finally terminated or the period
within which such proceedings may be initiated has not expired;

 

24

 

(n)           Liens
arising solely by virtue of any statutory or common law provisions relating to
banker’s Liens, rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a depositary institution; provided that:

 

(i)                                     such deposit account is not a dedicated cash collateral
account and is not subject to restrictions against access by the Company in
excess of those set forth by regulations promulgated by the Federal Reserve
Board; and

 

(ii)                                  such deposit account is not intended by the Company or any
Subsidiary to provided collateral to the depositary institution;

 

(o)           Liens
securing Indebtedness or other obligations of the Company or any Guarantor
owing to the Company or another Guarantor;

 

(p)           any
interest or title of a lessor under any Capitalized Lease Obligation; provided that such Capitalized Lease Obligation was
permitted to be incurred under this Indenture;

 

(q)           Liens on
property of the Company or any Restricted Subsidiary that are the subject of a
sale/leaseback transaction securing Attributable Indebtedness incurred in
connection with such sale/leaseback transaction; provided
that such sale/leaseback transaction was permitted under Section 4.13;

 

(r)            Liens on
the Capital Stock of Unrestricted Subsidiaries;

 

(s)           any
encumbrance or restriction (including put and call arrangements) with respect
to Capital Stock of any joint venture or similar arrangement pursuant to any
minority owned joint venture;

 

(t)            pledges
or deposits by such Person under workers’ compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States government
bonds to secure surety or appeal bonds to which such Person is a party, or
deposits as security for contested taxes or import or customs duties or for the
payment of rent, in each case Incurred in the ordinary course of business;

 

(u)           Liens
securing Interest Swap and Hedging Obligations so long as (a) the related
Indebtedness is permitted to be incurred under this Indenture, (b) such
Lien extends only to the same property securing the related Indebtedness, and (c) the
representative with respect to such Interest Swap and Hedging Obligations has
duly executed and delivered the Intercreditor Agreement (or a joinder to the
Intercreditor Agreement),

 

(v)           Liens
securing Indebtedness permitted to be incurred pursuant to Section 4.11 in
an amount not to exceed $10,000,000 in the aggregate at any one time
outstanding;

 

25

 

(w)          at any time
when no amounts are outstanding under any Credit Agreement, Liens securing up
to $5,000,000 in reimbursement obligations for letters of credit incurred in the
ordinary course of business;

 

(x)            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

 

(y)           Liens on
Collateral securing an aggregate principal amount of Parity Lien Debt
Obligations up to an amount that will not cause the Consolidated Secured
Leverage Ratio to exceed 2.75 to 1.00, giving pro forma
effect to such incurrence.

 

“Permitted
Prior Liens” means:

 

(1)                                  Liens described in clauses (b), (c), (e), (f), (g), (i), (j),
(p), (r), (t) and (w) of the definition of “Permitted Liens”; and

 

(2)                                  Permitted Liens that arise by operation of law and are not
voluntarily granted, to the extent they by law have priority over the Liens
created by the Security Documents.

 

“Permitted
Priority Lien Debt” means Indebtedness for borrowed money incurred
by the Company or any Guarantor under a Credit Agreement, which was permitted
to be incurred under clause (b) of Section 4.11 and permitted to be
secured by a Permitted Priority Lien pursuant clause (b) of the definition
of Permitted Lien.

 

“Permitted
Priority Lien Debt Cap” means, $20,000,000, minus
the amount of any such Permitted Priority Lien Debt (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.

 

“Permitted
Priority Lien Debt Collateral Agent” means any collateral agent
under a Permitted Priority Lien Debt facility.

 

“Permitted
Priority Lien Debt Obligations” means Permitted Priority Lien Debt
and all other Obligations in respect thereof, including Interest Swap and
Hedging Obligations of the Company or any Guarantor incurred pursuant to
arrangements provided by the holders or agents of Permitted Priority Lien Debt
to hedge or manage interest rate risk with respect to such Permitted Priority
Lien Debt; provided that, pursuant to the terms of the documents governing the
Permitted Priority Lien Debt Obligations, such Interest Swap and Hedging
Obligations are secured equally and ratably by a Permitted Priority Lien on all
of the assets and properties that secure the Indebtedness in respect of which
such Interest Swap and Hedging Obligations are incurred.

 

26

 

“Permitted
Priority Lien Debt Representative” means, in the case of any
Permitted Priority Lien Debt, the agent of the holders of such Permitted Priority
Lien Debt who is appointed as an agent for purposes related to the
administration of the Permitted Priority Lien Debt Security Documents pursuant
to the credit agreement or other agreement governing such Permitted Priority
Lien Debt, together with its successor in such capacity.

 

“Permitted
Priority Liens” means Liens granted to the Permitted Priority Lien
Debt Collateral Agent, at any time, upon the Collateral to secure Permitted
Priority Lien Debt Obligations.

 

“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.

 

“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.

 

“Principal”
means Jeffrey P. Jacobs.

 

“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.

 

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

 

“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.

 

“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
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 

 

27

 

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

 

(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 

 

28

 

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 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.

 

“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, the Guarantors 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 Permanent Global Note.

 

“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.

 

“Related
Party” means:

 

(1)                                  any controlling stockholder, majority owned Subsidiary,
immediate family member, lineal descendant (or spouse of such immediate family
member or lineal descendant) of a Principal or any executor, administrator or
legal representative for the estate, heirs and beneficiaries of a Principal; or

 

(2)                                  any trust, corporation, partnership, limited liability
company or other entity, the beneficiaries, stockholders, partners, members,
owners or Persons beneficially holding a majority (and controlling) interest of
which consist of a Principal and/or such other Persons referred to in the
immediately preceding clause (1).

 

“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.

 

29

 

“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 or with the proceeds of any concurrent issuance
of Capital Stock (other than Disqualified Capital Stock and other than Capital
Stock issued and sold to any Subsidiary), 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 unsecured Indebtedness (other than
the Senior Notes) or 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.

 

“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 Financial Services LLC, a subsidiary of The
McGraw- Hill Companies, Inc., and its successors.

 

“Sale of a
Guarantor” means any Asset Sale involving a sale or other
disposition of Capital Stock of a Guarantor.

 

“Sale of
Collateral” means any Asset Sale involving a sale or other
disposition of Collateral.

 

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

 

“Security
Documents” means the Intercreditor Agreement, all security
agreements, pledge agreements, collateral assignments, mortgages, deeds of
trust or other grants or transfers for security or agreements related thereto
executed and delivered by the Company or any

 

30

 

Guarantor
creating or perfecting (or purporting to create or perfect) or perfecting a
Lien upon Collateral in favor of the Collateral Agent to secure the Note
Obligations, in each case, as amended, modified, renewed, restated, amended and
restated, or replaced, in whole or in part, from time to time, in accordance
with its terms.

 

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

 

“Senior Notes”
means the $130,000,000 in aggregate principal amount of 9.75% Senior Notes due
2010 issued by the Company under the Senior Notes Indenture.

 

“Senior
Secured Notes” means the 12.625% Senior Secured Notes due 2014, 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.

 

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

 

“Stated
Maturity”, when used with respect to any Note, means July 15,
2014.

 

“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”,
means any subsidiary of the Company that is not an Unrestricted Subsidiary.

 

“TIA”
means the Trust Indenture Act of 1939, as amended, (15 U.S. Code §§
77aaa77bbbb) as in effect on the date of the execution of this Indenture,
except as provided in Section 9.3.

 

31

 

“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 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.

 

“Uniform
Commercial Code” means the Uniform Commercial Code as in effect from
time to time in any applicable jurisdiction.

 

“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 Reno, 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 Company’s Board of Directors 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 

 

32

 

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; provided, further that no
subsidiary that owns or holds any Core Gaming Assets may be designated as an
Unrestricted Subsidiary; and

 

(c)           any
subsidiary of an Unrestricted Subsidiary.

 

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.

 

33

 

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;

 

(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.

 

34

 

(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 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
$250,000,000 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
an office or agency in the Borough of Manhattan, The City of New York, where
Notes may be presented for registration of transfer or for exchange (“Registrar”) and 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 

 

35

 

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 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, premium or Liquidated
Damages, if any, or interest 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 

 

36

 

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. 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 39 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.  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 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)(l) above. 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 

 

37

 

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 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 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

 

38

 

(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 (l)(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 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:

 

39

 

(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)(l) 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:

 

(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

 

40

 

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.

 

(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 

 

41

 

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;

 

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 

 

42

 

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 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).

 

43

 

(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,
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 

 

44

 

Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (l)(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 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.

 

45

 

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 the Senior Secured 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

 

(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 Senior Secured
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:

 

“THE NOTES EVIDENCED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”)
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO
A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION
COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL INVESTOR THAT IS AN
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501 OF 

 

46

 

REGULATION D UNDER THE
SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.”

 

(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 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.”

 

47

 

(3)           Original
Issue Discount Legend.  To the extent
required by the Depositary, each Global Note and each Definitive Note shall
bear a legend in substantially the following form:

 

“ORIGINAL ISSUE
DISCOUNT.  THE NOTES HAVE BEEN ISSUED
WITH ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (“OID”).  THE ISSUE PRICE, THE AMOUNT OF OID, THE ISSUE
DATE AND THE YIELD TO MATURITY MAY BE OBTAINED BY CONTACTING DAVID R. HUGHES,
CORPORATE EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, MTR GAMING
GROUP, INC., (724) 933-8122.”

 

(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 hot 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 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 

 

48

 

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.

 

(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 

 

49

 

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 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.

 

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, unless the Company
directs the Trustee to deliver cancelled Notes 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.

 

50

 

SECTION 2.12                                                              DEFAULTED INTEREST

 

Any interest 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 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 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
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 

 

51

 

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,
Section 4.16 and applicable law, issue Additional Notes under this
Indenture.  The Notes issued on the Issue
Date and any 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

 

The Company shall not have
the right to redeem any Notes pursuant to this Section 3.1 prior to July 15,
2011.  The Notes will be redeemable for
cash at the option of the Company, in whole or in part, upon not less than 30
days nor more than 60 days notice to each holder of Notes, at the following
redemption prices (expressed as percentages of the principal amount) if
redeemed during the 12-month period commencing July 15 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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2011

  	
   

  	
  106.313

  	
  %

  
	
  2012

  	
   

  	
  103.156

  	
  %

  
	
  2013 and thereafter 

  	
   

  	
  100.000

  	
  %

  

 

If the Redemption 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.

 

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 or Section 3.9, 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 

 

52

 

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 appropriate and fair.  The Notes may be redeemed in part in
multiples of $1,000 only.

 

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 to such Holder’s
last address as then shown upon the registry books of the Registrar.  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.  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;

 

53

 

(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, but not later than 11:00 a.m. New York City time on 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.

 

54

 

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                                                                     [RESERVED]

 

SECTION 3.9                                                                     REGULATORY REDEMPTION

 

Notwithstanding any
provision hereof, if any Gaming Authority requires that a Holder of Notes or
beneficial owner of Notes must be licensed, qualified or found suitable under
any applicable Gaming Law and such Holder of Notes 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 of Notes 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 of Notes 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 

 

55

 

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.

 

SECTION 3.10                                                              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 IV

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 in the Borough of Manhattan, The City of New York, 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, 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 

 

56

 

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, or (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 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 in such Person, including, if applicable, such
Unrestricted Subsidiary, less the cost of disposition; plus

 

(4)           $5,000,000.

 

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

 

57

 

(1)           repurchases,
redemptions, or other retirements or acquisitions of Capital Stock from the
Company’s employees or 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
(1) 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 (1);

 

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

 

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

 

(2)           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;

 

(3)           a
Qualified Exchange;

 

(4)           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;

 

(5)           Track
Business Contingent Earnout Payments;

 

(6)           the
purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value of any unsecured Indebtedness or Subordinated Indebtedness (i) at
a purchase price not greater than 101% of the principal amount of such
unsecured Indebtedness or Subordinated Indebtedness in the event of a Change of
Control in accordance with provisions similar to Section 4.14 of this
Indenture or (ii) at a purchase price not greater than 100% of the principal
amount thereof in accordance with provisions similar to Section 4.13 of
this Indenture; provided that, prior to or
simultaneously with such purchase, repurchase, redemption, defeasance or other
acquisition or retirement, the Company has made the Change of Control Offer or
Asset Sale Offer, as applicable, as provided in such covenant with respect to
the Notes and has completed the repurchase or redemption of all Notes validly
tendered for payment in connection with such Change of Control Offer or Asset Sale
Offer;

 

(7)           so long as
no Default or Event of Default has occurred and is continuing, the declaration
and payment of dividends to holders of any class or series of Disqualified
Capital Stock of the Company issued in accordance with the terms of this Indenture,
including Section 4.11, to the extent such dividends are included in the
definition of “Consolidated Fixed Charges;”

 

(8)           a
Restricted Investment either (i) solely in exchange for shares of Capital
Stock (other than Disqualified Capital Stock) of the Company or (ii) through
the application of the Net Cash Proceeds of the substantially concurrent sale
of Capital Stock (other than Disqualified Capital Stock) of the Company; provided, that the Net Cash Proceeds from such sale of
Capital Stock will be excluded from clause (c)(3) of the preceding
paragraph; or

 

58

 

(9)           so long as
clause (a) of the 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 (9) not to exceed $30,000,000
since the Issue Date.

 

The full amount of any
Restricted Payment made pursuant to the foregoing clauses (1), (3), (5), (6) and
(7) (but not pursuant to clause (2) or (4)) 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 (c) of the first paragraph of
this Section 4.3.

 

The Company shall not, and
the Guarantors shall not, and neither the Company nor the Guarantors shall
permit any of its Subsidiaries to, directly or indirectly, make any Restricted
Payment consisting of any Core Gaming Asset.

 

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 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 11.4, 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, 

 

59

 

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 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, each of
their Subsidiaries and each of their properties, insurance (including
appropriate self-insurance) to such extent and against such risks (and with
such deductibles, retentions and exclusions), including fire and other risks
insured against by extended coverage, that, in the reasonable, good faith
opinion of the Board of Directors of the Company, is adequate, appropriate and
customary for the conduct of the business of the Company, the Guarantors and
such Subsidiaries and as is customary with companies in the same or similar
businesses operating in the same or similar locations, including public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any
properties owned, occupied or controlled by them, in a prudent manner, with (except
for self insurance) financially sound and 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, which is currently December 31, 2009, 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 §3l4(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

 

60

 

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 l5(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 of
Notes, 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 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.  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.

 

61

 

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 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 has been approved by a majority of the members of the
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 $10,000,000 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 Affiliate Transaction 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 five days of any
Affiliate Transaction 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 complied
with clauses (a), (b) and (c) of this Section 4.10, as
applicable.

 

SECTION 4.11                
LIMITATION ON INCURRENCE OF ADDITIONAL
INDEBTEDNESS AND DISQUALIFIED CAPITAL STOCK

 

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.

 

62

 

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 following the Issue Date 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 Refinancing Indebtedness incurred
to retire, defease, refinance, replace or refund such Indebtedness) of up to
the greater of (x) $10,000,000 and (y) 2.25% of Consolidated Tangible
Assets of the Company, and

 

(b)           the
Company’s incurrence or the incurrence by any Guarantor of Indebtedness
pursuant to a 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 $20,000,000, 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; provided that in the case of the incurrence of any
Indebtedness pursuant to this clause (b), the collateral agent or other
representative with respect to such Indebtedness, the Collateral Agent, the
issuers and each applicable Guarantor have duly executed and delivered the
Intercreditor Agreement (or a joinder to the Intercreditor Agreement).

 

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 

 

63

 

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 shall not incur,
and shall not permit any Guarantor to incur, any Indebtedness (including
Permitted Indebtedness) that is contractually subordinated in right of payment
to any other Indebtedness of the Company or such Guarantor unless such
Indebtedness is also contractually subordinated in right of payment to the
Notes and the Guarantees on substantially identical terms; provided, however,
that no Indebtedness will be deemed to be contractually subordinated in right
of payment to any other Indebtedness of the Company solely by virtue of being
unsecured or by virtue of being secured on a junior priority basis.

 

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
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 Permitted Priority
Lien Debt or other Indebtedness (which may also be guaranteed by the
Guarantors) ranking pari passu with
the Notes or the Guarantees or Preferred Stock issued in accordance with Section 4.11,
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;

 

64

 

(e)           any
restriction imposed by Indebtedness incurred under a Credit Agreement incurred
pursuant to Section 4.11; provided, that
the Company provides an Officers’ Certificate to the Trustee stating that any
such restrictions are no more restrictive in any material respect than those
customarily imposed by similar credit agreements;

 

(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;

 

(h)           customary
provisions in joint venture agreements relating to Joint Ventures that are not
Subsidiaries, and

 

(i)            in
connection with and pursuant to permitted refinancings, the replacement of
restrictions imposed pursuant to clauses (a), (c), (d) or (g) or this
clause (i) 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 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 SALE 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), and including any sale or other transfer or issuance of any
Equity Interests of any of the Company’s 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 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, provided, that for purposes
of this 

 

65

 

provision, property or assets of the type set forth in clause
(b) of the second succeeding paragraph will be deemed to be cash;

 

(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 Guarantor 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) 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.

 

The Company shall not, and
the Guarantors shall not, and neither the Company nor the Guarantors will
permit any of its Subsidiaries to, in one or a series of related transactions,
convey, sell, transfer, assign or otherwise dispose of, directly or indirectly,
any of their Core Gaming Assets, including by merger or consolidation (in the
case of a Guarantor or one of the Company’s Subsidiaries), and including any
sale or other transfer or issuance of any Equity Interests of any of the
Company’s Subsidiaries, whether by the Company or any of its Subsidiaries or
through the issuance, sale or transfer of Equity Interests by any of the
Company’s Subsidiaries and including any sale-leaseback transaction.

 

Within 360 days following
such Asset Sale (other than a Sale of Collateral or a Sale of a Guarantor), Net
Cash Proceeds therefrom shall be:

 

(a)           (i) used
to retire Indebtedness secured by the asset which was the subject of the Asset
Sale; (ii) used to retire, repay and permanently reduce Permitted Priority
Lien Debt or the Notes; provided, that in the case of a revolver or similar
arrangement that makes credit available, such commitment is permanently reduced
by such amount; or (iii) to retire, repay and permanently reduce other
senior secured Indebtedness; provided that
the Notes are retired or repaid on a pro rata basis;
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.

 

Within 360 days following an
Asset Sale that constitutes a Sale of Collateral or the Sale of a Guarantor,
Net Cash Proceeds therefrom shall be (a) applied to purchase assets and
property, which in the good faith judgment of the Company’s Board of Directors
shall immediately constitute Collateral, (b) used to purchase Capital
Stock of a Related Business if, after giving effect to such purchase, the
Related Business becomes a Guarantor or is merged into 

 

66

 

or
consolidated with the Company or a Guarantor, or (c) used to retire,
prepay and permanently reduce Indebtedness secured by the asset which was the
subject of the Asset Sale or to repay and permanently reduce Permitted Priority
Lien Debt or the Notes; provided, that
in the case of a revolver or similar arrangement that makes credit available,
such commitment is permanently reduced by such amount.

 

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 third or fourth preceding paragraphs 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 and the Security Documents.

 

When the Excess Proceeds
equal or exceed $5,000,000, the Company shall offer to repurchase the Notes,
together with any senior secured Indebtedness 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 senior secured
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”). 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 senior secured 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 and the Security Documents.  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.

 

67

 

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 and the Security Documents; and

 

(6)           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 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, 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:

 

68

 

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

 

(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) 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

 

(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 

 

69

 

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 in integral multiples
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:

 

(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;

 

70

 

(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) 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 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 shall
promptly after receipt of funds from the Company in accordance with the
preceding paragraph 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 will promptly 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 

 

71

 

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 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 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.

 

72

 

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                     GAMING LICENSES

 

In the event of a
foreclosure, deed in lieu of foreclosure or other similar transfer of a Gaming
Facility or Future Gaming Facility to the Collateral Agent or its designee, the
Company shall, and shall cause its Subsidiaries to, reasonably cooperate with
the Collateral Agent or its designee in obtaining all Gaming Licenses and other
governmental approvals necessary to conduct all gaming operations at such
Gaming Facility or Future Gaming Facility. 
Following a foreclosure, deed in lieu of foreclosure or other similar
transfer of a Gaming Facility or Future Gaming Facility to the Collateral Agent
or its designee, subject to receipt of requisite approvals from any applicable
Gaming Authority, the Company shall, and shall cause its Subsidiaries to,
reasonably cooperate with the transition of the gaming operations at such
Gaming Facility or Future Gaming Facility to any new gaming operator
(including, without limitation, the Collateral Agent or its designee).

 

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 

 

73

 

the Company’s Obligations in connection with the Notes, this
Indenture, the Security Documents 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 and any
related financing transaction on a pro forma basis
(a) the Person surviving such transaction would be able to incur at least
$1.00 of Indebtedness pursuant to the second paragraph under Section 4.11
or (b) the Consolidated Coverage Ratio for the Person surviving such
transaction would be greater than such ratio for the Company immediately prior
to such transaction; and

 

(d)           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, the Security Documents and the Registration Rights Agreement.

 

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 anyone 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)

 

74

 

(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, this Indenture or the Security Documents 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 or any of the Guarantors as bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization of
the Company or any of the Guarantors 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 or any of the Guarantors, 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 or any of the Guarantors 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 any of the Company’s
Indebtedness or the Indebtedness of any of the Guarantors or any of the Company’s
Subsidiaries with an aggregate principal amount 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;

 

75

 

(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 is 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;

 

(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
Casino, Racetrack & Resort and Presque Isle Downs), provided that such
sale, lease or closure was otherwise permitted by, and complied with the
provisions of, the Indenture) of our 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; and

 

(j)            the
occurrence of any of the following:

 

(1)           (i) any
Security Document is held in any judicial proceeding to be unenforceable or
invalid or ceases for any reason to be in full force and effect or is declared
null and void, other than in accordance with the terms of the relevant Security
Document, or (ii) it becomes unlawful for the Company or any Guarantor to
perform any of the Note Obligations or the Collateral Agent shall not have or
shall cease to have a valid and perfected Lien in any material portion of the
Collateral purported to be covered by the Security Documents with the priority
required by the relevant Security Document (including as a result of assets not
constituting Collateral by operation of clause (1) or clause (2) of
the definition of Excluded Assets), in each case for any reason other than the
failure of the Collateral Agent or any other holder of Note Obligations to take
any action within its control, or (iii) the Company or any Guarantor shall
contest the validity or enforceability of the Indenture or any Security
Document in writing or repudiate or rescind (or purport to repudiate or
rescind) or deny in writing that it has any further liability under any
provision of any Security Document to which the Company or it is a party or
shall contest the validity or perfection of any Lien in any Collateral
purported to be covered by the Security Documents; or

 

(2)           except
as permitted by this Indenture, any Permitted Priority Lien purported to be
granted under any Security Document on Collateral, individually or in the
aggregate, having a fair market value in excess of $5,000,000 ceases to be
enforceable and perfected first-priority Lien, subject only to Permitted Prior
Liens; or

 

(3)           the
Company or any Guarantor, or any Person acting on behalf of any of them, denies
or disaffirms, in writing, any obligation of the Company or any Guarantor set
forth in or arising under any Security Document.

 

76

 

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 of
Notes.  The Holders of a majority in
aggregate principal amount of the Notes, by written notice to the Trustee, may
rescind any such 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.

 

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 

 

77

 

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 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 

 

78

 

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

 

Subject to Section 10.3,
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 and
the Collateral Agent in payment of all amounts due pursuant to Section 7.7
and the applicable Security Documents;

 

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;

 

(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 

 

79

 

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 (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.

 

SECTION 6.11                     CONTROL BY HOLDERS

 

Subject to the provisions of
the Intercreditor Agreement, 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;

 

80

 

(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 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.

 

81

 

SECTION 6.15                     EXERCISE OF REMEDIES BY COLLATERAL AGENT

 

Subject to the provisions of
the Intercreditor Agreement, the Collateral Agent may exercise any and all
other remedies available to it under the Security Documents.

 

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
a Default or 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 a Default or 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:

 

(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.

 

82

 

(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.

 

(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.

 

83

 

(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 6.1(d), 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 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.

 

84

 

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

 

(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 

 

85

 

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.

 

The Company and the
Guarantors jointly and severally agree to pay to the Collateral Agent from time
to time such compensation for its services as the Company and the Collateral
Agent shall from time to time agree in writing. 
The Collateral Agent’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 Collateral Agent 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 Collateral Agent’s agents, accountants, experts and
counsel.

 

The Company and the
Guarantors jointly and severally agree to indemnify each of the Collateral
Agent (in its capacity as Collateral Agent) and each predecessor Collateral
Agent 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
Collateral Agent’s agents and counsel), loss or liability incurred by it
without negligence or bad faith on the part of the Collateral Agent, 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
Collateral Agent shall notify the Company promptly of any claim asserted
against the Collateral Agent 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 

 

86

 

hereunder.  The Company and the Guarantors shall defend
the claim and the Collateral Agent shall provide reasonable cooperation at the
Company’s and the Guarantors’ expense in the defense.  The Collateral Agent 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
Collateral Agent’s defense and if the Collateral Agent is advised by counsel
that there is no conflict of interest between the Company and the Guarantors
and the Collateral Agent 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 Collateral Agent 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 and
Collateral Agent shall have a lien prior to the Notes on all assets held or
collected by the Trustee or Collateral Agent, in its capacity as Trustee or
Collateral Agent, as applicable, except assets held in trust to pay principal
and premium, if any, of or interest on particular Notes.

 

When the Trustee or
Collateral Agent, as applicable, 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.

 

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 and the
Collateral Agent, 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 

 

87

 

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.

 

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.

 

88

 

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 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 (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 11.1(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 

 

89

 

(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,
Sections 6.1(f) through 6.l(i) shall not constitute Events of Default
with respect to the Notes to the extent such events occur thereafter; provided, however that for
all other purposes asset 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 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)           in
the case of Legal Defeasance or Covenant Defeasance, (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) 

 

90

 

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.

 

The Defeasance will be
effective on the day on which all 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.

 

Upon a Legal Defeasance or
Covenant Defeasance, in accordance with the provisions of the Security
Documents, the Collateral Agent will cease to be a party to the Security
Documents on behalf of the Holders of the Notes and the Collateral will no
longer secure the Notes.

 

The Collateral will be
released from the Liens securing the Notes, as provided under Section 10.5,
upon a Legal Defeasance or Covenant Defeasance in accordance with the
provisions described above.

 

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 

 

91

 

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 VI 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)           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 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 

 

92

 

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)           all Notes have been called for redemption pursuant to the
provisions in Section 3.1 by mailing to holders a notice of redemption or
all Notes otherwise have become due and payable,

 

(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
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.

 

Upon a satisfaction and
discharge in accordance with the provisions of the Security Documents, the
Collateral Agent will cease to be a party to the Security Documents on behalf
of the holders of the Notes and the Collateral will no longer secure the Notes.

 

93

 

The Collateral will be
released from the Liens securing the Notes, as provided under Section 10.5,
upon a Legal Defeasance or Covenant Defeasance in accordance with the
provisions described 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 of the Notes, the Company, the
Guarantors and the Trustee may amend, modify or supplement this Indenture, the
Notes, the Guarantees or any of the Security Documents (subject to Section 10.9):

 

(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 or to evidence the addition of any new
Guarantor in accordance with Article X;

 

(e)           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;

 

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

 

(g)           to
comply with applicable Gaming Laws;

 

(h)           to
comply with the provisions of DTC 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;

 

(i)            to
conform the text of this Indenture, the Notes or the Guarantees to any
provision of the “Description of Notes” section of the Offering Circular, dated
July 24, 2009, relating to the initial offering of the Senior Secured
Notes, to the extent that such provision in that “Description of Notes” was intended
to be a verbatim recitation of a provision of this Indenture, the Notes or the
Guarantees, which intent may be evidenced by an Officers’ Certificate to that
effect;

 

94

 

(j)                                     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;

 

(k)                                  to release Collateral in accordance with the terms of this
Indenture and the Security Documents or the TIA, if applicable;

 

(l)                                     to mortgage, pledge, hypothecate or grant any additional Lien
in favor of the Collateral Agent for the benefit of the holders of the Notes,
as additional security for the payment and performance of all Obligations with
respect to the Notes; or

 

(m)                               to evidence and provide for the acceptance by appointment of
a successor Collateral Agent so long as (a) such successor Collateral
Agent is reasonably acceptable to the Trustee and (b) is otherwise
qualified and eligible to serve as Collateral Agent.

 

In addition, the Collateral
Agent and the Trustee shall be authorized to amend the Security Documents to
add additional secured parties to the extent Liens securing the Notes held by
such parties are permitted under this Indenture and that after so securing any
such additional secured parties, the amount of Permitted Priority Lien Debt
does not exceed the Permitted Priority Lien Debt Cap.

 

The consent of the Holders
of the Notes is not necessary under this Indenture to approve the particular
form of any proposed amendment or supplement. 
It is sufficient if such consent approves the substance of the proposed amendment
or supplement.

 

	
  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, the Guarantees and any Security Documents,
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.

 

95

 

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;

 

(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)                            release any
Guarantor from any of its obligations under its Guarantee or this Indenture
other than in compliance with this Indenture or release all or substantially
all of the Collateral, in each case except as expressly provided in the
Indenture or the Security Documents; or

 

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

 

96

 

In addition, any amendment
to, or waiver of, the provisions of this Indenture or any Security Document
that has the effect of releasing all or substantially all of the Collateral
from the Liens securing the Notes will require the consent of the holders of at
least 662/3% in aggregate principal
amount of the Notes then outstanding (but only to the extent any such consent
is required under the Intercreditor Agreement and the Security Documents).

 

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.

 

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.

 

Any amendment or supplement
to the provisions of the Security Documents that releases Collateral will be
effective only in accordance with the requirements set forth in this
Indenture.  Any amendment or supplement
that results in the Collateral Agent’s Liens upon the Collateral no longer
securing the Notes and the other Obligations under the Indenture may only be
effected in accordance with Section 10.5 below.

 

Notwithstanding the
foregoing, the Company may direct the Collateral Agent to amend, supplement or
otherwise modify any Security Document; provided
that the changes made by such amendment, supplement or other modification,
taken together with all other changes to the Security Documents, as in effect
on the Issue Date, are not materially adverse to any holder of Note
Obligations.

 

	
  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 

 

97

 

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 (12) 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 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 (and the
Collateral Agent, if applicable) 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 or any amendment, supplement or modification of any Security
Document, the Trustee and the Collateral Agent 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.

 

98

 

ARTICLE X

 

COLLATERAL AND SECURITY

 

	
  SECTION 10.1

  	
  SECURITY
  INTEREST

  

 

The due and punctual payment
of the principal of and interest and Liquidated Damages, if any, on the Notes
when and as the same shall be due and payable, whether on an Interest Payment
Date, at maturity, by acceleration, repurchase, redemption, prepayment, demand
or otherwise, and interest on the overdue principal of and interest and
Liquidated Damages (to the extent permitted by law), if any, on the Notes and
performance of all other obligations of the Company and the Guarantors to the
Holders of Notes or the Trustee under this Indenture and the Notes, according
to the terms hereunder or thereunder, are secured as provided in the Security
Documents.  Each Holder of Notes, by its
acceptance thereof, consents and agrees to the terms of the applicable Security
Documents (including, without limitation, the provisions providing for
foreclosure and release of Collateral) as the same may be in effect or may be
amended or modified from time to time in accordance with their terms and
authorizes and directs the Collateral Agent to enter into the Security
Documents and to perform its obligations and exercise its rights thereunder in
accordance therewith.  The Company will
deliver to the Trustee copies of all documents delivered to the Collateral
Agent pursuant to the applicable Security Documents, and will do, or cause to
be done, all such acts and things as may be necessary or proper, or as may be
required by the provisions of the applicable Security Documents, to assure and
confirm to the Trustee and the Collateral Agent the security interest in the
Collateral contemplated hereby, by the Security Documents or any part thereof,
as from time to time constituted, so as to render the same available for the
security and benefit of this Indenture and of the Notes secured hereby,
according to the intent and purposes herein expressed.  The Company will take, and will cause its
Subsidiaries to take any and all actions reasonably required to cause the
Security Documents to create and maintain, as security for the Parity Lien Debt
Obligations, a valid and enforceable perfected second-priority security
interest in and continuing Lien on all the Collateral, in favor of the
Collateral Agent for the benefit of the Holders of Notes and the holders of
Parity Lien Debt Obligations, subject (in the case of priority only) to any
Permitted Prior Liens.

 

	
  SECTION 10.2

  	
  INTERCREDITOR
  AGREEMENT

  

 

This Article X of the
Indenture and the provisions of each other Security Document are subject to the
terms, limitations and conditions set forth in the Intercreditor Agreement.

 

	
  SECTION 10.3

  	
  ORDER OF
  APPLICATION

  

 

Subject to the terms of the
Intercreditor Agreement, if any Collateral is sold or otherwise realized upon
by the Collateral Agent in connection with any foreclosure, collection or other
enforcement of Liens granted to the Collateral Agent in the Security Documents,
the proceeds received by the Collateral Agent from such foreclosure, collection
or other enforcement will be distributed by the Collateral Agent in the
following order of application:

 

99

 

FIRST, to the payment of all
amounts payable under this Indenture and the Security Documents on account of
the Collateral Agent’s and the Trustee’s fees and any reasonable legal fees,
costs and expenses or other liabilities of any kind incurred by the Collateral
Agent or the Trustee or any co-trustee or agent of the Collateral Agent or the
Trustee in connection with any Security Document or the Indenture;

 

SECOND, to the Trustee for
application to the payment of all outstanding Notes and all Obligations under
this Indenture and the Security Documents that are then due and payable in such
order as may be provided in the Indenture in an amount sufficient to pay in
full in cash all outstanding Notes that are then due and payable (including all
interest accrued thereon) after the commencement of any Insolvency or
Liquidation Proceeding at the rate, including any applicable post-default rate,
specified in this Indenture, even if such interest is not enforceable,
allowable or allowed as a claim in such proceeding; and

 

THIRD, any surplus remaining
after the payment in full in cash of the amounts described in the preceding
clauses will be paid to the Company or the applicable Guarantor, as the case
may be, or its successors or assigns, or as a court of competent jurisdiction
may direct.

 

This Section 10.3 shall
be subject to the seniority of any Permitted Priority Liens and any Permitted
Priority Lien Debt Obligations and subject to the provisions of the
Intercreditor Agreement.

 

In addition, this Section 10.3
is intended for the benefit of, and shall be enforceable as a third party
beneficiary by, each present and future Holder of Notes and the Collateral
Agent as holder of Liens securing the Notes and the Guarantees.

 

In connection with the
application of proceeds in accordance with this Section 10.3, except as
otherwise directed by holders of a majority in aggregate principal amount of
all Notes then outstanding, the Collateral Agent may sell any non-cash proceeds
for cash prior to the application of the proceeds hereof.

 

	
  SECTION 10.4

  	
  RELEASE
  OF LIENS ON COLLATERAL

  

 

Subject to the terms of the
Intercreditor Agreement, if applicable, the Collateral Agent’s Liens on the
Collateral will be released:

 

(a)                                  in whole, upon payment in full and discharge of all
outstanding Notes; provided that
the Company has delivered an Officer’s Certificate to the Collateral Agent
certifying that the conditions described in this clause (a) have been met
and that such release of the Collateral does not violate the terms of this
Indenture or the Security Documents;

 

(b)                                 as to any Collateral that is sold, transferred or otherwise
disposed of by the Company or any Guarantor to a Person that is not (either
before or after such sale, transfer or disposition) the Company or a Guarantor
in a transaction or other circumstance that is not prohibited by the terms of
this Indenture, at the time of such sale, transfer or other disposition or to
the extent of the interest sold, transferred or otherwise disposed of; provided
that, the Collateral Agent’s Liens upon the Collateral will not be released if
the sale or disposition is 

 

100

 

subject to Section 5.1 herein; provided,
further, that the Collateral Agent’s
Liens will attach to the proceeds received in respect of any such sale,
transfer or other disposition;

 

(c)                                  as provided under Section 5.1 of the Intercreditor
Agreement, if applicable; and

 

(d)                                 as to any other release of the Collateral, if (x) consent
to the release of all Liens on such Collateral has been given by the requisite
percentage or number of Holders of Notes at the time outstanding as provided
for in this Indenture and (B) the Company has delivered an Officer’s
Certificate to the Collateral Agent certifying that any such necessary consents
have been obtained and that such release of the Collateral does not violate the
terms of this Indenture or the Security Documents.

 

	
  SECTION 10.5

  	
  RELEASE
  OF LIENS IN RESPECT OF NOTES

  

 

Subject
to the terms of the Intercreditor Agreement, the Collateral Agent’s Liens upon
the Collateral shall no longer secure the Notes and Guarantees outstanding
under this Indenture or any other Obligations under this Indenture, and the
right of the Holders of the Note Obligations to the benefits and proceeds of
the Collateral Agent’s Liens on the Collateral shall terminate and be
discharged:

 

(a)                                  upon satisfaction and discharge of this
Indenture as set forth under Article VIII hereof;

 

(b)                                 upon a Legal Defeasance or Covenant
Defeasance of the Notes as set forth under Article VIII hereof;

 

(c)                                  upon payment in full and discharge of
all Notes outstanding under this Indenture and all Obligations that are
outstanding, due and payable under this Indenture at the time the Notes are
paid in full and discharged; or

 

(d)                                 in whole or in part, with the consent
of the Holders of the requisite percentage of Notes in accordance with Article IX
hereof, and upon delivery of instructions and any other documentation, in each
case as required by this Indenture and the Security Documents, in a form
satisfactory to the Collateral Agent.

 

The Collateral Agent shall execute and deliver such documents and instruments prepared
by the Company as the Company and the Guarantors may reasonably request to
evidence such release without the consent of the Holders of the Notes.

 

	
  SECTION 10.6

  	
  ADDITIONAL
  PARITY LIEN DEBT

  

 

The Company may incur
additional Parity Lien Debt by issuing additional notes under one or more
additional indentures, incurring additional Indebtedness under a credit
facility or otherwise issuing or increasing a new series of Parity Lien Debt
secured by Liens on the Collateral.  All
additional Parity Lien Debt shall be pari passu in
right of payment with the Notes, shall be guaranteed on a pari passu
basis by each Guarantor and shall be secured equally and ratably with the Notes
by Liens on the Collateral granted under the Security Documents or 

 

101

 

otherwise
granted to the Collateral Agent or other representative with respect to such
Parity Lien Debt for as long as the Notes and the Guarantees are secured by the
Collateral, subject to this Indenture. 
Additional Parity Lien Debt shall only be permitted to be incurred and
secured by the Collateral if such Indebtedness and the related Liens are
permitted to be incurred under Section 4.11 and Section 4.16 and if
such Indebtedness is properly designated by the Company, in an Officers’
Certificate delivered to the Trustee and the Collateral Agent, as “Parity Lien
Debt” in accordance with the definition of Parity Lien Debt.

 

	
  SECTION 10.7

  	
  RELATIVE
  RIGHTS

  

 

Nothing in this Indenture
will:

 

(a)                                  impair, as between the Company and the holders of the Notes,
the obligation of the Company to pay principal of, premium and interest and
Liquidated Damages, if any, on the Notes in accordance with their terms or any
other obligation of the Company or any Guarantor;

 

(b)                                 affect the relative rights of Holders of Notes as against any
other creditors of the Company or any Guarantor (other than holders of
Permitted Priority Lien Debt or Permitted Prior Liens);

 

(c)                                  restrict the right of any Holder of Notes to sue for payments
that are then due and owing (but not enforce any judgment in respect thereof
against any Collateral to the extent specifically prohibited by Article VI
of the Intercreditor Agreement);

 

(d)                                 subject to any required approval, license or permit from a
Gaming Authority, restrict or prevent any holder of Notes or the Collateral
Agent from exercising any of its rights or remedies upon a Default or Event of
Default not specifically restricted or prohibited by Article VI of the
Intercreditor Agreement; or

 

(e)                                  subject to any required approval, license or permit from a
Gaming Authority, restrict or prevent any holder of Notes or the Collateral
Agent from taking any lawful action in an Insolvency or Liquidation Proceeding
not specifically restricted or prohibited by Article VI of the
Intercreditor Agreement.

 

	
  SECTION 10.8

  	
  SENIOR
  RANKING OF PERMITTED PRIORITY LIEN DEBT

  

 

The Company and the
Guarantors may incur Permitted Priority Lien Debt in an aggregate amount not to
exceed the Permitted Priority Lien Debt Cap.

 

Notwithstanding: (1) anything
contained in the Security Documents; (2) the time of incurrence of the
Notes or Permitted Priority Lien Debt; (3) the order or method of
attachment or perfection of any Liens securing the Notes or any Permitted
Priority Lien Debt; (4) the time or order of filing or recording of
financing statements on other documents filed or recorded to perfect the Notes
or any Permitted Priority Lien Debt upon any Collateral; (5) the time of
taking possession or control over any Collateral; (6) that the Notes or
any Permitted Priority Lien Debt may not have been perfected or may be or have
become subordinated, by equitable subordination or otherwise, to any other
Lien; or (7) the rules for determining priority under any law
governing 

 

102

 

relative
priorities of Liens, all Liens securing the Note Obligations and the Guarantees
at any time granted by the Company or any Guarantor will be subject and
subordinate to all Permitted Priority Liens securing the Permitted Priority
Lien Debt Obligations.

 

The foregoing provision is
intended for the benefit of, and will be enforceable as a third party
beneficiary by, each present and future holder of Permitted Priority Lien Debt
Obligations, each present and future Permitted Priority Lien Debt
Representatives and the Permitted Priority Lien Debt Collateral Agent as holder
of Permitted Priority Lien Debt.  No
other Person will be entitled to rely on, have the benefit of or enforce those
provisions.

 

In addition, the foregoing
provision is intended solely to set forth the relative ranking, as Liens, of
the Liens securing the Notes as against the Permitted Priority Liens.  The Notes, nor the exercise or enforcement of
any right or remedy for the payment or collection thereof (other than with
respect to the Collateral or any proceeds thereof to the extent set forth in
the Intercreditor Agreement), are not intended to be, or will ever be by reason
of the foregoing provision, in any respect subordinated, deferred, postponed,
restricted or prejudiced.

 

	
  SECTION 10.9

  	
  AMENDMENTS
  OF SECURITY DOCUMENTS

  

 

Subject to the terms of the
Intercreditor Agreement, no amendment or supplement to the provisions of any
Security Document shall be effective without the approval of the Collateral
Agent acting as directed by the holders of a majority in aggregate principal
amount of all Notes then outstanding, except that:

 

(a)                                  any amendment or supplement that has the effect solely of
adding or maintaining Collateral or preserving, perfecting or establishing the
priority of the Liens thereon or the rights of the Collateral Agent therein
will become effective when executed and delivered by the Company or any other
Guarantor party thereto and the Collateral Agent;

 

(b)                                 any amendment or supplement that has the effect solely of
curing any ambiguity, defect or inconsistency or making any change that would
provide any additional rights or benefits to the holders of Note Obligations or
the Collateral Agent or that does not adversely affect the legal rights under
the Indenture or any other Security Document of any holder of Note Obligations
or the Collateral Agent, will, in each case, become effective when executed and
delivered by the Company and any Guarantor party thereto and the Collateral
Agent;

 

(c)                                  no amendment or supplement that reduces, impairs or adversely
affects the right of any Holder of Notes:

 

(1)                                  to vote its outstanding Notes as to any matter described as
subject to direction by the holders of a majority in aggregate principal amount
of all Notes then outstanding,

 

(2)                                  to share in other order of application described under Section 10.3
in the proceeds of enforcement of or realization on any Collateral, or

 

103

 

(3)                                  to require that Liens securing Notes be released only as set
forth under Section 10.5,

 

will become effective
without the consent of the requisite percentage or number of holders of the
Notes and in the case of clause (c)(3) above, the holders of Parity Lien
Debt so affected under this Indenture and the Security Documents; and

 

(d)                                 no amendment or supplement that imposes any obligation upon
the Collateral Agent or adversely affects the rights of the Collateral Agent in
its individual capacity as such will become effective without the consent of
the Collateral Agent.

 

Any amendment or supplement
to the provisions of the Security Documents that releases Collateral will be
effective only in accordance with the requirements set forth in this
Indenture.  Any amendment or supplement
that results in the Collateral Agent’s Liens upon the Collateral no longer
securing the Notes and the other Obligations under the Indenture may only be
effected in accordance with Section 10.5 above.

 

Notwithstanding the
foregoing, the Company may direct the Collateral Agent to amend, supplement or
otherwise modify any Security Document; provided
that the changes made by such amendment, supplement or other modification,
taken together with all other changes to the Security Documents, as in effect
on the Issue Date, are not materially adverse to any holder of Note Obligations
as certified by the Company in an Officers’ Certificate delivered to the
Collateral Agent.

 

	
  SECTION 10.10

  	
  FURTHER
  ASSURANCES; INSURANCE

  

 

(a)                                  The Company and each of the Guarantors will use commercially
reasonable efforts to perfect on the Issue Date the security interests in the
Collateral for the benefit of the Holders of Note Obligations, but to the
extent any such security interest cannot be perfected by such date, the Company
and the Guarantors shall have all security interests perfected, to the extent
required by the Security Documents, promptly following the Issue Date, but in
any event shall do, or cause to be done, all such acts and things as may be
necessary or proper to have all such security interests perfected no later than
30 days thereafter.  The Company and each
of the Guarantors will deliver an Officers’ Certificate to the Trustee
confirming that all of the security interests have been perfected, not later
than 30 days after the Issue Date.

 

(b)                                 The Company and each of the Guarantors will do or cause to be
done all acts and things that may be required, or that the Collateral Agent
from time to time may reasonably request, to assure and confirm that the
Collateral Agent holds, for the benefit of the Holders of Notes, duly created
and enforceable and perfected Liens upon the Collateral (including any property
or assets that are acquired or otherwise become Collateral after the Notes are
issued), in each case, as contemplated by, and with the Lien priority required
under, this Indenture and the Security Documents.

 

Upon the reasonable request
of the Collateral Agent at any time and from time to time, the Company and each
of the Guarantors (including any future Subsidiaries that become Guarantors in
accordance with Article XI below) shall promptly execute, acknowledge and

 

104

 

deliver
such security documents, instruments, certificates, notices and other
documents, and take such other actions as may be reasonably required, or that
the Collateral Agent may reasonably request, to create, perfect, protect,
assure or enforce the Liens and benefits intended to be conferred, in each case
as contemplated by this Indenture for the benefit of the Holders of Notes.

 

(c)                                  The Company and the Guarantors shall:

 

(1)                                  keep their properties adequately insured at all times by
financially sound and reputable insurers;

 

(2)                                  maintain such other insurance, to such extent and against
such risks (and with such deductibles, retentions and exclusions), including
fire and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses operating in the same or similar
locations, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by them;

 

(3)                                  maintain such other insurance as may be required by law; and

 

(4)                                  maintain such other insurance as may be required by the
Security Documents.

 

(d)                                 The Collateral Agent shall be named as an additional insured
and loss payee as its interests may appear, to the extent required by the
Security Documents.  Upon the request of
the Collateral Agent, the Company and the Guarantors shall furnish to the
Collateral Agent full information as to their property and liability insurance
carriers.

 

	
  SECTION 10.11

  	
  COMPLIANCE
  WITH TRUST INDENTURE ACT

  

 

The Company shall comply
with the provisions of TIA § 314.

 

To the extent applicable,
the issuers will cause TIA § 313(b), relating to reports, and TIA
§ 314(d), relating to the release of property or securities or relating to
the substitution therefor of any property or securities to be subjected to the
Lien of the Security Documents, to be complied with.  Any certificate or opinion required by TIA
§ 314(d) may be made by an officer of the Company except in cases
where TIA § 314(d) requires that such certificate or opinion be made
by an independent Person, which Person will be an independent engineer,
appraiser or other expert selected or reasonably satisfactory to the Trustee.

 

Notwithstanding anything to
the contrary in the preceding paragraph, the Company shall not be required to
comply with all or any portion of TIA § 314(d) if the Company
determines, in good faith, that under the terms of TIA § 314(d) and/or
any interpretation or guidance as to the meaning thereof of the Commission and
its staff, including “no action” letters or exemptive orders, all or any
portion of TIA § 314(d) is inapplicable to released Collateral.  The Company and the Guarantors may, subject
to the provisions of this Indenture, among other things, without any release or
consent by the Collateral Agent or any holder of Permitted Priority Lien Debt
Obligations, conduct ordinary course activities with respect to the Collateral.

 

105

 

	
  SECTION 10.12

  	
  COLLATERAL
  AGENT

  

 

Wilmington Trust FSB is
appointed as Collateral Agent for the benefit of the holders of the Note
Obligations and shall initially act as Collateral Agent under the Indenture and
the Security Documents.

 

Subject to the terms of the
Intercreditor Agreement, the Collateral Agent will hold (directly or through
co-trustees or agents), and will be entitled to enforce on behalf of the
holders of Note Obligations and holders of Parity Lien Debt Obligations, all
Liens on the Collateral.

 

Except as provided in the
Indenture or the Security Documents, the Collateral Agent will not be
obligated:

 

(1)                                  to act upon directions purported to be delivered to it by any
Person;

 

(2)                                  to foreclose upon or otherwise enforce any Lien; or

 

(3)                                  to take any other action whatsoever with regard to any or all
of the Security Documents, the Liens created thereby or the Collateral.

 

For the avoidance of doubt,
all of the rights, protections and immunities granted to the Trustee hereunder
shall inure to the benefit of the Collateral Agent acting hereunder and under
the Security Documents.

 

	
  SECTION 10.13

  	
  REPLACEMENT
  OF COLLATERAL AGENT

  

 

The Collateral Agent 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 Collateral Agent by so notifying the Company
and the Collateral Agent in writing and may appoint a successor Collateral
Agent with the Company’s consent.  The
Company may remove the Collateral Agent if:

 

(a)                                  the Collateral Agent is adjudged bankrupt or insolvent;

 

(b)                                 a receiver, Custodian or other public officer takes charge of
the Collateral Agent or its property; or

 

(c)                                  the Collateral Agent becomes incapable of acting.

 

If the Collateral Agent
resigns or is removed or if a vacancy exists in the office of Collateral Agent
for any reason, the Company shall promptly appoint a successor Collateral
Agent.

 

A successor Collateral Agent
shall deliver a written acceptance of its appointment to the retiring
Collateral Agent and to the Company. 
Immediately after that and provided that all sums owing to the retiring
Collateral Agent provided for in Section 7.7 have been paid, the retiring
Collateral Agent shall transfer all property held by it as Collateral Agent to
the successor Collateral Agent, subject to the lien, if any, provided in Section 7.7,
the resignation or removal of 

 

106

 

the
retiring Collateral Agent shall become effective, and the successor Collateral
Agent shall have all the rights, powers and duties of the Collateral Agent
under this Indenture. A successor Collateral Agent shall mail notice of its
succession to each Holder.

 

If a successor Collateral
Agent does not take office within 60 days after the retiring Collateral Agent
resigns or is removed, the retiring Collateral Agent (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 Collateral Agent.

 

Notwithstanding replacement
of the Collateral Agent pursuant to this Section 10.13, the Company’s and
the Guarantors’ obligations under Section 7.7 shall continue for the benefit
of the retiring Collateral Agent.

 

ARTICLE XI

 

GUARANTEE

 

	
  SECTION 11.1

  	
  GUARANTEE

  

 

(a)                                  Each of the Guarantors shall, jointly and severally,
irrevocably and unconditionally guarantee, on a senior secured 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. 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.

 

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.

 

107

 

The Company shall cause each
Subsidiary that is formed or acquired after the date hereof and each subsidiary
that becomes a Subsidiary after the date hereof, in each case, concurrently
upon becoming a 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.

 

The Company shall cause each
Subsidiary that ceases to be an Immaterial Subsidiary after the date hereof,
upon ceasing to be 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.

 

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 Guarantor, or the Company or any of the Guarantors,
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 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.

 

108

 

(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 11.2

  	
  EXECUTION
  AND DELIVERY OF GUARANTEE

  

 

Each Guarantor shall, by
virtue of such Guarantor’s execution and delivery of an indenture supplement
pursuant to Section 11.1, 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 11.1 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 11.4,
is released from such Guarantee.

 

	
  SECTION 11.3

  	
  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.

 

	
  SECTION 11.4

  	
  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) 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 

 

109

 

guarantee,
on a senior secured basis, all of such Guarantor’s obligations under such
Guarantor’s Guarantee on the terms set forth herein and 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 11.4 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
(including by merger or sale or transfer of all of the Equity Interests) 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 termination 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 which 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 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:

 

110

 

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

4800 Montgomery Lane, Suite 150

Bethesda, Maryland 20814

Facsimile No.: (301) 951-9636

Attention: Robert L. Ruben

 

If
to the Trustee:

 

Wilmington Trust FSB

591 Broadway, Suite 2-A

New York, NY 10012-3249

Facsimile No.: (212) 343-1079

Attention: Adam Berman

 

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 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).

 

111

 

	
  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

 

(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.

 

112

 

	
  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.

 

	
  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.

 

113

 

	
  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 anyone 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.

 

	
  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 Counselor 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]

 

114

 

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

 

 

	
   

  	
  MTR
  GAMING GROUP, INC.

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert F. Griffin

  
	
   

  	
   

  	
  Name:
  Robert F. Griffin

  
	
   

  	
   

  	
  Title:
  President and CEO

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  MOUNTAINEER
  PARK, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John W. Bittner, Jr.

  
	
   

  	
   

  	
  Name:
  John W. Bittner, Jr.

  
	
   

  	
   

  	
  Title:
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PRESQUE
  ISLE DOWNS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John W. Bittner, Jr.

  
	
   

  	
   

  	
  Name:
  John W. Bittner, Jr.

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SCIOTO
  DOWNS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John W. Bittner, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  John W. Bittner, Jr.

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  
				

 

115

 

	
   

  	
  WILMINGTON
  TRUST FSB, as Trustee and Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Adam Berman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  Adam Berman

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

116

 

EXHIBIT A

 

[FORM OF NOTE]

 

MTR GAMING GROUP, INC.

 

12.625% SENIOR SECURED NOTE

DUE 2014

 

	
   

  	
  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
                ,
2014.

 

Interest
Payment Dates:  January 15 and July 15,
commencing January 15, 2010.

 

Interest
Record Dates:  January 1 and July 1.

 

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]

 

A-1

 

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

	
   

  	
  MTR
  GAMING GROUP, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Dated:

 

A-2

 

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

 

This
is one of the Notes described in the Indenture hereinafter referred to.

 

	
   

  	
  WILMINGTON
  TRUST FSB

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  

 

A-3

 

(Back of Note)

 

12.625% Senior Secured Notes due 2014

 

[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.

 

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.](1)

 

[THE NOTES EVIDENCED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”)
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO
A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING
WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL INVESTOR 

 

(1)                                  To be included
only on Global Notes.

 

A-4

 

THAT IS AN ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501 OF REGULATION D UNDER THE SECURITIES
ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.](2)

 

[Insert the
Original Issue Discount Legend, pursuant to the provisions of the Indenture]

 

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 12.625% per annum from
the Issue Date until maturity and shall pay the Liquidated Damages, if any,
payable pursuant to Section 2(c) of the Registration Rights Agreement
referred to below.  The Company will pay
interest and Liquidated Damages, if any, semi-annually in arrears on July 15
and January 15 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 January 15, 2010.  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 July 1 or January 1 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 in the Borough of Manhattan, The City and
State of New York 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 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.

 

(2)                                  To be included
only on Transfer Restricted Notes.

 

A-5

 

3.                                       Paying
Agent and Registrar.  Initially,
Wilmington Trust FSB, 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 August 12, 2009 (the “Indenture”), by and among the Company, the Guarantors, the
Trustee and the Collateral Agent.  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 July 15,
2011.  The Notes will be redeemable for
cash at the option of the Company, in whole or in part, at any time on or after
July 15, 2011, at the following redemption prices (expressed as percentages
of the principal amount) if redeemed during the 12-month period commencing July 15
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

  	
   

  
	
  2011

  	
   

  	
  106.313

  	
  %

  
	
  2012

  	
   

  	
  103.156

  	
  %

  
	
  2013 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)                                 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 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.

 

A-6

 

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.

 

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 in integral multiples 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 will be made in accordance with Section 4.14
of the Indenture.

 

(b)                                 Asset
Sale.  If the Company, any Guarantor
or any Subsidiary of the Company or any Guarantor consummates any Asset Sales,
when the Excess Proceeds equal or exceed $5,000,000, the Company shall offer to
repurchase the Notes, together with any senior secured Indebtedness 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 senior secured 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”).  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 

 

A-7

 

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 senior secured 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 and the Security Documents. 
Following the consummation of each Asset Sale Offer, the Excess Proceeds
amounts shall be reset to zero.

 

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 set forth in Article IX of the
Indenture, 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 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).

 

12.                                 Defaults
and Remedies.  The
Indenture provides that each of the following constitutes an Event of Default:

 

(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 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

 

A-8

 

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 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;

 

(d)                                 certain events
of bankruptcy, insolvency or reorganization in respect of the Company or any of
the Guarantors;

 

(e)                                  a default
occurs (after giving effect to any waivers, amendments, applicable grace
periods or any extension of any maturity date) in any of the Company’s
Indebtedness or the Indebtedness of any of the Guarantors or any of the Company’s
Subsidiaries with an aggregate principal amount 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;

 

(f)                                    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;

 

(g)                                 any Guarantee
of a Guarantor ceases to be in full force and effect or becomes unenforceable
or is 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;

 

(h)                                 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 Casino,
Racetrack & Resort and Presque Isle Downs), provided
that such sale, lease or closure was otherwise permitted by, and complied with
the provisions of, the Indenture) of the Company’s 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; and

 

(i)                                     the occurrence
of any of the following:

 

(1)                                  (i) any Security Document is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in
full force and effect or is declared null and void, other than in accordance
with the terms of the relevant Security Document, or (ii) it becomes
unlawful for the Company or any Guarantor to perform any of the Note
Obligations or Collateral Agent shall not have or shall cease to have a valid
and perfected Lien in any material portion of the Collateral purported to be
covered by the Security Documents with the priority required by the relevant
Security Document (including as a result of assets not constituting Collateral
by operation of clause (1) or clause (2) of the definition
of Excluded Assets), in each case for any reason other than the 

 

A-9

 

failure of Collateral Agent or any other holder of Note
Obligations to take any action within its control, or (iii) the Company or
any Guarantor shall contest the validity or enforceability of the Indenture or
any Security Document in writing or repudiate or rescind (or purport to
repudiate or rescind) or deny in writing that it has any further liability
under any provision of any Security Document to which the Company or it is a
party or shall contest the validity or perfection of any Lien in any Collateral
purported to be covered by the Security Documents; or

 

(2)                                  except as permitted by the Indenture, any Permitted Priority
Lien purported to be granted under any Security Document on Collateral,
individually or in the aggregate, having a fair market value in excess of
$5,000,000 ceases to be enforceable and perfected first-priority Lien, subject
only to Permitted Prior Liens; or

 

(3)                                  the Company or any Guarantor, or any Person acting on behalf
of any of them, denies or disaffirms, in writing, any obligation of the Company
or any Guarantor set forth in or arising under any Security Document.

 

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.(3)  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”).

 

(3)                                  To be included only on Transfer Restricted Notes.

 

A-10

 

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 shall, jointly and
severally, irrevocably and unconditionally guarantee, on a senior secured 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. 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.  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, any
of the Security Documents and/or the Registration Rights Agreement.  Requests may be made to:

 

MTR Gaming Group, Inc.

State Route 2, South

 

A-11

 

P.O. Box 358

Chester, West Virginia 26034

Attention:  Chief Financial
Officer

Facsimile: (304) 387-2167

 

A-12

 

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-13

 

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)

  

 

 

(2)           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-14

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

 

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-15

 

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”), Wilmington Trust FSB, as
trustee (the “Trustee”), and any
additional Guarantors, relating to the Company’s 12.625% Senior Secured Notes
due 2014 (the “Notes”)), jointly
and severally, irrevocably and unconditionally guarantee, in accordance with Article XI
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.  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 XI 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 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.

 

A-16

 

THE TERMS OF ARTICLE XI 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-17

 

IN
WITNESS WHEREOF, each of the Guarantors has caused this instrument to be duly
executed.

 

Dated:

 

	
   

  	
  MOUNTAINEER
  PARK, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  PRESQUE
  ISLE DOWNS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  SCIOTO
  DOWNS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-18

 

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

 

Wilmington
Trust FSB

591
Broadway, Suite 2-A

New
York, NY 10012-3249

Facsimile
No.: (212) 343-1079

Attention: Adam Berman

 

Re:                               12.625% Senior Secured Notes due 2014

 

Ladies and Gentlemen:

 

Reference
is hereby made to the Indenture, dated as of August 12, 2009 (the “Indenture”),
by and among MTR Gaming Group, Inc., as issuer (the “Company”),
the Guarantors and Wilmington Trust FSB, 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. 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 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 

 

B-2

 

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 the restrictions
on transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

 

B-3

 

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, or

 

(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

 

Wilmington
Trust FSB

591
Broadway, Suite 2-A

New
York, NY 10012-3249

Facsimile
No.: (212) 343-1079

Attention: Adam Berman

 

Re:                               12.625% Senior
Secured Notes due 2014

 

Ladies and Gentlemen:

 

Reference
is hereby made to the Indenture, dated as of August 12, 2009 (the “Indenture”),
by and among MTR Gaming Group, as issuer (the “Company”), the
Guarantors party thereto and Wilmington Trust FSB, 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 

 

C-2

 

will continue to be subject
to the restrictions on transfer 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 50 I 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

 

Wilmington
Trust FSB

591
Broadway, Suite 2-A

New
York, NY 10012-3249

Facsimile
No.: (212) 343-1079

Attention: Adam Berman

 

Re:                               12.625% Senior
Secured Notes due 2014

 

Ladies and Gentlemen:

 

Reference is hereby made to
the Indenture, dated as of August 12, 2009 (the “Indenture”), by
and among MTR Gaming Group, as issuer (the “Company”), the
Guarantors, and Wilmington Trust FSB, as 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 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”) or, 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 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.

 

D-1

 

3.                                       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”) or any exemption
from registration available under the Securities Act.

 

4.                                       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 either of the Company or any affiliate of the
Company was the owner of such Notes (or any predecessor thereof) (the “Resale
Restriction Termination Date”) only (a) to the Company, (b) pursuant
to a registration statement which has been declared effective under the
Securities Act, (c) for so long as the 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) 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 (e) 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 any 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 he made pursuant to clause (d) 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) or (e) above to
require the delivery of an opinion of counsel, certifications and/or other
information satisfactory to each of them. 
We further understand that any subsequent transfer by us of the Notes or
beneficial interests in therein acquired by us must be effected through one of
the Initial Purchasers.

 

5.                                       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:

 

D-2

 

THE NOTES EVIDENCED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”)
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO
A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION
COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL INVESTOR THAT IS AN
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501 OF REGULATION D UNDER THE
SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

 

6.                                       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-3

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