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

 

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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

 

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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

 

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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

 

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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.

 

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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.

 

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“ 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

 

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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.

 

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“ 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;

 

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(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

 

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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;

 

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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

 

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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.

 

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“ 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.

 

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“ 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.

 

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“ 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;

 

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(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,

 

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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.

 

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“ 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;

 

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(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);

 

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(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),

 

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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;

 

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(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;

 

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(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

 

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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

 

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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”;

 

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(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

 

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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;

 

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(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;

 

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(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.

 

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“ 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

 

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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

 

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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.

 

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“ 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

 

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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.

 

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“ 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

 

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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.

 

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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.

 

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(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

 

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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

 

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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

 

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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

 

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(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:

 

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(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

 

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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

 

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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

 

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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).

 

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(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

 

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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.

 

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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

 

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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.”

 

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(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

 

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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

 

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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.

 

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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

 

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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

 

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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 redempt