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                                                                   Exhibit 10.35

January 23, 2003

STRICTLY PERSONAL AND CONFIDENTIAL
HAND DELIVERED, ORIGINAL TO FILE

Dear Rick:

I am pleased to confirm your new title and position as Senior Vice President
Sales and Marketing, at ALDERWOODS GROUP, INC. This letter is intended to
replace any other previous employment letters and/or contracts, between you and
ALDERWOODS GROUP INC.; and details your new salary increase, effective on the
February 4, 2003 payroll.

REPORTS TO:                         PAUL HOUSTON, PRESIDENT AND CEO
LOCATION:                           2225 SHEPPARD AVENUE EAST, SUITE 1100
                                    TORONTO, ONTARIO M2J 5C2

Please find listed below an outline of your employment terms;

     1)   BASE SALARY; your base salary is $190,000 CDN (paid bi-weekly)

     2)   ANNUAL INCENTIVE; you are entitled to participate at the annual
          executive level of 40% target and 80% maximum. Program details
          supplied to you.

     3)   STOCK OPTIONS; you will be entitled to participate in the stock option
          program. The details of this grant will be covered by a separate stock
          option agreement as determined and administrated by the Board of
          Directors.

     4)   BENEFITS PROGRAMS; you will be covered by the company's benefits
          programs, covering medical and dental plans.

     5)   ANNUAL MEDICAL; you are entitled to take a company paid annual
          medical.

     6)   RRSP PENSION; you will be eligible company's RRSP program in which you
          can make deposits and the company will match the value.

     7)   CAR ALLOWANCE; you will be entitled to $600.00 CDN/ month (paid
          bi-weekly ).

     8)   VACATION ENTITLEMENT; you are eligible for four (4) weeks vacation per
          year.

     9)   TERMINATION OF EMPLOYMENT; if you should be terminated for any reason
          other than just cause, you will be entitled to receive twelve (12)
          months severance.

     10)  CHANGE OF CONTROL; if there is a change in control whereby 51% or more
          of the company's shares change hands and as a result your employment
          is terminated, you will receive 24 months severance.

Sincerely,                                              Acceptance:

-------------------------------                         ------------------------
Paul Houston, President and CEO                         Rick ScullyQuickLinks
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Exhibit 4.16    
  

233
South Wacker Drive, Suite 2800

Chicago, Illinois 60606

Tel 312-234-2732

Fax 312-234-3603 

Bank of America N. A.

TO:
Mandalay Resort Group

2880 LasVegas Blvd-South

Las Vegas, NV 89109

ATTN: Amy Preiss

TEL: 702 632 6820

FAX: 702 632 6822 

FROM:
Bank of America, N.A.

233 South Wacker Drive—Suite 2800

Chicago, Illinois 60606

Robert OHara / Paul Enright

Date: 13FEB03 

Our
Reference No. 3033348

Internal Tracking Nos. 7374064 7374064 

        The
purpose of this letter agreement is to confirm the terms and conditions of the Transaction entered into between Mandalay Resort Group and Bank of America, N.A. (each a "party" and
together "the parties") on the Trade Date specified below (the "Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the ISDA Master Agreement specified in
paragraph 1 below (the "Agreement"). 

        The
definitions and provisions contained in the 2000 ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc., (the "Definitions") are
incorporated into this
Confirmation. In the event of any inconsistency between the Definitions and this Confirmation, this Confirmation will govern. 

        1.    This
Confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement dated as of 24OCT86, as amended and supplemented from time to time (the
"Agreement"), between the parties. All provisions contained in the Agreement govern this Confirmation except as expressly modified below. In this Confirmation "Party A" means Bank of America, N.A. and
"Party B" means Mandalay Resort Group. 

        2.    The
terms of the particular Transaction to which this Confirmation relates are as follows: 

Notional
Amount: USD 275,000,000.00 

Trade
Date: 12FEB03 

Effective
Date: 14FEB03 

Termination
Date: 01DEC05, subject to adjustment in accordance with the Modified Following Business Day Convention and "Other Provisions." 

 Fixed Amounts:  

Fixed
Rate Payer: Party A 

Fixed
Rate Payer Payment 

Dates:
The 1st of each June and December, commencing 01JUN03 and ending 01DEC05, subject to adjustment in accordance with the Modified Following Business Day Convention and "Other Provisions." No
Adjustment Of Period End Dates. 

Fixed
Rate: 9.25000% 

Fixed
Rate Day Count 

Fraction:
30/360 

 Floating Amounts:  

Floating
Rate Payer: Party B 

Floating
Rate Payer 

Payment
Dates: The 1st of each June and December, commencing 01JUN03 and ending 01DEC05, subject to adjustment in accordance with the Modified Following Business Day Convention and "Other Provisions." 

Floating
Rate for initial 

Calculation
Period: TO BE SET 

Floating
Rate Option: USD-LIBOR-BBA 

Averaging:
Inapplicable 

Designated
Maturity: 6 Month, except for the Initial Calculation Period (from 14FEB03-02JUN03), which shall be determined by the interpolated three and four month rate of
USD-LIBOR-BBA plus a spread of 6.35000% 

Spread:
Plus 6.35000% 

Floating
Rate Day Count 

Fraction:
Actual/360 

Reset
Dates: The last day of each Calculation Period 

Compounding:
Inapplicable 

Business
Days: NewYork,London 

Calculation
Agent: Party A 

 Other Provisions:  

        (a)  On
every annual Fixed Rate Payer Payment Date from and including 01DEC03, to and including 01DEC04, provided that no Event of Default with respect to Party A or event
that with the giving of notice or the lapse of time, or both, would constitute such an Event of Default shall have occurred and be continuing, and provided that no Early Termination Date has been
designated, Party A may, on the terms and conditions set forth herein, terminate this Transaction (without, however, terminating any other Transactions under the ISDA Agreement, unless Party A shall
otherwise be entitled to terminate such other Transactions pursuant to Section 6 of the ISDA Agreement). Party A shall notify Party B telephonically (between the hours of 9:00 a.m. and
11:00 a.m. New York City time) of its election to terminate this Transaction (the "Optional Termination Election Date") not less than 2 Business Days prior to the corresponding Fixed Rate Payer
Payment Date and such notice shall be irrevocable. The
Optional Termination Election Date shall be confirmed by a notice in writing by Party A one Business Day after making such election. Failure by Party A to send such written notice shall not invalidate
its oral election. 

        (b)  The
Cash Settlement Amount payable by Party A on the Optional Termination Date shall be calculated as the sum of the following: 

          (i)  the
cancellation premium, in accordance with the Optional Termination Date schedule as set forth below: 

Optional
Termination Date Amount

01DEC03 USD 6,360,750.00

01DEC04 0.00 

        (ii)  the
net of the accrued but unpaid amount between the Fixed Rate Payer and the Floating Rate Payer from and including the last Payment Date to but excluding the Optional
Termination Date. 

        (c)  The
designation of an Optional Termination Date by Party A shall not affect or suspend any obligations of the parties hereto arising under this Transaction on or prior
to such Optional Termination Election Date or its corresponding Fixed Rate Payer Payment Date. Upon the payment of the amount required by the preceding subsection (b), the obligation of each party to
make any further payments contemplated by Section 2 of the ISDA Agreement with respect to this Transaction will terminate. 

        3.    Recording of Conversations: Each party to this Transaction acknowledges and agrees to the tape recording of conversations
between the parties to this Transaction whether by one or other or both of the parties or their agents, and that any such tape recordings may be submitted in evidence in any Proceedings relating to
the Agreement and/or this Transaction. 

        4.    Account Details:

Account
for payments to Party A:

    USD

    We will debit your account

    NAME: Bank of America

    ABA #: CA

    ACCT: 1257501024

    Mandalay Resort Group 

Account
for payments to Party B:

    USD

    NAME: Bank of America

    ABA #: CA

    NAME: Mandalay Resort Group

    ACCT: 1257501024 

        5.    Offices:

The
Office of Party A for this

Transaction is: Charlotte, NC

Please
send reset notices to fax no. (312-234-3603) 

The
Office of Party B for this Transaction is: Nevada, USA 

        Credit Support Document:    As per Agreement (and Credit Support Annex if applicable). 

        Please
confirm that the foregoing correctly sets forth the terms and conditions of our agreement by returning via telecopier an executed copy of this Confirmation to the attention of
Global Derivative Operations at (fax no.(312) 234-3603). 

Yours
Sincerely, 

	Bank of America, N.A.	 	 
	

By:

Name:

Title:	
 	

/S/ DAVE WALKER
 Dave Walker
 Senior Vice President	
 	

 
	Authorized Signatory	 	 
	Accepted and confirmed as of the date first written:	 	 
	Mandalay Resort Group	 	 
	

By:

Name:

Title:	
 	

/S/ LES MARTIN
 Les Martin
 Vice President and Chief Accounting Officer	
 	

 

Our
Reference # 3033348 7374064 

QuickLinks

Exhibit 4.16QuickLinks
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Exhibit 4.17    
  

Scotiabank
  THE BANK OF NOVA SCOTIA
  International Banking Division

Derivative Products

44 King St. West, 14th Floor, Toronto, Ontario, Canada M5H 1H1

(416) 866-5415 

February 12,
2003 

MANDALAY RESORT GROUP
  3950 Las Vegas Boulevard South

Las Vegas, Nevada

89119 

Attention: Les Martin

Dear
Sirs, 

	Re:	 	The Bank of Nova Scotia ("Party A")

Mandalay Resort Group ("Party B")

Our Interest Rate Swap Reference No. S36408KS

        This transaction was affected through Scotia Capital (USA) Inc., a U.S. broker-dealer subsidiary of the Bank of Nova Scotia (BNS), who acted as agent in
the transaction.

        The
purpose of this letter is to confirm the terms and conditions of the transaction entered into between us on the Trade Date specified below (the "Transaction"). This letter agreement
constitutes a "Confirmation" as referred to in the ISDA Master Agreement specified below. 

        The
definitions and provisions contained in the 2000 ISDA Definitions (the "ISDA Definitions") as published by the International Swaps and Derivatives Association, Inc. ("ISDA")
are incorporated into this Confirmation. 

        1.    Until
such time as Party A and Party B have executed and delivered to the other a master netting agreement governing this Transaction, the Transaction evidenced hereby
shall be governed and construed in accordance with an 1992 ISDA Master Agreement (Multicurrency—Cross Border), as published by ISDA (the "ISDA Master Agreement") (and for greater
certainty, each party hereto shall have all of the rights, and be subject to all of the obligations, set out therein) in respect of which the following elections have been made: (a) the
Governing Law shall be the laws of the the State of New York; (b) the Termination Currency shall be USD; (c) the payment method shall be Second Method and the payment measure shall be
Loss; (d) "Cross Default" shall apply to Party A and Party B and all references therein to "Threshold Amount" shall mean, in respect of Party A, 5% of shareholders' equity as set out in Party
A's most recently published audited annual financial statement, and shall mean, in respect of Party B, USD 0.00, or its equivalent in any other currency; (e) "Credit Event Upon Merger" shall
apply to Party A and Party B. (f) Credit Support Document in relation to Party B shall mean each document that by its terms secures, guaranteees or otherwise supports Party B's obligations
hereunder (whether or not this Confirmation or the Transaction evidenced hereby is specifically referenced or described therein), as such document(s) may be amended, revised, restated, supplemented or
replaced from time to time; and (g) Credit Support Provider in relation to Party B shall mean any party to a Credit Support Document that provides or is obligated to provide security, a
guarantee or other credit support for Party B's obligations hereunder. 

        In
the event of any inconsistency among or between the ISDA Master Agreement, the ISDA Definitions and this Confirmation, this Confirmation will govern. This Confirmation, as
supplemented by the ISDA Master Agreement referred to above, constitutes a complete and binding agreement between us as to the terms of the Transaction evidenced hereby. Upon completion of a master
netting 

 

agreement as aforesaid, this Transaction shall be governed and construed in accordance with such master netting agreement and all references herein to the "ISDA Master Agreement" shall be deemed
references to such master netting agreement. To the extent the elections set out in this Section 1 conflict with the provisions of such master netting agreement, the provisions of such master
netting agreement shall prevail. 

        2.    The
following provisions shall also apply: 

        (a)  Any
amount (the "Early Termination Amount") payable to one party ("the Payee") by the other party ("the Payer") under Section 6(e) of the ISDA Master Agreement,
in circumstances where there is a Defaulting Party or one Affected Party in the case where a Termination Event under Section 5(b)(iv) of the ISDA Master Agreement [or an
Additional Termination Event under this Confirmation] has occurred, will, at the option of the party ("X") other than the Defaulting Party or the Affected Party ("Y") (and without prior
notice to Y), be reduced by its set-off against any amount(s) (the "Other Agreement Amount") payable (whether at such time or in the future or upon the occurrence of a contingency) by the
Payee to the Payer (irrespective of the currency, place of payment or booking office of the obligation) under any other agreement(s) between the Payee and the Payer or instrument(s) or undertaking(s)
issued or executed by one party to, or in favour of, the other party (and the Other Agreement Amount will be discharged promptly and in all respects to the extent it is so set-off). For
this purpose, either the Early Termination Amount or the Other Agreement Amount (or the relevant portion of such amounts) may be converted by X into the currency in which the other is denominated at
the rate of exchange at which such party is able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency. If an obligation is unascertained, X may in good
faith estimate that obligation and set off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. Nothing contained in this
Section 2(a) shall be effective to create a charge or other security interest, and shall be without prejudice and in addition to any right of set-off, combination of accounts, lien
or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise). 

        (b)  Notwithstanding
the provisions of 6(e) of the ISDA Master Agreement, if X is the Payee, Y will pay the Early Termination Amount to X, and if X is the Payer, X shall have
no obligation to pay the Early Termination Amount to Y unless and until the conditions set forth in (1) and (2) below have been satisfied at which time there shall arise an obligation of
X to pay to Y an amount equal to the Early Termination Amount less any and all amounts which Y may be obligated to pay under Section 11 of the ISDA Master Agreement and any and all Other
Agreement Amounts set-off under Section 2(a) of this Confirmation: 

	(1)
	X
shall have received confirmation satisfactory to it in its sole discretion (which may include an opinion of its counsel) that (A) no further payments or deliveries under
Section 2(a)(i) or 2(e) of the ISDA Master Agreement in respect of Terminated Transactions will be required to be made in accordance with Section 6(c)(ii) of the ISDA
Master Agreement and (B) each Specified Transaction shall have terminated pursuant to its specified termination date or through the exercise by a party of a right to terminate and all
obligations owing under each such Specified Transaction shall have been fully and finally performed; and

	(2)
	all
obligations (whether at such time or in the future or upon the occurrence of a contingency) of Y to make any payment or delivery to X shall have been fully and finally performed. 

        (c)  Neither
this Confirmation nor any interest or obligation in or under this Confirmation may be transferred (whether by way of security or otherwise) by either party
without the prior written consent of the other party and any purported transfer in violation hereof shall be void. 

2

 

        3.    The
terms of the particular Transaction to which this Confirmation relates are as follows:- 

	Notional Amount:	 	USD 200,000,000.00
	Trade Date	 	Feb 12, 2003
	Effective Date:	 	Feb 14, 2003
	Termination Date	 	Feb 1, 2006; subject to adjustment in accordance with the Modified Following Business Day Convention

Fixed Amounts:  

	Fixed Rate Payer:	 	The Bank of Nova Scotia
	Fixed Rate Payer Payment Dates:	 	Adjusted in accordance with the Modified Following Business Day Convention.
	 	 	Aug 1, 2003 Feb 2, 2004 Aug 2, 2004 Feb 1, 2005 Aug 1, 2005 Feb 1, 2006
	Fixed Rate Payer Period End Dates:	 	The 1st of each August and February; commencing August 1, 2003; with no adjustment to Period End Dates.
	USD Fixed Rate	 	 
	Payment Amounts:	 	USD 5,984,166.67

(For the period February 14, 2003 to August 1, 2003)
	 	 	USD 6,450,000.00 (For each subsequent Payment Date)
	Fixed Rates:	 	6.45% Paid Semi-Annually
	Fixed Rate Day Count Fraction:	 	30/360 (Unadjusted)
	Business Days for Payments	 	London, New York

3

 

Floating Amounts:  

	Floating Rate Payer:	 	MANDALAY RESORT GROUP
	Floating Rate Payer Payment Dates:	 	Adjusted in accordance with the Modified Following Business Day Convention.
	 	 	Aug 1, 2003 Feb 2, 2004 Aug 2, 2004 Feb 1, 2005 Aug 1, 2005 Feb 1, 2006
	Floating Rate for initial Calculation Period:	 	To be determined on Jul 30 2003 (For the period Feb 14, 2003 to Aug 1, 2003)
	Floating Rate Option:	 	USD-LIBOR-BBA (Set in arrears)
	Floating Rate Day Count Fraction:	 	Actual/360
	Designated Maturity:	 	Interpolation of a 5-month and 6-month USD-LIBOR-BBA (For the period February 14, 2003 to August 1, 2003)
	 	 	USD-LIBOR-BBA (For the period August 1, 2003 to Termination Date)
	Spread:	 	Plus 357 Basis Points
	Reset Dates:	 	The first date of the relevant Calculation period.
	Compounding:	 	Inapplicable
	Business Days for Payments:	 	London, New York
	Business Days for RateResets:	 	London
	Calculation Agent:	 	The Bank of Nova Scotia

4.    Relationship Between Parties:  

        Each party will be deemed to represent to the other on the date of this Confirmation that (absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for this Swap Transaction): 

        (a)  Non-Reliance.    It is acting for its own account, and it has made its own independent decisions to
enter into this Swap Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advise from such advisors as it has deemed necessary. It is not
relying on any communication (written or oral) of the other party as investment advise or as a recommendation to enter into this Swap Transaction; it being understood that information and explanations
related to the terms and conditions of this Swap Transaction shall not be considered investment advise or a recommendation to enter into this Swap Transaction. It has not received from the other party
any assurance or guarantee as to the expected results of this Swap Transaction. 

        (b)  Assessment and Understanding.    It is capable of assessing the merits of and understanding (on its own behalf
or through independent professional advise), and understands and accepts, the terms, conditions and risks of this Swap Transaction. It is also capable of assuming and assumes, the risk of this Swap
Transaction. 

        (c)  Status of Parties.    The other party is not acting as a fiduciary for or as an advisor to it in respect of
this Swap Transaction. 

        (d)  Commitment to Unwind.    Neither party has committed to unwind this Swap Transaction.

5.    Offices  

        (a)  The
Office of The Bank of Nova Scotia is Toronto, Ontario. 

        (b)  The
Office of Mandalay is Las Vegas, Nevada. 

4

 

        6.    Account
Details 

        Payments
to THE BANK OF NOVA SCOTIA:

	Accounts for payments in USD:	 	The Bank of Nova Scotia

New York Agency

1 Liberty Plaza, 165 Broadway

26th Floor, N.Y., New York

ABA 0260-02532 A/C 6027-36

Attn: Derivative Products

        Payments
to MANDALAY RESORT GROUP:

Accounts
for payments in USD: (Please Provide on Return Fax to ensure Prompt Payment Procedures)

        7.    The
parties hereto agree that this Confirmation, whether received in original or facsimile form, may be executed in counterparts, which execution may be effected by means
of facsimile transmission, and which when taken together shall constitute a single and original agreement between the parties and a binding supplement to the Agreement. Where execution is effected by
means of facsimile transmission, the parties agree that the sender's signature as printed by the recipient's facsimile machine shall be deemed to be the sender's original signature. 

        Please
confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us. 

	 	 	Yours sincerely,
	

 	
 	
THE BANK OF NOVA SCOTIA
	

 	
 	

By:	
 	

/s/  KIRAN SHARMA      

	 	 	Name:	 	Kiran Sharma
	 	 	Title:	 	Confirmation Officer
	

 	
 	

By:	
 	

/s/  GITA SINGH      

	 	 	Name:	 	Gita Singh
	 	 	Title:	 	Assistant Manager

	Confirmed as of the date first written:	 	 
	
MANDALAY RESORT GROUP	
 	

 
	

By:	
 	

/s/  LES MARTIN      
	
 	

 
	Name:	 	Les Martin	 	 
	Title:	 	Vice President and Chief Accounting Officer	 	 
	

By:	
 	

 	
 	

 
	Name:	 	 	 	 
	Title:	 	 	 	 

5

QuickLinks

Exhibit 4.17

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