S-4

As filed with the Securities and Exchange Commission on May 27, 2003

Registration No. 333-          

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

The Old Evangeline Downs, L.L.C.	The Old Evangeline Downs Capital Corp.
(Exact name of registrant as specified in their charter)	(Exact name of registrant as specified in their charter)

Louisiana	7948	Delaware
(State or other jurisdiction of incorporation or organization)	(Primary standard industrial classification code number)	(State or other jurisdiction of incorporation or organization)

72-1280511	25-1902805
(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)

P.O. Box 90270

Lafayette, Louisiana 70509-0270

(337) 896-7223

(Address, including zip code, and telephone number, including area code, of registrants’ principal executive offices)

M. Brent Stevens

Chief Executive Officer

P.O. Box 90270

Lafayette, Louisiana 70509-0270

(337) 896-7223

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With a copy to:

Nazim Zilkha, Esq.

Mayer, Brown, Rowe & Maw

1675 Broadway

New York, New York

(212) 506-2620

Approximate date of commencement of proposed sale to the public:    As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ¨

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, please check the following box.  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per unit(1)	Proposed maximum aggregate offering price(1)	Amount of registration fee
13% Senior Secured Notes due 2010 with Contingent Interest	$123,200,000	100%(1)	$123,200,000	$9,966.88

(1) Estimated solely for the purpose of computing the registration fee.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting any offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, Dated May 27, 2002

PROSPECTUS

THE OLD EVANGELINE DOWNS, L.L.C.

THE OLD EVANGELINE DOWNS CAPITAL CORP.

Offer to Exchange

$123,200,000

13% Senior Secured Notes Due 2010

With Contingent Interest

• We are offering to exchange new registered 13% Senior Secured Notes due 2010 with Contingent Interest for all of our outstanding unregistered 13% Senior Notes due 2010 with Contingent Interest.

• The exchange offer expires at 5:00 p.m., New York City time, on                 , 2003, unless extended.

• The exchange offer is subject only to the conditions that the exchange offer will not violate any applicable law or any interpretation of applicable law by the staff of the Securities and Exchange Commission.

• All outstanding notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer will be exchanged.

• Tenders of outstanding notes may be withdrawn at any time before 5:00 p.m., New York City time, on the expiration date of the exchange offer.

• We will not receive any proceeds from the exchange offer.

• The terms of the new notes to be issued are substantially identical to your notes, except that the new notes will not have securities laws transfer restrictions, and you will not have registration rights.

• Any restricted subsidiary we form or acquire will be required to fully and unconditionally guarantee the notes on a senior secured basis, subject to the prior lien in favor of the lenders under our proposed $15.0 million senior secured credit facility with respect to the collateral securing our obligations thereunder.

• There is no established trading market for the new notes, and we do not intend to apply for listing of the new notes on any securities exchange.

For a discussion of factors that you should consider before you participate in the exchange offer, see “Risk Factors” beginning on page 13 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is                     , 2003

TABLE OF CONTENTS

PROSPECTUS SUMMARY	1
RISK FACTORS	13
FORWARD-LOOKING STATEMENTS	27
USE OF PROCEEDS	29
CAPITALIZATION	29
SELECTED FINANCIAL DATA	30
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	32
BUSINESS	42
LICENSING AND REGULATORY MATTERS	46
MANAGEMENT	51
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	53
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	54
DESCRIPTION OF PROPOSED SENIOR SECURED CREDIT FACILITY AND INTERCREDITOR AGREEMENT	56
OTHER MATERIAL AGREEMENTS	57
THE EXCHANGE OFFER	62
DESCRIPTION OF NOTES	72
BOOK-ENTRY; DELIVERY AND FORM	124
SPECIFIC FEDERAL INCOME TAX CONSIDERATIONS	126
PLAN OF DISTRIBUTION	132
LEGAL MATTERS	133
EXPERTS	133
WHERE YOU CAN FIND MORE INFORMATION	133
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1

Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act of 1933, as amended, which we refer to as the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where the old notes were acquired by the broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of up to 180 days after the expiration of the exchange offer, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

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You should rely only on the information contained in this prospectus. We have not authorized any other person to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it.

PROSPECTUS SUMMARY

This summary highlights selected information from this prospectus and may not contain all of the information that is important to you. You should carefully read this entire prospectus, including any information or documents to which we refer you, before deciding to purchase any of the notes. You should read the following summary together with the more detailed information and consolidated financial statements and the notes to those statements included elsewhere in this prospectus. Unless otherwise indicated, the terms “our,” “we” and “us” refer collectively to The Old Evangeline Downs, L.L.C., d/b/a Evangeline Downs, and its wholly-owned subsidiary The Old Evangeline Downs Capital Corp., which was created for the sole purpose of facilitating the issuance of the notes.

Our Business

We own and operate the Evangeline Downs pari-mutuel horse racetrack near Lafayette, Louisiana. This horse racetrack has been in operation since 1966 and is one of only four pari-mutuel horse racetracks operating in Louisiana. We are currently developing a casino and pari-mutuel horse racetrack facility, or “racino,” in nearby Opelousas, Louisiana, which facility will replace our existing horse racetrack near Lafayette and where we will be permitted to operate slot machines and conduct live horse racing. Our approximately 532-acre racino site is located approximately 20 miles north of Lafayette, our primary market, at the intersection of Interstate 49 and U.S. Highway 190. There are no other casinos located within approximately 50 miles of the racino site or within approximately 50 miles of Lafayette.

The racino will be located in St. Landry Parish, which is adjacent to Lafayette Parish where our existing horse racetrack is located. On December 19, 2002, we received our racing license to operate in St. Landry Parish, and on January 21, 2003, we received our gaming license to operate slot machines at the racino, subject to customary conditions. We are relocating our existing operations to St. Landry Parish because St. Landry Parish will permit us to operate both slot machines and pari-mutuel wagering at the new racino while Lafayette Parish permits us to operate only pari-mutuel wagering at our existing horse racetrack.

Racino Development

We have purchased all the necessary land to develop our racino, and the total remaining cost to design, develop, construct, equip and open the racino is expected to be approximately $88.5 million. The construction and development of the racino project is expected to be completed in two phases. During the first phase, we will construct the casino and related casino amenities, which we expect to open in March 2004, at a total remaining cost of approximately $68.6 million. During the second phase, we will construct the horse racetrack and related facilities for a total remaining cost of approximately $19.9 million. We expect to be prepared to begin scheduling live racing meets in December 2004. We will continue to operate our existing horse racetrack until live racing meets are scheduled at the racino, at which time we will cease operations at our existing horse racetrack.

On February 25, 2003, we entered into a bonded guaranteed maximum price construction contract for $52.0 million with W.G. Yates & Sons Construction Company for the construction of the racino facility. The approximate $36.5 million remaining project budget includes the costs of equipment, additional land purchases, off-site improvements, cage cash, pre-opening expenses and development costs. W.G. Yates is an experienced

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casino builder, having built casinos throughout the southern United States for Boyd Gaming Corporation, Harrah’s Entertainment, and Mirage Resorts, among others. Kittrell Garlock and Associates, AIA, Ltd., d/b/a KGA Architecture (“KGA Architects”) is the racino architect, having most recently designed the Palms Casino in Las Vegas, Nevada, among other gaming projects. The design of the horse racetrack and related facilities has been sub-contracted by KGA Architects to Foehlich, Kow & Gong Architects, who have been involved with the design of more than 50 horse racing facilities. KGA Architects’ project management subsidiary will administer the bonded guaranteed maximum price construction contract on our behalf. We have also engaged Abacus Project Management, Inc. to act as the independent construction consultant, on behalf of the holders of notes, who certify from time to time the proper use of the portion of the net proceeds of this offering to be used to develop the racino pursuant to the terms of the Cash Collateral and Disbursement Agreement. Abacus has extensive experience representing lenders in such capacity, including lenders to several resort developments and a pari-mutuel horse racetrack in Arizona.

Competitive Strengths

Strong Local Market Demographics.    There are approximately 300,000 adults living within 35 miles of the racino site, consisting primarily of the Lafayette area, our primary market. In addition, there are approximately 1.5 million adults living within 100 miles of the racino site. This area includes secondary markets from which we believe we will attract patrons due to our ease of access from a major interstate or highway as compared to our competitors in those areas, as well as due to our offering of pari-mutuel live horse racing. Approximately 32,000 vehicles per day pass through the intersection of Interstate 49 and U.S. Highway 190 where the racino site is located. In addition, the racino site is located adjacent to a recently opened shopping center, which currently includes a Wal-Mart Supercenter and which is planned to include additional retail facilities, affording us an opportunity to attract additional patrons.

Large and Growing Regional Gaming Market.    Louisiana generated approximately $2.0 billion of casino gaming revenue in 2002, excluding Native American casinos. Such amount grew at a compound annual rate of 8.7% since 1996 and 6.0% since 2001. We believe that our centralized location in Louisiana will afford us the opportunity to participate in this large and growing market.

Limited Competition.    We believe, because of our close proximity to Lafayette and ease of access via major interstates and highways, that we will be the primary source of gaming entertainment in our primary market of Lafayette. The nearest competitor to Lafayette is a Native American casino approximately 50 miles to the south of Lafayette, including several miles off the highway. Beyond that, patrons in Lafayette would need to drive approximately 50 miles to reach riverboat casinos in Baton Rouge or approximately 70 miles to reach riverboat casinos in Lake Charles and Native American casinos in Marksville and Kinder. Because our competition in Marksville is situated more than 20 miles off the highway, we believe that patrons of the Marksville casino may find the ease of highway access to our racino more convenient.

Legislatively Protected Market.    Louisiana law currently places limitations on the number and types of gaming facilities that may operate in the State. Currently, there are only four horse racetracks in Louisiana with licenses to conduct live racing. Under the Louisiana Pari-Mutuel Live Racing Facility Economic Redevelopment and Gaming Control Act (the “Pari-Mutuel Act”), only three of the four horse racetracks (including our racino) are permitted to install slot machines at their facilities. The horse racetrack nearest to the racino site that is allowed to have gaming operations is located in Vinton, Louisiana, near Lake Charles, which is over 100 miles away. In addition, current Louisiana law permits only 15 riverboat gaming licenses to be awarded. The fifteenth and last license was recently awarded to operate a riverboat casino to be constructed in Lake Charles. Also, under current Louisiana law, the only non-Native American land-based casino permitted to operate in the State is the land-based casino currently operating in New Orleans, over 100 miles from Lafayette. Native American gaming

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facilities operate pursuant to compacts with the State of Louisiana. There currently are only four federally-recognized Native American tribes in Louisiana and only three Native American casinos currently operating in Louisiana, the closest being in Marksville and Kinder which are approximately 50 miles from the racino site. The fourth tribe, which does not have a compact with the State of Louisiana as of the date of this prospectus, has proposed to develop a casino in DeSoto Parish, over 150 miles from the racino site.

Diverse Entertainment Offering.    We plan to offer our patrons an experience at the racino that cannot be matched by our casino-only competitors. In addition to approximately 1,600 planned slot machines, we will offer our guests live horse racing a minimum of 80 days per year and year-round simulcast pari-mutuel racing. Since only two other racinos are legislatively authorized in Louisiana, with the nearest located over 100 miles to the west, we believe that our entertainment offering will be unrivaled in both our primary market area of Lafayette and secondary markets, including Baton Rouge which is approximately 50 miles to the east.

High Margins with Predictable Business.    Slot machines are typically both the highest margin and most predictable component of the gaming industry. Slot machines do not have the staffing requirements of table games nor do they have the variation in hold percentages attributable to “luck” which characterize the table game side of the casino business. We believe that this will afford us a more stable and predictable revenue stream, as well as consistently higher margins than those facilities that operate table games. In addition, due to our local market focus on Lafayette and limited competition within that market, we believe our marketing costs will be reduced compared to casinos which focus primarily on patrons outside of their local market and/or who face more competition in their market.

Increased Purse Levels.    A significant portion of the fees imposed on our slot machine revenues will be allocated to increased purses for live horse racing at the racino. We believe that the substantial increase in purses at the racino, compared to horse racetrack-only facilities, will attract higher quality horses to our new horse racetrack, which should in turn increase the wagering for both on-site and off-track betting.

Racino Operator

Peninsula Gaming Company, LLC (“PGC”), our indirect parent company, and OED Acquisition, LLC (“OEDA”), our direct parent company, will collectively supervise the development of the racino and will together act as the operator (the “Operator”) of the racino pursuant to the terms of a management services agreement with us.

PGC has owned and operated the Diamond Jo riverboat casino located in Dubuque, Iowa since 1999. The Diamond Jo is a riverboat casino that offers 729 gaming machines and 17 table games on approximately 17,800 ft² of gaming space. The Diamond Jo has consistently achieved a share of Dubuque’s gaming market in excess of 50%, generating $49.3 million of net revenues and $15.6 million of earnings before interest, taxes, depreciation and amortization (excluding management fees and non-recurring charges) for the fiscal year ended December 31, 2002. Several persons who will be active in managing our casino, including George T. Papanier, the Chief Operating Officer of PGC, and Michael S. Luzich, PGC’s President and Secretary, were integrally involved in the development, layout design and structure of other casino projects, such as the Mohegan Sun Casino in Uncasville, Connecticut, the Turning Stone Casino near Syracuse, New York for the Oneida Tribe and the Cliff Castle Casino near Sedona, Arizona for the Yavapai-Apachi Tribe. For more information regarding the terms of our management services agreement with the Operator, refer to the section entitled “Other Material Agreements—Management Services Agreement.”

Peninsula Gaming Partners, LLC (“PGP”) is the sole managing member of, and the owner of 100% of the voting equity interests in, PGC. Certain affiliates, officers and employees of Jefferies & Company, Inc., the initial purchaser in connection with the issuance of the old notes, serve as managers and officers of PGC and PGP, and, through their direct and indirect beneficial ownership or control of voting equity interests of PGP, beneficially own or control in the aggregate approximately 66.2% of our equity interests. See the sections entitled

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“Risk Factors—Risks Relating to Our Business—Concentration of Ownership” and “—Interested Party Matters” and “Certain Relationships and Related Party Transactions” and “Plan of Distribution.”

We are wholly-owned by OEDA, which in turn is wholly-owned by PGC, of which PGP owns 100% of the voting equity interests. The address of our principal offices is P.O. Box 90270, Lafayette, Louisiana 70509-0270. Our telephone number is (337) 896-7223. Our website address is www.evangelinedowns.com. Information on our website does not constitute part of this prospectus.

The Exchange Offer

We sold $123.2 million of our 13% Senior Secured Notes due 2010 with Contingent Interest to Jefferies & Company, Inc., as initial purchaser, in a private placement of our notes on February 25, 2003. The initial purchaser resold those notes in reliance on Rule 144A and other exemptions under the Securities Act of 1933.

On February 25, 2003, we also entered into a registration rights agreement with the initial purchaser in which we agreed, among other things, to:

• file a registration statement with the Securities and Exchange Commission relating to the exchange offer on or before May 26, 2003;

• deliver to you this prospectus;

• cause the registration statement, which includes this prospectus, to become effective on or before August 24, 2003;

• consummate the exchange offer within 45 days after the registration statement is declared effective; and

• keep the exchange offer open for at least 20 business days after the date on which we mail notice of the exchange offer to you.

You are entitled to exchange your old notes for new registered 13% Senior Secured Notes due 2010 with Contingent Interest, with substantially identical terms as your notes, except for transfer restrictions and registration rights. If we do not offer you the opportunity to exchange your old notes, or if we commit other “registration defaults,” we may be required to pay you liquidated damages at an amount per week per $1,000 principal amount equal to $0.05 for the first 90-day period following the registration default, increasing by an additional $0.05 per week per $1,000 principal amount with respect to each subsequent 90-day period, up to a maximum of $0.25 per week per $1,000 principal amount. As soon as we cure a registration default, the interest rates on the notes will revert to their original levels. You should read the discussion under the heading “The Exchange Offer—Purpose and Effect; Registration Rights” and “Description of Notes” for further information regarding registration defaults, additional interest and the new notes that we are offering in exchange for your notes.

We believe that you may resell the new notes issued in the exchange offer without compliance with the registration and prospectus delivery provisions of the Securities Act of 1933, subject to the conditions described under “The Exchange Offer.” You should read that section for further information regarding the exchange offer.

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TERMS OF THE EXCHANGE OFFER

We refer to the old notes and the new notes together as the “notes.” The following summary of the exchange offer is not intended to be complete. For a more complete description of the terms of the exchange offer, see “The Exchange Offer” in this prospectus.

Old Notes 13% Senior Secured Notes due 2010 with Contingent Interest, which we issued on February 25, 2003.

New Notes 13% Senior Secured Notes due 2010 with Contingent Interest, the issuance of which has been registered under the Securities Act of 1933. The terms of the registered new notes and your old notes are substantially identical, except:

• the new notes will be registered under the Securities Act of 1933;

• the new notes will not bear any legends restricting transfer; and

• except under limited circumstances, your rights under the registration rights agreement, including your right to receive additional interest, will terminate.

The Exchange Offer We are offering to exchange $1,000 in principal amount of the new notes for each $1,000 in principal amount of your old notes. As of the date of this prospectus, $123.2 million aggregate principal amount of the old notes is outstanding.

Expiration Date You have until 5:00 p.m., New York City time, on             , 2003 to validly tender your old notes if you want to exchange your old notes for new notes. We may extend that date under some conditions.

Conditions of the Exchange Offer; Extensions; Amendments You are not required to tender any minimum principal amount of your old notes in order to participate in the exchange offer. If you validly tender and do not validly withdraw your old notes, your old notes will be exchanged for new notes as long as the exchange offer does not violate any applicable law or any interpretation of applicable law by the staff of the Securities and Exchange Commission.

We may delay or extend the exchange offer and, if either of the above conditions is not met, we may terminate the exchange offer. We will notify you of any delay, extension or termination of the exchange offer.

We may also waive any condition or amend the terms of the exchange offer. If we materially amend the exchange offer, we will notify you.

All conditions to the exchange offer must be satisfied or waived prior to the expiration of the exchange offer.

Interest The first interest payment date on your old notes is September 1, 2003. Interest has accrued on your old notes since February 25, 2003,

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but has not yet been paid. If your old notes are exchanged for new notes, you will not receive any accrued interest on your old notes. You will receive interest on your new notes from February 25, 2003.

Consequences of Failure to Exchange Outstanding notes that are not tendered or that are tendered but not accepted will continue to be subject to the restrictions on transfer that are described in the legend on those notes. In general, you may offer or sell your outstanding notes only if they are registered under, or offered or sold under an exemption from, the Securities Act of 1933 and applicable state securities laws. We, however, will have no further obligation to register the outstanding notes. If you do not participate in the exchange offer, the liquidity of your notes could be adversely affected.

Procedures for Tendering Old Notes; Special Procedures for Beneficial Owners If you want to participate in the exchange offer, you must transmit a properly completed and signed letter of transmittal, and all other documents required by the letter of transmittal, to the exchange agent. Please send these materials to the exchange agent at the address set forth in the accompanying letter of transmittal prior to 5:00 p.m., New York City time, on the expiration date. You must also send one of the following:

• certificates of your old notes;

• a timely confirmation of book-entry transfer of your old notes into the exchange agent’s account at The Depository Trust Company; or

• the items required by the guaranteed delivery procedures described below. If you are a beneficial owner of your old notes and your old notes are registered in the name of nominee, such as a broker, dealer, commercial bank or trust company, and you wish to tender your old notes in the exchange offer, you should instruct your nominee to promptly tender the old notes on your behalf. If you are a beneficial owner and you want to tender your old notes on your own behalf, you must, before completing and executing the letter of transmittal and delivering your old notes, make appropriate arrangements to either register ownership of your old notes in your name or obtain a properly completed bond power from the registered holder of your old notes.

By executing the letter of transmittal, you will represent to us that:

• you are not our “affiliate,” as defined in Rule 405 under the Securities Act of 1933;

• you will acquire the new notes in the ordinary course of your business;

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• you are not a broker-dealer that acquired your notes directly from us in order to resell them in reliance on Rule 144A of the Securities Act of 1933 or any other available exemption under the Securities Act of 1933;

• if you are a broker-dealer that acquired your notes as a result of market-making or other trading activities, you will deliver a prospectus in connection with any resale of new notes; and

• you are not participating, do not intend to participate and have no arrangement or understanding with any person to participate in the distribution of the new notes.

Guaranteed Delivery Procedures If you wish to tender your old notes and:

• your old notes are not immediately available; or

• you are unable to deliver on time your old notes or any other document that you are required to deliver to the exchange agent;

then you may tender your old notes according to the guaranteed delivery procedures that are discussed in the letter of transmittal and in “The Exchange Offer—Guaranteed Delivery Procedures.”

Acceptance of Old Notes and Delivery of New Notes We will accept all old notes that you have properly tendered on time when all conditions of the exchange offer are satisfied or waived. The new notes will be delivered promptly after the expiration date.

Withdrawal Rights Tenders of old notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date.

Use of Proceeds We will not receive any cash proceeds from the exchange offer.

The Exchange Agent U.S. Bank National Association is the exchange agent. Its address and telephone number are set forth in “The Exchange Offer—The Exchange Agent; Assistance.”

Fees and Expenses We will pay all expenses relating to the exchange offer and compliance with the registration rights agreement. We will also pay some kinds of transfer taxes, if applicable, relating to the exchange offer.

Resales of New Notes We believe that the new notes may be offered for resale, resold and otherwise transferred by you without further compliance with the registration and prospectus delivery requirements of the Securities Act of 1933 if:

• you are not our “affiliate,” as defined in Rule 405 under the Securities Act of 1933;

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• you acquire the new notes in the ordinary course of your business;

• you are not a broker-dealer that purchased old notes from us to resell them in reliance on Rule 144A of the Securities Act of 1933 or any other available exemption under the Securities Act of 1933;

• you are not participating, and have no arrangement or understanding with any person to participate in a distribution, within the meaning of the Securities Act of 1933, of the new notes.

You should read the information under the heading “The Exchange Offer—Resales of the New Notes” for a more complete description of why we believe that you can freely transfer new notes received in the exchange offer without registration or delivery of a prospectus.

All broker-dealers that are issued new notes for their own accounts in exchange for old notes that were acquired as a result of market-making or other trading activities must acknowledge that they will deliver a prospectus meeting the requirements of the Securities Act of 1933 in connection with any resale of the new notes. If you are a broker-dealer and are required to deliver a prospectus, you may use this prospectus for an offer to resell, a resale or other transfer of the new notes.

Federal Income Tax Consequences The exchange of old notes for new notes pursuant to the exchange offer will not constitute a taxable exchange for federal income tax purposes. You should read the information under the heading “Specific Federal Income Tax Considerations” for a more complete discussion of the federal income tax consequences of an exchange of old notes for new notes and of holding the notes.

Registration Rights Agreement In connection with the sale of the old notes, we entered into a registration rights agreement with the initial purchaser of the old notes that grants the holders of the old notes registration rights. As a result of making and consummating this exchange offer, we will have fulfilled most of our obligations under the registration rights agreement. If you do not tender your old notes in the exchange offer, you will not have any further registration rights under the registration rights agreement or otherwise unless you were not eligible to participate in the exchange offer or do not receive freely transferable new notes in the exchange offer. You should read the information under the heading “The Exchange Offer—Purpose and Effect; Registration Rights” for a more complete discussion of the effects the exchange offer will have on your registration rights.

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TERMS OF THE NEW NOTES

The summary below describes the principal terms of the new notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. The “Description of Notes” section of this prospectus contains a more detailed description of the terms and conditions of the notes.

Issuers The Old Evangeline Downs, L.L.C. and its wholly-owned subsidiary, The Old Evangeline Downs Capital Corp.

Securities Offered $123.2 million aggregate principal amount of 13% Senior Secured Notes due 2010 with Contingent Interest.

Maturity Date March 1, 2010.

Interest Payment Dates March 1 and September 1 of each year, beginning on September 1, 2003.

Fixed Interest Fixed interest will be payable at a rate of 13% per annum.

Contingent Interest Contingent interest will accrue on the notes in the first full fiscal year after our casino begins operating. The amount of contingent interest will be equal to 5.0% of our cash flow for the applicable period, subject to certain limitations. We may defer paying a portion of contingent interest under certain circumstances described in the section entitled “Description of Notes—Principal, Maturity and Interest; Additional Notes.”

Ranking The notes will be our senior secured obligations, will rank equal in right of payment with all of our existing and future senior indebtedness and will rank senior in right of payment to all of our existing and future subordinated indebtedness.

Guarantees The notes will be unconditionally guaranteed on a senior secured basis by each restricted subsidiary we form or acquire, subject to the prior lien in favor of the lenders under our proposed $15.0 million senior secured credit facility with respect to the collateral securing our obligations thereunder. The guarantees will rank equal in right of payment with all existing and future senior indebtedness of those subsidiaries and will rank senior in right of payment to all existing and future subordinated indebtedness of those subsidiaries.

Security The notes and the guarantees will be secured by a security interest on substantially all of our and the guarantors’ existing and future assets (other than certain excluded assets and subject to permitted liens), including, without limitation:

• a pledge of the construction disbursement, interest reserve and completion reserve accounts, into which a portion of the net proceeds of the offering of the old notes was deposited to fund the design, construction and development of the racino and to pay the first three payments of fixed interest on the notes;

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• a pledge of the excess cash flow account;

• substantially all of the assets that will comprise the racino;

• certain licenses and permits relating to the construction, operation and management of the racino (excluding gaming, racing and liquor licenses); and

• a pledge of our equity interests.

The security interest of the holders of the notes in these assets is subject to a number of important limitations and exceptions which are described under the sections entitled “Risk Factors—Risks Relating to the Notes” and “Description of Notes—Collateral,” including without limitation, our ability to incur, subject to certain limitations, up to $15.0 million of indebtedness under our proposed senior secured credit facility. See the section entitled “Description of Notes—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests.” Our obligations under such proposed senior secured credit facility will have a security interest in the collateral securing the notes and the guarantees (other than the construction disbursement, interest reserve, completion reserve and excess cash flow accounts) that pursuant to an intercreditor agreement will be prior to the security interest securing the notes and the guarantees and accordingly our obligations under the notes and the obligations of our restricted subsidiaries under the guarantees will be contractually subordinated to our obligations under such new senior secured credit facility to the extent of the collateral securing such obligations.

Optional Redemption On or after March 1, 2007, we may redeem some or all of the notes at any time at the prices set forth in the section entitled “Description of Notes—Optional Redemption.”

Prior to March 1, 2006, we may redeem up to 35% of the original aggregate principal amount of the notes at the prices set forth in the section entitled “Description of Notes—Optional Redemption” with the net cash proceeds of certain public offerings of our common stock.

Gaming Redemption The notes will be subject to mandatory disposition and redemption requirements following certain determinations by any gaming authority.

Change of Control If a change of control occurs, the holders of the notes will have the right to require us to repurchase their notes at a price equal to 101% of the principal amount, plus accrued and unpaid interest to the date of repurchase. See the section entitled “Description of Notes—Offers to Repurchase the Notes—Repurchase of Notes at the Option of the Holder Upon a Change of Control.”

Excess Cash Flow Offer At the end of each six-month period after the casino portion of our racino begins operating, we will offer to purchase the maximum

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principal amount of notes that may be purchased, first, with 50% of our excess cash flow for such period (if any) and, second, with any amounts in an excess cash flow account. Any amount of such 50% of excess cash flow not used to purchase notes will be deposited into the excess cash flow account, up to an available balance of $10.0 million. In between such offers to purchase notes, holders of notes will have the right, subject to certain limitations, to require us to purchase notes with amounts in the excess cash flow account. All such offers to purchase notes shall be made at 101% of the principal amount, plus accrued and unpaid interest. We will not be required to make such offers unless the offer amount is at least $2.5 million. See the section entitled “Description of Notes—Offer to Repurchase the Notes—Repurchase of Notes at the Option of the Holder From Excess Cash Flow.”

Asset Sales and Events of Loss If we sell assets or experience an event of loss and do not apply the proceeds as required, we may be required to use the proceeds to offer to repurchase some of the notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest to the date of repurchase. See the section entitled “Description of Notes—Repurchase at the Option of Holders—Limitation on Sale of Assets and Restricted Subsidiary Equity Interests.”

Basic Covenants of the Indenture The notes will be issued under an indenture that will, among other things, restrict our ability and the ability of our restricted subsidiaries to, among other things:

• pay dividends, redeem stock or make other distributions or restricted payments;

• incur indebtedness or issue preferred shares;

• make certain investments;

• create liens;

• agree to payment restrictions affecting the subsidiary guarantors;

• consolidate or merge;

• sell or otherwise transfer or dispose of assets, including equity interests of our subsidiaries;

• enter into transactions with our affiliates;

• designate our subsidiaries as unrestricted subsidiaries;

• use the proceeds of permitted sales of our assets; and

• change our line of business.

These covenants will be subject to a number of important exceptions and qualifications. See the section entitled “Description of Notes—Certain Covenants.”

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Cash Collateral and Disbursement Agreement Approximately $89.7 million of the net proceeds of the offering of the old notes was deposited in construction disbursement, interest reserve and completion reserve accounts which was pledged to the trustee as security for our obligations under the notes. Approximately $60.5 million of the net proceeds were deposited into the construction disbursement account and used (together with cash from operations, borrowings under our proposed senior secured credit facility and furniture, fixtures and equipment financing) to design, develop, construct, equip and open the racino in accordance with the terms of the Cash Collateral and Disbursement Agreement. Approximately $24.2 million of the net proceeds, representing funds sufficient to pay the first three payments of fixed interest on the notes, were deposited into the interest reserve account. The remaining $5.0 million of the net proceeds were deposited into a completion reserve account to fund potential cost overruns and contingency amounts with respect to the design, development, construction, equipping and opening of the racino. The funds in the accounts were invested in government securities and other cash equivalents and will be disbursed in accordance with the terms of the Cash Collateral and Disbursement Agreement. See also the section entitled “Description of Notes—Cash Collateral and Disbursement Agreement.”

Risk Factors

Before deciding to tender your old notes in exchange for new notes pursuant to the exchange offer, you should consider carefully the information included in the “Risk Factors” section, as well as all other information set forth in this prospectus.

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RISK FACTORS

An investment in the notes involves a high degree of risk. You should carefully consider the following risks, as well as other information set forth in this prospectus, before tendering your old notes in the exchange offer.

Risks Relating to the Exchange Offer and Holding the New Notes

Holders who fail to exchange their old notes will continue to be subject to restrictions on transfer.

Holders who fail to exchange their old notes will continue to be subject to restrictions on transfer. If you do not exchange your old notes for new notes in the exchange offer, you will continue to be subject to the restrictions on transfer of your old notes described in the legend on the certificates for your old notes. The restrictions on transfer of your old notes arise because we issued the old notes under exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, you may only offer or sell the old notes if they are registered under the Securities Act and applicable state securities laws, or are offered and sold under an exemption from these requirements. We do not plan to register the old notes under the Securities Act. For further information regarding the consequences of tendering your old notes in the exchange offer, see the discussions below under the captions “The Exchange Offer—Consequences of Not Exchanging Old Notes” and “Specific Federal Income Tax Consequences.”

You must comply with the exchange offer procedures in order to receive new, freely tradable notes.

Delivery of new notes in exchange for old notes tendered and accepted for exchange pursuant to the exchange offer will be made only after timely receipt by the exchange agent of the following:

• certificates for old notes or a book-entry confirmation of a book-entry transfer of old notes into the exchange agent’s account at DTC, New York, New York as a depository, including an agent’s message, as defined in this prospectus, if the tendering holder does not deliver a letter of transmittal;

• a completed and signed letter of transmittal, or facsimile copy, with any required signature guarantees, or, in the case of a book-entry transfer, an agent’s message in place of the letter of transmittal; and

• any other documents required by the letter of transmittal.

Therefore, holders of old notes who would like to tender old notes in exchange for new notes should be sure to allow enough time for the old notes to be delivered on time. We are not required to notify you of defects or irregularities in tenders of old notes for exchange. Old notes that are not tendered or that are tendered but we do not accept for exchange will, following consummation of the exchange offer, continue to be subject to the existing transfer restrictions under the Securities Act and will no longer have the registration and other rights under the exchange agreement. See “The Exchange Offer—Procedures for Tendering Old Notes” and “The Exchange Offer—Consequences of Not Exchanging Old Notes.”

Some holders who exchange their old notes may be deemed to be underwriters and these holders will be required to comply with the registration and prospectus delivery requirements in connection with any resale transaction.

If you exchange your old notes in the exchange offer for the purpose of participating in a distribution of the new notes, you may be deemed to have received restricted securities. If you are deemed to have received restricted securities, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.

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There is currently no public market for the new notes and you may find it difficult to sell your new notes.

There is no existing market for the new notes. We do not intend to apply for listing of the new notes on any securities exchange or for quotation through the National Association of Securities Dealers Automated Quotation System. The liquidity of the trading market in the new notes, and the market price quoted for the new notes, will depend on many factors, including, among other things, prevailing interest rates, our operating results and the market for similar securities. We do not know the extent to which investor interest will lead to the development of a trading market for the new notes or how liquid that market might be. Historically, the market for non-investment grade debt, such as the new notes, has been subject to disruptions that have caused substantial volatility in the prices of securities. Any disruptions may make it more difficult for holders to sell their new notes and may have an adverse effect on the price at which the new notes might be sold.

Value of Collateral—The fair market value of the collateral securing the notes may not be sufficient to pay the amounts owed under the notes. As a result, you may not receive full payment on your notes following an event of default.

The proceeds of any sale of collateral following an event of default with respect to the notes may not be sufficient to satisfy, and may be substantially less than, amounts due on the notes. Shortly following the issue date of the notes, we expect that the total value of the collateral will be less than the amount due on the notes. Although the collateral will include substantially all of our assets (other than certain excluded assets and subject to permitted liens), until construction of the racino is completed, our only assets will be the $89.7 million of net proceeds of the offering deposited in the construction disbursement, interest reserve and completion reserve accounts, the land (purchased for approximately $4.3 million) on which the racino is to be constructed and the assets of our current horse racetrack operations. The balance of the funds in the construction disbursement and completion reserve accounts will continue to decline until such funds are substantially depleted upon completion of the project. Although we also operate OTBs, the assets of the OTBs may not be available as collateral because the indenture governing the notes will permit us to transfer the assets and operations of the OTBs into an unrestricted subsidiary under certain conditions and therefore outside of the limitations of the indenture and, upon such transfer, the transferred assets of the OTBs will no longer constitute collateral.

The value of the collateral in the event of liquidation will depend upon market and economic conditions, the availability of buyers and similar factors. The collateral does not include contracts, agreements, licenses (including gaming, racing and liquor licenses) and other rights that by their express terms prohibit the assignment thereof or the grant of a security interest therein. Some of these may be material to us or may be necessary to operate the racino, and such exclusion could have a material adverse effect on the value of the collateral. By its nature, some or all of the collateral may not have a readily ascertainable market value or may not be saleable or, if saleable, there may be substantial delays in its liquidation. To the extent that liens, security interests and other rights granted to other parties (including the lenders under our proposed senior secured credit facility) encumber assets owned by us, those parties have or may exercise rights and remedies with respect to the property subject to their liens that could adversely affect the value of that collateral and the ability of the trustee under the indenture or the holders of the notes to realize or foreclose on that collateral. If the proceeds of any sale of collateral are not sufficient to repay all amounts due on the notes, the holders of the notes (to the extent not repaid from the proceeds of the sale of the collateral), would have only an unsecured claim against our remaining assets.

Subordination and Standstill—Your right to receive payments on the notes or proceeds from the sale of collateral securing the notes will be contractually subordinated to payments under our proposed senior secured credit facility to the extent of the collateral securing such credit facility. Your right to exercise remedies with respect to certain collateral will also be limited.

The security interests securing the notes and the guarantees (other than the construction disbursement, interest reserve, completion reserve and excess cash flow accounts) will be (i) contractually subordinated to up to $15.0 million principal amount of indebtedness that may be incurred under our proposed senior secured credit

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facility, pursuant to an intercreditor agreement to be entered into between the trustee under the indenture and the lender or lenders under our proposed senior secured credit facility, and (ii) effectively subordinated to any future furniture, fixtures and equipment financing, in each case, to the extent of the assets securing such indebtedness. As a result, upon any distribution to our creditors, whether or not in bankruptcy, liquidation, reorganization or similar proceedings, or following acceleration of our indebtedness or an event of default under such indebtedness, the lenders under our proposed senior secured credit facility will be entitled to be repaid in full from the proceeds of the assets securing such credit facility before any payment is made to you from such proceeds. If the proceeds of any sale of collateral are not sufficient to repay all amounts due on the notes, the holders of the notes (to the extent not repaid from the proceeds of the sale of the collateral), would have only an unsecured claim against our remaining assets.

A number of the trustee’s rights and remedies with respect to the collateral to be shared with the lenders under our proposed senior secured credit facility also will be significantly limited under the intercreditor agreement. For instance, if the notes become due and payable prior to the stated maturity or are not paid in full at the stated maturity at a time during which we have indebtedness outstanding under our new senior secured credit facility, the trustee will only have the right to foreclose upon the collateral that also secures the obligations under our new senior secured credit facility (with or without the lenders under such credit facility taking part in any such foreclosure) if the lenders under such credit facility either fail to take steps to exercise remedies with respect to or in connection with the collateral within 180 days following notice to such lenders of the occurrence of an event of default under the indenture or fail to continue to pursue any such exercise of remedies while such event of default is then continuing outside of an insolvency proceeding. In addition, the intercreditor agreement will prevent the trustee and the holders of the notes from pursuing remedies with respect to the collateral in an insolvency proceeding.

With respect to certain deposit accounts that constitute part of the collateral (other than the construction disbursement, interest reserve, completion reserve and excess cash flow accounts), the trustee will only be permitted to exercise remedies with respect to such deposit accounts at the earliest of (i) the date that an event of default under the indenture governing the notes shall be continuing for 180 consecutive days after the delivery of written notice to us of such event of default, (ii) the date on which a declaration of acceleration has been made in accordance with the terms of the indenture or the occurrence of certain bankruptcy events of default and (iii) any other date to the extent permitted under the intercreditor agreement at any time the intercreditor agreement is in effect.

Mechanics’ Liens—Parties who have provided services or supplies in connection with the construction of the racino may have a lien on the project senior to the security interests securing the notes and the guarantees.

Louisiana law provides contractors, subcontractors and material suppliers with a lien on the property improved by their services or supplies in order to secure their right to be paid. If these parties are not paid in full, they may seek foreclosure on their liens. In Louisiana, the priority of all mechanics’ liens related to a particular construction project relate back to the date on which construction of the project first commenced by any contractor. Although pre-construction activities for the development of the racino have not yet begun, we may conduct such activities before the pledges and security interests securing the notes are recorded. Accordingly, contractors, subcontractors and suppliers providing goods and services in connection with the construction of the racino who after recordation of the security interests securing the notes otherwise comply with the applicable requirements of Louisiana law may have a lien on the racino senior in priority to the security interests, securing the notes until they are paid in full.

The Cash Collateral and Disbursement Agreement requires compliance with procedures intended to insure the proper payment to parties performing work after the date of the offering of the old notes. Additionally, as a condition to the disbursement of funds for the construction of the racino from the construction disbursement and completion reserve accounts, lien releases are required to be obtained from all contractors, subcontractors and

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suppliers who have provided work, materials and services. Furthermore, we obtained a title insurance policy for the benefit of the holders of the notes to insure the first priority of the security interest held by holders of the notes and to insure against any loss occurring as a result of a mechanic’s lien. Nevertheless, in the event of a liquidation, proceeds from the sale of collateral will be used to pay the holders of any mechanics’ liens then in existence before holders of the notes.

Ability to Realize on Collateral—Gaming laws, bankruptcy laws and other laws and regulations may delay or otherwise impede the trustee’s ability to foreclose on the collateral.

In addition to our proposed intercreditor arrangements described above, the gaming licensing processes, along with other laws relating to foreclosure and sale, could substantially delay or prevent the ability of the trustee or any holder of the notes to obtain the benefit of any collateral securing the notes. If the trustee sought to operate, or retain an operator for, the racino, the trustee would be required to obtain Louisiana gaming and racing licenses. Potential purchasers of the racino or the gaming equipment would also be required to obtain a Louisiana gaming license as well as appropriate racing licenses relating to horse racetrack operations. This could limit the number of potential purchasers in a sale of the racino or gaming equipment, which may delay the sale of and reduce the price paid for the collateral.

Federal bankruptcy law also could impair the trustee’s ability to foreclose upon the collateral. If we or our subsidiaries become debtors in cases under the Bankruptcy Code, there can be no assurance:

• whether any payments under the notes would be made;

• whether or when the trustee could foreclose upon or sell the collateral;

• whether the term or other conditions of the notes or any rights of the holders could be altered in a bankruptcy case without the trustee’s or your consent;

• whether the trustee or you would be able to enforce your rights against the guarantors under their guarantees; or

• whether or to what extent holders of the notes would be compensated for any delay in payment or decline in the collateral’s value.

Fraudulent Transfer—Under certain circumstances, a court could restrict your ability to enforce our subsidiaries’ guarantees.

Unless designated as an unrestricted subsidiary, any subsidiary we form or acquire will be required to guarantee the notes, and each such guarantor will be required to grant a security interest in certain of its assets (junior to the security interest granted to the lenders under our proposed senior secured credit agreement) to secure its guarantee. Although such guarantees will provide you with a direct claim against the assets of the subsidiary guarantors, under federal bankruptcy law and comparable provisions of state fraudulent transfer laws, under certain circumstances a court could avoid (i.e. cancel) a guarantee and the security interest in the guarantor’s assets and order the return of any payments made thereunder to the guarantor or to a fund for the benefit of its other creditors.

A court might take these actions if it found, among other things, that when the guarantor entered into its guarantee (or, in some jurisdictions, when payments became due on its guarantee), (i) it received less than reasonably equivalent value or fair consideration for incurring obligations under the guarantee, and (ii) that any one of the following conditions was then satisfied:

• the guarantor was insolvent or rendered insolvent by reason of incurring its obligations under its guarantee;

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• the guarantor was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or

• the guarantor intended to incur, or believed (or reasonably should have believed) that it would incur, debts beyond its ability to pay as those debts matured.

In applying these factors, a court would likely find that a subsidiary guarantor did not receive fair consideration or reasonably equivalent value for its guarantee, except to the extent that it benefited directly or indirectly from the registered notes’ issuance or from the construction of the racino. The determination of whether a subsidiary was or was rendered “insolvent” would vary depending on the law of the jurisdiction being applied. Generally, an entity would be considered insolvent if the sum of its debts (including contingent or unliquidated debts) is greater than all of its property at a fair valuation or if the present fair salable value of its assets is less than the amount that will be required to pay its probable liability on its existing debts (including contingent or unliquidated debts) as they become absolute and matured.

A court might also avoid a guarantor’s guarantee and the security interest in its assets if the court concluded that the guarantor entered into the guarantee with actual intent to hinder, delay, or defraud creditors. If a court avoided a guarantor’s guarantee, you would no longer have a claim against that subsidiary. There can be no assurance that the assets of the other guarantors would be sufficient to pay amounts then due under the notes.

Certain Bankruptcy Considerations—We are uncertain how the bankruptcy of our member would affect our ability to continue to operate.

The Old Evangeline Downs, L.L.C. is a limited liability company organized under the laws of the State of Louisiana. Limited liability companies (“LLCs”) are relatively recent creations under the laws of the State of Louisiana and other jurisdictions. Generally, LLCs are intended to provide both the limited liability of the corporate form for their members and certain advantages of partnerships, including “pass-through” income tax treatment for members, and thus have attributes of both corporations and partnerships. Given their recent creation, LLCs and their members have been involved in relatively few bankruptcy cases as debtors, and there has been little reported judicial authority addressing bankruptcy issues as they pertain to LLCs. There is some authority that the bankruptcy of a partnership’s general partner may lead to the winding up or dissolution of the partnership. It is possible that a bankruptcy court might hold, by analogy, that an LLC member’s bankruptcy would have a similar effect on a LLC. In the absence of judicial precedent, there can be no assurance as to the effect that the bankruptcy of our member might have on our ability to continue in business.

Restrictive Covenants—The indenture governing the notes and our proposed senior secured credit facility will contain covenants that significantly restrict our operations.

The indenture governing the notes and the agreement governing our proposed senior secured credit facility will contain, and any other future debt agreements may contain, numerous covenants imposing financial and operating restrictions on our business. These restrictions may affect our ability to operate our business, may limit our ability to take advantage of potential business opportunities as they arise and may adversely affect the conduct of our current business. These covenants will place restrictions on our ability and the ability of our subsidiaries to, among other things:

• pay dividends, redeem stock or make other distributions or restricted payments;

• incur indebtedness or issue preferred membership interests;

• make certain investments;

• create liens;

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• agree to payment restrictions affecting the subsidiary guarantors;

• consolidate or merge;

• sell or otherwise transfer or dispose of assets, including equity interests of our restricted subsidiaries;

• enter into transactions with our affiliates;

• designate our subsidiaries as unrestricted subsidiaries;

• use the proceeds of permitted sales of our assets; and

• change our line of business.

It is expected that our proposed senior secured credit facility also will require us to meet a number of financial ratios and tests. Compliance with these financial ratios and tests may adversely affect our ability to adequately finance our operations or capital needs in the future or to pursue attractive business opportunities that may arise in the future. Our ability to meet these ratios and tests and to comply with other provisions governing our indebtedness may be adversely affected by our operations and by changes in economic or business conditions or other events beyond our control. Our failure to comply with our debt-related obligations could result in an event of default under the notes and our other indebtedness.

Change of Control Offer—Our ability to repurchase the notes upon a change of control may be limited.

Upon the occurrence of specific change of control events, we will be required to offer to repurchase all outstanding notes at 101% of the principal amount, plus accrued and unpaid interest to the date of repurchase. The lenders under our proposed senior secured credit facility will have a similar right to be repaid upon a change of control. Any of our future debt agreements may contain a similar provision. However, we may not have sufficient funds at the time of the change of control to make the required repurchase of notes or repayment of our other indebtedness. The terms of our proposed senior secured credit facility also will limit our ability to purchase your notes until all debt under our proposed senior secured credit facility is paid in full. Any of our future debt agreements may contain similar restrictions. If we fail to repurchase any notes submitted in a change of control offer, it would constitute an event of default under the indenture which would, in turn, constitute an event of default under our proposed senior secured credit facility and could constitute an event of default under our other indebtedness, even if the change of control itself would not cause a default. Important corporate events, such as takeovers, recapitalizations or similar transactions, may not constitute a change of control under the indenture governing the notes and thus not permit the holders of the notes to require us to repurchase or redeem the notes. See the section entitled “Description of Notes—Offers to Repurchase the Notes—Repurchase of the Notes at the Option of the Holder Upon a Change of Control.”

Redemption of Notes Required by the Gaming Authorities—You may be required to sell your notes if any gaming authority finds you unsuitable to hold them.

The current policy of the Louisiana racing and liquor agencies and authorities does not require you to be licensed or found suitable in order to own any notes. The Louisiana Gaming Control Board has exempted this note offering, therefore, prospective purchasers of the notes are effectively exempted from rules regarding suitability requirements. However, the policy of any of these agencies could change. In the event the Louisiana gaming, racing or liquor agencies or authorities require you, as a holder of the notes, to be licensed, qualified or found suitable under Louisiana gaming, racing or liquor laws, you will be required to submit an application which will be investigated by such agencies or authorities. If you are unable or unwilling to obtain such license, qualification or finding of suitability, such agencies and authorities may not grant us or, if already granted, may suspend or revoke our licenses unless we terminate our relationship with you. Under these circumstances, we would be required to repurchase your notes. There can be no assurance that we will have sufficient funds or otherwise will be able to repurchase any or all of your notes.

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Risks Relating to Construction of the Racino

Failure to Complete the Racino on Time and within Budget—We could encounter problems during development and construction that could substantially increase the construction costs of the racino or delay its opening.

There can be no assurance that we will complete all portions of the racino on time or within budget. Construction projects such as the construction of the racino are subject to significant development and construction risks, any of which could cause unanticipated cost increases and delays. These include the following:

• shortages of energy, material and skilled labor;

• delays in obtaining or inability to obtain necessary permits, licenses and approvals;

• changes in law applicable to gaming and horse racing projects;

• changes to the plans or specifications;

• weather interferences or delays;

• engineering problems;

• labor disputes and work stoppages;

• disputes with contractors;

• environmental and real property issues;

• fire, earthquake, hurricane and other natural disasters;

• change in political, financial or economic conditions, including as a result of international conflict; and

• geological, construction, excavation and equipment problems, including special challenges and risks associated with construction on terrain historically used for oil-drilling.

The casino portion of the racino is scheduled to be completed and opened in March 2004. However, opening the casino by this date assumes that there are no unforeseen difficulties or delays.

The construction design documents for the racino will be subject to revisions during the construction of the facility. Such revisions could result in inefficiencies or modifications to the design documents that could cause actual construction costs to exceed budgeted amounts. For example, certain items may need to be modified or replaced after they have been purchased, constructed or installed in order to conform with the final design documents or building code requirements. There can be no assurance that changes in the scope of the project will not be required, even though they are not part of the general contractor’s guaranteed maximum price. The total remaining cost to design, develop, construct, equip and open the racino is expected to be approximately $88.5 million. We deposited an aggregate of approximately $65.5 million of the net proceeds of the offering of the old notes into construction disbursement and completion reserve accounts to fund a portion of the costs of the design, development, construction, equipping and opening of the racino. Funds will be disbursed from the construction disbursement and completion reserve accounts only upon satisfaction of certain conditions, including the approval of the disbursements by the independent construction consultant. However, if the independent construction consultant fails to perform its responsibilities as required, funds could be disbursed from these accounts without having satisfied all applicable requirements.

Numerous regulatory licenses, permits and approvals are necessary to construct and operate the racino. We have obtained a portion of the necessary permits, including our gaming license, racing license and building permits. However, during the course of development and construction of the racino, we expect to obtain the remaining permits, such as local building permits, liquor licenses and regulatory approval for gaming space configuration which will determine the number of slot machines we are entitled to operate. There can be no assurance that we will be able to obtain all necessary permits and, even if obtained, such permits could have

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conditions and restrictions that could adversely affect the completion of the racino. Failure to complete or open our racino as currently contemplated may have a material adverse effect on our business, financial condition, results of operations and ability to meet our payment obligations under the notes and our other indebtedness.

Additional Sources of Funds Required—We may not be able to find sufficient funding to pay for the development of the racino.

The net proceeds of the offering of the old notes is not sufficient to fund all of the construction costs of the racino. Our construction budget and initial operating budget anticipate that we will obtain a senior secured credit facility of up to $15.0 million and furniture, fixtures and equipment financing. We do not have any binding agreements for such financing, and we cannot be certain that such financing will be obtained on commercially reasonable terms or at all.

If we are unable to obtain financing under our proposed senior secured credit facility or obtain furniture, fixtures and equipment financing or do not have sufficient cash flow from operations, or if actual construction costs exceed budgeted amounts, we will be required to do one or more of the following: seek alternative financing; use a portion or all of our completion reserve account and other contingency reserves; materially modify our construction plans; or use cash from operations that would otherwise be used for other purposes. There can be no assurance that any of these alternatives will be available. If we are unable to obtain alternative financing on terms and conditions favorable to us or at all, or if we must materially alter our construction plans or construction schedule, we will not be able to complete the racino project as currently planned which could materially adversely affect our financial condition and our ability to meet our payment obligations under the notes and our other indebtedness.

Licensing—If a schedule of live racing meets at the new horse racetrack is not established by January 21, 2005 or if we fail to meet the minimum live racing day requirements, our gaming license will be canceled and all slot machine gaming at the racino must cease.

Our failure to complete construction of the horse racetrack at the racino or to establish a schedule of live racing meets at the new horse racetrack by January 21, 2005, will result in the cancellation of our gaming license. While Louisiana allows us to operate slot machines at the racino prior to completion of the new horse racing facility and the commencement of live racing at the new horse racetrack, Louisiana gaming regulations and our gaming license require that the racino must be constructed and a schedule of live racing meets at the new horse racetrack must be established by January 21, 2005, which is within two years from the date of the grant of our gaming license. In addition, to maintain our gaming license, we must remain an “eligible facility” under the Pari-Mutuel Act. This means that we must, among other things, have a minimum of 80 live racing days in a consecutive 20-week period each year of live horse race meetings at the new horse racetrack. Live racing days typically vary in number from year to year and are based on a number of factors, including the number of suitable race horses and the occurrence of severe weather, many of which are beyond our control. If either a schedule of live racing meets at the new horse racetrack has not been established by January 21, 2005 or we fail to have the minimum number of live racing days, our gaming license will be canceled, and the casino would be required to cease operations. Any cessation of our operation could have a material adverse affect on our business and financial condition and ability to meet our payment obligations under the notes and our other indebtedness.

Risks Relating to Our Business

Substantial Leverage—We have a substantial amount of indebtedness which could adversely affect our financial condition and prevent us from meeting our payment obligations under the notes and our other indebtedness.

We have a significant amount of indebtedness. In addition to the notes, we are permitted under the indenture governing the notes to incur up to $15.0 million of indebtedness under a new senior secured credit facility, incur indebtedness to purchase furniture, fixtures and equipment, and incur up to $5.0 million of additional

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indebtedness. If we satisfy debt coverage tests, we could incur further indebtedness. If new debt were to be incurred in the future, the related risks could intensify.

Our substantial indebtedness could have important consequences to you and significant effects on our business. For example, it could:

• make it more difficult for us to satisfy our obligations under the notes and our other indebtedness;

• result in an event of default if we fail to satisfy our obligations under the notes or our other indebtedness or fail to comply with the financial and other restrictive covenants contained in the indenture or our proposed senior secured credit facility, which event of default could result in all of our indebtedness becoming immediately due and payable and could permit our lenders to foreclose on our assets securing such indebtedness;

• require us to dedicate a substantial portion of our cash flow from operations to pay our indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, development projects, general operational requirements and other purposes;

• limit our ability to obtain additional financing for working capital, capital expenditures and other activities;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• increase our vulnerability to general adverse economic and industry conditions or a downturn in our business; and

• place us at a competitive disadvantage compared to competitors that are not as highly leveraged.

Dependence Upon a Single Gaming Site—Our cash flow to meet our payment obligations under the notes and our other indebtedness is dependent solely on the racino.

We deposited a portion of the net proceeds of the offering of the old notes in an interest reserve account to fund the first three payments of fixed interest on the notes. Once funds in the interest reserve account have been depleted, we will rely exclusively on cash flow generated by the racino and, until live racing meets have been scheduled at our new horse racetrack, our existing horse racetrack as well as any amount that may be available under our proposed senior secured credit facility, to meet our payment obligations under the notes and our other indebtedness. After live racing meets are scheduled at the racino, we will close the existing horse racetrack and will rely on cash flow generated by the racino to meet such payment obligations. Although we also operate off-track betting parlors (each, an “OTB”), cash flow generated by the OTBs may not be available to service the notes because the indenture governing the notes permits us to transfer the assets and operations of the OTBs, under certain conditions, into an unrestricted subsidiary and therefore outside of the limitations of the indenture.

Although our plans include approximately 1,600 slot machines, the actual number of slot machines we are permitted to operate is subject to regulatory approval of the configuration of our gaming space. If we have insufficient funds available under our proposed senior secured credit facility, and the casino is not generating sufficient cash flow to meet our payment obligations under the notes by the date on which we are required to make the third fixed interest payment on the notes, we may be unable to make the required interest payments to you.

The racino’s future operating performance will be subject to many economic, competitive, legislative and business factors that we are not able to control. The impact of these factors will be more significant to us than it would be to a diversified gaming company or to a gaming company that does not depend on seasonal earnings from racing. Weather and other factors could cause complete or partial closure of our facilities or reduce the number of people visiting our facilities. We will have no operating cash flow to service the notes for any period that our facility is not in service. In addition, to maintain our gaming license, we must have a minimum of 80 live

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racing days in a consecutive 20-week period each year of live horse race meetings at the new horse racetrack. We also are vulnerable to any adverse changes in general political, financial and economic conditions (including as a result of international conflict) and any negative economic, competitive, demographic or other conditions affecting the State of Louisiana, the cities of Lafayette and Opelousas and surrounding areas from which we expect to attract patrons. If the economy of any of these areas suffers a downturn or if any of that area’s larger employers lays off workers, we may be adversely affected as the disposable income of consumers in that area declines. Although we maintain insurance policies, insurance proceeds may not adequately compensate us for all economic consequences of any loss. If the racino is not able to generate sufficient cash flow, we may not be able to meet our payment obligations under the notes and our other indebtedness.

Dependence on the Operator—We will depend upon services to be provided by the Operator. If the Operator ceases to provide these services for any reason and alternative sources cannot be found, our business and our ability to satisfy our obligations under the notes and our other indebtedness could be materially adversely affected.

We have entered into a management services agreement with the Operator to manage the day-to-day operations of the racino. Although the agreement terminates on the earlier of eight years after we begin operating the casino portion of the racino and the date that PGC sells its direct or indirect beneficial membership interest in us, there can be no assurance that the agreement will remain in effect for its duration. The Operator may terminate the agreement upon the earlier of (1) our default under the agreement which materially adversely affects our financial condition or results of operations or (2) upon our failure to make any monetary payment required under the agreement. Although, the agreement provides limited circumstances under which we may terminate the Operator as the manager of our new racino, the failure on the part of the Operator to manage the racino profitably is not a basis for termination. If the Operator ceases to provide management services for any reason, including that it is not deemed suitable to manage the racino by the Louisiana Gaming Control Board or the Louisiana State Racing Commission, we would need to find alternative sources of these management services. There can be no assurance that we would be able to find alternative sources on economically advantageous terms and conditions or at all or that any replacement manager would have the same experience, expertise or national name recognition as the Operator. If we were unable to find alternative sources for these management services, our ability to conduct our gaming operations may be significantly impaired which could materially adversely affect our financial condition and our ability to satisfy our obligations under the notes and our other indebtedness. See the section entitled “Other Material Agreements—Management Services Agreement.”

Concentration of Ownership—All of our voting equity interests are indirectly beneficially owned in the aggregate by the members of the board of managers of PGP, which board effectively manages our operations, and such ownership may give rise to a conflict of interest.

All of our voting equity interests are indirectly beneficially owned or controlled in the aggregate by Messrs. Stevens, Luzich, Oliver and Whittaker. Specifically, M. Brent Stevens, our Chief Executive Officer, is also a manager of PGP and the Chief Executive Officer of PGP and PGC. Mr. Stevens indirectly beneficially owns or controls (through his beneficial ownership or control of voting equity interests in PGP) approximately 66.2% of our equity interests. Michael Luzich, our President and Secretary, is also a manager of PGP and the President and Secretary of PGC and PGP. Mr. Luzich indirectly beneficially owns (through his ownership of voting equity interests in PGP) approximately 32.3% of our equity interests. Terrance W. Oliver, a manager of PGP, indirectly beneficially owns (through his direct ownership of interests in The Oliver Family Trust) approximately 1.5% of our equity interests. Andrew R. Whittaker, a manager of PGP, indirectly beneficially owns (through his indirect ownership of voting equity interests in PGP) approximately 4.2% (included in the 66.2% owned or controlled by Mr. Stevens) of our equity interests. In addition, Mr. Stevens has the right to designate three of the five members of PGP’s board of managers, including one of the two independent managers, and Mr. Luzich has the right to designate two of the five members of PGP’s board of managers, including one of the two independent managers, for so long as Mr. Stevens and Mr. Luzich, respectively, beneficially hold at least 5% of the voting equity

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interests of PGP. See the sections entitled “Management,” “Security Ownership of Certain Beneficial Owners and Management,” “Certain Relationships and Related Party Transactions” and “Plan of Distribution.”

Accordingly, these individuals have the power to elect a majority of our managers, appoint new management and approve any action requiring the approval of holders of our equity interests, including adopting amendments to our certificate of formation, approving mergers or sales of substantially all of our assets or changes to our capital structure, or pursuing other transactions which may increase the value of their, PGC’s or PGP’s equity investment even though these transactions may involve risks to you as a holder of notes. There can be no assurance that the interests of these individuals, PGC or PGP will not conflict with your interests as a holder of notes.

Interested Party Matters—PGP, PGC and OEDA and certain of their managers and executive officers have interests in us that may differ from your interests as a holder of notes.

PGC and OEDA are primarily responsible for supervising the construction of and managing the racino. PGC has owned and operated the Diamond Jo riverboat casino located in Dubuque, Iowa since 1999. Neither PGC nor any of its affiliates is restricted from managing other gaming operations, including new gaming ventures or facilities that may compete with us. Such activities could require significant amounts of time of PGC’s officers and managers and adversely affect their ability to operate us.

Other than the pledge of our stock by OEDA as collateral, neither PGC nor OEDA will guarantee the notes or otherwise provide any credit support to us. Under the indenture governing PGC’s outstanding senior secured notes, PGC is restricted, except in limited circumstances, from distributing cash or granting credit support to us and some of its other subsidiaries and from engaging in certain transactions with us and some of its other subsidiaries. On the other hand, PGC may redesignate us as restricted subsidiaries under its indenture. In such a case, our business and operations would become subject to, and would be required to comply with, the restrictions set forth in PGC’s indenture. The restrictions in PGC’s indenture could have a material adverse effect on our business, financial condition and results of operations and our ability to service the notes and our other indebtedness.

In addition, M. Brent Stevens, our Chief Executive Officer, a manager of PGP and the chief executive officer of PGP and PGC, and Andrew R. Whittaker, a manager of PGP, are an Executive Vice President and a Vice Chairman, respectively, of Jefferies & Company, Inc., the initial purchaser in connection with the issuance of the old notes. See the sections entitled “Certain Relationships and Related Transactions” and “Plan of Distribution.”

Risk of a New Venture—We do not have any similar prior operating history or history of earnings.

We have no operating history or history of earnings with regards to racino operations. In addition, neither we nor the Operator has any experience in operating or marketing a casino in Opelousas, Louisiana. There also is not an established history of casino gaming in the area in which we will operate the racino. As a result, you must evaluate our business prospects in light of the difficulties frequently encountered by companies in the early stages of substantial real estate development and gaming projects and the risks inherent in the establishment of a new business enterprise. There can be no assurance that we or the Operator will be able to successfully operate the racino, that the racino will be profitable or that we will generate sufficient cash flow to meet our payment obligations under the notes and our other indebtedness.

Difficulty in Attracting and Retaining Qualified Employees—If we are unable to attract and retain a sufficient number of qualified employees or are required to substantially increase our labor costs, our business, results of operations and financial condition will be materially adversely affected.

The operation of our business requires qualified executives, managers and skilled employees with gaming industry experience and qualifications to obtain the requisite licenses. We may have difficulty attracting and

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retaining a sufficient number of qualified employees and may be required to pay higher levels of compensation than we have estimated in order to do so. If we are unable to attract and retain a sufficient number of qualified employees or are required to substantially increase our labor costs, we may not be able to operate our business in a cost effective manner or at all.

Competition—We compete directly and indirectly with other casinos and pari-mutuel wagering facilities as well as other forms of gaming. Increased competition could have a material adverse effect on our business.

The gaming industry in Louisiana is highly competitive, and the racino will face competition from a variety of gaming alternatives. We will face competition from other casino and pari-mutuel gaming facilities located approximately 50 to 100 or more miles from us. Under current Louisiana law, there are a total of 15 riverboat gaming licenses. Pinnacle Entertainment was recently awarded the fifteenth and last license to operate a riverboat casino in Lake Charles, Louisiana, which has not yet been constructed. In addition, pursuant to the Pari-Mutuel Act, three of the four existing pari-mutuel horse racetracks in Louisiana conducting live racing are permitted to install slot machines. Another horse racetrack that is allowed to have gaming operations is located in Vinton, Louisiana, near Lake Charles, which is over 100 miles away. In addition, there are three Native American tribes operating casinos in Louisiana, the closest of which is located approximately 50 miles from our proposed facility. The fourth Native American tribe in Louisiana has proposed to develop a casino in DeSoto Parish, over 150 miles from the racino site. There also is a land-based casino currently operating in New Orleans, over 100 miles from Lafayette. We also will face competition from truck stop video poker parlors and OTBs in areas surrounding Lafayette and Opelousas.

In addition to competing with gaming facilities in Louisiana, we will compete to some extent with other forms of gaming on both a local and national level, including state-sponsored lotteries, charitable gaming, on- and off-track wagering, and other forms of entertainment, including motion pictures, sporting events and other recreational activities. It is possible that these secondary competitors could reduce the number of visitors to our facilities or the amount they are willing to wager, which could have a material adverse effect on our ability to generate revenue or maintain our profitability.

Adoption by Louisiana or any neighboring state of more favorable gaming laws or laws authorizing new or additional gaming facilities could increase the competition that we face.

For example, proposals were introduced in the last regular session of the Louisiana House of Representatives to authorize slot machine gaming in Orleans Parish (over 100 miles from Lafayette) as well as at live harness or standard bred horse racetracks (which is different from thorough bred or quarter horse racing which we conduct). We believe that this Orleans Parish bill will likely be enacted by the Louisiana legislature, but that the Louisiana legislature will unlikely authorize slot machine gaming at live harness or standard bred horse racetracks. If slot machine gaming is authorized by the Louisiana legislature at live harness or standard bred horse racetracks, increased competition could have a material adverse effect on our financial condition by reducing our net income and operating cash flows. Similar proposals may be introduced in the future to authorize additional gaming in these or other parishes, and any of such proposals could become law. In addition, new or expanded operations by others, including Native American casinos, can be expected to increase competition in our industry and could limit new opportunities for us or result in the saturation of certain gaming markets, including the market in which we operate. For more information relating to government regulation of gaming in Louisiana, see “—Government Regulations—Extensive gaming and racing-related regulation continuously impacts our operations.”

Increased competition may require us to make substantial capital expenditures to maintain and enhance the competitive positions of our properties, including updating slot machines to reflect changing technology, refurbishing rooms and public service areas periodically, replacing obsolete equipment on an ongoing basis and making other expenditures to increase the attractiveness and add to the appeal of the racino. Because we are highly leveraged, after satisfying our obligations under our outstanding indebtedness, there can be no assurance that we will have sufficient funds to undertake these expenditures or that we will be able to obtain sufficient

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financing to fund such expenditures. If we are unable to make such expenditures, our competitive position could be materially adversely affected.

Governmental Regulation—Extensive gaming and racing-related regulation continuously impacts our operations.

The ownership, management and operation of our facilities is subject to extensive laws, regulations and ordinances which are administered by the Louisiana State Gaming Control Board, the Louisiana State Racing Commission, and various other federal, state and local government entities and agencies. We are subject to regulations that apply specifically to the gaming industry and horse racetracks and casinos, in addition to regulations applicable to businesses generally. See the section entitled “Licensing and Regulatory Matters.”

Government regulations require us to, among other things:

• pay gaming and racing fees and taxes in the State of Louisiana;

• obtain gaming and racing licenses in Louisiana for the racino, which licenses we must have renewed periodically and which may be suspended or revoked if we do not meet detailed regulatory requirements; and

• receive and maintain state and local licenses to sell alcoholic beverages and tobacco in our facilities and to operate our food service facilities.

The compliance costs associated with these laws, regulations and licenses are significant. For example, the effective rate of total taxes and fees on our slot machine proceeds currently is approximately 36.5%. Additionally, we will have to pay $0.25 to the Louisiana State Racing Commission for each patron attending a live race at our horse racetrack and all patrons at our OTBs. By comparison, the riverboat casinos pay 21.5% of net gaming proceeds in state taxes plus additional taxes and fees to local municipalities which may or may not add up to the amount the racinos are charged, and Native American casinos pay no state taxes on net gaming proceeds.

The Louisiana State Gaming Control Board and the Louisiana State Racing Commission have broad authority and discretion to require us and our officers, directors, managers, members, employees and certain security holders to obtain and maintain various licenses, registrations, permits, findings of suitability and other approvals. To enforce applicable laws and regulations, governmental authorities may, among other things, limit, suspend or revoke the licenses of any gaming entity or individual, and may levy fines or forfeiture of assets against us or individuals for violations of such laws and regulations. In addition, the actions of persons associated with us and our management and employees, over whom we may have no control, could jeopardize any licenses held by us. There can be no assurance that we will be able to maintain our existing licenses, registrations, findings of suitability, permits and approvals or obtain when necessary any new ones. Any failure to renew or maintain our licenses or receive new licenses when necessary could prevent us from conducting our business, which would result in a material decrease in our net income and operating cash flows.

From time to time, various proposals have been introduced in the Louisiana legislature that, if enacted, would affect the tax, regulatory, operational or other aspects of the gaming and racing industries. In 1996, the State of Louisiana adopted a statute in connection with which votes were held locally where gaming operations were conducted and which, had the continuation of gaming been rejected by the voters, might have resulted in the termination of operations at the end of their current license terms. During the 1996 local gaming referendums, Lafayette Parish voted to disallow gaming in the Parish, whereas St. Landry Parish, the site of our relocation, voted in favor of gaming. All parishes where riverboat gaming operations are currently conducted voted to continue riverboat gaming, but there can be no guarantee that similar referenda might not produce unfavorable results in the future. Proposals to amend or supplement the Louisiana Riverboat Economic Development and Gaming Control Act and the Pari-Mutuel Act also are frequently introduced in the Louisiana State legislature. In

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the 2001 session, a representative from Orleans Parish introduced a proposal to repeal the authority of horse racetracks in Calcasieu Parish (i.e., Delta Downs) and St. Landry Parish (i.e., our proposed racino) to conduct slot machine gaming at such horse racetracks and to repeal the special taxing districts created for such purposes. If adopted, this proposal would have effectively prohibited us from operating the casino portion of our racino. Most recently, in the 2002 session of the Louisiana House of Representatives, representatives from Lake Charles and Shreveport (adjacent to parishes in which a racino and a pari-mutuel horse racetrack, respectively, currently operate) introduced a proposal requesting the Louisiana State Racing Commission to study the feasibility and economic impact of licensing additional racing facilities in the State and to suspend granting any additional licenses for new racing facilities until the legislature has been granted additional time to review the racing commission’s findings. In addition, the State legislature, from time to time, considers proposals to repeal the Pari-Mutuel Act. If these proposals were approved or if legislation were enacted prohibiting gaming in Louisiana or if new taxes or fees were introduced or the rates of existing taxes and fees were increased, it could have a material adverse effect on our ability to conduct our business through, among other things, increasing competition, limiting or restricting the types of gaming activity in which we may engage and reducing our net income and operating cash flows, and our ability to meet our payment obligations under the notes and our other indebtedness.

Environmental Laws—We are subject to environmental laws and potential exposure to environmental liabilities.

We are, and upon completion of the racino will be, subject to various federal, state and local environmental laws, ordinances and regulations, including those governing the remediation of soil and groundwater contaminated by petroleum products or hazardous substances or wastes, and the health and safety or our employees. Under certain of these laws, ordinances or regulations, a current or previous owner or operator of property may be liable for the costs of removal or remediation of certain hazardous substances or petroleum products on, under, or in its property, without regard to whether the owner or operator knew of, or caused, the presence of the contaminants, and regardless of whether the practices that resulted in the contamination were legal at the time they occurred. The presence of, or failure to remediate properly, such substances may adversely affect the ability to sell or rent such property or to borrow funds using such property as collateral. Additionally, the owner of a site may be subject to claims by third parties based on damages and costs resulting from environmental contamination emanating from a site.

We have not identified any such issues associated with our properties that could reasonably be expected to have an adverse effect on us or the results of our operations. However, it is possible that historical or neighboring activities have affected one or more of our properties and, as a result, there can be no assurance that material obligations or liabilities under environmental laws will not arise in the future which may give rise to compliance costs that could have a material adverse effect on our business and financial condition.

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FORWARD-LOOKING STATEMENTS

This prospectus includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “would,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “likely,” “continue” and similar terms and phrases, including references to assumptions, and include all discussions of our plans for the design, development, construction and operation of the racino. The forward-looking information contained in this prospectus is generally located under the headings “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” but may be found in other locations as well. These forward-looking statements generally relate to our strategies, plans and objectives for future operations and are based upon management’s current beliefs or estimates of future results or trends. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, they are inherently subject to risks, uncertainties and assumptions, including those relating to the design, construction, development and anticipated results of operations of the racino. Accordingly, there can be no assurance that such plans, intentions or expectations will be achieved or that any trends noted in this prospectus will continue. We caution you that any forward-looking statement reflects only our belief at the time the statement is made. You should read this prospectus completely and with the understanding that actual future results may be materially different from what we expect. We do not plan to update forward-looking statements even though our situation may change in the future.

Specific factors that might cause actual results to differ from our expectations, might cause us to modify our plans or objectives, may affect our ability to pay timely amounts due under the notes and/or may affect the value of the notes, include, but are not limited to:

• our ability to complete the construction of the racino on time and within budget, the failure of which could result in, among other things, the cancellation of our gaming license and our inability to make payments on the notes;

• our ability to enter into our proposed senior secured credit facility and to procure other necessary financing for furniture, fixtures and equipment relating to the construction and development of the racino;

• our failure to obtain, delays in obtaining, failure to renew or the loss of any licenses, permits or approvals, (including gaming, racing, alcoholic beverage and tobacco licenses), or the limitation, conditioning, suspension or revocation of any such licenses, permits or approvals;

• our dependence on a single gaming facility, a single gaming market and the number of live racing days at our facility;

• uncertainties in starting up new operations, including our ability to retain qualified employees and to conduct our gaming operations;

• the availability and adequacy of the cash flow from the racino to meet our operational and debt service requirements, including payment of amounts due under the notes and our other indebtedness;

• our substantial indebtedness and the effect of restrictive covenants in our debt instruments on our operating and financial flexibility;

• competition in the gaming or racing industry, including, without limitation, new or expansion of existing Native American gaming establishments and the availability and success of alternative gaming or racing venues and other entertainment attractions;

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• other risks related to the notes (including the value of the collateral) and to high-yield securities and gaming securities generally;

• our control by Peninsula Gaming Partners, LLC and potential conflicts of interest with Peninsula Gaming Partners, LLC and its affiliates;

• adverse changes or developments in laws, regulations or taxes in the gaming or racing industry, or a decline in the public acceptance of gaming or racing;

• other adverse conditions, such as adverse economic conditions, changes in general customer confidence or spending, weather-related factors, factors relating to the current state of world affairs, including war, and any further acts of terrorism or any other destabilizing events, that may adversely affect the economy in general and/or the casino industry in particular; and

• other factors discussed under the section entitled “Risk Factors” or elsewhere in this prospectus and factors that may be disclosed from time to time in our SEC filings or otherwise.

All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. In light of these and other risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur.

You should rely only on the information contained in this prospectus. We have not authorized any other person to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it.

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USE OF PROCEEDS

This exchange offer is intended to satisfy our obligations under the registration rights agreement entered into in connection with the issuance of the old notes. We will not receive any proceeds from the issuance of the new notes in the exchange offer. You will receive, in exchange for old notes tendered by you and accepted by us in the exchange offer, new notes in the same principal amount. The old notes surrendered in exchange for the new notes will be retired and cancelled and cannot be reissued. Accordingly, the issuance of the new notes will not result in any increase of our existing debt.

We used the net proceeds of the offering of the old notes to repay existing indebtedness and (together with cash from operations, borrowings under our proposed senior credit facility and furniture, fixtures and equipment financing) to build the racino facility. We deposited the net proceeds from the offering of the old notes, after repaying existing indebtedness, into (i) a construction disbursement account, from which funds will be periodically withdrawn to fund (together with cash from operations, borrowings under our proposed senior secured credit facility and furniture, fixtures and equipment financing) the design, construction, development, equipping and opening costs of the racino, (ii) an interest reserve account, the funds in which will be used to pay the first three payments of fixed interest on the old notes and (iii) a completion reserve account.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization at March 31, 2003. This table should be read in conjunction with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the more detailed financial statements, including the notes thereto, included elsewhere in this prospectus.

	As of March 31, 2003
	($ in millions)
Cash and cash equivalents(1)	$    0.7
Debt:
Notes offered hereby(2)	$120.8
Total debt	120.8
Total members’ capital	10.8
Total capitalization	$131.6

(1) Cash and cash equivalents does not include proceeds of the offering of the old notes as the use of these proceeds is restricted to (i) the design, development, construction, equipping and opening of the racino, (ii) the payment of interest on the old notes and (iii) repayment of outstanding debt at the date of the offering.

(2) Includes the net proceeds of the offering of the old notes deposited in the construction disbursement, interest reserve and completion reserve accounts. A portion of this amount has been and will be used to fund construction of the racino and pay the first three payments of fixed interest on the notes.

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SELECTED FINANCIAL DATA

The selected historical financial data at December 31, 2001, for the years ended December 31, 2000 and 2001, for the period January 1 to August 30, 2002 (Predecessor), at December 31, 2002 and for the period August 31 to December 31, 2002 (Successor) have been derived from our audited financial statements included elsewhere in this prospectus. The selected historical financial data at December 31, 2000 have been derived from our audited financial statements not included elsewhere in this prospectus. The selected historical financial data at and for each of the years ended December 31, 1998 and 1999 have been derived from our unaudited financial statements. The selected historical financial data for the three months ended March 31, 2002 (Predecessor) and at March 31, 2003 and for the three months ended March 31, 2003 (Successor) have been derived from our unaudited financial statements. The unaudited financial statements have been prepared by us on a basis consistent with the audited financial statements and include all normal recurring adjustments necessary for a fair presentation of information set forth therein. The data presented below is a summary only, should be read in conjunction with, and is qualified in its entirety by reference to, the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the notes thereto appearing elsewhere in this prospectus.

	Predecessor															Successor			Predecessor			Successor
	Fiscal Year Ended December 31,												January 1, through August 30, 2002(1)			August 31, through December 31, 2002(1)			Three Months Ended March 31, 2002			Three Months Ended March 31, 2003
	1998			1999			2000			2001
STATEMENTS OF OPERATIONS DATA:
Revenues
Meet	$	4,274,741		$	4,493,371		$	4,187,371		$	3,827,889		$	3,348,108		$	463,970		$	340,594		$	401,790
Off-track betting		7,863,233			7,946,460			8,059,366			8,337,246			5,387,021			2,372,353			2,213,450			2,213,732
Concession		1,201,267			1,253,011			1,190,624			1,113,044			971,238			185,215			145,759			161,990
Total revenues		13,339,241			13,692,842			13,437,361			13,278,179			9,706,367			3,021,538			2,699,803			2,777,512
Operating Expenses
Meet		3,427,499			3,461,025			3,568,563			3,546,139			3,034,289			664,037			415,819			542,252
Off-track betting		4,994,121			5,165,620			5,240,303			5,216,505			3,454,157			1,568,790			1,378,310			1,357,373
Concession		1,089,295			1,194,011			1,148,970			1,131,499			886,708			187,438			157,005			161,073
General and administrative		1,030,184			1,116,966			1,448,067			1,251,099			791,846			371,157			236,895			361,456
Bad debts		32,000			648			92,847			434			—			—
Depreciation and amortization		720,453			727,626			659,963			655,194			138,166			77,806			64,292			67,110
Management fee														64,644			160,000						120,000
Litigation settlements		18,542			—			76,776			5,946			—			—						1,600,000
Loss on abandoned assets		28,300			44,409			12,067			12,801			—			—
Relocation expense		311,101			597,536			511,031			404,738			—			—
Impairment charges on long-lived assets		—			—			—			4,361,134			—			—
Total operating expenses		11,651,495			12,307,841			12,758,587			16,585,489			8,369,810			3,029,228			2,252,321			4,209,264
Income (loss) from operations		1,687,746			1,385,001			678,774			(3,307,310	)		1,336,557			(7,690	)		447,482			(1,431,752	)
Other income (expenses)
Earnings (losses) from equity affiliate		(22,202	)		(14,725	)		(14,209	)		58,862			—			—			—			—
Interest expense		(1,224,461	)		(1,192,255	)		(1,157,239	)		(1,121,835	)		(769,163	)		(748,787	)		(269,871	)		(2,294,672	)
Interest income		23,140			38,423			27,657			10,720			9,243			(4,979	)		4,075			73,728
Total other expense		(1,223,523	)		(1,168,557	)		(1,143,791	)		(1,052,253	)		(759,920	)		(753,766	)		(265,796	)		(2,220,944	)
Income (loss) before income taxes		464,223			216,444			(465,017	)		(4,359,563	)		576,637			(761,456	)	$	181,686		$	(3,652,696	)
Income tax benefit (expense)		6,447			9,138			(221,343	)		—			—			—
Net income (loss)	$	470,670		$	225,582		$	(686,360	)	$	(4,359,563	)	$	576,637		$	(761,456	)	$	181,686		$	(3,652,696	)

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	At December 31,												As of March 31, 2003
	1998		1999		2000			2001			2002
BALANCE SHEET DATA:
Cash and cash equivalents	$	1,202,778	$	1,683,413	$	1,042,728		$	994,830		$	962,652	$	659,077
Property, plant and equipment, net		6,946,821		6,808,916		6,030,483			1,495,802			8,796,268		13,271,502
Total assets		14,274,013		14,073,632		12,161,060			7,208,712			42,741,843		146,563,467
Long-term debt		11,766,975		11,399,838		10,981,852			10,527,560			0		121,553,818
Total debt(2)		12,102,298		11,765,333		11,393,082			10,981,852			20,125,000		121,953,818
Total members’ equity (deficit)		525,684		461,266		(1,541,083	)		(5,900,646	)		14,470,600		10,817,904

	Predecessor					Successor	Predecessor	Successor
	Fiscal Year Ended December 31,				January 1, through August 30, 2002(1)	August 31, through December 31, 2002(1)	Three Months Ended March 31, 2002	Three Months Ended March 31, 2003
	1998	1999	2000	2001
Ratio of earnings to fixed charges(3)	1.4x	1.2x	0.6x	-2.9x	1.7x	0.1x	1.7x	-0.5x

(1) As a result of OEDA’s acquisition of us that was accounted for using the purchase method of accounting and due to a practice known as “push down” accounting, as of August 31, 2002, the date on which OEDA acquired 100% of us, we adjusted our consolidated assets and liabilities to their estimated fair values based upon an independent valuation and management’s estimates. Therefore, the financial statements presented for the post-acquisition period are not comparable to the financial statements presented for the pre-acquisition periods.

(2) Total debt includes short-term and long-term borrowings (net of applicable discounts), and current maturities of long-term debt, and excludes intercompany payables.

(3) For purposes of determining the ratio of earnings to fixed charges, earnings consist of net income (loss) before income taxes, excluding capitalized interest. Fixed charges consist of interest on indebtedness, including capitalized interest. For the years ended December 31, 2000, 2001, the period August 31 through December 31, 2002 and the three months ended March 31, 2003, our earnings were insufficient to cover our fixed charges by $0.5 million, $4.4 million, $0.8 million and $3.7 million, respectively.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with, and is qualified in its entirety by, our financial statements, including the notes thereto, and the other financial information included elsewhere in this prospectus.

Overview

We currently own and operate a 94,200 ft² pari-mutuel wagering complex located near Lafayette, Louisiana, which offers pari-mutuel wagering live and simulcast on thoroughbred and quarter horse races. We also operate an OTB in New Iberia, Louisiana, that offers simulcast pari-mutuel wagering, and an OTB in Port Allen, Louisiana, that offers video poker gaming and simulcast pari-mutuel wagering. Our business operations generate revenue from three main sources:

Pari-Mutuel Operations.    The pari-mutuel segment consists of pari-mutuel wagering on live thoroughbred and quarter horse races, from the middle of April through Labor Day in September. We also offer a mixture of simulcast wagering six days per week. The two OTBs offer six days of pari-mutuel wagering on simulcast races. Pari-mutuel revenues are a function of wagering handle, or the total amount wagered, without regard to predetermined deductions. The total amounts wagered form a pool of funds from which winnings are paid based on odds determined solely by the wagering activity. In pari-mutuel wagering, patrons bet against each other rather than against the operator of the facility, or with pre-set odds. The horse racetrack acts as a stakeholder for the wagering patron and deducts from the amounts wagered a gross commission. We also generate revenue from simulcasting our races to other horse racetracks. The simulcast fees are determined by the contract agreed upon with the horse racetrack in question. Out of our live and simulcast commission revenues, we are required by statute to pay taxes to the state of Louisiana.

Food and Beverage Operations.    The food and beverage operations at the main horse racetrack include a full service 850-seat clubhouse restaurant, four concession stands and four other bars. The two off-track betting parlors each include a kitchen that prepares short order food and a bar that serves alcoholic and non-alcoholic beverages.

Gaming Operations.    Only the Port Allen OTB parlor operates video poker gaming. The machines are currently owned and operated by a third party. We are currently expanding the Port Allen OTB from 18 to 100 video poker machines which will initially be operated by a third party until we obtain a license. Under Louisiana’s racing and off-track betting laws, we have a right of prior approval with respect to any applicant seeking a permit to operate an OTB within a 55-mile radius of our horse racetrack. This effectively gives us the exclusive right, at our option, to operate OTBs within a 55-mile radius of our horse racetrack, provided that such OTBs are not also within a 55-mile radius of another horse racetrack.

Gaming revenues represent net revenues from video poker gaming which is calculated by taking gross revenues from video poker gaming taken in by the third party operator, or the total amount wagered, net of winning patron payout, less: (i) franchise fees (22.5% of the net device revenue) paid to the Louisiana Office of State Police and (ii) fees paid to the machine owner (60% of the net device revenue less the franchise fees). The remaining amount is recorded as gaming revenue. Historically, 50% of the net device revenue less (i) franchise fees and (ii) a $116 credit per machine per month was paid to the Louisiana Horsemen’s Benevolent and Protective Association 1993, Inc. (“LHBPA”) as video poker purses. However, under the current interpretation of net device revenues as defined by the Louisiana Supreme Court (application for rehearing pending), the only deduction currently allowed prior to the equal division of the net device revenues with the LHBPA is $116 credit per machine per month. Prior to the Louisiana Supreme Court’s ruling, we settled with the LHBPA and, accordingly, have no liability to the LHBPA for any periods prior to February 26, 2003 (date of the settlement) other than the $1.6 million settlement amount. Based on historical video poker revenues, we expect the Louisiana Supreme Court’s interpretation to have an annual negative impact to income from operations of approximately $60,000.

In 1997, the State of Louisiana passed the Pari-Mutuel Act, which permitted three of the four companies operating pari-mutuel wagering facilities in Louisiana which offer live horse racing to install slot machines at

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their horse racetrack facilities, subject to ratification by the voters of the individual parishes. The voters of Lafayette Parish, where our existing horse racetrack is located, have not approved the installation of slot machines at our horse racetrack facility. However, in October 1997 the voters of St. Landry Parish approved the operation of both slot machines and pari-mutuel wagering. Therefore, we are proceeding to move our operations to Opelousas within St. Landry Parish. In August 2002, we purchased all of the land necessary to develop our new racino. Plans for our new racino facility include a casino containing approximately 1,600 slot machines with several dining options and a pari-mutuel horse racetrack with related facilities for a total remaining cost of approximately $88.5 million.

Results of Operations

The results of operations for the three months ended March 31, 2003 and 2002 discussed below represent the consolidated results of operations of the successor and predecessor companies respectively. The results of operations for 2002 include the consolidated results of operations for the period January 1 to August 30, 2002 for the predecessor company and our consolidated results of operations for the period August 31 to December 31, 2002 for the successor company. The results of operations for 2001 and 2000 represent the consolidated results of operations of the predecessor company for the years then ended. As a result of the substantially different capital structure of our company in comparison to that of the predecessor company, and of the applications of purchase accounting in connection with the acquisition, our results of operations may not be comparable to the results of operations of the predecessor company.

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

Revenues

Meet revenues increased slightly to $0.4 million for the three months ended March 31, 2003 from $0.3 million for the three months ended March 31, 2002. This increase is primarily attributed to (i) an increase in the number of simulcasting days during the three months ended March 31, 2003 compared to the three months ended March 31, 2002 and (ii) commissions received from a horse sale we held during the three months ended March 31, 2003 (we did not host a corresponding horse sale during the three months ended March 31, 2002). Meet revenues accounted for 14.5% and 12.6% of the total revenues for the three months ended March 31, 2003 and 2002, respectively.

Off-track betting revenues remained substantially unchanged at $2.2 million for the three months ended March 31, 2003 and 2002 and accounted for 79.7% and 82.0% of the total revenues for the three months ended March 31, 2003 and 2002, respectively.

Concession revenue remained substantially unchanged at $0.2 million for the three months ended March 31, 2003 and 2002 and accounted for 5.8% and 5.4% of the total revenues for the three months ended March 31, 2003 and 2002, respectively.

Operating Expenses

Meet expense increased 30.4% to $0.5 million for the three months ended March 31, 2003 from $0.4 million for the three months ended March 31, 2002. This increase is primarily attributed to increases in (i) payroll expenses of approximately $48,000 due to an increase in the number of employees to improve the services provided to the horsemen for horse training, (ii) an increase in utilities of approximately $20,000 due to an increase in utility rates, (iii) an increase in stable expenses of approximately $18,000 due to a change in location of, and the related increase in cost of, waste disposal and (iv) expenses associated with the horse sale (as noted above) of approximately $15,000.

Off-track betting expense remained substantially unchanged at $1.4 million for the three months ended March 31, 2003 and 2002 which is consistent with off-track betting revenue stated above.

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Concession expense remained substantially unchanged at $0.2 million for the three months ended March 31, 2003 and 2002.

General and administrative expense increased 52.6% to $0.4 million for the three months ended March 31, 2003 from $0.2 million for the three months ended March 31, 2002. This increase is primarily due to (i) an increase in professional fees of approximately $56,000, primarily legal expenses related to the LHBPA video poker settlement and (ii) an increase in management payroll of approximately $46,000.

Management fees of $0.1 million accrued but not paid during the three months ended March 31, 2003 relate to a management services agreement we entered into with the Operator. See the section entitled “Other Material Agreements—Management Services Agreement” for further details regarding this agreement.

Depreciation and amortization expense remained substantially unchanged at $0.1 million for the three months ended March 31, 2003 and 2002.

Litigation settlement expense during the three months ended March 31, 2003 of $1.6 million relates to the litigation settlement with the Louisiana Horsemen’s Benevolent and Protective Association 1993, Inc. in February 2003.

Other Income

Net interest expense increased to $2.2 million for the three months ended March 31, 2003 from $0.3 million for the three months ended March 31, 2002. This change is primarily due to the change in our debt structure. During the period January 1 through February 25, 2003 and the period February 26 through March 31, 2003, we had outstanding interest bearing debt of approximately $20.0 million and $123.2 million, respectively, compared to approximately $10.9 million during the three months ended March 31, 2002.

Twelve Months Ended December 31, 2002 Compared to Twelve Months Ended December 31, 2001

Revenues

Meet revenues remained substantially unchanged at $3.8 million in 2002 and 2001, respectively, and accounted for 30.0% and 28.8% of the total revenues in 2002 and 2001, respectively.

Net off-track betting revenues decreased 6.9% to $7.8 million in 2002 from $8.3 million in 2001 and accounted for 61.0% and 62.8% of the total revenues in 2002 and 2001, respectively. This decrease in revenue is primarily due to a 6.4% decrease in amounts wagered by our customers at our OTB locations attributable to a market decline consistent with other Louisiana OTBs and the impact of Hurricane Lili, which forced the closing of our Lafayette betting at the horse racetrack locations and our Port Allen facility for 3 days each, and our New Iberia facility for 5 days.

Concession revenue increased 3.9% to $1.2 million in 2002 from $1.1 million in 2001. This increase is primarily attributed to our efforts to improve the menu and quality of service offered to our customers.

Operating Expenses

Meet expense increased 4.3% to $3.7 million in 2002 from $3.5 million in 2001. This increase is primarily attributed to (i) an increase in utilities of $56,000 due to an increase in utility rates, (ii) an increase in stable expenses of approximately $48,000 due to a change in location of, and related increase in cost of, waste disposal and (iii) an increase in property insurance expense of approximately $28,000 due to an increase in insurance premiums.

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Off-track betting expense decreased 3.7% to $5.0 million in 2002 from $5.2 million in 2001. This decrease is primarily attributed to the decrease in off-track betting revenue stated above.

Concession expense remained substantially unchanged at $1.1 million in 2002 and 2001.

General and administrative expense decreased 7.0% to $1.2 million in 2002 from $1.3 million in 2001. This decrease is primarily due to the elimination of management fees that were paid to the predecessor company in 2001 of $150,000.

Management fees of $0.2 million accrued but not paid in 2002 relate to a management services agreement we entered into with the Operator. See the section entitled “Other Material Agreements—Management Services Agreement” for further details regarding this agreement.

Depreciation and amortization expense decreased 67.0% to $0.2 million in 2002 from $0.7 million in 2001. This decrease is due to adoption of SFAS 142, which provides that goodwill and certain indefinite lived intangible assets will no longer be amortized but will be reviewed at least annually for impairment and written down and charged to income when their recorded value exceeds their estimated fair value. Amortization of such assets were $0.4 million in 2001.

Relocation expenses in 2001 of $0.4 million reflect lobbying, legal and other costs related to our relocation in connection with the racino project that cannot be capitalized under existing authoritative guidance and are recorded as an expense in the period incurred.

Other Income

Earnings from an equity affiliate of $0.1 million relates to our 25% investment in Intertrack Partners, a Louisiana general partnership operating an OTB in Rapids Parish, Louisiana (“Intertrack”). As of December 31, 2000, we recorded a negative equity investment balance of $0.1 million representing our estimate of our share of the partnership liabilities. Upon the satisfaction of all liabilities to third parties in 2001, the equity method of accounting was suspended and no additional loss was charged to operations. Accordingly, our 2001 share of losses was not recorded; instead we recorded $0.1 million of income to reflect the recoupment of our negative capital account recorded as an estimate of partnership liabilities in 2000.

Net interest expense increased 36.2% to $1.5 million in 2002 from $1.1 million in 2001 primarily due to the amortization of deferred financing costs of $0.3 million associated with our loan and security agreement with Foothill Capital Corporation entered into on August 30, 2002 and an increase in interest expense of $0.1 million related to an increase in outstanding debt in 2002.

Twelve Months Ended December 31, 2001 Compared to Twelve Months Ended December 31, 2000

Revenues

Net meet revenues decreased 8.6% to $3.8 million in 2001 from $4.2 million in 2000 and accounted for 28.8% and 31.2% of the total revenues in 2001 and 2000, respectively. The decline in meet revenue, both overall and as a percentage of our total revenues, was primarily attributable to a 12% decline in attendance for our live meets, which resulted in a $1.4 million decline in the handle for the wagering on track for our live races.

Net off-track betting revenues increased 3.4% to $8.3 million in 2001 from $8.1 million in 2000 and accounted for 62.8% and 60.0% of the total revenues in 2001 and 2000, respectively. This increase in revenue is primarily due to a 4.5% increase in amounts wagered by our customers at all of our OTB locations.

Concession revenues decreased 6.5% to $1.1 million in 2001 from $1.2 million in 2000. This decrease is primarily attributed to the decline in live meet attendance.

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Operating Expenses

Meet expense remained substantially unchanged at approximately $3.5 million in 2001 and 2000.

Off-track betting expense remained substantially unchanged at $5.2 million in 2001 and 2000.

Concession expense remained substantially unchanged at $1.1 million in 2001 and 2000.

General and administrative expense decreased 13.6% to $1.3 million in 2001 from $1.4 million in 2000. This decrease is primarily due to a decrease in employee medical insurance of $73,000 and consulting fees of $23,000.

Bad debt expense of $0.1 million in 2000 is due primarily to increasing the allowance for doubtful accounts related to a $0.3 million note receivable from Intertrack.

Depreciation and amortization expense remained substantially unchanged at $0.7 million in 2001 and 2000.

Lawsuit settlements of $0.1 million relate primarily to the settlement paid in 2000 to the LHBPA relating to video poker payments for the period from November 1995 through December 1995.

Relocation expenses of $0.4 million and $0.5 million in 2001 and 2000, respectively, reflect lobbying, legal and other costs related to our relocation in connection with the racino project that are not capitalizable under existing authoritative guidance and are recorded as an expense in the period incurred.

Impairment charges on long-lived assets of $4.4 million were charged to income from operations in 2001. In connection with our assessment of the events surrounding the racino project, a review was performed of the carrying values of long-lived assets, including the recorded balance of the line item “Goodwill and other intangible assets.” We determined that the sale of a 50% interest of us to OEDA, which was consummated on February 15, 2002, significantly changed the time period over which the horse racing facility in Lafayette, Louisiana would be used. This review was performed pursuant to the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 121, “Accounting for the Impairment of Long-Lived Assets to be Disposed of.” As a result of this review, we recorded a charge of $4.4 million in 2001 to record the related assets at fair value based on the present value of estimated expected future cash flows using a discount rate commensurate with the risks involved.

Other income

Net interest expense remained substantially unchanged at $1.1 million in 2001 and 2000.

Recent Accounting Pronouncements

SFAS No. 142 “Goodwill and Other Intangible Assets” provides that goodwill and certain indefinite lived intangible assets will no longer be amortized but will be reviewed at least annually for impairment and written down and charged to income when their recorded value exceeds their estimated fair value.

In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This statement supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” and the accounting and reporting provisions of Accounting Principles Board (“APB”) Opinion No. 30, “Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.” This new pronouncement also amends APB Opinion No. 51 “Consolidated Financial

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Statements,” to eliminate the exception to consolidation for a subsidiary for which control is likely to be temporary. SFAS No. 144 requires that one accounting model be used for long-lived assets to be disposed of by sale, whether previously held and used or newly acquired and also broadens the presentation of discontinued operations to include more disposal transactions. SFAS No. 144 is effective for fiscal years beginning after December 15, 2001 and interim periods within those fiscal years. Adoption of SFAS No. 144 on January 1, 2002, did not have any impact on our financial position or results of operations for the year ended December 31, 2002.

In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” This statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies the previous guidance on the subject. This statement requires, among other things, that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. The provisions for this statement are effective for exit or disposal activities that are initiated after December 31, 2002. Management does not expect the adoption of SFAS No. 146 to have a material effect on our results of operations or financial position.

Critical Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We periodically evaluate our policies and the estimates and assumptions related to these policies. We also periodically evaluate the carrying value of our assets in accordance with generally accepted accounting principles. We operate in a highly regulated industry and are subject to regulations that describe and regulate operating and internal control procedures. The majority of our revenues are in the form of cash, which by its nature, does not require complex estimates. We also made certain estimates surrounding our application of purchase accounting related to the acquisition and the related assignment of costs to goodwill and other intangible assets.

In addition, contingencies are accounted for in accordance with SFAS No. 5, “Accounting for Contingencies.” SFAS No. 5 requires that we record an estimated loss from a loss contingency when information available prior to issuance of our financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal matters requires us to use judgment. Many of these legal contingencies can take years to be resolved. Generally, as the time period increases over which the uncertainties are resolved, the likelihood of changes to the estimate of the ultimate outcome increases. However, an adverse outcome could have a material impact on our financial condition and operating results.

Liquidity and Capital Resources

Cash Flows from Operating, Investing and Financing Activities for the period ended March 31, 2003

Our cash and cash equivalents balance decreased to $0.7 million at March 31, 2003 from $1.0 million at December 31, 2002.

Cash flows used in operating activities of $0.5 million for the three months ended March 31, 2003 consisted of net loss of $3.7 million increased by non-cash charges of $0.7 million, principally amortization and write off of deferred financing costs, and an increase in working capital of $2.5 million. The change in working capital is primarily comprised of an increase in accrued interest of $1.2 million related to the old notes and an additional $1.2 million accrual related to the outstanding balance of the LHBPA litigation settlement.

Cash flows used in investing activities for the three months ending March 31, 2003 was $91.3 million consisting of (i) an increase in restricted cash—racino project and restricted investments of $87.7 million related

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to the investment of proceeds from the old notes into interest bearing cash equivalents and investments whose distribution is restricted as outlined in the Cash Collateral and Disbursement Agreement, (ii) approximately $2.1 million for the purchase of land at St. Landry Parish (the future site of the racino project) and architecture fees associated with the racino project, (iii) approximately $1.2 million in development costs related to our acquisition and our racing and gaming licenses and (iv) cash outflows of approximately $0.3 million used for capital expenditures mainly related to the renovation of our OTB at Port Allen, Louisiana.

Cash flows from financing activities for the three months ended March 31, 2003 of $91.5 million reflects the net proceeds from the offering of the old notes of $120.7 million. These proceeds were offset by (i) principal payments to repay outstanding debt totaling $20.1 million and (ii) deferred financing costs paid of $9.1 million associated with the issuance of the old notes.

Cash Flows from Operating, Investing and Financing Activities for the year ended December 31, 2002

Our cash balance remained constant at $1.0 million at December 31, 2001 and 2002.

Cash flows from operating activities of $1.5 million for the year ended December 31, 2002 consisted of net loss of $0.2 million increased by non-cash charges of $0.5 million, principally depreciation and amortization of deferred financing costs, and an increase in working capital of $1.2 million. The change in working capital is primarily comprised of an increase in accrued expenses of $0.7 million which is primarily due to an increase in accrued interest related to notes payable where interest is not due until the maturity of the notes.

Cash flows used in investing activities for the year ended December 31, 2002 was $5.5 million including $4.7 million for the purchase and development of the land and building at St. Landry Parish (the future site of the racino project) and approximately $0.7 million in development costs related to OEDA’s acquisition of us and license costs. In addition, cash outflows of approximately $0.1 million were used for capital expenditures in 2002. Capital expenditures are expected to be approximately $1.1 million in 2003, approximately $1.0 million of which relates to the Port Allen OTB renovation and the purchase of video poker machines.

Cash flows from financing activities for the year ended December 31, 2002 of $3.9 million reflects the proceeds of a $4.5 million note payable to William E. Trotter, II, the proceeds of which were used to purchase land and to pay other development costs associated with the racino project. These proceeds were offset by deferred financing costs and expenses paid of $0.3 million, principal payments on our term loan with Foothill Capital Corporation of $0.2 million and principal payments on long-term debt to related parties of $0.1 million.

Contractual Obligations and Contingent Liabilities and Commitments

Our future contractual obligations related to debt (excluding interest) and operating leases at March 31, 2003 were as follows (in millions of dollars):

	Payments due by Period
Contractual Obligations	Total		Less Than 1 Year		1-3 Years		4-5 Years		After 5 Years
Debt	$	124.4	$	0.4	$	0.8	$	—	$	123.2
Operating Leases		1.4		0.5		0.9		—		—
Other Contractual Cash Obligations		4.4		0.8		3.6		—		—
Total	$	130.2	$	1.7	$	5.3	$	—	$	123.2

Off-Balance Sheet Transactions

We do not maintain any off-balance sheet transactions, arrangements, obligations or other relationships with unconsolidated entities or others that are reasonably likely to have a material current or future effect on our

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financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

OEDA Acquisition

During 2002, PGC, indirectly through its wholly-owned subsidiary OEDA, became our sole member as a result of the following transactions:

On June 27, 2001, BIM3 Investments, a Louisiana partnership and a 50% owner of our membership interests, entered into an agreement to sell 50% of our membership interests to PGP, our parent. The agreement was assigned by PGP to OEDA on October 23, 2001. On February 15, 2002, OEDA consummated the acquisition of 50% of our membership interests and a one-half (½) interest in two promissory notes issued by OED in the aggregate principal amount of $10,909,244 (the “Old OED notes”), for an aggregate purchase price of $15,000,000 (the “BIM3 Purchase”).

The source of funds for the BIM3 Purchase was $3,000,000 of cash on-hand and $12,000,000 of borrowings under PGC’s credit facility with Foothill Capital Corporation. In connection with the BIM3 Purchase, PGC paid consent fees totaling $887,500 to holders of the $71,000,000 Peninsula notes due July 1, 2006 (the “Peninsula notes”).

On June 25, 2002, PGP entered into an agreement with William E. Trotter, II (“Trotter”) and William E. Trotter, II Family L.L.C., a Louisiana limited liability company (“WET2LLC”) to acquire (i) the remaining 50% interest in the Old OED notes owned by Trotter, and (ii) our remaining 50% membership interest owned by WET2LLC (the “Trotter Purchase”). On August 30, 2002, OEDA consummated the Trotter Purchase for a purchase price consisting of cash of $15,546,000 plus a contingent fee of one half of one percent (0.5%) of the net slot revenues generated by the new casino to be located in St. Landry Parish for a period of ten years commencing on the date the casino opens to the public.

The source of funds for the Trotter Purchase described above was (1) $8,450,000 of borrowings under OEDA’s loan and security agreement with Foothill Capital Corporation entered into and assigned to us on August 30, 2002 (the “Term Loan”) and (2) proceeds from a $7,325,000 intercompany note issued by OEDA in favor of PGP due June 30, 2003 (the “PGP note”). Additionally, in connection with the Trotter Purchase, we and PGP issued, as joint obligors, a $4,500,000 note payable to Trotter (the “Trotter note”), the proceeds of which were used to purchase the land on which the racino will be operated and to pay certain deferred financing costs and reimbursable expenses. The source of cash provided by PGP pursuant to the PGP note relates to the proceeds from a $7,325,000 note payable issued by PGP in favor of WET2LLC due June 30, 2003 (the “WET2LLC note”).

On August 30, 2002, OEDA entered into the Term Loan with Foothill Capital Corporation providing for borrowings of $8,450,000. Borrowings under the Term Loan bear interest at a rate equal to Prime + 3.75%, subject to a minimum rate of 7.5% (interest rate of 8.0% at December 31, 2002). The Term Loan contained, among other things, covenants, representations and warranties and events of default customary for loans of this type, including, but not limited to certain requirements relative to the financing, construction and development of the racino project and a minimum EBITDA maintenance covenant. Under the Term Loan, EBITDA was defined as consolidated net earnings (or loss), excluding extraordinary gains or losses, plus interest expense, income taxes, and depreciation and amortization. The obligations under the Term Loan were secured by substantially all of OED’s assets and guaranteed by PGP. In addition, the Term Loan required OED to make principal payments of $50,000 per month beginning October 1, 2002. At December 31, 2002, OED had borrowings outstanding under the Term Loan of $8,300,000. On February 26, 2003, a portion of the net proceeds of the offering of the OED Notes was used to terminate the Term Loan and repay all outstanding borrowings thereunder.

On August 30, 2002, OEDA issued the $7,325,000 PGP note due June 30, 2003. The source of cash provided by PGP pursuant to the PGP note relates to the proceeds from the $7,325,000 WET2LLC note. The

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PGP note and the WET2LLC note bear interest at a rate of 7% until January 31, 2003, thereafter at a rate of 8% until February 28, 2003, thereafter at a rate of 9% until March 31, 2003 and thereafter at a rate equal to the greater of (1) 12% or (2) the fixed interest rate on indebtedness evidenced by a note offering consummated by OED to finance the racino project. On February 26, 2003, a portion of the net proceeds of the offering of the OED notes was used to repay all outstanding borrowings under the PGP note (the proceeds of which in turn paid off the WET2LLC note).

On August 30, 2002, OED and PGP, as joint obligors, issued the $4,500,000 Trotter note due June 30, 2003 and bearing interest at a rate of 7% until March 31, 2003 and thereafter at a rate equal to the greater of (1) 12% or (2) the fixed interest rate on indebtedness evidenced by a note offering consummated by OED to finance the racino project. On February 26, 2003, a portion of the net proceeds of the offering of the OED notes was used to repay all outstanding borrowings under the Trotter note.

We accounted for OEDA’s acquisition of all of the membership interests in us as a purchase in accordance with SFAS No. 141 “Business Combinations” and SFAS No. 142 “Goodwill and Other Intangible Assets.” The purchase price has been allocated to the underlying assets and liabilities based on their estimated fair values at the date of acquisition. To the extent the purchase price exceeded the fair value of the net identifiable assets acquired, such excess has been recorded as intangible assets. Under the provisions of SFAS 142, goodwill and other intangible assets with indefinite lives arising from the acquisition will not be amortized but will be reviewed at least annually for impairment and written down and charged to income when its recorded value exceeds its estimated fair value.

The following table summarizes the estimated fair value of the assets acquired and the liabilities assumed at the acquisition date. Third party valuations have been obtained for property and equipment.

	(in thousands)
Current assets	$  2,317
Property and equipment	1,369
Other assets	1,090
Intangible assets	28,393
Total assets	33,169
Liabilities assumed	(2,623)
Purchase price	$30,546

Intangible assets of $28.4 million acquired as part of the OED acquisition were identified and valued as follows (in millions):

Slot Machine and Electronic Video Game Licenses	$24.6
Tradename	$  2.5
Horse Racing Licenses	$  1.3
Total	$28.4

Racino Project

As described in this prospectus, we are planning to design, construct, manage and operate a new casino and contiguous racetrack facility with pari-mutuel wagering and slots in St. Landry Parish, Louisiana. The Operator will manage and supervise the construction of the racino. Other than the pledge of our stock by OEDA as collateral, neither PGC nor OEDA will guarantee the notes or otherwise provide any credit support to us. We have purchased all the necessary land to develop our racino, and the total remaining cost to design, develop, construct, equip and open the racino is expected to be approximately $88.5 million.

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Immediately following the completion of the offering of the old notes, we had cash and cash equivalents of approximately $89.7 million, after deducting for fees and expenses related to the offering of the old notes and after repaying outstanding borrowings of $20.5 million, including principal and accrued interest. These cash and cash equivalents were deposited in the construction disbursement, interest reserve and completion reserve accounts and will be used to fund (together with cash from operations, available borrowings under our proposed senior secured credit facility and furniture, fixtures and equipment financing) construction of our new racino in Opelousas, and to fund the first three payments of fixed interest on the notes. In addition, we are currently in discussions with Foothill Capital Corporation to enter into a new $15.0 million senior secured credit facility and furniture, fixtures and equipment financing.

We believe that cash on hand and cash generated from operations will be sufficient to satisfy our working capital and capital expenditure requirements (excluding the costs of designing, developing, constructing, equipping and opening the racino) and to satisfy our other debt service requirements. However, we cannot assure you that this will be the case. If cash on hand and cash generated from operations are insufficient to meet these obligations, we may have to refinance our debt or sell some or all of our assets to meet our obligations.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to certain market risks which are inherent in our financial instruments which arise from transactions entered into in the normal course of business. Market risk is the risk of loss from adverse changes in market prices and interest rates. We do not currently utilize derivative financial instruments to hedge market risk, and we do not hold or issue derivative financial instruments for trading purposes.

We are also exposed to fair value risk due to changes in interest rates with respect to our long-term fixed interest rate debt borrowing. Our fixed rate debt instruments are not generally affected by a change in the market rates of interest, and therefore, such instruments generally do not have an impact on future earnings. However, future earnings and cash flows may be impacted by changes in interest rates related to indebtedness incurred to fund repayments as such fixed rate debt matures. The following table contains information relating to our fixed rate debt borrowings which are subject to interest rate risk (dollars in millions):

Description	Contract Terms	Interest Rate	Cost		Fair Value
Senior Secured Notes with Contingent Interest	due March 1, 2010	13% Fixed	$	123.2	$	123.8	*

* Represents fair value as of May 22, 2003 based on information provided by a nationally recognized investment banking firm.

We have no investments in market risk sensitive instruments issued by others. The only securities owned by us are the shares of common stock of our wholly-owned subsidiary, The Old Evangeline Downs Capital Corp.

Seasonality and Inflation

Our operations are subject to seasonal fluctuations, which is usually stronger during live racing season which runs from April through September. In general, our payroll and general and administrative expenses are affected by inflation. Although inflation has not had a material effect on our business to date, we could experience more significant effects of inflation in future periods.

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BUSINESS

The Company

We own and operate the Evangeline Downs pari-mutuel horse racetrack near Lafayette, Louisiana. This horse racetrack has been in operation since 1966 and is one of only four pari-mutuel horse racetracks operating in Louisiana. We are currently developing a casino and pari-mutuel horse racetrack facility, or “racino,” in nearby Opelousas, Louisiana, which facility will replace our existing horse racetrack near Lafayette and where we will be permitted to operate slot machines and conduct live horse racing. Our approximately 532-acre racino site is located approximately 20 miles north of Lafayette, our primary market, at the intersection of Interstate 49 and U.S. Highway 190. There are no other casinos located within approximately 50 miles of the racino site or within approximately 50 miles of Lafayette.

The racino will be located in St. Landry Parish, which is adjacent to Lafayette Parish where our existing horse racetrack is located. On December 19, 2002, we received our racing license to operate in St. Landry Parish, and on January 21, 2003, we received our gaming license to operate slot machines at the racino, subject to customary conditions. We are relocating our existing operations to St. Landry Parish because St. Landry Parish will permit us to operate both slot machines and pari-mutuel wagering at the new racino while Lafayette Parish permits us to operate only pari-mutuel wagering at our existing horse racetrack.

Racino Development

The design of the racino will incorporate a Southern Louisiana Cajun roadhouse theme on the exterior, with a complementary regional Acadian atmosphere on the interior. Current plans for the racino include:

• a casino with approximately 1,600 slot machines;

• parking spaces for 1,990 cars and 5 buses;

• a one-mile dirt track with inner  ⁷/8-mile turf track;

• stables for 920 horses;

• grandstand and clubhouse seating for 1,436 patrons and apron and patio space for an additional 3,000 patrons; and

• several dining options, including a 340-seat buffet, 82-seat fine dining restaurant, 192-seat food court and 202-seat sports bar with an additional 98-seat screened patio.

We have purchased all the necessary land to develop our racino, and the total remaining cost to design, develop, construct, equip and open the racino is expected to be approximately $88.5 million. The construction and development of the racino project is expected to be completed in two phases. During the first phase, we will construct the casino and related casino amenities, which we expect to open in March 2004, at a total remaining cost of approximately $68.6 million. During the second phase, we will construct the horse racetrack and related facilities for a total remaining cost of approximately $19.9 million. We expect to be prepared to begin scheduling live racing meets in December 2004. We will continue to operate our existing horse racetrack until live racing meets are scheduled at the racino, at which time we will cease operations at our existing horse racetrack.

On February 25, 2003, we entered into a bonded guaranteed maximum price construction contract for $52.0 million with W.G. Yates & Sons Construction Company for the construction of the racino facility. The approximate $36.5 million remaining project budget includes the costs of equipment, additional land purchases, off-site improvements, cage cash, pre-opening expenses and development costs. W.G. Yates is an experienced casino builder, having built casinos throughout the southern United States for Boyd Gaming Corporation, Harrah’s Entertainment, and Mirage Resorts, among others. Kittrell Garlock and Associates, AIA, Ltd.,

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d/b/a KGA Architecture (“KGA Architects”) is the racino architect, having most recently designed the Palms Casino in Las Vegas, Nevada, among other gaming projects. The design of the horse racetrack and related facilities has been sub-contracted by KGA Architects to Foehlich, Kow & Gong Architects, who have been involved with the design of more than 50 horse racing facilities. KGA Architects’ project management subsidiary will administer the bonded guaranteed maximum price construction contract on our behalf. We have also engaged Abacus Project Management, Inc. to act as the independent construction consultant, on behalf of the holders of notes, who certify from time to time the proper use of the portion of the net proceeds of this offering to be used to develop the racino pursuant to the terms of the Cash Collateral and Disbursement Agreement. Abacus has extensive experience representing lenders in such capacity, including lenders to several resort developments and a pari-mutuel horse racetrack in Arizona.

We anticipate that, as of the opening of the casino which we expect to be in March 2004, we will have approximately $18.8 million in the construction, interest reserve and completion reserve accounts (considering the use of approximately $16.3 million from the interest reserve account to pay the present value of the first two payments of fixed interest on the notes and approximately $54.6 million from the construction disbursement account). In calculating the above balances, we do not consider any cash flow, income or losses from operations or any interest earned on the funds in the construction disbursement, interest reserve and completion reserve accounts through such time or funds available from other financing sources. No assurances can be given that any of these funds will be available when the casino opens.

Description of Facilities

Set forth below is a description of our current plans for our new racino and a description of our existing facilities.

Racino Under Development.    Our new racino is designed to be a state-of-the-art gaming facility featuring slot machine casino gaming and pari-mutuel wagering from both live and simulcast horse racing. The racino will reside on an approximately 532-acre site adjacent to a recently opened Wal-Mart Supercenter and a planned retail complex, at the intersection of Interstate 49 and U.S. Highway 190. The main racino customer entrance will be located approximately ¼-mile from Interstate 49, and is also easily accessible from U.S. Highway 190. Our 1,990 space parking lot will accommodate 1,668 customer cars (322 additional spaces are reserved for employees) and five buses. There will be three entrances to the approximately 170,000 ft² structure that will house our casino, amenities, grandstand, clubhouse and offices. The south entrance will be immediately accessible to the parking lot, the west entrance will feature a porte-cochere and valet parking, and the north entrance will be used by primarily by our bus customers. The exterior of the facility will have a Cajun road house theme and will feature a period water tower replica.

The interior of the facility will have a complementary Acadian atmosphere. Upon entering the facility, customers will immediately encounter an entrance to our designated casino area. Gaming regulations require that the casino area be separated from the rest of our facility with controlled entrance points. The separation barriers will resemble a decorative, wrought-iron fence that will promote an open and spacious atmosphere. The casino area will contain 15,000 ft² of defined regulated gaming space, which equates to a casino floor area of approximately 26,000 ft², and approximately 1,600 state-of-the-art slot machines in numerous denominations and related signage that will be grouped together to generate an atmosphere of excitement consistent with that typically found in Las Vegas-style casinos. In addition, monitors in the casino area will facilitate live and simulcast wagering within the casino area. A raised bar will occupy the center of the casino floor with cashier cages and service bars along the sides. Our primary food and beverage amenities will be located adjacent to the casino area. These amenities are expected to include a 340-seat buffet, 82-seat full-service fine dining restaurant, 192-seat food court and 202-seat sports bar with an additional 98-seat screened patio area with visibility of the horse racetrack. Past these amenities will be a 1,436-seat enclosed three-story grandstand overlooking the paddock and horse racetrack. Just outside the grandstand there will be a 3,000-person capacity apron and patio, accessible from the grandstand and overlooking the horse racetrack, providing additional capacity at peak

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periods. We will conduct a minimum of 80 live racing days per year during our mid-April to Labor Day season, and our import simulcast will operate five days a week year-round.

The horse racetrack will feature a one-mile long dirt track with  ⁷/8-mile inner turf track. A paddock will be placed in close proximity to the grandstands. State-of-the-art lighting will accommodate racing at night. A lake will occupy a portion of the infield and will retain water run-off. Stables accommodating 920 horses will be located opposite from the grandstands.

OTBs.    We currently operate two OTBs, one in Port Allen, Louisiana and one in New Iberia, Louisiana. Each of these OTBs offers simulcast pari-mutuel wagering six days a week and is equipped with a bar to serve alcoholic and non-alcoholic beverages and kitchen that prepares short order food. The Port Allen OTB is located immediately off Interstate 10, across the Mississippi river from Baton Rouge. The two-story Port Allen facility currently offers off-track betting and a limited food offering. The facility is also undergoing renovation to accommodate 100 video poker machines, to upgrade the bar and cafe on the first floor and to build-out a VIP lounge and offices on the second floor. We expect to complete these renovations and install the video poker machines in May 2003. The New Iberia OTB, located on U.S. Highway 182, approximately 20 miles outside Lafayette, Louisiana, offers off-track betting and a limited food offering. Under Louisiana’s racing and off-track betting laws, we have a right of prior approval with respect to any applicant seeking a permit to operate an OTB within a 55-mile radius of our horse racetrack. This effectively gives us the exclusive right, at our option, to operate OTBs within a 55-mile radius of our horse racetrack, provided that such OTB is not also within a 55-mile radius of another horse racetrack.

Existing horse racetrack.    Our existing horse racetrack facility is located approximately five miles north of Lafayette off Interstate 49 and is comprised of a 94,200 ft² pari-mutuel wagering complex, an approximate 2,000-space parking lot,  ⁷/8-mile dirt track and stables for approximately 1,000 horses. The complex features an approximate 750-seat grandstand, an approximate 3,000-person capacity apron and patio, an approximately 850-seat restaurant, four concession stands and four bars. The horse racetrack offers live thoroughbred and quarter horse races a minimum of 80 days a year from mid-April through Labor Day in September. The horse racetrack also offers simulcast wagering six days a week year-round.

Marketing Strategy

Our current marketing programs are minimal and limited to the existing horse racetrack. These programs are centered around local television and radio spots, and some print advertising, highlighting the start of the racing season each year. We do not currently maintain a marketing database or conduct direct mail campaigns. We believe our existing pari-mutuel wagering operations rely on the large base of horseman and related horse racing culture, and the limited alternative entertainment venues in the area. In connection with the planned expansion of video poker at our Port Allen OTB, located just outside Baton Rouge, we will begin marketing a branded product and introduce customary casino gaming incentive programs including a players club. This marketing program will be aimed at the nearby Baton Rouge market. Our new brand will be called “Races & Aces”, and will emphasize the “Evangeline Downs” trade name, and will be promoted primarily through billboards and print advertising and limited radio spots.

We plan to significantly increase the size and scope of our marketing programs in connection with the opening and operation of our new racino. Our marketing programs will emphasize our casino gaming product, value oriented-gaming experience, food and beverage amenities, ambient atmosphere and convenient location with ease of access. Our marketing programs will include billboard and print advertising, limited television and radio spots and direct mail, as well as customary casino gaming incentive programs including the players club we are currently developing. Our advertising will be aimed primarily at the local Lafayette market and traffic passing through the intersection of Interstate 49 and U.S. Highway 190. We will begin developing a customer database, or players club, with the start of the upcoming racing season at our existing horse racetrack, approximately a year before the opening of the racino, and with the expansion of video poker at our Port Allen

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OTB. The players club will reward casino play at the new racino, and repeat visits to the new racino and our Port Allen OTB, with various privileges and amenities. We will rely on database marketing to best identify target customer segments of the populations and to tailor our promotions and amenities to our core group of customers. Additionally, we will establish a bus program that will offer bus patrons incentives directed specifically to them. We will also continue to promote our horse racetrack operations separately and in connection with our other marketing programs.

Property

The racino will be constructed on approximately 532 acres of owned land located in Opelousas that we purchased in 2002.

We lease the land on which our existing horse racetrack in Lafayette is located and own the related building and improvements. The ground lease annual rental is $0 per year.

We own the land, building and improvements of our Port Allen OTB. We lease the facility that comprises our New Iberia OTB.

Employees

We currently employ approximately 145 employees. During our racing season, we employ up to approximately 325 employees. We anticipate that when the racino opens it will require the full time equivalent of approximately 600 additional employees.

Legal Proceedings

On November 8, 1994, the LHBPA filed a lawsuit against all licensed horse racetracks in the State of Louisiana. The lawsuit alleged that LHBPA did not receive the appropriate share of net revenues from video poker devices located at licensed horse racetracks. In February 2003, we entered into a settlement agreement with the LHBPA for $1.6 million. The terms of the settlement agreement require us to make payments of $400,000 annually beginning in March 2003, with additional $400,000 payments, adjusted for inflation due March 2004 through 2006. See the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Neither we nor our subsidiaries are a party to, and none of our nor our subsidiaries’ property is the subject of, any other pending legal proceedings other than litigation arising in the normal course of business. We do not believe that adverse determinations in any or all such other litigation would have a material adverse effect on our financial condition, results of operations or cash flows.

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LICENSING AND REGULATORY MATTERS

The ownership and operation of pari-mutuel casinos and live racing facilities are subject to extensive regulation in Louisiana. Our planned racino will be subject to the Louisiana Pari-Mutuel Live Racing Facility Economic Redevelopment and Gaming Control Act (the “Pari-Mutuel Act”) and the Louisiana Horse Racing Act. Laws and regulations applicable to our current racetrack and our planned racino are administered by the Louisiana State Gaming Control Board and the Louisiana State Racing Commission.

The Horse Racing Act and The Pari-Mutuel Act

The Horse Racing Act has been in effect since 1968 and is the basis for the current statutory scheme regulating live and off-track betting for horse racing. The Horse Racing Act states, among other things, that certain policies of Louisiana with respect to horse racing are to encourage the development of the business of horse racing with pari-mutuel wagering on a high plane; to encourage the development of the breeding and ownership of race horses; to regulate the business of horse racing by licensed horse racing tracks in the state and to provide the orderly conduct of racing; to provide financial assistance to encourage the business of racing horses; and to provide a program for the regulation, ownership, possession, licensing, keeping and inoculation of horses.

The Pari-Mutuel Act became effective on July 9, 1997, and provides for numerous controls and supervision over the operation of slot facilities and requires us to comply with complex and extensive requirements. Failure to adhere to these statutes and regulations will result in serious disciplinary action against us, including monetary fines and suspension or revocation of our licenses.

The Pari-Mutuel Act allows only one facility in each of St. Landry Parish, Bossier Parish and Calcasieu Parish to be licensed to operate slot machines at a live horse racing facility. The Company is presently the only “eligible facility” in St. Landry Parish under the Pari-Mutuel Act. The Pari-Mutuel Act requires (among other things) that two conditions be met prior to the opening and operation of a slot machine casino at a live racing venue. First, a parish-wide election must approve the operation. In 1997, voters in St. Landry Parish voted to approve the slot machine casino at the racino site. Secondly, the Pari-Mutuel Act requires that an appropriate tax be levied on the slot machine operation. In 2000, an 18.5% license tax was levied upon taxable net slot machine proceeds. Therefore, we believe that both of the conditions required by the Pari-Mutuel Act have been met with respect to the racino at our site in Opelousas within St. Landry Parish.

The Pari-Mutuel Act also provides that the “designated gaming space” in any eligible facility cannot exceed 15,000 ft², that the licensee will not allow underage gaming and that notice of toll-free telephone assistance for compulsive gamblers will be posted at the facility.

The Pari-Mutuel Act requires that licensees supplement horse racing purses and pay certain other fees from slot machine proceeds. The Pari-Mutuel Act also levies taxes on the net slot machine proceeds. Licensees must pay fifteen (15%) percent of gross slot machine proceeds to supplement purses at their facilities, pay two (2%) percent to the Louisiana Thoroughbred Breeders Association and also pay one (1%) percent to the Louisiana Quarter Horse Breeders Association. In addition to these payments, we will pay eighteen and one-half (18.5%) percent of the net slot machine proceeds (net of the payments described above) as state taxes and four (4%) percent as local taxes. The effective rate of total taxes and fees is therefore approximately 36.5%. Additionally, we will also have to pay $0.25 to the Louisiana State Racing Commission for each patron attending a live race at our horse racetrack and all patrons at our OTBs.

To remain an “eligible facility” under the Pari-Mutuel Act, we must, among other things, have a minimum of 80 live racing days in a consecutive 20-week period each year of live horse race meetings at the new horse racetrack.

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The Louisiana State Gaming Control Board and Our Gaming License

In 1996, Louisiana created the Louisiana Gaming Control Board, which was granted all of the regulatory authority, control and jurisdiction to license and monitor gaming facilities in Louisiana, including our planned racino. To receive a gaming license an applicant and its management must apply to the Louisiana Gaming Control Board and be investigated by the Louisiana State Police prior to licensing. The Louisiana Gaming Control Board and Louisiana State Police must determine that the applicant is suitable to conduct the gaming operations, including that the applicant (and its owners, officers, directors and key employees) is of good character, honesty and integrity, that its prior activities, reputation and associations pose no threat to the public interest or to the effective regulation of the industry and that the applicant is capable of conducting the operation of the slot machine facility. The Louisiana Gaming Control Board must also determine that the applicant has adequate financing from a source suitable and acceptable to the Louisiana Gaming Control Board.

The applicant for a gaming license, its directors, officers, key personnel, partners, and persons holding a five (5%) percent or greater equity or economic interest in the applicant will be required to be found suitable by the Louisiana Gaming Control Board. To receive a license the applicant must file an extensive application with the Louisiana Gaming Control Board, disclosing personal, financial, criminal, business and other information. The applicant is required to pay all costs of investigation. An application for a finding of suitability of a person may be denied for any cause deemed reasonable by the Louisiana Gaming Control Board. Any other person who is found to have a material relationship to or a material involvement with a gaming company also may be required to be investigated in order to be found suitable or be licensed as a business associate of an applicant. Key employees, controlling persons or others who exercise significant influence upon the management or affairs of a gaming company may be deemed to have such a relationship or involvement.

If the Louisiana Gaming Control Board were to find a director, officer or key employee of an applicant unsuitable for licensing purposes or unsuitable to continue having a relationship with an applicant, the applicant would have to dismiss and sever all relationships with such person. The applicant would have similar obligations with regard to any person who refuses to file appropriate applications. Each gaming employee must obtain a gaming employee permit which may be revoked upon the occurrence of certain specified events.

An applicant must also demonstrate that the proposed gaming operation has adequate financial resources generated from suitable sources and adequate procedures to comply with the operating controls and requirements imposed by the laws and regulations in the State of Louisiana. Additionally, the applicant must submit plans and specifications of the gaming premises specifying the layout and design of the gaming space. Proof of tax compliance, both state and federal, is also required. This submission is followed by a thorough investigation by the regulatory authorities of the applicant, its business probity, the premises and other matters. An application for any gaming license, approval or finding of suitability may be denied for any cause that the regulatory authorities deem reasonable.

We received our gaming license to operate slot machines at our racino from the Louisiana Gaming Control Board on January 21, 2003. Our license has a term of five years and is renewable for succeeding five year periods upon application for such renewal. The Louisiana Gaming Control Board retains absolute discretion over the right to renew our license upon the termination of its initial term.

OED’s gaming license authorizes the use of 15,000 square feet of designated gaming space. On February 18, 2003, OED submitted for approval its layout for the casino, which incorporated 1,631 slot machines. OED’s layout was approved based on the type of machines which were all upright machines. Should OED change the manufacturer, type and/or design of its slot machines prior to installation, it must once again go before the Louisiana Gaming Control Board to obtain approval for the new machines. Once the machines are installed, they must be inspected by regulators and tested prior to the approval of their operation.

Maintaining our gaming license is contingent in certain respects on our horse racetrack operations at our planned racino. First, our failure to complete construction of the horse racetrack at the racino or to establish a

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schedule of live racing meets at the new horse racetrack by January 21, 2005, will result in the cancellation of our gaming license. While Louisiana allows us to operate slot machines at the racino prior to completion of the new horse racing facility and the commencement of live racing at the new horse racetrack, Louisiana gaming regulations and our gaming license require that the racino must be constructed and a schedule of live racing meets at the new horse racetrack be established by January 21, 2005, which is within two years from the date of the grant of our gaming license. Second, to maintain our gaming license, we must remain an “eligible facility” under the Pari-Mutuel Act. This means that we must, among other things, have a minimum of 80 live racing days in a consecutive 20-week period each year of live horse race meetings at the new horse racetrack.

Although we have obtained our license to conduct slot machine operations, we continue to be subject to ongoing monitoring and compliance requirements by the Louisiana Gaming Control Board and the Louisiana State Police. Additionally, we have applications pending with the Louisiana Gaming Control Board for a video draw poker establishment license and owner device license. The video draw poker establishment license would allow us to operate video draw poker devices at our approved OTB locations but not the racino, and the owner device license allows us to own those machines. The failure to obtain the video draw poker establishment license would preclude us from owning or operating video draw poker devices at our approved OTB locations. Regulations require us to comply with rigorous accounting and operating procedures, including the submission of detailed financial and operating reports. Our accounting records must include accurate, complete and permanent records of all transactions pertaining to revenue. Detailed ownership records must be kept on site available for inspection. All records must be retained for a period of five years. Audited financial statements are required to be submitted to the Louisiana State Police. Internal controls must be approved and in place beginning the first day of operation. These controls will include handling of cash, tips and gratuities, slot operations, count room procedures and management information systems. Each licensed facility is required by the Louisiana Gaming Control Board to maintain cash or cash equivalent amounts on site sufficient to protect patrons against defaults in gaming debts owed by the licensee. In addition, licensees are be subject to currency transaction report regulations.

We must also strictly comply with mandated operating procedures and supply detailed reports disclosing such compliance. Regulation of a casino’s methods of operations is extensive and will include substantially all aspects of our casino operation. Operating procedures that are subject to regulation include slot machine maintenance and operation, cash management and cash procedures, cage procedures, drop procedures, regulation of weapons in the casino, parking, access to the premises and records by regulators, gaming credit and advertising, surveillance and security standards, safeguards against underage gambling, compulsive gambling programs, physical layout and progressive jackpots.

The Louisiana Gaming Control Board retains the power to suspend, revoke, condition, limit or restrict our license to conduct slot machine operations as a sanction for violating licensing terms or for any cause they deem reasonable. In addition, monetary fines for violations may be levied against us, and our gaming operation revenues may be forfeited to the state under certain circumstances. Initial enforcement actions against a licensee are brought by the Louisiana State Police and are heard before an administrative law judge to whom the Louisiana Gaming Control Board has delegated decision making power. Either party may appeal the ruling of the administrative law judge before the full Louisiana Gaming Control Board. Either party may further appeal the ruling of the Louisiana Gaming Control Board in state court. The laws, regulations and procedures pertaining to gaming are subject to the interpretation of the regulatory authorities and may be amended. Any changes in such laws or regulations, or their current interpretations, could have a material adverse effect on our business, financial condition, results of operations and ability to meet our payment obligations under the notes and our other indebtedness.

The Louisiana Gaming Control Board has broad regulatory power over securities issuances and incurrence of indebtedness by gaming facilities. Substantially all loans, leases, private sales of securities, extensions of credit and similar financing transactions entered into by a licensee must be approved by the Louisiana Gaming Control Board. Pursuant to a letter dated January 31, 2003, the Louisiana Gaming Control Board exempted the

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notes offering from any requirement for prior approval by the Louisiana Gaming Control Board. As a result of the letter of January 31, 2003, prospective purchasers of the notes are effectively exempted from the rules regarding suitability requirements. However, at any time, any holder of the notes may be called before the Louisiana Gaming Control Board to undergo a suitability investigation in the event the Louisiana Gaming Control Board determines that such holder exercises a material influence over us or our operations.

At any time the Louisiana Gaming Control Board may investigate and require the finding of suitability of any shareholder or beneficial shareholder (and if the shareholder is a corporate or partnership entity, then the shareholders or partners of the entity), officer, partner, member, manager or director of a licensee if the Louisiana Gaming Control Board believes such holder exercises a material influence over the licensee. Furthermore, all holders of more than a 5% interest in the licensee, or proposed purchasers of more than a 5% interest are automatically investigated and are required to submit to suitability requirements of the Louisiana Gaming Control Board. Any sale or transfer of more than a 5% interest in any riverboat or slot project is subject to the approval of the Louisiana Gaming Control Board.

Although the Pari-Mutuel Act does not specifically require debt holders to be licensed or to be found suitable, the Louisiana Gaming Control Board, in its sole discretion, may require the holders of debt securities to file applications and obtain suitability certificates from it. Furthermore, if the Louisiana Gaming Control Board finds that any holder exercises a material influence over the gaming operations, a suitability certificate will be required.

If the Louisiana Gaming Control Board finds that any security holder or proposed security holder, including a holder of the notes, is not qualified pursuant to the existing laws, rules and regulations, and if as a result it determines that the licensee is no longer qualified to continue as a licensee, it can propose action necessary to protect the public interest, including the suspension or revocation of a license or permit. It may also issue, under penalty of revocation of license, a condition of disqualification naming the person and declaring that such person may not (a) receive dividends or interest on securities of the licensee, (b) exercise any right conferred by securities of the licensee, (c) receive remuneration or any other economic benefit from the licensee or (d) continue in an ownership or economic interest in the licensee or remain as a director, partner, officer, or manager of the licensee. A security issued by a licensee must generally disclose these restrictions.

Louisiana State Racing Commission and Our Racing License

Pari-mutuel betting and the conducting of live horse race meets in Louisiana are strictly regulated by the Louisiana State Racing Commission, which was created pursuant to the Horse Racing Act. The Louisiana Racing Commission is comprised of ten members and is domiciled in New Orleans, Louisiana. In order to be approved to conduct a live race meet and to operate pari-mutuel wagering (including off-track betting), an applicant must show, among other things: racing experience; financial qualifications; moral and financial qualifications of applicant and applicant’s partners, officers and officials; the expected effect on the breeding and horse industry; and the expected effect on the State’s economy.

In 2000, we received from the Louisiana State Racing Commission a license to conduct live race meets and to operate pari-mutuel wagering at our existing facility. The initial term of this license is ten years subject to renewal in 2010. On December 19, 2002, we received approval to transfer our operations under our license from Lafayette Parish to St. Landry Parish for the racing season commencing in 2005. As a condition to the approval of our racing license, we are required to offer pari-mutuel wagering in the defined casino gaming space at the time we begin conducting slot machine gaming. Our current plans for our new racino include monitors and other equipment to facilitate live and simulcast wagering within the casino area in compliance with this condition.

The Louisiana State Racing Commission promulgates rules, regulations and conditions for the holding, conducting and operating of all racetracks in the state. Failure to adhere to these regulations may result in substantial fines or the suspension or revocation of our racing license. A revocation or suspension of the racing

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license would, in turn, result in the revocation or suspension of our gaming license to conduct slot machine operations. Any alteration in the regulation of these activities could have a material adverse effect on our operations.

Federal Regulation of Slot Machines

We are required to make annual filings with the U.S. Attorney General in connection with the sale, distribution or operation of slot machines. We are currently in compliance with such filing requirements.

Potential Changes in Tax and Regulatory Requirements

In the past, federal and state legislators and officials have proposed changes in tax law, or in the administration of the laws, affecting the gaming industry. Regulatory commissions and state legislatures sometimes consider limitations on the expansion of gaming in jurisdictions where we operate and other changes in gaming laws and regulations. Proposals at the national level have included a federal gaming tax and limitations on the federal income tax deductibility of the cost of furnishing complimentary promotional items to customers, as well as various measures which would require withholding on amounts won by customers or on negotiated discounts provided to customers on amounts owed to gaming companies. It is not possible to determine with certainty the likelihood of possible changes in tax or other laws or in the administration of the laws. The changes, if adopted, could have a material adverse effect on our financial results.

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MANAGEMENT

Directors and Officers

The following information summarizes the business experience during at least the past five years of each of our officers and the board of managers of PGP. The PGP board of managers indirectly manages our operations as a result of the corporate structure and ownership of the membership interests of PGP and its subsidiaries. We are managed by OEDA, our sole member. OEDA is managed by PGC, which is OEDA’s sole member, and PGC in turn is managed by its sole voting member, PGP.

Name	Age	Position
M. Brent Stevens	42	Chief Executive Officer and Manager of PGP
Michael S. Luzich	48	President and Secretary and Manager of PGP
Terrance W. Oliver	53	Manager of PGP
Andrew R. Whittaker	41	Manager of PGP
George T. Papanier	45	Chief Operating Officer
Natalie A. Schramm	32	Chief Financial Officer

M. Brent Stevens.    Mr. Stevens is our Chief Executive Officer and is a manager and the Chief Executive Officer of PGP, the parent and sole manager of PGC. Mr. Stevens is also the Chief Executive Officer of PGC and is an Executive Vice President of Jefferies & Company, Inc., the initial purchaser of the old notes, which he joined in 1990. See also the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Certain Relationships and Related Transactions.” Mr. Stevens has served as a member of the board of directors of American Restaurant Group, Inc. since 1999.

Michael S. Luzich.    Mr. Luzich is our President and Secretary and is a manager, President and Secretary of PGP. Mr. Luzich is also the President and Secretary of PGC. See also the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Certain Relationships and Related Transactions.” Mr. Luzich is the founder and President of Cambridge Investment Group, LLC, an investment and development company located in Las Vegas, Nevada. Prior to October 1995, Mr. Luzich was a founding partner and director of Fitzgeralds New York, Inc. and Fitzgeralds Arizona Management, Inc., which were development companies responsible, respectively, for the Turning Stone Casino near Syracuse, New York, for the Oneida Tribe and the Cliff Castle Casino near Sedona, Arizona, for the Yavapai-Apachi Tribe.

Terrance W. Oliver.    Mr. Oliver serves as a manager of PGP. Since 1993, Mr. Oliver has served as a director of and consultant to Mikohn Gaming Corporation, a gaming equipment manufacturer headquartered in Las Vegas. From 1988 until 1993, Mr. Oliver served as Chairman of the Board to the predecessor company of Mikohn. From 1984 until 1996, Mr. Oliver was a founding shareholder, board member and executive officer of Fitzgeralds Gaming Corporation. Mr. Oliver retired as the Chief Operating Officer of Fitzgeralds Gaming Corporation in 1996.

Andrew R. Whittaker.    Mr. Whittaker serves as a manager of PGP and is a Vice Chairman of Jefferies & Company, Inc., the initial purchaser, which he joined in 1990. See also the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Certain Relationships and Related Transactions.”

George T. Papanier.    Mr. Papanier serves as our Chief Operating Officer. Mr. Papanier has served as the Chief Operating Officer of PGC since July 2000. Prior to joining PGC, Mr. Papanier was employed by Resorts Casino Hotel in Atlantic City, New Jersey as Executive Vice President and Chief Operating Officer from May 1997 to March 2000. Prior to that, Mr. Papanier served as Senior Vice President of Finance and Chief Financial

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Officer of the Mohegan Sun Casino since October 1995 and Senior Vice President of Finance and Chief Financial Officer of Mohegan Sun Casino since October 1995. Mr. Papanier has been in the casino industry for 20 years working for various casinos including Sands Hotel and Casino, Golden Nugget Casino Hotel, Bally’s Grand, Trump Plaza Hotel and Casino and Hemmeter Enterprises.

Natalie A. Schramm.    Ms. Schramm serves as our Chief Financial Officer. Ms. Schramm has served as the Chief Financial Officer of PGC since July 1999. Ms. Schramm joined PGC’s predecessor, Greater Dubuque Riverboat Entertainment Company, L.C., in November 1996 and was formerly employed by Aerie Hotels and Resorts in Oak Brook, Illinois as Corporate Accounting Manager since 1992. She was responsible for the corporate accounting functions of the Silver Eagle, the Eagle Ridge Inn and Resorts, located in Galena, Illinois and the Essex Hotel, located in Chicago, Illinois. She served as Internal Audit Manager for the Silver Eagle and was a member of a development team that successfully pursued a riverboat gaming license in Indiana.

We have entered into a management services agreement with PGC and OEDA pursuant to which our daily operations will be managed. See the section entitled “Other Material Agreements—Management Services Agreement”. We have not entered into any employment agreements or other compensatory arrangements with any of our executive officers.

Board of Managers of PGP

We are controlled by OEDA, our sole member, which in turn is indirectly controlled by PGP. Under PGP’s operating agreement, the management of PGP is vested in a board of managers composed of five individuals, two of whom must be independent managers. Presently, one seat of PGP’s board of managers is vacant. A manager may resign at any time, and the member who designates a manager may remove or replace that manager from the board of managers at any time. At any time that M. Brent Stevens, together with any entity controlled by Mr. Stevens, beneficially holds at least 5% of the voting common membership interests of PGP, Mr. Stevens is entitled to designate three of PGP’s managers, including one of the two independent managers. At any time that Michael Luzich, together with any entity controlled by Mr. Luzich, beneficially holds at least 5% of the voting common membership interests of PGP, Mr. Luzich is entitled to designate two of PGP’s managers, including the other independent manager.

On May 21, 2003, PGP’s operating agreement was amended to create an executive committee consisting of Messrs. Luzich and Stevens. Under the amendment, the executive committee manages our business and affairs. The executive committee meets weekly or as otherwise agreed upon between Messrs. Luzich and Stevens. Other than with respect to any officers whose responsibilities include any project or real estate development, all executive officers of PGP and OED shall report to the Chief Executive Officer of PGP. The executive committee shall, subject to the approval of the board of managers of PGP, unanimously approve the engagement of all of our executive officers (whose compensation exceeds $100,000 annually), attorneys and accountants. In the event that the executive committee is unable to reach a unanimous determination as to any such engagement within a reasonable period of time, the executive committee shall submit the prospective engagement to the independent managers of PGP’s board, whose determination shall be final.

Executive Compensation

None of our executive officers were directly compensated by us or any of our subsidiaries in the fiscal years ended 2000, 2001 and 2002. However, our executive officers received compensation from our parent, PGC, and/or PGP, the parent of PGC in the fiscal years ended 2000, 2001 and 2002. For a description of this compensation, see the section entitled “Certain Relationships and Related Party Transactions”.

Compensation of Managers

All managers of PGP receive an annual payment of $25,000 (other than Mr. Stevens who receives $125,000) for their services as managers on the board of managers of PGP and are reimbursed for their travel and related out-of-pocket expenses for attendance at board of managers meetings.

Compensation Committee Interlocks and Insider Participation

We have no standing Compensation Committees. All compensation decisions are made by PGP, our parent and sole manager. The managers of PGP each participate in the determination of executive officer compensation.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

All of our membership interests are owned by our parent, OEDA which is in turn wholly-owned by PGC. PGP is the sole managing member of PGC and owns 100% of the voting membership interests of PGC. See the section entitled “Risk Factors—Risks Relating to Our Business—Interested Party Matters.”

The table below sets forth information regarding the beneficial ownership of the voting common membership interests of PGP by:

(a)  each person or entity known by us to own beneficially 5% or more of the common membership interests of PGP;

(b)  each of our executive officers and the managers of PGP; and

(c)  all of our executive officers and the managers of PGP as a group.

The following information is helpful to an understanding of, and qualifies the beneficial ownership data contained in, the table set forth below. Mr. Stevens holds 248,334 PGP common membership interests directly and 413,333 PGP common membership interests indirectly through PGP Investors, LLC. Mr. Stevens is the sole managing member of PGP Investors, LLC and exercises voting and investment power over the PGP common membership interests owned by PGP Investors, LLC. Mr. Stevens, our Chief Executive Officer and a manager of PGP, and Mr. Andrew Whittaker, a manager of PGP, are an Executive Vice President and a Vice Chairman, respectively, of Jefferies & Company, Inc, the initial purchaser in connection with the issuance of the old notes. In addition, Jefferies & Company, Inc. and some of its affiliates, officers and employees are members of PGP Investors, LLC. Mr. Whittaker holds an economic interest in approximately 41,667 PGP common membership interests indirectly through his membership in PGP Investors, LLC, but does not exercise voting or investment power with respect to these PGP common membership interests. Mr. Oliver holds his interest through The Oliver Family Trust. The total holding of all managers and executive officers as a group includes the 413,333 PGP common membership interests held by PGP Investors, LLC, over which Mr. Stevens exercises voting and investment power.

Name and Address of Beneficial Owner	Number of Voting Common Membership Interests of PGP Beneficially Owned	Percentage of Class
PGP Investors, LLC 11100 Santa Monica, 10th Floor Los Angeles, CA 90071	413,333	41.33	%
M. Brent Stevens(1)	661,667	66.17	%
Michael S. Luzich(1)	323,333	32.33	%
Terrance Oliver(1)	15,000	1.50	%
Andrew R. Whittaker(1)	41,667	4.17	%
George T. Papanier(1)	—	—
Natalie A. Schramm(1)	—	—
All managers of PGP and executive officers as a group (6 persons)	1,000,000	100.00	%

(1) The business address for PGP, PGC, M. Brent Stevens, Michael S. Luzich, Terrance W. Oliver, George T. Papanier, Andrew R. Whittaker and Natalie A. Schramm is c/o Peninsula Gaming Company, LLC, 3rd Street Ice Harbor, P.O. Box 1750, Dubuque, Iowa 52004.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Andrew R. Whittaker, a Vice Chairman of Jefferies & Company, Inc., is also a manager of PGP. M. Brent Stevens, our Chief Executive Officer and an Executive Vice President of Jefferies & Company, Inc., is also a manager and Chief Executive Officer of PGP and the Chief Executive Officer of PGC. Due to these relationships, those individuals may indirectly receive money from us for management fees and other amounts paid by us to PGC. See the sections entitled “Risk Factors—Risks Relating to Our Business—Concentration of Ownership” and “ —Interested Party Matters” and “Plan of Distribution.”

We entered into a management services agreement with the Operator under which the Operator will assist us in developing and managing our racino. The terms of the agreement are described below under the section entitled “Other Material Agreements—Management Services Agreement.”

Messrs. Stevens and Luzich also are entitled to receive certain payments from PGC and/or PGP in connection with certain services that they provide to PGC and PGP. Mr. Stevens, our Chief Executive Officer, received $125,000 for his services as a manager for the board of managers of PGP for 2000, 2001 and 2002, in addition to reimbursement for certain out-of-pocket expenses related to attendance at board of managers’ meetings. Mr. Stevens also is the sole managing member of PGP Advisors, LLC. Under the terms of PGP’s operating agreement, PGP Advisors, LLC may render financial advisory and consulting services to PGP, although it does not currently, and will be entitled to receive commercially reasonable fees from PGP for these services consistent with industry practices. In January 2003, Cambridge Capital Advisors, LLC, which is 99% owned directly by Mr. Luzich, our President and Secretary, entered into an amended consulting agreement with PGP. Under the terms of this amended consulting agreement, Mr. Luzich is entitled to receive from PGP compensation in an aggregate annual amount equal to (a) 2.0% of PGC’s unconsolidated earnings before interest, taxes, depreciation, amortization and other non-recurring charges during the preceding calendar year, plus (b) 2.5% of OED’s earnings before interest, taxes, depreciation, amortization and other non-recurring charges during the preceding calendar year commencing on the first day of the month succeeding the month in which OED commences gaming operations. The consulting agreement has a one-year term and, subject to the occurrence of various termination events, is renewable automatically for successive one-year terms. Under this agreement, Mr. Luzich is also entitled to reimbursement of reasonable business expenses as approved by the board of managers of PGP. For the fiscal years ended 2000, 2001 and 2002, Mr. Luzich received, $335,420, $327,128 and $336,829, respectively, under this consulting agreement.

Mr. Papanier, our Chief Operating Officer, received a salary from PGC of $109,203, $299,489 and $350,046 in the fiscal years ended 2000, 2001 and 2002, respectively. Mr. Papanier received a bonus of $190,000 in 2002. Mr. Papanier received other annual compensation (including club membership fees, automobile allowances and for reimbursement of certain out-of-pocket expenses) of $19,341, $13,150 and $12,465 in the fiscal years ended 2000, 2001 and 2002, respectively. In 2000, in connection with his relocation, PGC acquired Mr. Papanier’s current residence for which he pays all property taxes, utility expenses, and other out-of-pocket costs related to maintaining such residence, excluding the fair market value equivalent of rental expense. Additionally, Mr. Papanier received compensation of $5,250 and $5,500 in 2001 and 2002, respectively, in each case representing matching contributions made by PGC to PGC’s 401(k) plan.

In April 2000, Ms. Schramm, our Chief Financial Officer, entered into a new employment agreement with our parent, PGC. Under the terms of this employment agreement, Ms. Schramm is entitled to receive from PGC a base annual salary that is reviewed on an annual basis and adjusted upward annually by not less than five percent (5%) of the prior year’s compensation. In addition to the base salary, Ms. Schramm shall be entitled to receive an annual cash bonus payable by PGC based on her performance during the previous employment year, which is consistent with the PGC’s bonus plan for department directors. The employment agreement has an initial term of three years and, subject to the occurrence of various termination events, is renewable automatically for successive one-year terms. Ms. Schramm received a salary from PGC of $114,207, $129,567 and $136,955 in the fiscal years ended 2000, 2001 and 2002, respectively. Ms. Schramm received a bonus of $20,000, $19,328 and

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$40,000 in the fiscal years ended 2000, 2001 and 2002, respectively. Ms. Schramm received other annual compensation of $3,840, $4,200 and $3,408 in the fiscal years ended 2000, 2001 and 2002, respectively, in each case representing club membership fees. Additionally, Ms. Schramm received compensation of $4,480, $5,082 and $5,500 in the fiscal years ended 2000, 2001 and 2002, respectively, in each case representing matching contributions made by PGC to PGC’s 401(k) plan.

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DESCRIPTION OF PROPOSED SENIOR SECURED CREDIT FACILITY

AND INTERCREDITOR AGREEMENT

Proposed Senior Secured Credit Facility

On or shortly after the closing of this offering, we intend to enter into a new $15.0 million senior secured credit facility. Our obligations under the proposed credit facility will be secured by a lien on substantially all of our and our subsidiaries’ current and future assets, other than the construction disbursement, interest reserve, completion reserve and excess cash flow accounts and certain other excluded assets. Pursuant to the intercreditor agreement described below, the lien on the collateral securing our proposed senior secured credit facility will be senior to the lien on such collateral securing the notes and the guarantees and accordingly our obligations under the notes and the obligations of our restricted subsidiaries under the guarantees will be contractually subordinated to our obligations under such new senior secured credit facility to the extent of the collateral securing such obligations. We expect that our proposed senior secured credit facility will contain customary conditions to closing and to borrowing and will contain representations and warranties customary in other gaming-related financings. We also expect that our proposed senior secured credit facility will contain certain financial covenants and restrictions on, among other things, indebtedness, liens, investments, distributions, transactions with affiliates, asset dispositions, acquisitions and mergers. We expect that our proposed senior secured facility will contain customary events of default. We are currently in discussions with Foothill Capital Corporation, the lender under our existing senior credit facility, regarding proposed financing arrangements for the new senior secured credit facility, however there can be no assurance that we will be able to enter into our proposed senior secured credit facility or any alternative credit facility. The establishment of our proposed senior secured credit facility is subject to the approval of the gaming authorities in Louisiana. There can be no assurances that such approval will be obtained.

Intercreditor Agreement

In connection with our entering into our proposed senior secured credit facility, we expect that the trustee under the indenture for the notes (as secured party) will enter into an intercreditor agreement concurrently with the closing of such new senior secured credit facility, substantially in the form of the intercreditor agreement attached as an exhibit to the indenture, with the lender under such credit facility which, among other things, will subordinate the liens securing the notes and the guarantees to the liens securing the indebtedness under our proposed senior secured credit facility (except that the construction disbursement, interest reserve, completion reserve and excess cash flow accounts will only be security for the notes and the guarantees). See the section entitled “Description of Notes—Intercreditor Agreement.”

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OTHER MATERIAL AGREEMENTS

Management Services Agreement

We have entered into a management services agreement with PGC and OEDA, together, as the Operator. Pursuant to the terms of that agreement, the Operator will manage and operate our existing horse racetrack and design, develop, construct, manage and operate the new racino and provide certain pre-opening services in connection therewith. Although the Operator may obtain services from affiliates to the extent necessary to perform its obligations, the Operator will be fully responsible for all obligations under the agreement.

Below is a summary of the material terms of the management services agreement. This summary is qualified in its entirety by the management services agreement, a copy of which will be provided to investors for their review upon request.

Duties of the Operator.    Prior to the opening of the racino, the Operator will supervise the design, development and construction of the racino and perform pre-opening budgeting, marketing, hiring of personnel, and coordinating of initial inventories and will establish security systems, data processing systems, accounting and internal controls, and preventive maintenance programs. The Operator will retain architects, engineers, contractors, designers and other specialists as it deems necessary to prepare plans and specifications for the racino. Upon opening of the racino, the Operator will be responsible for the day to day operation of the racino, including the hiring of personnel, participation in sales and promotional campaigns, maintenance and repairs and the execution of agreements necessary for the proper operation of the racino.

Fees.    The Operator is entitled to receive a pre-opening service fee equal to $40,000 per month, retroactive to June 27, 2001, which fee has not yet been paid. Payments in respect of these pre-opening service fees are not required to be paid until the earlier to occur of the commencement of operations at the casino or the operating deadline applicable to the casino under the Cash Collateral and Disbursement Agreement. The Operator is also entitled to be reimbursed for all reasonable and documented out-of-pocket expenses permitted to be incurred under the management services agreement, including, but not limited to, tax preparation, accounting, legal and administrative fees and expenses incurred in connection with the Operator’s ownership of us. The Operator is also entitled to receive a basic management fee equal to 1.75% of net revenue (less net food and beverage revenue) and an incentive fee equal to:

• 3.0% of the first $25.0 million of EBITDA (as defined below);

• 4.0% of EBITDA in excess of $25.0 million but less than $30.0 million of EBITDA; and

• 5.0% of EBITDA in excess of $30.0 million.

“EBITDA” is defined in the management services agreement as earnings before interest, income taxes, depreciation and amortization; provided, however, that in calculating earnings, the basic management fee, the incentive fee and reimbursables payable under the management services agreement shall not be deducted.

Term.    The management services agreement will terminate on the later of (i) the date that is eight years after the first date a revenue paying customer is admitted to the new racino and (ii) the date of sale by PGC of its direct or indirect beneficial ownership of our membership interests.

Termination.    The management services agreement may be terminated by mutual agreement of the parties prior to the expiration of its term. In addition:

The Operator may terminate the management services agreement if:

• we fail to make any monetary payment required on or before the date such payment is due and such failure continues for 10 business days after receipt by us of a written notice from the Operator specifying such failure; or

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• we fail to perform our material obligations and such failure has a material adverse effect on the financial condition or results of operations of our business and such failure shall continue for a period of 30 days after written notice thereof from the Operator to us specifying in reasonable detail the nature of such failure.

We may terminate the management services agreement if:

• The Operator fails to perform its material obligations and such failure has a material adverse effect on the financial condition or results of operations of our business and such failure continues for a period of 30 days after written notice of such failure from us to the Operator specifying in reasonable detail the nature of such failure; or

• The Operator has been found unsuitable to provide the services contemplated by the management services agreement by the applicable gaming authorities and no appeal or other remedy is available or undertaken.

If the management services agreement is terminated, all sums owed by either party to the other will be paid within 30 days of the termination date. If the management services agreement is terminated, we will, notwithstanding such termination, be liable to the Operator for the fees earned and reimbursables incurred by the Operator thereunder before such termination as follows:

• unpaid accrued and payable management fees, pre-opening services fees and any advances made by the Operator on behalf of us (including any unpaid accrued interest thereon), if any,

• the present value (calculated based on projections at the time of termination and based on an 8.0% discount rate) of the projected management fees remaining unpaid during the eight year period immediately subsequent to the opening date of the new racino; provided, however, that this amount will not be payable if the termination is made by us as a result of the Operator’s default under the management services agreement;

• all reimbursables incurred before termination thereunder, plus

• a termination fee equal to $5.0 million plus an amount computed like interest at the rate of eight percent 8% per annum (compounded semi-annually) until such termination fee is paid.

Non-compete.    During the term of the management services, except for the new racino, we agree that we will not either directly or indirectly:

• own, manage or operate a casino in any jurisdiction in which the Operator or any of the Operator’s affiliates own, manage or operate a casino or conduct other gaming activities, now or in the future, whether as a proprietor, partner, stockholder, advisor, consultant or in any other capacity, or

• provide technical, marketing or other assistance to any casino or casino operator in any jurisdiction where the Operator or its affiliates own, manage or operate a casino or conduct other gaming activities.

Right of First Offer.    During the term of the management services agreement, we will offer to the Operator the right of first offer to manage and operate any casino that we or our affiliates construct, develop or own, other than the racino, located in Louisiana for which we or our affiliates are seeking to engage a third party to manage and operate.

Indemnification.    We will indemnify and hold harmless the Operator, and its members, officers, employees and agents from and against any uninsured loss, liability or cost based upon breach of any representation, warranty, covenant or agreement by us or the ownership, condition or use of the casino; provided that we will not be liable for any such loss, liability or cost solely to the extent caused by the Operator’s gross negligence, willful misconduct or criminal conduct. The Operator will indemnify and hold us, and our members, directors, officers,

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employees and agents, harmless from and against any uninsured loss, liability or based upon the operation, management, condition or use of the casino by the Operator only to the extent any such loss, liability or cost is caused by the Operator’s gross negligence, willful misconduct or criminal conduct.

Construction Contract

On February 25, 2003, we entered into a bonded guaranteed maximum price construction contract with W.G. Yates & Sons Construction Company pursuant to which W.G. Yates & Sons Construction Company shall act as the construction contractor for the racino facility. W.G. Yates & Sons Construction Company is an experienced casino builder having built casinos throughout the United States for Boyd Gaming Corporation (Borgata Hotel Casino & Spa, Atlantic City), Harrah’s Entertainment (Harrah’s, Tunica) and Mirage Resorts (Beau Rivage Resort & Casino, Biloxi), among others. The basis for payments under the bonded guaranteed maximum price construction contract will be the cost of the work plus a fee in the amount of 4½% of the cost of the work with a guaranteed maximum price (which is the aggregate of the cost of the work and the fee) in the amount of $52.0 million. As of March 3, 2003, the specification and drawings were 100% completed. The guaranteed maximum price in the bonded guaranteed maximum price construction contract was based upon the specifications and drawings being 80% complete and may be adjusted if a change order is approved by the contractor, us and KGA Architects. In addition, the general contractor will agree to share 50% of all cost savings with us which will be determined as subcontracts are finalized.

The bonded guaranteed maximum price construction contract covers the site preparation work for the racino site and the construction of the casino complex (excluding gaming equipment), horse racetrack, grandstand, stables and parking area. Performance of the contractor’s obligations under the bonded guaranteed maximum price construction contract will be supported by payment and performance bonds. In addition, W.G. Yates & Sons Construction Company will provide comprehensive public liability insurance, including contractual liability coverage in such amounts as shall be deemed appropriate as determined in the reasonable good faith opinion of each of the Issuers, W.G. Yates & Sons Construction Company and the Trustee under the indenture governing the notes. We have obtained builder’s all risk insurance to insure against damage to the work in place during construction. Under the bonded guaranteed maximum price construction contract, the racino will be developed in two phases with the first phase being the casino and the second phase being the horse racetrack. The first phase is to be completed within 12 months after the commencement of construction, which occurred on March 10, 2003. If the contractor fails to achieve substantial completion within such 12-month period, the contractor is obligated to pay us liquidated damages in the amount of $33,333 for each day that substantial completion has not been achieved. If the contractor achieves substantial completion prior to the expiration of such 12-month period, we will agree to pay the contractor $33,333 for each day prior to the expiration of such 12-month period that substantial completion has been achieved; provided, however, such amount may be forfeited by the contractor if it fails to complete the second phase on or before November 15, 2004.

Construction of the second phase of the racino will begin no later than December 1, 2003. The second phase is to be completed on or before November 15, 2004. If the contractor fails to achieve substantial completion by November 15, 2004, the contractor is obligated to pay us liquidated damages in the amount of $20,000 for each day that substantial completion has not been achieved. If the contractor achieves substantial completion prior to November 15, 2004, we will agree to pay the contractor $20,000 for each day prior to November 15, 2004 that substantial completion has been achieved.

In addition to adjustments to the guaranteed maximum price discussed above, the guaranteed maximum price will be subject to material increase if:

• we change the scope of our construction plans or specifications after such construction plans and specifications have been completed;

• we encounter unforeseen geological, environmental, or site preparation conditions;

• unions may attempt to picket the contractor since it is not employing union contractors, which picket lines may restrict passage in and out of the property or delivery of materials; or

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• our construction plans or specifications are changed as a result of changes in the law or governmental requirements.

Architectural Contract

PGC has retained KGA Architects as the racino architect. On February 25, 2003, we entered into an architectural contract with KGA Architects for provision of architectural and engineering services related to the racino.

Cash Collateral and Disbursement Agreement

Pursuant to the Cash Collateral and Disbursement Agreement entered into among U.S. Bank National Association, as the disbursement agent and the trustee, Abacus Project Management, Inc., as the independent construction consultant and us, the net proceeds of the offering of the old notes were placed into a construction disbursement account, an interest reserve account and a completion reserve account to be disbursed by the disbursement agent.

Construction Disbursement Account

Approximately $60.5 million of the net proceeds of the offering of the old notes was deposited into a construction disbursement account and will be used to fund the design, development, construction and opening of the racino. All such funds will be held in the construction disbursement account and pledged to the trustee for the benefit of itself and the holders of the notes until disbursed in accordance with the Cash Collateral and Disbursement Agreement.

Subject to certain exceptions, the disbursement agent will disburse funds from the construction disbursement account only upon the satisfaction of the disbursement conditions set forth in the Cash Collateral and Disbursement Agreement.

The Cash Collateral and Disbursement Agreement permits advance disbursements from the construction disbursement account of up to $1.5 million in the aggregate outstanding at any time subject to certain conditions.

Interest Reserve Account

Approximately $24.2 million of the net proceeds of the offering of the old notes were deposited into an interest reserve account. Funds in this account will be invested in securities by the disbursement agent as directed by the trustee from time to time. Funds and other assets held in the interest reserve account will be pledged to the trustee for the benefit of itself and the holders of the notes. These funds will be used for the first three payments of fixed interest on the notes during the construction period of the racino in accordance with the indenture governing the notes.

Completion Reserve Account

We deposited approximately $5.0 million of the net proceeds of the offering of the notes into a completion reserve account. The funds in which account will be disbursed, upon satisfaction of certain disbursement conditions, to fund potential cost overruns and contingency amounts with respect to the design, development, construction, equipping and opening of the racino.

Construction Budget

The Cash Collateral and Disbursement Agreement provides that the construction budget may be amended only upon the satisfaction of certain conditions set forth in the Cash Collateral and Disbursement Agreement. In addition, construction line items in the budget may only be increased if the funds for such increase are made

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available in the budget from certain specified sources. We will also agree to cure any anticipated cost overrun during the construction of the racino using funds from certain specified sources, including the completion reserve account, and to provide certain certifications from time to time regarding project costs.

Final Disbursement of Funds

Any funds remaining in the interest reserve account following payment of the first three payments of fixed interest on the notes shall be automatically deposited into the construction disbursement account to be subsequently disbursed in accordance with the Cash Collateral and Disbursement Agreement.

Pursuant to the Cash Collateral and Disbursement Agreement, once the disbursement agent receives an officer’s certificate from us, the Operator (as the manager of the racino) and the independent construction consultant confirming that (1) the racino has been operating uninterrupted for at least 30 days prior to the date of the certification, (2) there is no ongoing construction (other than maintenance and repairs in the ordinary course of business, (3) there exists no default or event of default under the Cash Collateral and Disbursement Agreement, (4) all amounts required to be paid to the contractors in connection with the racino have been paid and (5) that there are no mechanic’s liens or other liens filed against the racino, then the disbursement agent will disburse all remaining funds in the construction disbursement account, if any, to the account specified by us.

The disbursement conditions for the guaranteed completion reserve account are the same as for the construction disbursement account except that the racino shall have been operating uninterrupted for at least 180 days prior to the date of the certification.

Investments; Pledge of Accounts

The disbursement agent will invest any money held by it in the construction disbursement account, interest reserve account and completion reserve account in government securities and other cash equivalents as directed in writing by the trustee from time to time. Any income or gain realized as a result of any such investment shall be held as part of the applicable account and reinvested as provided in the Cash Collateral and Disbursement Agreement. All funds, government securities and other assets in the securities accounts and the deposit accounts established pursuant to the Cash Collateral and Disbursement Agreement will be pledged to the trustee for the benefit of itself and the holders of the notes.

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THE EXCHANGE OFFER

Purpose and Effect; Registration Rights

On February 25, 2003 (the “Issue Date”), we sold 13% Senior Notes due 2010 with Contingent Interest in a private placement to Jefferies & Company, Inc., as the initial purchaser. The initial purchaser then resold those notes under an offering circular dated February 19, 2003 in reliance on Rule 144A and other available exemptions under the Securities Act of 1933, as amended. On February 25, 2003, we, the guarantors and the initial purchasers also entered into a registration rights agreement (the “Registration Rights Agreement”) pursuant to which each of us and the guarantors agreed that we will, at our expense, for the benefit of the holders of the notes, subject to certain exceptions:

(a)  file the a registration statement (the “Exchange Offer Registration Statement”) with the Securities and Exchange Commission (the “Commission”) promptly, but no later than 90 days after the Issue Date;

(b)  will use their reasonable best efforts to cause the Exchange Offer Registration Statement to become effective under the Securities Act promptly, but no later than 180 days after the Issue Date;

(c)  will keep the Exchange Offer Registration Statement effective until the consummation of the exchange offer; and

(d)  will use their reasonable best efforts to commence and complete the exchange offer promptly, but no later than 45 days after the date on which the Exchange Offer Registration Statement has become effective, and hold the exchange offer open for not less than 20 business days and exchange exchange notes for all Registrable Securities that have been properly tendered and not withdrawn on or prior to the expiration of the exchange offer.

“Registrable Securities” mean the notes (together with the guarantees thereon); provided, however, that any such security shall cease to be a Registrable Security when (i) it has been exchanged for an exchange note in an exchange offer as contemplated in Section 2(a) of the Registration Rights Agreement (provided, that any exchange note that, as described in the following paragraph, is included in a prospectus for use in connection with resales by broker-dealers shall be deemed to be a Registrable Security with respect to specified sections of the Registration Rights Agreement until resale of such Registrable Security has been effected within the period referred to in the following paragraph); (ii) a Shelf Registration Statement registering such security under the Securities Act has been declared or becomes effective and such security has been sold or otherwise transferred by the holder thereof pursuant to and in a manner contemplated by such effective Shelf Registration Statement; (iii) such security is sold pursuant to Rule 144 under the Securities Act under circumstances in which any legend borne by such security relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the Issuers or pursuant to the Indenture; (iv) such security is eligible to be sold pursuant to paragraph (k) of Rule 144 under the Securities Act; or (v) such security shall cease to be outstanding.

Under existing Commission interpretations, we believe that the exchange notes would in general be freely transferable after the exchange offer without further registration under the Securities Act, except that broker-dealers receiving exchange notes in the exchange offer will be subject to a prospectus delivery requirement with respect to resales of those exchange notes. The Commission has taken the position that such broker-dealers may fulfill their prospectus delivery requirements with respect to the exchange notes (other than a resale of an unsold allotment from the original sale of the notes) by delivery of the prospectus contained in the Exchange Offer Registration Statement. Under the Registration Rights Agreement, the Issuers have agreed to allow such broker-dealers to use the prospectus contained in the Exchange Offer Registration Statement in connection with the resale of the exchange notes. The Issuers and the Guarantors will use their respective reasonable best efforts to keep the Exchange Offer Registration Statement effective for such period of time as such Persons must comply with such requirements in order to resell the Exchange Securities, the “Applicable Period”).

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If (i) prior to the time the exchange offer is completed (A) existing Commission interpretations are changed such that the exchange notes received in the exchange offer would not in general be, upon receipt, transferable by holders thereof without restrictions under the Securities Act or (B) the interests of the Holders, taken as a whole, would be materially adversely affected by the consummation of the exchange offer; (ii) the exchange offer has not been completed within 225 days following the Issue Date; or (iii) the exchange offer is not available to any holder of the notes, the Issuer and the Guarantors shall, in lieu of (or, in the case of clause (iii), in addition to) conducting the exchange offer, file under the Securities Act a “shelf” registration statement providing for the registration of, and the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities (the “Shelf Registration Statement”).

The Registration Rights Agreement will provide that the Issuers:

(a)  will file the Shelf Registration Statement with the Commission as soon as practicable, but no later than 30 days after the time such obligation to file arises;

(b)  will use their reasonable best efforts to cause the Shelf Registration Statement to become or be declared effective under the Securities Act no later than 60 days after the date such Shelf Registration Statement is filed; and

(c)  will use their reasonable best efforts to keep such Shelf Registration Statement continuously effective for a period ending on the earlier of the second anniversary of the date such Shelf Registration Statement became or was declared effective or such time as all Registrable Securities covered by the Shelf Registration have been sold or there are no longer any Registrable Securities outstanding.

A Holder that sells notes pursuant to the Shelf Registration Statement generally would be required to be named as a selling security-holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement which are applicable to such a Holder (including certain indemnification obligations). The Issuers will provide a copy of the Registration Rights Agreement to prospective investors upon request.

In the event that:

(a)  the Issuers have not filed the Exchange Offer Registration Statement or Shelf Registration Statement on or before the date on which such registration statement is required to be filed, or

(b)  such Exchange Offer Registration Statement or Shelf Registration Statement has not become effective or been declared effective by the Commission on or before the date on which such registration statement is required to become or be declared effective, or

(c)  the exchange offer has not been completed within 30 days after the initial effective date of the Exchange Offer Registration Statement relating to the exchange offer (if the exchange offer is then required to be made), or

(d)  any Exchange Offer Registration Statement or Shelf Registration Statement is filed and declared effective but shall thereafter either be withdrawn by the Issuers or shall become subject to an effective stop order suspending the effectiveness of such registration statement without being succeeded within 30 days by an additional registration statement filed and declared effective

(each such event referred to in clauses (a) through (d), a “Registration Default” and, each period during which a Registration Default has occurred and is continuing, a “Registration Default Period”), then, in addition to the interest on the notes, liquidated damages (“Liquidated Damages”) shall accrue at an amount per week per $1,000 principal amount of Registrable Securities equal to $0.05 for the first 90 days of the Registration Default Period, increasing by an additional $0.05 per week per $1,000 principal amount of Registrable Securities with respect to each subsequent 90-day period, up to a maximum of $0.25 per week per $1,000 principal amount of Registrable

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Securities. Liquidated Damages shall be paid on interest payment dates to holders of record for the payment of interest.

Holders of notes will be required to make certain representations to us and to deliver information to be used in connection with the Shelf Registration Statement (in each case, as described in the Registration Rights Agreement) and will be required to provide comments on the Shelf Registration Statement within the time periods set forth in the Registration Rights Agreement in order to have their notes included in the Shelf Registration Statement and benefit from the provisions regarding Liquidated Damages set forth above.

The notes and the exchange notes will be considered collectively to be a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase, and for purposes of “The Exchange Offer” section (except with respect to liquidated damages above), all references herein to “notes” shall be deemed to refer collectively to notes and any exchange notes, unless the context otherwise requires.

Expiration Date; Extensions

The expiration date of the exchange offer is                     , 2003 at 5:00 p.m., New York City time. We may extend the exchange offer in our sole discretion. If we extend the exchange offer, the expiration date will be the latest date and time to which the exchange offer is extended. We will notify the exchange agent of any extension by oral or written notice and will make a public announcement of the extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

We expressly reserve the right, in our sole and absolute discretion:

• to delay accepting any notes;

• to extend the exchange offer;

• if any of the conditions under “—Conditions of the Exchange Offer” have not been satisfied, to terminate the exchange offer; and

• to waive any condition or otherwise amend the terms of the exchange offer in any manner.

If the exchange offer is amended in a manner we deem to constitute a material change, we will promptly disclose the amendment by means of a prospectus supplement that will be distributed to the registered holders of the notes. Any delay in acceptance, extension, termination or amendment will be followed promptly by an oral or written notice of the event to the exchange agent. We will also make a public announcement of the event. Without limiting the manner in which we may choose to make any pubic announcement and subject to applicable law, we have no obligation to publish, advertise or otherwise communicate any pubic announcement other than by issuing a release to a national news service.

Terms of the Exchange Offer

We are offering, upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, to exchange $1,000 in principal amount of the new notes for each $1,000 in principal amount of outstanding notes. We will accept for exchange any and all old notes that are validly tendered on or before 5:00 p.m., New York City time, on the expiration date. Tenders of the old notes may be withdrawn at any time before 5:00 p.m., New York City time, on the expiration date. The exchange offer is not conditioned upon any minimum principal amount of old notes being tendered for exchange. However, the exchange offer is subject to the terms of the registration rights agreement and the satisfaction of the conditions described under “—Conditions of the Exchange Offer.” Old notes may be tendered only in multiples of $1,000. Holders of notes may tender less than the aggregate principal amount represented by their old notes if they appropriately indicate this fact on the letter of transmittal accompanying the tendered old notes or indicate this fact under the procedures for book-entry transfer described below.

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As of the date of this prospectus, $123.2 million in aggregate principal amount of the old notes were outstanding. Solely for reasons of administration, we have fixed the close of business on                     , 2003 as the record date for purposes of determining the persons to whom this prospectus and the letter of transmittal will be mailed initially. There will be no fixed record date for determining the eligible holders of the old notes who are entitled to participate in the exchange offer. We believe that, as of the date of this prospectus, no holder of notes (other than Jefferies & Company, Inc. which may be our affiliate) is our “affiliate,” as defined in Rule 405 under the Securities Act of 1933.

We will be deemed to have accepted validly tendered old notes when, as and if we give oral or written notice of our acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders of old notes and for purposes of receiving the new notes from us. If any tendered old notes are not accepted for exchange because of an invalid tender or otherwise, certificates for the unaccepted old notes will be returned, without expense, to the tendering holder promptly after the expiration date.

Holders of old notes do not have appraisal or dissenters’ rights under applicable law or the indenture as a result of the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Securities Exchange Act of 1934 and the rules and regulations under the Securities Exchange Act of 1934, including Rule 14e-1.

Holders who tender their old notes in the exchange offer will not be required to pay brokerage commissions or fees or, following the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes under the exchange offer. We will pay all charges and expenses, other than transfer taxes in some circumstances, in connection with the exchange offer. See “—Fees and Expenses” for more information about the costs of the exchange offer.

We do not make any recommendation to holders of old notes as to whether to tender any of their old notes under the exchange offer. In addition, no one has been authorized to make any recommendation. Holders of old notes must make their own decision whether to participate in the exchange offer and, if the holder chooses to participate in the exchange offer, the aggregate principal amount of old notes to tender, after reading carefully this prospectus and the letter of transmittal and consulting with their advisors, if any, based on their own financial position and requirements.

Conditions of the Exchange Offer

You must tender your old notes in accordance with the requirements of this prospectus and the letter of transmittal in order to participate in the exchange offer.

Notwithstanding any other provision of the exchange offer, or any extension of the exchange offer, we will not be required to accept for exchange any old notes, and we may terminate or amend the exchange offer, if we are not permitted to effect the exchange offer under applicable law or any interpretation of applicable law by the staff of the Securities and Exchange Commission. If we determine in our sole discretion that any of these events or conditions has occurred, we may, subject to applicable law, terminate the exchange offer and return all old notes tendered for exchange or may waive any condition or amend the terms of the exchange offer.

We expect that the above conditions will be satisfied. The above conditions are for our sole benefit and may be waived by us at any time in our sole discretion. Our failure at any time to exercise any of the above rights will not be a waiver of those rights and each right will be deemed an ongoing right that may be asserted at any time, provided that all conditions to the exchange offer, other than any involving governmental approval, must be satisfied or waived before the expiration of the exchange offer. Any determination by us concerning the events described above will be final and binding upon all parties.

Interest

Each new note will bear interest from the most recent date to which interest has been paid or duly provided for on the old note surrendered in exchange for the new note or, if no interest has been paid or duly provided for

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on the old note, from February 25, 2003. Holders of the old notes whose old notes are accepted for exchange will not receive accrued interest on their old notes for any period from and after the last interest payment date to which interest has been paid or duly provided for on their old notes prior to the original issue date of the new notes or, if no interest has been paid or duly provided for, will not receive any accrued interest on their old notes, and will be deemed to have waived the right to receive any interest on their old notes accrued from and after such interest payment date or, if no such interest has been paid or duly provided for, from and after February 25, 2003.

Procedures for Tendering Old Notes

The tender of a holder’s old notes and our acceptance of old notes will constitute a binding agreement between the tendering holder and us upon the terms and conditions of this prospectus and the letter of transmittal. Unless a holder tenders old notes according to the guaranteed delivery procedures or the book-entry procedures described below, the holder must transmit the old notes, together with a properly completed and executed letter of transmittal and all other documents required by the letter of transmittal, to the exchange agent at its address before 5:00 p.m., New York City time, on the expiration date. The method of delivery of old notes, letters of transmittal and all other required documents is at the election and risk of the tendering holder. If delivery is by mail, we recommend delivery by registered mail, properly insured, with return receipt requested. Instead of delivery by mail, we recommend that each holder of notes use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery.

Any beneficial owner of the old notes whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender old notes in the exchange offer should contact that registered holder promptly and instruct that registered holder to tender on its behalf. If the beneficial owner wishes to tender directly, it must, prior to completing and executing the letter of transmittal and tendering old notes, make appropriate arrangements to register ownership of the old notes in its name. Beneficial owners should be aware that the transfer of registered ownership may take considerable time.

Any financial institution that is a participant in DTC’s Book-Entry Transfer Facility system may make book-entry delivery of the old notes by causing DTC to transfer the old notes into the exchange agent’s account in accordance with DTC’s procedures for the transfer. To be timely, book-entry delivery of old notes requires receipt of a confirmation of a book-entry transfer before the expiration date. Although delivery of the old notes may be effected through book-entry transfer into the exchange agent’s account at DTC, the letter of transmittal, properly completed and executed, with any required signature guarantees and any other required documents or an agent’s message, as described below, must in any case be delivered to and received by the exchange agent at its address on or before the expiration date, or the guaranteed delivery procedure set forth below must be complied with.

DTC has confirmed that the exchange offer is eligible for DTC’s Automated Tender Offer Program. Accordingly, participants in DTC’s Automated Tender Offer Program may, instead of physically completing and signing the applicable letter of transmittal and delivering it to the exchange agent, electronically transmit their acceptance of the exchange offer by causing DTC to transfer old notes to the exchange agent in accordance with DTC’s Automated Tender Offer Program procedures for transfer. DTC will then send an agent’s message to the exchange agent.

The term “agent’s message” means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that DTC has received an express acknowledgment from a participant in DTC’s Automated Tender Offer Program that is tendering old notes that are the subject of the book-entry confirmation; that the participant has received and agrees to be bound by the terms of the applicable letter of transmittal or, in the case of an agent’s message relating to guaranteed delivery, that the participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and that we may enforce the agreement against that participant.

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Each signature on a letter of transmittal or a notice of withdrawal must be guaranteed unless the old notes are tendered:

• by a registered holder who has not completed the box entitled “Special Delivery Instructions;” or

• for the account of an eligible institution, as described below.

If a signature on a letter of transmittal or a notice of withdrawal is required to be guaranteed, the signature must be guaranteed by a participant in a recognized medallion signature program. If the letter of transmittal is signed by a person other than the registered holder of the old notes, the old notes surrendered for exchange must be endorsed by the registered holder, with the signature guaranteed by a medallion signature guarantor. If any letter of transmittal, endorsement, bond power, power of attorney or any other document required by the letter of transmittal is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person should sign in that capacity when signing. The person must submit to us evidence satisfactory, in our sole discretion, of his or her authority to so act unless we waive the requirement.

As used in this prospectus with respect to the old notes, a “registered holder” is any person in whose name the old notes are registered on the books of the registrar. An “eligible institution” is a firm that is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or any other “eligible guarantor institution” as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934.

We will determine in our sole discretion all questions as to the validity, form, eligibility, including time of receipt, acceptance and withdrawal of old notes tendered for exchange. Our determination will be final and binding. We reserve the absolute right to reject old notes not properly tendered and to reject any old notes if acceptance might, in our judgment or our counsel’s judgment, be unlawful. We also reserve the absolute right to waive any defects or irregularities or conditions of the exchange offer as to particular old notes at any time, including the right to waive the ineligibility of any holder who seeks to tender old notes in the exchange offer.

Our interpretation of the terms and conditions of the exchange offer, including the letter of transmittal and its instructions, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of old notes for exchange must be cured within the period of time as we determine. Neither our company nor the exchange agent is under any duty to give notification of defects in the tenders or will incur any liability for failure to give the notification. The exchange agent will use reasonable efforts to give notification of defects or irregularities with respect to tenders of old notes for exchange but will not incur any liability for failure to give the notification. Tenders of old notes will not be deemed to have been made until the irregularities have been cured or waived.

By tendering, you will represent to us that, among other things:

• you are not our “affiliate,” as defined in Rule 405 under the Securities Act of 1933;

• you will acquire the new notes in the ordinary course of your business;

• you are not a broker-dealer that acquired your notes directly from us in order to resell them in reliance on Rule 144A of the Securities Act of 1933 or any other available exemption under the Securities Act of 1933;

• if you are a broker-dealer that acquired your notes as a result of market-making or other trading activities, you will deliver a prospectus in connection with any resale of new notes; and

• you are not participating, do not intend to participate and have no arrangement or understanding with any person to participate in the distribution of the new notes.

In connection with a book-entry transfer, each participant will confirm that it makes the representations and warranties contained in the letter of transmittal.

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Guaranteed Delivery Procedures

If you wish to tender your old notes and:

• your old notes are not immediately available;

• you are unable to deliver on time your old notes or any other document that you are required to deliver to the exchange agent; or

• you cannot complete the procedures for delivery by book-entry transfer on time;

you may tender your old notes according to the guaranteed delivery procedures described in the letter of transmittal. Those procedures require that:

• tender must be made by or through an eligible institution and a notice of guaranteed delivery must be signed by the holder;

• on or before the expiration date, the exchange agent must receive from the holder and the eligible institution a properly completed and executed notice of guaranteed delivery by facsimile, mail or hand delivery containing the name and address of the holder, the certificate number or numbers of the tendered old notes, the principal amount of tendered old notes, a statement that the tender is being made, and a guarantee that within three business days after the expiration date, the certificates representing the old notes in proper form for transfer or a book-entry confirmation and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and

• properly completed and executed documents required by the letter of transmittal and the tendered old notes in proper form for transfer or confirmation of a book-entry transfer of the old notes into the exchange agent’s account at DTC must be received by the exchange agent within three business days after the expiration date of the exchange offer.

Any holder who wishes to tender old notes under the guaranteed delivery procedures must ensure that the exchange agent receives the notice of guaranteed delivery and letter of transmittal relating to the old notes before 5:00 p.m., New York City time, on the expiration date.

Acceptance of Old Notes for Exchange; Delivery of New Notes

Upon satisfaction or waiver of all the conditions to the exchange offer, we will accept old notes that are properly tendered in the exchange offer prior to 5:00 p.m., New York City time, on the expiration date. The new notes will be delivered promptly after acceptance of the old notes. For purposes of the exchange offer, we will be deemed to have accepted validly tendered old notes when, as and if we have given notice to the exchange agent.

Withdrawal Rights

Tenders of the old notes may be withdrawn by delivery of a written or facsimile transmission notice to the exchange agent at its address set forth under “—The Exchange Agent; Assistance” at any time before 5:00 p.m., New York City time, on the expiration date. Any such notice of withdrawal must:

• specify the name of the person having deposited the old notes to be withdrawn;

• identify the old notes to be withdrawn, including the certificate number or numbers and principal amount of the old notes, or, in the case of old notes transferred by book-entry transfer, the name and number of the account at DTC to be credited;

• be signed by the holder in the same manner as the original signature on the letter of transmittal by which old notes were tendered, including any required signature guarantees, or be accompanied by a bond

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power in the name of the person withdrawing the tender, in satisfactory form as determined by us in our sole discretion, executed by the registered holder, with the signature guaranteed by a medallion signature guarantor, together with the other documents required upon transfer by the indenture; and

• specify the name in which the old notes are to be re-registered, if different from the person who deposited the old notes.

All questions as to the validity, form and eligibility, including time of receipt, of the notices will be determined by us, in our sole discretion. Any old notes withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer and will be returned to the holder without cost as promptly after withdrawal. Properly withdrawn old notes may be retendered following the procedures described under “—Procedures for Tendering Old Notes” at any time on or before the expiration date.

The Exchange Agent; Assistance

U.S. Bank, N.A. is the exchange agent. All tendered old notes, executed letters of transmittal and other related documents should be directed to the exchange agent. Questions and requests for assistance and requests for additional copies of the prospectus, the letter of transmittal and other related documents should be addressed to the exchange agent as follows:

By Registered or Certified Mail:	By Hand or Overnight Courier:	By Telephone or Facsimile:
U.S. Bank National Association 180 East Fifth Street St. Paul, MN 55101 Attn. Corporate Trust— Specialized Finance	U.S. Bank National Association 180 East Fifth Street St. Paul, MN 55101 Attn. Corporate Trust—Specialized Finance	Phone: (651) 244-8677 Facsimile: (651) 244-0711

Fees and Expenses

We will bear the expenses of soliciting old notes for exchange. The principal solicitation is being made by mail by the exchange agent. Additional solicitation may be made by telephone, facsimile or in person by officers and regular employees of our company and our affiliates and by persons so engaged by the exchange agent.

We will pay the exchange agent reasonable and customary fees for its services and will reimburse the exchange agent for its reasonable out-of-pocket expenses in connection with its services and pay other registration expenses, including fees and expenses of the trustee under the indenture, filing fees, blue sky fees and printing and distribution expenses.

We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptance of the exchange offer.

We will pay all transfer taxes, if any, applicable to the exchange of old notes under the exchange offer. If, however, a transfer tax is imposed for any reason other than the exchange of old notes under the exchange offer, then the amount of those transfer taxes, whether imposed on the registered holder or any other persons, will be payable by the tendering holder. If satisfactory evidence of payment of those taxes or exemption is not submitted with the letter of transmittal, the amount of those transfer taxes will be billed directly to the tendering holder.

Accounting Treatment

The new notes will be recorded at the same carrying value as the old notes, as reflected in our accounting records on the date of the exchange. Accordingly, we will recognize no gain or loss for accounting purposes. The expenses of the exchange offer will be amortized over the term of the new notes.

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Consequences of Not Exchanging Old Notes

As a result of this exchange offer, we will have fulfilled most of our obligations under the registration rights agreement. Holders who do not tender their old notes, except for limited instances involving the initial purchasers or holders of old notes who are not eligible to participate in the exchange offer or who do not receive freely transferable new notes under the exchange offer, will not have any further registration rights under the registration rights agreement or otherwise and will not have rights to receive additional interest. Accordingly, any holder who does not exchange its old notes for new notes will continue to hold the untendered old notes and will be entitled to all the rights and subject to all the limitations applicable under the indenture, except to the extent that the rights or limitations, by their terms, terminate or cease to have further effectiveness as a result of the exchange offer.

Any old notes that are not exchanged for new notes under the exchange offer will remain restricted securities within the meaning of the Securities Act of 1933. In general, the old notes may be resold only:

• to us or any of our subsidiaries;

• inside the United States to a “qualified institutional buyer” in compliance with Rule 144A under the Securities Act of 1933;

• inside the United States to an institutional “accredited investor,” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, or an “accredited investor” that, prior to the transfer, furnishes or has furnished on its behalf by a U.S. broker-dealer to the trustee under the indenture a signed letter containing various representations and agreements relating to the restrictions on transfer of the new notes, the form of which letter can be obtained from the trustee;

• outside the United States in compliance with Rule 904 under the Securities Act of 1933;

• in reliance on the exemption from registration provided by Rule 144 under the Securities Act of 1933, if available; or

• under an effective registration statement under the Securities Act of 1933.

Each accredited investor that is not a qualified institutional buyer and that is an original purchaser of any of the old notes from the initial purchasers will be required to sign a letter confirming that it is an accredited investor under the Securities Act of 1933 and that it acknowledges the transfer restrictions summarized above.

Resales of the New Notes

We are making the exchange offer in reliance on the position of the staff of the Securities and Exchange Commission as set forth in interpretive letters addressed to third parties in other transactions. However, we have not sought our own interpretive letter. Although there has been no indication of any change in the staff’s position, we cannot assure you that the staff of the Securities and Exchange Commission would make a similar determination with respect to the exchange offer as it has in its interpretive letters to third parties. Based on these interpretations by the staff, and except as provided below, we believe that new notes may be offered for resale, resold and otherwise transferred by a holder who participates in the exchange offer and is not a broker-dealer without further compliance with the registration and prospectus delivery provisions of the Securities Act of 1933. In order to receive new notes that are freely tradeable, a holder must acquire the new notes in the ordinary course of its business and may not participate, or have any arrangement or understanding with any person to participate, in the distribution, within the meaning of the Securities Act of 1933, of the new notes. Holders wishing to participate in the exchange offer must make the representations described in “—Procedures for Tendering Old Notes” above.

Any holder of old notes:

• who is our “affiliate,” as defined in Rule 405 under the Securities Act of 1933;

• who did not acquire the new notes in the ordinary course of its business;

• who is a broker-dealer that purchased old notes from us to resell them under Rule 144A of the Securities Act of 1933 or any other available exemption under the Securities Act of 1933; or

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• who intends to participate in the exchange offer for the purpose of distributing, within the meaning of the Securities Act of 1933, new notes;

will be subject to separate restrictions. Each holder in any of the above categories:

• will not be able to rely on the interpretations of the staff of the Securities Act of 1933 in the above-mentioned interpretive letters;

• will not be permitted or entitled to tender old notes in the exchange offer; and

• must comply with the registration and prospectus delivery requirements of the Securities Act of 1933 in connection with any sale or other transfer of old notes, unless the sale is made under an exemption from such requirements.

In addition, if you are a broker-dealer holding old notes acquired for your own account, then you may be deemed a statutory “underwriter” within the meaning of the Securities Act of 1933 and must deliver a prospectus meeting the requirements of the Securities Act of 1933 in connection with any resales of your new notes. Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it acquired the old notes for its own account as a result of market-making activities or other trading activities and must agree that it will deliver a prospectus meeting the requirements of the Securities Act of 1933 in connection with any resale of those new notes. The letter of transmittal states that, by making the above acknowledgment and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act of 1933.

Based on the position taken by the staff of the Securities and Exchange Commission in the interpretive letters referred to above, we believe that “participating broker-dealers,” or broker-dealers that acquired old notes for their own accounts, as a result of market-making or other trading activities, may fulfill their prospectus delivery requirements with respect to the new notes received upon exchange of old notes, other than old notes that represent an unsold allotment from the original sale of the old notes, with a prospectus meeting the requirements of the Securities Act of 1933, which may be the prospectus prepared for an exchange offer so long as it contains a description of the plan of distribution with respect to the resale of the new notes. Accordingly, this prospectus, as it may be amended or supplemented, may be used by a participating broker-dealer during the period referred to below in connection with resales of new notes received in exchange for old notes where the old notes were acquired by the participating broker-dealer for its own account as a result of market-making or other trading activities. Subject to the provisions of the registration rights agreement, we have agreed that this prospectus may be used by a participating broker-dealer in connection with resales of the new notes. See “Plan of Distribution.” However, a participating broker-dealer that intends to use this prospectus in connection with the resale of new notes received in exchange for old notes pursuant to the exchange offer must notify us, or cause us to be notified, on or before the expiration date of the exchange offer, that it is a participating broker-dealer. This notice may be given in the space provided for that purpose in the letter of transmittal or may be delivered to the exchange agent at the address set forth under “—The Exchange Agent; Assistance.” Any participating broker-dealer that is our “affiliate” may not rely on these interpretive letters and must comply with the registration and prospectus delivery requirements of the Securities Act of 1933 in connection with any resale transaction.

Each participating broker-dealer that tenders old notes pursuant to the exchange offer will be deemed to have agreed, by execution of the letter of transmittal, that upon receipt of notice from us of the occurrence of any event or the discovery of any fact that makes any statement contained in this prospectus untrue in any material respect or that causes this prospectus to omit to state a material fact necessary in order to make the statements contained in this prospectus, in light of the circumstances under which they were made, not misleading or of the occurrence of other events specified in the registration rights agreement, the participating broker-dealer will suspend the sale of new notes pursuant to this prospectus until we have amended or supplemented this prospectus to correct the misstatement or omission and have furnished copies of the amended or supplemented prospectus to the participating broker-dealer or we have given notice that the sale of the new notes may be resumed, as the case may be.

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DESCRIPTION OF NOTES

The old notes were, and the new notes will be, issued under an indenture (the “Indenture”) among the Issuers, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”). The terms of the notes include those stated in the Indenture and the Collateral Agreements and those made a part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). The form and terms of the new notes are substantially identical to the form and terms of the old notes, except that the new notes:

• will be registered under the Securities Act of 1933; and

• will not bear any legends restricting transfer.

We will issue the new notes solely in exchange for an equal principal amount of old notes in denominations of $1,000 and integral multiples of $1,000.

The following summarizes certain provisions of the Indenture, the Collateral Agreements, the Construction Documents, the Intercreditor Agreement and the Registration Rights Agreement, as such agreements are defined below. The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the Indenture, the Collateral Agreements, the Construction Documents, the Intercreditor Agreement and the Registration Rights Agreement, and terms made a part of the Indenture by reference to the Trust Indenture Act. We urge you to read the Indenture, the Collateral Agreements, the Construction Documents, the Intercreditor Agreement, the Registration Rights Agreement and the Trust Indenture Act because they, and not this description, define your rights as a holder of notes. Wherever particular provisions of the Indenture, the Collateral Agreements, the Construction Documents, the Intercreditor Agreement, the Registration Rights Agreement and the Trust Indenture Act are referred to in this Description of Notes, such provisions are incorporated by reference as part of the statements made, and such statements are qualified in their entirety by such reference. Copies of the Indenture, the Collateral Agreements and the Registration Rights Agreement are available from the Company as described below under the section of this prospectus entitled “Where You Can Find More Information”.

You can find the definitions of certain terms used in this Description of Notes under “Certain Definitions” and throughout this Description of Notes. As used in this Description of Notes, all references to:

• “Issuers,” “we,” “our” or “us” mean The Old Evangeline Downs, L.L.C. and The Old Evangeline Downs Capital Corp. and their respective successors in accordance with the terms of the Indenture, and not any of their respective subsidiaries;

• the “Company” mean The Old Evangeline Downs, L.L.C. and its successors in accordance with the terms of the Indenture, and not any of its subsidiaries;

• “Capital” means The Old Evangeline Downs Capital Corp. and its successors in accordance with the terms of the Indenture, and not any of its subsidiaries;

• “new notes” refers to the registered notes being offered by this prospectus;

• “old notes” refers to your old notes that may be exchanged for new notes in the exchange offer; and

• “notes” refers collectively to the new notes and the old notes.

As used in this Description of Notes, all references to Capital is a wholly-owned subsidiary of the Company and was incorporated solely for the purpose of serving as a co-issuer of the notes in order to facilitate the Offering. Capital will not have any operations or assets and will not have any revenues. As a result, prospective investors should not expect Capital to participate in servicing the principal, interest, Liquidated Damages, if any, premium or any other payment obligations on the notes. See the covenant “Restrictions on Activities of Capital.”

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Brief Description of Notes and the Guarantees

The Notes

The notes are:

• ranked senior in right of payment to all existing and future Subordinated Indebtedness of the Issuers;

• ranked equal in right of payment with all existing and future senior Indebtedness of the Issuers;

• are secured by a security interest in substantially all of the assets of the Issuers, other than Excluded Assets; and

• unconditionally guaranteed by the Guarantors.

Although the notes will be secured by a Lien on the Collateral, the Lien on the collateral securing our proposed senior secured credit facility will be senior to the Lien on the Collateral securing the notes and the Guarantees (except that the Collateral Accounts and the Excess Cash Flow Account will only be security for the notes and the Guarantees).

The notes will be issued in fully registered form only, without coupons, in denominations of $1,000 and integral multiples thereof.

As of the date of the Indenture, the Company has no subsidiaries other than Capital, and Capital has no subsidiaries. However, under certain circumstances described below under “Certain Definitions—Unrestricted Subsidiary,” we will be able to designate any subsidiaries that we form or acquire in the future as Unrestricted Subsidiaries. Unrestricted Subsidiaries will not guarantee the notes and will not be subject to the restrictive covenants set forth in the Indenture. In addition, the Indenture will permit the Company to transfer its OTB Operations to an Unrestricted Subsidiary under certain circumstances. See the definition of “Permitted Investments.”

The Guarantees

The notes will be jointly and severally irrevocably and unconditionally guaranteed (the “Guarantees”) on a senior secured basis by each of the existing and future Restricted Subsidiaries (the “Guarantors”). The Guarantees will be secured by a security interest in substantially all of the assets of the Guarantors, other than Excluded Assets. The obligations of each Guarantor under its Guarantee, however, will be limited in a manner intended to avoid it being deemed a fraudulent conveyance under applicable law. See “Certain Limitations on the Collateral—Certain Bankruptcy Limitations.”

Collateral

The notes will be secured by a security interest in substantially all of our assets (other than Excluded Assets and subject to Permitted Liens), including the Collateral Accounts and the Excess Cash Flow Account and the Equity Interests of the Issuers and the Restricted Subsidiaries. The Guarantees will be secured by a security interest in substantially all of the assets of the Guarantors, other than Excluded Assets.

The Collateral includes the following existing and future property and assets of the Issuers and the Restricted Subsidiaries:

• the Collateral Accounts and all funds and securities in the Collateral Accounts,

• the Excess Cash Flow Account and all funds in the Excess Cash Flow Account,

• to the extent permitted by law, the Construction Documents, the Management Agreement and other agreements entered into in connection with the design, development, construction, ownership and operation of the Racino,

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• the assets of the Racino,

• the assets of the racetrack facility currently operated by the Company,

• subject to certain rights of the Company described herein, the assets relating to the Company’s OTB Operations,

• all owned real property and leasehold interests in all leased real property, including the Racino site and the Company’s leasehold interest in the land on which the racetrack facility currently operated by the Company is located, and all additions and improvements to real property,

• all furniture, fixtures and equipment, inventory, accounts, contract rights and other general intangibles, trademarks and trade names,

• all Permits relating to the Racino, other than any Gaming License or Racing License,

• deposit accounts and securities accounts,

• the equity interests of the Issuers and the Restricted Subsidiaries,

• all other existing and future property of the Issuers and the Restricted Subsidiaries that does not constitute Excluded Assets, and

• all proceeds and products of any of the foregoing.

The Collateral will not include the following:

• the assets that secure FF&E financing,

• any motor vehicles,

• the lease for the Company’s New Iberia OTB, and any other leases of off tracking betting parlors operated by the Company in any other location in the future,

• Gaming Licenses and Racing Licenses, and

• any agreements, leases, Permits or other assets or property that cannot be subjected to a Lien under the Collateral Agreements without the consent of third parties that has not been obtained (including applicable Gaming Authorities, Racing Authorities and liquor agencies and authorities)

(collectively, the “Excluded Assets”).

The Collateral initially includes the existing and future assets of the Company’s OTB Operations. However, the Indenture permits the Company to transfer its OTB Operations to an Unrestricted Subsidiary under certain circumstances and, upon any such transfer, the transferred assets of the Company’s OTB Operations shall no longer constitute Collateral. See the definition of “Permitted Investments.”

The Collateral Agreements define the terms of the security interests and pledges that will secure the notes and the Guarantees and provide for the grant of a security interest in and perfection of the Collateral in favor of the Trustee, as collateral agent (in such capacity, the “Secured Party”) for the benefit of the holders of the notes. Such security interests secure the payment and performance when due of all of the Obligations of us and the Guarantors under the Indenture, the notes, the Guarantees and the Collateral Agreements. The pledge of, or any negative pledge on, our equity securities or the equity securities of any of the Restricted Subsidiaries that hold one or more Gaming Licenses or Racing Licenses requires the approval of relevant Gaming Authorities and Racing Authorities. See “Licensing and Regulatory Matters” included in this prospectus. Until such approval is received, if ever, any such pledge or negative pledge will be ineffective.

With respect to certain deposit accounts that constitute part of the Collateral (other than the Collateral Accounts), the Collateral Agreements also provide that the Trustee may only exercise remedies with respect to such deposit accounts at the earliest of (i) the date that an Event of Default shall be continuing for 180

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consecutive days after the delivery of written notice thereof to us in accordance with the Indenture, (ii) the date on which a declaration of acceleration has been made in accordance with the provisions described in the second paragraph under the heading “—Events of Default and Remedies” or an Event of Default of the type specified in clause (5) of the first paragraph under the heading “—Events of Defaults and Remedies” and (iii) any other date to the extent permitted under the Intercreditor Agreement at any time the Intercreditor Agreement is in effect.

We are currently in discussions with Foothill Capital Corporation to enter into a new $15.0 million senior secured credit facility (the “Proposed Credit Facility”). If the Proposed Credit Facility is entered into, it would be secured by substantially all of our current and future assets (including the Collateral), other than certain excluded assets and the Collateral Accounts. We will not grant any security interest in the Collateral Accounts other than the security interest granted in favor of the Holders of the notes. If the Proposed Credit Facility is entered into, the security interest in the Collateral securing the notes (other than the Collateral Accounts) will be subordinated to Liens securing the Proposed Credit Facility to the extent provided by the Intercreditor Agreement. So long as no Event of Default has occurred and is continuing, and subject to certain terms and conditions in the Indenture, the Proposed Credit Facility, the Intercreditor Agreement and the Collateral Agreements, we will be entitled to receive all cash dividends, interest and other payments made upon or with respect to the Equity Interests of any Restricted Subsidiary pledged under the Collateral Agreements, and to exercise any voting, other consensual rights and other rights pertaining to such Equity Interests. All funds distributed under the Collateral Agreements and received by the Secured Party for the benefit of the holders of the notes will be retained and/or distributed by the Secured Party in accordance with the provisions of the Indenture.

Upon the full and final payment and performance of all our and the Guarantors’ Obligations under the Indenture, the notes and the Guarantees, the Collateral Agreements will terminate, and the Collateral will be released. In addition, the Trustee shall release from the Lien created by the Indenture and the Collateral Agreements:

(a)  Collateral that is sold, transferred, disbursed or otherwise disposed of in accordance with the provisions of the Indenture and the Collateral Agreements; provided that the Collateral Agent will not release such liens in the event that the transaction is subject to the covenant “Limitation on Merger, Sale or Consolidation;”

(b)  Collateral that is released with the consent of the Holders of not less than a majority in aggregate principal amount of the outstanding notes as provided under “Amendments, Supplements and Waivers;”

(c)  all Collateral (except the funds in the trust account and except as otherwise provided) upon defeasance of the Indenture in accordance with the provisions under “Legal Defeasance and Covenant Defeasance” or discharge of the Indenture in accordance with the provisions under “Satisfaction and Discharge;”

(d)  Collateral of a Guarantor whose Guarantee is released in accordance with the Indenture and the Collateral Agreements; and

(e)  funds in the Excess Cash Flow Account used to purchase notes in accordance with the covenant “Offers to Repurchase the Notes—Repurchase of Notes at the Option of the Holder from Excess Cash Flow;”

provided, that the Secured Party has received all documentation required by the Trust Indenture Act in connection therewith.

In the case of an event of default under the notes, the proceeds from the sale of the Collateral may not be sufficient to satisfy our obligations under the notes in full. See “Risk Factors—Risks Relating to the Notes—Value of Collateral.”

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Certain Limitations on the Collateral

Value of Collateral

There can be no assurance that the proceeds of any sale of Collateral following an Event of Default with respect to the notes would be sufficient to satisfy, or would not be substantially less than, amounts due on the notes. See “Risk Factors—Risks Relating to the Notes—Value of Collateral.” In addition, in the event that we enter into the Proposed Credit Facility, outstanding borrowings under such facility would be secured by a Lien on the Collateral (other than the Collateral Accounts and the Excess Cash Flow Account) that is prior to the Lien securing the notes. See “Risk Factors—Risks Relating to the Notes—Subordination.”

With respect to some of the Collateral, the Trustee’s ability to foreclose will be limited by the Intercreditor Agreement described below, state and other laws relating to foreclosure and sale, the need to obtain third party consents and the gaming and racing licensing process. See “Risk Factors—Risks Relating to the Notes—Ability to Realize on Collateral.”

Accordingly, there can be no assurance that the proceeds of any sale of the Collateral pursuant to the Indenture and the Collateral Agreements following an Event of Default would be sufficient to satisfy, or would not be substantially less than, amounts due on the notes. If the proceeds of any sale of the Collateral were not sufficient to repay all amounts due on the notes, the holders of the notes (to the extent not repaid from the proceeds of the sale of the Collateral) would have only an unsecured claim against the remaining assets of the Issuers and the Guarantors. See “Risk Factors—Risks Relating to the Notes.”

Certain Bankruptcy Limitations

We may in the future conduct a substantial portion of our business through Restricted Subsidiaries, which will guarantee our Obligations with respect to the notes, and Unrestricted Subsidiaries (of which there are currently none), which Unrestricted Subsidiaries will not guarantee the notes.

Holders of the notes will be direct creditors of each Guarantor by virtue of its Guarantee. Each Guarantor will secure its obligations under its Guarantee by granting a security interest in its assets (junior to the security interest granted under the Credit Agreement). Under federal or state fraudulent transfer laws, however, under certain circumstances a court might avoid (i.e., cancel) a Guarantee and the Guarantor’s grant of a security interest in its assets. If a court avoided a Guarantor’s Guarantee, we cannot assure you that the assets of the other Guarantors would be sufficient to pay all amounts due on the notes. See “Risk Factors—Risks Relating to the Notes—Fraudulent Transfer.”

If we or a Guarantor become a debtor in a case under the United States Bankruptcy Code, the automatic stay imposed by the Bankruptcy Code upon the commencement of a case would prevent the Trustee from foreclosing upon the Collateral or (if the trustee has already taken control of the Collateral) from disposing of it, without prior bankruptcy court approval. In addition, the bankruptcy court might permit us to continue to use the Collateral while the bankruptcy case was pending, even after a default under the Indenture and the notes. The trustee could file a claim in the bankruptcy case for all amounts due under the notes, including interest up to the date of bankruptcy, but interest stops accruing after a bankruptcy filing except in certain specified circumstances. As a result, in the event of our or our subsidiaries’ bankruptcy, we cannot assure you whether or when you would recover any amounts due under the notes, or whether the Trustee would be permitted to foreclose upon the Collateral. For these and other bankruptcy related matters, see “Risk Factors—Risks Relating to the Notes.”

Intercreditor Agreement

If we enter into the Proposed Credit Facility, we, the Guarantors, the Trustee and the lenders under the Proposed Credit Facility will concurrently enter into an intercreditor agreement (the “Intercreditor Agreement”). Accordingly, the Intercreditor Agreement may or may not be entered into by the Issue Date, and the following description of the principal terms of the Intercreditor Agreement is subject to and qualified entirely by reference to the definitive Intercreditor Agreement, which we will provide upon request when finalized. The Intercreditor

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Agreement is anticipated to provide that the Liens securing the notes and the Guarantees on any collateral that also secures the obligations under the Proposed Credit Facility will be subordinated to the Liens securing up to the Maximum Credit Facility Amount outstanding under the Proposed Credit Facility and related interest, fees, costs and expenses. Under the Intercreditor Agreement, if the notes become due and payable prior to the Stated Maturity thereof for any reason or are not paid in full at the Stated Maturity thereof at a time during which Indebtedness is outstanding under the Proposed Credit Facility, the Secured Party will only have the right to foreclose upon any Collateral that also secures the obligations under the Proposed Credit Facility if the lenders under the Proposed Credit Facility (with or without the lenders under the Proposed Credit Facility taking part in any such foreclosure) either fail to take steps to exercise remedies with respect to or in connection with such collateral within 180 days following notice to such lenders of the occurrence of an Event of Default under the Indenture or fail to continue to pursue any such exercise of remedies while such Event of Default is then continuing outside of an insolvency proceeding. The Intercreditor Agreement will prevent the Secured Party and the holders of the notes from pursuing remedies with respect to such collateral in all other instances, including during any insolvency proceeding. The Intercreditor Agreement will provide that the net proceeds from any disposition of the shared collateral will first be applied to repay Indebtedness outstanding under the Proposed Credit Facility and thereafter to repay all of our and the Guarantors’ Obligations under the Indenture, the notes and the Guarantees.

Principal, Maturity and Interest; Additional Notes

Principal, Maturity and Additional Notes

We initially issued notes with a maximum aggregate principal amount of $123.2 million. The Indenture provides, in addition to the $123.2 million aggregate principal amount of notes issued on the Issue Date, for the issuance of an unlimited principal amount of additional notes having identical terms and conditions to the notes offered hereby (the “additional notes”) without the consent of the Holders of previously issued notes, in an aggregate principal amount to be determined from time to time by the Issuers, subject to compliance with the terms of the Indenture, including the covenant “Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests.” Interest would accrue on the additional notes issued pursuant to the Indenture from and including the date of issuance of such additional notes. Any such additional notes would be issued on the same terms as the notes and would constitute part of the same series of securities as the notes and would vote together as one series on all matters with respect to the notes. Because, however, any additional notes may not be fungible with the notes for federal income tax purposes, they may have a different CUSIP number or numbers, be represented by a different global note or notes, and otherwise be treated as a separate class or classes of notes for other purposes. Except where stated otherwise, all references to notes herein include the additional notes. We will issue notes in denominations of $1,000 and integral multiples of $1,000.

Fixed Interest

The notes will mature on March 1, 2010. The notes will bear fixed interest (“Fixed Interest”) at the rate per annum stated on the cover page of this prospectus from the date of issuance or from the most recent date to which Fixed Interest has been paid or provided for (the “Interest Payment Date”), payable semi-annually in arrears on March 1 and September 1 of each year, commencing September 1, 2003, to the Persons in whose names such notes are registered at the close of business on the February 15 or August 15 immediately preceding such Interest Payment Date (each an “Interest Record Date”). Fixed Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

Contingent Interest

In addition, the notes will bear Contingent Interest after the Casino begins Operating. Contingent Interest will be payable semi-annually in arrears on each Interest Payment Date to the Persons in whose names such notes are registered at the close of business on the associated Interest Record Date, unless a portion of such Contingent Interest is permitted to be deferred.

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We may defer payment of a portion of accrued Contingent Interest otherwise due and payable and may continue to defer the payment of a portion of accrued Contingent Interest which has already been deferred (the aggregate amount of deferred Contingent Interest at any particular time, “Deferred Contingent Interest”) if, and only to the extent that:

(1)  the payment of that Deferred Contingent Interest on the applicable Interest Payment Date will cause our Adjusted Consolidated Coverage Ratio for the Reference Period immediately prior to the applicable Interest Payment Date, after giving effect on a pro forma basis to the payment of such Contingent Interest, to be less than 1.5 to 1.0; and

(2)  the principal amount of the notes corresponding to that Deferred Contingent Interest has not then matured and become due and payable, whether at Stated Maturity, upon acceleration, upon redemption, upon maturity of repurchase obligation or otherwise.

Deferred Contingent Interest will become due and payable, in whole or in part, upon the earlier of:

(a)  the next succeeding Interest Payment Date on which all or a portion of that Deferred Contingent Interest is not permitted to be deferred; and

(b)  the maturity of the corresponding principal amount of the notes, whether at Stated Maturity, upon acceleration, upon redemption or otherwise.

The amount of Contingent Interest payable for any period will be reduced pro rata for reductions in the outstanding principal amount of the notes prior to the immediately preceding Interest Record Date. No interest will accrue on any Deferred Contingent Interest which does not become due and payable. Contingent Interest will accrue daily on the principal amount of each note outstanding and shall be pro rated, based on a period of 180 days, for any partial semi-annual periods.

Each installment of Contingent Interest will be calculated to accrue:

(i)  from, but not including, the most recent Interest Payment Date for which Contingent Interest has been paid or through which Contingent Interest had been calculated and deferred; or

(ii)  if no installment of Contingent Interest has been paid or deferred, from and including the date on which the Casino begins Operating,

in the case of each of the preceding clauses (i) and (ii) to, and including, the earlier of:

(a)  the next Interest Payment Date if the corresponding principal amount of the notes has not become due and payable; or

(b)  the date of payment if the corresponding principal amount of the notes has become due and payable, whether at Stated Maturity, upon acceleration, upon redemption or otherwise.

Methods of Receiving Payments on the Notes

Principal of, premium, if any, and interest (and Liquidated Damages, if any) on the notes will be payable, and the notes may be presented for registration of transfer or exchange, at our office or agency maintained for such purpose, which office or agency shall be maintained in the Borough of Manhattan, The City of New York. Except as set forth below, at our option, payment of interest may be made by check mailed to the holders of the notes (the “Holders”) at the addresses set forth upon our registry books or by wire transfer to the account specified by them. See “Book-Entry; Delivery; Form and Transfer—Same Day Settlement and Payment.” No service charge will be made for any registration of transfer or exchange of notes, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Until otherwise designated by us, our office or agency will be the corporate trust office of the Trustee presently located at the office of the Trustee in the Borough of Manhattan, The City of New York. If any payment date in respect of the notes (whether in respect of principal, premium, interest, Liquidated Damages or otherwise) is a Legal Holiday, payment may be made at that place on the next succeeding Business Day, and no interest shall accrue for the intervening period.

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Optional Redemption

We do not have the right to redeem any notes prior to March 1, 2007 (other than out of the Net Cash Proceeds of a Qualified Equity Offering, as described in the next following paragraph).

At any time on or after March 1, 2007, we may redeem the notes for cash at our option, 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 March 1 of the years indicated below, in each case together with accrued and unpaid interest and Liquidated Damages, if any, thereon to the date of redemption of the notes (the “Redemption Date”):

Year	Percentage
2007	106.50	%
2008	103.25	%
2009 and thereafter	100.00	%

At any time on or prior to March 1, 2006, upon a Qualified Equity Offering, up to 35% of the aggregate principal amount of the notes issued pursuant to the Indenture may be redeemed at our option within 120 days of such Qualified Equity Offering, on not less than 30 days, but not more than 60 days, notice to each Holder of the notes to be redeemed, with cash received by us from the Net Cash Proceeds of such Qualified Equity Offering, at a redemption price equal to 113% of the principal amount thereof, together with accrued and unpaid interest and Liquidated Damages, if any, thereon to the Redemption Date; provided, however, that immediately following such redemption not less than 65% of the aggregate principal amount of the notes issued pursuant to the Indenture on the Issue Date remain outstanding.

If the Redemption Date is on or after an Interest Record Date on which the Holders of record have a right to receive the corresponding interest due and Liquidated Damages, if any, 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.

The Issuers are not, however, prohibited from acquiring notes by means other than an optional redemption or a mandatory redemption, whether pursuant to an issuer tender offer, in open market purchases or otherwise, so long as such acquisition does not otherwise violate the terms of the Indenture or applicable securities laws.

Regulatory Redemption

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

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The Holder or beneficial owner applying for a license, qualification or a finding of suitability must pay all costs of the licensure and investigation for such qualification or finding of suitability. Under the Indenture, we are not required to pay or reimburse any Holder of the notes or beneficial owner who is required to apply for such license, qualification or finding of suitability for the costs of the licensure and investigation for such qualification or finding of suitability. Such expense will, therefore, be the obligation of such Holder or beneficial owner. See “Risk Factors—Risks Relating to the Notes.”

Mandatory Redemption

The notes do not have the benefit of any sinking fund and we will not be required to make any mandatory redemption payments with respect to the notes.

Selection and Notice

In the case of a partial redemption, the Trustee shall select the notes or portions thereof for redemption as follows: (1) if the notes are listed on a national securities exchange, in compliance with the requirements of the principal national securities exchange on which the notes are listed, or (2) if the notes are not so listed, on a pro rata basis, by lot or in such other manner it deems appropriate and fair. The notes may be redeemed in part in multiples of $1,000 only.

Notice of any redemption will be sent, by first class mail, at least 30 days and not more than 60 days prior to the date fixed for redemption, to the Holder of each note to be redeemed to such Holder’s last address as then shown upon the registry books of our registrar. Any notice which relates to a note to be redeemed in part only must state the portion of the principal amount of such note to be redeemed and must state that on and after the date of redemption, upon surrender of such note, a new note or notes in a principal amount equal to the unredeemed portion thereof will be issued. On and after the date of redemption, interest will cease to accrue on the notes or portions thereof called for redemption, unless we default in the payment thereof.

Offers to Repurchase the Notes

Repurchase of Notes at the Option of the Holder Upon a Change of Control

The Indenture provides that in the event that a Change of Control has occurred, each Holder of notes will have the right, at such Holder’s option, pursuant to an offer (subject only to conditions required by applicable law, if any) by us (the “Change of Control Offer”), to require us to repurchase all or any part of such Holder’s notes (provided, that the principal amount of such notes must be $1,000 or an integral multiple thereof) on a date (the “Change of Control Purchase Date”) that is no earlier than 30 days and no later than 45 days after the date on which notice of a Change of Control Offer is mailed to the Holders (or such other time period as may be required by applicable law), at a cash price equal to 101% of the principal amount thereof (the “Change of Control Purchase Price”), together with accrued and unpaid interest and Liquidated Damages, if any, to the Change of Control Purchase Date. Holders electing to have a note purchased pursuant to a Change of Control Offer will be required to surrender the note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the note completed, to the Paying Agent at the address specified in the notice of Change of Control Offer prior to the close of business on the third Business Day prior to the Change of Control Purchase Date.

The Change of Control Offer shall be made within 30 days following a Change of Control and shall remain open for at least 20 Business Days following its commencement (the “Change of Control Offer Period”). Upon expiration of the Change of Control Offer Period, we promptly shall purchase all notes properly tendered in response to the Change of Control Offer.

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As used herein, a “Change of Control” means:

(1)  during any period of two consecutive calendar years, individuals who at the beginning of such period constituted the Managers of the Company (together with any new Managers whose election as a Manager or whose nominations for election by the Company’s members or stockholders, was approved by a majority of Managers then still in office who were either Managers at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of such Managers then in office; provided, however, that there shall be no Change of Control pursuant to this clause (1) if during such two-year period any of the Excluded Persons continue to (i) own, directly or indirectly, a majority of the Voting Equity Interests of the Company or (ii) control or manage, directly or indirectly, the day-to-day operations of the Company,

(2)  any Person (other than an Excluded Person) is or becomes the Beneficial Owner, directly or indirectly, of more than 50% of the aggregate voting power of the Voting Equity Interests of the Company,

(3)  we adopt a plan of liquidation,

(4)  except in connection with the transfer of the OTB Operations into an Unrestricted Subsidiary in accordance with the Indenture, the direct or indirect sale, 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 the Restricted Subsidiaries, in each case, taken as a whole, to any Person other than the Company, a Restricted Subsidiary or the Excluded Persons, or the first day on which the Company fails to own 100% of the issued and outstanding Equity Interests of Capital;

provided, however, that a “Change of Control” shall not occur solely by reason of a Permitted C-Corp Conversion.

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

On or before the Change of Control Purchase Date, we will:

(1)  accept for payment notes or portions thereof properly tendered pursuant to the Change of Control Offer,

(2)  deposit with the paying agent for us (the “Paying Agent”) cash sufficient to pay the Change of Control Purchase Price (together with accrued and unpaid interest and Liquidated Damages, if any, to the Change of Control Purchase Date) of all notes so tendered, and

(3)  deliver to the Trustee the notes so accepted together with an Officers’ Certificate listing the notes or portions thereof being purchased by us.

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

The occurrence of the events constituting a Change of Control under the Indenture could result in an event of default under the Proposed Credit Facility and under our and our subsidiaries’ other credit facilities and debt instruments. Following such an event of default under the Proposed Credit Facility, the lenders under the Proposed Credit Facility or such other credit facilities and debt instruments would have the right to require the immediate repayment of the indebtedness thereunder in full, and might have the right to require such repayment prior to the Change of Control Purchase Date on which we would be required to repurchase the notes.

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The Proposed Credit Facility also will provide that the occurrence of a “change of control” (as defined in the Proposed Credit Facility) will constitute an event of default under the Proposed Credit Facility. The definition of “change of control” under the Proposed Credit Facility may be broader than that in the Indenture. Thus, the lenders under the Proposed Credit Facility may be entitled to require repayment of the indebtedness thereunder due to events constituting a “change of control” (as defined therein) without such events constituting a Change of Control for purposes of the Indenture. However, such events may constitute an Event of Default under the Indenture.

No assurances can be given that we will have funds available or otherwise will be able to purchase any notes upon the occurrence of a Change of Control. The Proposed Credit Facility will prohibit us from purchasing any of the notes until borrowings under the Proposed Credit Facility are paid in full. Any future credit agreements or other debt instruments may contain similar prohibitions. See “Risk Factors—Risks Relating to the Notes—Change of Control Offer.”

The provisions described above that require us to make a Change of Control Offer following a Change of Control will be applicable regardless of whether or not any other provisions of the Indenture are applicable.

Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holders of notes to require the Issuers to repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction. Neither the Issuers nor the Trustee, without the consent of the Holders of notes, may waive the covenant relating to a Holder’s right to repurchase upon a Change of Control. Restrictions in the Indenture on the ability of the Issuers and the Restricted Subsidiaries to incur additional Indebtedness, to grant Liens on their assets, to make Restricted Payments and to make Asset Sales may also make more difficult or discourage a takeover of the Company, whether favored or opposed by the management of the Company. Consummation of any such transaction in certain circumstances may require redemption or repurchase of the notes, and there can be no assurance that the Issuers or the acquiring party will have sufficient financial resources to effect such redemption or repurchase. Such restrictions and the restrictions on transactions with Affiliates may, in certain circumstances, make more difficult or discourage any leveraged buyout of the Company or any of its subsidiaries by the management of the Company.

The provisions of the Indenture relating to a Change of Control in and of themselves may not afford holders of the notes protection in the event of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction involving us that may adversely affect holders of the notes if such transaction is not the type of transaction included within the definition of a Change of Control. A transaction involving our management or our affiliates likewise will result in a Change of Control only if it is the type of transaction specified by such definition. The existence of the foregoing provisions relating to a Change of Control may or may not deter a third party from seeking to acquire us in a transaction which constitutes a Change of Control. The phrase “all or substantially all” of our assets will likely be interpreted under applicable state law and will be dependent upon particular facts and circumstances. As a result, there may be a degree of uncertainty in ascertaining whether a sale or transfer of “all or substantially all” of our assets has occurred.

Any Change of Control Offer will be made in compliance with all applicable laws, rules and regulations, including, if applicable, Regulation 14E under the Exchange Act and the rules thereunder and all other applicable federal and state securities laws. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this covenant, our compliance with such laws and regulations shall not in and of itself cause a breach of our obligations under such covenant.

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

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The Issuers will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all notes validly tendered and not withdrawn under such Change of Control Offer.

Limitation on Sale of Assets and Restricted Subsidiary Equity Interests

The Indenture provides that we will not and the Guarantors will not, and neither we nor the Guarantors will permit any of the Restricted Subsidiaries to, make any Asset Sale, unless:

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

(2)  the Managers of the Company determine in good faith that we will receive or such Restricted Subsidiary will receive, as applicable, consideration at the time of such Asset Sale at least equal to the fair market value of the property, assets or Equity Interests issued or sold or otherwise disposed of;

provided, however, that the 75% limitation set forth in clause (1) above shall not apply to any proposed Asset Sale for which an independent certified accounting firm shall certify to the Managers of the Company and the Trustee that the after-tax cash portion of the consideration to be received by the Company or such Restricted Subsidiary in such proposed Asset Sale is equal to or greater than what the net after-tax cash proceeds would have been had such proposed Asset Sale complied with the 75% limitation set-forth in clause (1) above.

For purposes of clause (1) of the preceding sentence, total consideration received means the total consideration received for such Asset Sale (or series of related Asset Sales) minus the amount of (a) any liabilities (other than liabilities that are by their terms subordinated to the notes and the Guarantees) of the Company or any Restricted Subsidiary that are assumed by a transferee; provided, that we are and the Restricted Subsidiaries are fully released from obligations in connection therewith, and (b) property that within 30 days of such Asset Sale is converted into cash or Cash Equivalents; provided, that such cash and Cash Equivalents shall be treated as Net Cash Proceeds attributable to the original Asset Sale for which such property was received.

Within 360 days after receipt of any Net Cash Proceeds from an Asset Sale, the Company may apply such Net Cash Proceeds at its option:

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

(b)  (i) to make an investment or capital expenditure in, or otherwise acquire, (A) assets or properties that replace the assets or properties that were the subject of such Asset Sale, or (B) assets and property (other than notes, bonds, obligations and securities, except in connection with the acquisition of a Restricted Subsidiary which is a Guarantor in a Related Business) which are used or useful in a Related Business, or (ii) to acquire (A) all or substantially all of the assets of any person engaged in a related business or (B) a majority of the Voting Equity Interests of a Person engaged in a Related Business that becomes a Restricted Subsidiary; provided, in each case, that such investment, capital expenditure or acquisition is made in compliance with the other provisions of the Indenture, including the covenant “—Limitation on Restricted Payments;” or

(c)  any combination of the foregoing clauses (a) and (b).

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

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The accumulated Net Cash Proceeds from Asset Sales not applied as set forth in clauses (a) and (b) of the immediately preceding paragraph within such 360 day period and the accumulated Net Cash Proceeds from any Event of Loss not applied as set forth in clauses (1) and (2) of the immediately preceding paragraph within such 360 day period shall constitute “Excess Proceeds.” Pending the final application of any Net Cash Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise temporarily invest or use for general corporate purposes (other than Restricted Payments that are not solely Restricted Investments) the Net Cash Proceeds in any manner that is not prohibited by the Indenture.

When the Excess Proceeds equal or exceed $10.0 million (the “Asset Sale Offer Trigger Date”), the Issuers shall offer to repurchase the notes and any other Indebtedness ranking on a parity with the notes and with similar provisions requiring us to make an offer to purchase such Indebtedness with the proceeds from such Asset Sale pursuant to a cash offer (subject only to conditions required by applicable law, if any) not later than 30 days following the applicable Asset Sale Offer Trigger Date, the maximum principal amount of notes and such other pari passu Indebtedness (or accreted values in the case of Indebtedness issued with an original issue discount) that may be purchased out of the Excess Proceeds (the “Asset Sale Offer”) on a pro rata basis in proportion to the respective principal amounts of the notes and such other pari passu Indebtedness (or accreted values in the case of Indebtedness issued with an original issue discount) at a purchase price of 100% of the principal amount (or accreted value in the case of Indebtedness issued with an original issue discount) (the “Asset Sale Offer Price”) together with accrued and unpaid interest and Liquidated Damages, if any, to the date of payment. The Asset Sale Offer shall remain open for at least 20 Business Days following its commencement (the “Asset Sale Offer Period”). Upon receiving notice of the Asset Sale Offer, Holders may elect to tender their notes in whole or in part in integral multiples of $1,000.

Upon expiration of the Asset Sale Offer Period, we shall apply an amount equal to the Excess Proceeds plus an amount equal to accrued and unpaid interest and Liquidated Damages, if any, to the purchase of all Indebtedness properly tendered in accordance with the provisions of this covenant (on a pro rata basis if the Excess Proceeds are insufficient to purchase all Indebtedness so tendered) at the Asset Sale Offer Price (together with accrued and unpaid interest and Liquidated Damages, if any, to the date of payment). The principal amount of notes and such other pari passu Indebtedness to be purchased pursuant to an Asset Sale Offer may be reduced by the principal amount of notes and such other pari passu Indebtedness, respectively, acquired by the Issuers through purchase or redemption (other than pursuant to a Change of Control Offer) subsequent to the date of the Asset Sale and surrendered to the Trustee for cancellation. To the extent that the aggregate amount of notes and such other pari passu Indebtedness tendered or to be purchased pursuant to an Asset Sale Offer is less than the Excess Proceeds, we may use any remaining Net Cash Proceeds for any purpose not otherwise prohibited by the Indenture. Following the consummation of each Asset Sale Offer in accordance with the provisions of this covenant, the Excess Proceeds amount shall be reset to zero.

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

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

Repurchase of Notes at the Option of the Holder From Excess Cash Flow

The Indenture provides that not later than 60 days after each Operating Six Months of the Company, beginning with the first Operating Six Months after the Casino becomes Operating, the Company will make an

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offer to all Holders (the “Initial Excess Cash Flow Offer”) to purchase the maximum principal amount of notes that is an integral multiple of $1,000 that may be purchased with an amount equal to the sum (such sum, the “Excess Cash Flow Offer Amount”) of (i) 50% of the Company’s Excess Cash Flow in respect of the Operating Six Months then ended (less all transaction costs and expenses incurred by the Issuers in connection with such Excess Cash Flow Offer) (the “Applicable Excess Cash Flow Amount”) and (ii) the then available Excess Cash Flow Balance (as defined below), at a purchase price in cash equal to 101% of the principal amount of the notes to be purchased, plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the date fixed for the closing of the Excess Cash Flow Offer (the “Excess Cash Flow Purchase Price”), in accordance with the Indenture. Notwithstanding the foregoing, the Company will not be required to make an Initial Excess Cash Flow Offer to purchase notes pursuant to this covenant if the then available Excess Cash Flow Offer Amount is less than $2.5 million; provided, that in such event any Applicable Excess Cash Flow Offer Amount (if positive) will be added to the Excess Cash Flow Offer Amount for each subsequent Operating Six Months until an Initial Excess Cash Flow Offer is made.

If the aggregate principal amount of notes tendered pursuant to any Initial Excess Cash Flow Offer is less than the Excess Cash Flow Offer Amount with respect thereto, notes purchased pursuant to such Initial Excess Cash Flow Offer shall be purchased (i) first, from the Applicable Excess Cash Flow Amount and (ii) second, if such Applicable Excess Cash Flow Amount is not sufficient to purchase all notes tendered in such Initial Excess Cash Flow Offer, from the then available Excess Cash Flow Balance.

If the aggregate principal amount of notes tendered pursuant to any Initial Excess Cash Flow Offer is less than the Applicable Excess Cash Flow Amount with respect thereto (such difference, the “Unapplied Excess Cash Flow Amount”), the Company shall as soon as practicable following the expiration of such Initial Excess Cash Flow Offer deposit into an account (the “Excess Cash Flow Account”) an amount equal to the lesser of (i) the Unapplied Excess Cash Flow Amount with respect to such Initial Excess Cash Flow Offer and (ii) the difference between $10.0 million and the then available Excess Cash Flow Balance (as defined below) immediately preceding such deposit. The balance at any particular time in the Excess Cash Flow Account is referred to herein as the “Excess Cash Flow Balance.”

The Company shall make a public announcement of the results of each Initial Excess Cash Flow Offer, including the then available Excess Cash Flow Balance taking into account any use of such funds to purchase notes in such Initial Excess Cash Flow Offer, as soon as practicable after the expiration of such Initial Excess Cash Flow Offer.

For 45 days following the expiration date with respect to each Initial Excess Cash Flow Offer, each Holder shall have the right, at such Holder’s option, to request (by providing written notice to the Trustee) that the Company make an offer to all Holders (the “Subsequent Excess Cash Flow Offer”) to purchase the maximum principal amount of notes that is an integral multiple of $1,000 that may be purchased with then available Excess Cash Flow Balance (if any) (less all transaction costs and expenses incurred by the Issuers in connection with such Excess Cash Flow Offer) at the Excess Cash Flow Offer Price. No later than 30 days following the receipt of such a request, the Company shall make a Subsequent Excess Cash Flow Offer in accordance with this covenant. Each Initial Cash Flow Offer and each Subsequent Excess Cash Flow Offer are referred to herein, collectively, as an “Excess Cash Flow Offer.” Notwithstanding the foregoing, the Company will not be required to make a Subsequent Excess Cash Flow Offer to purchase notes pursuant to this covenant if the then available Excess Cash Flow Balance is less than $2.5 million.

If the aggregate principal amount of notes tendered pursuant to any Excess Cash Flow Offer exceeds, in the case of an Initial Excess Cash Flow Offer, the Excess Cash Flow Offer Amount or, in the case of a Subsequent Excess Cash Flow Offer, the then available Excess Cash Flow Balance, the Trustee will select the notes to be repurchased in the manner described below under “ —Selection and Notice.”

Each Excess Cash Flow Offer will be required to remain open for 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law. Upon the

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expiration of that period, the Company will apply the Excess Cash Flow Offer Amount, in the case of an Initial Excess Cash Flow Offer, or Excess Cash Flow Balance, in the case of a Subsequent Excess Cash Flow Offer, to the purchase of all notes tendered at the Excess Cash Flow Offer Purchase Price.

Any Excess Cash Flow Offer will be made in compliance with all applicable laws, rules and regulations, including, if applicable, Regulation 14E under the Exchange Act and the rules thereunder and all other applicable federal and state securities laws. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this covenant, our compliance with such laws and regulations shall not in and of itself cause a breach of our obligations under such covenant.

Notwithstanding anything to the contrary set forth above, the Company shall not be required (i) to make any Subsequent Excess Cash Flow Offer pursuant to this covenant if the Company does not reasonably believe (taking into account all applicable notice periods in this covenant) that it can consummate such Subsequent Excess Cash Flow Offer prior to the first day of the next Operating Six Months period, or (ii) to make an Initial Excess Cash Flow Offer pursuant to this covenant if, on the first day of the applicable Operating Six Months period with respect to which such Initial Excess Cash Flow Offer is to be made, the immediately preceding Initial Excess Cash Flow Offer or Subsequent Excess Cash Flow Offer is still outstanding and has not yet been consummated; provided, that, in the case of an Initial Excess Cash Flow Offer, any amount of Excess Cash Flow Offer Amount with respect to such Operating Six Months period will be added to the Excess Cash Flow Offer Amount for each subsequent Operating Six Months period until an Initial Excess Cash Flow Offer is made.

Certain Covenants

The Indenture also contains certain covenants that will, among other things, restrict our, the Guarantors’ and the Restricted Subsidiaries’ ability to borrow money, pay dividends on or repurchase equity interests, make investments and sell assets or enter into mergers or consolidations. The following summaries of certain covenants of the Indenture are summaries only, do not purport to be complete and are qualified in their entirety by reference to all of the provisions of the Indenture. We urge you to read the Indenture because it, and not this description, details your rights as a Holder of notes.

Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests

The Indenture provides that, except as set forth in this covenant, we will not and the Guarantors will not, and neither we nor the Guarantors will permit any of the Restricted Subsidiaries to, directly or indirectly, create, issue, assume, guarantee, incur, become directly or indirectly liable with respect to (including as a result of an Acquisition), or otherwise become responsible for, contingently or otherwise (individually and collectively, to “incur” or, as appropriate, an “incurrence”), any Indebtedness (including Disqualified Equity Interests and Acquired Indebtedness), other than Permitted Indebtedness.

Notwithstanding the foregoing if:

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

(2)  on the date of such incurrence (the “Incurrence Date”), our Consolidated Coverage Ratio for the Reference Period immediately preceding the Incurrence Date, after giving effect on a pro forma basis (as set forth in the definition of Consolidated Coverage Ratio) to such incurrence of such Indebtedness and, to the extent set forth in the definition of Consolidated Coverage Ratio, the use of proceeds thereof, would be at least 2.0 to 1.0 (the “Debt Incurrence Ratio”),

then we and the Guarantors may incur such Indebtedness (including Disqualified Equity Interests and Acquired Indebtedness).

In addition, the foregoing limitations of the first paragraph of this covenant will not prohibit our incurrence or the incurrence by any Guarantor of Indebtedness pursuant to the Credit Agreement in an aggregate amount

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incurred and outstanding at any time pursuant to this paragraph (plus any Permitted Refinancing Indebtedness incurred to retire, defease, refinance, replace or refund such Indebtedness) of up to the Maximum Credit Facility Amount, minus the amount of any such Indebtedness retired with the Net Cash Proceeds from any Asset Sale applied to permanently reduce the outstanding amounts or the commitments with respect to such Indebtedness pursuant to the covenant “—Limitation on Sale of Assets and Restricted Subsidiary Equity Interests.”

Indebtedness (including Disqualified Equity Interests) of any Person which is outstanding at the time such Person becomes one of the Restricted Subsidiaries (including upon designation of any Person as a Restricted Subsidiary) or is merged with or into or consolidated with us or one of the Restricted Subsidiaries shall be deemed to have been incurred at the time such Person becomes or is designated one of the Restricted Subsidiaries or is merged with or into or consolidated with us or one of the Restricted Subsidiaries, as applicable.

Upon each incurrence of Indebtedness, (i) we may designate pursuant to which provision of this covenant such Indebtedness is being incurred, (ii) we may subdivide an amount of Indebtedness and designate more than one provision pursuant to which such amount of Indebtedness is being incurred and shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify, all or a portion of such item of Indebtedness, in any manner that complies with this covenant and (iii) such Indebtedness shall not be deemed to have been incurred or outstanding under any other provision of this covenant, except that all Indebtedness under the notes, the Guarantees and the Indenture shall be deemed to have been incurred pursuant to clause (a) of the definition of Permitted Indebtedness.

Limitation on Restricted Payments

The Indenture provides that we will not and the Guarantors will not, and neither we nor the Guarantors will permit any of the Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment if, after giving effect on a pro forma basis to such Restricted Payment:

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

(2)  we are not permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio in the covenant “—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests,” or

(3)  the aggregate amount of all Restricted Payments made by us and the Restricted Subsidiaries, including after giving effect to such proposed Restricted Payment, on and after the Issue Date (excluding Restricted Payments permitted by clauses (a), (e), (f), (g), and (i) of the next succeeding paragraph), would exceed, without duplication, the sum of:

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

(B)  100% of the aggregate Net Cash Proceeds received by us from the issue or sale of our Qualified Equity Interests (other than (i) to one of the Restricted Subsidiaries, (ii) to the extent applied in connection with a Qualified Exchange or, to avoid duplication, otherwise given credit for in any provision of this or the following paragraph, or (iii) used as consideration to make a Permitted Investment pursuant to clause (h) of the definition of “Permitted Investment”) after the Issue Date, plus

(C)  without duplication of any amounts included in clause (A) above, an amount equal to the sum of (i) 50% of (a) any dividends or distributions received by the Company or a Restricted Subsidiary from an Unrestricted Subsidiary, to the extent that such dividends or distributions were not otherwise included in Consolidated Net Income of the Company, minus (b) the aggregate cash distributions

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received by the Company from a Flow Through Entity that is not a Restricted Subsidiary that have been used to make a Permitted Tax Distribution attributable to a Flow Through Entity that is not a Restricted Subsidiary pursuant to clause (g)(iii) below, plus (ii) to the extent not otherwise included in Consolidated Net Income of the Company, an amount equal to the net reduction in Investments in Unrestricted Subsidiaries resulting from (x) repayments of the principal of loans or advances or other transfers of assets to the Company or any Restricted Subsidiary from Unrestricted Subsidiaries or (y) the sale or liquidation of any Unrestricted Subsidiaries, plus (iii) to the extent that any Unrestricted Subsidiary of the Company is designated to be a Restricted Subsidiary, the fair market value of the Company’s Investment in such subsidiary on the date of such designation, plus

(D)  without duplication of any amounts included in clause (B) above, 100% of the Net Cash Proceeds (or of the Net Cash Proceeds received upon the conversion of non-cash proceeds into cash) of any equity contributions (including the forgiveness of any Indebtedness other than Subordinated Indebtedness) received after the Issue Date by the Company from any holder (other than a Restricted Subsidiary) of the Company’s Equity Interests.

The preceding paragraph, however, will not prohibit:

(a)  (i) the repurchase, redemption, or other retirement or acquisition of Equity Interests of the Company or any Restricted Subsidiary from our employees, directors or managers (or their heirs or estates) or employees, directors or managers (or their heirs or estates) of the Restricted Subsidiaries or (ii) any dividend, distribution or other payment to OEDA to enable OEDA, PGC or PGP to repurchase, redeem, or otherwise retire or acquire Equity Interests of any of OEDA, PGC or PGP from any of their respective employees, directors or managers (or their heirs or estates) or employees, directors or managers (or their heirs or estates) of any of their respective subsidiaries, in the case of each of the preceding clauses (i) and (ii) upon the death, disability or termination of employment or pursuant to the terms of any subscription, stock option, stockholder or other agreement or plan in effect on the Issue Date in an aggregate amount pursuant to this paragraph (a) to all such employees, directors or managers (or their heirs or estates) not to exceed $500,000 per fiscal year on and after the Issue Date, provided, that any amounts not used in a fiscal year may be carried forward to succeeding fiscal years until used,

(b)  any dividend, distribution or other payment by any of the Restricted Subsidiaries on its Equity Interests that is paid pro rata to all holders of such Equity Interests,

(c)  a Qualified Exchange,

(d)  the payment of any dividend on Qualified Equity Interests within 60 days after the date of its declaration if such dividend could have been made on the date of such declaration in compliance with the foregoing provisions,

(e)  so long as clause (1) above is satisfied, the payment of Management Amounts, provided, that in the case of the Incentive Fee, such Incentive Fee is permitted to be paid pursuant to the covenant “Restriction on Payment of Management Fees,”

(f)  so long as clause (1) above is satisfied, the payment of reasonable and customary directors fees payable to, and indemnity provided on behalf of, the Managers of the Company and its Restricted Subsidiaries, indemnity provided on behalf of officers and employees of the Company and its Restricted Subsidiaries, and customary reimbursement of travel and similar expenses incurred in the ordinary course of business, and consulting or similar fees to the Managers, officers or employees of the Company pursuant to, and in accordance with, agreements in effect on the Issue Date (without giving effect to any amendment or supplement thereto or modification thereof),

(g)  with respect to each tax year or portion thereof that the Company qualifies as a Flow Through Entity and so long as clause (1) above is satisfied, the payment of Permitted Tax Distributions (whether paid in such tax year or portion thereof, or any subsequent tax year); provided, that (i) prior to the first payment of Permitted Tax Distributions during any particular calendar year the Company provides an Officers’

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Certificate and an Opinion of Counsel to the effect that the Company and each other Flow Through Entity in respect of which such distributions are being made qualify as Flow Through Entities for federal income tax purposes and for the states in respect of which such distributions are being made for such tax year or portion thereof, (ii) at the time of such distribution, the most recent audited financial statements of the Company for periods including such tax year or portion thereof provided to the Trustee pursuant to the covenant described under the caption “Reports” provide that the Company and each subsidiary of the Company in respect of which such distributions are being made was treated as a Flow Through Entity for the period of such financial statements, and (iii) in the case of the portion, if any, of any Permitted Tax Distribution that is proposed to be distributed for a particular taxable period or portion thereof, which portion of such Permitted Tax Distribution is attributable to a Flow Through Entity that is not a Restricted Subsidiary, such portion of such proposed Permitted Tax Distribution shall be limited to the excess of (a) the aggregate actual cash distributions received by the Company or a Restricted Subsidiary from all Flow Through Entities that are not Restricted Subsidiaries of the Company during the period commencing with the Issue Date and continuing to and including the last day of the period in respect of which such proposed Permitted Tax Distribution is being determined over (b) the aggregate amount of such cash distributions described in the immediately preceding clause (a) that (x) have already been taken into account for purposes of making a Permitted Tax Distribution previously made and which was attributable to a Flow Through Entity that was not a Restricted Subsidiary at the time such Permitted Tax Distribution was made or (y) the Company previously used to make a Restricted Payment permitted by clause (A) or (C) of clause (3) above (treating such cash distributions described in this clause (b)(y) as used to make a Restricted Payment in any previous period only to the extent that in such period, the total amount of Restricted Payments actually made during such period exceeded the excess of (m) the total amount of Restricted Payments permitted to be made in such period over (n) the amount of such cash distributions described in the immediately preceding clause (a) that were actually received by the Company or a Restricted Subsidiary during such period or any prior period and that were not previously used to make a Permitted Tax Distribution or treated as used to make a Restricted Payment pursuant to this clause (b)(y)),

(h)  the declaration and payment of dividends and distributions to holders of Disqualified Equity Interests of the Company or any of the Restricted Subsidiaries issued or incurred in accordance with the covenant described above under the caption “—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests,”

(i)  the redemption and repurchase of any Equity Interests or Indebtedness of the Company or any of the Restricted Subsidiaries to the extent required by any Gaming Authority or Racing Authority, or

(j)  so long as clause (1) above is satisfied, Restricted Payments not otherwise permitted pursuant to this covenant in an aggregate amount pursuant to this clause (j) not to exceed $2.5 million.

For purposes of this covenant, the amount of any Restricted Payment made or returned, if other than in cash, shall be the fair market value thereof, as determined in the reasonable good faith judgment of the Managers of the Company, unless stated otherwise, at the time made or returned, as applicable. Additionally, within 5 days of the date of making any Restricted Payment pursuant to the first paragraph of this covenant in excess of (or series of related Restricted Payments to the same Person and its Affiliates in the aggregate in excess of) $1.0 million, we shall deliver an Officers’ Certificate to the Trustee describing in reasonable detail the nature of such Restricted Payment, stating the amount of such Restricted Payment, stating in reasonable detail the provisions of the Indenture pursuant to which such Restricted Payment was made and certifying that such Restricted Payment was made in compliance with the terms of the Indenture.

Limitation on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries

The Indenture provides that we will not and the Guarantors will not, and neither we nor the Guarantors will permit any of the Restricted Subsidiaries to, directly or indirectly, incur or suffer to exist any consensual restriction on the ability of any of the Restricted Subsidiaries (i) to pay dividends or make other distributions to

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or on behalf of, (ii) to pay any obligation to or on behalf of, (iii) to otherwise transfer assets or property to or on behalf of, or (iv) to make or pay loans or advances to or on behalf of, us or any of the Restricted Subsidiaries, except:

(1)  restrictions imposed by the notes or the Indenture or by our other Indebtedness (which may also be guaranteed by the Guarantors) ranking pari passu with the notes or the Guarantees, as applicable; provided, that such restrictions are no more restrictive in any material respect than those imposed by the Indenture and the notes,

(2)  restrictions imposed by applicable law,

(3)  restrictions under agreements existing on the Issue Date, including with respect to Existing Indebtedness (as in effect on the Issue Date, without giving effect to any amendment, supplement or modification thereof),

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

(5)  restrictions imposed by Indebtedness incurred under the Credit Agreement, provided, that such restrictions are no more restrictive in any material respect than those contained in the Indenture as in effect on the Issue Date, without giving effect to any amendment, supplement or modification thereof,

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

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

(8)  customary restrictions on subletting, sublicensing or assignment and net worth provisions in any contract, lease or license entered into in the ordinary course of business,

(9)  customary limitations on the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business,

(10)  customary restrictions on the transfer of assets subject to a Permitted Lien imposed by a holder of such Lien,

(11)  restrictions in agreements governing Permitted Refinancing Indebtedness; provided, that such restrictions are not more restrictive in any material respect than those contained in the agreement governing the Indebtedness being so refinanced and do not apply to any other Person or assets than those that would have been covered by the restrictions contained in the agreement governing the Indebtedness being so refinanced, and

(12)  restrictions under any amendment, modification, restatement, renewal, increase, supplement, refunding or replacement of any of the instruments or agreements referred to in clauses (1) through (11) above; provided, that such restrictions under any such amendment, modification, restatement, renewal, increase, supplement, refunding or replacement are no more restrictive in any material respect as determined by the Managers of the Company in their reasonable good faith judgment than those contained in the instrument or agreement being so amended, modified, restated, renewed, increased, supplemented, refunded or replaced.

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Limitation on Liens

The Indenture provides that we will not and the Guarantors will not, and neither we nor the Guarantors will permit any of the Restricted Subsidiaries to, directly or indirectly, incur or suffer to exist any Lien of any kind, other than Permitted Liens, upon any of our or their respective assets, including, without limitation, all real, tangible or intangible property (other than Excluded Assets) now owned or acquired on or after the date of the Indenture, or upon any income or profits therefrom, or convey any right to receive income or profits therefrom.

Limitation on Transactions with Affiliates

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

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

(2)  if involving consideration to either party of $1.0 million or more, unless such Affiliate Transaction(s) has been approved by a majority of the Managers of the Company that are disinterested in such transaction or, if none, a disinterested representative appointed by the Managers of the Company for such purpose, and

(3)  if involving consideration to either party of $5.0 million or more (or if no Managers of the Company are disinterested in such transaction and no disinterested representative is appointed by the Managers of the Company as described in clause (2) above) unless, in addition we, prior to the consummation thereof, obtain a written favorable opinion as to the fairness of such transaction(s) to us from a financial point of view from an independent investment banking, accounting or appraisal firm of national reputation in the United States.

Within 5 days of any Affiliate Transaction(s) involving consideration to either party of $5.0 million or more, the Company shall deliver to the Trustee an Officers’ Certificate addressed to the Trustee certifying that such Affiliate Transaction(s) complied with clause (1), (2) and (3) above, as applicable.

Limitation on Merger, Sale or Consolidation

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

(1)  either (a) the Company is the surviving Person or (b) the resulting, surviving or transferee Person is a Person (provided, that at least one of the Issuers of the notes is a corporation) organized under the laws of the United States, any state thereof or the District of Columbia and expressly assumes by supplemental indenture all of our Obligations in connection with the notes, the Indenture, the Collateral Agreements and the Construction Documents;

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

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(3)  unless such transaction is solely the merger of us and one of our Wholly-owned Restricted Subsidiaries, immediately after giving effect to such transaction on a pro forma basis, the Consolidated Net Worth of the resulting, surviving or transferee Person is at least equal to our Consolidated Net Worth immediately prior to such transaction;

(4)  unless such transaction is solely the merger of us and one of our Wholly-owned Restricted Subsidiaries, immediately after giving effect to such transaction on a pro forma basis, the resulting, surviving or transferee Person would immediately thereafter be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio set forth in the covenant “—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests;” and

(5)  each Guarantor shall have, if required by the terms of the Indenture or the Collateral Agreements, confirmed in writing that its Guarantee shall apply to the Obligations of the Issuers or the resulting, surviving or transferee Person in accordance with the notes, the Indenture and the Collateral Agreements.

In the event of any transaction (other than a lease or transfer of less than all of our assets) in accordance with the foregoing in which the Company is not the surviving Person, the resulting, surviving or transferee Person shall succeed to and be substituted for, and may exercise every right and power of, the Company under the Indenture with the same effect as if such resulting, surviving or transferee Person had been named therein as the Company, and the Trustee may require any such Person to ensure, by executing and delivering appropriate instruments and opinions of counsel, that the Trustee continues to hold a Lien, having the same relative priority as was the case immediately prior to such transactions, on all Collateral for the benefit of the Holders.

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

Limitation on Lines of Business

The Indenture provides that we will not and the Guarantors will not, and neither we nor the Guarantors will permit any of the Restricted Subsidiaries to, directly or indirectly engage to any substantial extent in any line or lines of business activity other than that which, in the reasonable good faith judgment of the Managers of the Company, is a Related Business.

Guarantors

The Indenture provides that all of our present and future Restricted Subsidiaries (other than Foreign Subsidiaries), jointly and severally will guarantee all principal, premium, if any, interest and Liquidated Damages, if any, on the notes on a senior secured basis.

We will cause each Restricted Subsidiary we form or acquire to (i) execute and deliver to the Trustee a supplemental indenture and a guarantee in form reasonably satisfactory to the Trustee, pursuant to which such Restricted Subsidiary shall unconditionally guarantee, on a senior secured basis, all of our Obligations under the notes and the Indenture on the terms set forth in the Indenture, (ii) execute a security agreement and other Collateral Agreements necessary or reasonably requested by the Trustee to grant, and grant, the Trustee a valid, enforceable, perfected Lien on the Collateral described therein, and (iii) deliver to the Trustee an Opinion of Counsel that such supplemental indenture guarantee and Collateral Agreements have been duly authorized, executed and delivered by such Restricted Subsidiary and that each of such documents and the Indenture constitutes a legal, valid, binding and enforceable obligation of such Restricted Subsidiary, in each case subject to customary qualifications. Thereafter, such Restricted Subsidiary shall be a Guarantor for all purposes of the Indenture.

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Release of Guarantors

The Indenture provides that no Guarantor will consolidate or merge with or into (whether or not such Guarantor is the surviving Person) another Person unless, subject to the provisions of the following paragraph and the other provisions of the Indenture, (1) the Person formed by, resulting from or surviving any such consolidation or merger (if other than such Guarantor) (a) expressly assumes all the obligations of such Guarantor pursuant to a supplemental indenture in form reasonably satisfactory to the Trustee, pursuant to which such Person shall unconditionally guarantee, on a senior secured basis, all of such Guarantor’s Obligations under such Guarantor’s Guarantee on the terms set forth in the Indenture, (b) executes a security agreement and other Collateral Agreements necessary or reasonably requested by the Trustee to grant, and grants, a valid, enforceable, perfected Lien on the Collateral owned by such Person to secure such Obligations on terms not less favorable in any material respect to the holders of notes than the terms set forth in the Collateral Agreements, and (c) delivers to the Trustee an Opinion of Counsel that such supplemental indenture, guarantee and Collateral Agreements have been duly authorized, executed and delivered and that each of such documents and the Indenture constitutes a legal, valid, binding and enforceable obligation of such Person, in each case subject to customary qualifications; and (2) immediately before and immediately after giving effect to such transaction on a pro forma basis, no Default or Event of Default shall have occurred or be continuing. The provisions of the covenant shall not apply to the merger of any Guarantors with or into each other or with or into us.

Upon the sale or disposition (including by merger or sale or transfer of all of the Equity Interests) of a Guarantor (as an entirety) to a Person which is not and is not required to become a Guarantor, or the designation of a Restricted Subsidiary as an Unrestricted Subsidiary, which transaction is otherwise in compliance with the Indenture (including, without limitation, the provisions of the covenant “—Limitations on Sale of Assets and Restricted Subsidiary Equity Interests”), such Guarantor will be deemed released from its Obligations under its Guarantee of the notes and the Collateral Agreements; provided, however, that any such termination shall occur only to the extent that all obligations of such Guarantor under all of its guarantees of, and under all of its pledges of assets or other security interests which secure, any of our Indebtedness or any Indebtedness of any other of the Restricted Subsidiaries shall also terminate upon such release, sale or transfer and none of its Equity Interests are pledged for the benefit of any holder of any of our Indebtedness or any Indebtedness of any of the Restricted Subsidiaries.

Limitation on Status as Investment Company

The Indenture prohibits us, the Guarantors and the Restricted Subsidiaries from being required to register as an “investment company” (as that term is defined in the Investment Company Act of 1940, as amended), or from otherwise becoming subject to regulation under the Investment Company Act.

Impairment of Security Interests

The Indenture provides that, except as permitted in the Indenture, the Intercreditor Agreement and the Collateral Agreements, we will not and the Guarantors will not, and neither we nor the Guarantors will permit any of the Restricted Subsidiaries to, take or omit to take any action that would have the result of materially adversely affecting or impairing the Lien on the Collateral in favor of the Trustee for the benefit of the Holders of the notes.

Restrictions on Activities of Capital

The Indenture provides that Capital shall not hold any material assets, become liable for any obligations or engage in any business activities; provided, that Capital must be a co-obligor of the notes (including any additional notes incurred pursuant to the covenant described under “—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests”) pursuant to the terms of the Indenture and as contemplated by the Purchase Agreement executed by the Issuers, the Guarantors and the Initial Purchaser and, as necessary, may engage in any activities directly related or necessary in connection therewith.

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Restriction on Payment of Management Fees

The Indenture provides that we will not and the Guarantors will not, and neither we nor the Guarantors will permit any of the Restricted Subsidiaries to, directly or indirectly, pay to PGP, PGC, OEDA or any of their Affiliates any Incentive Fees if:

(a)  a Default or Event of Default shall have occurred and be continuing at the time of, or would occur after giving effect on a pro forma basis to, such payment; or

(b)  our Consolidated Coverage Ratio for the Reference Period preceding the date on which such Management Fees are proposed to be paid would have been less than 2.0 to 1.0, calculated on a pro forma basis, provided, that in calculating the Consolidated Coverage Ratio for purposes of this covenant, there shall be deducted in calculating Consolidated EBITDA the amount of any Management Fees (including any Management Fees deferred from a prior period) to the extent paid in cash.

Any Incentive Fees not permitted to be paid pursuant to this covenant will be deferred and will accrue and may be paid only at such time that they would otherwise be permitted to be paid under the Indenture.

Entity Classification

The Indenture provides that the Company will be a Flow Through Entity and will not take, or fail to take, any action which would result in the Company no longer being classified as a Flow Through Entity except (i) pursuant to a Permitted C-Corp Conversion or (ii) any transaction permitted under the covenant described under the caption “—Limitation on Merger, Sale or Consolidation.”

Limitation on Use of Proceeds

The Indenture provides that we are required to deposit on the Issue Date approximately $62.4 million into the Construction Disbursement Account, approximately $24.2 million into the Interest Reserve Account and approximately $5.0 million into the Completion Reserve Account. Funds in the Interest Reserve Account shall be used only to pay the first three Fixed Interest payments on the notes. The funds in the Construction Disbursement Account, the Interest Reserve Account and the Completion Reserve Account may be invested only in Cash Equivalents. All funds in the Construction Disbursement Account, the Interest Reserve Account and the Completion Reserve Account shall be disbursed only in accordance with the Cash Collateral and Disbursement Agreement.

Gaming Licenses and Other Permits

The Indenture provides that we and the Guarantors will, and will cause the Restricted Subsidiaries to, use our and their commercially reasonable efforts to obtain and maintain in full force and effect at all times all Gaming Licenses, all Racing Licenses and all other Permits from or with any Gaming Authority, Racing Authority or other governmental authority that are necessary for the design, development, construction, equipping and operation of the Racino or any of the Issuers’ and the Restricted Subsidiaries’ other operations; provided, that if in the course of the exercise of its governmental or regulatory functions the applicable Gaming Authority or Racing Authority is required to suspend or revoke any Gaming License, Racing License or other Permit or close or suspend any operation of any part of the Racino or any of the Issuers’ and the Restricted Subsidiaries’ other operations as a result of any noncompliance therewith or with law, the Company shall use its commercially reasonable efforts to promptly and diligently correct such noncompliance or replace any personnel causing such noncompliance so that the Racino or such other operations, as the case may be, shall be opened and fully operating as promptly as practicable.

Reports

The Indenture provides that whether or not we are subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as any notes are outstanding, we will deliver to the Trustee and, to each

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Holder, within 15 days after we are or would have been (if we were subject to such reporting obligations) required to file such with the Commission, (i) annual and quarterly financial statements substantially equivalent to financial statements that would have been required to be contained in a filing with the Commission on Forms 10-Q and 10-K if we were required to file such Forms, including in each case, together with a Management’s Discussion and Analysis of Financial Condition and Results of Operations which would be so required, and including, with respect to annual information only, a report thereon by our certified independent public accountants as would be so required, and (ii) all information that would be required to be contained in a filing with the Commission on Form 8-K if we were required to file such reports. From and after the time we file a registration statement with the Commission with respect to the notes, we will file with the Commission the annual, quarterly and other reports which we are required to file with the Commission at such time as are required to be filed. The Company will make all such information available to prospective investors in the notes upon reasonable request.

Rule 144A Information Requirement

The Indenture provides that the Issuers and the Guarantors will furnish to the Holders or beneficial holders of notes, upon their request, and to prospective purchasers thereof designated by such Holders or beneficial holders, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act for so long as is required for an offer or sale of the notes to qualify for an exemption under Rule 144A.

Events of Default and Remedies

The Indenture defines an “Event of Default” as:

(1)  our failure to pay any installment of interest (or Liquidated Damages, if any) on the notes as and when the same becomes due and payable and the continuance of any such failure for 30 days,

(2)  our failure to pay all or any part of the principal, or premium, if any, on the notes when and as the same becomes due and payable at maturity, redemption, by acceleration or otherwise, including, without limitation, payment of the Change of Control Purchase Price, the Excess Cash Flow Purchase Price or the Asset Sale Offer Price, on notes validly tendered and not properly withdrawn pursuant to a Change of Control Offer, an Excess Cash Flow Offer or Asset Sale Offer, as applicable,

(3)  our failure or the failure by any of the Restricted Subsidiaries to comply with the requirement to make the Change of Control Offer, Excess Cash Flow Offer or Asset Sale Offer as described under the captions “—Repurchase of Notes at the Option of the Holder Upon a Change of Control,” “—Repurchase of Notes at the Option of the Holder From Excess Cash Flow” and “—Limitation on Sale of Assets and Restricted Subsidiary Equity Interests,” respectively, or to comply with the provisions described under the caption “—Limitation on Merger, Sale or Consolidation,”

(4)  our failure or the failure by any of the Restricted Subsidiaries to observe or perform any other covenant or agreement contained in the notes or the Indenture and the continuance of such failure for a period of 60 days after written notice is given to us by the Trustee or to us and the Trustee by the Holders of at least 25% in aggregate principal amount of the notes outstanding,

(5)  certain events of bankruptcy, insolvency or reorganization in respect of us, any of the Guarantors or any of our Significant Subsidiaries,

(6)  an event of default occurs (after giving effect to any waivers, amendments, applicable grace periods, applicable notice periods or any extension of any maturity date) in our Indebtedness or the Indebtedness of the Guarantors or any of the Restricted Subsidiaries with an aggregate amount outstanding in excess of $5.0 million (a) resulting from the failure to pay principal of or interest on such Indebtedness or (b) as a result of such default, the maturity of such Indebtedness has been accelerated prior to its stated maturity,

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(7)  failure by the Issuers or any Restricted Subsidiary to pay final judgments not covered by insurance aggregating in excess of $5.0 million, at any one time rendered against the Issuers or any of the Restricted Subsidiaries, which judgments are not stayed, bonded or discharged within 60 days after their entry,

(8)  any Guarantee of a Guarantor which is a Significant Subsidiary ceases to be in full force and effect or shall be held in any judicial proceeding to be unenforceable or invalid or is declared null and void (other than in accordance with the terms of the Guarantee and the Indenture) or any Guarantor which is a Significant Subsidiary denies or disaffirms its Obligations under its Guarantee or the Collateral Agreements (in each case, other than by reason of the termination of the Indenture or the release of any such Guarantee in accordance with the Indenture),

(9)  the Casino or the Racino is not Operating by the applicable Operating Deadline,

(10)  (a) any event of default occurs under any of the Collateral Agreements (after giving effect to any applicable grace periods, applicable notice periods, waivers or amendments) or (b) our failure or the failure of any of the Restricted Subsidiaries to comply with any material agreement or covenant in, or material provision of, any of the Collateral Agreements, or any breach in any material respect of any material representation or warranty made by us or any of the Restricted Subsidiaries in any Collateral Agreement, and the continuance of such failure or breach for a period of 30 days after written notice is given to us by the Trustee or to us and the Trustee by the Holders of at least 25% in aggregate principal amount of the notes outstanding, and

(11)  any of the Collateral Agreements ceases to be in full force and effect or any of the Collateral Agreements ceases to give the Trustee (or, in the case of a mortgage, ceases to give the Trustee or any other trustee under such mortgage) any of the Liens, rights, powers or privileges purported to be created thereby, or any of the Collateral Agreements is declared null and void, or either of the Issuers or any Guarantor denies that it has any further liability under any Collateral Agreement to which it is a party or gives notice of such effect (in each case other than by reason of the termination of the Indenture or any such Collateral Agreement in accordance with its terms or the release of any Guarantor in accordance with the Indenture) and the continuance of such failure for a period of 30 days after written notice is given to us by the Trustee or to us and the Trustee by the Holders of at least 25% in aggregate principal amount of the notes outstanding.

If an Event of Default occurs and is continuing (other than an Event of Default specified in clause (5) above relating to us, any of the Guarantors or any of our Significant Subsidiaries) then in every such case, unless the principal of all of the notes shall have already become due and payable, either the Trustee or the Holders of at least 25% in aggregate principal amount of the notes then outstanding, by notice in writing to us (and to the Trustee if given by Holders) (an “Acceleration Notice”), may declare all principal, premium, if any, and accrued interest (and Liquidated Damages, if any) thereon to be due and payable immediately. If an Event of Default specified in clause (5), above, relating to us, any of the Guarantors or any of our Significant Subsidiaries occurs, all principal and accrued interest (and Liquidated Damages, if any) thereon will be immediately due and payable on all outstanding notes without any declaration or other act on the part of the Trustee or the Holders. The Holders of a majority in aggregate principal amount of notes generally are authorized to (i) waive any existing Default or Event of Default and its consequences under the Indenture and/or (ii) rescind an acceleration and its consequences if all existing Events of Default (other than the non-payment of the principal of, premium, if any, and interest and Liquidated Damages, if any, on the notes which have become due solely by such acceleration) have been cured or waived.

Subject to the provisions of the Indenture relating to the duties of the Trustee, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable security or indemnity.

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Subject to all provisions of the Indenture and applicable law, the Holders of a majority in aggregate principal amount of the notes at the time outstanding will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee.

Legal Defeasance and Covenant Defeasance

The Indenture provides that we may, at our option, elect to discharge our obligations and the Guarantors’ obligations with respect to the outstanding notes and Guarantees (“Legal Defeasance”). If Legal Defeasance occurs, we shall be deemed to have paid and discharged all amounts owed under the notes, and the Indenture shall cease to be of further effect as to the notes and Guarantees (upon which we may obtain the release of the Collateral as security for the notes and the Guarantees), except that:

(1)  Holders will be entitled to receive timely payments for the principal of, premium, if any, and interest (and Liquidated Damages, if any) on the notes, from the funds deposited for that purpose (as explained below);

(2)  our obligations will continue with respect to the issuance of temporary notes, the registration of notes, and the replacement of mutilated, destroyed, lost or stolen notes;

(3)  the Trustee will retain its rights, powers, duties, and immunities, and we will retain our obligations in connection therewith; and

(4)  other Legal Defeasance provisions of the Indenture will remain in effect.

In addition, we may, at our option and at any time, elect to cause the release of our obligations and the Guarantors’ with respect to most of the covenants in the Indenture (except as described otherwise therein) (“Covenant Defeasance”). If Covenant Defeasance occurs, certain events (not including non-payment and bankruptcy, receivership, rehabilitation and insolvency events) relating to us, any of the Guarantors or any Significant Subsidiary described under “Events of Default and Remedies” will no longer constitute Events of Default with respect to the notes. We may exercise Legal Defeasance regardless of whether we previously exercised Covenant Defeasance.

In order to exercise either Legal Defeasance or Covenant Defeasance (each, a “Defeasance”):

(1)  we must irrevocably deposit with the Trustee, in trust, for the benefit of Holders of the notes, U.S. legal tender, U.S. Government Obligations or a combination thereof, in amounts that will be sufficient, in the written opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest and Liquidated Damages, if any, on the notes on the stated date for payment or any redemption date thereof (and we must specify whether the notes are being defeased to Stated Maturity or a particular redemption date), and the Trustee must have, for the benefit of Holders of the notes, a valid, perfected, exclusive security interest in the trust;

(2)  in the case of Legal Defeasance, we must deliver to the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee confirming that:

(A)  we have received from, or there has been published by the Internal Revenue Service, a ruling or

(B)  since the date of the Indenture, there has been a change in the applicable federal income tax law,

in either case to the effect that Holders of notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

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

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

(5)  the Defeasance may not result in a breach or violation of, or constitute a default under, any other material agreement or instrument (other than the Indenture) to which we, any of the Guarantors or any of the Restricted Subsidiaries are a party or by which we, or any of the Restricted Subsidiaries are bound;

(6)  we must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by us with the intent to hinder, delay or defraud any other of our creditors; and

(7)  we must deliver to the Trustee an Officers’ Certificate confirming the satisfaction of conditions in clauses (1) through (6) above, and an Opinion of Counsel confirming the satisfaction of the conditions in clauses (1) (with respect to the validity and perfection of the security interest), (2), (3) and (5) above.

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

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

Satisfaction and Discharge

The Indenture provides that the Issuers may terminate their obligations and the obligations of the Guarantors under the Indenture, the notes, the Guarantees and the Collateral Agreements (except as described below) (whereupon the Issuers may obtain the release of the Collateral as security for the notes and the Guarantees) when:

(1)  either:

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

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(b)  (i) all notes have been called for redemption pursuant to the provisions under “Optional Redemption” by mailing to holders a notice of redemption or all notes otherwise have become due and payable, and

(ii)  the Issuers have irrevocably deposited or caused to be irrevocably deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the notes not theretofore delivered to the Trustee for cancellation, for principal of, and interest and Liquidated Damages, if any, on the notes to the date of redemption or maturity, as the case may be, together with irrevocable instructions from the Issuers directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be,

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

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

(2)  each of the Issuers and the Guarantors has paid all other sums payable by it under the Indenture, the notes, the Guarantees, the Intercreditor Agreement and the Collateral Agreements, and

(3)  we shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel confirming the satisfaction of all conditions set forth in clauses (1) and (2) above.

Amendments, Supplements and Waivers

Except as provided in the two succeeding paragraphs, the Indenture, the notes and the Guarantees may be amended, supplemented or otherwise modified, and any existing Default or Event of Default (except certain payment defaults) or compliance with any provisions of the Indenture, the notes and the Guarantees may be waived, with the consent of the Holders of not less than a majority in aggregate principal amount of the notes at the time outstanding (including consents obtained in connection with a tender or exchange offer for the notes).

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

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

(2)  change the Stated Maturity on any note,

(3)  reduce the principal of, or any premium (including redemption premium but not including any redemption premium relating to the covenants described under “Offers to Repurchase the Notes” except as prohibited by paragraph (6) below) on, any note,

(4)  reduce the rate of or change the time for payment of interest (or Liquidated Damages, if any), including default interest, on any note,

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

(6)  reduce the Change of Control Purchase Price or the Asset Sale Offer Price after the corresponding Asset Sale or Change of Control has occurred or reduce the Excess Cash Flow Purchase Price after the Company becomes obligated to make the Excess Cash Flow Offer,

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

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

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

(10)  modify or change any provision of the Indenture affecting the ranking of the notes or any Guarantee in a manner adverse to the Holders of the notes,

(11)  release any Guarantor that is a Significant Subsidiary from any of its obligations under its Guarantee or the Collateral Agreements or the Indenture other than in compliance with the Indenture and the Collateral Agreements, or

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

Notwithstanding the foregoing, without the consent of the Holders, we, the Guarantors and the Trustee may amend, modify or supplement the Indenture, the notes or the Guarantees:

(i)  to cure any ambiguity, defect or inconsistency,

(ii)  to provide for uncertificated notes in addition to or in place of certificated notes,

(iii)  to provide for the assumption of any of our or the Guarantors’ obligations to Holders in the case of a merger or consolidation or a sale of all or substantially all of our assets in accordance with the Indenture and the Collateral Agreements,

(iv)  to evidence the release any Guarantor permitted to be released under the terms of the Indenture and the Collateral Agreements or to evidence the addition of any new Guarantor,

(v)  to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act,

(vi)  to enter into additional or supplemental Collateral Agreements,

(vii)  to comply with applicable Gaming Laws and Racing Laws,

(viii)  to comply with the provisions of DTC or the Trustee with respect to the provisions of the Indenture and the notes relating to transfers and exchanges of notes or beneficial interests therein, or

(ix)  to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the rights of any Holder of notes under the Indenture, the notes, the Guarantees, the Registration Rights Agreement, the Collateral Agreements or the Intercreditor Agreement.

Governing Law

The Indenture provides that it and the notes will be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and to be performed in the State of New York, including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law and New York Civil Practice Laws and Rules 327(b); provided, that with respect to the creation, attachment, perfection or priority of the security interest in any real property Collateral, the governing law shall be the laws of the jurisdiction where such Collateral is located.

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No Personal Liability of Partners, Stockholders, Officers, Directors

The Indenture provides that no director, officer, manager, employee, incorporator, stockholder, member or controlling person of us or any Guarantor, in such capacity, will have any liability for any obligations of us or any Guarantor under the notes, the Indenture, the Collateral Agreements or the Registration Rights Agreement or for any claim based on, or in respect of, or by reason of, such obligations or their creation; provided, that this provision shall in no way limit the obligation of any Guarantor pursuant to any Guarantee of the notes.

Certain Definitions

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

“Adjusted Consolidated Coverage Ratio” means, with respect to any Person for any period, the ratio of the Consolidated EBITDA of such Person and its Consolidated Subsidiaries for such period to the Adjusted Consolidated Fixed Charges of such Person and its Consolidated Subsidiaries for such period (calculated in the same manner as the Consolidated Coverage Ratio is calculated, except that Management Fees shall be deducted in calculating Consolidated EBITDA).

“Adjusted Consolidated Fixed Charges” means, with respect to any Person for any period, the Consolidated Fixed Charges of such Person and its Consolidated Subsidiaries for such period minus, to the extent included therein, any Deferred Contingent Interest of such Person and its Consolidated Subsidiaries for such period, plus any Deferred Contingent Interest accrued in respect of any prior periods that is proposed to be paid for the period in respect of which Adjusted Consolidated Fixed Charges is being determined.

“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, the Initial Purchaser shall not be deemed to be an Affiliate of PGP, PGC, OEDA, the Issuers or any of the Restricted Subsidiaries.

“Applicable Capital Gain Tax Rate” means a rate equal to the sum of:

(a)  the highest marginal federal income tax rate applicable to net capital gain of an individual who is a citizen of the United States, plus

(b)  the greater of (i) an amount equal to the sum of the highest marginal state and local income tax rates applicable to net capital gain of an individual who is a resident of the State of California and (ii) an amount equal to the sum of the highest marginal state and local income tax rates applicable to net capital gain of an individual who is a resident of the State of Louisiana, multiplied by a factor equal to 1 minus the highest marginal federal income tax rate described in clause (a) above.

“Applicable Income Tax Rate” means a rate equal to the sum of:

(a)  the highest marginal federal ordinary income tax rate applicable to an individual who is a citizen of the United States, plus

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(b)  the greater of (i) an amount equal to the sum of the highest marginal state and local ordinary income tax rates applicable to an individual who is a resident of the State of California and (ii) an amount equal to the sum of the highest marginal state and local ordinary income tax rates applicable to an individual who is a resident of the State of Louisiana, multiplied by a factor equal to 1 minus the highest marginal federal income tax rate described in clause (a) above.

“Asset Sale” means:

(a)  the conveyance, sale, transfer, assignment or other disposition of, directly or indirectly, any of the property, business or assets of the Company and the Restricted Subsidiaries, including by merger or consolidation (in the case of a Guarantor or one of the Restricted Subsidiaries); and

(b)  the sale or other transfer or issuance of any Equity Interests of any of the Restricted Subsidiaries, whether by us or by one of the Restricted Subsidiaries or through the issuance, sale or transfer of Equity Interests by one of the Restricted Subsidiaries (in each case, other than directors’ qualifying shares).

Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales:

(1)  any (a) conveyance, sale, transfer, assignment, lease or other disposition of inventory, equipment, accounts receivable or other assets acquired and held for resale in the ordinary course of business, consistent with past practices of the Issuers and the Restricted Subsidiaries and (b) the sale or other disposition of, or liquidation of, Cash Equivalents;

(2)  any sale or disposition of damaged, worn out or other obsolete personal property so long as such property is no longer necessary for the proper conduct of our business or the business of such Restricted Subsidiary, as applicable;

(3)  any conveyance, sale, transfer, assignment or other disposition of all or substantially all of the assets of the Company and the Restricted Subsidiaries taken as a whole that is governed by and complies with the provisions of the Indenture described under “—Offers to Repurchase the notes—Repurchase of notes at the Option of the Holder Upon a Change of Control” and/or the provisions described under “—Certain Covenants—Limitation on Merger, Sale or Consolidation;”

(4)  a transaction or series of related transactions that have a fair market value (or result in gross proceeds) of less than $1.0 million, until the aggregate fair market value and gross proceeds of the transactions excluded from the definition of Asset Sale pursuant to this clause (4) exceed $5.0 million;

(5)  conveyance, sale, transfer, assignment, lease or other disposition to the Company or any of the Restricted Subsidiaries;

(6)  any settlement, release or surrender of tort or other litigation claims in the ordinary course of business or any grant of any Liens not otherwise prohibited by the Indenture;

(7)  any Investments that are not prohibited by the covenant described under “Certain Covenants—Limitation on Restricted Payments;”

(8)  any exchange of equipment or assets for any assets or property of the type set forth in clause (b) of the second paragraph covenant described under the heading “—Offers to Repurchase the Notes—Limitation on Sale of Assets and Restricted Subsidiary Equity Interests;” and

(9)  any issuance of Equity Interests by any Restricted Subsidiary to the Company or to any other Restricted Subsidiary.

“Average Life” means, as of the date of determination, with respect to any security or instrument, the quotient obtained by dividing (1) the sum of the products (a) of the number of years from the date of

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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.

“Beneficial Owner” or “beneficial owner” 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.

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in Lafayette, Louisiana or New York, New York are authorized or obligated by law or other government action to close.

“Capital” means The Old Evangeline Downs Capital Corp., a Delaware corporation and a wholly-owned subsidiary of the Company.

“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.

“Cash Collateral and Disbursement Agreement” means the Cash Collateral and Disbursement Agreement dated as of the date of the Indenture, among the Issuers, the Trustee, Independent Construction Consultant and the Disbursement Agent, as in effect on the date of the Indenture or as amended in accordance with the section entitled “Amendment, Supplement and Waiver.”

“Cash Equivalent” means:

(1)  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 having maturities of not more than one year from the date of acquisition),

(2)  securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, having the highest rating obtainable from either Standard & Poor’s Ratings Group, or any successor thereto (“S&P”), or Moody’s Investors Service, Inc., or any successor thereto (“Moody’s”),

(3)  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 $250.0 million and in each case, having maturities of not more than one year from the date of acquisition,

(4)  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 and, in each case, having maturities of not more than one year from the date of acquisition,

(5)  repurchase obligations for underlying securities of the types described in (1) and (2) above, or

(6)  money market funds, substantially all of the assets of which constitute Cash Equivalents of the kinds described in (1) through (5) of this definition.

“Casino” means the project to design, develop, construct, equip and operate a casino and related amenities as part of the Racino, as generally described in the prospectus.

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

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“Collateral” means all “collateral” referred to in the Collateral Agreements.

“Collateral Accounts” means the Construction Disbursement Account, the Interest Reserve Account and the Completion Reserve Account.

“Collateral Agreements” means, collectively, the Cash Collateral and Disbursement Agreement and all mortgages, deeds of trust, security agreements, pledge agreements, control agreements, collateral assignment agreements and other agreements, instruments, financing statements and other documents evidencing, creating, setting forth or limiting any Lien on Collateral in favor of the Trustee (or, in the case of mortgages, deeds of trust or similar agreements, in favor of the Trustee or another trustee thereunder), for the benefit of the holders of the notes.

“Commission” means the Securities and Exchange Commission.

“Completion Reserve Account” means the completion reserve account to be maintained by the Disbursement Agent and pledged to the Trustee pursuant to the terms of the Cash Collateral and Disbursement Agreement.

“consolidated” means, with respect to the Company, the consolidation of the accounts of the Restricted 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 (before deducting Management Fees either paid in cash or deferred during the applicable Reference Period) (exclusive of Consolidated EBITDA attributable to operations and businesses permanently discontinued or disposed of, as determined in accordance with GAAP) 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, as determined in accordance with GAAP, 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:

(1)  Acquisitions which occurred during the Reference Period or subsequent to the Reference Period and on or prior to the Transaction Date shall be assumed to have occurred on the first day of the Reference Period,

(2)  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,

(3)  the incurrence of any Indebtedness (including issuance of any Disqualified Equity Interests) 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), other than Indebtedness incurred in the ordinary course of business for general corporate purposes pursuant to working capital facilities, shall be assumed to have occurred on the first day of the Reference Period, and

(4)  the Consolidated Fixed Charges of such Person attributable to interest on any Indebtedness or dividends on any Disqualified Equity Interests 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 the Restricted Subsidiaries is a party to an Interest Swap or Hedging Obligation (which shall remain in effect for the 12-month period immediately following the Transaction Date) that has the effect of fixing the interest rate on the date of computation, then such rate (whether higher or lower) shall be used.

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

(a)  to add thereto (to the extent deducted for purposes of determining Consolidated Net Income), without duplication, the sum of

(1)  consolidated income tax expense for such Person and the amount of Permitted Tax Distributions subtracted from net income in the determination of the Consolidated Net Income of such Person for such period,

(2)  consolidated depreciation and amortization expense for such Person,

(3)  Consolidated Fixed Charges for such Person, and

(4)  all other non-cash charges reducing 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 Equity Interests to or from employees of such Person and its Consolidated Subsidiaries determined in accordance with GAAP, but (ii) excluding non-cash charges that require an accrual of or a reserve for cash charges for any future periods and normally occurring accruals such as reserves for accounts receivable; and

(b)  to subtract therefrom:

(1)  the amount of all cash payments made by such Person or any of the Restricted Subsidiaries during such period to the extent such payments relate to non-cash charges that were added back in determining Consolidated EBITDA for such period or any prior period, and

(2)  any extraordinary non-cash items increasing Consolidated Net Income for such period.

“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 Contingent Interest (excluding (i) amortization or write-off of deferred financing costs and debt issuance costs of such Person and the Restricted Subsidiaries during such period and any premium or penalty paid in connection with redeeming or retiring Indebtedness of such Person and the Restricted Subsidiaries prior to the stated maturity thereof pursuant to the agreements governing such Indebtedness, and (ii) the net effect of all cash payments made or received pursuant to Interest Swap and Hedging Obligations including, but not limited to, cash costs paid to unwind Interest Swap and Hedging Obligations existing on and prior to the date of the Indenture), 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, 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 Equity Interests, other than dividends payable solely in Qualified Equity Interests and other than by Restricted Subsidiaries of the Company to the Company or the Company’s Wholly-owned Restricted 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 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 Restricted Subsidiary of such Person of an obligation of another Person shall be deemed to be the interest expense attributable to the Indebtedness guaranteed.

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

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

(b)  the net income of any other Person, other than a Restricted 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 Restricted 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 other Person’s net income for such period, and

(c)  the net income of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that net income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its members or stockholders,

and reduced by the maximum amount of Permitted Tax Distributions attributable to such net income for such period, reduced by the amounts described in the immediately preceding clauses (a), (b) and (c).

“Consolidated Net Worth” of any Person at any date means the aggregate consolidated stockholders’ or members’ equity of such Person and its Consolidated Subsidiaries, plus the aggregate amounts that would be shown on the consolidated balance sheet of such Person prepared in accordance with GAAP, as of such date with respect to any series of Preferred Equity Interests that by their terms are not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, adjusted to exclude (to the extent included in calculating such equity), (a) the amount of any such stockholders’ (or members’) equity attributable to Disqualified Equity Interests or treasury stock of such Person and its Consolidated Subsidiaries, and (b) all upward revaluations and other write-ups in the book value of any asset of such Person or a Consolidated Subsidiary of such Person subsequent to the Issue Date made in connection with or in contemplation of the transaction which requires the calculation of Consolidated Net Worth.

“Consolidated Subsidiary” means, for any Person, each Restricted 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.

“Construction Disbursement Account” means the construction disbursement account to be maintained by the Disbursement Agent and pledged to the Trustee pursuant to the terms of the Cash Collateral and Disbursement Agreement.

“Construction Disbursement Budget” has the meaning set forth in the Cash Collateral and Disbursement Agreement.

“Construction Documents” has the meaning set forth in the Cash Collateral and Disbursement Agreement.

“Contingent Interest” means interest payable on each Interest Payment Date with respect to any principal amount of outstanding notes in an amount equal to the product of (1) 5.0% of the Company’s Consolidated EBITDA for its two most recently completed fiscal quarters for which financial statements are available prior to the Interest Record Date applicable to that Interest Payment Date and (2) a fraction, the numerator of which is the

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principal amount of the notes outstanding on the close of business on that Interest Record Date and the denominator of which is $123.2 million; provided, that Contingent Interest will cease to accrue during a semi-annual period on any principal amount of outstanding notes if the aggregate amount of Contingent Interest in respect of any four consecutive fiscal quarters (excluding any Contingent Interest deferred from prior periods) exceeds the product of (a) 5.0% multiplied by the Target EBITDA and (b) a fraction, the numerator of which is such principal amount of outstanding notes and the denominator of which is $123.2 million.

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

“Credit Agreement” means one or more debt facilities, commercial paper facilities or other debt instruments, indentures or agreements providing for revolving credit loans, term loans, receivable financings, letters of credit or other debt obligations entered into on or after the Issue Date providing for an aggregate $15.0 million senior credit facility, including any related notes, guarantees, collateral documents, instruments and agreements to be executed in connection therewith, in each case as amended, restated, supplemented, renewed, replaced or otherwise modified from time to time, whether in whole or in part, and whether or not with the same agent, trustee, representative lenders or holders or otherwise, and, subject to the proviso to the next succeeding sentence, irrespective of any changes in the terms and conditions thereof. Without limiting the generality of the foregoing, the term “Credit Agreement” shall include agreements in respect of Interest Swap and Hedging Obligations with lenders (or Affiliates thereof) party to the Credit Agreement and shall also include any amendment, amendment and restatement, renewal, extension, restructuring, supplement or modification to any Credit Agreement and all refundings, refinancings and replacements of any Credit Agreement, including any credit agreement:

(1)  extending the maturity of any Indebtedness incurred thereunder or contemplated thereby,

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

(3)  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 the covenant “—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests,” or

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

“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.

“Disbursement Agent” means U.S. Bank National Association or the then acting Disbursement Agent under the Cash Collateral and Disbursement Agreement.

“Disqualified Equity Interests” means with respect to any Person, any Equity Interests of such Person that, either 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 for cash by such Person or any of the Restricted Subsidiaries, in whole or in part, on or prior to 91 days following the Stated Maturity of the notes. Notwithstanding the foregoing, any Equity Interests that would constitute Disqualified Equity Interests solely because such Equity Interests mature or become mandatorily redeemable, or give the holders thereof the right to require the Company to repurchase such Equity Interests, in each case, upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Equity Interests if the terms of such Equity Interests provide that the Company may not repurchase or redeem any such Equity Interests pursuant to such provisions prior to the Company’s purchase of the notes as are required to be purchased pursuant to the provisions of the Indenture as described under “—Offers to Repurchase the Notes—Repurchase of Notes at the Option of the Holder Upon a Change of Control” and “—Limitation on Sale of Assets and Restricted Subsidiary Equity Interests.”

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“Equity Holder” means each Person treated for federal income tax purposes as (a) with respect to a corporation, an owner of stock of such corporation, (b) with respect to a limited liability company or similar entity, a member of such limited liability company or similar entity, (c) with respect to a partnership, a partner of such partnership, (d) with respect to any entity described in clause (a)(iv) of the definition of “Flow Through Entity”, the owner of such entity, and (e) with respect to a trust described in clause (a)(v) of the definition of “Flow Through Entity”, an owner thereof.

“Equity Interests” means (a) (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, and (b) all warrants, options or other rights to acquire any of the Equity Interests described in the immediately preceding clause (a) (but excluding any debt security that is convertible into, or exchangeable for, any of the Equity Interests described in the immediately preceding clause (a)).

“Event of Loss” means, with respect to any property or asset, (1) any loss, destruction or damage of such property or asset, (2) 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 (3) any settlement in lieu of clause (2) above, in each case having a fair market value or resulting in gross proceeds in excess of $1.0 million.

“Excess Cash Flow” means, with respect to the Company for any Operating Six Months, the Consolidated EBITDA of the Company and its Restricted Subsidiaries for such Operating Six Months, minus (1) Permitted Tax Distributions for such Operating Six Months, minus (2) (i) capital expenditures of the Company and its Restricted Subsidiaries actually paid to complete the Racino (including additional deposits made in the Collateral Accounts) during such Operating Six Months and (ii) $2.0 million of other capital expenditures for each Operating Six Months that the Casino has been open less amounts previously deducted pursuant to this clause 2(ii), minus (3) principal and interest payments (other than Contingent Interest), in each case, whether made at maturity or otherwise, or whether voluntary or required, made during such Operating Six Months in respect of Indebtedness permitted to be incurred pursuant to the covenant described above under the covenant “Limitation of Incurrence of Additional Indebtedness and Disqualified Equity Interests” (including the portion of any payments associated with Capital Lease Obligations), minus (4) Contingent Interest accrued for such Operating Six Months.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Person” means (i) PGC; (ii) PGP; (iii) PGP Investors, LLC; (iv) OEDA, (v) M. Brent Stevens, Michael S. Luzich and any Affiliate or Manager of PGP, PGC, PGP Investors, LLC, M. Brent Stevens or Michael S. Luzich (collectively, the “Existing Holders”), (vi) any trust, corporation, partnership or other entity (a) controlled by the Existing Holders and members of the immediate family of the Existing Holders or (b) 80% of the beneficiaries, stockholders, partners or owners of which consist solely of the Existing Holders and members of the immediate family of the Existing Holders or (vii) any partnership, the sole general partners of which consist solely of the Existing Holders and members of the immediate family of the Existing Holders.

“Exempted Affiliate Transaction” means:

(a)  reasonable and customary compensation paid to officers, employees or consultants of the Company or any Restricted Subsidiary, in each case, for services provided to the Company or any Restricted Subsidiary, as determined in good faith by the Managers of the Company;

(b)  Restricted Payments permitted under the terms of the covenant discussed above under “Certain Covenants—Limitation on Restricted Payments;”

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(c)  transactions solely between or among the Company and any Restricted Subsidiary or solely among Restricted Subsidiaries;

(d)  the Management Agreement and payment of Management Amounts pursuant thereto;

(e)  any agreement (other than the Management Agreement) as in effect on the Issue Date among the Company, any officers or managers of the Company, one or more Restricted Subsidiaries and one or more Affiliates of the Company (including any amendments thereof so long as any such amendment is not more disadvantageous to the Company or the relevant Restricted Subsidiary in any material respect than the original agreement as in effect on the Issue Date);

(f)  Permitted Investments; and

(g)  transactions with a joint venture engaged in a Related Business; provided, that all the outstanding ownership interests of such joint venture are owned only by the Company, the Restricted Subsidiaries and Persons who are not Affiliates of the Company.

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

“FF&E” means furniture, fixtures and equipment (including Gaming Equipment) acquired by the Issuers and the Restricted Subsidiaries in the ordinary course of business for use in the construction and business operations of the Company.

“FF&E Financing” means Purchase Money Indebtedness, Capital Lease Obligations and other Indebtedness (to the extent that under the terms thereof and any related contract or other agreement, no personal recourse could be had against such Person for the payment of the principal of or interest or premium or other amounts with respect to such Indebtedness or for any claim based on such Indebtedness and that enforcement of obligations on such Indebtedness is limited solely to recourse against interests in specified assets), the proceeds of which are used solely by the Issuers and the Restricted Subsidiaries to acquire or lease or refinance, respectively, FF&E.

“Flow Through Entity” means an entity that (a) for federal income tax purposes constitutes (i) an “S corporation” (as defined in Section 1361(a) of the Code), (ii) a “qualified subchapter S subsidiary” (as defined in Section 1361(b)(3)(B) of the Code), (iii) a “partnership” (within the meaning of Section 7701(a)(2) of the Code) other than a “publicly traded partnership” (as defined in Section 7704 of the Code), (iv) an entity that is disregarded as an entity separate from its owner under the Code, the Treasury regulations or any published administrative guidance of the Internal Revenue Service, or (v) a trust, the income of which is includible in the taxable income of the grantor or another person under sections 671 through 679 of the Code (the entities described in the immediately preceding clauses (i), (ii), (iii), (iv) and (v), a “Federal Flow Through Entity”) and (b) for state and local jurisdictions in respect of which Permitted Tax Distributions are being made, is subject to treatment on a basis under applicable state or local income tax law substantially similar to a Federal Flow Through Entity.

“Foreign Subsidiary” means any subsidiary of the Company which (i) is not organized under the laws of the United States, any state thereof or the District of Columbia and (ii) conducts substantially all of its business operations outside of the United States of America.

“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 Person as approved by a significant segment of the accounting profession in the United States as in effect from time to time.

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“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, including, without limitation, the Louisiana Gaming Control Board, or any other agency, in each case, with authority to regulate any gaming operation (or proposed gaming operation) owned, managed or operated by the Issuers and their subsidiaries.

“Gaming Equipment” means slot machines, video poker machines, and all other gaming equipment and related signage, accessories and peripheral equipment.

“Gaming FF&E Financing” means FF&E Financing, the proceeds of which are used solely by the Issuers and the Restricted Subsidiaries to acquire or lease FF&E that constitutes Gaming Equipment.

“Gaming Law” means the provisions of any gaming laws or regulations of any jurisdiction or jurisdictions to which any of the Issuers and the Restricted Subsidiaries is, or may at any time after the date of the Indenture, be subject.

“Gaming License” means any Permit required to own, lease, operate or otherwise conduct gaming activities of the Issuers and the Restricted Subsidiaries and all applicable liquor and tobacco Permits.

“General Contractor” has the meaning set forth in the Cash Collateral and Disbursement Agreement.

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

“Incentive Fees” has the meaning set forth in the Management Agreement.

“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;

(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

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(f)  all Disqualified Equity Interests 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 Equity Interests which do not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity Interests were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Equity Interests, such fair market value shall be determined in reasonable good faith by the Managers of the Company.

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 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.

“Independent Construction Consultant” means Abacus Project Management, Inc. and its successors or replacements as provided in the Cash Collateral and Disbursement Agreement.

“Interest Reserve Account” means the interest reserve account to be maintained by the Disbursement Agent and pledged to the Trustee pursuant to the terms of the Cash Collateral and Disbursement Agreement into which an amount, together with interest earned on such amount, sufficient to pay the first two Fixed Interest payments on the notes will be deposited on the date of the Indenture.

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

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

(a)  the acquisition (whether by purchase, merger, consolidation or otherwise) by such specified Person (whether for cash, property, services, securities or otherwise) of Equity Interests, 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 (i) advances to officers and employees made in the ordinary course of business and (ii) accounts receivable, trade credit, endorsements for collection or deposits arising in the ordinary course of business);

(c)  other than guarantees of Indebtedness of the Issuers or any Guarantor to the extent permitted by the covenant “—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests,” 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 Managers of the Company of any Person to be an Unrestricted Subsidiary.

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The Company shall be deemed to make an Investment in a subsidiary of the Company in an amount equal to the fair market value of the Equity Interests of such subsidiary then held by the Company, at the time that such subsidiary is designated an Unrestricted Subsidiary, and any property transferred to an Unrestricted Subsidiary from the Company or a Restricted Subsidiary shall be deemed an Investment valued at its fair market value at the time of such transfer. The Company or any of the Restricted Subsidiaries shall be deemed to have made an Investment in a Person that is or was a Restricted Subsidiary or a Guarantor if, upon the issuance, sale or other disposition of any portion of the Company’s or the Restricted Subsidiary’s ownership in the Equity Interests of such Person, such Person ceases to be a Restricted Subsidiary or 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 the Indenture.

“Issuers” means Capital and the Company.

“Legal Holiday” means a Saturday, Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

“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.

“Management Agreement” means the Amended and Restated Management Services Agreement, dated as of the date of the Indenture, by and between the Operator and the Company, as in effect on the Issue Date, without giving effect to any amendment or supplement thereto or modification thereof.

“Management Amounts” shall mean Management Fees and Reimbursable Expenses.

“Management Fees” shall mean any of the “Pre-Opening Services Fee,” the “Basic Management Fee” and the “Incentive Fee,” as such terms are defined in the Management Agreement.

“Manager” means, with respect to any Person (i) if such Person is a limited liability company, the members of the board of managers, or members of such other body performing similar functions for such Person, manager or managers, as appointed pursuant to the operating agreement of such Person as then in effect, or in the event that there are no managers or board of managers or similar governing body, the sole member of such Person or (ii) otherwise, the members of the board of directors (if such Person is a corporation) or other governing body of such Person.

“Maximum Credit Facility Amount” means at any time (such time, the “Time of Determination”) (a) prior to the second anniversary of the date the Casino first becomes Operating (the “Second Anniversary Date”), $15.0 million, and (b) on or after the Second Anniversary Date, the greater of (i) the borrowings outstanding under the Credit Agreement on the Second Anniversary Date less any repayments, refinancings or retirings of such borrowings made on or after the Second Anniversary Date and on or prior to the Time of Determination and (ii) $10.0 million.

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“Net Cash Proceeds” means the aggregate amount of cash or Cash Equivalents received by (i) the Company in the case of a sale or issuance of Qualified Equity Interests or an equity contribution or (ii) the Company or a Restricted Subsidiary, as the case may be, in the case 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 or paid as the result of any Event of Loss),

(1)  plus, in the case of an issuance of Qualified Equity Interests 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),

(2)  plus, in the case of an Asset Sale, any cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration received in such Asset Sale,

(3)  less, in each case, the sum of all the direct costs relating to such transaction, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result thereof, and

(4)  less, in the case of an Asset Sale only:

(i)  taxes paid or payable as a result thereof (x) by the Company and the Restricted Subsidiaries or (y) any Equity Holder of the Company (or, in the case of any Company Equity Holder that is a Flow Through Entity, the Upper Tier Equity Holder of such Flow Through Entity) in an amount equal to the increase in the amount of Permitted Tax Distributions in the taxable year that such Asset Sale is consummated or in the immediately succeeding taxable year attributable to income or gain from such Asset Sale, in each case, after taking into account any available operating losses and net operating loss carryovers, tax credits, tax credit carryforwards, or deductions and any tax sharing arrangements or similar tax attributes,

(ii)  amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale, and

(iii)  any amounts provided as a reserve by the Company or any of the Restricted Subsidiaries, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by the Company or such Restricted Subsidiary, as the case may be, after such Asset Sale (including, without limitation, as applicable, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations arising from such Asset Sale).

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

“OEDA” means OED Acquisition, LLC, a Delaware limited liability company and the direct parent of the Company.

“Offering” means the offering of the notes by the Issuers.

“Officers’ Certificate” means the officers’ certificate to be delivered upon the occurrence of certain events as set forth in the Indenture.

“Operating” has the meaning set forth in the Cash Collateral and Disbursement Agreement.

“Operating Deadline” has the meaning set forth in the Cash Collateral and Disbursement Agreement.

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“Operating Six Months” means the two consecutive fiscal quarter period of the Company beginning with the first full fiscal quarter immediately after the date that the Casino first becomes Operating, and each succeeding two consecutive fiscal quarter period thereafter.

“Opinion of Counsel” means the opinion of counsel to be delivered upon the occurrence of certain events set forth in the Indenture.

“OTB Operations” means all of the assets and properties of the Company and its subsidiaries (including, but not limited to, all Gaming Licenses, Racing Licenses and Permits) related to the business operation of any off-track betting parlor or similar facility operated or owned by the Company or such subsidiary.

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

“Permitted C-Corp Conversion” means a transaction resulting in the Company becoming subject to tax under the Code as a corporation (a “C Corporation”); provided, that:

(1)  the C Corporation resulting from such transaction, if a successor to The Old Evangeline Downs, L.L.C., (a) is a corporation, limited liability company or other entity organized and existing under the laws of any state of the United States or the District of Columbia, (b) assumes all of the obligations of the Company under the notes and the Indenture pursuant to a supplemental indenture in form reasonably satisfactory to the Trustee and (c) will have Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction;

(2)  after giving effect to such transaction no Default or Event of Default exists;

(3)  prior to the consummation of such transaction, the Company shall have delivered to the Trustee (a) an Opinion of Counsel to the effect that the holders of the outstanding notes will not recognize income gain or loss for federal income tax purposes as a result of such Permitted C-Corp Conversion and will be subject to federal income tax on the same amounts, in the same manner, and at the same times as would have been the case if such Permitted C-Corp Conversion had not occurred and (b) an Officer’s Certificate as to compliance with all of the conditions set forth in paragraphs (1), (2) and (3)(a) above; and

(4)  such transaction would not (a) result in the loss or suspension or material impairment of any Gaming License or Racing License unless a comparable replacement Gaming License or Racing License is effective prior to or simultaneously with such loss, suspension or material impairment or (b) require any holder or beneficial owner of notes to obtain a Gaming License or Racing License or be qualified or found suitable under any applicable Gaming Laws or Racing Laws.

“Permitted Indebtedness” means:

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

(b)  Permitted Refinancing Indebtedness;

(c)  FF&E Financing; provided, that (1) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof, (2) no Indebtedness incurred under the notes is utilized for the purchase or lease of such FF&E, and (3) 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 (c)) outstanding at any time (excluding any Gaming FF&E Financing incurred pursuant to this clause (c)) does not exceed $5.0 million;

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(d)  Indebtedness solely in respect of bankers acceptances, letters of credit payment obligations in connection with self-insurance or similar requirements, security for workers’ compensation claims, appeal bonds, surety bonds, insurance obligations or bonds, 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), and similar bonds or obligations, all incurred in the ordinary course of business (including, without limitation, to maintain any license or permits) in accordance with customary industry practices, in amounts and for the purposes customary in the Company’s industry;

(e)  (i) Indebtedness of the Company owed to (borrowed from) any Guarantor, (ii) Indebtedness of any Guarantor owed to (borrowed from) any other Guarantor or the Company, (iii) Indebtedness of any Restricted Subsidiary owed to (borrowed from) any Guarantor or the Company or (iv) Disqualified Equity Interests issued by any Guarantor or Restricted Subsidiary to the Company, any other Guarantor or any other Restricted Subsidiary; provided, that:

(w)  in the case of clause (i) of this paragraph, 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 as an Unrestricted Subsidiary) shall be deemed to be a new incurrence by the Company of such Indebtedness and any Guarantor thereof subject to the covenant “—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests;”

(x)  in the case of clause (ii) of this paragraph, such obligations shall be unsecured and contractually subordinated in all respects to such Guarantor’s obligations pursuant to such Guarantor’s Guarantee and any event that causes the Guarantor lender no longer to be a Guarantor (including a designation as an Unrestricted Subsidiary) shall be deemed to be a new incurrence by such Guarantor borrower of such Indebtedness and any guarantor thereof subject to the covenant “—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests;”

(y)  in the case of clause (iii) of this paragraph 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 Restricted Subsidiary borrower of such Indebtedness and any guarantor thereof subject to the covenant “—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests;” and

(z)  in the case of clause (iv) of this paragraph, any event that causes the Guarantor or Restricted Subsidiary no longer to be, as applicable, a Guarantor or Restricted Subsidiary (including a designation as an Unrestricted Subsidiary) shall be deemed in each case to be an issuance of such Disqualified Equity Interests subject to the covenant “—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests;”

(f)  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 the 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;

(g)  Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business;

(h)  Indebtedness represented by Capitalized Lease Obligations, mortgage financings or Purchase Money Indebtedness, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to repay, redeem, discharge, retire, defease, refund, refinance or replace any Indebtedness incurred pursuant to this clause (h), not to exceed $5.0 million at any one time outstanding;

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(i)  the accrual of interest, the accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms;

(j)  the guarantee of any Indebtedness of the Company, any Guarantor or any Restricted Subsidiary that was permitted to be incurred by another provision of this covenant so long as such guarantee otherwise complies with the Indenture;

(k)  Indebtedness arising from agreements for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business or assets, other than guarantees of Indebtedness incurred by any person acquiring all or any portion of such business or assets for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or the applicable Guarantor or Restricted Subsidiary in connection with such disposition;

(l)  Indebtedness not otherwise included as “Permitted Indebtedness” in an aggregate principal amount (or accreted value, as applicable) at any time outstanding pursuant to this paragraph (l), including all Permitted Refinancing Indebtedness incurred to repay, redeem, discharge, retire, defease, refund, refinance or replace any Indebtedness incurred pursuant to this paragraph (l), not to exceed $5.0 million; and

(m)  the obligation of the Company to pay Reimbursables (as defined in the Management Agreement) to PGC and OEDA pursuant to the Management Agreement.

“Permitted Investment” means:

(a)  Investments existing on the date of the Indenture;

(b)  any Investment in any of the notes or Guarantees;

(c)  any Investment in cash or Cash Equivalents;

(d)  Investments of the types referred to in clause (e) of the definition of “Permitted Indebtedness;”

(e)  any Investment by the Company, any Guarantor or any Restricted Subsidiary in a Person if as a result of such Investment such Person immediately becomes a Wholly-owned Restricted Subsidiary and a Guarantor or such Person is immediately merged with or into the Company or a Wholly-owned Restricted Subsidiary that is a Guarantor;

(f)  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 (f) 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 (f) in such Person, at any time does not in the aggregate exceed $5.0 million (measured by the value attributed to the Investment at the time made or returned, as applicable);

(g)  (i) contribution of the Company’s or any Restricted Subsidiaries’ OTB Operations to an Unrestricted Subsidiary or (ii) the designation of a subsidiary which holds the OTB Operations as an Unrestricted Subsidiary in accordance with the Indenture, provided, that in each case, immediately after giving effect to such contribution or designation, on a pro forma basis, the Company could incur at least $1.00 of Indebtedness pursuant to the Debt Incurrence Ratio of the covenant “ —Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests;”

(h)  any Investment in any Person in exchange for the Company’s Qualified Equity Interests or the Net Cash Proceeds of any substantially concurrent sale of the Company’s Qualified Equity Interests;

(i)  any Investment in the Company or in a Wholly-owned Restricted Subsidiary of the Company which is a Guarantor, provided, however, that any Indebtedness evidencing such Investment is unsecured and subordinated to the Company’s obligations under the notes;

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(j)  Interest Swap and Hedging Obligations;

(k)  Investments in securities of trade creditors, customers or any debtor of the Company or the Restricted Subsidiaries received (a) in satisfaction of judgments, or (b) pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors, customers or debtors; and

(l)  loans and advances to employees, directors, officers and Managers of the Company and the Restricted Subsidiaries in the ordinary course of business not to exceed $2.5 million at any one time outstanding.

“Permitted Lien” means:

(a)  Liens imposed by governmental authorities for taxes, assessments or other charges not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently pursued, if adequate reserves with respect thereto are maintained on the books of the Company in accordance with GAAP;

(b)  statutory Liens of carriers, warehousemen, mechanics, material men, suppliers, 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 yet delinquent, or (2) such Liens are being contested in good faith by appropriate proceedings promptly instituted and diligently pursued and adequate reserves with respect thereto are maintained on the books of the Company in accordance with GAAP;

(c)  Liens securing the performance of statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(d)  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 the Restricted Subsidiaries) or materially interfere with the ordinary conduct of the business of the Company or any of the Restricted Subsidiaries;

(e)  Liens incurred or deposits made in the ordinary course of business to secure the obligations of the Company and the Restricted Subsidiaries under workers’ compensation, unemployment insurance and other types of social security legislation or otherwise to secure statutory or regulatory obligations of the Company or any of the Restricted Subsidiaries in the ordinary course of business consistent with past practice, including to secure the performance of tenders, surety and appeal bonds, bids, leases, governmental contracts, performance and return-of-money bonds and other similar obligations (exclusive in each case of obligations for the payment of borrowed money); provided, that the obligations in connection with which such Liens were incurred or deposits made shall have been incurred in the ordinary course of business and shall otherwise be permitted by the Indenture;

(f)  Liens securing the notes and the Guarantees;

(g)  Liens securing Acquired Indebtedness or other Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary or is merged with or into the Company or a Restricted Subsidiary 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 of such acquisition, and do not extend to any other assets;

(h)  Liens arising from Purchase Money Indebtedness permitted to be incurred pursuant to the covenant “—Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests;” provided, that such Liens relate solely to the property which is subject to such Purchase Money Indebtedness;

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

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

(k)  Liens securing Permitted Refinancing Indebtedness incurred in compliance with the Indenture to refinance any Indebtedness that was secured by Liens;

(l)  Liens securing Indebtedness (up to the Maximum Credit Facility Amount) incurred under the Credit Agreement in compliance with the Indenture;

(m)  Liens in favor of the Company or any Guarantor, which are assigned to the Secured Party for the notes or a Guarantee, as applicable;

(n)  Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;

(o)  Liens incurred in the ordinary course of business securing Interest Swap and Hedging Obligations that are otherwise permitted under the Indenture;

(p)  Liens on a pledge of the Equity Interests of any Unrestricted Subsidiary securing Indebtedness of such Unrestricted Subsidiary;

(q)  Liens to secure Permitted Indebtedness of the types set forth in clauses (c) and (h) of the definition thereof covering only the assets acquired with such Permitted Indebtedness;

(r)  any interest or title of a lessor under any Capitalized Lease Obligation; provided that such Liens do not extend to any property or assets which is not leased property subject to such Capitalized Lease Obligation;

(s)  Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; and

(t)  Liens securing assets of the Company or any Restricted Subsidiary in addition to Liens described in clauses (a) through (s) above, so long as the aggregate principal amount of Indebtedness secured by Liens incurred pursuant to this clause (t) does not exceed $5.0 million at any one time outstanding.

“Permitted Refinancing Indebtedness” means Indebtedness (including Disqualified Equity Interests) (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, extension, modification or supplement to, or a deferral or renewal of ((a) and (b) above are, collectively, a “Refinancing”), any Indebtedness (including Disqualified Equity Interests) in a principal amount or, in the case of Disqualified Equity Interests, 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 Equity Interests, liquidation preference, of the Indebtedness (including Disqualified Equity Interests) 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 Permitted Refinancing Indebtedness shall only be used to refinance outstanding Indebtedness (including Disqualified Equity Interest) of such Person issuing such Permitted Refinancing Indebtedness, (B) such Permitted Refinancing Indebtedness shall (x) not have an Average Life shorter than the Indebtedness (including Disqualified Equity Interests) 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

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than was the Indebtedness (including Disqualified Equity Interest) to be refinanced, (C) such Permitted 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 Equity Interests) to be so refinanced or, if sooner, 91 days after the Stated Maturity of the notes, and (D) such Permitted 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 and the Lien is not extended to any additional assets or property that would not have been security for the Indebtedness refinanced.

“Permitted Tax Distributions” in respect of the Company means, with respect to any taxable year or portion thereof in which the Company is a Flow Through Entity, the sum of: (i) the product of (a) the excess of (1) all items of taxable income or gain (other than capital gain) of the Company for such year or portion thereof over (2) all items of taxable deduction or loss (other than capital loss) of the Company for such year or portion thereof and (b) the Applicable Income Tax Rate, plus (ii) the product of (a) the net capital gain (i.e., net long-term capital gain over net short-term capital loss), if any, of the Company for such year or portion thereof and (b) the Applicable Capital Gain Tax Rate, plus (iii) the product of (a) the net short-term capital gain (i.e., net short-term capital gain in excess of net long-term capital loss), if any, of the Company for such year or portion thereof and (b) the Applicable Income Tax Rate, minus (iv) the aggregate Tax Loss Benefit Amount for the Company for such year or portion thereof; provided, that in no event shall the Applicable Income Tax Rate or the Applicable Capital Gain Tax Rate exceed the greater of (i) the greater of (a) the highest aggregate applicable effective marginal rate of federal, state, and local income tax to which a corporation doing business in the state of California and (b) the highest aggregate applicable effective marginal rate of federal, state, and local income tax to which a corporation doing business in the state of Louisiana, would be subject to in the relevant year of determination (as certified to the Trustee by a nationally recognized tax accounting firm) plus 5% and (ii) 60%. For purposes of calculating the amount of the Permitted Tax Distributions the items of taxable income, gain, deduction or loss (including capital gain or loss) of any Flow Through Entity of which the Company is treated for federal income tax purposes as a member (but only for periods for which such Flow Through Entity is treated as a Flow Through Entity), which items of income, gain, deduction or loss are allocated to or otherwise treated as items of income, gain, deduction or loss of the Company for federal income tax purposes, shall be included in determining the taxable income, gain, deduction or loss (including capital gain or loss) of the Company.

Estimated tax distributions may be made within thirty days following March 15, May 15, August 15, and December 15 based upon an estimate of the excess of (x) the tax distributions that would be payable for the period beginning on January 1 of such year and ending on March 31, May 31, August 31, and December 31 if such period were a taxable year (computed as provided above) over (y) distributions attributable to all prior periods during such taxable year.

The amount of the Permitted Tax Distribution for a taxable year shall be re-computed promptly after (i) the filing by the Company and each subsidiary of the Company that is treated as a Flow Through Entity of their respective annual income tax returns and (ii) an appropriate federal or state taxing authority finally determines that the amount of the items of taxable income, gain, deduction, or loss of the Company or any such subsidiary that is treated as a Flow Through Entity for such taxable year or the aggregate Tax Loss Benefit Amount carried forward to such taxable year should be adjusted (each of clauses (i) and (ii) a “Tax Calculation Event”). To the extent that the Permitted Tax Distributions previously distributed in respect of any taxable year are either greater than (a “Tax Distribution Overage”) or less than (a “Tax Distribution Shortfall”) the Permitted Tax Distributions with respect to such taxable year, as determined by reference to the computation of the amount of the items of income, gain, deduction, or loss of the Company and each such subsidiary in connection with a Tax Calculation Event, the amount of the estimated Permitted Tax Distributions that may be made on the estimated tax distribution date immediately following such Tax Calculation Event shall be reduced or increased as appropriate to the extent of the Tax Distribution Overage or the Tax Distribution Shortfall. To the extent that a Tax Distribution Overage remains after the estimated tax distribution date immediately following such Tax Calculation Event, the amount of the estimated Permitted Tax Distribution that may be made on the subsequent estimated tax distribution date shall be reduced to the extent of such Tax Distribution Overage.

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Prior to making any Permitted Tax Distributions, the Company shall require each Equity Holder to agree that promptly after the second estimated tax distribution date following a Tax Calculation Event, such Equity Holder shall reimburse the Company to the extent of its pro rata share (based on the portion of Permitted Tax Distributions distributed to such Equity Holder for the taxable year) of any remaining Tax Distribution Overage.

“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.

“PGC” means Peninsula Gaming Company, LLC, a Delaware limited liability company, and the direct parent and sole member of OEDA.

“PGP” means Peninsula Gaming Partners, LLC, a Delaware limited liability company, the direct parent and sole managing member of PGC.

“Plans” means the Final Plans (as defined in the Cash Collateral and Disbursement Agreement).

“Preferred Equity Interests” means any Equity Interests 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.

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

“Purchase Money Indebtedness” of any Person means any Indebtedness of such Person (to the extent that under the terms thereof and any related contract or other agreement, no personal recourse could be had against such Person for the payment of the principal of or interest or premium or other amounts with respect to such Indebtedness or for any claim based on such Indebtedness and that enforcement of obligations on such Indebtedness is limited solely to recourse against interests in specified assets) 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 is incurred concurrently with such acquisition, construction, installation or improvement and is secured only by the assets so financed.

“Qualified Equity Interests” means, with respect to any Person, any Equity Interests of such Person that are not Disqualified Equity Interests.

“Qualified Equity Offering” means a public or private offering of Qualified Equity Interests of the Company or an equity contribution from a holder of Qualified Equity Interests of the Company (other than an offering pursuant to a registration statement on Form S-8 or otherwise relating to equity securities issuable under any employee benefit plan of the Company).

“Qualified Exchange” means:

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

(2)  any issuance of Qualified Equity Interests of the Company in exchange for any Equity Interests or Indebtedness of the Company issued on or after the Issue Date.

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“Racino” means the project to design, develop, construct, equip and operate a casino, racetrack and related amenities, as generally described in this prospectus.

“Racing 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, including, without limitation, the Louisiana State Racing Commission or any other agency, in each case, with authority to regulate any racing operation (or proposed racing operation) owned, managed or operated by the Issuers and their subsidiaries.

“Racing Law” means the provisions of any racing laws or regulations of any jurisdiction or jurisdictions to which any of the Issuers and their subsidiaries is, or may at any time after the date of the Indenture, be subject.

“Racing License” means any Permit required to own, lease, operate or otherwise conduct racing activities of the Issuers and their subsidiaries and all applicable liquor and tobacco Permits.

“Recourse Indebtedness” means Indebtedness (a) as to which the Issuers or one of the Restricted 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 Issuers or any of the Restricted 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.

“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 the Indenture for which financial statements are available.

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

“Reimbursable Expenses” shall mean (i) reasonable and documented out-of-pocket developmental, legal, licensure and other costs and expenses for the Racino previously paid by PGC, OEDA or any of their respective Affiliates on behalf of the Company or (ii) Reimbursables and Operator Advances (as such terms are defined in the Management Agreement) permitted or required to be paid to PGC or OEDA pursuant to the Management Agreement.

“Related Business” means the business conducted (or proposed to be conducted) by the Issuers and the Restricted Subsidiaries as of the Issue Date and any and all businesses that in the reasonable good faith judgment of the Managers of the Company are related, similar or ancillary businesses.

“Restricted Investment” means, in one or a series of related transactions, any Investment, other than 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 or any direct or indirect parent or other Affiliate of such Person or any other payment to any direct or indirect parent or other Affiliate of such Person or to an Excluded Person,

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(b)  any payment on account of the purchase, redemption or other acquisition or retirement for value of Equity Interests of such Person or any direct or indirect parent or other Affiliate of such Person (other than a Wholly-owned Restricted Subsidiary of such Person),

(c)  other than with the proceeds from the substantially concurrent sale of, or in exchange for, Permitted Refinancing Indebtedness any purchase, redemption, or other acquisition or retirement for value of, any payment in respect of any amendment of the terms of or any defeasance of, any Subordinated Indebtedness, directly or indirectly, by such Person or a Restricted 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 Equity Interests of such issuer, or (2) any dividend, distribution or other payment to the Company or to any of the Restricted Subsidiaries, by the Company or any of the Restricted Subsidiaries, and any Investment in any Restricted Subsidiary by the Company or any other Restricted Subsidiary.

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

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

“Stated Maturity,” when used with respect to any note, means March 1, 2010.

“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, (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 means each direct and indirect subsidiary of the Company.

“Target EBITDA” means Consolidated EBITDA of the Company of $50.0 million.

“Unrestricted Subsidiary” means (i) any subsidiary that, at or prior to the time of determination, shall have been designated by the Managers of the Company as an Unrestricted Subsidiary; provided, that such subsidiary at the time of such designation (a) has no Recourse Indebtedness; (b) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company; (c) is a Person with respect to which neither the Company nor any of the Restricted 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 Restricted Subsidiary of the Company, and (ii) any subsidiary of an Unrestricted Subsidiary. The Managers of the Company may designate any Unrestricted

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Subsidiary to be a Restricted 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 the covenant “Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interest.” 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.

“Upper Tier Equity Holder” means, in the case of any Flow Through Entity the Equity Holder of which is, in turn, a Flow Through Entity, the person that is ultimately subject to tax on a net income basis on the items of taxable income, gain, deduction, and loss of the Company and its subsidiaries that are Flow Through Entities.

“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 Restricted Subsidiary” means a Restricted Subsidiary all the Equity Interests of which (other than directors’ qualifying shares) are owned by the Company or one or more Wholly-owned Restricted Subsidiaries of the Company or a combination thereof.

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BOOK-ENTRY; DELIVERY AND FORM

The old notes offered and sold to qualified institutional buyers of the old notes are currently represented by one or more fully registered global notes without interest coupons. The new notes issued in exchange for the old notes will be represented by one or more fully registered global notes, without interest coupons and will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company (“DTC”), in New York, New York, and registered in the name of DTC or its nominee, in each case, for credit to an account of a direct or indirect participant as described below.

Except as described below, the global notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global notes may not be exchanged for notes in certificated form except in limited circumstances. See “—Certificated Securities” for more information about the circumstances in which certificated notes may be issued.

Transfers of beneficial interests in the global notes are subject to the applicable rules and procedures of DTC and its direct or indirect participants, which may change.

The notes may be presented for registration of transfer and exchange at the offices of the Registrar.

The Global Notes

We expect that pursuant to procedures established by DTC (i) upon the issuance of the global notes, DTC or its custodian will credit, on its internal system, the principal amount at maturity of the individual beneficial interests represented by such global notes to the respective accounts of persons who have accounts with such depositary and (ii) ownership of beneficial interests in the global notes will be shown on, and the transfer of such ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). Such accounts initially will be designated by or on behalf of the initial purchasers and ownership of beneficial interests in the global notes will be limited to persons who have accounts with DTC (“participants”) or persons who hold interests through participants. Holders may hold their interests in the global notes directly through DTC if they are participants in such system, or indirectly through organizations that are participants in such system.

So long as DTC, or its nominee, is the registered owner or holder of the notes, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the notes represented by such global notes for all purposes under the indenture. No beneficial owner of an interest in the global notes will be able to transfer that interest except in accordance with DTC’s procedures, in addition to those provided for under the indenture with respect to the notes.

Payments of the principal of, premium (if any), interest (including Additional Interest) on, the global notes will be made to DTC or its nominee, as the case may be, as the registered owner thereof. None of us, the Trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the global notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest.

We expect that DTC or its nominee, upon receipt of any payment of principal, premium, if any, interest (including Additional Interest) on the global notes, will credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global notes as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in the global notes held through such participants will be governed by standing instructions and customary practice, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants.

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Transfers between participants in DTC will be effected in the ordinary way through DTC’s same-day funds system in accordance with DTC rules and will be settled in same day funds. If a holder requires physical delivery of a Certificated Security for any reason, including to sell notes to persons in states which require physical delivery of the notes, or to pledge such securities, such holder must transfer its interest in a global note, in accordance with the normal procedures of DTC and with the procedures set forth in the indenture.

DTC has advised us that it will take any action permitted to be taken by a holder of notes (including the presentation of notes for exchange as described below) only at the direction of one or more participants to whose account the DTC interests in the global notes are credited and only in respect of such portion of the aggregate principal amount of notes as to which such participant or participants has or have given such direction. However, if there is an event of default under the indenture, DTC will exchange the global notes for Certificated Securities, which it will distribute to its participants.

DTC has advised us as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “Clearing Agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the global note among participants of DTC, it is under no obligation to perform such procedures, and such procedures may be discontinued at any time. Neither the Trustee nor we will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Certificated Securities

Certificated Securities shall be issued in exchange for beneficial interests in the global notes (i) if requested by a holder of such interests or (ii) if DTC is at any time unwilling or unable to continue as a depositary for the global notes and a successor depositary is not appointed by us within 90 days.

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SPECIFIC FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is based on the opinion of Mayer, Brown, Rowe & Maw, counsel to The Old Evangeline Downs, L.L.C., as to the material federal income tax consequences of the issuance of the new notes and the exchange offer, and of the ownership and disposition of the notes. This summary is based on current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), applicable Treasury Regulations, judicial authorities, and current administrative rulings and pronouncements of the Internal Revenue Service (“IRS”). There can be no assurance that the IRS will not assert a contrary view, and no ruling from the IRS has been or will be sought. Legislation, judicial or administrative changes or interpretations may occur that could alter or modify the following statements and conclusions. Any of these changes or interpretations may or may not be retroactive and could affect the tax consequences to holders of the notes.

Although this discussion summarizes the material federal income tax consequences of the issuance of the new notes and the exchange offer, and of the ownership and disposition of the notes, the federal income tax consequences to a holder of notes may vary from those set forth below depending upon the holder’s particular situation. The discussion below does not address the tax consequences to special classes of investors (including, but not limited to, certain financial institutions, insurance companies, broker-dealers, tax-exempt organizations, partnerships and persons treated as partnerships for U.S. federal income tax purposes, non-resident alien individuals, foreign corporations and other non-U.S. persons (other than as discussed below under the heading “Special Rules Concerning Non-U.S. Holders”), and persons holding the notes as part of a “straddle,” “hedge” or “conversion transaction”) who may be subject to special rules not discussed below. This discussion is limited to holders who will hold the notes as “capital assets” (generally, property held for investment) within the meaning of Section 1221 of the Code.

PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE EXCHANGE OF OLD NOTES FOR NEW NOTES, AND OF THE OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR FOREIGN TAX LAWS.

Consequences of the Exchange Offer to Exchanging Holders

For federal income tax purposes, the exchange of a new note for an old note pursuant to the exchange offer will not be a taxable event for an exchanging holder; the new note will in effect be treated as the continuation of the old note. As a result, for federal income tax purposes, (i) an exchanging holder will not recognize any gain or loss on the exchange, (ii) an exchanging holder will be required to include interest on a new note in gross income in the manner described below, (iii) the holding period for the new note will include the holding period for the old note, and (iv) the holder’s tax basis in the new note will be the same as its basis in the old note.

Recognition of Interest Income

The inclusion of income on the notes is determined in accordance with Treasury regulations applicable to debt instruments providing for one or more contingent payments. Under those regulations, we were required to construct a projected payment schedule for the notes. The projected payment schedule reflects the fixed payments on the notes and our determination of the expected value of contingent interest to be paid on the notes. The projected payment schedule is projected to produce a “comparable yield,” which is a hypothetical yield at which on the date on which we issued the old notes, we could have issued a fixed rate debt instrument with terms and conditions similar to those of the notes. A holder generally will be required to recognize interest income on the notes for each day on which the holder holds the notes under a constant yield-to-maturity basis applicable to debt instruments issued with original issue discount in a manner that assumes in the first instance that actual payments on the notes will be made in accordance with the projected payment schedule. Such income inclusions will be adjusted in the manner described below to reflect the actual amounts of payments of contingent interest at

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the time that they are made and, in the case of a holder whose tax basis in the notes differs from their adjusted issue price, amounts attributable to such difference. Under this method, a holder may generally be required to include amounts in income in respect of the notes in some periods (e.g., prior to the commencement of payments of contingent interest) in excess of cash payments of interest in such periods.

The amount of interest that accrues on the notes during each accrual period equals the product of the “comparable yield” and the “adjusted issue price” of the notes at the beginning of each accrual period. The adjusted issue price of the notes is the issue price of the old notes (i.e., the first price paid by investors for a substantial amount of the old notes), increased by interest previously accrued on the notes determined under the assumption that payments on the notes are made in accordance with the projected payment schedule, and decreased by the amount of any noncontingent payments and the projected amount of any contingent interest payments previously made on the notes. A holder is required to allocate to and include in gross income on each day during each accrual period a ratable portion of the interest income accrued in that accrual period. Accrual periods may be any length, and may vary in length, provided that each interest payment date is the first day or final day of an accrual period. We intend to file information returns with the Internal Revenue Service using accrual periods that coincide with the periods between each interest payment date.

If actual payments of contingent interest differ from projected payments in any given taxable year, then holders are generally required in such year either to include the difference in gross income as additional interest in case the actual payments exceed projected payments in such taxable year (a “positive adjustment”) or to reduce by the difference the amount of interest otherwise accounted in case the actual payments are less than the projected payments in such taxable year (a “negative adjustment”). If the negative adjustment exceeds the interest for the taxable year that would otherwise have been accounted for on the notes, then the excess is treated as ordinary loss. The amount treated as an ordinary loss in any taxable year is limited, however, to the amount by which the holder’s total interest inclusions on the notes exceed the total amount of the net negative adjustments treated as ordinary loss in prior years. Any remaining excess is a negative adjustment carryforward and treated as a negative adjustment in the succeeding year to the extent of interest accrued on the note in that year. If a note is sold, exchanged, or retired, any negative adjustment carryforward from the prior year reduces the holder’s amount realized on the sale, exchange or retirement. Except to the extent described in this paragraph or below under the heading “—Sale, Exchange, Retirement or Other Taxable Disposition,” the receipt of payments on the notes will not result in recognition of income or loss for federal income tax purposes.

Holders may obtain the projected payment schedule from Natalie Schramm, our Chief Financial Officer, whose business address is c/o Peninsula Gaming Company, LLC, 3^rd Street Ice Harbor, P.O. Box 1750, Dubuque, Iowa 52004, and whose telephone number is (563) 690-2120. The projected payment schedule is determined in accordance with the applicable Treasury Regulations and should be used solely for federal income tax purposes. Holders should not rely upon the projected payment schedule as an estimate of future operating performance or an assurance by us with respect to the amounts of payments of contingent interest on the notes. Holders will generally be bound by the projected payment schedule. However, the IRS will not respect a projected payment schedule which it determines to be unreasonable. Holders are urged to consult their tax advisors with respect to the application of the rules described above to the notes.

In the case of a holder whose tax basis in the notes differs from the adjusted issue price of the notes (e.g., a holder who purchased notes for cash at a price different than the adjusted issue price of the notes at the time of purchase), applicable Treasury regulations require that, in addition to including interest income on the notes under the method prescribed above, such a holder reasonably allocate such difference to daily portions of interest and/or projected payments over the remaining term of the notes. Each allocated amount will generally be accounted for as a positive adjustment (in the case of a holder whose basis is less than the notes’ adjusted issue price) or a negative adjustment (in the case of a holder whose basis is greater than the notes’ adjusted issue price) on the day on which the related interest accrual or payment falls in the same manner as differences between actual payments of contingent interest on the notes and the projected amounts of those payments (as described above). Any holder whose tax basis in the notes differs from their adjusted issue price should consult its tax

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advisor as to the proper allocation of such difference and the effect thereof on the holder’s accruals of interest on the notes and the realization of gain or loss on a subsequent sale or other disposition of the notes.

Sale, Exchange, Retirement or Other Taxable Disposition

A holder of a note will generally recognize gain or loss upon the sale, exchange, retirement, or other taxable disposition of the note in an amount equal to the difference between (1) the amount of cash and the fair market value of property received in exchange therefor, reduced by any negative adjustment carryforward (as described above, including any negative adjustment carryforward resulting from an allocation of the excess, if any, of the holder’s tax basis in the note over the adjusted issue price of the note at the time of the holder’s purchase) and (2) the holder’s adjusted tax basis in the note. A holder’s adjusted tax basis in a note generally is equal to the price paid for the note, increased by the amount of interest previously accrued on the note in the manner described above (determined without adjustments created by differences between projected and actual payments), and decreased by the amount of any noncontingent payments and the projected amount of any contingent payments previously made on the note. In the case of a holder whose tax basis in the notes differs from their adjusted issue price, the holder’s tax basis in the notes is further increased or decreased by the amount the holder treated as a positive adjustment or negative adjustment, respectively, as a result of the allocation to interest accruals or payments on the notes of the difference between the holder’s tax basis in the notes and their adjusted issue price (as described in the previous paragraph).

Any gain recognized on the sale or other disposition of a note will be treated as ordinary interest income. Any loss recognized will be ordinary loss to the extent the holder’s total interest inclusions on the note exceed the total net negative adjustments the holder took into account as ordinary loss under the rules described above applicable to differences between actual payments and projected payments. Any additional loss will be capital loss.

Special Rules Concerning Non-U.S. Holders

Special rules apply to non-U.S. holders of notes. A non-U.S. holder is any beneficial owner of notes that is not:

• a citizen or resident of the United States;

• a partnership or corporation (or an entity that is treated for U.S. federal income tax purposes as a partnership or corporation) that was organized in or under the laws of the United States or any political subdivision of or in the United States;

• an estate the income of which is subject to U.S. federal income tax regardless of its source; or

• a trust with respect to which a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of the substantial decisions of the trust.

Payments on the Notes other than Contingent Interest

Under present U.S. federal income tax law, and subject to the discussions below concerning payments of contingent interest and backup withholding, the payment by us or our paying agent of an amount other than contingent interest on a note that is beneficially owned by a non-U.S. holder will not be subject to U.S. federal withholding tax, provided that (the “portfolio interest” exemption):

• the non-U.S. holder does not actually or constructively own 10% or more of the capital or profits interest in PGC or PGP within the meaning of Section 871(h)(3) of the Code and the regulations thereunder;

• the non-U.S. holder is not a controlled foreign corporation that is related to us through stock ownership; and

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either

• the non-U.S. holder (or its agent) delivers to the paying agent an IRS Form W-8BEN, signed by it or its agent on its behalf, claiming exemption from withholding; or

• if the non-U.S. holder holds its notes through a securities clearing organization or certain other financial institutions, the organization or institution that holds the non-U.S. holder’s notes provides a signed statement to the paying agent that is accompanied by an IRS Form W-8BEN provided by the non-U.S. holder to that same organization or institution.

Special rules apply to the statements that must be provided by non-U.S. partnerships in order to establish eligibility for the portfolio interest exemption. In general, a non-U.S. partnership may qualify for the portfolio interest exemption by delivery of the foregoing statements of its partners. These rules may also apply to non-U.S. estates, trusts and intermediaries. Any non-U.S. holder should consult its tax advisor regarding the application of the U.S. federal withholding tax rules to its particular circumstances.

Subject to the discussion below regarding effectively connected interest, a non-U.S. holder that does not qualify for the portfolio interest exemption as described above will be subject to a 30 percent U.S. federal withholding tax with respect to payments of noncontingent interest (i.e., interest paid at the stated rate of 13 percent), unless such non-U.S. holder is eligible for an exemption or reduction of U.S. federal withholding tax under an applicable tax treaty (and the non-U.S. holder delivers to the paying agent in the manner described above an IRS Form W-8BEN claiming such treaty benefits and showing its United States taxpayer identification number).

Payments of Contingent Interest on the Notes

Notwithstanding the previous paragraphs describing the U.S. federal withholding tax treatment of noncontingent payments on the notes, payments of contingent interest on a note beneficially owned by a non-U.S. holder will be subject to U.S. federal withholding tax (currently at a rate of 30 percent), unless such rate is reduced or eliminated under an applicable treaty or treated as effectively connected to a trade or business conducted by the non-U.S. holder in the United States (as described below). Although not entirely clear, we intend to take the position that such tax will not be withheld from any payment of noncontingent interest on the notes, but rather will only be withheld upon an actual payment to the non-U.S. holder of contingent interest, and then in an amount equal to the payment multiplied by the withholding rate applicable to the non-U.S. holder (i.e., 30 percent or a reduced treaty rate). If an applicable treaty reduces the withholding tax, the non-U.S. holder must comply with the same certification delivery requirements as described above with respect to noncontingent interest.

Interest Treated as Effectively Connected

Notwithstanding the foregoing discussion and subject to the discussion below regarding backup withholding, interest (both noncontingent and contingent) on a non-U.S. holder’s notes will not be subject to U.S. federal withholding tax, but will be includible in the income of the non-U.S. holder for regular U.S. federal income tax purposes (and, in the case of a non-U.S. holder that is a foreign corporation, for purposes of the 30 percent U.S. branch profits tax) if:

• the non-U.S. holder is engaged in the conduct of a trade or business in the United States;

• interest income on the non-U.S. holder’s notes is effectively connected to the conduct of its trade or business in the United States (and, if a “permanent establishment” clause in a tax treaty applies, is attributable to a permanent establishment in the United States); and

• the non-U.S. holder has certified to the paying agent on an IRS Form W-8ECI that it is exempt from withholding tax because the interest income on its notes will be effectively connected with the conduct of its trade or business in the United States.

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Sale of Notes

If a non-U.S. holder sells or otherwise disposes of its notes prior to maturity or any earlier redemption in a transaction that is treated as a taxable exchange for U.S. federal income tax purposes, the person purchasing the notes from such non-U.S. holder would not be required to withhold U.S. tax from any amount paid by the purchaser to the non-U.S. holder, unless the sale or exchange is part of a plan the principal purpose of which is to avoid tax and the purchaser knows or should have known of the plan. The non-U.S. holder will nonetheless be required to pay U.S. federal income tax on the contingent interest accrued since the preceding payment date at a flat rate of 30 percent or a lower rate provided in a tax treaty. Non-U.S. holders are urged to consult their own tax advisors regarding such obligation.

A non-U.S. holder generally will not be subject to U.S. federal income tax on any gain recognized on a sale or redemption of the notes, unless:

• the gain is effectively connected with the conduct of its U.S. trade or business (and, if an applicable tax treaty so provides, is attributable to its U.S. permanent establishment);

• the non-U.S. holder is an individual who is present in the U.S. for 183 days or more in the year in which he disposed of his notes and certain other conditions are met; or

• the non-U.S. holder is an individual who is subject to the special U.S. income tax provisions that apply to certain expatriates.

Estate Tax Consequences

Generally, the Code provides that if a holder of notes is an individual who is not a U.S. citizen or resident (special definitions of these terms apply for purposes of the U.S. federal estate tax) at the time of his death, a portion of the value of the notes held by such holder at the time of his death will be includible, as determined in a manner prescribed by the IRS, in his gross estate and potentially subject to U.S. federal estate tax. The remaining value of the notes will generally not be includible in such gross estate, provided that:

• at the time of the holder’s death, income with respect to his notes would not be treated as effectively connected with the conduct of a U.S. trade or business; and

• the noncontingent interest with respect to his notes would qualify for the portfolio interest exemption from withholding tax described above (without regard to whether or not he satisfied the certification requirements).

A non-U.S. holder may qualify for an exemption or reduction of U.S. federal estate tax imposed with respect to the notes under an applicable estate tax treaty. Non-U.S. holders of notes who are individuals should consult with their tax advisors regarding the potential application of the U.S. federal estate tax to their particular circumstances, including the determination of the portion of the value of the notes that may be includible in the non-U.S. holder’s gross estate for U.S. federal estate tax purposes.

Backup Withholding and Information Reporting

A holder of notes may be subject to backup withholding (currently at the rate of 30%) with respect to accrued interest paid on, and gross proceeds from a sale or other disposition of, the notes unless (1) the holder is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact or (2) provides a correct taxpayer identification number, certifies as to no loss of exemption from backup withholding and otherwise complies with applicable requirements of the backup withholding rules. A holder of notes who does not provide us with his or her correct taxpayer identification number may be subject to penalties imposed by the IRS.

We will report to the holders of the notes and the IRS the amount of any “reportable payments,” including any interest accrued on the notes and any amount withheld with respect to the notes during the calendar year.

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Non-U.S. holders are exempt from such backup withholding and information reporting requirements, so long as they provide the certification described above in “—Special Rules Concerning Non-U.S. Holders—Payments on the Notes other than Contingent Interest,” unless, however, we or the paying agent knows or has reason to know that the non-U.S. holder is not entitled to such exemption. Further, we may report payments of interest on the notes to a non-U.S. holder on IRS Form 1042-S regardless of whether a non-U.S. holder provides the certification described above.

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PLAN OF DISTRIBUTION

Each broker-dealer that receives new notes for its own account as a result of market-making activities or other trading activities in connection with the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of new notes. This prospectus, as it may be amended or supplemented, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where such old notes were acquired as a result of market-making activities or other trading activities. Until                     , 2003 (90 days after the date of this prospectus), all dealers effecting transactions in the new notes may be required to deliver a prospectus.

We will receive no proceeds in connection with the exchange offer or any sale of new notes by broker-dealers.

New notes received by broker-dealers for their own account pursuant to the exchange offer may be sold in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of these methods of resale, at market prices prevailing at the time of resale, at prices related to prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers that may receive compensation in the form of commissions or concessions from the broker-dealers or the purchasers of any new notes. Any broker-dealer that resells new notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of new notes may be deemed to be an “underwriter” within the meaning of the Securities Act of 1933, and any profit on any resale of new notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act of 1933. The letter of transmittal states that by acknowledging that it will deliver, and by delivering, a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act of 1933. See “The Exchange Offer—Resales of the new notes” for additional information on resales of the new notes.

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LEGAL MATTERS

The validity of the new notes will be passed upon for us by Mayer, Brown, Rowe & Maw, New York, New York.

EXPERTS

The consolidated financial statements of The Old Evangeline Downs, L.C. (predecessor) as of December 31, 2001 and for the years ended December 31, 2000 and 2001 and the period January 1 to August 30, 2002 and The Old Evangeline Downs, LLC (a wholly-owned subsidiary of OED Acquisition, LLC) (successor) as of December 31, 2002 and the period August 31 to December 31, 2002 included in this prospectus, have been audited by Deloitte & Touche, LLP, independent auditors, as stated in their reports appearing herein and elsewhere in the registration statement (which reports express unqualified opinions and include an explanatory paragraph referring to the predecessor changing its method of accounting for goodwill and intangible assets to conform to Statement of Accounting Standard No. 142 Goodwill and Other Intangible Assets as well as being dual dated as of February 26, 2003 for the litigation settlement of the successor as disclosed in notes 8 and 15) and have been so included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Commission a registration statement pursuant to the Securities Act, and the rules and regulations promulgated thereunder, covering the new notes being offered hereby. This prospectus does not contain all the information set forth in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information with respect to us and the new notes, reference is hereby made to the registration statement. Statements made in this prospectus as to the contents of any contract, agreement or other document referred to in the registration statement are not necessarily complete. With respect to each such contract, agreement or other document filed as an exhibit to the registration statement, reference is made to the exhibit for a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference. We will continue to be subject to the periodic and other informational requirements of the Exchange Act. Periodic reports and other information filed by us with the Commission may be inspected at the Commission’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information as to the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. Such materials may also be accessed electronically by means of the Commission’s home page on the Internet at http://www.sec.gov.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS OF THE OLD EVANGELINE DOWNS, L.L.C.

Audited Consolidated Financial Statements of The Old Evangeline Downs, L.L.C.:
Independent Auditors’ Reports	F-2
Consolidated Balance Sheets at December 31, 2001 and 2002	F-4
Consolidated Statements of Operations for the Years Ended December 31, 2000, 2001, the period January 1 to August 30, 2002 (Predecessor) and the period August 31 to December 31, 2002 (Successor)	F-5
Consolidated Statements of Changes in Members’ Equity for the Years Ended December 31, 2000, 2001, the period January 1 to August 30, 2002 (Predecessor) and the period August 31 to December 31, 2002 (Successor)	F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 2001, the period January 1 to August 30, 2002 (Predecessor) and the period August 31 to December 31, 2002 (Successor)	F-7
Notes to Consolidated Financial Statements	F-8
Unaudited Interim Consolidated Financial Statements of The Old Evangeline Downs, L.L.C.:
Condensed Consolidated Balance Sheets at December 31, 2002 and March 31, 2002	F-20
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2002 (Predecessor) and March 31, 2003 (Successor)	F-21
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2002 (Predecessor) and March 31, 2003 (Successor)	F-22
Notes to Interim Consolidated Financial Statements	F-23

F-1

INDEPENDENT AUDITORS’ REPORT

To the Members of

The Old Evangeline Downs, L.C.

Lafayette, Louisiana

We have audited the accompanying consolidated balance sheet of The Old Evangeline Downs, L.C. (the “Predecessor Company”) as of December 31, 2001, and the related consolidated statements of operations, changes in members’ equity (deficit), and cash flows for the years ended December 31, 2000 and 2001 and the period January 1, 2002 through August 30, 2002. These financial statements are the responsibility of the Predecessor Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Predecessor Company as of December 31, 2001 and the results of its operations and its cash flows for the years ended December 31, 2000 and 2001 and the period January 1, 2002 through August 30, 2002 in conformity with accounting principles generally accepted in the United States of America.

As described in Note 2 to the consolidated financial statements, in 2002 the Predecessor Company changed its method of accounting for goodwill and intangible assets to conform to Statement of Accounting Standard No. 142 Goodwill and Other Intangible Assets.

Cedar Rapids, Iowa

January 24, 2003

F-2

INDEPENDENT AUDITORS’ REPORT

To the Members of

The Old Evangeline Downs, L.L.C.

Lafayette, Louisiana

We have audited the accompanying consolidated balance sheet of The Old Evangeline Downs, L.L.C., a (wholly-owned subsidiary of OED Acquisition, LLC) (successor) as of December 31, 2002, and the related consolidated statements of operations, changes in members’ equity (deficit), and cash flows for the period August 31, 2002 through December 31, 2002. These financial statements are the responsibility of the Successor Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Old Evangeline Downs, LLC, as of December 31, 2002 and the results of its operations and its cash flows for the period August 31, 2002 through December 31, 2002 in conformity with accounting principles generally accepted in the United States of America.

Cedar Rapids, Iowa

January 24, 2003

(February 26, 2003 as to Note 8 and Note 15)

F-3

THE OLD EVANGELINE DOWNS, L.L.C.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2001 and 2002

	Predecessor 2001			Successor 2002
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	994,830		$	962,652
Restricted cash		1,101,756			840,366
Note receivable—Intertrack Partners, net of allowance for bad debts of $229,098		56,517
Receivables		30,940			176,120
Inventory		46,280			29,736
Prepaid expenses		43,447			48,885
Total current assets		2,273,770			2,057,759
PROPERTY AND EQUIPMENT, NET		1,175,802			1,340,383
RACINO PROJECT DEVELOPMENT COSTS		320,000			7,455,885
OTHER ASSETS:
Deferred financing costs, net of accumulated amortization of $339,937					484,851
Goodwill and other intangible assets, net of accumulated amortization of $3,016,272 and $0, respectively		3,371,140			31,329,834
Deposits		68,000			73,131
Total other assets		3,439,140			31,887,816
TOTAL ASSETS	$	7,208,712		$	42,741,843
LIABILITIES AND MEMBERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	608,839		$	3,614,097
Purse settlement payable		1,051,699			846,778
LTBA video poker purse settlement payable		47,813			861
Pari-mutuel tickets out		141,135			150,191
Accrued interest		91,515			658,161
Other accrued expenses		186,505			392,015
Intercompany accounts payable					2,484,140
Current portion of long-term debt to related parties		454,292
Notes payable					20,125,000
Total current liabilities		2,581,798			28,271,243
LONG-TERM DEBT TO RELATED PARTIES		10,527,560
Total liabilities		13,109,358			28,271,243
COMMITMENTS AND CONTINGENCIES
MEMBERS’ EQUITY (DEFICIT):
Common members’ interest					15,232,056
Accumulated deficit					(761,456	)
Total members’ equity (deficit)		(5,900,646	)		14,470,600
TOTAL LIABILITIES AND MEMBERS’ EQUITY (DEFICIT)	$	7,208,712		$	42,741,843

See notes to consolidated financial statements.

F-4

THE OLD EVANGELINE DOWNS, L.L.C.

CONSOLIDATED STATEMENTS OF OPERATIONS

THE YEARS ENDED DECEMBER 31, 2000, 2001, THE PERIOD JANUARY 1 TO AUGUST 30, 2002 (PREDECESSOR) AND THE PERIOD AUGUST 31 TO DECEMBER 31, 2002 (SUCCESSOR)

	Predecessor									Successor
	2000			2001			Period from January 1 through August 30, 2002			Period from August 31 through December 31, 2002
REVENUES:
Meet	$	4,187,371		$	3,827,889		$	3,348,108		$	463,970
Off-track betting		8,059,366			8,337,246			5,387,021			2,372,353
Concession		1,190,624			1,113,044			971,238			185,215
Total net revenues		13,437,361			13,278,179			9,706,367			3,021,538
EXPENSES:
Meet		3,568,563			3,546,139			3,034,289			664,037
Off-track betting		5,240,303			5,216,505			3,454,157			1,568,790
Concession		1,148,970			1,131,499			886,708			187,438
General and administrative		1,448,067			1,251,099			791,846			371,157
Bad debt		92,847			434
Depreciation and amortization		659,963			655,194			138,166			77,806
Management fee								64,644			160,000
Lawsuit settlements		76,776			5,946
Loss on abandoned assets		12,067			12,801
Relocation expense		511,031			404,738
Impairment charges on long-lived assets					4,361,134
Total expenses		12,758,587			16,585,489			8,369,810			3,029,228
INCOME (LOSS) FROM OPERATIONS		678,774			(3,307,310	)		1,336,557			(7,690	)
OTHER INCOME (EXPENSE):
Earnings (losses) from equity affiliate		(14,209	)		58,862
Interest expense		(1,157,239	)		(1,121,835	)		(769,163	)		(748,787	)
Interest income		27,657			10,720			9,243			(4,979	)
Total other expense		(1,143,791	)		(1,052,253	)		(759,920	)		(753,766	)
NET INCOME (LOSS) BEFORE INCOME TAXES		(465,017	)		(4,359,563	)		576,637			(761,456	)
INCOME TAX EXPENSE		(221,343	)
NET INCOME (LOSS) TO COMMON MEMBERS’ INTEREST	$	(686,360	)	$	(4,359,563	)	$	576,637		$	(761,456	)

See notes to consolidated financial statements.

F-5

THE OLD EVANGELINE DOWNS, L.L.C.

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

THE YEARS ENDED DECEMBER 31, 2000, 2001, THE PERIOD JANUARY 1 TO AUGUST 30, 2002 (PREDECESSOR) AND THE PERIOD AUGUST 31 TO DECEMBER 31, 2002 (SUCCESSOR)

	PREDECESSOR TOTAL MEMBERS’ EQUITY (DEFICIT)
BALANCE, JANUARY 1, 2000	$	461,266
Net loss to common members’ interest		(686,360	)
Member distributions		(1,315,989	)
BALANCE, DECEMBER 31, 2000		(1,541,083	)
Net loss to common members’ interest		(4,359,563	)
BALANCE, DECEMBER 31, 2001		(5,900,646	)
Net income to common members’ interest		576,637
BALANCE, AUGUST 30, 2002	$	(5,324,009	)

	SUCCESSOR COMMON MEMBERS’ INTEREST		SUCCESSOR ACCUMULATED DEFICIT			SUCCESSOR TOTAL MEMBERS’ EQUITY
BALANCE, AUGUST 31, 2002	$	15,232,056				$	15,232,056
Net income to common members’ interest			$	(761,456	)		(761,456	)
BALANCE DECEMBER 31, 2002	$	15,232,056	$	(761,456	)	$	14,470,600

See notes to consolidated financial statements.

F-6

THE OLD EVANGELINE DOWNS, L.L.C.

CONSOLIDATED STATEMENTS OF CASH FLOWS

THE YEARS ENDED DECEMBER 31, 2000, 2001, THE PERIOD JANUARY 1 TO AUGUST 30, 2002 (PREDECESSOR) AND THE PERIOD AUGUST 31 TO DECEMBER 31, 2002 (SUCCESSOR)

	Predecessor									Successor
	2000			2001			Period from January 1 through August 30, 2002			Period from August 31 through December 31, 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(686,360	)	$	(4,359,563	)	$	576,637			(761,456	)
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
Depreciation and amortization		659,963			655,194			138,166			77,806
Loss on abandoned assets		12,067			12,801
Amortization of deferred financing costs											339,937
Impairment charges on long-lived assets					4,361,134
Changes in operating assets and liabilities:
Restricted cash		(118,930	)		(24,426	)		1,093,687			(832,297	)
Receivables		12,333			33,489			(1,394,560	)		1,305,897
Inventory		(7,732	)		(2,782	)		5,439			11,105
Prepaid expenses and other assets		76,554			(62,339	)		(97,903	)		87,334
Accounts payable		174,630			(27,414	)		(255,764	)		580,388
Accrued expenses		272,800			(154,141	)		390,424			260,949
Net cash flows from operating activities		395,325			431,953			456,126			1,069,663
CASH FLOWS FROM INVESTING ACTIVITIES:
Business acquisition and licensing costs								(269,680	)		(438,932	)
Racino project development costs		(200,000	)					(382,159	)		(4,280,112	)
Proceeds from sale of property and equipment		3,100			1,100
Purchase of property and equipment		(50,870	)		(69,721	)		(54,289	)		(75,602	)
Net cash flows from investing activities		(247,770	)		(68,621	)		(706,128	)		(4,794,646	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs											(316,206	)
Member distributions		(415,989	)
Principal payments on term loan											(150,000	)
Principal payments on long-term debt to related party		(372,251	)		(411,230	)		(90,987	)
Proceeds from notes payable											4,500,000
Net cash flows from financing activities		(788,240	)		(411,230	)		(90,987	)		4,033,794
NET INCREASE (DECREASE) IN CASH		(640,685	)		(47,898	)		(340,989	)		308,811
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		1,683,413			1,042,728			994,830			653,841
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,042,728		$	994,830		$	653,841		$	962,652
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	1,160,341		$	1,125,262		$	432,812		$	267,995
Cash paid during the year for income taxes				$	123,043
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES:
Non-cash distribution of land to members	$	900,000
Push down of OEDA note payable to PGP										$	7,325,000
Assignment from OEDA of term loan payable to Foothill Capital Corp.										$	8,450,000
Push down of OEDA intercompany accounts payable to PGC										$	2,484,140
Push down of deferred financing costs, Racino Project development costs, and business acquisition and licensing costs paid by OEDA										$	2,934,140

See notes to consolidated financial statements.

F-7

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    ORGANIZATION, BUSINESS PURPOSE, AND BASIS OF PRESENTATION

In 2002, The Old Evangeline Downs, L.C. was purchased by OED Acquisition, LLC (“OEDA”), a wholly-owned subsidiary of Peninsula Gaming Company, LLC (“PGC”), as discussed below, and was renamed The Old Evangeline Downs, LLC (the “LLC”). The LLC currently owns and operates the Evangeline Downs Racetrack in Lafayette, Louisiana. The racetrack provides both live thoroughbred horse racing and off-track betting. The LLC also operates off-track betting parlors in New Iberia and Port Allen, Louisiana. PGC, OEDA and LLC will manage the existing racetrack and, subject to receipt of required gaming approvals, are planning to design, construct, manage and operate a new casino and contiguous racetrack facility with pari-mutuel wagering and slots in St. Landry Parish, Louisiana (the “Racino Project”).

Predecessor Companies for the years ended 2000 and 2001 and the period January 1 to August 30, 2002—The accompanying consolidated financial statements include the consolidated accounts of The Old Evangeline Downs, L.C. (the “L.C.”) and its affiliated companies, Racetrack at Evangeline Downs, Inc. and its wholly-owned subsidiary, First Statewide Racing Co., Inc. until December 2000. In December 2000, the L.C. was reorganized with its affiliated corporations being liquidated/merged into the L.C. The L.C. was organized as a limited liability company under the provisions of the laws of the State of Louisiana in October 1994 for the purpose of both acquiring through the Bankruptcy Plan of Reorganization, and operating the Evangeline Downs Racetrack.

The LLC and predecessor companies are hereafter referred to as the “Company” or “OED”. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements.

On June 27, 2001, BIM3 Investments, a Louisiana Partnership and a 50% owner of The Old Evangeline Downs, L.C., entered into an agreement to sell 50% of the Company to Peninsula Gaming Partners, LLC (“PGP”), parent company of PGC. The agreement was assigned by PGP to OEDA on October 23, 2001. On February 15, 2002, OEDA consummated its acquisition of: (i) 50% of the membership interests in the Company; and (ii) a one-half (½) interest in two promissory notes in the principal amount of $10,909,244 issued by the Company (the “OED Notes”), for an aggregate purchase price of $15,000,000 in cash from PGC. This one-half (½) interest in the OED Notes was converted by OEDA into members’ equity of OED.

On June 25, 2002, PGP entered into an agreement with William E. Trotter, II (“WET2”) and William E. Trotter, II Family L.L.C., a Louisiana limited liability company (“WET2LLC”), to acquire (i) the 50% interest in the OED Notes owned by WET2, and (ii) the 50% membership interest in OED owned by WET2LLC (the “Trotter Purchase”). On August 30, 2002, OEDA consummated the Trotter Purchase for a purchase price of $15,546,000 plus a contingent fee of one half of one percent (.5%) of the net slot revenues from the date of opening of a new casino, located in St. Landry Parish, until the date that is ten years after the opening of the casino to the public. After consummation of the Trotter Purchase, all OEDA transactions associated with the purchase were pushed down and reflected in the financial position of the Company as of December 31, 2002.

The source of funds for the Trotter Purchase described above was (1) $8,450,000 of borrowings under OEDA’s loan and security agreement with Foothill Capital Corporation entered into on August 30, 2002 and maturing on the earlier of (a) June 30, 2003 or (b) the date on which OED consummates its financing of the Racino Project, which loan and security agreement, upon consummation of the purchase of the Trotter membership interests, was assigned to OED (the “Term Loan”) and (2) proceeds from a $7,325,000 intercompany note issued by OED payable to PGP due June 30, 2002. The source of cash provided by PGP pursuant to the intercompany note relates to the proceeds from a $7,325,000 note payable issued by PGP payable to WET2LLC due June 30, 2003. The Term Loan contains, among other things, covenants, representations and warranties and events of default customary for loans of this type, including, but not limited to certain

F-8

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

requirements relative to the financing, construction and development of the Racino Project and a minimum EBITDA maintenance covenant. The obligations under the Term Loan are secured by substantially all of the assets of the Company and are guaranteed by PGP. OEDA’s one-half ( ¹/2) interest in the OED Notes was cancelled upon OED’s assumption of OEDA’s obligations under the Term Loan. Additionally, in connection with the Trotter Purchase, OED and PGP issued, as joint obligors, a $4,500,000 note payable to WET2, the proceeds of which were used to purchase the land on which our racino will be operated and to pay certain deferred financing costs and reimbursable expenses.

The Company paid principal of $45,494 and interest of $317,096 during the period January 1, 2002 through August 30, 2002, and interest of $96,156 during the period August 31, 2002 through December 31, 2002, to WET2 related to WET2’s 50% interest in the OED Notes.

The Company accounted for its acquisition as a purchase in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141 “Business Combinations” and SFAS No. 142 “Goodwill and Other Intangible Assets”. The purchase price has been allocated to the underlying assets and liabilities based on their estimated fair values at the date of acquisition. To the extent the purchase price exceeded the fair value of the net identifiable assets acquired, such excess has been recorded as goodwill and other intangible assets. As of December 31, 2002, the Company recorded goodwill of approximately $28.4 million related to the acquisition. The Company has not completed its evaluation of the intangible assets acquired and contingent liabilities assumed in the acquisition. This evaluation may result in adjustments to the purchase price allocation. Under the provisions of SFAS 142, goodwill and other intangible assets with indefinite lives arising from the acquisition will not be amortized but will be reviewed at least annually for impairment and written down and charged to income when its recorded value exceeds its estimated fair value.

The following table summarizes the estimated fair value of the assets acquired and the liabilities assumed at the acquisition date. Third party valuations have been obtained for property and equipment.

(in thousands)
Current assets	$   2,317
Property and equipment	1,369
Other assets	1,090
Goodwill	28,393
Total assets	33,169
Current liabilities assumed	(2,623)
Purchase price	$ 30,546

The total remaining cost to design, develop, construct, equip and open the Racino Project is expected to be approximately $88.5 million. The Company is currently investigating financing alternatives for the financing of construction and development costs including, but not limited to, a private placement of debt securities. The Racino Project is expected to include approximately 1,600 slot machines, dirt and turf horse racetracks and several dining options. The Racino Project is one of only three horse racetracks in the State of Louisiana currently authorized to conduct casino operations. The successful completion of the Racino Project is subject to factors beyond the control of the Company. The extent and timing of the development and construction of the Racino Project will depend on available cash flow or the ability to obtain financing. There can be no assurance that sufficient cash flow or necessary financing will be available on satisfactory terms to the Company. In addition, the Company will be subject to comprehensive and stringent government regulations. The Company and their respective officers, directors, members, significant shareholders and employees will be subject to the

F-9

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Louisiana Gaming Control Board and the Louisiana Gaming Commission rules and regulations and will need to submit to a regulatory review process prior to mandatory licensing. There can be no assurance that all necessary licenses will be issued, or issued on a timely basis. For the foregoing reasons, there can be no assurance that the Racino Project will be completed, or completed in a timely manner.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents—The Company considers all cash on hand and in banks, certificates of deposit and other highly liquid debt instruments purchased with original maturities of three months or less to be cash equivalents.

Inventories—Inventories consisting principally of food, beverage, retail items, and operating supplies are stated at the lower of first-in, first-out cost or market.

Property and Equipment—Property and equipment are recorded at cost. Major renewals and improvements are capitalized, while maintenance and repairs are expensed as incurred. Depreciation and amortization are computed on a straight-line basis over the following estimated useful lives:

Building and leasehold improvements*	20-40 years
Furniture, fixtures and equipment	3-12 years
Vehicles	5 years

* The Company currently leases the land on which the OED building and leasehold improvements are located. The ground lease annual rental is $0 per year and the lease term expires on the earlier of December 31, 2004, subject to extension as described below. In the event a senior secured note financing to fund the Racino Project is not consummated prior to December 15, 2003, OED may extend the term of the lease to December 31, 2005 (the “First Renewal Option”), and if the First Renewal Option is exercised, OED may further extend the term of the lease to December 31, 2006 (the “Second Renewal Option”). OED must give written notice to the lessor of its exercise of the First Renewal Option and the Second Renewal Option by December 31, 2003 and December 31, 2004, respectively. The landlord is not obligated to extend the lease if all of OED’s outstanding loan obligations to Foothill Capital Corporation (or its successors) have been paid. Rent associated with the First Renewal Option and the Second Renewal Option will be $75,000 per month, due on the first of each month. The remaining net book value of the Company’s leasehold improvements at The Old Evangeline Downs horse racetrack as of December 31, 2002 is being amortized over the period in which management estimates that the facility will be used by OED. If an event occurs that should cause OED management to change its estimate, the amortization period will be adjusted accordingly on a go-forward basis.

Investments—The equity method of accounting is used for investments in affiliates owned 20%-50% in which the Company has the ability to exercise significant influence over operating and financial policies. Under this method, equity in the pre-tax income or losses of partnerships is reflected currently in the Company’s income, rather than when realized through dividends distributions.

Long-Lived Assets—Statement of Financial Accounting Standards (“SFAS”) No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of” requires, among other things, that an entity review its long-lived assets and certain related intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. Under the standard, if the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized. The impairment is measured based on the fair value of the asset.

F-10

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Racino Project Development Costs—Included in Racino Project development costs are land and land acquisition costs associated with the Racino Project of approximately $0.3 million and $5.3 million as of December 31, 2001 and 2002, respectively, and architecture fees associated with the design and development of the Racino Project of approximately $2.1 million as of December 31, 2002. These Racino Project development costs will be transferred to property and equipment upon completion and opening of casino.

Capitalized Interest—The Company capitalizes interest costs associated with debt incurred in connection with the Racino Project. When debt is not specifically identified as being incurred in connection with the development of the Racino Project, the Company capitalizes interest on amounts expended on the Racino Project at the Company’s average cost of borrowed money. Capitalization of interest will cease when the project is substantially complete. The amounts capitalized during the period August 31, 2002 through December 31, 2002 was $0.1 million.

Deferred Financing Costs—Costs associated with the issuance of debt are being deferred and are being amortized over the life of the debt using the effective interest method.

Goodwill and Other Intangible Assets—For the years ended December 31, 2000 and 2001, Goodwill and Other Intangible Assets consists of reorganization value in excess of amounts allocable to identifiable assets. On March 4, 1994, Racetrack at Evangeline Downs, Inc. filed petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Western District of Louisiana. The Company emerged from Chapter 11 effective with the beginning of business on December 2, 1994. The Plan provided for the racetrack facilities to be sold to The Old Evangeline Downs, L.C. and for the full payment of all creditors.

As of December 2, 1994, in accordance with the AICPA Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under Bankruptcy Code,” the Company was required to adopt “fresh-start” reporting. The ongoing impact of the adoption of fresh-start reporting is reflected in the consolidated financial statements for the years ended December 31, 2001 and 2000.

In adopting fresh-start reporting, the Company, with assistance of its financial advisors, determined its reorganization value which represents the fair value of the entity in excess of amounts allocated to identifiable assets and approximates the amount a willing buyer would pay for the assets of the Company immediately after its emergence from Chapter 11 status. The reorganization value is being amortized on the straight-line method over a period of 15 years with amortization expense of $425,827 being charged to operations for each of the years ended December 31, 2000 and 2001.

For the year ended December 31, 2002, Goodwill and Other Intangible Assets consists of goodwill, business acquisition costs, licensing costs and the acquired tradename associated with the purchase of the Company as described in Note 1. To the extent the purchase price exceeded the fair value of the net identifiable assets acquired, such excess has been recorded as goodwill. SFAS 142 provides that goodwill and certain indefinite lived intangible assets will no longer be amortized but will be reviewed at least annually for impairment and written down and charged to income when their recorded value exceeds their estimated fair value.

Revenue Recognition—In accordance with common industry practice, our casino revenues are the net of gaming wins and losses. Meet and off-track betting revenues include our share of pari-mutuel wagering on live races after payment of amounts returned as winning wagers, and our share of wagering from import and export simulcasting as well as our share of wagering from our off-track betting parlors.

F-11

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Income Taxes—The Company is a limited liability company. In lieu of corporate income taxes, the members of a limited liability company are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for federal income taxes has been included in the financial statements for the years ended December 31, 2001 and 2002.

During 2000, all other affiliated companies were “C” Corporations, and as such, income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences in depreciation methods for financial and income tax reporting.

Concentrations of Credit Risk—The Company’s customer base consists of the southwest Louisiana area. Although the Company is directly affected by the well being of the area, management does not believe significant risk exists at December 31, 2002.

The Company maintains deposit accounts at one bank. At December 31, 2001 and 2002, and various times during the years then ended, the balance at the bank exceeded the maximum amount insured by the FDIC. Management believes any credit risk related to the uninsured balance is minimal.

Recently Issued Accounting Standards—In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This statement supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” and the accounting and reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.” This new pronouncement also amends APB No. 51 “Consolidated Financial Statements,” to eliminate the exception to consolidation for a subsidiary for which control is likely to be temporary. SFAS No. 144 requires that one accounting model be used for long-lived assets to be disposed of by sale, whether previously held and used or newly acquired and also broadens the presentation of discontinued operations to include more disposal transactions. SFAS No. 144 is effective for fiscal years beginning after December 15, 2001 and interim periods within those fiscal years. Adoption of SFAS No. 144 on January 1, 2002, did not have any impact on our financial position or results of operations for the year ended December 31, 2002.

In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”. This statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies the previous guidance on the subject. This statement requires, among other things, that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. The provisions for this statement are effective for exit or disposal activities that are initiated after December 31, 2002. Management does not expect the adoption of SFAS No. 146 to have a material effect on the Company’s results of operations or financial position.

Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We periodically evaluate our policies and the estimates and assumptions related to these policies. We operate in a highly regulated industry and are subject to regulations that describe and regulate operating and internal control procedures. The majority of our revenues are in the form of cash, which by its nature, does not require complex estimates. We also made certain estimates surrounding our application of purchase accounting related to the acquisition and the related assignment of costs to goodwill and other intangible assets.

F-12

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In addition, contingencies are accounted for in accordance with SFAS No. 5, “Accounting for Contingencies.” SFAS No. 5 requires that we record an estimated loss from a loss contingency when information available prior to issuance of our financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal matters requires us to use judgment. Many of these legal contingencies can take years to be resolved. Generally, as the time period increases over which the uncertainties are resolved, the likelihood of changes to the estimate of the ultimate outcome increases. However, an adverse outcome could have a material impact on our financial condition and operating results.

Consolidations—The consolidated financial statements include the financial information of the Company and its wholly-owned subsidiary The Old Evangeline Downs Capital Corp. All significant intercompany transactions have been eliminated.

Reclassifications—Certain 2000 and 2001 amounts have been reclassified to conform with 2002 presentation.

3.    RESTRICTED CASH

Restricted cash represents amounts for purses to be paid during the live meet racing season. Additionally, restricted cash includes entrance fees for two (2) special futurity races during the next racing season, plus any interest earnings. These funds will be used to pay the purse for the two races. A separate interest bearing bank account is required for these funds.

4.    INTERTRACK PARTNERS OF RAPIDS PARISH

The Company had a 25% investment in Intertrack Partners, a Louisiana general partnership operating an off-track betting facility in Rapids Parish, Louisiana (“Intertrack”). The investment was accounted for using the equity method of accounting whereby the Company’s investment is carried at cost, adjusted for the Company’s proportionate share of their undistributed earnings or losses. Additionally, at December 31, 2001, the Company had a note receivable from Intertrack Partners in the amount of $285,615, bearing interest at an annual rate of 9%.

During 1998, Intertrack discontinued operations and the Company determined that the carrying value of its note receivable exceeded the estimated recovery value. Accordingly, no interest was accrued on the note due to the uncertainty of its collectibility. For 2000, the allowance was increased to $235,615, resulting in a $92,615 charge to operations. During 2001, the assets of Intertrack were sold and all third party payables were paid. After payment of payables, there remained only a limited amount of cash to make a partial payment on Partner notes. A final payment of $56,517 on the Company’s note was made in 2002.

	2001
Note receivable from Intertrack Partners of Rapids Parish in the original amount of $285,615 bearing interest at an annual rate of 9%	$	285,615
Less: Allowance for doubtful accounts		(229,098	)
	$	56,517

As of December 31, 2000, the Company recorded a negative equity investment balance of $58,862 within current liabilities in the Consolidated Balance Sheet, representing the Company’s estimate of its share of the partnership

F-13

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

liabilities. Upon the satisfaction of all liabilities to third parties in 2001, the equity method of accounting was suspended and no additional loss was charged to operations. Accordingly, the Company’s 2001 share of losses was not recorded; instead the Company recorded $58,862 of income to reflect the recoupment of its negative capital account recorded as an estimate of partnership liabilities in 2000.

5.    PROPERTY AND EQUIPMENT

The carrying value for property and equipment is as follows:

	2001			2002
Furniture, fixtures, equipment and vehicles	$	1,023,786		$	1,169,935
Building and leasehold improvements		1,743,313			1,822,508
Land		170,000			310,000
		2,937,099			3,302,443
Less: Accumulated depreciation		(1,761,297	)		(1,962,060	)
	$	1,175,802		$	1,340,383

Depreciation expense charged to operations for 2000, 2001, the period January 1 through August 30, 2002 and the period August 31 through December 31, 2002 was $234,136, $229,367, $138,166 and $77,806, respectively.

In December 2001, the Company recorded property impairment charges of $4,361,134 related to its horse racing facility, see note 13.

6.    PARI-MUTUEL TICKETS OUT

“Pari-mutuel tickets out” represent the amounts due on winning wagering tickets which have not been claimed, the total amount unclaimed was $141,135 and $150,191, as of December 31, 2001 and 2002, respectively. At the expiration of ninety (90) days after the close of the racing season, all unclaimed winnings are realized as income in accordance with 1992 State of Louisiana legislation. Unclaimed winnings for 2000, 2001, the period January 1 through August 30, 2002 and the period August 31 through December 31, 2002 were $265,723, $289,446, $133,357 and $121,157, respectively, and are included in off-track betting revenue for such periods.

F-14

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

7.    DEBT

The Company’s debt consists of the following:

	December 31, 2001			December 31, 2002
Term loan with Foothill Capital Corporation, interest at Prime + 3.75%, however, at no time shall the interest rate be lower than 7.5% (current rate of 8.0%), maturing the earlier of (a) June 30, 2003 or (b) the date on which OED consummates its financing of the Racino Project.				$	8,300,000
Note payable to WET2LLC, issued by PGP, interest rate of 7% until January 31, 2003, thereafter 8% until February 28, 2003, thereafter 9% until March 31, 2003, thereafter the greater of 12% or the fixed rate on the notes expected to be issued to finance the Racino Project, maturing on June 30, 2003.					7,325,000
Note payable to WET2, issued by OED and PGP, interest rate of 7% until March 31, 2003, thereafter the greater of 12% or the fixed rate on the notes expected to be issued to finance the Racino Project, maturing on June 30, 2003.					4,500,000
Note payable to Moody-Trotter Investments in the original amount of $13,159,627, dated December 1, 1994 and bearing interest at 10% per annum, due August 1, 2014, payable in monthly installments of $127,669 including principal and interest; secured by equipment, building, and land.	$	10,981,852
Total debt		10,981,852			20,125,000
Less current portion		(454,292	)		(20,125,000	)
Total long term debt	$	10,527,560		$	0

The Company’s debt agreements contain, among other things, covenants customary for loans of this type. At December 31, 2001 and 2002 the Company was in compliance with all such covenants.

8.    LITIGATION SETTLEMENT

On November 8, 1994, the Louisiana Horsemen’s Benevolent and Protective Association 1993, Inc. (“LHBPA”) filed a lawsuit against all licensed horse racetracks in the State of Louisiana. The lawsuit alleged that LHBPA did not receive the appropriate share of net revenues from video poker devices located at licensed horse racetracks. As of the date of the issuance of these financial statements, the potential liability of the Company related to an adverse outcome was inherently uncertain. As such, no expense or related accrual was recorded in the financial statements as of December 31, 2002.

In February 2003, subsequent to the issuance of these financial statements, the Company entered into a settlement agreement with LHBPA for $1.6 million. The terms of the settlement agreement require the Company to make payments of $400,000 annually beginning in March 2003, with additional $400,000 payments, adjusted for inflation, due in March 2004 through 2006.

9.    OPERATING LEASES

Ground Lease—Lafayette—The Company currently leases the land on which the OED building and leasehold improvements are located. The ground lease annual rental is $0 per year and the lease term expires on December 31, 2004, subject to extension as described below. In the event a senior secured note financing to fund the Racino Project is not consummated prior to December 15, 2003, OED may extend the term of the lease to December 31,

F-15

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2005 (the “First Renewal Option”), and if the First Renewal Option is exercised, OED may further extend the term of the lease to December 31, 2006 (the “Second Renewal Option”). OED must give written notice to the lessor of its exercise of the First Renewal Option and the Second Renewal Option by December 31, 2003 and December 31, 2004, respectively. The landlord is not obligated to extend the lease if all of OED’s outstanding loan obligations to Foothill Capital Corporation (or its successors) have been paid. Rent associated with the First Renewal Option and the Second Renewal Option will be $75,000 per month, due on the first of each month. The remaining net book value of the Company’s leasehold improvements at The Old Evangeline Downs horse racetrack as of December 31, 2002 is being amortized over the period in which management estimates that the facility will be used by OED. If an event occurs that should cause OED management to change its estimate, the amortization period will be adjusted accordingly on a go-forward basis.

New Iberia—The Company is under a twelve month lease which runs from September 1, 2002 through August 31, 2003 with lease payments of $5,000 due each month, after which the lease will revert to a month-to-month contract with all the same terms and conditions for $5,000 per month to lease the New Iberia off-track betting parlor. Either party may terminate the lease during the month to month tenancy. The lease requires payment of property taxes, maintenance and insurance on the property. During the period 2000, 2001, the period January 1 through August 30, 2002 and the period August 31 through December 31, 2002 the Company paid $60,000, $60,000, $40,000 and $20,000, respectively, in rent for the New Iberia off-track betting parlor.

Pari-Mutuel Processing Equipment—The Company entered into a five-year lease agreement commencing on January 1, 2001 for computerized pari-mutuel central processing equipment, terminals and certain associated equipment. A similar lease agreement was in existence for all of 2000 and through February 15, 2001. Additionally, the lease agreement provides the Company with pari-mutuel services whereby the leased equipment automatically registers and totals the amounts wagered on the races held at the horse racetrack or simulcast to it and to its respective off-track wagering parlors, and displays the win pool odds, payoffs, and other pertinent horse racing information needed to operate live meet horse racing and off-track betting. The Company pays 0.43% of the handle for the services provided during both live meet racing days and off-track betting racing days. The charges are subject to a minimum of $1,950 per live meet race day and $1,150 per off-track betting race day. Additionally, if a race day is not completed, the Company must pay 50% of the minimum if less than four races are declared official and 100% of the minimum if four or more races are declared official. In a typical year, the Company has approximately 87 live meet racing days and 223 off-track betting days. The Company paid $485,168, $429,357, $308,972 and $116,308 during the period 2000, 2001, the period January 1 through August 30, 2002 and the period August 31 through December 31, 2002, respectively, related to the pari-mutuel processing equipment lease.

The total minimum rental payments for the lease mentioned in the preceding paragraph assuming the Company has 87 live meet racing days and 223 off-track betting days for each of the years ended December 31 are summarized as follows:

2003	$   426,100
2004	426,100
2005	426,100
	$1,278,300

Other—The Company has operating leases for various pieces of equipment under non-cancelable agreements, which expire in various years through 2007. Total other rent expense for the period 2000, 2001, the period January 1 through August 30, 2002 and the period August 31 through December 31, 2002 were $27,194,

F-16

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

$32,091, $9,718 and $8,208, respectively. The total minimum rental payments for these leases for the years ended December 31 are summarized as follows:

2003	$23,962
2004	21,624
2005	21,624
2006	21,049
2007	8,651
	$96,910

10.    INCOME TAXES

The provision for income tax expense for 2000 is as follows:

Current
Federal	$123,043
State
Total current	123,043
Deferred
Federal	80,488
State	17,812
Total deferred	98,300
Total	$221,343

Current taxes payable arise from the liquidation of the affiliated corporations as discussed in Note 1.

11.    RELATED PARTIES

Debt—“Long term debt to related parties” at December 31, 2001 is a note payable to Moody-Trotter Investments. B.I. Moody, III, William E. Trotter and their respective families, either individually or through partnerships of limited liability companies, owned 100% of each of Moody-Trotter Investments, Racetrack at Evangeline Downs, Inc. and The Old Evangeline Downs, L.C. During the period 2000, 2001, the period January 1 through August 30, 2002 and the period August 31 through December 31, 2002, interest was paid to Moody-Trotter Investments and William E. Trotter in the amount of $1,160,341, $1,125,262, $432,812 and $96,156, respectively.

At December 31, 2002, the Company had accrued interest recorded of $330,209 payable to OEDA primarily related to OEDA’s purchase of a 50% interest in the Company’s long-term notes payable on February 15, 2002. Interest was accrued from the date of purchase of the notes until August 30, 2002, at which time the interest in the notes was converted to members’ equity of the Company.

At December 31, 2002, the Company had an intercompany accounts payable to PGC of $2,484,140 related to Racino Project development costs paid by PGC on behalf of the Company.

Management Services Agreement—In 2002, the Company entered into a management services agreement (“MSA”) with PGC and OEDA (together the “Operator”). Pursuant to the terms of that agreement, the Operator

F-17

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

will manage and operate our existing horse racetrack and design, develop, construct, manage and operate the new racino and provide certain pre-opening services in connection therewith. Under the management services agreement, the Operator is entitled to receive a pre-opening service fee equal to $40,000 per month, retroactive to June 27, 2001 which is not required to be paid until the earlier to occur of commencement of the operations of the casino or the Operating Deadline (as defined in the MSA and applicable to the casino). The Operator is also entitled to be reimbursed for all reasonable and documented out-of-pocket expenses permitted to be incurred under the management services agreement, including, but not limited to tax preparation, accounting, legal and administrative fees and expenses incurred in connection with the Operator’s ownership of us. The Operator will also receive a basic management fee equal to 1.75% of net revenue (less net food and beverage revenue) and an incentive fee equal to:

• 3.0% of the first $25.0 million of EBITDA (as defined below);

• 4.0% of EBITDA in excess of $25.0 million but less than $30.0 million of EBITDA; and

• 5.0% of EBITDA in excess of $30.0 million.

“EBITDA” is defined in the management services agreement as earnings before interest, income taxes, depreciation and amortization; provided, however, that in calculating earnings, the basic management fee, the incentive fee and reimbursables payable under the management services agreement shall not be deducted.

The management services agreement will terminate on the later of (i) the date that is eight years after the first date a revenue paying customer is admitted to the new racino and (ii) the date of sale by PGC of its beneficial ownership of the Company’s membership interests.

During the period January 1 to August 30, 2002 and the period August 31 to December 31, 2002, the Company accrued management fee expenses of $64,644 and $160,000, respectively.

Distribution—Leaseback of Land—In 2000, the Company entered into a distribution-leaseback arrangement with its members. Under the arrangement, the Company distributed the 133.668 acres of land upon which the horse racetrack is located to its members and leased it back from its members’ related company, MT Holdings, LLC, for a period of 36 months. The land had a carrying value of $900,000. MT Holdings, LLC is owned 100% by B.I. Moody, III, William E. Trotter, and their respective families, either individually or through partnerships of limited liability companies. The leaseback has been accounted for as an operating lease as further discussed in Note 8. The lease has been further amended as further discussed in Note 8.

Consulting Fees—During 2000, the Company paid $30,000, to B.K. Entertainment, LLC for consulting services. B.K. Entertainment, LLC is owned by William E. Trotter and Kevin Moody. For 2000, 2001 and the period January 1, to February 15, 2002, the Company paid $150,000, 180,000 and $30,000, respectively, to TMC, L.C. for management services. Also, the Company paid $3,501 and $3,842 in 2000 and 2001, respectively, to The Moody Company for reimbursement of pro-rata retirement plan administration services.

Group Insurance—Effective 2001, the Company terminated its affiliation in The Moody Company’s self-insured plan and obtained conventional coverage from another health insurance provider. During 2000, the Company is included in The Moody Company’s self-insured health insurance program. The Company paid $309,334 to The Moody Company for group insurance during 2000. Included in the $309,334 of group insurance expense for 2000 is $83,849 which was accrued for estimated health insurance claims payable as a result of terminating the self-insured program.

F-18

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

12.    EMPLOYEE BENEFIT PLAN

During 2000 and through February 2002, the Company participated in a profit sharing 401(k) Plan sponsored by the Moody Company which was implemented during 1996 that covered any employee who wished to participate, who was over age 21 and had given one year of service to the Company. Contributions to the plan made by the employees were limited to 15% of their compensation and were partially matched by the Company based on a formula providing for 1) 50% matching on the first 4% of compensation, and 2) an optional contribution of up to 15% of compensation, based on an annual decision of the Company’s managers. Company contributions to the plan were $17,340, $18,895 and $2,995 for 2000, 2001 and the period January 1 through the end of the Company’s participation in the plan in February 2002, respectively.

On June 1, 2002, the Company implemented a new 401(k) Plan that covers any employee who wishes to participate, who was over age 21 and has given one year of service to the Company. Contributions to the plan made by the employees are limited to 15% of their compensation and are partially matched by the Company based on a formula providing for 50% matching on the first 4% of compensation contributed. Company contributions to the plan for the period June 1, 2002 (date of plan implementation) to August 30, 2002 and August 31, 2002 to December 31, 2002 were $3,635 and $5,954, respectively.

13.    COMMITMENTS AND CONTINGENCIES

Neither we nor our subsidiaries are a party to, and none of our nor our subsidiaries’ property is the subject of, any other pending legal proceedings other than litigation arising in the normal course of business. We do not believe that adverse determinations in any or all such other litigation would have a material adverse effect on our financial condition, results of operations or cash flows.

In November, 2002, the Company entered into three purchase agreements to purchase land related to the Racino Project for a total purchase price of $842,466. The Company paid deposits totaling $61,000 related to these purchase agreements as of December 31, 2002. These deposits will be applied against the purchase price at closing which shall occur before June 30, 2003.

14.    IMPAIRMENT CHARGE

In connection with the Company’s assessment of the events enumerated in Note 1 surrounding the Racino Project, a review was performed of the carrying values of long-lived assets, including the recorded balance of the line item “Goodwill and other intangible assets”. The Company determined that the sale of a 50% interest of the Company to OEDA, which was consummated on February 15, 2002, significantly changed the time period over which the horse racing facility in Lafayette, Louisiana would be used. This review was performed pursuant to the provisions of SFAS No. 121, Accounting for the Impairment of Long-Lived Assets to be Disposed of. As a result of this review, the Company recorded a charge of $4,361,134 in 2001 to record the related assets at fair value based on the present value of estimated expected future cash flows using a discount rate commensurate with the risks involved.

15.    SUBSEQUENT EVENTS

On December 19, 2002, the Company was granted a racing license by the Louisiana State Racing Commission to operate in St. Landry Parish, Louisiana, and on January 21, 2003, the Company was granted a gaming license by the Louisiana Gaming Control Board to operate slot machines at the racino, subject to customary conditions.

As noted in Note 8, in February 2003, the Company entered into a settlement agreement with LHBPA for a total of $1.6 million. The settlement will be paid by the Company in four annual payments of $400,000. The first payment was made on March 7, 2003.

F-19

THE OLD EVANGELINE DOWNS, L.L.C.

CONDENSED CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2002 and MARCH 31, 2003 (UNAUDITED)

	December 31, 2002			March 31, 2003
				(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	962,652		$	659,077
Restricted cash—futurity escrow		840,366			1,767,336
Restricted cash—racino project construction					63,799,585
Restricted investments					23,922,971
Accounts receivable		176,120			862,100
Interest receivable					66,565
Inventory		29,736			28,280
Prepaid expenses		48,885			254,809
Total current assets		2,057,759			91,360,723
PROPERTY AND EQUIPMENT, NET		1,340,383			1,567,806
RACINO PROJECT DEVELOPMENT COSTS		7,455,885			11,703,696
OTHER ASSETS:
Deferred financing costs, net of accumulated amortization of $339,937		484,851			9,702,577
Intangible assets		31,329,834			32,155,371
Deposits		73,131			73,294
Total other assets		31,887,816			41,931,242
TOTAL ASSETS	$	42,741,843		$	146,563,467
LIABILITIES AND MEMBERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	3,614,097		$	6,540,181
Purse settlement payable		846,778			1,763,112
LTBA video poker purse settlement payable		861			816
Pari-mutuel tickets out		150,191			177,132
Accrued interest		327,952			1,512,666
Other accrued expenses		167,371			577,634
Accounts payable to PGC and OEDA		3,038,993			3,620,204
Notes payable		20,125,000
Total current liabilities		28,271,243			14,191,745
LONG-TERM LIABILITIES:
13% Senior secured notes, net of discount					120,753,818
Litigation settlement					800,000
Total long-term liabilities					121,553,818
Total liabilities		28,271,243			135,745,563
COMMITMENTS AND CONTINGENCIES
MEMBERS’ EQUITY:
Common members’ interest		15,232,056			15,232,056
Accumulated deficit		(761,456	)		(4,414,152	)
Total members’ equity		14,470,600			10,817,904
TOTAL LIABILITIES AND MEMBERS’ EQUITY	$	42,741,843		$	146,563,467

See notes to condensed consolidated financial statements.

F-20

THE OLD EVANGELINE DOWNS, L.L.C.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THE THREE MONTHS ENDED MARCH 31, 2002 (PREDECESSOR) and MARCH 31, 2003 (SUCCESSOR)

	Predecessor			Successor
	Three Months Ended March 31, 2002			Three Months Ended March 31, 2003
	(Unaudited)			(Unaudited)
REVENUES:
Meet	$	340,594		$	401,790
Off-track betting		2,213,450			2,213,732
Concession		145,759			161,990
Total net revenues		2,699,803			2,777,512
EXPENSES:
Meet		415,819			542,252
Off-track betting		1,378,310			1,357,373
Concession		157,005			161,073
General and administrative		236,895			361,456
Depreciation and amortization		64,292			67,110
Management fee					120,000
Litigation settlement					1,600,000
Total expenses		2,252,321			4,209,264
INCOME (LOSS) FROM OPERATIONS		447,482			(1,431,752	)
OTHER INCOME (EXPENSE):
Interest expense		(269,871	)		(2,294,672	)
Interest income		4,075			73,728
Total other expense		(265,796	)		(2,220,944	)
NET INCOME (LOSS) TO COMMON MEMBERS’ INTEREST	$	181,686		$	(3,652,696	)

See notes to condensed consolidated financial statements.

F-21

THE OLD EVANGELINE DOWNS, L.L.C.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THE THREE MONTHS ENDED MARCH 31, 2002 (PREDECESSOR) and MARCH 31, 2003 (SUCCESSOR)

	Three months ended March 31, 2002			Three months ended March 31, 2003
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	181,686		$	(3,652,696	)
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
Depreciation and amortization		64,292			67,110
Amortization of deferred financing costs and discount on notes					585,659
Changes in operating assets and liabilities:
Restricted cash—futurity escrow		(820,499	)		(926,970	)
Receivables		(12,422	)		(752,545	)
Intercompany payable					264,455
Inventory		(2,764	)		1,456
Prepaid expenses and other assets		(103,040	)		(206,087	)
Accounts payable		890,110			1,661,182
Accrued expenses		(46,020	)		1,233,295
Litigation settlement					1,200,000
Net cash flows from operating activities		151,343			(525,141	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Business acquisition and licensing costs		(52,359	)		(1,173,847	)
Racino project development costs		(50,000	)		(2,046,143	)
Restricted cash—racino project construction					(63,799,585	)
Restricted investments					(23,922,971	)
Purchase of property and equipment		(30,165	)		(327,733	)
Proceeds from property and equipment insurance		158,295
Net cash flows from investing activities		25,771			(91,270,279	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs					(9,119,155	)
Proceeds from senior secured notes					120,736,000
Principal payments on intercompany notes payable					(7,325,000	)
Principal payments on notes payable					(4,500,000	)
Principal payments on senior credit facilities					(8,300,000	)
Principal payments on notes payable to related party		(90,988	)
Net cash flows from financing activities		(90,988	)		91,491,845
NET INCREASE (DECREASE) IN CASH		86,126			(303,575	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		994,830			962,652
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,080,956		$	659,077

See notes to condensed consolidated financial statements.

F-22

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    ORGANIZATION, BUSINESS PURPOSE, AND BASIS OF PRESENTATION

In 2002, The Old Evangeline Downs, L.C. was purchased by OED Acquisition, LLC (“OEDA”), a wholly-owned subsidiary of Peninsula Gaming Company, LLC (“PGC”), and was renamed The Old Evangeline Downs, LLC (the “LLC”). The LLC currently owns and operates the Evangeline Downs Racetrack in Lafayette, Louisiana. The racetrack provides both live thoroughbred horse racing and off-track betting. The LLC also operates off-track betting parlors in New Iberia and Port Allen, Louisiana. The Old Evangeline Downs Capital Corp is a wholly owned subsidiary of LLC, has no assets or operations and was formed solely to facilitate the offering by LLC of its 13% Senior Secured Notes due 2010 with Contingent Interest in certain jurisdictions. PGC, OEDA and LLC will manage the existing racetrack and, subject to receipt of required gaming approvals, are planning to design, construct, manage and operate a new casino and contiguous racetrack facility with pari-mutuel wagering and slots in St. Landry Parish, Louisiana (the “racino project”).

The LLC and predecessor companies are hereafter referred to as the “Company” or “OED”. All intercompany balances and transactions have been eliminated in the consolidated financial statements.

The financial statements contained herein should be read in conjunction with the audited financial statements and accompanying notes to the financial statements included elsewhere in this prospectus for the period ended December 31, 2002. Accordingly, footnote disclosure which would substantially duplicate the disclosure in the audited financial statements has been omitted in the accompanying unaudited financial statements.

Racino Development

In 1997, the State of Louisiana passed the Pari-Mutuel Act, which permitted three of the four companies operating pari-mutuel wagering facilities in Louisiana which offer live horse racing to install slot machines at their horse racetrack facilities, subject to ratification by the voters of the individual parishes. The voters of Lafayette Parish, where the Company’s existing horse racetrack is located, have not approved the installation of slot machines at the Company’s horse racetrack facility. However, in October 1997 the voters of St. Landry Parish approved the operation of both slot machines and pari-mutuel wagering. Therefore, the Company is currently developing a casino and pari-mutuel horse racetrack facility, or “racino,” in nearby Opelousas, Louisiana within St. Landry Parish, which will replace it’s existing horse racetrack near Lafayette and where the Company will be permitted to operate slot machines, in addition to conducting live horse racing. The Company’s approximately 532-acre racino site is located approximately 20 miles north of Lafayette, the Company’s primary market, at the intersection of Interstate 49 and U.S. Highway 190. On December 19, 2002, the Company received a racing license to operate in St. Landry Parish, and on January 21, 2003, the Company received a gaming license to operate slot machines at the racino, subject to customary conditions.

The Company purchased all the necessary land to develop the racino, and the total remaining cost to design, develop, construct, equip and open the racino is expected to be approximately $88.5 million. The construction and development of the racino project is expected to be completed in two phases. During the first phase, the Company will construct the casino and related casino amenities, which it expects to open in March 2004, at a total remaining cost of $68.6 million. During the second phase, the Company will construct the horse racetrack and related facilities for a total remaining cost of $19.9 million. The Company expects to be prepared to begin scheduling live racing meets in December 2004. The Company expects to continue to operate its existing horse racetrack until live racing meets are scheduled at the racino, at which time the Company will cease operations at its existing horse racetrack.

The source of funds to develop the racino will be proceeds from the Company’s private placement of $123.2 million aggregate principal amount of Series A 13% Senior Secured Notes due 2010 with Contingent Interest (the “OED Notes”). See Note 5 for further information about the OED Notes.

F-23

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Restricted Cash—Racino Project.    “Restricted cash—racino project” represents unused proceeds from the OED Notes, the use and disbursement of which are restricted to the design, development, construction, equipping and opening of the racino in accordance with the terms of a Cash Collateral and Disbursement Agreement, dated February 25, 2003, among the Company, US Bank (as trustee and disbursement agent) and an independent construction consultant (the “Cash Collateral and Disbursement Agreement”). As of March 31, 2003, the Company had $58,519,571 deposited in a construction disbursement account, $279,691 deposited in an interest reserve account that will be used toward payment of fixed interest on the OED Notes and $5,000,323 deposited in a completion reserve account that will be used to fund potential cost overruns and contingency amounts with respect to the design, development, construction, equipping and opening of the racino. The funds deposited in these accounts are invested in securities that are readily convertible to cash.

Restricted Investments.    As of March 31, 2003, the Company had $23,922,971 invested in government securities with original maturities of greater than 90 days from the date of initial investment. Proceeds from the sale of these investments at maturity will be used to help pay the first three payments of fixed interest on the OED Notes in accordance with the Cash Collateral and Disbursement Agreement.

Property and Equipment at St. Landry Parish.    Included in Property and Equipment at St. Landry Parish as of December 31, 2002 and March 31, 2003 are land and land acquisition costs associated with the racino project of approximately $5.4 and $5.9 million, respectively, and architecture fees and construction costs associated with the design and development of the racino of approximately $2.1 million and $5.8 million, respectively.

Capitalized Interest.    The Company capitalizes interest costs associated with debt incurred in connection with the racino project. When debt is not specifically identified as being incurred in connection with the development of the racino project, the Company capitalizes interest on amounts expended on the racino project at the Company’s average cost of borrowed money. Capitalization of interest will cease when the project is substantially complete. The amount capitalized as of December 31, 2002 and March 31, 2003 was $0.1 million and $0.2 million, respectively.

Business Acquisition and Licensing Costs.    As of March 31, 2003, the Company had recorded approximately $3.9 million on its balance sheet for directly related legal and other incremental costs associated with the acquisition of OED and obtaining the relevant gaming licenses to conduct gaming operations associated with the racino project in Louisiana. These costs are included as a cost of the acquisition and have been evaluated under SFAS No. 141 “Business Combinations” and SFAS No. 142 “Goodwill and Other Intangible Assets.” Intangible assets of $28.4 million acquired as part of the acquisition were identified and valued as follows (in millions):

Slot Machine and Electronic Video Game Licenses	$24.6
Tradename	$  2.5
Horse Racing Licenses	$  1.3
Total	$28.4

Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We periodically evaluate our policies and the estimates and

F-24

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

assumptions related to these policies. We also periodically evaluate the carrying value of our assets in accordance with generally accepted accounting principles. We operate in a highly regulated industry and are subject to regulations that describe and regulate operating and internal control procedures. The majority of our revenues are in the form of cash, which by its nature, does not require complex estimates. We also made certain estimates surrounding our application of purchase accounting related to the acquisition and the related assignment of costs to goodwill and other intangible assets.

In addition, contingencies are accounted for in accordance with SFAS No. 5, “Accounting for Contingencies.” SFAS No. 5 requires that we record an estimated loss from a loss contingency when information available prior to issuance of our financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal matters requires us to use judgment. Many of these legal contingencies can take years to be resolved. Generally, as the time period increases over which the uncertainties are resolved, the likelihood of changes to the estimate of the ultimate outcome increases. However, an adverse outcome could have a material impact on our financial condition and operating results.

Consolidations—The consolidated financial statements include the financial information of the Company and its wholly-owned subsidiary, The Old Evangeline Downs Capital Corp. All intercompany transactions have been eliminated.

Reclassifications—Certain 2002 amounts have been reclassified to conform with 2003 presentation.

3.    PROPERTY AND EQUIPMENT

The carrying value for property and equipment is as follows:

	December 31, 2002			March 31, 2003
Land		310,000			310,000
Building and leasehold improvements		1,822,508			1,714,905
Furniture, fixtures, equipment and vehicles	$	1,169,935		$	1,572,070
		3,302,443			3,596,975
Less: Accumulated depreciation		(1,962,060	)		(2,029,169	)
	$	1,340,383		$	1,567,806

Depreciation expense charged to operations for the three months ended March 31, 2002 and 2003 was $64,292 and $67,110, respectively.

4.    PARI-MUTUEL TICKETS OUT

“Pari-mutuel tickets out” represent the amounts due on winning wagering tickets which have not been claimed, the total amount unclaimed was $150,191 and $177,132, as of December 31, 2002 and March 31, 2003, respectively. At the expiration of ninety (90) days after the close of the racing season, all unclaimed winnings are realized as income in accordance with 1992 State of Louisiana legislation. Unclaimed winnings for the three months ended March 31, 2002 and 2003 were $79,505 and $41,666, respectively, and are included in off-track betting revenue for such periods.

F-25

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

5.    DEBT

The Company’s debt consists of the following:

	December 31, 2002			March 31, 2003
Term loan with Foothill Capital Corporation, interest at Prime + 3.75%, however, at no time shall the interest rate be lower than 7.5% (current rate of 8.0%), maturing the earlier of (a) June 30, 2003 or (b) the date on which OED consummates its financing of the Racino Project.	$	8,300,000
Note payable to OEDA, interest rate of 7% until January 31, 2003, thereafter 8% until February 28, 2003, thereafter 9% until March 31, 2003, thereafter the greater of 12% or the fixed rate on the notes expected to be issued to finance the Racino Project, maturing on June 30, 2003. Obligations under this note were repaid in February 2003 with proceeds of the offering of the OED Notes.		7,325,000
Note payable to WET2, issued by the Company and PGP, interest rate of 7% until March 31, 2003, thereafter the greater of 12% or the fixed rate on the notes expected to be issued to finance the Racino Project, maturing on June 30, 2003. Obligations under this note were repaid in February 2003 with proceeds of the offering of the OED Notes.		4,500,000
13% Senior Secured Notes due March 1, 2010 with Contingent Interest, net of discount of $2,446,182, secured by certain assets of the Company.					120,753,818
Total debt		20,125,000			120,753,818
Less current portion		(20,125,000	)		0
Total long term debt	$	0		$	120,753,818

On February 25, 2003, the Company completed the private placement of $123.2 million aggregate principal amount of OED Notes. The OED Notes bear interest at a rate of 13% per year which is payable semi-annually on March 1 and September 1 of each year. Contingent interest will accrue on the OED Notes in the first full fiscal year after the casino begins operations. The amount of contingent interest will be equal to 5.0% of the Company’s cash flow for the applicable period, subject to certain limitations. The Company may defer paying a portion of contingent interest under certain circumstances set forth in the indenture governing the OED Notes.

At the end of each six-month period after the casino portion of the racino begins operations, the Company is required under the indenture governing the OED Notes to offer to purchase the maximum principal amount of OED Notes that may be purchased, with an amount equal to the sum of (i) 50% of the Company’s excess cash flow for such period (if any) and (ii) the then available balance in an excess cash flow account, which account at any time shall not exceed $10 million. For 45 days following the expiration of each initial excess cash flow offer to purchase, the holders of the OED Notes have the right to request that the Company make an offer to purchase OED Notes with the funds in the excess cash flow account, provided, however, that the Company shall not be required to make more than one offer at any one time. All such offers to purchase OED Notes shall be made at 101% of the principal amount, plus accrued and unpaid interest.

The OED Notes are secured by all of the Company’s current and future tangible and intangible assets (with the exception of certain excluded assets). The OED Notes, which mature on March 1, 2010, are redeemable at the Company’s option, in whole or in part at any time or from time to time, on and after March 1, 2007 at certain specified redemption prices set forth in the indenture governing the OED Notes. The indenture governing the OED Notes contains a number of restrictive covenants and agreements, including covenants that limit the ability of the Company and its subsidiaries to, among other things: (1) pay dividends, redeem stock or make other distributions or restricted payments; (2) incur indebtedness or issue preferred shares; (3) make certain

F-26

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

investments; (4) create liens; (5) agree to payment restrictions affecting the subsidiary guarantors; (6) consolidate or merge; (7) sell or otherwise transfer or dispose of assets, including equity interests of subsidiaries; (8) enter into transactions with affiliates; (9) designate subsidiaries as unrestricted subsidiaries; (10) use proceeds of permitted asset sales and (11) change its line of business. At March 31, 2003, the Company was in compliance with all such covenants. The events of default under the indenture include provisions that are typical of senior debt financings. Upon the occurrence and continuance of certain events of default, the trustee or the holders of not less than 25% in aggregate principal amount of outstanding OED Notes may declare all unpaid principal and accrued interest on all of the OED Notes to be immediately due and payable. Upon the occurrence of a change of control (as defined in the indenture), each holder of OED Notes will have the right to require the Company to purchase all or a portion of such holder’s OED Notes at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase.

6.    LITIGATION SETTLEMENT

On November 8, 1994, the Louisiana Horsemen’s Benevolent and Protective Association 1993, Inc. (“LHBPA”) filed a lawsuit against all licensed horse racetracks in the State of Louisiana. The lawsuit alleged that LHBPA did not receive the appropriate share of net revenues from video poker devices located at licensed horse racetracks. As of the date of the issuance of the December 31, 2002 financial statements, the potential liability of the Company related to an adverse outcome was inherently uncertain. As such, no expense or related accrual was recorded in the financial statements as of December 31, 2002.

In February 2003, the Company entered into a settlement agreement with LHBPA for $1.6 million. The terms of the settlement agreement require the Company to make payments of $400,000 annually beginning in March 2003, with additional $400,000 payments, adjusted for inflation, due in March 2004 through 2006.

During the three months ended March 31, 2003, the Company recorded an expense and related accrual of $1.6 million. Of the total $1.6 million accrual, $0.4 million was paid to the LHBPA in March 2003 and $0.4 million has been included in “Other accrued expenses” in the “Current Liabilities” section with the remaining $0.8 million recorded under “Litigation settlement” in the “Long-term liabilities” section of the Condensed Consolidated Balance Sheet as of March 31, 2003.

7.    RELATED PARTIES

At December 31, 2002 and March 31, 2003, the Company had accrued interest recorded of $330,209 payable to OEDA related primarily to OEDA’s purchase of a 50% interest in the Company’s long-term notes payable on February 15, 2002. Interest was accrued from the date of purchase of the notes until August 30, 2002, at which time the interest in the notes was converted to members’ equity of the Company.

At December 31, 2002 and March 31, 2003 the Company had an intercompany accounts payable to PGC of $2,484,140 and $2,945,351, respectively, related to racino project development costs and business acquisition and licensing costs paid by PGC on behalf of the Company.

At December 31, 2002 and March 31, 2003 the Company had management services fees payable to PGC and OEDA totaling $224,644 and $344,644, respectively.

8.    COMMITMENTS AND CONTINGENCIES

Neither the Company nor any of its subsidiaries are a party to, and none of its property is the subject of, any other pending legal proceedings other than litigation arising in the normal course of business. The Company does not

F-27

THE OLD EVANGELINE DOWNS, L.L.C.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

believe that adverse determinations in any or all such other litigation would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

In November, 2002, the Company entered into three purchase agreements to purchase land related to the Racino Project for a total purchase price of $842,466. The Company paid deposits totaling $61,000 related to these purchase agreements as of March 31, 2002. These deposits will be applied against the purchase price at closing which shall occur before June 30, 2003.

9.    SUBSEQUENT EVENT

The Company calculates its video poker purse liability expense based on net video poker revenues which, historically, were calculated as gross revenues from video poker gaming taken in, or total amount wagered, net of patron payouts less: (i) franchise fees payable to the Louisiana Office of State Police and (ii) $116 fee per machine per month. Fifty percent of the net video poker revenue as calculated above is payable to the LHBPA to be paid out as purses.

On April 9, 2003, the Louisiana Supreme Court handed down a ruling (application for rehearing pending) which defines net video poker revenues similar to the calculation above except that no deduction is allowed for the franchise fee prior to the equal division of the net video poker revenues with the LHBPA.

As noted in Note 6, the Company settled with the LHBPA prior to the Louisiana Supreme Court’s ruling and, accordingly, has no liability to the LHBPA for any periods prior to February 26, 2003 (date of the settlement) other than the $1.6 million settlement amount.

Based on historical video poker revenues, the Company expects the Louisiana Supreme Court’s interpretation to have an annual negative impact to income from operations of the Company of approximately $60,000.

F-28

No person has been authorized to give any information or to make any representations other than those contained in this prospectus, and, if given or made, such information and representations must not be relied upon as having been authorized. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities to which it relates or any offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs since the date hereof or that the information contained herein is correct as of any time subsequent to its date.

THE OLD EVANGELINE DOWNS, L.L.C.

THE OLD EVANGELINE DOWNS CAPITAL CORP.

Offer to Exchange

$123,200,000

13% Senior Secured Notes Due 2010

with Contingent Interest

                    , 2003

Until                     , all dealers effecting transactions in the old notes or the new notes, whether or not participating in the exchange offer, may be required to deliver a prospectus. This requirement is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

A-1

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.    Indemnification of Members and Managers

(a)  The Old Evangeline Downs, L.L.C. (“OED”) is a limited liability company organized under the laws of the State of Louisiana pursuant to the Louisiana Limited Liability Company Act as codified in Chapter 22 of Title 12 of the Louisiana Revised Statutes (the “Louisiana Act”). OED is empowered by Section 1314 of the Louisiana Act, subject to the procedures and limitations set forth in OED’s Amended and Restated Operating Agreement (the “Operating Agreement”), to indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever.

Section 7(c) of OED’s Operating Agreement provides that, to the fullest extent permitted under applicable law, neither the sole member nor any officer of OED shall be deemed to violate the Operating Agreement or be liable, responsible or accountable in damages or otherwise to any other member or officer or OED for any action or failure to act, including but not limited to, under any theory of fiduciary duty or obligation, unless such violation or liability is attributable to the sole member, or such officer’s gross negligence, willful misconduct, bad faith or a continuing material breach of the Operating Agreement. Without limiting the generality of the foregoing, the sole member and each such officer shall, in the performance of his or its duties, be fully protected in relying in good faith upon the records of OED and upon information, opinions, reports or statements presented to the sole member or such officer by any other person or entity as to matters the sole member or such officer reasonably believes are within such other person’s or entity’s professional or expert competence and that has been selected with reasonable care by or on behalf of OED. The sole member shall be deemed by the execution of the Operating Agreement to acknowledge and agree that each officer, in accepting its duties hereunder, disclaims, to the maximum extent permitted under applicable law, any fiduciary duty or obligation it may have to OED and the sole member as a result of its acceptance of its duties, responsibilities and obligations thereunder.

Section 7(d) of OED’s Operating Agreement provides that, to the fullest extent permitted under applicable law, OED shall severally indemnify and hold harmless any person or entity (an “Indemnified Party”) who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action by or in the right of OED) by reason of or arising from any acts or omissions (or alleged acts or omissions) on behalf of OED or in furtherance of the interests of OED arising out of the Indemnified Party’s activities as a member, officer, employee, trustee or agent of OED against losses, damages or expenses (including attorneys’ fees, judgments, fines and amounts paid in settlement) actually and reasonably incurred by such Indemnified Party in connection with such action, suit or proceeding and for which such Indemnified Party has not otherwise been reimbursed, so long as such Indemnified Party did not act in bad faith or in a manner constituting gross negligence or willful misconduct or materially breach the Operating Agreement. The termination of any action, suit or proceeding by judgment, order, settlement or upon a plea of nolo contendere or its equivalent shall not of itself (except insofar as such judgment, order, settlement or plea shall itself specifically provide) create a presumption that the Indemnified Party acted in bad faith or in a manner constituting gross negligence or willful misconduct or materially breached the Operating Agreement.

Section 13 of OED’s Operating Agreement provides that, except as otherwise expressly provided in the Louisiana Act, the debts, obligations and liabilities of OED, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of OED, and the sole member shall not be obligated personally for any such debt, obligation or liability of OED solely by reason of being the sole member. Except as otherwise expressly provided in the Louisiana Act, the liability of the sole member shall be limited to the amount of capital contributions, if any, required to be made by the sole member in accordance with the provisions of the Operating Agreement, but only when and to the extent the same shall become due pursuant to the provisions of the Operating Agreement.

II-1

(b)  The Old Evangeline Downs Capital Corp. (“Capital Corp.”) is a corporation organized under the laws of the State of Delaware pursuant to the Delaware General Corporation Law. Capital Corp. is empowered under Section 145 of the Delaware General Corporation Law (the “DGCL”), subject to the procedures and limitations set forth in its Certificate of Incorporation (the “Certificate of Incorporation”) and its By-Laws (the “By-Laws”), to indemnify directors, officers, employees and other individuals against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than a derivative action) if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of Capital Corp. and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard of care is applicable in the case of a derivative action, except that indemnification only extends to expenses (including attorneys’ fees) incurred in connection with the defense or settlement of such an action, and the DGCL requires court approval before there can be any indemnification of expenses where the person seeking indemnification has been found liable to Capital Corp.

Article Eighth of Capital Corp.’s Certificate of Incorporation provides that, to the fullest extent permitted by the DCGL as the same exists or may hereafter be amended, a director of Capital Corp. shall not be liable to Capital Corp. or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of Article Eighth of the Certificate of Incorporation shall not adversely affect any right or protection of a director of Capital Corp. existing at the time of such repeal or modification.

Section 9.1 of Capital Corp.’s By-Laws provides that every person who was or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or a person of whom he is the legal representative is or was a director or officer of Capital Corp. or is or was serving at the request of Capital Corp. or for its benefit as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under and pursuant to any procedure specified in the Delaware Code, against all expenses, liabilities and losses (including attorneys’ fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. Such right of indemnification shall not be exclusive of any other right which such directors, officers or representatives may have or hereafter acquire and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any by-law, agreement, vote of stockholders, provision of law or otherwise, as well as their rights under Article 9 of the By-Laws.

Section 9.2 of Capital Corp.’s By-Laws provides that its Board may cause Capital Corp. to purchase and maintain insurance on behalf of any person who is or was a director or officer of Capital Corp., or is or was serving at the request of Capital Corp. as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not Capital Corp. would have the power to indemnify such person.

Section 9.3 of Capital Corp.’s By-Laws provides that its Board may from time to time adopt further by-laws with respect to indemnification and may amend the current By-Laws and such by-laws to provide at all times the fullest indemnification permitted by the Delaware Code.

Section 9.4 of Capital Corp.’s By-Laws provides that expenses incurred in defending a civil or criminal action or proceeding of the type described in Section 9.1 of the By-Laws shall be paid by Capital Corp. in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of the person requesting such advance to repay such amount in the event that such person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced by Capital Corp. or allowed by a court exceed the indemnification to which such person is entitled.

II-2

Item 21.    Exhibits and Financial Statement Schedules

See Index to Exhibits, which is incorporated by reference.

Item 22.    Undertakings

Each of the undersigned registrants hereby undertakes:

(1)  To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)  To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii)  To reflect in the prospectus any facts or events arising after the effective date of the registration statement, or the most recent post-effective amendment thereof, which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered, if the total dollar value of securities offered would not exceed that which was registered, and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii)  To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2)  That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)  To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering.

(4)  Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 20 or otherwise, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding, is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

(5)  To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form within one business day of receipt of such request and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of this registration statement through the date of responding to the request.

(6)  To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in this registration statement when it became effective.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, The Old Evangeline Downs, L.L.C. has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lafayette, State of Louisiana, on May 27, 2003.

THE OLD EVANGELINE DOWNS, L.L.C.
By:	/S/    NATALIE A. SCHRAMM
	Natalie A. Schramm Chief Financial Officer

Each person whose signature appears below constitutes and appoints M. Brent Stevens and Natalie A. Schramm, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and to file the same, with all exhibits thereto, and any and all documents in connection therewith, with the Securities and Exchange Commission, and hereby grants unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on May 27, 2003.

/S/    M. BRENT STEVENS

M. Brent Stevens

Chief Executive Officer and Manager

/S/    MICHAEL S. LUZICH

Michael S. Luzich

President and Secretary

/S/    TERRANCE W. OLIVER

Terrance W. Oliver

Manager

/S/    ANDREW R. WHITTAKER

Andrew R. Whittaker

Manager

/S/    GEORGE T. PAPANIER

George T. Papanier

Chief Operating Officer

/S/     NATALIE A. SCHRAMM

Natalie A. Schramm

Chief Financial Officer

1

Pursuant to the requirements of the Securities Act of 1933, The Old Evangeline Downs Capital Corp. has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in City of Lafayette, State of Louisiana, on May 27, 2003.

THE OLD EVANGELINE DOWNS CAPITAL CORP.
By:	/S/    NATALIE A. SCHRAMM
	Natalie A. Schramm Chief Financial Officer

Each person whose signature appears below constitutes and appoints M. Brent Stevens and Natalie A. Schramm, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and to file the same, with all exhibits thereto, and any and all documents in connection therewith, with the Securities and Exchange Commission, and hereby grants unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on May 27, 2003.

/S/    M. BRENT STEVENS

M. Brent Stevens

Chief Executive Officer and Manager

/S/    MICHAEL S. LUZICH

Michael S. Luzich

President and Secretary

/S/    GEORGE T. PAPANIER

George T. Papanier

Chief Operating Officer

/S/     NATALIE A. SCHRAMM

Natalie A. Schramm

Chief Financial Officer

2

INDEX TO EXHIBITS

Exhibit Number		Description of Exhibit
1.1	†	Purchase Agreement, dated February 19, 2003, between The Old Evangeline Downs, LLC and Jefferies & Company, Inc.
2.1	†	Purchase Agreement, dated June 27, 2001, by and among Peninsula Gaming Partners, LLC, a Delaware limited liability company, The Old Evangeline Downs, LC, a Louisiana limited company and BIM3 Investments, a Louisiana partnership.
2.2	†	First Amendment to Purchase Agreement, dated January 1, 2002, by and among BIM3 Investments, a Louisiana partnership, The Old Evangeline Downs, LC, a Louisiana limited company and OED Acquisition, LLC, a Delaware limited liability company.
3.1	†	Amended and Restated Articles of Organization of The Old Evangeline Downs, L.L.C., dated as of February 19, 2003.
3.2	†	Amended and Restated Operating Agreement of The Old Evangeline Downs, LLC, dated as of January 30, 2003, between The Old Evangeline Downs, LLC and OED Acquisition, LLC.
3.3	†	First Amendment to Amended and Restated Operating Agreement of The Old Evangeline Downs, LLC, dated as of May 21, 2003
3.4	†	Certificate of Incorporation of The Old Evangeline Downs Capital Corp.
3.5	†	By-laws of The Old Evangeline Downs Capital Corp.
4.1	†	Indenture, dated February 25, 2003, by and among The Old Evangeline Downs, LLC, The Old Evangeline Downs Capital Corporation and U.S. Bank National Association.
4.2	†	Registration Rights Agreement, dated February 25, 2003, by and among The Old Evangeline Downs, LLC, The Old Evangeline Downs Capital Corporation and Jefferies & Company, Inc.
4.3	†	Form of 13% Senior Secured Note due 2010
5.1	†	Opinion of Mayer, Brown, Rowe & Maw
8.1	†	Tax Opinion of Mayer, Brown, Rowe & Maw
10.1	†	Amended and Restated Management Services Agreement, dated as of February 25, 2003, by and among The Old Evangeline Downs, LLC, OED Acquisition, LLC and Peninsula Gaming Company, LLC.
10.2	†	Standard Form of Agreement between Owner and Contractor, dated February 25, 2003, by and between The Old Evangeline Downs, LLC and W.G. Yates & Sons Construction Company.
10.3	†	Standard Form of Agreement between Owner and Architect and Standard Form of Architect’s Services, dated January 31, 2003, by and between The Old Evangeline Downs, LLC and KGA Architecture.
10.4*		Cash Collateral and Disbursement Agreement, dated as of February 25, 2003, by and among The Old Evangeline Downs, LLC, The Old Evangeline Downs Capital Corporation, U.S. Bank National Association and Abacus Project Management, Inc.
12.1	†	Computation of ratio of earnings to fixed charges
21.1	†	Subsidiaries of the Registrant
23.1	†	Consent of Deloitte & Touche, LLP
23.2	†	Consent of Mayer, Brown, Rowe & Maw (included in Exhibit 5.1)
24.1	†	Power of Attorney (included as part of signature page hereto)
25.1	†	Form T-1 of Trustee under Indenture.
99.1	†	Form of Letter of Transmittal
99.2	†	Form of Notice of Guaranteed Delivery
99.3	†	Form of Letter to Clients
99.4	†	Form of Letter to DTC Participants

† Filed herewith.

* To be filed by amendment.

EX-1.1

Exhibit 1.1

THE OLD EVANGELINE DOWNS, L.L.C.

THE OLD EVANGELINE DOWNS CAPITAL CORP.

$123,200,000 13% Senior Secured Notes due 2010

with Contingent Interest

PURCHASE AGREEMENT

February 19, 2003

JEFFERIES & COMPANY, INC.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, California 90025

Ladies and Gentlemen:

Each of The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (the “Company”), The Old Evangeline Downs Capital Corp., a Delaware corporation and a wholly owned subsidiary of the Company (“Capital” and, together with the Company, the “Issuers”), and OED Acquisition, LLC, a Delaware limited liability company and the direct and indirect parent of the Company and Capital, respectively (“Parent”), hereby agrees with you as follows:

1. Issuance of Securities. The Issuers propose to issue and sell to Jefferies & Company, Inc. (the “Initial Purchaser”), and the Initial Purchaser proposes to purchase, $123,200,000 aggregate principal amount of the Issuers’ 13% Senior Secured Notes due 2010 with Contingent Interest, Series A (the “Series A Notes”). The Series A Notes will be issued pursuant to an indenture (the “Indenture”), to be dated as of the Closing Date (as defined below), by and among the Issuers, the Guarantors (as defined below), if any, and U.S. Bank National Association, as trustee (the “Trustee”). The Series A Notes and the Series B Notes (as defined below), each with the Guarantee (as defined below), if any, endorsed thereon, are collectively referred to herein as the “Notes.”

Any subsidiaries of either of the Issuers that has executed or that in the future executes a guarantee in accordance with the Indenture (each a “Guarantor” and collectively the “Guarantors”) will fully and unconditionally guarantee on a senior secured basis the obligations under the Notes and the Indenture (the “Guarantees”), including the payment of principal, interest, premium, if any, and Liquidated Damages (as defined in the Indenture), if any, on the Notes.

The obligations under the Notes and the Guarantees will be secured by security interests in or pledges of (the “Security Interests”) substantially all of the assets (other than certain excluded assets) of, and all of the shares of capital stock of and membership interests in (the “Collateral”), the Issuers, the Guarantors (if any) and certain of the Issuers’ respective future subsidiaries, as set forth in the Offering Circular (as defined below). Parent (with respect to the Security Interest in the membership interests in the Company), the Issuers, the Guarantors (if any) and such subsidiaries collectively are referred to herein as the “Grantors.” The security and pledge agreements, mortgages, deeds of trust, control agreements, collateral assignment

agreements, uniform commercial code financing and fixture statements and certain other collateral agreements and other documents providing for the grant of the Security Interests in the Collateral to the Trustee, as secured party (in such capacity, the “Secured Party”), for the benefit of the holders of the Notes are referred to herein as the “Security Documents.”

The Series A Notes will be offered and sold to the Initial Purchaser pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the “Act”). The Issuers have prepared a preliminary offering circular, dated February 3, 2003 (the “Preliminary Offering Circular”), and a final offering circular, dated February 19, 2003 (the “Offering Circular”), relating to the offer and sale of the Series A Notes (the “Offering”).

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

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) UNDER THE SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES BY NON-AFFILIATES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH EITHER OF THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO EITHER OF THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A) UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT

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TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER APPLICABLE JURISDICTION.

2. Agreements to Sell and Purchase. On the basis of the representations, warranties and agreements contained herein, and subject to the terms and conditions hereof, the Issuers shall issue and sell to the Initial Purchaser (and, in order to induce the Initial Purchaser to purchase the Series A Notes, the Grantors shall grant the Security Interests), and the Initial Purchaser agrees to purchase from the Issuers, $123,200,000 aggregate principal amount of Series A Notes. The purchase price for the Series A Notes shall be 92.295% of the principal amount thereof.

3. Terms of Offering. The Initial Purchaser has advised the Issuers that the Initial Purchaser will make offers to sell (the “Exempt Resales”) the Series A Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Offering Circular, as amended or supplemented, solely to (a) persons whom the Initial Purchaser reasonably believes to be “qualified institutional buyers,” as defined in Rule 144A under the Act (“QIBs”) and (b) a limited number of institutional “accredited investors,” as defined in Rule 501(a)(1), (2), (3) or (7) under the Act that make certain representations and warranties to the Initial Purchaser and the Issuers (“Accredited Investors” and, together with QIBs, “Eligible Purchasers”), which representations and warranties are set forth in the form of Accredited Investor Letter attached as Annex A hereto (the “Accredited Investor Letter”).

Holders of the Series A Notes (including subsequent transferees) will have the registration rights set forth in the registration rights agreement (the “Registration Rights Agreement”), to be executed on and dated as of the Closing Date. Pursuant to the Registration Rights Agreement, the Issuers and the Guarantors, if any, will agree, among other things, to file with the Securities and Exchange Commission (the “Commission”) under the circumstances set forth therein (a) a registration statement under the Act (the “Exchange Offer Registration Statement”) relating to, among other things, the 13% Senior Secured Notes due 2010 with Contingent Interest, Series B, of the Issuers (the “Series B Notes”), identical in all material respects to the Series A Notes, including with respect to the Guarantees thereof (if any) (except that the Series B Notes shall have been registered pursuant to such registration statement), to be offered in exchange for the Series A Notes (such offer to exchange being referred to as the “Registered Exchange Offer”), and (b) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the “Shelf Registration Statement”) relating to the resale by certain holders of the Series A Notes.

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The Series A Notes are being sold in connection with a financing related to the design, development, construction, equipping and operation by the Company of The Old Evangeline Downs racetrack and casino in Opelousas, Louisiana (the “Racino”).

The following documents are referred to herein as the “Operative Documents”: (i) this Agreement, (ii) the Indenture, (iii) the Registration Rights Agreement, (iv) the Notes (including the Guarantees (if any)), (v) the Security Documents, (vi) the Cash Collateral and Disbursement Agreement, to be dated as of the Closing Date (the “Cash Collateral and Disbursement Agreement” and, together with the Security Documents, the “Collateral Agreements”), by and among the Issuers, U.S. Bank National Association, as Trustee and Disbursement Agent, and Abacus Project Management, Inc., as Independent Construction Consultant (“Abacus”), (vii) the Standard Form of Agreement Between Owner and Contractor (the “Construction Contract”), to be entered into by and between the Company and W.G. Yates & Sons Construction Company, (viii) the Standard Form of Agreement Between Owner and Architect and the Standard Form of Architect Services: Design and Contract Administration, dated as of January 31, 2003 (the “Architect Agreement”), by and between the Company and Kitrell Garlock and Associates, AIA Ltd., d/b/a KGA Architecture, (ix) the Letter Agreement, dated as of January 7, 2003 (the “ICC Agreement” and, collectively with the Construction Contract and the Architect Agreement, the “Construction Documents”), by and among the Company and Abacus, and (x) the Amended and Restated Management Services Agreement (the “Management Agreement”), to be entered into by and among the Company, Parent and Peninsula Gaming Company, LLC (“PGC”).

In addition, following the Closing Date, the Company anticipates entering into a new $15.0 million senior secured credit facility (the “New Credit Facility”), with Foothill Capital Corporation (“Foothill”) and in connection with the New Credit Facility, the Trustee and Foothill shall enter into (and the Company shall acknowledge) an Intercreditor Agreement, substantially in the form attached as an exhibit to the Indenture, and the Company shall execute an acknowledgement with respect to such Intercreditor Agreement (the “Acknowledgement”) (such Intercreditor Agreement, collectively with the Acknowledgement, the “Intercreditor Agreement”). The New Credit Facility, together with all related security and pledge agreements executed by the Issuers or Parent in connection with the transactions contemplated thereby, collectively are referred to herein as the “Bank Documents.”

The transactions contemplated by the Operative Documents, including, without limitation, (i) the Offering and the application of the net proceeds therefrom as described in the Offering Circular, as amended or supplemented, (ii) the issuance and sale of the Notes in accordance with this Agreement, (iii) the creation, grant, recording and perfection of the Security Interests, and (iv) the design, development, construction, equipping, management and operation of the Racino collectively are referred to herein as the “Transactions.”

4. Delivery and Payment. Delivery to the Initial Purchaser of and payment for the Series A Notes shall be made at a Closing (the “Closing”) to begin at 9:00 a.m., New York City time, on February 25, 2003, (such time and date, the “Closing Date”) at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036. The Closing Date and the location of delivery of and the form of payment for the Series A Notes may be varied by agreement between the Initial Purchaser and the Issuers.

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The Issuers shall deliver to the Initial Purchaser one or more certificates representing the Series A Notes (the “Global Securities”), each in definitive form, registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), or such other names as the Initial Purchaser may request upon at least one Business Day’s notice to the Issuers, in an amount corresponding to the aggregate principal amount of the Series A Notes sold pursuant to Exempt Resales to QIBs and to Accredited Investors, respectively, in each case against payment by the Initial Purchaser of the purchase price therefore by immediately available Federal funds bank wire transfer to such bank account as the Issuers shall designate to the Initial Purchaser at least two Business Days prior to the Closing. “Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in The City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

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

5. Agreements of the Issuers. Each of the Issuers, jointly and severally, hereby agrees:

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

(b) Offering Circular. To (i) furnish the Initial Purchaser and those persons identified by the Initial Purchaser to the Issuer, without charge, as many copies of the Preliminary Offering Circular and the Offering Circular, and any amendments or supplements thereto, as the Initial Purchaser may reasonably request, and (ii) promptly prepare, upon the Initial Purchaser’s reasonable request, any amendment or supplement to the Offering Circular that the Initial Purchaser, upon the advice of legal counsel, deems may be necessary in connection with Exempt Resales (and the Issuers hereby consent to the use of the Preliminary Offering Circular and the Offering Circular, and any

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amendments and supplements thereto, by the Initial Purchaser in connection with Exempt Resales).

(c) Notice of Amendment or Supplement. Except as set forth in Section 5(d), not to amend or supplement the Offering Circular prior to the Closing Date, or at any time prior to the completion of the resale by the Initial Purchaser of all of the Series A Notes, unless the Initial Purchaser shall previously have been advised thereof and shall not have objected thereto within two Business Days after being furnished a copy thereof.

(d) Preparation of Amendments and Supplements. At any time prior to the completion of the resale by the Initial Purchaser of all of the Series A Notes, (i) if any event shall occur as a result of which, in the reasonable judgment of the Issuers or the Initial Purchaser or their respective counsel, it becomes necessary or advisable to amend or supplement the Offering Circular in order to make the statements therein, in the light of the circumstances under which they were made and when such Offering Circular is delivered to an Eligible Purchaser, not misleading, or if it is necessary to amend or supplement the Offering Circular to comply with Applicable Law (as defined below), forthwith to prepare an appropriate amendment or supplement to the Offering Circular (in form and substance reasonably satisfactory to the Initial Purchaser) so that as so amended or supplemented, (A) the Offering Circular will not include an untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made and when such Offering Circular is so delivered, not misleading, and (B) the Offering Circular will comply with Applicable Law, and (ii) if it becomes necessary or advisable to amend or supplement the Offering Circular so that the Offering Circular will contain all of the information specified in, and meet the requirements of, Rule 144A(d)(4) under the Act, forthwith to prepare an appropriate amendment or supplement to the Offering Circular (in form and substance satisfactory to the Initial Purchaser) so that the Offering Circular, as so amended or supplemented, will contain the information specified in, and meet the requirements of, such Rule.

(e) Qualification of Securities. To cooperate with the Initial Purchaser and the Initial Purchaser’s counsel in connection with the qualification of the Notes under the securities or Blue Sky laws of such jurisdictions as the Initial Purchaser may request and continue such qualification in effect so long as reasonably required for Exempt Resales, and to file such consents to service of process or other documents as may be necessary in order to effect such qualification; provided, that neither of the Issuers shall be required in connection therewith (i) to file any general consent to service of process or take any action that would subject it to service of process in suits other than those arising out of the offer and sale of the Notes in any jurisdiction in which it is not otherwise so subject, (ii) to register or qualify as a foreign corporation in any jurisdiction where it is not now so qualified or (iii) to subject itself to general taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

(f) Costs and Expenses. Whether or not any of the Transactions are consummated or this Agreement is terminated, to pay (i) all costs, expenses, fees and taxes incident to and in connection with the performance of the obligations of the Issuers

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under this Agreement, including: (A) the preparation, printing and distribution of the Preliminary Offering Circular and the Offering Circular and all amendments and supplements thereto (including, without limitation, financial statements and exhibits), and all preliminary and final Blue Sky memoranda and all other agreements, memoranda, correspondence and other documents prepared and delivered in connection herewith (including the furnishing of copies of the foregoing to the Initial Purchaser and such other persons as the Initial Purchaser may designate), (B) the printing, processing and distribution (including, without limitation, word processing and duplication costs) and delivery of each of the Operative Documents, the Bank Documents, the Intercreditor Agreement and any other agreements or documents in connection with the Transactions, (C) the preparation, issuance and delivery of the Notes, including the fees and expenses of the Trustee and the Secured Party (including fees and expenses of their respective counsel) and the cost of their respective personnel, and all costs and expenses related to the delivery of the Notes to the Initial Purchaser and pursuant to Exempt Resales, including any transfer or other taxes payable thereon, and (D) the qualification of the Notes for offer and sale under the securities or Blue Sky laws of the several states (including, without limitation, filing fees and fees and disbursements of the Initial Purchaser’s counsel relating to such registration or qualification and the preparation of memoranda related thereto); (ii) all fees and expenses of the counsel and accountants of the Issuers and their respective direct and indirect parents and subsidiaries; (iii) all expenses and listing fees in connection with the application for quotation of the Series A Notes in The PORTAL^SM Market (“PORTAL”) of the National Association of Securities Dealers, Inc. (the “NASD”); (iv) all fees and expenses (including fees and expenses of counsel) of the Issuers in connection with approval of the Notes by DTC for “book-entry” transfer; (v) all fees charged by rating agencies in connection with the rating of the Notes; (vi) the costs and charges of any transfer agent, registrar and/or depositary (including DTC); (vii) all costs and expenses of the Registered Exchange Offer, the Exchange Offer Registration Statement and any Shelf Registration Statement, as set forth in the Registration Rights Agreement; (viii) all costs and expenses in connection with the creation and perfection of the Security Interests (including, without limitation, filing and recording fees, search fees, taxes and costs of title policies); (ix) all costs and expenses of the repayment of the Company’s existing credit facility with Foothill and the release of liens thereunder (including, without limitation, filing and recording fees); (x) all fees and expenses (including reasonable fees and expenses of counsel) incurred by the Initial Purchaser in connection with the preparation, negotiation and execution of the Operative Documents, the Bank Documents and the Intercreditor Agreement and the consummation of the Transactions; and (xi) all other costs and expenses incident and necessary to the performance of the obligations of the Issuers for which provision is not otherwise made in this section.

(g) Use of Proceeds. To use the proceeds from the sale of the Series A Notes in the manner described in the Offering Circular under the caption “Use of Proceeds.”

(h) Waiver of Certain Laws. To the extent it may lawfully do so, not to insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension usury or other law, wherever enacted, now or at any time hereafter in force, that would prohibit or forgive the payment of all or any portion of the principal of

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or interest on the Notes, or that may affect the covenants or the performance of the Indenture or any of the Collateral Agreements (and, to the extent it may lawfully do so, each Issuer hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power granted to the Trustee in the Indenture or to the Secured Party in the Collateral Agreements but shall suffer and permit the execution of every such power as though no such law had been enacted).

(i) Security Interests. To do and perform all things required to be done and performed under the Collateral Agreements prior to, on and after the Closing Date, including, without limitation, all things that are required to be done and performed under the Collateral Agreements that are necessary or reasonably advisable to obtain on or prior to the Closing Date (i) all Permits (as defined below), other than any gaming or racing approvals required to be obtained by a purchaser in a foreclosure sale, necessary for the granting, perfection and enforcement of the Security Interests and for the foreclosure by the Secured Party thereon following an Event of Default (as defined in the Indenture), (ii) all termination statements, mortgage releases and other documents necessary to terminate any Liens (as defined in the Indenture) on the Collateral (other than Liens created by the Indenture, Liens created by the Collateral Agreements and Permitted Liens (as defined in the Indenture)), and (iii) subject to the terms of the Intercreditor Agreement and any Permitted Liens, a valid and perfected, first priority Security Interest with respect to each of the assets, shares of capital stock and membership interests which are to constitute the Collateral.

(j) Integration. Not to, and to ensure that no affiliate (as defined in Rule 501(b) under the Act) of either of the Issuers will, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any “security” (as defined in the Act) that would be integrated with the sale of the Series A Notes in a manner that would require the registration under the Act of the sale to the Initial Purchaser or of the offers or sales of Series A Notes pursuant to Exempt Resales.

(k) Rule 144A Information. For so long as any of the Series A Notes remain outstanding, during any period in which either of the Issuers is not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to make available, upon request, to any holder of the Notes in connection with any sale thereof and any prospective Eligible Purchaser of such Notes from such holder, the information required by Rule 144A(d)(4) under the Act.

(l) DTC. To comply with the representation letter of the Issuers to DTC relating to the approval of the Notes by DTC for “book entry” transfer.

(m) PORTAL. To use its reasonable best efforts to effect the inclusion of the Series A Notes in PORTAL and to use its reasonable best efforts to maintain the listing of the Series A Notes on PORTAL for so long as the Series A Notes are outstanding.

(n) Reporting Requirements. For so long as any of the Notes are outstanding, and whether or not required to do so by the rules and regulations of the Commission, (i)

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to furnish to the Trustee and deliver or cause to be delivered to the holders of the Notes, in accordance with the Indenture, and to deliver to the Initial Purchaser, within 15 days after either Issuer is or would have been required to file such with the Commission, (A) annual and quarterly financial statements substantially equivalent to financial statements that would have been included in reports on Forms 10-K or 10-Q if the Issuers were required to file such Forms, including in each case, together with a “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” which could be so required, and including, with respect to annual information only, a report thereon by the Issuers’ certified independent public accountants as would be so required, and (B) all information that would have been required to be contained in a filing with the SEC on

Form 8-K, if the Issuers were required to file such reports, and (ii) from and after the time the Exchange Offer Registration Statement or the Shelf Registration Statement (or other registration statement under the Act with respect to the Notes) is filed with the Commission, to file the annual, quarterly and other reports which the Issuers are required to file with the Commission at such time as are required to be filed so long as the Commission will accept such filings.

(o) No Selling Efforts or General Solicitation. Except in connection with the Registered Exchange Offer or the filing of the Shelf Registration Statement, not to, and not to authorize or permit any person acting on its behalf to, (i) distribute any offering material in connection with the offer and sale of the Series A Notes other than the Preliminary Offering Circular and the Offering Circular and any amendments and supplements to the Offering Circular prepared in compliance with Section 5(d), or (ii) solicit any offer to buy or offer to sell the Series A Notes by means of any form of general solicitation or general advertising (including, without limitation, as such terms are used in Regulation D under the Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Act.

(p) No Similar Offerings. Not to, directly or indirectly, without the prior consent of the Initial Purchaser, offer, sell, contract to sell, grant any option to purchase or otherwise dispose of (or announce any offer or sale of, contract to sell, grant of any option to purchase or other disposition of) any securities of any of the Issuers substantially similar to the Notes or the Guarantees (if any) for a period of six months after the date of the Offering Circular, except as contemplated by the Registration Rights Agreement; provided, that the foregoing will not apply to (i) the Notes or the Guarantees (if any) or (ii) borrowings (not constituting the issuance of securities) from financial institutions to the extent not prohibited by the Indenture.

(q) ERISA. At any time prior to the completion of the resale by the Initial Purchaser of the Series A Notes, to notify the Initial Purchaser promptly in writing if either of the Issuers or any of their Affiliates becomes a party in interest or a disqualified person with respect to any employee benefit plan, and to identify such plans. The terms “ERISA,” “Affiliates,” “party in interest,” “disqualified person” and “employee benefit plan” shall have the meanings as set forth in Section 6(kk).

(r) Racino Authorizations. To diligently seek the issuance of any Permit (as defined in Section 6(r)) which is necessary for the Issuers to design, construct, develop,

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own and operate the Racino, including without limitation, any necessary Permit to be issued by any Gaming Authority (as defined in Section 6(p)) or Governmental Authority (as defined in Section 6(p)).

(s) Performance of Agreements. To do and perform in all material respects all things required or necessary to be done and performed on its part under the Operative Documents on or prior to the Closing Date and to satisfy in all material respects all conditions precedent to the delivery of the Series A Notes and the Guarantees (if any) and the granting, perfection and enforcement of the Security Interests.

6. Representations and Warranties of the Issuers. Each of the Issuers, jointly and severally, represents and warrants to the Initial Purchaser that:

(a) Offering Circular. The Preliminary Offering Circular as of its date did not, and the Offering Circular, as of its date does not and as of the Closing Date will not, and each supplement or amendment thereto (if any) as of its date will not, contain any untrue statement of a material fact or omit to state any material fact (except with respect to offers and sales of Notes by the Initial Purchaser to Accredited Investors, as to which we make no representation, and except, in the case of the Preliminary Offering Circular, for pricing terms and other financial or similar terms intentionally left blank) necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The foregoing representation and warranty made in this Section 6(a) shall not apply to any statements or omissions made in reliance on and in conformity with information relating to the Initial Purchaser furnished to the Issuers by the Initial Purchaser specifically for inclusion in the Preliminary Offering Circular or the Offering Circular. The parties hereto acknowledge that for purposes of this Agreement (including this Section 6(a) and Section 9) the only information furnished to the Issuers by the Initial Purchaser specifically for inclusion in Preliminary Offering Circular or the Offering Circular is the information set forth (i) on the cover page of the Offering Circular with respect to the price of the Notes, (ii) in the third paragraph on page 117 of the Offering Circular concerning offering the Notes for resale by the Initial Purchaser, (iii) in the fourth paragraph on page 117 of the Offering Circular concerning market-making by the Initial Purchaser, (iv) in the fifth paragraph on page 117 of the Offering Circular concerning settlement of the Notes on the fifth business day following pricing, (v) in the sixth paragraph on page 117, continuing on to page 118, of the Offering Circular concerning stabilization by the Initial Purchaser and (vi) in the first full paragraph on page 118 of the Offering Circular concerning the affiliation of the Initial Purchaser and its affiliates with the Issuers and their affiliates (such information described in the immediately preceding clauses (i) through (vi) of this Section 6(a), the “Furnished Information”). Each of the Preliminary Offering Circular and the Offering Circular, as of their respective dates contained, and the Offering Circular, as of the Closing Date and as amended or supplemented, will contain, all of the information specified in, and meet the requirements of, Rule 144A(d)(4) under the Act.

(b) 144A Eligibility. There are no securities of the same class (within the meaning of Rule 144A) as the Notes of either of the Issuers registered under the Exchange Act or listed on a national securities exchange registered under Section 6 of the

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Exchange Act or quoted in a United States automated inter-dealer quotation system. The Series A Notes are eligible for resale pursuant to Rule 144A under the Act.

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

(d) Subsidiaries. Immediately following the Closing, (i) Capital will have no subsidiaries, (ii) the only subsidiary of the Company will be Capital, (iii) the Company will directly own 100% of the outstanding shares of capital stock of Capital, free and clear of all Liens, except for Liens created by the Indenture, Liens created by the Collateral Agreements and Permitted Liens, and (iv) Parent will directly own 100% of the outstanding membership interests in the Company, free and clear of all Liens, except for Liens created by the Indenture, Liens created by the Collateral Agreements and Permitted Liens, and will directly own 100% of the outstanding membership interests in OED Acquisition II, LLC. Except as disclosed in the Offering Circular, there are no outstanding (i) securities convertible into or exchangeable for any capital stock of or any membership interests in, as the case may be, either of the Issuers, (ii) options, warrants or other rights to purchase or subscribe for any capital stock of or any membership interests in, or any securities convertible into or exchangeable for any capital stock of or any membership interests in, as the case may be, either of the Issuers or (iii) contracts, commitments, agreements, understandings, arrangements, undertakings, rights, calls or claims of any kind relating to the issuance of any capital stock of or any membership interests in, as the case may be, either of the Issuers, any such convertible or exchangeable securities or any such options, warrants or rights. Except as set forth above, immediately following the Closing, neither of the Issuers or Parent will directly or indirectly own any capital stock of or other equity interest in any person.

(e) Capitalization. All of the outstanding shares of capital stock of or membership interests in, as the case may be, each of the Issuers have been duly authorized, are validly issued, fully paid and nonassessable, and were not issued in violation of, and are not subject to, any preemptive or similar rights. The table under the

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caption “Capitalization” in the Offering Circular (including the footnotes thereto) sets forth, as of December 31, 2002, (i) the actual capitalization of the Issuers, on a consolidated basis, and (ii) the pro forma cash and cash equivalents and capitalization of the Issuers, on a consolidated basis, after giving effect to the Offering and the application of the net proceeds therefrom. Immediately following the Closing, except as set forth in such table, neither of the Issuers will have any liabilities, absolute, accrued, contingent or otherwise other than: (i) liabilities that are reflected in the Company Financial Statements (as defined below), (ii) liabilities set forth on Schedule 6(e) hereto or (iii) liabilities incurred subsequent to December 31, 2002, in the ordinary course of business, that would not, singly or in the aggregate, have a Material Adverse Effect.

(f) No Other Registration Rights. Except for this Agreement and the Registration Rights Agreement, there are no contracts, commitments, agreements, arrangements, understandings or undertakings of any kind to which either of the Issuers is a party, or by which either of them is bound, granting to any person the right (i) to require either of the Issuers to file a registration statement under the Act with respect to any securities of either of the Issuers or requiring either of the Issuers to include such securities with the Notes registered pursuant to any registration statement, or (ii) to purchase or offer to purchase any securities of either of the Issuers or any of their respective affiliates.

(g) Power and Authority. Each of the Issuers has all requisite power and authority to execute and deliver, and to perform its obligations under, the Operative Documents to which it is a party and to consummate the Transactions.

(h) Authorization of this Agreement. This Agreement and the Transactions contemplated hereby (including, without limitation, the Offering and the issuance and sale of the Notes in accordance with this Agreement) have been duly authorized by each of the Issuers, and this Agreement has been validly executed and delivered by, and is the legal, valid and binding obligation of, each of the Issuers and Parent, enforceable against each of the Issuers and Parent in accordance with its terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally, (ii) any rights of acceleration and the availability of equitable remedies and general principles of equity (whether considered in a proceeding in equity or at law) and (iii) with respect to rights to indemnity or contribution thereunder, by Federal and state securities laws and public policy considerations.

(i) Authorization of Indenture. The Indenture and the Transactions contemplated thereby have been duly authorized by each of the Issuers and, on the Closing Date, the Indenture will have been validly executed and delivered by, and will be the legal, valid and binding obligation of, each of the Issuers, enforceable against each of the Issuers in accordance with its terms, except that (i) such enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) any rights of acceleration and the availability of equitable remedies may be subject to general principles of equity (whether considered in a proceeding in equity or at law). On the Closing Date, the Indenture will conform to the requirements of the Trust

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Indenture Act of 1939, as amended (the “TIA”), applicable to an indenture that is required to be qualified under the TIA.

(j) Authorization of Registration Rights Agreement. The Registration Rights Agreement and the Transactions contemplated thereby have been duly authorized by each of the Issuers and, on the Closing Date, the Registration Rights Agreement will have been validly executed and delivered by, and will be the legal, valid and binding obligation of, each of the Issuers, enforceable against each of the Issuers in accordance with its terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency or similar laws, (ii) any rights of acceleration and the availability of equitable remedies and general principles of equity (whether considered in a proceeding in equity or at law) and (iii) with respect to rights to indemnity or contribution thereunder, by Federal and state securities laws and public policy considerations.

(k) Authorization of Series A Notes. The Series A Notes have been duly authorized by each of the Issuers for issuance and sale to the Initial Purchaser pursuant to this Agreement and, on the Closing Date, will have been validly executed, authenticated, issued and delivered by the Issuers in accordance with the terms of this Agreement and the Indenture. When the Series A Notes have been issued and executed by the Issuers and authenticated by the Trustee in accordance with the terms of the Indenture and delivered to and paid for by the Initial Purchaser in accordance with the terms of this Agreement, the Series A Notes will be legal, valid and binding obligations of each of the Issuers, entitled to the benefits of the Indenture and enforceable against each of the Issuers in accordance with their terms, except to the extent that (i) such enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) any rights of acceleration and the availability of equitable remedies may be subject to general principles of equity (whether considered in a proceeding in equity or at law). Upon and following delivery to the Initial Purchaser, the Notes will rank on a parity with all senior Indebtedness (as defined in the Indenture) of each of the Issuers that is outstanding on the date hereof or that may be incurred hereafter and senior to all other Indebtedness of each of the Issuers that is outstanding on the date hereof or that may be incurred hereafter; provided, that pursuant to the Intercreditor Agreement, the Lien on the Collateral securing the New Credit Facility will be senior to the Lien on the Collateral securing the Notes and the Guarantees (if any).

(l) Authorization of Series B Notes. The Series B Notes have been duly authorized by each of the Issuers and, when issued in the Registered Exchange Offer, (A) will have been validly executed, authenticated, issued and delivered in accordance with the terms of the Indenture, the Registration Rights Agreement and the Registered Exchange Offer and (B) will be legal, valid and binding obligations of each of the Issuers, entitled to the benefits of the Indenture and enforceable against each of the Issuers in accordance with their terms, except to the extent that (i) such enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) any rights of acceleration and the availability of equitable remedies may be subject to general principles of equity (whether considered in a proceeding in equity or at law).

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(m) Authorization of Collateral Agreements. Each of the Collateral Agreements and the Transactions contemplated thereby (including, without limitation, the creation, grant, recording and perfection of the Security Interests, the execution and filing of financing statements and the payment of any fees and taxes in connection therewith) have been duly authorized by each of the Issuers and, on the Closing Date, each of the Collateral Agreements will have been validly executed and delivered by, and will be the legal, valid and binding obligation of, each of the Issuers, enforceable against each of the Issuers in accordance with its terms, except that (i) such enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) any rights of acceleration and the availability of equitable remedies may be subject to general principles of equity (whether considered in a proceeding in equity or at law).

(n) Authorization of the Other Operative Documents. Each of the Construction Documents and the Management Agreement and the Transactions contemplated thereby have been duly authorized by the Company and, on the Closing Date, each of the Construction Documents and the Management Agreement will have been validly executed and delivered by, and will be the legal, valid and binding obligation of, the Company, enforceable against the Company in accordance with its terms, except that (i) such enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) any rights of acceleration and the availability of equitable remedies may be subject to general principles of equity (whether considered in a proceeding in equity or at law). On the Closing Date, the Management Agreement will be the legal, valid and binding obligation of PGC, enforceable against PGC in accordance with its terms, except that (i) such enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) any rights of acceleration and the availability of equitable remedies may be subject to general principles of equity (whether considered in a proceeding in equity or at law).

(o) Actions in Connection with Operative Documents. Each of the Operative Documents, as executed and delivered, and each of the Transactions described in the Offering Circular conforms in all material respects to the description thereof in the Offering Circular.

(p) No Violation. The Company is not in violation of its certificate of formation or operating agreement (the “Company Charter Documents”), Capital is not in violation of its charter or bylaws (the “Capital Charter Documents” and, collectively with the Company Charter Documents, the “Charter Documents”). Neither of the Issuers is (i) in violation of any Federal, state, municipal, county, parish, local or foreign statute, law, ordinance or standard applicable to it, or any judgment, decree, rule, regulation or order applicable to it (including, without limitation, the Louisiana Pari-Mutuel Live Racing Facility Economic Redevelopment and Gaming Control Act, the Louisiana Gaming Control Law and the Video Draw Poker Device Control Law) in each case including the rules and regulations promulgated thereunder (collectively, “Applicable Law”), of any government, governmental or regulatory agency or body (including, without limitation, the Louisiana Gaming Control Board, the Louisiana State Racing Commission or other

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applicable gaming or racing authority) (each, a “Gaming Authority”), court, arbitrator or self-regulatory organization, domestic or foreign (each, a “Governmental Authority”) or (ii) in breach of or default under any bond, debenture, note or other evidence of indebtedness, indenture, mortgage, deed of trust, lease or any other agreement or instrument to which any such person is a party or by which any of them or any of their respective property is bound (collectively, “Applicable Agreements”), other than, in the case of each of the immediately preceding clauses (i) and (ii), violations, breaches or defaults that would not, singly or in the aggregate, have a Material Adverse Effect. There exists no condition that, with the passage of time or otherwise, would reasonably be expected to (x) constitute a violation of (A) the Charter Documents or (B) Applicable Laws or (y) constitute a breach of or default under any Applicable Agreement or (z) result in the imposition of any penalty or the acceleration of any indebtedness, other than, in the case of the immediately preceding clauses (x)(B),(y) and (z), such violations, breaches, penalties or defaults that would not, singly or in the aggregate, have a Material Adverse Effect. All Applicable Agreements are in full force and effect with respect to the Issuers, and are legal, valid and binding obligations of the Issuers.

(q) No Conflict. None of the execution, delivery or performance of any of the Operative Documents, nor the compliance with the terms and provisions thereof, nor the consummation of any of the Transactions, shall conflict with, violate, constitute a breach of or a default (with the passage of time or otherwise) under, result in the imposition of a Lien on any assets of (including capital stock owned by the Company in Capital) or any capital stock of or membership interests in either of the Issuers (except for Liens created by the Indenture, Liens created by the Collateral Agreements and Permitted Liens), or result in an acceleration of indebtedness under or pursuant to, (i) the Charter Documents, (ii) any Applicable Agreement, or (iii) (assuming the accuracy of the representations and warranties of the Initial Purchaser in Section 8 of this Agreement and, if any Exempt Resales are made to Accredited Investors, the accuracy of the representations and warranties of such Accredited Investors contained in the Accredited Investor Letters executed by such Accredited Investors) any Applicable Law, other than, in the case of the immediately preceding clauses (ii) and (iii), such violations, breaches or defaults that would not, singly or in the aggregate, have a Material Adverse Effect. After giving effect to the Transactions, no Default or Event of Default (each, as defined in the Indenture) will exist.

(r) Permits. Except as disclosed in the Offering Circular and assuming the accuracy of the representations and warranties of the Initial Purchaser in Section 8 of this Agreement and, if any Exempt Resales are made to Accredited Investors, the accuracy of the representations and warranties of such Accredited Investors contained in the Accredited Investor Letters executed by such Accredited Investors, no permit, certificate, authorization, approval, consent, license or order of, or filing, registration, declaration or qualification with, any Governmental Authority or any other person (collectively, “Permits”) is required to own, lease, use and operate the properties and assets and to conduct and carry on the businesses described in the Offering Circular, or in connection with, or as a condition to, the execution, delivery or performance of any of the Operative Documents, the compliance with the terms and provisions thereof or the consummation of any of the Transactions, other than (i) such Permits as have been made or obtained on

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or prior to the Closing Date, which Permits are in full force and effect on the Closing Date, (ii) as may be required for Exempt Resales under the securities or blue sky laws of the various jurisdictions in which the Notes are being offered by the Initial Purchaser, (iii) an order declaring effective a registration statement filed by the Issuers with the Commission pursuant to the Act pursuant to the Registration Rights Agreement, and (iv) such Permits, the failure of which to make or obtain would not, singly or in the aggregate, have a Material Adverse Effect.

(s) No Proceedings. Except as disclosed in the Offering Circular and other than ongoing general licensing investigations conducted in the ordinary course of business, there is no action, claim, suit, demand, hearing, notice of violation or deficiency, or proceeding (including, without limitation, any investigation or partial proceeding, such as a deposition), domestic or foreign (collectively, “Proceedings”), pending or, to the knowledge of the Issuers, threatened, either (i) in connection with, or that seeks to restrain, enjoin or prevent the consummation of, or that otherwise objects to, any of the Operative Documents or any of the Transactions, or (ii) that could, singly or in the aggregate, have a Material Adverse Effect. Neither of the Issuers is subject to any judgment, order, decree, rule or regulation of any Governmental Authority that could, singly or in the aggregate, have a Material Adverse Effect. No injunction or order has been issued and no Proceeding is pending or, to the knowledge of the Issuers, threatened that (i) asserts that the offer, sale and delivery of the Series A Notes to the Initial Purchaser pursuant to this Agreement or the initial resale of the Series A Notes by the Initial Purchaser in the manner contemplated by this Agreement is subject to the registration requirements of the Act, or (ii) would prevent or suspend the issuance or sale of the Notes, including the Exempt Resales, or the use of the Preliminary Offering Circular, the Offering Circular, or any amendment or supplement thereto, in any jurisdiction.

(t) Regulated Persons. Except as set forth on Schedule 6(t) hereto, each of the Issuers’, respective directors, officers, key personnel, partners, members and persons holding a five percent or greater equity or economic interest in the Issuers (each of such persons, a “Regulated Person” and, collectively, the “Regulated Persons”) has all Permits (including, without limitation, Permits with respect to engaging in gaming or racing operations) necessary or advisable to own, lease, use and operate the properties and assets and to conduct and carry on the businesses described in the Offering Circular, other than such Permits the failure of which to have would not, singly or in the aggregate, have a Material Adverse Effect (a “Material Permit”). All Material Permits are valid and in full force and effect. Each of the Regulated Persons is in compliance with the terms and conditions of all Permits (including, without limitation, Permits with respect to engaging in gaming or racing operations) necessary or advisable to own, lease, use and operate the properties and assets and to conduct and carry on the businesses described in the Offering Circular, other than where such failure to be in compliance would not, singly or in the aggregate, have a Material Adverse Effect. None of the execution, delivery or performance of any of the Operative Documents, nor the compliance with the terms and provisions thereof, nor the consummation of any of the Transactions, will allow or result in, and no event has occurred which allows or results in, or after notice or lapse of time would allow or result in, the imposition of any material penalty under, or the revocation

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or termination of, any Material Permit or any material impairment of the rights of the holder of any Material Permit. None of the Issuers has received any notice from any issuer, and the Issuers have no actual knowledge, that any issuer is considering limiting, conditioning, suspending, modifying, revoking or not renewing any Material Permit.

(u) No Investigations of Regulated Persons. To the knowledge of the Issuers, except as disclosed in the Offering Circular and except as set forth on Schedule 6(u) hereto, no Gaming Authority is investigating any Regulated Person, other than ongoing general licensing investigations conducted in the ordinary course of business.

(v) Title to Assets. Immediately following the Closing, each of the Issuers (i) will have good and marketable title, free and clear of all Liens (other than Liens created by the Indenture, Liens created by the Collateral Agreements and Permitted Liens), to all property and assets described in the Offering Circular as being or to be owned by it (including, without limitation, the real property constituting the site of the Racino) and (ii) will hold a valid leasehold interest with respect to each such lease and will remain in possession of the real property leased pursuant to those leases until the date the lease expires in accordance with its terms. Capital has no assets, other than assets received in payment for its capital stock.

(w) Sufficiency and Condition of Assets. The assets of each of the Issuers include all of the assets and properties necessary or required in, or otherwise material to, the conduct of the businesses of each of them as currently conducted and as proposed to be conducted (as described in the Offering Circular), and such assets are in working condition, except where the failure of such assets to be in working condition would not, singly or in the aggregate, have a Material Adverse Effect. Without limiting the foregoing, each of the properties of the Issuers (including, without limitation, all buildings, structures, improvements and fixtures located thereon, thereunder, thereover or therein, and all appurtenances thereto and other aspects thereof) is otherwise suitable, sufficient, adequate and appropriate in all respects (including physical, structural, operational, legal, practical and otherwise) for its current and proposed use, operation and occupancy, except, in each such case, for such failures to meet such standards as would not, singly or in the aggregate, have a Material Adverse Effect.

(x) Insurance. Except as set forth on Schedule 6(x) hereto, each of the Issuers maintains reasonably adequate insurance covering its properties, operations, personnel and businesses against losses and risks in accordance with customary industry practice. All such insurance is outstanding and duly in force.

(y) Real Property. No condemnation, eminent domain, or similar proceeding exists, is pending or, to the knowledge of the Issuers, is threatened, with respect to or that could affect any real properties owned by either of the Issuers, except for such proceedings as would not, singly or in the aggregate, have a Material Adverse Effect. No real property owned by either of the Issuers is subject to any sales contract, option, right of first refusal or similar agreement or arrangement with any third party. There is no real property currently under contract or subject to an option in favor of any of the Issuers,

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except for real property which the failure of the Issuers to acquire, would not, singly or in the aggregate, have a Material Adverse Effect.

(z) Related Party Transactions. Except as disclosed in the Offering Circular, there are no related party transactions that would be required to be disclosed in the Offering Circular if the Offering Circular were a prospectus included in a registration statement on Form S-1 filed under the Act.

(aa) Security Interests. Upon execution and delivery of the Collateral Agreements and the issuance of the Notes, the Collateral Agreements will create, in favor of the Secured Party, for the benefit of the holders of the Notes, a legal, valid and enforceable security interest in (subject to Permitted Liens), all of the right, title and interest of the Grantors in the Collateral covered by the Collateral Agreements and the proceeds thereof. As of the Closing Date, the Security Interests will constitute first priority security interests in (subject to Permitted Liens), such Collateral (other than motor vehicles and insurance policies). As of the Closing Date, the Collateral will be subject to no Liens other than Permitted Liens.

(bb) Taxes. All material tax returns required to be filed by either of the Issuers in any jurisdiction (including foreign jurisdictions) have been filed and, when filed, all such returns were accurate in all material respects, and all taxes, assessments, fees and other charges (including, without limitation, withholding taxes, penalties and interest) due or claimed to be due from either of the Issuers have been paid, other than those being contested in good faith by appropriate proceedings, or those that are currently payable without penalty or interest and, in each case, for which an adequate reserve or accrual has been established on the books and records of the Issuers, as applicable, in accordance with generally accepted accounting principles of the United States, consistently applied (“GAAP”). There are no actual or proposed additional tax assessments for any tax period against either of the Issuers that would, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books and records of the Issuers, as applicable, in respect of any tax liability for any tax periods not finally determined are adequate to meet any assessments of tax or re-assessments of additional tax for any such period.

(cc) Intellectual Property. The Issuers own, possess or are licensed under, and have the right to use, all trademarks, service marks, trade names and other intellectual property (collectively, “Intellectual Property”) currently used in and material to the conduct of their business, free and clear of all Liens, other than Permitted Liens. To the knowledge of the Issuers, no claims have been asserted by any person challenging the use of any such Intellectual Property by any of the Issuers and there is no valid basis for any such claim, and the use of such Intellectual Property by the Issuers will not infringe on the Intellectual Property rights of any other person.

(dd) Accounting Controls. Each of the Issuers maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) material transactions are executed in accordance with management’s general or specific authorization, (ii) material transactions are recorded as necessary to permit preparation of

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financial statements in conformity with GAAP, and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any material differences.

(ee) Financial Statements. The audited historical financial statements and related notes of the Company contained in the Offering Circular (the “Company Financial Statements”) present fairly the financial position, results of operations and cash flows of the Company, as of the respective dates and for the respective periods to which they apply, and have been prepared in accordance with GAAP consistently applied throughout the periods involved and the requirements of Regulation S-X that would be applicable if the Offering Circular were a prospectus included in a registration statement on Form S-1 filed under the Act (the “S-X Requirements”). The selected historical financial data included in the Offering Circular for the Company has been prepared on a basis consistent with that of the Company Financial Statements and present fairly the financial position and results of operations of the Company, as of the respective dates and for the respective periods indicated. Deloitte & Touche, LLP are independent public accountants with respect to the Company.

(ff) No Material Adverse Change. Subsequent to the respective dates as of which information is given in the Offering Circular, except as disclosed in the Offering Circular, (i) neither of the Issuers has incurred any liabilities, direct or contingent, that are material, singly or in the aggregate, to any of them, or has entered into any material transactions not in the ordinary course of business, (ii) there has not been any material decrease in the capital stock or membership interests, as the case may be, or any material increase in long-term indebtedness or any material increase in short-term indebtedness of any of the Issuers, or any payment of or declaration to pay any dividends or any other distribution with respect to any of the Issuers, and (iii) there has not been any material adverse change in the properties, business, prospects, operations, earnings, assets, liabilities or condition (financial or otherwise) of the Issuers taken as a whole (each of clauses (i) and (iii), a “Material Adverse Change”). To the actual knowledge of the Issuers after reasonable inquiry, there is no event that is reasonably likely to occur, which if it were to occur, could, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect, except such events that have been disclosed in the Offering Circular.

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

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(hh) Solvency. Each of the Issuers is incurring its respective indebtedness under the Series A Notes for proper purposes and in good faith. Immediately before and after giving effect to the issuance of the Series A Notes, (i) the assets of the Issuers, considered as a whole and as a going concern, at a fair valuation, will exceed the sum of their debts, taken as a whole; (ii) each of the Issuers will have adequate capital with which to conduct the business it is presently conducting and presently anticipates conducting; and (iii) the Company reasonably believes it will not intend to incur, and does not believe and reasonably should not believe that it will incur debts beyond its ability to pay as those debts become due. Neither Issuer is aware of any reason why it would be inappropriate to consider, for purposes of clause (i) above, the Issuers as a going concern. For purposes of this paragraph, “debts” includes contingent and unliquidated debts.

(ii) No Solicitation. Neither of the Issuers nor any of their affiliates nor anyone acting on their behalf has (i) taken, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the Notes or to facilitate the sale or resale of any of the Notes, (ii) sold, bid for, purchased, or paid anyone any compensation for soliciting purchases of, any of the Notes, or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of either of the Issuers.

(jj) No Registration. Without limiting clause (q) above, no registration under the Act, and no qualification of the Indenture under the TIA is required for the sale of the Series A Notes to the Initial Purchaser as contemplated hereby or for the Exempt Resales, assuming (i) that the purchasers in the Exempt Resales are Eligible Purchasers, (ii) the accuracy of the Initial Purchaser’s representations contained in Section 8 of this Agreement and (iii) if any Exempt Resales are made to Accredited Investors, the accuracy of the representations and warranties of such Accredited Investors contained in the Accredited Investor Letters executed by such Accredited Investors. No form of general solicitation or general advertising (including, without limitation, as such terms are defined in Regulation D under the Act) was used by either of the Issuers or any of their respective affiliates or any of their respective representatives in connection with the offer and sale of any of the Series A Notes or in connection with Exempt Resales. No securities of the same class as the Series A Notes have been offered, issued or sold by either of the Issuers or any of their respective affiliates within the six-month period immediately prior to the date hereof.

(kk) ERISA. Neither of the Issuers nor any of their respective “Affiliates” maintains a plan that is intended to qualify under Section 401(a) of the Code, or is a “party in interest” or a “disqualified person” with respect to any employee benefit plans. No condition exists or event or transaction has occurred in connection with any employee benefit plan that could result in either of the Issuers or any such “Affiliate” incurring any liability, fine or penalty that could, singly or in the aggregate, have a Material Adverse Effect. Neither of the Issuers nor any trade or business under common control with the Issuers (for purposes of Section 414(c) of the Code) maintains any employee pension

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benefit plan that is subject to Title IV of the Employee Retirement Income Act of 1974, as amended, or the rules and regulations promulgated thereunder (“ERISA”).

The terms “employee benefit plan,” “employee pension benefit plan,” and “party in interest” shall have the meanings assigned to such terms in Section 3 of ERISA. The term “Affiliate” shall have the meaning assigned to such term in Section 407(d)(7) of ERISA, and the term “disqualified person” shall have the meaning assigned to such term in section 4975 of the Internal Revenue Code of 1986, as amended, or the rules, regulations and published interpretations promulgated thereunder (collectively the “Code”).

(ll) Investment Company Act and Other Federal Regulations. None of the Issuers has taken, and none of them will take, any action that may cause this Agreement or the issuance of the Series A Notes to violate or result in a violation of Section 7 of the Exchange Act (including, without limitation, Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System). Neither of the Issuers is subject to regulation, or shall become subject to regulation upon the consummation of the Offering and sale of the Series A Notes and the application of the net proceeds thereof as described in the Offering Circular, under the Investment Company Act of 1940, as amended, and the rules and regulations and interpretations promulgated thereunder.

(mm) No Brokers. Neither of the Issuers has dealt with any broker, finder, commission agent or other person (other than the Initial Purchaser) in connection with the Offering and neither of the Issuers is under any obligation to pay any broker’s fee or commission in connection with the Offering (other than commissions and fees to the Initial Purchaser).

(nn) No Labor Disputes. Except as would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect, neither of the Issuers is engaged in any unfair labor practice. There is (i) no unfair labor practice complaint or other proceeding pending or, to the knowledge of the Issuers, threatened against either of the Issuers before the National Labor Relations Board or any state, local or foreign labor relations board or any industrial tribunal, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending or, to the knowledge of the Issuers, threatened, (ii) no strike, labor dispute, slowdown or stoppage pending or, to the knowledge of the Issuers, threatened against either of the Issuers, and (iii) no union representation question existing with respect to the employees of either of the Issuers, and, to the knowledge of the Issuers, no union organizing activities are taking place except, in the case of each of clauses (i), (ii) and (iii) above, as would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(oo) Environmental Laws. Except as disclosed in the Offering Circular or as otherwise would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect or otherwise require disclosure in the Offering Circular, (i) neither of the Issuers has been or is in violation of any Federal, state or local laws and regulations relating to pollution or protection of human health or the environment,

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including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of toxic or hazardous substances, materials or wastes, or petroleum and petroleum products (“Materials of Environmental Concern”), or otherwise relating to the protection of human health and safety, or the use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, “Environmental Laws”), which violation includes, but is not limited to, noncompliance with, or lack of, any permits or other environmental authorizations; (ii) to the knowledge of the Issuers, there are no circumstances, either past, present or that are reasonably foreseeable, that may lead to any such violation in the future; (iii) neither of the Issuers has received any communication (written or oral), whether from a Governmental Authority or otherwise, alleging any such violation; (iv) there is no pending or, to the knowledge of the Issuers, threatened claim, action, investigation, notice (written or oral) or other Proceeding by any person or entity alleging potential liability of either of the Issuers (or against any person or entity for whose acts or omissions either of the Issuers is or may reasonably be expected to be liable, either contractually or by operation of law) for investigatory, cleanup, or other response costs, or natural resources or property damages, or personal injuries, attorney’s fees or penalties relating to (A) the presence, or release into the environment, of any Materials of Environmental Concern at any location, or (B) circumstances forming the basis of any violation or potential violation, of any Environmental Law (collectively, “Environmental Claims”); and (v) to the knowledge of the Issuers, there are no past or present actions, activities, circumstances, conditions, events or incidents that could reasonably be expected to form the basis of any Environmental Claim.

Each of the Issuers, as appropriate, has conducted environmental investigations of, and have reviewed reasonably available information regarding, the business, properties and operations of each of the Issuers, and of other properties within the vicinity of their business, properties and operations, as appropriate for the circumstances of each such property and operation; on the basis of such reviews, investigations and inquiries, the Issuers have reasonably concluded that any costs and liabilities associated with such matters would not have, singularly or in the aggregate, a Material Adverse Effect or otherwise require disclosure in the Offering Circular.

(pp) Market Data. All statistical and market and industry related data included in the Offering Circular are based on or derived from sources which the Issuers believe to be reliable and accurate.

(qq) Representations and Warranties. Each certificate signed by any officer of any of the Issuers or Parent and delivered to the Initial Purchaser or counsel for the Initial Purchaser in connection with the Transactions shall be deemed to be a representation and warranty by such Issuer to the Initial Purchaser as to the matters covered thereby.

(rr) Plans and Specifications. The Initial Purchaser has been furnished with a copy of the plans and specifications for the design, development and construction of the Racino and related expenditures. The anticipated schedule of construction and opening of the casino and race track portion of the Racino is as set forth in the Offering Circular. The anticipated cost of the Racino (including interest, legal, architectural, engineering,

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planning, zoning and other similar costs) is not reasonably expected to exceed the amounts for such costs set forth under the caption “Use of Proceeds” in the Offering Circular. In addition, each of the other amounts set forth under the caption “Use of Proceeds” in the Offering Circular is based upon reasonable assumptions as to all matters material to the estimates set forth therein and are not reasonably expected by the Company to exceed the amounts set forth for such items.

(ss) Construction Disbursement Budget and Construction Schedules. The Issuers have prepared the Construction Disbursement Budget (as defined in the Cash Collateral and Disbursement Agreement) and the Construction Schedules (as defined in the Cash Collateral and Disbursement Agreement). The construction of the project in accordance with the Plans (as defined in the Cash Collateral and Disbursement Agreement), the Construction Disbursement Budget and the Construction Schedules, each as in effect on the Closing Date, is reasonably expected to result in the construction of the Minimum Facilities (as defined in the Cash Collateral and Disbursement Agreement) on or prior to the Operating Deadline (as defined in the Cash Collateral and Disbursement Agreement).

7. Representations and Warranties of Parent. Parent represents and warrants to the Initial Purchaser that:

(a) Due Organization; Good Standing. Parent has been duly organized, is validly existing and is in good standing under the laws of the State of Delaware and is duly qualified or licensed to do business and is in good standing as a foreign limited liability company, authorized to do business in each jurisdiction in which the nature of its business or the ownership, leasing, use or operation of its properties and assets requires such qualification or licensing.

(b) Ownership of the Company. Immediately following the Closing, Parent will directly own 100% of the outstanding membership interests in the Company free and clear of all Liens, except for Liens created by the Indenture and the Collateral Agreements.

(c) Power and Authority. Parent has all requisite power and authority to execute and deliver, and to perform its obligations under, this Agreement and the Parent Pledge Agreement (such agreements, together, the “Parent Operative Documents”) and to consummate the Transactions contemplated thereby.

(d) Authorization of the Operative Documents. Each of the Parent Operative Documents and the Transactions contemplated thereby to which Parent is a party have been duly authorized by Parent, and each of the Parent Operative Documents has been validly executed and delivered by, and is the legal, valid and binding obligation of, Parent, enforceable against Parent in accordance with its terms, except that (i) such enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally, (ii) any rights of acceleration and the availability of equitable remedies and general principles of equity (whether considered in a proceeding

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in equity or at law) and (iii) with respect to rights to indemnity or contribution thereunder, by Federal and state securities laws and public policy considerations.

(e) No Violation. Parent is not in violation of its certificate of formation or operating agreement (the “Parent Charter Documents”). Parent is not (i) in violation of any Applicable Law, other than violations that would not, singly or in the aggregate, have a material adverse effect on (A) the ability of Parent to perform its obligations in all material respects under any of the Parent Operative Documents, (B) the enforceability of the Parent Pledge Agreement or the attachment, perfection or priority of any of the Security Interests in the membership interests of the Company intended to be created thereby or (C) the validity of any of the Parent Operative Documents or the consummation of any of the Transactions contemplated thereby (each, a “Parent Material Adverse Effect”) or (ii) in breach of or default under any Applicable Agreement, other than breaches or defaults that would not, singly or in the aggregate, have a Parent Material Adverse Effect. There exists no condition that, with the passage of time or otherwise, would reasonably be expected to (x) constitute a violation of (A) the Parent Charter Documents or (B) Applicable Laws or (y) constitute a breach of or default under any Applicable Agreement or (z) result in the imposition of any penalty or the acceleration of any indebtedness, other than, in the case of the immediately preceding clauses (x)(B), (y) and (z), such violations, breaches, penalties or defaults that would not, singly or in the aggregate, have a Parent Material Adverse Effect.

(f) No Conflict. None of the execution, delivery or performance by Parent of the Parent Operative Documents, nor the compliance by Parent with the terms and provisions thereof, nor the consummation by Parent of the Transactions contemplated thereby shall conflict with, violate, constitute a breach of or a default (with the passage of time or otherwise) under, result in the imposition of a Lien on any assets of, including without limitation the membership interests in the Company owned by, Parent (except for Liens created by the Indenture, Liens created by the Collateral Agreements and Permitted Liens), or result in an acceleration of indebtedness under or pursuant to (i) the Parent Charter Documents, (ii) any Applicable Agreement or (iii) (assuming the accuracy of the representations and warranties of the Initial Purchaser in Section 8 of this Agreement) any Applicable Law, other than, in the case of the immediately preceding clauses (ii) and (iii), such violations, breaches or defaults that would not, singly or in the aggregate, have a Parent Material Adverse Effect.

(g) Permits. Except as disclosed in the Offering Circular and assuming the accuracy of the representations and warranties of the Initial Purchaser in Section 8 of this Agreement, no Permit is required in connection with, or as a condition to, the execution, delivery or performance by Parent of the Parent Operative Documents, the compliance by Parent with the terms and provisions thereof or the consummation by Parent of any of the Transactions contemplated thereby, other than (i) such Permits as have been made or obtained on or prior to the Closing Date, which Permits are in full force and effect on the Closing Date, and (ii) such Permits, the failure of which to make or obtain would not, singly or in the aggregate, have a Parent Material Adverse Effect.

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(h) No Proceedings. There is no Proceeding, pending or, to the knowledge of Parent, threatened, either (i) in connection with, or that seeks to restrain, enjoin or prevent the consummation of, or that otherwise objects to, any of the Parent Operative Documents or any of the Transactions contemplated thereby, or (ii) that could, singly or in the aggregate, have a Parent Material Adverse Effect. Parent is not subject to any judgment, order, decree, rule or regulation of any Governmental Authority that could, singly or in the aggregate, have a Parent Material Adverse Effect.

8. Representations and Warranties of the Initial Purchaser. The Initial Purchaser represents and warrants to the Issuers that:

(a) QIB or Accredited Investor. It is either a QIB or an Accredited Investor, in either case, with such knowledge and experience in financial and business matters as is necessary in order to evaluate the merits and risks of an investment in the Series A Notes.

(b) Eligible Purchasers. It (i) is not acquiring the Series A Notes with a view to any distribution thereof that would violate the Act or the securities laws of any state of the United States or any other applicable jurisdiction, and (ii) will be soliciting offers for the Series A Notes only from, and will be reoffering and reselling the Series A Notes only to, (i) persons in the United States whom it reasonably believes to be QIBs in reliance on the exemption from the registration requirements of the Act provided by Rule 144A under the Act and (ii) a limited number of Accredited Investors that execute and deliver to the Issuers and the Initial Purchaser an Accredited Investor Letter.

(c) No General Solicitation. No form of general solicitation or general advertising within the meaning of Rule 502(c) under the Act or in any manner involving a public offering within the meaning of Section 4(2) of the Act has been or will be used by the Initial Purchaser or any of its representatives in connection with the offer and sale of any of the Series A Notes.

(d) Representations of Eligible Purchasers. In connection with the Exempt Resales, it will solicit offers to buy the Series A Notes only from, and will offer and sell the Series A Notes only to, (x) persons whom it reasonably believes to be QIBs and (y) a limited number of Accredited Investors that execute and deliver to the Issuers and the Initial Purchaser an Accredited Investor Letter, in each case, who, in purchasing such Series A Notes, will be deemed to have represented and agreed that: (i) such Eligible Purchaser understands that such Series A Notes have not been registered under the Act or any other applicable securities law; the Series A Notes purchased by such (ii) Eligible Purchaser may be offered, sold or otherwise transferred prior to the date which is two years (or such other period that may hereafter be provided under Rule 144(k) under the Act as permitting resales of restricted securities by non-affiliates without restriction) after the later of the original issue date of the Series A Notes and the last date on which either of the Issuers or any affiliate of the Issuers was the owner of the Series A Notes (or any predecessor of the Series A Notes) only (A) to either of the Issuers, (B) pursuant to a registration statement which has been declared effective under the Act, (C) for so long as the Series A Notes are eligible for resale pursuant to Rule 144A under the Act, to a person it reasonably believes is a QIB that purchases for its own account or for the

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account of a QIB to whom notice is given that the transfer is being made in reliance on Rule 144A under the Act, (D) to an institutional “accredited investor” within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Act that is acquiring the Series A Notes for its own account or for the account of such an institutional “accredited investor” for investment purposes and not with a view to, or for offer or sale in connection with, any distribution in violation of the Act or (E) pursuant to another available exemption from the registration requirements of the Act, subject (1) in each of the foregoing clauses (A) through (E) to any requirement of law that the disposition of its property or the property of such investor account or accounts be at all times within its or their control, (2) to the Issuers’ and the Trustee’s right prior to any such offer, sale or transfer pursuant to clause (D) or (E) above to require the delivery of an opinion of counsel, certifications and/or other information satisfactory to each of them, and in each of the foregoing cases, a certificate of transfer in the form appearing on the Series A Notes is completed and delivered by the transferor to the Trustee and (3) in each of the foregoing clauses (A) through (E) in accordance with applicable securities laws of any U.S. state or any other applicable jurisdiction; and (iii) such Eligible Purchaser will deliver to each person to whom the Series A Notes are transferred a notice substantially to the effect of the foregoing.

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

9. Indemnification.

(a) Indemnification of Initial Purchaser. Each of the Issuers shall, jointly and severally, without limitation as to time, indemnify and hold harmless the Initial Purchaser and each person, if any, who controls (within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) the Initial Purchaser (any of such persons being hereinafter referred to as a “controlling person”), and the respective officers, directors, partners, employees, representatives and agents of the Initial Purchaser and any such controlling person (collectively with the Initial Purchaser, the “Purchaser Indemnified Parties”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and reasonable attorneys’ fees) and expenses (including, without limitation, costs and expenses incurred in connection with investigating, preparing, pursuing or defending against any of the foregoing) (collectively, “Losses”), as incurred, directly or indirectly caused by, related to, based upon, arising out of or in connection with (i) any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Circular or the Offering Circular (or any amendment or supplement thereto) or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) any act, omission, transaction or event contemplated by the Operative Documents or the Bank Documents or the Acknowledgement; provided, that neither of the Issuers nor any Guarantor shall be liable under the indemnity provided in this Section 9(a) to any Purchaser Indemnified Party for any Losses that (A) result solely from an untrue statement of a material fact contained in, or the omission of a material fact from, any Preliminary Offering Circular, which untrue

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statement or omission was completely corrected in the Offering Circular (as then amended or supplemented) if it shall have been determined by a court of competent jurisdiction by final and nonappealable judgment that (1) such Purchaser Indemnified Party sold the Notes to the person alleging such Loss and failed to send or give, at or prior to the written confirmation of such sale, a copy of the Offering Circular (as then amended or supplemented), if required by law to have so delivered it, and (2) the Issuers had previously furnished copies of the corrected Offering Circular to such Purchaser Indemnified Party within a reasonable amount of time prior to such sale or such confirmation, and (3) the corrected Offering Circular, if delivered, would have been a complete defense against the person asserting such Loss; or (B) are based on an untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with the Furnished Information. The Issuers shall not be liable under this Section 9 for any settlement of any claim or action (other than settlements permitted by Section 9(b)(3)) effected without their prior written consent, which consent shall not be unreasonably withheld. The Issuers shall notify the Initial Purchaser promptly of the institution, threat or assertion of any Proceeding of which either of the Issuers is aware in connection with the matters addressed by this Agreement which involves either of the Issuers, or any of the Purchaser Indemnified Parties.

(b) Actions Against Parties; Notification. (1) If any Proceeding shall be brought or asserted against any person entitled to indemnification hereunder (an “Indemnified Party”), such Indemnified Party shall give prompt written notice to the party or parties from which such indemnification is sought (the “Indemnifying Parties” and each, an “Indemnifying Party”); provided, that the failure to so notify the Indemnifying Parties shall not relieve any of the Indemnifying Parties from any obligation or liability except to the extent (but only to the extent) that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal) that such Indemnifying Party has been prejudiced materially by such failure.

(2) The Indemnifying Parties shall have the right, exercisable by giving written notice to an Indemnified Party, within 20 Business Days after receipt of written notice from such Indemnified Party of such Proceeding, to assume, at their expense, the defense of any such Proceeding; provided, that an Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or parties unless: (i) the Indemnifying Parties have agreed to pay such fees and expenses; (ii) the Indemnifying Parties shall have failed promptly to assume the defense of such Proceeding or shall have failed to employ counsel reasonably satisfactory to such Indemnified Party; or (iii) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and one or more Indemnifying Parties (or any affiliates or controlling persons of any of the Indemnifying Parties), and such Indemnified Party shall have been advised by counsel that there may be one or more defenses available to such Indemnified Party that are in addition to, or in conflict with, those defenses available to the indemnifying party or such affiliate or controlling person (in which case, if such Indemnified Party notifies the Indemnifying Parties in writing that it elects to employ separate counsel at the expense of the Indemnifying Parties, the Indemnifying Parties shall not have the right to assume the defense thereof and the reasonable fees and expenses of such counsel shall be at the expense of the Indemnifying Parties; it being understood, however, that, the Indemnifying Parties shall not, in connection with any one such Proceeding or separate but substantially similar or related Proceedings in the same jurisdiction,

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arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for such Indemnified Party).

(3) None of the Issuers, the Initial Purchaser, their respective controlling persons nor any of their respective officers, directors, partners, employees, representatives and agents shall consent to entry of any judgment in or enter into any settlement of any pending or threatened Proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Party is a party thereto) unless such judgment or settlement includes, as an unconditional term thereof, the giving by the claimant or plaintiff to each Indemnified Party of a release, in form and substance satisfactory to the Indemnified Party, from all Losses that may arise from such Proceeding or the subject matter thereof (whether or not any Indemnified Party is a party thereto).

(c) Indemnification of Issuers. The Initial Purchaser agrees to indemnify and hold harmless each of the Issuers and each of their controlling persons and the respective members, managers, officers, directors, partners, employees, representatives and agents of the Issuers and any such controlling person to the same extent as the foregoing indemnity from the Issuers to each of the Purchaser Indemnified Parties stated in Section 9(a), but only with respect to Losses that are caused by an untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with the Furnished Information. The Initial Purchaser shall not be liable under this Section 9(c) for any settlement of any claim or action (other than settlements permitted by Section 9(b)(3)) effected without its prior written consent, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, any liability of the Initial Purchaser hereunder shall be limited to an amount not to exceed the excess (such excess, the “Aggregate Amount”) of (i) the aggregate gross proceeds received by the Initial Purchaser from the sale of the Series A Notes over (ii) the sum of (A) the aggregate price at which such Initial Purchaser purchased the Series A Notes from the Issuers and (B) the amount of any Losses that the Purchaser Indemnified Parties otherwise have been required to pay by reason of such untrue or alleged untrue statement of such omission or alleged omission.

(d) Contribution. If the indemnification provided for in this Section 9 is unavailable to an Indemnified Party or is insufficient to hold such Indemnified Party harmless for any Losses in respect of which this Section 9 would otherwise apply by its terms (other than by reason of exceptions provided in this Section 9), then each indemnifying party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuers, on the one hand, and the Initial Purchaser, on the other hand, from the Offering or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Issuers, on the one hand, and the Initial Purchaser, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. The relative benefits received by the Issuers, on the one hand, and the Initial Purchaser, on the other hand, shall be deemed to be in the same proportion as the total net proceeds from the Offering (before deducting expenses) received by the Issuers, on the one hand, and the total discounts and commissions received by the Initial Purchaser, on the other hand, bear to the total price of the

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Series A Notes in Exempt Resales as set forth on the cover page of the Offering Circular. The relative fault of the Issuers, on the one hand, and the Initial Purchaser, on the other hand, shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Issuers, on the one hand, or the Initial Purchaser, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by an Indemnified Party as a result of any Losses shall be deemed to include any legal or other fees or expenses incurred by such party in connection with any Proceeding, to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 9 was available to such party.

Each party hereto agrees that it would not be just and equitable if contribution pursuant to this Section 9(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 9(d), the Initial Purchaser shall not be required to contribute, in the aggregate, any amount in excess of the Aggregate Amount. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(e) Nonexclusive Remedy. The indemnity and contribution agreements contained in this Section 9 are in addition to any liability that any of the Indemnifying Parties may otherwise have to the Indemnified Parties, and do not limit in any way rights or remedies which may otherwise be available at law or in equity.

10. Conditions.

(a) Conditions to Obligations of Initial Purchaser. The obligations of the Initial Purchaser to purchase the Series A Notes under this Agreement are subject to the satisfaction or waiver of each of the following conditions:

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

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(ii) Contents of Offering Circular. The Preliminary Offering Circular as of its date did not, and the Offering Circular, as of its date did not and, without giving effect to any amendment or supplement thereto, as of the Closing Date does not, and each supplement or amendment thereto as of its date did not, contain any untrue statement of a material fact or omit to state any material fact (except with respect to offers and sales of Notes by the Initial Purchaser to Accredited Investors, as to which we make no representation, and except, in the case of the Preliminary Offering Circular, for pricing terms, other financial terms intentionally left blank and other changes in the structure of the transaction described in the Preliminary Offering Circular which arose after the date of the Preliminary Offering Circular) necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, that the foregoing shall not apply to any statements or omissions made by the Issuers in reliance on and in conformity with the Furnished Information.

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

(iv) No Injunction. No injunction, restraining order or order of any nature by a Governmental Authority shall have been issued as of the Closing Date that would prevent or materially interfere with the issuance and sale of the Series A Notes or the consummation of any of the other Transactions; and no stop order suspending the qualification or exemption from qualification of any of the Series A Notes in any jurisdiction shall have been issued and no Proceeding for that purpose shall have been commenced or, to the knowledge of the Issuers, be pending or contemplated as of the Closing Date.

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

(vi) No Material Adverse Change. Since the date as of which information is given in the Offering Circular (without giving effect to any amendment thereto or supplement thereto), there shall not have been any Material Adverse Change.

(vii) PORTAL. The Notes shall have (A) been designated PORTAL securities in accordance with the rules and regulations adopted by the NASD relating to trading in the PORTAL market, and (B) received a rating of “B-” and “Caa1” from Standard & Poor’s Corporation and Moody’s Investors Services, Inc., respectively.

(viii) Maintenance of Rating. As of the Closing Date, (i) there shall not have occurred any downgrading, suspension or withdrawal of, nor shall any notice have been

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

(ix) Officers’, Secretary’s and Solvency Certificates. The Initial Purchaser shall have received on the Closing Date:

(A) certificates dated the Closing Date, signed by (1) the Chief Executive Officer, and (2) the principal financial or accounting officer of each of the Issuers, on behalf of the Issuers, confirming the matters set forth in paragraphs (i), (ii), (iv), (v), (vi), (viii) and (xv) of this Section 10(a) and of Parent, on behalf of Parent, confirming the matters set forth in paragraph (i) of this Section 10(a) with respect to Parent,

(B) a certificate, dated the Closing Date, signed by the (1) Chief Executive Officer and (2) the principal financial or accounting officer of each of the Issuers, on behalf of the Issuers, stating that the industry, statistical and market-related data included in the Offering Circular has been reviewed by such persons and, to the knowledge of such persons, subject to the risks and limitations described in the Preliminary Offering Circular and the Offering Circular, is true and accurate in all material respects and is based on or derived from sources which the Issuers believe to be reliable and accurate, which certificate shall be in form and substance reasonably satisfactory to counsel for the Initial Purchaser and may specifically reference certain industry, statistical and market-related data contained in the Offering Circular,

(C) a certificate, dated the Closing Date, signed by the Secretary or Secretaries of each of the Issuers and Parent, certifying such matters as the Initial Purchaser may reasonably request, and

(D) a certificate of solvency, dated the Closing Date, signed by the principal financial or accounting officer of the Issuers substantially in the form previously approved by the Initial Purchaser.

(x) Opinions of Counsel. The Initial Purchaser shall have received, a favorable opinion (in form and substance satisfactory to the Initial Purchaser and counsel to the Initial Purchaser), dated the Closing Date, of each of the following:

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(A) Mayer, Brown, Rowe & Maw, special counsel to the Issuers and Parent, containing opinions substantially to the effect of the opinions set forth in Exhibit A hereto;

(B) Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P., special Louisiana counsel to the Issuers and Parent, containing opinions substantially to the effect of the opinions set forth in Exhibit B hereto;

(C) McGlinchey Stafford PLLC, special Louisiana gaming counsel to the Issuers and Parent, containing opinions substantially to the effect of the opinions set forth in Exhibit C hereto; and

(D) Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Initial Purchaser.

(xi) Accountants’ Comfort Letters. The Initial Purchaser shall have received from Deloitte & Touche, LLP, independent public accountants with respect to the Company:

(A) a customary comfort letter, dated as of the date of the Offering Circular, in form and substance satisfactory to the Initial Purchaser, containing the information and statements of the type ordinarily included in accountants’ “comfort letters,” with respect to the financial statements of the Company and certain financial information with respect to the Company contained in the Offering Circular, and

(B) a customary “bring down” comfort letter, dated the Closing Date, in form and substance satisfactory to the Initial Purchaser, to the effect that Deloitte & Touche, LLP reaffirms the statements made in its letter furnished pursuant to clause (A) above, except that the specified date referred to shall be a date not more than five days prior to the Closing Date.

(xii) Execution and Delivery of Operative Documents. The Operative Documents shall have been executed and delivered by all parties thereto, and the Initial Purchaser shall have received a fully executed original of each Operative Document.

(xiii) Permits. All Permits required to be obtained from, and all notices or declarations required to be made with, any Gaming Authority or other Governmental Authority to permit the issuance and sale of the Series A Notes in accordance with the terms of, and in the aggregate principal amount set forth in, this Agreement shall have been obtained and made, in each case free of any conditions other than those set forth in this Agreement.

(xiv) Additional Operative Documents. The Initial Purchaser or its counsel shall have received copies of all opinions, certificates, letters and other documents delivered under or in connection with the Transactions consummated on or prior to the Closing Date.

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(xv) Consummation of Transactions. Each of the Transactions to be consummated on or prior to the Closing Date shall have been consummated on terms that conform in all material respects to the description thereof in the Offering Circular. The terms of each of the Operative Documents shall conform in all material respects to the description thereof in the Offering Circular.

(xvi) Collateral Agreements. The Issuers shall have furnished to the Initial Purchaser the Collateral Agreements duly executed by the respective Grantors party thereto, together with:

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

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

(C) contemplated requests for information and lien search results, listing all effective financing statements filed as of a recent date in Louisiana and Delaware that name any of the Issuers, the Guarantors (if any) or the Grantors as debtor, together with copies of such financing statements;

(D) copies of duly executed payoff letters, UCC-3 termination statements, mortgage releases, intellectual property releases and other collateral releases and terminations, each in form and substance reasonably satisfactory to the Initial Purchaser evidencing the release of any Liens on any of the Collateral (other than Liens created by the Indenture and the Collateral Agreements or Permitted Liens), and each such payoff letter, release and termination shall be in full force and effect.

(E) the original membership interest certificates and stock certificates pledged to the Secured Party pursuant to the Collateral Agreements, together with undated stock powers or endorsements duly executed in blank in connection therewith;

(F) mortgages and fixture filings in form and substance approved by the Initial Purchaser, to be recorded on or about the Closing Date in all jurisdictions that may be deemed necessary or desirable in order to perfect the liens created by the Collateral Agreements, covering the Collateral, which mortgages and fixture filings shall be so recorded on or about the Closing Date;

(G) irrevocable commitment by a title insurance company approved by the Initial Purchaser in the Initial Purchaser’s reasonable discretion to issue one or

33

more lender’s policies of title insurance insuring the liens created by the Collateral Agreements, subject only to those title matters and exceptions approved by the Initial Purchaser, together with fully executed reinsurance agreements in form and substance approved by the Initial Purchaser, providing for reinsurance in the amounts required by the Initial Purchaser with title insurance companies approved by the Initial Purchaser; and

(H) any other documents required to be delivered to the Secured Party pursuant to the Collateral Agreements and reasonable evidence that all other actions necessary to perfect and protect the Liens created by the Collateral Agreements have been taken.

(xvii) Certain Real Estate Documents. The Issuers shall have furnished to the Initial Purchaser the following:

(A) an original title policy (the “Title Policy”) reasonably acceptable to the Initial Purchaser, issued by Lawyer’s Title Company, covering the property identified in policy order number G41-0002764, which excludes any reference to exceptions 16 or 23 listed on the pro forma for the Title Policy (the “Old Exceptions”) and includes a reference instead to that certain Waiver and Cancellation of Servitude and Relocation of Servitude, dated as of February 14, 2003 (the “Waiver Agreement”), by and among Robert J. Nickolson, Sr., Gerard Perron and Loretta Veillon Perron, and the Company;

(B) a revised draft of that certain Survey, dated as of January 28, 2003, prepared by Aucoin & Associates, Inc., and identified as project number 02-0113(E), showing that the servitudes referenced in the Old Exceptions have been released and showing the location of the new servitudes as described in the Waiver Agreement; and

(C) a copy of the reinsurance agreement between Lawyer’s Title Company and the reinsurer, pursuant to which the reinsurer is responsible for $55,000,000 of the liability under the Title Policy.

(xviii) Insurance.

(A) The Issuers, at their sole cost and expense, shall have in full force and effect the insurance coverage of the types and minimum limits required by the Indenture, including but not limited to the following coverages:

(1) Property Insurance. Insurance with respect to the improvements and building equipment (if any) against loss customarily included under so called “All Risk” policies including but not limited to, vandalism and malicious mischief, and such other perils as is required to be obtained under the Indenture.

(2) Builder’s All-Risk Insurance. Builder’s “All-Risk” insurance in an amount equal to not less than the full insurable value of the Racino against such risks (including so called “All Risk” perils coverage to agreed limits as the Initial

34

Purchaser may reasonably request, in form and substance reasonably acceptable to Initial Purchaser) and otherwise in satisfaction of the Company’s requirements to provide insurance under the Construction Contract.

(3) Liability Insurance. Commercial general liability insurance and umbrella liability coverage including, but not limited to, personal injury, bodily injury, death, accident and property damage.

(B) A certificate of insurance with respect to all of the above-mentioned insurance policies has been delivered to the Initial Purchaser prior to the Closing. All policies shall name the Initial Purchaser as a mortgagee or loss payee and shall provide that all proceeds therefrom shall be payable in accordance with the Indenture.

(xix) Additional Documents. Counsel to the Initial Purchaser shall have been furnished with such documents as they may reasonably require for the purpose of enabling them to review or pass upon the matters referred to in this Section 10 and in order to evidence the accuracy, completeness and satisfaction of the representations, warranties and conditions contained in this Agreement.

(b) Conditions to the Issuers’ Obligations. The obligations of the Issuers to sell the Series A Notes under this Agreement are subject to the satisfaction or waiver of each of the following conditions:

(i) Payment. The Initial Purchaser shall have delivered payment to the Issuers for the Series A Notes pursuant to Sections 2 and 4 of this Agreement.

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

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

(iv) Execution and Delivery of Operative Documents. The Operative Documents shall have been executed and delivered by all parties thereto (other than the Issuers) and the Issuers shall have received a fully executed original of each Operative Document. On or prior to the Closing Date, the Initial Purchaser and each other party to the Operative Documents (other than the Issuers) shall have performed or complied in all material respects with all of the agreements and satisfied in all material respects all conditions on their respective parts to be performed, complied with or satisfied pursuant to the Operative Documents.

35

(v) Accredited Investor Side Letter. The Initial Purchaser shall have delivered to the Issuers a letter, dated as of the Closing Date, listing as of such date any and all Accredited Investors to whom the Initial Purchaser will make Exempt Resales of the Notes and the aggregate principal amount of Notes to be sold by the Initial Purchaser to each such Accredited Investor in such Exempt Resales.

11. Termination. This Agreement shall become effective upon the execution and delivery of this Agreement by the parties hereto. The Initial Purchaser may terminate this Agreement at any time prior to the Closing Date by written notice to the Issuers if any of the following has occurred:

(a) Material Adverse Effect. Since the date as of which information is given in the Offering Circular, any Material Adverse Effect or any Material Adverse Change that could, in the Initial Purchaser’s judgment, be reasonably expected to (i) make it impracticable or inadvisable to proceed with the Offering or delivery of the Series A Notes, including the Exempt Resales, on the terms and in the manner contemplated in the Offering Circular or (ii) materially impair the investment quality of the Notes.

(b) Failure to Satisfy Conditions. The failure of any of the Issuers or Parent to satisfy the conditions contained in Section 10(a) on or prior to the Closing Date.

(c) Outbreak of Hostilities. Any outbreak or escalation of hostilities, any declaration of war by the United States, any other calamity, emergency or crisis, any material adverse change in economic conditions in or the financial markets of the United States or elsewhere or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which could make it, in the Initial Purchaser’s judgment, impracticable or inadvisable to market or proceed with the offering or delivery of the Series A Notes on the terms and in the manner contemplated in the Offering Circular or to enforce contracts for the sale of any of the Series A Notes.

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

(e) Enactment of Adverse Law. The enactment, publication, decree or other promulgation after the date hereof of any Applicable Law that in the Initial Purchaser’s opinion materially and adversely affects, or could materially and adversely affect, the properties, business, prospects, operations, earnings, assets, liabilities or condition (financial or otherwise) of either of the Issuers.

(f) Downgrade of Securities. On or after the date hereof, (i) there shall not have occurred any downgrading, suspension or withdrawal of, nor shall any notice have been given of any potential or intended downgrading, suspension or withdrawal of, or of any review (or of any potential or intended review) for a possible change that does not indicate the direction of the possible change in, any rating of any of the Issuers or

36

Guarantors (if any) or any securities of any of the Issuers or Guarantors (if any) (including, without limitation, the placing of any of the foregoing ratings on credit watch with negative or developing implications or under review with an uncertain direction) by any “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change, nor shall any notice have been given of any potential or intended change, in the outlook for any rating of any of the Issuers or Guarantors (if any) or any securities of any of Issuers or Guarantors (if any) (by any such rating organization and (iii) no such rating organization shall have given notice that it has assigned (or is considering assigning) a lower rating to the Notes than that on which the Notes were marketed.

(g) Banking Moratorium. The declaration of a banking moratorium by any Governmental Authority; or the taking of any action by any Governmental Authority after the date hereof in respect of its monetary or fiscal affairs that in the Initial Purchaser’s opinion could reasonably be expected to have a material adverse effect on the financial markets in the United States or elsewhere.

The respective indemnities, contribution and expense reimbursement provisions and agreements, and representations, warranties and other statements of the Issuers and Parent and the Initial Purchaser set forth in or made pursuant to this Agreement shall remain operative and in full force and effect, and will survive, regardless of (i) any investigation, or statement as to the results thereof, made by or on behalf of the Initial Purchaser or any of the Issuers or Parent, or any of their respective officers, directors, members or managers or any of their respective controlling persons, (ii) acceptance of the Notes, and payment for them hereunder, and (iii) any termination of this Agreement (including, without limitation, any termination pursuant to this Section 11). Without limiting the foregoing, notwithstanding any termination of this Agreement, (i) the Issuers shall be and shall remain jointly and severally liable (x) for all expenses that they have agreed to pay pursuant to Section 5(f), and (y) for their obligations pursuant to Section 9, and (ii) Initial Purchaser shall be and shall remain liable for its obligations pursuant to Section 9.

12. Miscellaneous.

(a) Notices. Notices given pursuant to any provision of this Agreement shall be addressed as follows: (i) if to any of the Issuers, to The Old Evangeline Downs, L.L.C., P.O. Box 90270, Lafayette, Louisiana 80509-0270, facsimile number (702) 247-6822, Attention: Michael S. Luzich, with a copy to Peninsula Gaming Partners, LLC, 7137 Mission Hills Drive, Las Vegas, Nevada 89113, facsimile number (702) 247-6822, Attention: Michael S. Luzich, and another copy to Mayer, Brown, Rowe & Maw, 1675 Broadway, New York, New York 10019, facsimile number (212) 262-1910, Attention: Nazim Zilkha, Esq., and (ii) if to the Initial Purchaser, to Jefferies & Company, Inc., 11100 Santa Monica Boulevard, 10th Floor, Los Angeles, California 90025, Attention: Lloyd Feller, Esq., with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, California 90071, facsimile number (213) 687-5600, Attention: Nicholas P. Saggese, Esq. (provided, that any notice pursuant to Section 9 hereof will be mailed, delivered, telegraphed or sent by facsimile and confirmed to the party to be notified and its counsel), or in any case to such other address as the person to be notified may have requested in writing.

37

(b) Successors and Assigns. This Agreement has been and is made solely for the benefit of and shall be binding upon each of the Issuers, the Initial Purchaser and, to the extent provided in Section 9, and to the extent provided in Section 7, Parent the controlling persons, officers, directors, partners, employees, representatives and agents referred to in Section 9, and their respective heirs, executors, administrators, successors and assigns, all as and to the extent provided in this Agreement, and no other person shall acquire or have any right under or by virtue of this Agreement. The term “successors and assigns” shall not include a purchaser of any of the Series A Notes from the Initial Purchaser merely because of such purchase. Notwithstanding the foregoing, it is expressly understood and agreed that each purchaser who purchases Series A Notes from the Initial Purchaser is intended to be a beneficiary of the Issuers’ covenants contained in the Registration Rights Agreement to the same extent as if the Notes were sold and those covenants were made directly to such purchaser by each of the Issuers, and each such purchaser shall have the right to take action against each of the Issuers to enforce, and obtain damages for any breach of, those covenants.

(c) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED, AND THE RIGHTS OF THE PARTIES SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES. EACH OF THE ISSUERS AND PARENT HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE ISSUERS AND PARENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDINGS BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE ISSUERS AND PARENT IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH ISSUER OR SUCH GUARANTOR, AS THE CASE MAY BE, AT THE ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE INITIAL PURCHASER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OF THE ISSUERS OR PARENT IN ANY OTHER JURISDICTION.

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

38

(e) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. When a reference is made in this Agreement to a Section, paragraph, subparagraph, Schedule or Exhibit, such reference shall mean a Section, paragraph, subparagraph, Schedule or Exhibit to this Agreement unless otherwise indicated.

(f) Interpretation. The words “include,” “includes,” and “including” when used in this Agreement shall be deemed in each case to be followed by the words “without limitation.” The phrases “the date of this Agreement,” “the date hereof,” and terms of similar import, unless the context otherwise requires, shall be deemed to refer to February 19, 2003. The words “hereof,” “herein,” “herewith,” “hereby” and “hereunder” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement. The phrase “to the knowledge of the Issuers or Parent” means the actual knowledge, after due inquiry, of any of the members, managers, directors or officers of any of the Issuers or Parent, respectively, or any of their respective controlling persons. For purposes of this Agreement and the representations, warranties, covenants and agreements herein, the Initial Purchaser shall not be deemed to be an affiliate of PGC, Parent or the Issuers. Unless the context otherwise requires, defined terms shall include the singular and plural and the conjunctive and disjunctive forms of the terms defined.

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

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

[signature pages follow]

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Please confirm that the foregoing correctly sets forth the agreement among the Issuers, Parent and the Initial Purchaser.

Very truly yours,
The Old Evangeline Downs, L.L.C.
By:	/s/    M. BRENT STEVENS
Name :	M. Brent Stevens
Title :	Chief Executive Officer
The Old Evangeline Downs Capital Corp.
By:	/s/    M. BRENT STEVENS
Name:	M. Brent Stevens
Title:	Chief Executive Officer
OED Acquisition, LLC
By:	/s/    M. BRENT STEVENS
Name:	M. Brent Stevens
Title:	Chief Executive Officer

40

ACCEPTED AND AGREED TO:
Jefferies & Company, Inc.
By:	/s/    CHRIS KANOFF
Name:	Chris Kanoff
Title:	Executive Vice President

41

EX-2.1

Exhibit 2.1

Execution Copy

Purchase Agreement

by and among

Peninsula Gaming Partners, L.L.C.,

a Delaware Limited Liability Company

as Buyer,

BIM3 Investments,

a Louisiana Partnership

as Seller

and

The Old Evangeline Downs, L.C.,

a Louisiana Limited Liability Company

Dated as of

June 27, 2001

Relating to the Acquisition of

A Membership Interest in

The Old Evangeline Downs, L.C.

TABLE OF CONTENTS

SECTION			PAGE
1.	PURCHASE AND SALE OF THE MEMBERSHIP INTEREST		1
	a.	Sale and Price	1
	b.	Sales Price Allocation	2
	c.	Net Working Capital Purchase Price Adjustment	2
	d.	Deposit and Escrow	3
2.	CLOSING		3
3.	REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY		3
	a.	Authority	4
	b.	No Conflicts; Consents	4
	c.	Seller’s Membership Interest	4
	d.	Organization and Standing; Books and Records	5
	e.	Capitalization of the Company	5
	f.	Equity Interests	5
	g.	Financial Statements	6
	h.	Taxes	6
	i.	Assets Other than Real Property Interests	7
	j.	Real Property	8
	k.	Intellectual Property	8
	l.	Contracts	9
	m.	Litigation	12
	n.	Benefit Plans	12
	o.	Absence of Changes or Events	16
	p.	Compliance with Applicable Laws	17
	q.	Employee and Labor Matters	17
	r.	Customer Accounts Receivable	17
	s.	Licenses; Permits	18
	t.	Transactions with Affiliates	18
	u.	Effect of Transaction	18
	v.	Private Offering of Seller’s Membership Interest	18
	w.	Environmental Matters	18
	x.	Transaction Information	20
	y.	Brokerage and Finder’s Fees	20
	z.	Utilities Access	21
	aa.	Public Improvements	21
	bb.	Maintenance of Insurance	21
4.	COVENANTS OF SELLER AND THE COMPANY		22
	a.	Access	22

i

	b.	Ordinary Conduct	22
	c.	Confidentiality	23
	d.	Assignment of Confidentiality Agreements	23
	e.	Resignation	24
	f.	Exclusive Dealing	24
	g.	Notice	24
	h.	Certain Licenses and Permits	24
	i.	Disclosure Schedules, Updated Disclosures; Breaches	25
5.	REPRESENTATIONS AND WARRANTIES OF BUYER		25
	a.	Authority	25
	b.	No Conflicts; Consents	26
	c.	Securities Act	26
	d.	Actions and Proceedings, etc	26
6.	COVENANTS OF BUYER		26
	a.	Confidentiality	26
	b.	Notice	27
	c.	Disclosure Schedules, Updated Disclosures; Breaches	27
	d.	Pursuit of Regulatory Approval and Financing	27
	e.	No Flip	28
7.	MUTUAL COVENANTS		28
	a.	Cooperation	28
	b.	Confidentiality of the Existence of the Agreement	29
	c.	Publicity	29
	d.	Commercial Efforts	29
	e.	Records	29
	f.	Management Transition	29
8.	CONDITIONS TO CLOSING		30
	a.	Buyer’s Obligation	30
	b.	Seller’s Obligation	32
	c.	Frustration of Closing Conditions	33
9.	FURTHER ASSURANCES		33
10.	INDEMNIFICATION		33
	a.	Indemnification by Seller	33
	b.	No Exhaustion of Remedies; Exclusive Remedy	33
	c.	Indemnification by Buyer	34
	d.	Exclusive Remedy	34
	e.	Procedures Relating to Indemnification	35
	f.	Other Claims	36

ii

	g.	Survival of Representations and Warranties; Floor and Cap	36
	h.	Liability Limitations	37
	i.	Tax Treatment of Indemnification Payments	37
11.	TAX MATTERS		37
	(i)	Taxable Period Ending on or Before Closing Date	37
	(ii)	Taxable Period Beginning on or Before Closing Date and Ending After Closing Date	38
	(iii)	Franchise Tax	38
	(iv)	Consistent Preparation of Tax Returns	38
	(v)	Cooperation	38
	(vi)	Interest	39
12.	ASSIGNMENT		39
13.	NO THIRD-PARTY BENEFICIARIES		39
14.	TERMINATION		39
15.	EXPENSES		40
16.	ATTORNEY FEES		41
17.	AMENDMENTS		41
18.	NOTICES		41
19.	INTERPRETATION; EXHIBITS AND SCHEDULES; CERTAIN DEFINITIONS		42
20.	COUNTERPARTS		43
21.	ENTIRE AGREEMENT		43
22.	FEES		43
23.	SEVERABILITY		43
24.	GOVERNING LAW		43
25.	JOINT DRAFTING		43

iii

INDEX OF DEFINED TERMS

“Affiliate”	24
“Agreement”	1
“Applicable Laws”	17
“Balance Sheet”	4
“Benefit Program or Agreement”	12
“Buyer Disclosure Schedule”	27
“Buyer Indemnified Parties”	34
“Buyer Indemnified Party”	34
“Buyer”	1
“Casino Opening Date”	1
“Claim”	34
“Closing Date”	2
“Closing”	2
“Code”	5
“Company Properties”	7
“Company Property”	7
“Company”	1
“Confidential Information”	24
“Contracts”	11
“Control”	24
“Disclosure Schedule”	2
“Encumbrances”	7
“Environmental Assessment Audit”	21
“Environmental Laws”	18
“Environmental Reports”	20
“ERISA”	12
“Excepted Claims”	39
“Existing Mortgage Notes”	1
“Financial Statements”	5
“GAAP”	5
“Governmental Authority”	5
“Governmental Entity”	31
“Hazardous Materials”	19
“HBPA Lawsuit”	11
“Immediate Family”	24
“including”	45
“Income Statement”	5
“Indemnified Party”	37
“Intellectual Property”	8
“knowledge”	45
“Leased Property”	7
“Licenses”	18

iv

“Liens”	3
“Material Adverse Effect”	45
Old Evangeline Downs Casino”	1
“Organizational Documents”	3
“Permits”	19
“Permitted Liens”	7
“person”	45
“Plan”	12
“Pre-Closing Tax”	40
“Proceeding”	41
“Purchase Note”	2
“Purchase Price”	1
“Records”	30
“Regulatory Approval”	3
“Related Parties”	30
“Release”	19
“Securities Act”	18
“Seller Indemnified Parties”	36
“Seller Indemnified Party”	36
“Seller”	1
“Seller’s Membership Interest”	1
“Tax Items”	5
“Tax Return”	5
“Tax”	5
“Taxes”	5
“Third Party Claim”	37

v

PURCHASE AGREEMENT

This Purchase Agreement (this “Agreement”) dated as of June 27, 2001, is by and among BIM3 Investments, a Louisiana partnership (“Seller”), The Old Evangeline Downs, L.C., a Louisiana limited liability company (the “Company”) and Peninsula Gaming Partners, LLC, a Delaware limited liability company (the “Buyer”).

WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, Seller’s 50% membership interest (the “Seller’s Membership Interest”) in the Company and Seller’s undivided one-half (1/2) interest in and to each of the following described notes (the “Existing Mortgage Notes”):

a. That certain promissory note in the original principal amount of Twelve Million Two Hundred Ninety-Three Thousand Seven Hundred Twenty-Two and 60/100 Dollars ($12,293,722.60), dated August 31, 1988, executed by Racetrack at Evangeline Downs, Inc., in favor of Louisiana Savings Association, Inc.; and

b. That certain promissory note in the original principal amount of One Million Three Hundred Thirteen Thousand Four Hundred Eighty-Five and 30/100 Dollars ($1,313,485.30), dated August 31, 1988, executed by Racetrack at Evangeline Downs, Inc., in favor of Louisiana Savings Association, Inc.

Accordingly, Seller, the Company and Buyer hereby agree as follows:

1. PURCHASE AND SALE OF THE MEMBERSHIP INTEREST

a. Sale and Price

On the terms and subject to the conditions of this Agreement, Seller shall sell, transfer and deliver or cause to be sold, transferred and delivered to Buyer, and Buyer shall purchase from Seller, Seller’s Membership Interest and Seller’s one-half (1/2) interest in the Existing Mortgage Notes for an aggregate purchase price of Fifteen Million and No/100 Dollars ($15,000,000.00) (the “Purchase Price”), payable in cash at Closing.

b. Sales Price Allocation

Of the Purchase Price, an amount equal to the outstanding principal balance of the Existing Mortgage Notes shall be paid for the Existing Mortgage Notes out of the cash received at Closing. The remaining portion of the Purchase Price shall be allocated to Seller’s Membership Interest.

c. Net Working Capital Purchase Price Adjustment

Definitions. For the purposes of this Section 1(c), the following terms shall have the following meanings:

(A) “Final Balance Sheet” shall mean the unaudited balance sheet of the Company as of the Closing Date, which shall be prepared by the Company’s accountants, in accordance with generally accepted accounting principles consistently applied, in form and substance reasonably acceptable to Buyer.

(B) “Operating Accounts” shall mean the cash accounts listed on Schedule 1(c) (B) attached hereto.

(C) “Final Assets” shall mean the aggregate amount of all current assets of the Company on the Final Balance Sheet.

(D) “Final Liabilities” shall mean the aggregate amount of all current liabilities (other than any current liability relating to the HBPA Lawsuit or to the Existing Mortgage Notes) of the Company on the Final Balance Sheet.

(E) “Final Net Current Asset Value” shall mean the Final Assets less the Final Liabilities. The Final Net Current Asset Value can be a positive or a negative number.

(F) “Deficiency Amount” shall mean the amount, if any, by which the Final Net Current Asset Value is less than zero.

(G) “Surplus Amount” shall mean the amount, if any, by which the Final Net Current Asset Value is more than zero.

Seller shall deliver the Final Balance Sheet to Buyer no later than forty-five (45) days after the Closing Date. If there is a Deficiency Amount, no later than ten (10) days after delivery of the Final Balance Sheet to Buyer, Seller shall pay to Buyer, by wire transfer of immediately available funds, an amount in cash equal to the Deficiency Amount. If there is a Surplus Amount, no later than ten (10) days after delivery of the Final Balance Sheet to Buyer, Buyer shall pay to Seller, by wire transfer of immediately available funds, an amount in cash equal to the Surplus Amount. If the amount of cash in the Operating Accounts on the Closing Date is greater than $600,000, no later than ten (10) days after delivery of the Final Balance Sheet to Buyer, Buyer shall pay to Seller, by wire transfer of immediately available funds, an amount in cash equal to any such excess. Seller hereby represents and warrants to Buyer that $600,000 is sufficient to operate the Company’s business as presently conducted.

d. Deposit and Escrow

Within 72 hours after delivery of the final Disclosure Schedule, Buyer shall deliver a refundable cash deposit (the “Deposit”) in the amount of Five Hundred Thousand Dollars ($500,000) to Perrot Doise (the “Escrow Holder”) for deposit by the Escrow Holder in an interest bearing escrow account (with interest accruing thereon (the “Interest Amount”)). The Deposit and the Interest Amount shall be held by the Escrow Holder in accordance with the terms and provisions of this Agreement. Upon consummation of the transactions contemplated by this Agreement, on the Closing Date, the Deposit shall be applied to and credited against the Purchase Price, and the Escrow Holder shall deliver the Interest Amount to Buyer. Upon the termination of this Agreement (i) by Buyer in accordance with the provisions of Section 14(b) or Section 14(a) (iii) if any of the conditions to Closing set forth in Section 8(a) (other than clauses (vii), (xi), (xii),

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(xiii), (xiv) and (xvii) thereof) shall not have been satisfied in all material respects or waived by Buyer, (ii) by Seller in accordance with the provisions of Section 14(a) (v) or (vi) or Section 14(a) (ii) if any of the conditions to Closing set forth in Section 8(b) (ii) or (iii) shall not have been satisfied in all material respects or waived by Seller, or (iii) by Buyer and Seller in accordance with the provisions of Section 14(a) (i), the Escrow Holder shall deliver the Deposit and the Interest Amount to Buyer. Upon the termination of this Agreement in accordance with the provisions of Section 14 hereof by either Buyer or Seller for any reason other than those specifically described in the immediately preceding sentence, the Escrow Holder shall deliver the Deposit and the Interest Amount to the Seller.

2. CLOSING

The closing (the “Closing”) of the purchase and sale of Seller’s Membership Interest shall be held at the offices of Seller at 600 Jefferson Street, Suite 1500, Lafayette, Louisiana at 10:00 a.m. on the date of closing of the Jefferies Financing (as defined in Section 8.a.(xiii)), but in no event later than December 31, 2001 (subject to extension as set forth in Section 14(a) (iv)). The date on which the Closing shall occur is hereinafter referred to as the “Closing Date.” At the Closing, Buyer shall cause to be delivered to Seller a cashier’s check in an amount equal to the Purchase Price less the Deposit.

3. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY

Except as set forth on any of the schedules to this Agreement (the “Disclosure Schedule”) (the Disclosure Schedule shall be arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this Section 3, and the disclosures in any paragraph of the Disclosure Schedule shall qualify only (i) the corresponding paragraph of this Section 3 and (ii) other paragraphs of this Section 3 to the extent it is clear from a specific cross reference that such disclosure is applicable to such other paragraph), Seller and the Company hereby represent and warrant to Buyer, as of the date hereof and as of the Closing Date, as follows:

a. Authority

Seller and the Company have all requisite capacity and authority to enter into this Agreement, to execute, deliver and perform their respective obligations hereunder and to consummate the transactions contemplated hereby. All acts and other proceedings required to be taken by Seller or the Company to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly and properly taken. This Agreement has been duly executed and delivered by Seller and the Company and constitutes a legal, valid and binding obligation of Seller and the Company, enforceable against Seller and the Company in accordance with its terms.

b. No Conflicts; Consents

The execution, delivery and performance of this Agreement by Seller and the Company does not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation under, or result in the creation of any lien, claim, encumbrance, security interest, option, charge or restriction of any kind or nature whatsoever (collectively, “Liens”) upon, any of the

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properties or assets of the Company under any provision of (i) the Organizational Documents (as hereinafter defined) of the Company, (ii) except as set forth in Schedule 3(b), any note, bond, mortgage, indenture, deed of trust, license, lease, contract, commitment, agreement or arrangement to which Seller or the Company is a party or by which any of their respective properties or assets are bound or (iii) any judgment, order or decree, or statute, law, ordinance, rule or regulation applicable to Seller or the Company or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, would not have a material adverse effect on the business, condition (financial or otherwise), prospects or results of operations of the Company or on Buyer’s ability to develop, operate or manage the OED Facilities or to consummate the transactions contemplated hereby (a “Material Adverse Effect”). No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity or any other person is required to be obtained or made by or with respect to Seller or the Company or their respective Affiliates in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, other than approval from the Louisiana Gaming Control Board and the Louisiana State Racing Commission (herein “Regulatory Approval”). The term “Organizational Documents” means the articles of organization and the operating agreement of the Company, or any comparable governing instruments, each as amended.

c. Seller’s Membership Interest

Seller has good and valid title to Seller’s Membership Interest, free and clear of any Liens. Upon delivery to Buyer at the Closing of Seller’s Membership Interest, good and valid title to Seller’s Membership Interest will pass to Buyer free and clear of any Liens, other than those arising from acts of Buyer or its Affiliates. Seller’s Membership Interest is not subject to any voting trust agreement or other agreement, arrangement or understanding, including any such agreement, arrangement or understanding restricting or otherwise relating to the voting, dividend rights or disposition of Seller’s Membership Interest.

d. Organization and Standing; Books and Records

The copies of the Organizational Documents attached as Exhibit A are complete and correct, and the signatures appearing on the originals thereof are genuine. The Company is not in violation of its Organizational Documents in any manner that would adversely affect the validity, binding nature or enforceability of Seller’s or the Company’s obligations under this Agreement. The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Louisiana. The Company has full power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to carry on its business as presently conducted. The Company is duly qualified and authorized to do business in Louisiana and in each other jurisdiction in which the conduct or nature of its business or the ownership, leasing or holding of its properties makes such qualification necessary, except such jurisdictions where the failure to be so qualified or in good standing, individually or in the aggregate, would not have a Material Adverse Effect.

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e. Capitalization of the Company

Seller’s Membership Interest has the rights, privileges and preferences stated in the Organizational Documents. Seller is the record and beneficial owner of Seller’s Membership Interest. Seller’s Membership Interest has not been issued in violation of, and is not subject to, any purchase option, call, right of first refusal, preemptive, subscription or similar rights under any provision of (i) applicable law, (ii) the Organizational Documents, or (iii) any contract, agreement or instrument to which the Company is subject, bound or a party or otherwise. There are no outstanding warrants, options, rights, “phantom” rights, agreements, convertible or exchangeable securities or other commitments (other than this Agreement) pursuant to which Seller or the Company is or may become obligated to issue or cause the Company to issue, sell, purchase, return or redeem or cause the Company to redeem any of Seller’s Membership Interest, Certificates or any other capital stock of the Company. Except as set forth in Schedule 3(e), there are no membership interests of the Company reserved for issuance for any purpose. Except as set forth in Schedule 3(e), there are no outstanding bonds, debentures, notes or other indebtedness having the right to vote on any matters on which members of the Company may vote.

f. Equity Interests

The Company does not directly or indirectly own any capital stock of any corporation, partnership or other person other than Inter-Track Partners of Rapides Parish, which interest may be sold prior to Closing, and Offtrack at Baton Rouge, Inc., an inactive entity with no assets, liabilities, operations or activities, which may be dissolved before Closing, and the Company is not a member of or participant in any partnership, joint venture or similar person other than Intertrack Partners of Rapides Parish.

g. Financial Statements

Schedule 3(g) contains (A) the unaudited balance sheet of the Company as of May 31, 2001 (the “Balance Sheet”) and the unaudited statement of income of the Company for the four-month period ended May 31, 2001 (the “Income Statement”), and (B) the audited balance sheet of the Company as of December 31, 2000, and the audited statement of income of the Company for the fiscal year ended December 31, 2000 (collectively, the “Financial Statements”). The Financial Statements have been prepared using accounting principles consistently applied (except as set forth in Schedule 3(g)) and on a basis that fairly presents (subject to normal, recurring year-end audit adjustments) the financial condition and results of operations of the Company as of the respective dates thereof and for the respective periods indicated. There are no liabilities not disclosed in the Financial Statements that are required to be disclosed under generally accepted accounting principals (“GAAP”).

h. Taxes

(i) For purposes of this Agreement, (A) “Tax” or “Taxes” shall mean all taxes, charges, fees, levies or other assessments, however denominated, including any interest, penalties or other additions to tax that may become payable in respect thereof, imposed by any Governmental Authority, which taxes include, without limitation, all income or profits taxes (including federal income taxes and state income taxes), real property gains taxes,

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payroll and employee withholding taxes, unemployment insurance taxes, social security taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, occupation taxes, real and personal property taxes, stamp taxes, environmental taxes, transfer taxes, workers’ compensation, PBGC premiums and other Governmental charges, and other obligations of the same or of a similar nature to any of the foregoing, which the Company is required to pay, withhold or collect; (B) “Tax Return” shall mean all reports, information statements and returns required to be filed in connection with, any Taxes, including information returns or reports with respect to backup withholding and other payments to any Person; (C) “Governmental Authority” means any governmental or quasi-governmental body of the United States or any other country, including any state, province, county, city or other political subdivision thereof, or any agency, court, instrumentality or statutory or regulatory body of any of the foregoing; and (D) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(ii) Except as set forth in Schedule 3(h), (A) all Tax Returns which were required to be filed by or with respect to the Company have been duly and timely filed with the appropriate Governmental authority, (B) all items of income, gain, loss, deduction and credit or other items (“Tax Items”) required to be included in each such Tax Return have been so included and all such Tax Items and any other information provided in each such Tax Return are true, correct and complete, (C) all Taxes owed by the Company which are or have become due have been timely paid in full, (D) no penalty, interest or other charge is or will become due with respect to the late filing of any such Tax Return or late payment of any such Tax, (E) all Tax withholding and deposit requirements imposed on or with respect to the Company have been satisfied in full in all respects, and (F) there are no mortgages, pledges, liens, encumbrances, charges or other security interests on any of the assets of the Company that arose in connection with any failure (or alleged failure) to pay any Tax.

(iii) There is no claim against the Company for any Taxes, and no assessment, deficiency or adjustment has been asserted, proposed, or threatened with respect to any Tax Return of or with respect to the Company, other than those disclosed (and to which are attached true and complete copies of all audit or similar reports) in Schedule 3(h).

(iv) No claim has ever been made by an authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation in that jurisdiction.

(v) Except as set forth in Schedule 3(h), there is not in force any extension of time with respect to the due date for the filing of any Tax Return of or with respect to the Company or any waiver or agreement for any extension of time for the assessment or payment of any Tax of or with respect to the Company.

(vi) The total amounts set up as liabilities for Taxes in the Balance Sheet are sufficient to cover the payment of all Taxes, whether or not assessed or disputed, which are, or are hereafter found to be, or to have been, due by or with respect to the Company up to and through the periods ending on the dates thereof.

(vii) There are no Tax allocation, Tax sharing or Tax indemnification agreements affecting the Company.

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(viii) The Company currently qualifies, has qualified since the date of its formation, and will qualify immediately prior to the Closing Date, to be treated as a partnership for federal income tax purposes and neither the Company nor Seller has taken, and no Governmental Authority has asserted, a position inconsistent with such treatment.

(ix) All amounts required to be withheld and paid to any Governmental Authority for income, social security, unemployment insurance, sales, exercise, use and other Taxes have been collected or withheld and accrued or paid to the proper Governmental Authority. The Company has made all deposits required by law to be made with respect to employees’ withholding and other employment Taxes.

(x) Seller is not a “foreign person” within the meaning of Section 1445 of the Code and it will furnish the Buyer with an affidavit that satisfies the requirements of Section 1445(b)(2) of the Code, in the form attached as Exhibit 3(h)(x).

i. Assets Other than Real Property Interests

The Company has good and valid title to all material assets (as reflected on the Balance Sheet or thereafter acquired) that are used in the conduct of the Company’s business as presently being conducted, except those sold or otherwise disposed of since the date of the Balance Sheet in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case free and clear of all Liens, including all defects of title, pledges, equities, conditional sales agreements, leases, easements, rights of way, covenants, conditions and prior assignments of any kind or nature whatsoever (together with Liens, collectively, “Encumbrances”) except (i) such as are set forth in Schedule 3(i), (ii) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business, and Liens for Taxes which are not due and payable or which may thereafter be paid without penalty and (iii) imperfections of title which, individually or in the aggregate, would not have a Material Adverse Effect (the Liens described in clauses (ii) and (iii) above are hereinafter referred to collectively as “Permitted Liens”). No other material assets or rights, other than the real property set out in Section 3(j) below, whether or not owned by the Company, are required for the conduct of the Company’s business as currently conducted.

All the material assets of the Company have been maintained in accordance with the past practice of the Company and generally accepted industry practice and are in good operating condition and repair, ordinary wear and tear excepted, in each case except such as would not have a Material Adverse Effect, individually or in the aggregate.

This Section 3(i) does not relate to real property or interests in real property, such items being the subject of Section 3(j).

j. Real Property

Schedule 3(j) sets forth a complete list of all real property and interests in real property owned and/or leased by the Company that are used in the conduct of the Company’s business as presently being conducted (individually, a “Company Property” and, collectively, “Company Properties”). No other real properties or rights, whether or not owned by the Company, are required

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for the conduct of the Company’s business. The Company has good and valid title to all Company Property, in each case free and clear of all Encumbrances, except (A) such as are set forth in Schedule 3(j), (B) leases, subleases and similar agreements set forth in Schedule 3(l), (C) Permitted Liens, (D) easements, covenants, rights-of-way and other similar restrictions of record and (E) (I) zoning, building and other similar restrictions, (II) mortgages, liens, security interests, encumbrances, easements, covenants, rights-of-way and other similar restrictions that have been placed by any developer, landlord or other third party on property over which the Company has easement rights or on any Company Property and subordination or similar agreements relating thereto, and (III) unrecorded easements, covenants, rights-of-way and other similar restrictions, none of which items set forth in clauses (I), (II) and (III), individually or in the aggregate, would have a Material Adverse Effect. Neither the Seller nor the Company has received any notice of any material default under or breach of, or of any event that (with or without notice or the lapse of time) would constitute a material default under or breach of, any of the covenants, conditions, restrictions, rights-of-way, leases or easement affecting the Company’s business or any portion thereof, and no such material default or breach exists. Neither Seller nor the Company is in material default under any of the leases for the Company Properties, and there are no oral or written modifications or amendments to any of such leases.

k. Intellectual Property

(i) Schedule 3(k) sets forth a true and complete list of all (both foreign and domestic) patents, trademarks (registered or unregistered), service marks (registered or unregistered), trade names, licenses, franchises, copyrights and other assets of a like kind, and all applications and registrations therefor, as well as any trade secrets or confidential or proprietary information, inventions (whether patentable or not), and any other intellectual property which are, in whole or in part, owned, used, filed by or licensed to the Company (all of the foregoing referred to hereinafter collectively as “Intellectual Property”). Schedule 3(k) sets forth a list of all jurisdictions in which any of the Intellectual Property is the subject of a patent, registration, certificate, or other such governmental acknowledgment or grant or application therefor, together with all identifying numbers or other designations related to such patents, registrations, certificates or applications.

(ii) Unless (and only to the extent) expressly stated otherwise in Schedule 3(k):

(A) the Company owns (free and clear of any Encumbrances, joint interests or licenses) the Intellectual Property;

(B) the Company has the right to make, have made, use, sell, offer for sale, execute, reproduce, display, perform, modify, enhance, enforce, transfer, distribute, prepare derivative works of, and sublicense, without payment or provision of consideration in any form to any other person, all Intellectual Property;

(C) the consummation of the transactions contemplated hereby will not conflict with, alter, forfeit, terminate or impair any such rights of the Intellectual Property; and

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(D) the Company has not previously granted to third parties any rights of any kind relating to the Intellectual Property.

(iii) The Company and Seller have taken all necessary and appropriate steps to:

(A) insure that all requirements and all fees, annuities, or other payments which are due as of the consummation of this transaction for any patent, registration, certificate, or other such governmental acknowledgment or grant or application therefor have been met or paid;

(B) safeguard and maintain the secrecy of confidential and proprietary information of the Company; and

(C) insure that the Company has acquired ownership of all inventions, patents, copyrights, and other Intellectual Property developed for Company by its employees and contractors.

(iv) With respect to the Intellectual Property:

(A) no claims are pending or threatened as of the date of this Agreement against Seller or the Company by any person with respect to the ownership, validity, enforceability, infringement, effectiveness or use of any Intellectual Property;

(B) the Company and Seller have not received any communications alleging that the Company has violated

any rights relating to Intellectual Property or the rights of any person;

(C) the Intellectual Property, and any use thereof, does not infringe or otherwise violate, and has not infringed or otherwise violated, the rights of any other person (including but not limited to Seller), and the Company and Seller have no reason to believe that the Intellectual Property infringes the rights of other persons or involves the misappropriation or improper use of the information of other persons; and

(D) the Intellectual Property includes, but is not hereby limited to, all rights necessary for conducting the business of the Company.

l. Contracts

Except as set forth in Schedule 3(1), the Company is not a party to or bound by any:

(i) employment agreement or employment contract that has an aggregate future liability in excess of $5,000 per year and is not terminable by the Company by notice of not more than 60 days for a cost of less than $5,000;

(ii) employee collective bargaining agreement or other contract with any labor union;

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(iii) covenant of the Company not to compete or other covenant of the Company restricting the development, manufacture, marketing or distribution of the products and services of the Company that materially impairs the operation of the business of the Company as presently conducted;

(iv) agreement, contract or other arrangement with (A) Seller or any Affiliate of Seller or (B) any current or former officer, director or employee of the Company, Seller or any Affiliate of Seller (other than employment agreements covered by clause (i) above);

(v) lease, sublease or similar agreement with any person under which the Company is a lessor or sublessor of, or makes available for use to any person, (A) any Company Property or (B) any portion of any premises otherwise occupied by the Company;

(vi) lease or similar agreement with any person under which (A) the Company is lessee of, or holds or uses, any machinery, equipment, vehicle or other tangible personal property owned by any person or (B) the Company is a lessor or sublessor of, or makes available for use by any person, any tangible personal property owned or leased by the Company, in any such case which has an aggregate future liability or receivable, as the case may be, in excess of $5,000 per year and is not terminable by the Company by notice of not more than 60 days for a cost of less than $5,000;

(vii) (A) continuing contract for the future purchase of materials, supplies or equipment (other than purchase contracts and orders for inventory in the ordinary course of business consistent with past practice), (B) management, service, consulting or other similar type of contract, or (C) advertising agreement or arrangement, in any such case which has an aggregate future liability to any person in excess of $5,000 per year and is not terminable by the Company by notice of not more than 60 days for a cost of less than $            ;

(viii) material license, option or other agreement relating in whole or in part to the Intellectual Property set forth in Schedule 3(k) (including any license or other agreement under which the Company is licensee or licensor of any such Intellectual Property);

(ix) agreement, contract or other instrument under which the Company has borrowed any money from, or issued any note, bond, debenture or other evidence of indebtedness to, any person, or any other note, bond, debenture or other evidence of indebtedness issued to any person (other than the Company) in any such case which, individually, is in excess of $5,000 per year;

(x) agreement, contract or other instrument (including so-called take-or-pay or keepwell agreements) under which (A) any person has directly or indirectly guaranteed indebtedness, liabilities or obligations of the Company or (B) the Company has directly or indirectly guaranteed indebtedness, liabilities or obligations of any person (in each case other than endorsements for the purpose of collection in the ordinary course of business), in any such case which, individually, is in excess of $5,000 per year;

(xi) agreement, contract or other instrument under which the Company has, directly or indirectly, made any advance, loan, extension of credit or capital contribution to,

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or other investment in, any person, in any such case which, individually or in the aggregate, is in excess of $5,000 per year;

(xii) mortgage, pledge, security agreement, deed of trust or other instrument granting an Encumbrance upon any Company Property;

(xiii) agreement or instrument providing for indemnification of any person with respect to liabilities relating to any current or former business of the Company or any predecessor person;

(xiv) other agreement, contract, lease, license, commitment or instrument to which the Company is a party or by or to which it or any of its assets or business is bound or subject which (a) has an aggregate future liability to any person (other than the Company) in excess of $5,000 per year and is not terminable by the Company by notice of not more than 60 days for a cost of less than $5,000 or (b) the breach, termination or non-performance of which could have a Material Adverse Effect; and

(xv) agreement or contract with Seller or any of its members or Affiliates which will survive Closing, other than the Occupancy Agreement referred to in Section 8.a.(xvi).

The parties hereto acknowledge that, to the extent any agreement, contract or other arrangement referred to in clauses (i), (vi), (vii), (xi) or (xiv)(a) above (a) is inadvertently omitted from Schedule 3(l), (b) has an aggregate future liability to the Company of no greater than $5,000 (or, together with all other such agreements, contracts or arrangements, no greater than $25,000) and, (c) provides benefits to the Company equivalent, in the reasonable determination of Buyer, to such aggregate liability, Seller will have no liability to Buyer for omitting such contracts from Schedule 3(l).

Except as set forth in Schedule 3(1), (I) all agreements, contracts, leases, licenses, commitments or instruments of the Company listed in the Schedules hereto (collectively, the “Contracts”) are valid, binding and in full force and effect and are enforceable by the Company in accordance with their terms, (II) Seller and the Company have performed all obligations required to be performed by them to date under the Contracts and they are not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder, (III) to the best knowledge of Seller, no other party to any of the Contracts is (with or without the lapse of time or the giving of notice, or both) in breach or default in any respect thereunder and (IV) true and correct copies of all of the Contracts have been delivered to Buyer, except for copies of the Company’s simulcast agreements for racing seasons during the 2001 calendar year described at Schedule 3(l) and 3(l)(2), many of which are still pending as of the date of this Agreement.

m. Litigation

Schedule 3(m) describes all pending suits, claims, actions or proceedings with respect to which Seller or the Company has been contacted in writing by counsel for the plaintiff or claimant, against the Company or any of its respective properties, assets, operations or businesses, in particular the claims asserted by the Horsemen’s Beneficial Protection Association in the suit entitled “Louisiana Horsemen’s Benevolent and Protective Association 1993, Inc. vs. Fair Grounds Corporation,

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et al” bearing Docket No. 411,508 Div. F filed in the 19th Judicial District Court in and for the Parish of East Baton Rouge Parish, Louisiana against all Louisiana thoroughbred racetracks (the “HBPA Lawsuit”), and, to the best knowledge of Seller and the Company, no other such suits, claims, actions or proceedings are threatened. The Company is not a party to any suit, claim, action or proceeding pending or threatened by, nor is the Company subject to or in default under any judgment, order, injunction or decree of, any Governmental Entity or arbitration tribunal applicable to it or any of its respective properties, assets, operations or business. Except as set forth in Schedule 3(m), there is no lawsuit or claim by the Company pending against any other person. Except as set forth in Schedule 3(m), there is no pending or, to the knowledge of Seller and the Company, threatened investigation of or affecting the Company by any Governmental Entity.

n. Benefit Plans

(i) Schedule 3(n) provides a description of each of the following which is, or has been sponsored, maintained or contributed to by Seller or the Company for the benefit of or pursuant to which the Company could have liability with respect to any of the present or former directors, officers, employees, agents, consultants or similar representatives of the Company:

(A) each “employee benefit plan,” as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (including, but not limited to, employee benefit plans, such as foreign plans, which are not subject to the provisions of ERISA), (“Plan”);

(B) each personnel policy, stock option plan, collective bargaining agreement, bonus plan or arrangement, incentive award plan or arrangement, vacation policy, severance pay plan, policy, or agreement, deferred compensation agreement or arrangement, executive compensation or supplemental income arrangement, consulting agreement, employment agreement, and each other employee benefit plan, agreement, arrangement, program, practice, or understanding which is not described in Section 3(n)(i)(A) (“Benefit Program or Agreement”).

(ii) A copy of the commitment by Blue Cross Blue Shield of Louisiana to provide group health insurance coverage to the Company and its eligible employees for the calendar year beginning January 1, 2001 and a summary description of the plan has been provided to Buyer. As set forth at Schedule 3(n), eligible employees of the Company may currently participate in a 401(k) plan and a cafeteria “flex” plan implemented by The Moody Company, an affiliate of Seller, but the Company’s participation in such plan will be terminated at or before Closing. Prior to January 1, 2001, eligible employees of the Company were also allowed to participate in The Moody Company’s group health plan. Copies of The Moody Company’s 401(k) plan, cafeteria plan, and group health plan, and/or summary descriptions thereof, have not been provided to Buyer.

(iii) Neither the Company, nor any corporation, trade, business, or entity under common control with the Company, within the meaning of Sections 414(b), 414(c) or 414(m) of the Code or Section 4001 of ERISA sponsors maintains, contributes to, or has an

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obligation to contribute to or has sponsored, maintained, contributed to or has had an obligation to contribute to, at any time within six years prior to the Closing Date (A) any employee benefit plan within the meaning of Section 3(3) of ERISA that is or was subject to Title IV of ERISA, Section 302 of ERISA, or Section 412 of the Code or (B) any multiemployer plan within the meaning of Section 3(37) of ERISA;

(iv) Except as otherwise set forth on Schedule 3(n)(iv):

(A) Seller and the Company have substantially performed all obligations, whether arising by operation of law or by contract, required to be performed by them in connection with the Plans and the Benefit Programs and Agreements, and to the knowledge of the Company and Seller there have been no defaults or violations by any other party to the Plans or Benefit Programs and Agreements;

(B) All reports and disclosures relating to the Plans required to be filed with or furnished to governmental agencies, Plan participants or Plan beneficiaries have been filed or furnished in accordance with applicable law in a timely manner, and each Plan and each Benefit Program or Agreement is in substantial compliance with, and at all times within the six year period prior to the Closing Date has been maintained in substantial compliance with, its governing documents and the applicable provisions of ERISA and the Code;

(C) Each of the Plans intended to be qualified under Section 401 of the Code, (1) satisfies in form the requirements of such Section except to the extent amendments are not required by law to be made until a date after the Closing Date, (2) has received a favorable determination letter from the Internal Revenue Service regarding such qualified status, (3) has not, since receipt of the most recent favorable determination letter, been amended, and (4) has not been operated in a way that would adversely affect its qualified status;

(D) There are no actions, suits, or claims pending (other than routine claims for benefits) or, to the knowledge of Seller or the Company threatened against, or with respect to, any of the Plans or Benefit Programs and Agreements or their assets;

(E) All contributions required to be made to the Plans pursuant to their terms and the provisions of ERISA, the Code, or any other applicable Law have been timely made;

(F) As to any Plan intended to be qualified under Section 401 of the Code, there has been no termination or partial termination of the Plan within the meaning of Section 411(d)(3) of the Code;

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(G) No act, omission or transaction has occurred which would result in imposition on the Company of (1) breach of fiduciary duty liability damages under Section 409 of ERISA, (2) a civil penalty assessed pursuant to subsections (c), (i) or (l) of Section 502 of ERISA, or (3) a tax imposed pursuant to Chapter 43 of Subtitle D of the Code;

(H) To the knowledge of Seller and the Company, there is no matter pending (other than routine qualification determination filings) with respect to any of the Plans before the Internal Revenue Service, the Department of Labor, the PBGC, or other Governmental Authority;

(I) Each trust funding a Plan, which trust is intended to be exempt from federal income taxation pursuant to Section 501(c) (9) of the Code, satisfies the requirements of such section and has received a favorable determination letter from the Internal Revenue Service regarding such exempt status and has not, since receipt of the most recent favorable determination letter, been amended or operated in a way which would adversely affect such exempt status;

(J) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not (1) require Seller or the Company to make a larger contribution to, or pay greater benefits or provide other rights under, any Plan or Benefit Program or Agreement than it otherwise would, whether or not some other subsequent action or event would be required to cause such payment or provision to be triggered, or (2) create or give rise to any additional vested rights or service credits under any Plan or any Benefit Program or Agreement.

(v) Except as otherwise set forth in Schedule 3(n) (v), neither Seller nor the Company is a party to any agreement, nor has any of the foregoing parties established any policy or practice, requiring any payment, the acceleration of any payment, or any other form of compensation or benefit to any person performing services for the Company upon termination of such services which would not be payable or provided in the absence of the consummation of the transactions contemplated by this Agreement.

(vi) In connection with the consummation of the transactions contemplated by this Agreement, no payments of money or other property, acceleration of benefits, or provisions of other rights have or will be made hereunder, under any agreement contemplated herein, or under the Plans and the Benefit Programs and Agreements that would be reasonably likely to result in imposition of the sanctions imposed under Sections 280G and 4999 of the Code, whether or not some other subsequent action or event would be required to cause such payment, acceleration, or provision to be triggered.

(vii) Each Plan may be unilaterally amended or terminated in its entirety without liability except as to benefits accrued thereunder prior to such amendment or termination. No Plan or Benefit Program or Agreement provides retiree medical or retiree life insurance benefits to any individual and the Company is not contractually or otherwise obligated

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(whether or not in writing) to provide any individual with life insurance or medical benefits upon retirement or termination of employment, other than as required by the provisions of Sections 601 through 609 of ERISA and Section 4980B of the Code. Each Plan that is a “group health plan” has been operated in all material respects in compliance with the provisions of Part 6 of Title 1, Subtitle B of ERISA.

(viii) Schedule 3(n) (viii) sets forth by number and employment classification the approximate numbers of employees employed by the Company as of the date of this Agreement, and, except as set forth therein, none of said employees are subject to union or collective bargaining agreements with the Company. No collective bargaining agreement is being negotiated by the Company.

(ix) Except as set forth in Schedule 3(n) (ix), the Company is not a party to nor is it bound by any severance agreement, program, or policy nor does the Company have any liability, actual or contingent, under any severance agreement, program or policy of the Seller or an affiliate of the Company. True and correct copies of all employment agreements with officers of the Company, and all vacation, overtime, and other compensation policies of the Company relating to its employees have been made available to Buyer.

(x) Neither Seller nor the Company has announced, proposed, or agreed to any changes to any Plan or any Benefit Program or Agreement that would cause an increase in benefits (or the creation of new benefits) under any such Plan or any such Benefit Program or Agreement or that would cause a material increase in the cost of maintaining such Plan or such Benefit Program or Agreement.

o. Absence of Changes or Events

Except as set forth in Schedule 3(o), since the date of the Balance Sheet, whether or not in the ordinary course of business:

(i) there has not been any material adverse change in the business, condition (financial or otherwise), prospects or results of operations of the Company;

(ii) Seller has caused the business of the Company to be, and the Company has been, conducted in the ordinary course and in substantially the same manner as previously conducted and has made all reasonable efforts consistent with past practices to preserve the Company’s relationships with customers, suppliers and others with whom the Company deals;

(iii) there has not been any declaration, setting aside or payment of any distribution or dividend with respect to Seller’s Membership Interest or other capital stock of the Company, or any repurchase, redemption or other acquisition by the Company of Seller’s Membership Interest or other capital stock of the Company;

(iv) there has not been any amendment to the Organizational Documents of the Company (except as required pursuant to this Agreement or with the prior consent of Buyer);

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(v) there has not been any incurrence, assumption or guarantee by the Company of any indebtedness for borrowed money;

(vi) there has not been any creation or other incurrence by the Company of any Encumbrance on any asset;

(vii) there has not been any loan, advance or capital contributions to or investment in any person made by the Company;

(viii) there has not been any transaction or commitment made, or any contract or agreement entered into, by the Company relating to their respective assets or business (including the acquisition or disposition of any assets) other than in the ordinary course of business, or any relinquishment by the Company of any contract or other right material to the Company;

(ix) there has not been any change in any method of accounting or accounting practice by the Company;

(x) there has not been any (A) employment, deferred compensation, severance, retirement or other similar agreement entered into with any director, officer or employee of the Company (or any amendment to any such existing agreement), (B) grant of any severance or termination pay to any director, officer or employee of the Company, or (C) change in compensation or other benefits payable to any director, officer or employee of the Company pursuant to any severance or retirement plans or policies thereof.

(xi) there has not been any labor dispute, other than routine individual grievances, or any activity or proceeding by a labor union or representative thereof to organize any employees of the Company, which employees were not subject to a collective bargaining agreement at the Balance Sheet Date, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to any employees of the Company; and

(xii) there has not been any modification or amendment to any agreement to which the Company is a party other than in the ordinary course of business.

p. Compliance with Applicable Laws

Except as may be addressed in any of the lawsuits set out on Schedule 3(p), the Company is in compliance with all applicable statutes, laws, ordinances, rules, orders and regulations of any Governmental Entity (collectively, “Applicable Laws”), including those relating to occupational health and safety. Except as set forth in Schedule 3(p), neither Seller nor the Company has received any written communication during the past two years from a Governmental Entity that alleges that the Company is not in compliance in any material respect with any Applicable Laws. This Section 3(p) does not relate to matters with respect to Taxes, which are the subject of Section 3(h), or to environmental matters, which are the subject of Section 3(x).

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q. Employee and Labor Matters

Except as set forth in Schedule 3(q), (i) there is no, and during the past two years there has not been any, labor strike, dispute, work stoppage or lockout pending, or, to the knowledge of Seller and the Company, threatened, against the Company; (ii) to the knowledge of Seller and the Company, no union organizational campaign is in progress with respect to the employees of the Company and no question concerning representation exists respecting such employees; (iii) the Company is not engaged in any unfair labor practice; (iv) there is no unfair labor practice charge or complaint against the Company pending, or, to the knowledge of Seller and the Company, threatened, before the National Labor Relations Board; (v) there are no pending, or, to the knowledge of Seller and the Company, threatened, union grievances against the Company as to which there is a reasonable possibility of adverse determination and that, if so determined, individually or in the aggregate, would have a Material Adverse Effect; (vi) there are no pending, or, to the knowledge of Seller and the Company, threatened, charges against the Company or any current or former employee of the Company before the Equal Employment Opportunity Commission or any state or local agency responsible for the prevention of unlawful employment practices; (vii) neither Seller nor the Company has received written notice during the past two years of the intent of any Governmental Entity responsible for the enforcement of labor or employment laws to conduct an investigation of the Company and, to the knowledge of Seller and the Company, no such investigation is in progress; and (vii) to the Seller’s and the Company’s knowledge, there is no threatened or pending liability pursuant to the Worker Adjustment Retraining and Notification Act of 1988, as amended, or any similar state or local law.

r. Customer Accounts Receivable

Except as set forth in Schedule 3(r), all customer accounts receivable of the Company, whether reflected on the Balance Sheet or subsequently created, have arisen from bona fide transactions in the ordinary course of business and are collectible in the normal course of the Company’s business, subject to reserves recorded on the Balance Sheet. The Company has good and marketable title to its accounts receivable, free and clear of all Encumbrances.

s. Licenses; Permits

Schedule 3(s) sets forth a true and complete list, as of the date of this Agreement, of all licenses, permits, registrations, certificates, covenants, filings, declarations, authorizations and other official documents (collectively, “Licenses”) obtained by the Company which are necessary or desirable for the conduct of the business of the Company. All Licenses are in full force and effect and validly held by the Company, the Company has complied with all terms and conditions thereof and the same will not be subject to suspension, modification, revocation or nonrenewal as a result of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except Regulatory Approval, which must be obtained by Buyer. All such licenses, permits and authorizations which are held in the name of any member, employee, officer, director, stockholder, agent or otherwise on behalf of the Company shall be deemed included under this warranty.

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t. Transactions with Affiliates

Except as set forth on Schedule 3(t), none of the agreements, contracts or other arrangements set forth in Schedule 3(l) between the Company, on the one hand, and Seller or any of its Affiliates, on the other hand, will continue in effect subsequent to the Closing.

u. Effect of Transaction

Neither Seller nor the Company has any knowledge of facts that lead it to reasonably believe that the Company’s relationship with its creditors, employees, clients, customers or other persons having a material business relationship with the Company would change because of the purchase and sale of the Seller’s Membership Interest or the consummation of any other transaction contemplated hereby.

v. Private Offering of Seller’s Membership Interest

Neither Seller, any of its Affiliates nor anyone acting on its behalf has issued, sold or offered any security of the Company to any person under circumstances that would cause the sale of Seller’s Membership Interest, as contemplated by this Agreement, to be subject to the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”).

w. Environmental Matters

(i) As used in this Agreement:

(A) “Environmental Laws” means any and all applicable treaties, laws, regulations, enforceable requirements, binding determinations, orders, ordinances, decrees, judgments, injunctions, Permits, notices or binding agreements issued, promulgated or entered into by any Governmental Entity, relating to health, safety or the environment, preservation or reclamation of natural resources, or to the management, Release (as hereinafter defined) or threatened Release of Hazardous Materials, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Sections 9601 et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. Sections 1251 et seq., the Clean Air Act of 1970, as amended, 42 U.S.C. Sections 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. Sections 2601 et seq., the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Sections 651 et seq., the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. Sections 300(f) et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 et seq., and any similar or implementing state or local law, and all amendments or regulations promulgated thereunder.

(B) “Hazardous Materials” means: (1) any chemical, material, waste, or substance at any time defined or regulated by, or form the basis of, liability

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under any Environmental Law including, without limitation, any “hazardous waste,” “solid waste,” “extremely hazardous waste,” “hazardous material,” “hazardous substance,” “toxic substance,” “hazardous material,” “contaminant,” “pollutant” or any other comparable term or expression intended to define or classify substances by reason of properties harmful to health, safety, or the indoor or outdoor environment; (2) any oil or petroleum substance (including, without limitation, crude oil, any petroleum fraction or any petroleum derivative substance); (3) any drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources; (4) any flammable substances or explosives; (5) any radioactive materials, polychlorinated biphenyls, asbestos-containing materials, radon, or urea formaldehyde foam insulation; (6) pesticides; and (7) any other chemical, material, substance, or noxious odor, exposure to which is prohibited or regulated under Environmental Laws.

(C) “Permits” means any permit, license, variance, certificate, reportings, permission, exemption, approval, or authorization required under Environmental Laws.

(D) “Release” means any spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching, emanation or migration of any Hazardous Materials in, into, onto, or through the environment (including ambient air, surface water, ground water, soils, land surface, subsurface strata, building, workplace, or structure).

(ii) Except as set forth in Schedule 3(w): (A) The Company and its properties and operations are and, to the best of Seller’s knowledge, have been in compliance with all applicable Environmental Laws, and there are no Releases, threatened Releases, conditions or events existing on any properties currently or previously owned, operated, leased or otherwise used by the Company or at any offsite location or at any real property for which the Company may be liable; (B) the Company and its current and former properties and operations are not subject to any existing, pending or, to Seller’s knowledge, threatened claim, action, suit, investigation, inquiry or proceeding under any Environmental Law; (C) all Permits required to be obtained or filed by or complied with by the Company under any Environmental Law in connection with their respective operations and properties, including without limitation those relating to Hazardous Materials, have been duly obtained or filed and are in full force and effect, and the Company is in compliance with the terms and conditions of all such Permits in all material respects; (D) there has been no exposure of any person or property to any potentially harmful quantities of Hazardous Materials in connection with the current and former properties, operations, or activities of the Company; and (E) Seller and the Company have truthfully and fully provided to Buyer all reports relating to the environmental condition of the properties and operations of the Company (which such reports are collectively referred to as “Environmental Reports” and are listed in Schedule 3(w)(E) and any and all information in their possession, including such information as is contained in the files and records of the Company, relating to (i) any alleged non-

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compliance with, or violation of, Environmental Laws or Permits, (ii) the presence of any underground storage tanks on any property currently or formerly owned, occupied, or operated by the Company, (iii) any proposed change in Environmental Laws or Permits that could have a Material Adverse Effect or (iv) any alleged Release or threatened Release relating to the Company, or for which the Company may hold liability, or its current and former properties and operations.

x. Transaction Information

None of the documents or information, taken as a whole, delivered to Buyer in connection with the transactions contemplated by this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained therein not misleading. There is no fact or circumstance known to Seller or the Company that has not been disclosed to Buyer which, individually or in the aggregate, would reasonably be expected to be material to Buyer’s decision respecting the acquisition of the Company.

y. Brokerage and Finder’s Fees

Seller is not a party to any brokerage fee, finder’s fee or commission with respect to the transactions contemplated by this Agreement. The Company has entered into the agreement listed on Schedule 3(y), by which it is bound. Except as set forth on Schedule 3(y), the Company has not agreed to pay any brokerage fee, finder’s fee or commission, with respect to the transactions contemplated by this Agreement.

z. Utilities Access

The Company has access to all water, sewer, electric, natural gas, telephone and drainage facilities and all other utilities required to adequately conduct the Company’s business as presently conducted, and such access has been provided in full compliance with all requirements of applicable laws, rules, ordinances and regulations. Except as set forth on Schedule 3(z), all utility lines serving the Company are located either within the boundaries of the Company Properties or within lands dedicated to public use or within recorded easements for the benefit of the Company.

aa. Public Improvements

To the best of Seller’s and the Company’s knowledge, there are no (i) current or proposed plans to widen, modify or realign any street or highway, (ii) existing, proposed or, threatened eminent domain proceedings, or private purchase in lieu of such proceedings, that would affect the Company in any way whatsoever, or (iii) presently planned public improvements that would or could result in the creation of a special assessment or similar lien on the Company’s assets or properties.

bb. Maintenance of Insurance

The Company carries insurance (including self insurance) in such amounts and covering such risks as is adequate for (i) the conduct of the Company’s business and (ii) the value of the Company’s properties and assets. The Company is not in default under any of such policies or binders.

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4. COVENANTS OF SELLER AND THE COMPANY

Seller and the Company covenant and agree as follows:

a. Access

Prior to the Closing, Seller shall, and shall cause the Company to, give Buyer and its representatives, employees, counsel and accountants reasonable access, during normal business hours and upon reasonable notice, to the personnel, properties (including, without limitation, access to properties for the purpose of conducting environmental due diligence, including preparation of an updated Phase I Environmental Assessment Audit and Phase II Environmental Assessment Audit (the “Environmental Assessment Audits”)), books and records of the Company; provided, however, that such access does not unreasonably disrupt the normal operations of Seller or the Company.

b. Ordinary Conduct

Except as set forth in Schedule 4(b) or otherwise expressly permitted by the terms of this Agreement, from the date hereof to the Closing, Seller shall cause the business of the Company to be conducted, and the Company will conduct the business, in the ordinary course in substantially the same manner as presently conducted. The Seller shall make all reasonable efforts consistent with past practices to, and the Company shall, preserve the Company’s relationships with customers, suppliers and others with whom the Company deals; provided that, except as set forth in clause (xiv) of this Section, Seller shall not be obligated to, directly or indirectly, provide any funds to the Company. Neither Seller nor the Company shall take any action that would, or that reasonably could be expected to, (i) result in any of the conditions to the purchase and sale of Seller’s Membership Interest set forth in Section 8(a) not being satisfied or (ii) result in any of the representations or warranties of Seller and the Company becoming untrue. In addition, except as set forth in Schedule 4(b) or otherwise expressly permitted by the terms of this Agreement, Seller shall not permit the Company to, and the Company shall not, do any of the following without the prior written consent of Buyer:

(i) amend the Organizational Documents;

(ii) declare or pay any dividend or make any other distribution to Seller whether or not upon or in respect of Seller’s Membership Interest, other than distributions which do not cause the Company to be in violation of clause (xiv) and (xv) below;

(iii) redeem or otherwise acquire any membership interest or issue same or any option, warrant or right relating thereto or any securities convertible into or exchangeable therefor;

(iv) adopt or amend any collective bargaining agreement, except as required by law;

(v) establish, adopt, or enter into any new Plan or any new Benefit Program or Agreement or, except as required by applicable law, amend or take any other actions,

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including but not limited to, acceleration of vesting and waiver of performance criteria, with respect to any Plan or any Benefit Program or Agreement;

(vi) increase the compensation payable or to become payable to any director, officer, or employee of the Company, except for increases in salary or wages payable or to become payable upon promotion to an office having greater operational responsibilities or otherwise in the ordinary course of business and consistent with past practice or as may be required under existing agreements;

(vii) grant any severance or termination pay (other than pursuant to the severance policies of the Company as in effect on the date of this Agreement) to, or enter into any employment or severance agreement with, any director, officer, or employee of the Company, either individually or as part of a class of similarly situated persons;

(viii) incur or assume any liabilities, obligations or indebtedness for borrowed money or guarantee any such liabilities, obligations or indebtedness, other than in the ordinary course of business consistent with past practice; provided that in no event shall the Company incur, assume or guarantee any long-term indebtedness for borrowed money;

(ix) permit, allow or suffer any of the Company’s assets to become subjected to any Encumbrance;

(x) cancel any indebtedness (individually or in the aggregate) or waive any claims or rights of substantial value; (xi) except for dividends and distributions permitted under clause (ii) above, pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, Seller or any of its Affiliates;

(xii) make any change in any method of accounting or accounting practice or policy other than those required by GAAP;

(xiii) acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets (other than inventory) which are material, individually or in the aggregate, to the Company;

(xiv) allow the Company’s working capital (current assets less current liabilities (other than any current liability relating to the HBPA Lawsuit or to the Existing Mortgage Notes), as determined in accordance with GAAP) to be less than zero on the Closing Date;

(xv) allow the amount of cash in the Operating Accounts to be less than $600,000 on the Closing Date.

(xvi) sell, lease or otherwise dispose of any assets of the Company, except in the ordinary course of business consistent with past practice;

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(xvii) enter into any lease of real property, except any renewals of existing leases in the ordinary course of business; or

(xviii) agree, whether in writing or otherwise, to do any of the foregoing.

c. Confidentiality

Seller and the Company shall keep confidential, and cause their respective Affiliates to keep confidential, all information relating to the Company and its business (“Confidential Information”) and will at the Closing deliver to Buyer all tangible embodiments (and all copies) of such information which are in Seller’s and the Company’s possession. In the event that Seller or the Company is requested or required to disclose any such Confidential Information, Seller or the Company, as the case may be, shall immediately notify Buyer so that Buyer may seek a protective order or take other steps to prevent the disclosure of such information, and neither Seller nor the Company will disclose such information. The foregoing provisions do not apply to information which is available to the public on the Closing Date, or thereafter becomes available to the public other than as a result of a breach of this Section 4(c). For purposes of this Agreement, “Affiliate” means a person that directly, or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with the person specified. In addition, in the case of a person who is a natural person, the term Affiliate shall also include such person’s Immediate Family members and any relative or spouse who has the same home as the person specified. “Immediate Family” means a person’s spouse, parents, siblings, children, mothers and fathers-in-law, sons and daughters-in-law and brothers and sisters-in-law. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

d. Assignment of Confidentiality Agreements

On the Closing Date, Seller shall assign to Buyer its rights under all confidentiality agreements entered into by Seller with any person in connection with the proposed sale of the Company to the extent such rights relate to the Company. Copies of such confidentiality agreements shall be provided to Buyer promptly following the Closing Date.

e. Resignation

On the Closing Date, Seller shall cause to be delivered to Buyer a duly signed resignation, effective immediately after the Closing, of its position as a manager of the Company and shall take such other action as is necessary to accomplish the foregoing.

f. Exclusive Dealing

From the date hereof to the Closing, Seller shall, and shall cause each of its Affiliates, the Company, its Affiliates and all of the members, directors, officers, employees, representatives and agents of Company and each of their respective Affiliates (collectively, “Affected Persons”) to, immediately cease any action that may be ongoing with respect to a Competing Transaction (as defined below). Seller shall not, and shall cause the Affected Persons not to, initiate, solicit or encourage (including by way of furnishing information or assistance), or take any other action to

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facilitate, any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to any Competing Transaction, or enter into discussions or furnish any information or negotiate with any person or otherwise cooperate in any way in furtherance of such inquiries or to obtain a Competing Transaction, or agree to or endorse any Competing Transaction, or authorize any of the Affected Persons to take any such action. As used herein, Competing Transaction means (A) any acquisition or purchase of assets of, or any equity interest in the Company, or (B) any tender or exchange offer, merger, consolidation, business combination, recapitalization, spin-off, liquidation, dissolution or similar transaction involving, directly or indirectly, the Company or any of the assets of the Company (each a “Competing Transaction”).

Should Seller be approached by any person to consider a Competing Transaction, Seller or such Affected Person shall notify Hank Perret or another attorney at Perret Doise of the names of any such persons. In the event Closing does not take place due to any fault on the part of Seller, then within fifteen (15) days of the scheduled Closing Date, Perret Doise shall disclose to Buyer the name of each person who contacted Seller or any Affected Person prior to the scheduled Closing Date.

g. Notice

Seller and the Company shall promptly notify Buyer of, and furnish Buyer any information it may reasonably request with respect to, the occurrence to Seller’s or the Company’s knowledge of any event or condition or the existence to Seller’s or the Company’s knowledge of any fact that would cause any of the conditions to Buyer’s obligation to consummate the purchase and sale of Seller’s Membership Interest not to be fulfilled.

h. Certain Licenses and Permits

Seller and the Company covenant that all licenses, permits and authorizations which are held in the name of any employee, officer, director, member, agent or otherwise on behalf of the Company shall be duly and validly transferred to the Company without consideration prior to the Closing and that the warranties, representations, covenants and conditions contained in this Agreement shall apply to the same as if held by the Company as of the date hereof.

i. Disclosure Schedules, Updated Disclosures; Breaches

Prior to the execution and delivery hereof, Seller and the Company shall deliver to Buyer the Disclosure Schedule; provided, however, that Buyer’s rights set forth in Section 8(a)(x) hereof shall continue until the Closing Date with respect to matters disclosed pursuant to such Disclosure Schedule. The Disclosure Schedule shall constitute an integral part of this Agreement and shall modify or otherwise affect the respective representations, warranties, covenants or agreements of the parties hereto contained herein to the extent that such representations, warranties, covenants or agreements expressly refer to the Disclosure Schedule. Any and all statements, representations, warranties or disclosures set forth in the Disclosure Schedule shall be deemed to have been made on and as of the date of this Agreement.

From and after the date of this Agreement until the Closing Date, Seller and the Company shall promptly notify Buyer by written update to the Disclosure Schedule of (A) any representation or warranty made by either Seller or the Company in connection with this Agreement becoming

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untrue or inaccurate in any material respect, (B) the occurrence, or non-occurrence, of any event the occurrence, or non-occurrence, of which would be likely to cause any condition to the obligations of any party and the other transactions contemplated by this Agreement not to be satisfied, or (C) the failure of Seller or the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it pursuant to this Agreement which would be likely to result in any condition to the obligations of any party not to be satisfied; provided, however, that the delivery of any notice pursuant to this section shall not cure any breach of any representation or warranty requiring disclosure of such matter prior to the date of this Agreement or otherwise limit or affect the rights and remedies available hereunder to the party receiving such notice, except with respect to any breach which Buyer shall have waived in writing on or prior to the Closing Date.

5. REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Seller as follows:

a. Authority

Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Buyer has all requisite corporate power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. All acts and other proceedings required to be taken by Buyer to authorize the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby have been duly and properly taken. This Agreement has been duly executed and delivered by Buyer and constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms.

b. No Conflicts; Consents

Except as set forth in Schedule 5(b) (the schedules hereto in which Buyer sets forth exceptions to its covenants and representations and warranties being herein referred to as the “Buyer Disclosure Schedule”), (i) the execution and delivery of this Agreement by Buyer does not, and the execution and delivery of the Note by Buyer in accordance herewith will not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation under, or result in the creation of any Lien upon any of the properties or assets of Buyer under, any provision of (A) the organizational documents of Buyer as applicable, (B) any material note, bond, mortgage, indenture, deed of trust, license, lease, contract, commitment, agreement or arrangement to which Buyer is a party or by which any of its properties or assets are bound or (C) any judgment, order, or decree, or statute, law, ordinance, rule or regulation applicable to Buyer or its properties or assets, other than, in the case of clauses (B) and (C) above, any such items that, individually or in the aggregate, would not have a material adverse effect on the ability of Buyer to consummate the transactions contemplated hereby; and (ii) no consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to Buyer in connection with the execution, delivery and performance by Buyer of this Agreement, the Note or the consummation of the transactions contemplated hereby.

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c. Securities Act

Seller’s Membership Interest purchased by Buyer pursuant to this Agreement is being acquired for investment only and not with a view to any public distribution thereof, and Buyer shall not offer to sell or otherwise dispose of Seller’s Membership Interest so acquired by it in violation of any of the registration requirements of the Securities Act.

d. Actions and Proceedings, etc.

There are no (i) outstanding judgments, orders, injunctions or decrees of any Governmental Entity or arbitration tribunal against Buyer, (ii) lawsuits, actions or proceedings pending or, to the knowledge of Buyer, threatened against Buyer, or (iii) investigations by any Governmental Entity which are, to the knowledge of Buyer, pending or threatened against Buyer, and which, in the case of each of clauses (i), (ii) and (iii), have or could have a material adverse effect on the ability of Buyer to consummate the transactions contemplated hereby.

6. COVENANTS OF BUYER

Buyer covenants and agrees as follows:

a. Confidentiality

Subject to Section 7(d), until the Closing Date, Buyer shall keep confidential, and cause its Affiliates to keep confidential, all Confidential Information known to Buyer. In the event this Agreement is terminated pursuant to Section 14 hereof, Buyer will deliver to Seller or destroy all tangible embodiments (and all copies) of such Confidential Information which are in Buyer’s possession and shall keep confidential, and cause its Affiliates to keep confidential, all Confidential Information known to Buyer. Subject to Section 7(d), in the event Buyer is requested or required to disclose any Confidential Information, Buyer shall immediately notify Seller so that Seller may seek a protective order or take other steps to prevent the disclosure of information which is required to be kept confidential under the above terms, and Buyer will not disclose such information.

The foregoing provisions do not apply to information which is available to the public on the Closing Date, or thereafter becomes available to the public other than as a result of a breach of this Section 6(a). The covenant set forth in this Section 6(a) shall terminate three years after the Closing Date.

b. Notice

Buyer shall promptly notify Seller of, and furnish Seller any information it may reasonably request with respect to, the occurrence to Buyer’s knowledge of any event or condition or the existence to Buyer’s knowledge of any fact that would cause any of the conditions to Seller’s obligation to consummate the purchase and sale of Seller’s Membership Interest not to be fulfilled.

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c. Disclosure Schedules, Updated Disclosures; Breaches

Prior to the execution and delivery hereof, Buyer shall deliver to Seller the Buyer Disclosure Schedule. The Buyer Disclosure Schedule shall constitute an integral part of this Agreement and shall modify or otherwise affect the respective representations, warranties, covenants or agreements of the parties hereto contained herein to the extent that such representations, warranties, covenants or agreements expressly refer to the Buyer Disclosure Schedule. Any and all statements, representations, warranties or disclosures set forth in the Buyer Disclosure Schedule shall be deemed to have been made on and as of the date of this Agreement.

From and after the date of this Agreement until the Closing Date, Buyer shall promptly notify Seller by written update to the Buyer Disclosure Schedule of (A) any representation or warranty made by it in connection with this Agreement becoming untrue or inaccurate in any material respect, (B) the occurrence, or non-occurrence, of any event the occurrence, or non-occurrence, of which would be likely to cause any condition to the obligations of any party and the other transactions contemplated by this Agreement not to be satisfied, or (C) the failure of Buyer to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it pursuant to this Agreement which would be likely to result in any condition to the obligations of any party not to be satisfied; provided, however, that the delivery of any notice pursuant to this section shall not cure any breach of any representation or warranty requiring disclosure of such matter prior to the date of this Agreement or otherwise limit or affect the rights and remedies available hereunder to the party receiving such notice, except with respect to any breach which Seller shall have waived in writing on or prior to the Closing Date.

d. Pursuit of Regulatory Approval and Financing

Buyer agrees to immediately commence and thereafter diligently pursue all action necessary to obtain Regulatory Approval and financing of the transaction contemplated by this Agreement at the earliest time possible. In particular, Buyer will use its good faith efforts to submit, within fifteen (15)days from the date hereof, a fully completed application with the (1) Louisiana State Racing Commission for approval of the transfer of Seller’s Membership Interest to Buyer. Additionally, Buyer will use its good faith efforts to assist the Company in submitting, within forty-five (45) days from this date, or as soon thereafter as the (2) Louisiana Gaming Control Board and Louisiana State Police will accept it, a fully completed application for a license to operate slot machines at the Old Evangeline Downs Casino in compliance with LSA-RS 27:351 et seq. Seller acknowledges that, despite the good faith efforts of Buyer, the Louisiana Gaming Control Board may not allow Buyer prior to the Closing to file any applications for authority to operate slot machines and Seller acknowledges that, if Buyer is unable to file such application prior to Closing, such inability to file such application will not constitute a breach of this section. Buyer agrees that it, and each of its officers, directors, members, equityholders and controlling persons shall expeditiously respond to any and all requests for additional information which may be made by any gaming regulatory authority and to do all things reasonably requested to obtain Regulatory Approval as soon as practicable.

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e. No Flip

Buyer agrees that it is purchasing Seller’s Membership Interest to develop the facility in St. Landry Parish. Buyer shall not transfer, sell, assign or enter into any sale, transfer, assignment consolidation, merger, business combination, liquidation, dissolution or similar transaction involving, directly or indirectly, the Company or any of the assets of the Company, Seller’s Membership Interest or any other interest in the Company up to and for a period ending at Closing to any person (other than an Affiliate of Buyer) without the prior written consent of Seller, which consent may be withheld for any, or no, reason whatsoever, in Seller’s sole discretion. Any transaction in violation of this provision shall be null and void and cause for termination of this Agreement, or rescission of any sale which Seller has made to Buyer.

7. MUTUAL COVENANTS

Seller, Buyer and the Company covenant and agree as follows:

a. Cooperation

Buyer, the Company and Seller shall cooperate with each other, and shall cause their respective Affiliates, officers, employees, agents, auditors and representatives to cooperate with each other, for a period of ninety (90) days after the Closing to ensure the orderly transition of the Company from Seller to Buyer and to minimize any disruption to the respective businesses of Seller, Buyer, or the Company. After the Closing, upon reasonable written notice, Buyer and Seller shall furnish or cause to be furnished to each other and their employees, counsel, auditors and representatives access, during normal business hours, such information and assistance relating to the Company as is reasonably necessary for the preparation, filing or amendment of any gaming applications, financial reporting and accounting matters, compliance with any applicable laws or regulations, the preparation and filing of any tax returns, reports or forms or the defense of any tax claim or assessment. Neither party shall be required by this Section 7(a) to take any action that would unreasonably interfere with the conduct of its business or unreasonably disrupt its normal operations (or, in the case of Buyer, the business or operations of the Company).

b. Confidentiality of the Existence of the Agreement

The existence of this Agreement and its contents and the transactions contemplated hereby are intended to be confidential and shall not be disclosed by Seller, Buyer or the Company without the prior written consent of the other parties hereto, except as follows:

(i) a party may disclose the existence of this Agreement and its contents to its agents, consultants, representatives or advisers (collectively, “Related Parties”) if such disclosure is necessary in furtherance of the transactions contemplated by this Agreement; provided that any such Related Party to which such information is disclosed shall agree to treat such information confidentially; and

(ii) a party may disclose this Agreement and its contents if, but only to the extent, it is legally required to be disclosed or is otherwise subject to legal, judicial, regulatory or self-regulatory requests for information or documents, including that necessary to obtain Regulatory Approval.

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If a party makes a disclosure pursuant to paragraph (ii), it shall give the other parties written notice as soon as practicable (which shall be prior notice where possible) of any such disclosure, and the party making the disclosure shall use commercially reasonable efforts to obtain assurance that confidential treatment will be accorded the disclosed information.

c. Publicity

The parties hereto agree that, from the date hereof through the Closing Date, they will not make a public release or announcement concerning the transactions contemplated hereby without the prior consent of all other parties hereto. Each party will use commercially reasonable efforts to provide to the others a reasonable time prior to the release thereof copies of any such public release or announcements that are written.

d. Commercial Efforts

Subject to the terms and conditions of this Agreement, each party shall use all commercially reasonable efforts to cause the Closing to occur as promptly as practical following the date hereof.

e. Records

On the Closing Date, Seller shall deliver or cause to be delivered to Buyer all Contracts, material agreements, documents, books, records and files (collectively, “Records”), if any, in the possession of Seller relating to the business and operations of the Company to the extent not then in the possession of the Company, subject to the following exceptions:

(i) Seller may retain copies of Records prepared in connection with the sale of Seller’s Membership Interest; and

(ii) Seller may retain any Tax Returns, and Buyer shall be provided with copies of such Tax Returns only to the extent that they relate to the Company’s separate Tax Returns or separate Tax liability.

f. Management Transition

Seller shall cooperate with Buyer in the transition of operational management of the Company, provided all costs and expenses are paid by the Company.

8. CONDITIONS TO CLOSING

a. Buyer’s Obligation

The obligation of Buyer to purchase and pay for Seller’s Membership Interest is subject to the satisfaction (or waiver by Buyer) as of the Closing of the following conditions:

(i) The representations and warranties of Seller and the Company made in this Agreement shall be true and correct in each case as of the date hereof and as of the time of the Closing as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date, in which case then as of such earlier date. Seller and the Company shall have performed or complied with all obligations and covenants required by this Agreement to be performed or complied with by Seller and the Company by the time of the Closing. Seller shall have delivered to Buyer a certificate dated the Closing Date and signed by Seller confirming the foregoing and that all of the conditions contained in this Section have been satisfied in accordance with the terms and provisions hereof.

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(ii) Buyer shall have received an opinion dated the Closing Date of Perret Doise, counsel to Seller, in form and substance reasonably acceptable to Buyer.

(iii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any federal, state, local or foreign government or any court of competent jurisdiction, administrative agency, regulatory body, commission or other governmental authority or instrumentality, domestic or foreign (a “Governmental Entity”), or other legal restraint or prohibition preventing the purchase and sale of Seller’s Membership Interest shall be in effect.

(iv) There shall not be pending by any Governmental Entity any suit, action or proceeding (A) challenging or seeking to restrain or prohibit the purchase and sale of Seller’s Membership Interest or any of the other transactions contemplated by this Agreement or seeking to obtain from Buyer or any of its Affiliates in connection with the purchase and sale of Seller’s Membership Interest any damages that are material in relation to Buyer, the Company and their respective Affiliates taken as a whole, (B) seeking to prohibit or limit the ownership or operation by Buyer, the Company or any of their respective Affiliates of any material portion of the business or assets of Buyer, the Company or any of their respective Affiliates, or to compel Buyer, the Company or any of their respective Affiliates to dispose of or hold separate any material portion of the business or assets of Buyer, the Company or any of their respective Affiliates, in each case as a result of the purchase and sale of Seller’s Membership Interest or any of the other transactions contemplated by this Agreement, or (C) seeking to impose limitations on the ability of Buyer to acquire or hold, or exercise full rights of ownership of, Seller’s Membership Interest, including the right to vote Seller’s Membership Interest on all matters properly presented to the members of the Company.

(v) All consents, waivers, approvals and authorizations required to be obtained, and all filings or notices required to be made, prior to consummation of the transactions contemplated hereby shall have been obtained from and made with all required persons.

(vi) Seller shall have delivered Seller’s Membership Interest, via Act of Sale.

(vii) Buyer’s investigation of the books, records, properties (including the environmental condition thereof) and other assets of the Company (A) shall have been concluded to the satisfaction of Buyer, and (B) shall not have established, in the judgment of Buyer, that any representation, warranty, covenant or condition of the Company or the Seller has been, or reasonably can be foreseen to have been breached.

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(viii) Seller shall have delivered to Buyer its interest in the Existing Mortgage Notes.

(ix) Since December 31, 2000, there shall not have occurred any event that has had or will have a Material Adverse Effect (or any development that, insofar as reasonably can be foreseen, is likely to result in any Material Adverse Effect), except as disclosed in Schedule 3(m).

(x) Seller and the Company shall have delivered to Buyer at the Closing such other executed documents, agreements or instruments as shall be reasonably necessary to convey to Buyer full right, title and interest in and to Seller’s Membership Interest or as shall be reasonably necessary to effectuate the transactions contemplated by this Agreement.

(xi) The Company shall have executed and delivered to Buyer a management services agreement by and between the Company and the Buyer in form and substance satisfactory to Buyer.

(xii) The Organizational Documents shall have been amended in form and substance satisfactory to Buyer.

(xiii) Simultaneously with the Closing, (1) the Company shall have consummated an offering of senior secured notes in form and substance acceptable to Buyer to be placed by Jefferies & Co., Inc. (“Jefferies”) resulting in net proceeds of not less than $55 million (the “Jefferies Financing”) for the purpose of designing and constructing the Old Evangeline Downs Casino (the “OED Casino”), contiguous Racetrack (the “OED Racetrack”) and related on-site and off-site facilities and properties (together with the OED Casino and OED Racetrack, the “OED Facilities”), and (2) the Company shall have entered into a working capital facility providing for borrowings of not less than $10 million for working capital and general corporate purposes (which shall be undrawn at closing), in each case on terms and conditions acceptable to Buyer and Jefferies.

(xiv) Buyer and the Company shall not have been denied Regulatory Approval to own, manage and operate the OED Facilities and all related necessary findings of suitability, registrations and approvals before the Closing.

(xv) The options to purchase the real property in St. Landry Parish, Louisiana on which the OED Facilities will be constructed shall be in full force and effect.

(xvi) The Company shall have entered into such agreements as Buyer determines is necessary to grant the Company the right to use and occupy the “backside and track” in Lafayette through December 31, 2004 on substantially the same terms as provided in the Ground Lease dated as of April 19, 2000 between the Company and MT Holdings, L.L.C. As used herein “backside and track” mean the existing racing facilities and barns (including without limitation all improvements, furniture, fixtures and equipment related thereto) in Lafayette, Louisiana where racing takes place and horses are sheltered as necessary for the ongoing operations of the Company consistent with past practices.

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b. Seller’s Obligation

The obligation of Seller to sell and deliver Seller’s Membership Interest and its interest in the Existing Mortgage Notes to Buyer is subject to the satisfaction (or waiver by Seller) as of the Closing of the following conditions:

(i) The representations and warranties of Buyer made in this Agreement shall be true and correct, as of the date hereof and as of the time of the Closing as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date, in which case then as of such earlier date. Buyer shall have performed or complied with all obligations and covenants required by this Agreement to be performed or complied with by Buyer by the time of the Closing. Buyer shall have delivered to Seller a certificate dated the Closing Date and signed by an authorized officer of Buyer confirming the foregoing.

(ii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Entity or other legal restraint or prohibition preventing the purchase and sale of Seller’s Membership Interest shall be in effect.

(iii) There shall not be pending by any Governmental Entity any suit, action or proceeding challenging or seeking to restrain or prohibit the purchase and sale of Seller’s Membership Interest or any of the other transactions contemplated by this Agreement or seeking to obtain from Seller in connection with the purchase and sale of Seller’s Membership Interest any damages that are material to Seller.

(iv) There shall not have occurred any events that individually or in the aggregate, could reasonably be expected to have a material adverse effect on the business, financial condition or results of operations of Buyer or Buyer’s subsidiaries taken as a whole.

(v) Seller shall have received the full Purchase Price (less the Deposit) paid in cash simultaneously with or prior to the Closing.

(vi) Seller shall have received an opinion dated the Closing Date of Mayer, Brown & Platt, counsel for Buyer in form and substance reasonably satisfactory to Seller.

(vii) Buyer shall have delivered to Seller at the Closing such other executed documents, agreements and instruments as shall be reasonably necessary to effectuate the transactions contemplated by this Agreement.

c. Frustration of Closing Conditions

Neither Buyer nor Seller may rely on the failure of any condition set forth in Section 8(a) or 8(b), respectively, to be satisfied if such failure was caused by such party’s failure to act in good faith or to use its commercially reasonable efforts to cause the Closing to occur, as required by Section 7(e).

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9. FURTHER ASSURANCES

From time to time, as and when requested by any party hereto, the parties shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions, as such other party may reasonably deem necessary or desirable to consummate the transactions contemplated by this Agreement.

10. INDEMNIFICATION

a. Indemnification by Seller

Subject to the terms and conditions of this Section 10, Seller agrees to indemnify, defend and hold harmless Buyer and each of its members, managers and controlling persons (collectively, the “Buyer Indemnified Parties” or a “Buyer Indemnified Party”), from and against all Claims asserted against, resulting from, imposed upon or incurred by any Buyer Indemnified Party, directly or indirectly, by reason of, arising out of, or resulting from (i) the inaccuracy or breach of any representation or warranty of the Company or the Seller contained in or made pursuant to this Agreement or (ii) the breach of any covenant or agreement of the Company or the Seller contained in or made pursuant to this Agreement. As used in this Section 10, the term “Claim” shall include (i) all debts, liabilities and obligations, (ii) all losses, damages, costs and expenses (including, without limitation, interest (including prejudgment interest in any litigated matter), penalties, court costs and reasonable attorneys’ fees and expenses), and (iii) all demands, claims, actions, costs of investigation, causes of action, proceedings, arbitrations, judgments, settlements and assessments, whether or not ultimately determined to be valid.

b. No Exhaustion of Remedies; Exclusive Remedy

Seller acknowledges that its obligation under Section 10(a) of this Agreement is independent of the obligations of the Company pursuant to this Agreement, and that Seller waives any right to require Buyer Indemnified Parties to (i) proceed against the Company or (ii) pursue any other remedy whatsoever in the power of Buyer Indemnified Parties.

c. Indemnification by Buyer

Subject to the terms and conditions of this Section 10, Buyer agrees to indemnify, defend and hold harmless Seller, its partners, members, managers and controlling persons, (collectively the “Seller Indemnified Parties” or a “Seller Indemnified Party”), from and against all Claims asserted against, resulting from, imposed upon or incurred by any Seller Indemnified Party, directly or indirectly, by reason of, arising out of, or resulting from (a) the inaccuracy or breach of any representation or warranty of Buyer contained in or made pursuant to this Agreement, (b) the breach of any covenant or agreement of Buyer contained in or made pursuant to this Agreement or (c) any claims relating to the agreement listed on Schedule 3(y).

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d. Exclusive Remedy

Should the Closing occur, the sole and exclusive remedy of Buyer Indemnified Parties and Seller Indemnified Parties with respect to any and all Claims (other than Excepted Claims (as hereinafter defined)) shall be pursuant to the indemnification provisions set forth in this Section 10.

If Seller breaches this Agreement before the Closing Date, Buyer may elect to exercise any or all of the following remedies:

(i) terminate this Agreement and recover Buyer’s out-of-pocket costs and expenses incurred in connection with the negotiation, execution, delivery, preparation for performance, due diligence and performance of this Agreement, including, without limitation, all fees and costs incurred by Buyer for all of Buyer’s attorneys, accountants, investment bankers and other consultants, of not more than $100,000;

(ii) enforce this Agreement by obtaining specific performance of this Agreement;

(iii) if such breach pertains to a negative covenant, obtain a restraining order or injunction against such breach; or

(iv) pursue any other remedy at law or in equity.

If Buyer breaches this Agreement before the Closing Date, Seller may elect to exercise any or all of the following remedies:

(i) terminate this Agreement and recover Seller’s out-of-pocket costs and expenses incurred in connection with the negotiation, execution, delivery, preparation for performance, due diligence and performance of this Agreement, including, without limitation, all fees and costs incurred by Seller for all of Seller’s attorneys, accountants, investment bankers and other consultants, of not more than $100,000;

(ii) enforce this Agreement by obtaining specific performance of this Agreement;

(iii) if such breach pertains to a negative covenant, obtain a restraining order or injunction against such breach; or

(iv) pursue any other remedy at law or in equity.

e. Procedures Relating to Indemnification

In order for a party (the “Indemnified Party”) to be entitled to any indemnification provided for under this Agreement in respect of, arising out of or involving a Claim made by any person against the Indemnified Party (a “Third Party Claim”), such Indemnified Party must notify the indemnifying party in writing, and in reasonable detail, of the Third Party Claim within 30 business days after receipt by such Indemnified Party of written notice of the Third Party Claim; provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent (and only to the extent) the indemnifying party demonstrates that it has been actually materially prejudiced as a result of such failure and such failure was not the result, directly

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or indirectly, of any act or omission of the Indemnifying Party. Thereafter, the Indemnified Party shall deliver to the indemnifying party, within ten business days after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to the Third Party Claim.

If a Third Party Claim is made against an Indemnified Party, the indemnifying party shall be entitled to participate in the defense thereof and, if it so chooses and acknowledges its obligation to indemnify the Indemnified Party therefor, to assume the defense thereof with counsel selected by the indemnifying party and reasonably acceptable to the Indemnified Party. If the indemnifying party assumes such defense, the Indemnified Party shall have the right to participate in the defense thereof and to employ counsel at its own expense, separate from the counsel employed by the indemnifying party. The indemnifying party shall be liable for the fees and expenses of counsel employed by the Indemnified Party for any period during which the indemnifying party has failed to assume the defense thereof.

If the indemnifying party so elects to assume the defense of any Third Party Claim, all of the indemnified parties shall reasonably cooperate with the indemnifying party in the defense or prosecution thereof. Such cooperation shall include the retention and (upon the indemnifying party’s request) the provision to the indemnifying party of records and information which are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Whether or not the indemnifying party shall have assumed the defense of a Third Party Claim, the Indemnified Party shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the indemnifying party’s prior written consent (which consent shall not be unreasonably withheld). If the indemnifying party shall have assumed the defense of a Third Party Claim, the Indemnified Party shall agree to any settlement, compromise or discharge of a Third Party Claim which the indemnifying party may recommend and which by its terms obligates the indemnifying party to pay the full amount of the liability in connection with such Third Party Claim, which releases the Indemnified Party completely in connection with such Third Party Claim, which does not result in a finding or admission of fault or culpability of the Indemnified Party and which would not otherwise adversely affect the Indemnified Party.

Notwithstanding the foregoing, the indemnifying party shall not be entitled to assume the defense of any Third Party Claim (and shall be liable for the reasonable fees and expenses of counsel incurred by the Indemnified Party in defending such Third Party Claim) if the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnified Party which the Indemnified Party reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Third Party Claim can be so separated from that for money damages, the indemnifying party shall be entitled to assume the defense of the portion relating to money damages. The indemnification required by this Section shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or loss, liability, Claim, damage or expense is incurred. All Claims under this Section 10 other than Third Party Claims shall be governed by Section 10(f).

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f. Other Claims

In the event any Indemnified Party should have a Claim against any indemnifying party under this Section 10 that does not involve a Third Party Claim being asserted against or sought to be collected from such Indemnified Party, the Indemnified Party shall deliver notice of such Claim with reasonable promptness to the indemnifying party. The failure by any Indemnified Party so to notify the indemnifying party shall not relieve the indemnifying party from any liability which it may have to such Indemnified Party under this Section 10, except to the extent (and only to the extent) that the indemnifying party demonstrates that it has been actually materially prejudiced by such failure, and such failure was not the result, directly or indirectly, of any act or omission of the Indemnifying Party. If the indemnifying party does not notify the Indemnified Party within ten calendar days following its receipt of such notice that the indemnifying party disputes its liability to the Indemnified Party under this Section 10, such Claim specified by the Indemnified Party in such notice shall be conclusively deemed a liability of the indemnifying party under this Section 10 and the indemnifying party shall pay the amount of such liability to the Indemnified Party on demand or, in the case of any notice in which the amount of the claim (or any portion thereof) is estimated, on such later date when the amount of such Claim (or such portion thereof) becomes finally determined. If the indemnifying party has timely disputed its liability with respect to such Claim, as provided above, the indemnifying party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved by litigation in an appropriate court of competent jurisdiction.

g. Survival of Representations and Warranties; Floor and Cap

All representations, warranties, covenants and agreements in this Agreement or made pursuant hereto shall survive the Closing, and any investigation thereof, until the end of the twenty- fourth (24th) month following the Closing Date and neither Seller, the Company, nor Buyer shall have any liability under this Section 10 unless notice of a Claim or alleged or potential Claim is provided within such period, except that the representations and warranties of Seller contained in Sections 3(a), 3(b), 3(c) and 3(h) hereof and the representations and warranties of Buyer in Section 5(a) and 5(b) hereof shall survive indefinitely. The Buyer Indemnified Parties shall not be entitled to indemnification for Claims until the aggregate amount for all claims exceeds $100,000 (the “Threshold”). Seller, subject to the other limitations in this Section 10, shall be liable for all Claims of the Buyer Indemnified Parties in excess of the Threshold. Except for Claims arising from fraud, willful breach of any covenant or breaches of the representations and warranties contained in Sections 3(a), 3(b), 3(c) and 3(h) hereof (collectively, “Excepted Claims”), Seller’s indemnity obligations shall be limited to the amount of the Purchase Price. There shall be no indemnification limitation (cap) for the Excepted Claims.

Neither Seller, Buyer nor the Company shall have any liability under this Section 10 unless notice of a Claim or alleged or potential Claim is provided within the respective survival periods described above.

h. Liability Limitations

Notwithstanding anything herein to the contrary, except for Excepted Claims, in no event shall Seller’s indemnity obligations exceed the Purchase Price consideration received by Seller.

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Furthermore, the liability of Seller shall be “in rem,” that is, limited exclusively to the assets of Seller and shall not extend to any of the partners of Seller. Specifically, Buyer, and each of its successors and assigns, hereby waives any and all rights to proceed against any of the partners of Seller for any claim whatsoever, except claims against B.I. Moody III for breach of the agreement in the next paragraph.

Seller shall not, for a period of 24 months following the Closing Date, (a) make any distribution on account of Seller’s partnership interests (other than distributions with the proceeds of the Purchase Price) or purchase, redeem or otherwise acquire or retire for value any such partnership interests, (b) create any Encumbrances on the assets of Seller, or (c) sell, transfer or assign the assets of Seller other than for fair market value.

In no event shall Seller be liable to Buyer or the Company for any indemnity obligation(s) relating to any of the property to be purchased in St. Landry Parish, whether environmental or otherwise other than any breach of representations relating to the Company’s options to purchase such property. Buyer acknowledges that Seller shall not be responsible for any liability whatsoever with respect to the St. Landry Parish Property other than any breach of representations relating to the Company’s options to purchase such property.

In no event shall Seller be liable to Buyer or the Company for any indemnity or other obligation(s) arising out of, or in any way related to, the HBPA Lawsuit.

In no event shall Seller be liable to Buyer or the Company for any indemnity or other obligation(s) arising out of, or in any way related to, claims of New South Capital, Inc. and/or Ken Burns.

i. Tax Treatment of Indemnification Payments

To the extent permitted by applicable law, the parties agree that any indemnification payments (and/or payments or adjustments) made with respect to this Agreement shall be treated for all Tax purposes as an adjustment to the purchase price.

11. TAX MATTERS

a. Taxable Period Ending on or Before Closing Date

With respect to any Tax Return covering a taxable period ending on or before the Closing Date that is required to be filed after the Closing Date with respect to the Company, the Company: (i) shall cause such Tax Return to be prepared; (ii) shall cause to be included in such Tax Return all Tax Items required to be included therein; (iii) shall be responsible for the timely payment of all Taxes due with respect to the periods covered by such Tax Returns; and (iv) shall be responsible for the payment of all costs and expenses incurred in the preparation and filing of such Tax Returns. Not later than 10 business days prior to the due date of each such Tax Return, Company shall deliver a copy of such Tax Return to Buyer. Company shall permit Buyer to review and comment on each such Tax Return prior to filing and shall make such revisions to such Tax Return as are reasonably requested by Buyer.

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b. Taxable Period Beginning on or Before Closing Date and Ending After Closing Date

With respect to any Tax Return covering a taxable period beginning on or before the Closing Date and ending after the Closing Date that is required to be filed after the Closing Date with respect to the Company, the Company shall cause such Tax Return to be prepared, and shall cause to be included in such Tax Return all Tax Items required to be included therein. Not later than ten (10) business days prior to the due date of each such Tax Return, the Company shall deliver a copy of such Tax Return to Buyer and Seller, and the Company shall permit Buyer and Seller to review and comment on each such Tax Return prior to filing and shall make such revisions as are reasonably requested by Buyer and Seller. Thereafter, the Company shall file the Tax Return and timely pay the Taxes shown due on such Tax Return.

c. Franchise Tax

Notwithstanding anything to the contrary herein, any franchise Tax paid or payable with respect to the Company shall be allocated to the taxable period during which the income, operations, assets or capital comprising the base of such Tax is measured, regardless of whether the right to do business for another taxable period is obtained by the payment of such franchise Tax.

d. Consistent Preparation of Tax Returns

Any Tax Return to be prepared pursuant to the provisions of this Section 11 shall be prepared in a manner consistent with practices followed in prior years with respect to similar Tax Returns, except as otherwise required by law or fact.

e. Cooperation

Buyer and Seller shall cooperate fully, and shall cause their Affiliates, including the Company, to cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns pursuant to this Section and any audit, litigation or other proceeding (each a “Proceeding”) with respect to Taxes. Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information which are reasonably relevant to any such Proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Seller will deliver to Buyer all books and records with respect to Tax matters pertinent to the Company relating to any taxable period beginning before the Closing Date. Seller further agrees, upon request, to use its best efforts to obtain any certificate or other document from any Governmental Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed on Buyer or the Company. Buyer and Seller further agree, upon request, to provide the other party with all information regarding the Company that either party may be required to report to any taxing authority.

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f. Interest

Any payment required under this Section 11 and not made when due shall bear interest at the rate per annum determined, from time to time, under the provisions of Section 6621(a)(2) or 6621(c) as applicable of the Code for each day until paid.

12. ASSIGNMENT

This Agreement and the rights and obligations hereunder shall not be assignable or transferable by Buyer, Seller or the Company (including by operation of law in connection with a merger, or sale of substantially all the assets, of Buyer, Seller or the Company) without the prior written consent of the other parties hereto, which consent may be withheld for any reason whatsoever; provided, however, that Buyer and Seller may each assign this Agreement to any person controlled by Buyer or Seller respectively. For any assignment authorized hereunder, the assigning party and the assignee shall remain jointly and severally liable for all obligations under this Agreement. Any attempted assignment in violation of this Section 12 shall be void.

13. NO THIRD-PARTY BENEFICIARIES

Except as provided in Section 10, this Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.

14. TERMINATION

a. Anything contained herein to the contrary notwithstanding, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing Date:

(i) by mutual written consent of Seller and Buyer;

(ii) by Seller if any of the conditions set forth in Section 8(b) shall have become incapable of fulfillment, and shall not have been waived by Seller;

(iii) by Buyer if any of the conditions set forth in Section 8(a) shall have become incapable of fulfillment, and shall not have been waived by Buyer;

(iv) by either Buyer or Seller, if the Closing does not occur on or prior to December 31, 2001; provided, however, that Buyer may extend the December 31, 2001 termination date for up to 90 days if (i) the delay in Closing is due to Regulatory Approval, (ii) the Closing is reasonably expected to occur in the first quarter of 2002, and (iii) Buyer pays to Seller $50,000.00 per month on the first of each month commencing January 1, 2002 as a non-refundable extension payment, which amount shall be in addition to (and not applied toward) the Purchase Price;

(v) by Seller, if Seller or his spouse, or any linear descendant or the spouse of a linear descendant of Seller, is required to undergo a suitability investigation as part of any

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Regulatory Approval of the proposed transaction (other than by reason of the lease agreement contemplated by Section 8(a)(xvi)); provided, however, that Seller’s right to terminate under this section shall not arise until Buyer and the Company have exhausted their good faith efforts, including any appeals or similar procedures related thereto, to address such requirement for suitability investigation in a manner reasonably acceptable to Seller; or

(vi) by Seller if any Regulatory Authority, in a final, unappealable order or finding, rejects any application of Company, Buyer or any officer, director, member or controlling person of Buyer, such rejection has a Material Adverse Effect on Buyer’s ability to consummate the transactions contemplated hereby and such person is not immediately removed as an officer, director, member or controlling person of Buyer, as the case may be;

provided, however, that the party seeking termination pursuant to clause (ii), (iii) or (iv) is not in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement.

b. Furthermore, (i) Buyer may terminate this Agreement by delivering written notice to Seller, on or before 45 days after the date of this Agreement, if the Environmental Assessment Audits are not satisfactory to Buyer in its sole discretion and (ii) Buyer may terminate this Agreement by delivering written notice to Seller, on or before 72 hours after receipt of the final Disclosure Schedule.

c. In the event of termination by Seller or Buyer pursuant to this Section 14, written notice thereof shall forthwith be given to the other party and the transactions contemplated by this Agreement shall be terminated, without further action by either party. If the transactions contemplated by this Agreement are terminated as provided herein:

(i) Buyer shall return all documents and other material received from Seller or the Company relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to Seller; and

(ii) all confidential information received by Buyer with respect to the business of the Company shall be treated in accordance with the Confidentiality Agreement, which shall remain in full force and effect notwithstanding the termination of this Agreement.

d. If this Agreement is terminated and the transactions contemplated hereby are abandoned as described in this Section 14, this Agreement shall become void and of no further force or effect, except for the provisions of (i) Section 6(a) relating to the obligation of Buyer to keep confidential certain information and data obtained by it, (ii) Section 15 relating to certain expenses, (iii) Section 16 relating to attorney fees and expenses, (iv) Section 7(c) relating to publicity, (v) Section 22 relating to finder’s fees and broker’s fees and (vi) this Section 14. Nothing in this Section 14 shall be deemed to release either party from any liability for any breach by such party of the terms and provisions of this Agreement or to impair the right of either party to compel specific performance by the other party of its obligations under this Agreement.

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15. EXPENSES

Whether or not the transactions contemplated hereby are consummated, and except as otherwise specifically provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs or expenses.

16. ATTORNEY FEES

A party in breach of this Agreement shall, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement. The payment of such expenses is in addition to any other relief to which such other party may be entitled.

17. AMENDMENTS

No amendment, modification or waiver in respect of this Agreement shall be effective unless it shall be in writing and signed by both parties hereto.

18. NOTICES

All notices or other communications required or permitted to be given hereunder shall be in writing and shall be sent, postage prepaid, by registered, certified or express mail, return receipt requested or by reputable national overnight courier service guaranteeing next business day delivery and shall be deemed given if mailed, three days after mailing, and in the case of overnight courier service one business day after mailing), as follows:

(i) if to Buyer:

Peninsula Gaming Partners, L.L.C.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, CA 90025

Attention: M. Brent Stevens

    with a copy to:

Mayer, Brown & Platt

1675 Broadway

New York, NY 10019-5820

Attention: Ronald S. Brody, Esq.; and

    with a copy to:

Hopkins & Huebner

2700 Grand Avenue

Suite 111

Des Moines, IA 50312

Attention: Lorraine J. May

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(ii) if to Seller:

Kevin Moody

600 Jefferson Street, Suite 1500

Lafayette, LA 70501

    with a copy to:

Perret Doise

P.O. Drawer 3408

Lafayette, LA 70502-3048

Attention: Hank Perret

(iii) if to the Company:

William E. Trotter, II

600 Jefferson Street, Suite 1030

Lafayette, LA 70501

and

Kevin Moody

600 Jefferson Street, Suite 1500

Lafayette, LA 70501

      with copies to:

McGlinchey, Stafford

One American Place, 9th Floor

Baton Rouge, LA 70825

Attention: Rudy Aguillard

and

Perret Doise

P. O. Drawer 3408

Lafayette, LA 70502

Attention: Hank Perret

19. INTERPRETATION; EXHIBITS AND SCHEDULES; CERTAIN DEFINITIONS

a. The headings contained in this Agreement, in any Exhibit or Schedule hereto and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any matter set forth in any provision,

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subprovision, section or subsection of the Disclosure Schedule hereto shall be deemed set forth for all purposes of the Disclosure Schedule to the extent relevant. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein, shall have the meaning as defined in this Agreement.

b. For all purposes hereof:

(i) “including” means including, without limitation;

(ii) “knowledge” means with respect to any specific matter and Seller, the Company, or Buyer, the knowledge after due inquiry of the executive officers and other officers having primary responsibility for such matters, of Seller, the Company, or Buyer, as the case may be; and

(iii) “person” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental Entity or other entity.

20. COUNTERPARTS

This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party.

21. ENTIRE AGREEMENT

This Agreement and the Confidentiality Agreement contain the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings relating to such subject matter. Neither party shall be liable or bound to any other party in any manner by any representations, warranties or covenants relating to such subject matter except as specifically set forth herein or in the Confidentiality Agreement.

22. FEES

Each party hereto hereby represents and warrants that no brokers or finders have acted for such party in connection with this Agreement or the transactions contemplated hereby.

23. SEVERABILITY

If any provision of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) or the application of such provision to any other persons or circumstances.

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24. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.

25. JOINT DRAFTING

The parties have jointly participated in the negotiation and drafting of this Agreement. In the event any question of intent or interpretation arises, this agreement shall be construed as if drafted by all parties.

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

BIM3 INVESTMENTS, a Louisiana Partnership
By:	/s/    KEVIN MOODY
Name:	Kevin Moody
Title:	Managing Partner
By:	/s/    B. I. MOODY, III
Name:	B. I. Moody, III
Title:	Partner
THE OLD EVANGELINE DOWNS, L.C.
By:	/s/    WILLIAM E. TROTTER, II
Name:	William E. Trotter, II
Title:	Manager
PENINSULA GAMING PARTNERS, L.L.C.
By:	/s/    MICHAEL S. LUZICH
Name:	Michael S. Luzich
Title:	Managing Member
THE OLD EVANGELINE DOWNS, L.C.
BY:	BIME INVESTMENTS, Managing Member
By:	/s/    KEVIN MOODY
	Kevin Moody, Managing Partner

EX-2.2

Exhibit 2.2

FIRST AMENDMENT TO PURCHASE AGREEMENT

This Amendment to Purchase Agreement (the “Amendment”) executed the dates hereinbelow written, but effective the 1st day of January, 2002 by and among BIM3 INVESTMENTS, a Louisiana partnership (“Seller”), THE OLD EVANGELINE DOWNS, L.C., a Louisiana limited liability company (the “Company”) and OED ACQUISITION, LLC, a Delaware limited liability company, as successor in interest to PENINSULA GAMING PARTNERS, L.L.C., (the “Buyer”).

RECITALS

Seller, Company and Buyer entered into a Purchase Agreement (the “Purchase Agreement”) on June 27, 2001, purchase to which Seller agreed to sell to Buyer, and Buyer agreed to buy from Seller, Seller’s Membership Interest and Seller’s one-half ( ¹/2) interest in the Existing Mortgage Notes, as defined in the Purchase Agreement, for the aggregate purchase price of Fifteen Million and No/100 Dollars ($15,000,000.00).

The parties desire to amend the terms of the Purchase Agreement. All capitalized terms used herein shall have the meanings set forth in the Purchase Agreement.

AGREEMENT

NOW, THEREFORE, Seller, the Company and Buyer agree as follows:

MODIFICATIONS TO THE PURCHASE AGREEMENT

SUMMARY OF THE AMENDMENTS

The parties agree that the Purchase Agreement shall be modified as follows:

(i) Upon execution of this Amendment, the Escrow Holder is instructed to delivery the Deposit and the Interest Amount to Seller. Buyer relinquishes any and all claims to the Deposit and Interest Amount and acknowledges that they have been fully earned by Seller, however, a sum equal to the amount of the Deposit ($500,000.00) shall be applied toward the Purchase Price upon Closing. Buyer and Seller release, acquit, and discharge the Escrow Holder from any and all claims and obligations as the Escrow Holder.

(ii) As additional consideration for the agreement of Seller to enter into this Amendment, Buyer has this day delivered to Seller the cash sum of Two Hundred Twenty Thousand and No/100 Dollars ($220,000.00). Buyer acknowledges and agrees that this payment to Seller is non-refundable under any condition.

(iii) The Closing of the purchase and sale of Seller’s Membership Interest and Seller’s interest in the Existing Mortgage Notes shall be held at the offices of Seller at 600 Jefferson Street, Suite 1500, Lafayette, Louisiana at 10:00 a.m. on Friday, February 15, 2002, the Closing Date.

(iv) At the Closing, Buyer shall cause to be delivered to Seller a cashier’s check in the amount of Fourteen Million Five Hundred Thousand and No/100 Dollars ($14,500,000.00).

(v) Buyer may extend the February 15, 2002 Closing Date to March 15, 2002 by paying to Seller the cash sum of Five Hundred Sixty-Five Thousand and No/100 Dollars ($565,000.00) on or before

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February 15, 2002 as consideration for the extension. Buyer acknowledges and agrees that this $565,000.00 payment to Seller is non-refundable under any condition and shall not be applied toward the Purchase Price. At the extended Closing (i.e., on or before March 15, 2002), Buyer shall cause to be delivered to Seller a cashier’s check in the amount of Fourteen Million Five Hundred Thousand and No/100 Dollars ($14,500,000.00).

b. Specific Amendments

(i) Section 1(d) of the Purchase Agreement is deleted in this entirety.

(ii) Section 2 of the Purchase Agreement is amended to be and read:

“The closing (the “Closing”) of the purchase and sale of Seller’s Membership Interest shall be held at the offices of Seller at 600 Jefferson Street, Suite 1500, Lafayette, Louisiana at 10:00 a.m. on Friday, February 15, 2002 (subject to the extension as set forth in Section 14(a)(iv), as amended). The date on which the Closing shall occur is hereinafter referred to as the “Closing Date”. At the Closing, Buyer shall cause to be delivered to Seller a cashier’s check in the amount of Fourteen Million Five Hundred Thousand and No/100 ($14,500,000.00) dollars.”

(iii) Section 8(a) of the Purchase Agreement is amended to be and read as follows:

a. Buyer’s Obligation

“The obligation of Buyer to purchase and pay for Seller’s Membership Interest is subject to Buyer’s discretion. Buyer and Seller agree that the Conditions to Closing of the Buyer set forth in the original Purchase Agreement are hereby deleted, so that Buyer may determine, in its discretion, whether to close or not. This discretion provided to Buyer is given in consideration for the non-refundable amounts paid to Seller this date and/or to be paid on or before February 15, 2002 should Buyer extend the Closing Date.”

(iv) Section 8(b)(v) shall be amended to be and read as follows:

“(v) Seller shall have received the full Purchase Price less the $500,000.00 to be applied to the purchase price referenced in Section 2(a)(i) of this Amendment, paid in cash simultaneously with or prior to the Closing.” (v) Section 14(a)(ii) of the Purchase Agreement is amended to be and read as follows:

“(ii) by Seller if any of the conditions set forth in Section 8(b), as amended, shall have become incapable of fulfillment, and shall not have been waived by Seller.”

(vi) Section 14(a)(iv) of the Purchase Agreement is amended to be and read as follows:

“(iv) by either Buyer or Seller, if the Closing does not occur on or prior to February 15, 2002; unless, the Closing Date is extended to March 15, 2002, in which event, by either Buyer or Seller, if the Closing does not occur on or prior to March 15, 2002.”

(vii) Section 14(b) of the Purchase Agreement is deleted in its entirety.

(viii) Section 14(c)(ii) of the Purchase Agreement is amended to be and read as follows:

“(ii) all confidential information received by Buyer with respect to the business of the Company shall be treated in accordance with the Confidentiality Agreement, which shall remain in full force and effect notwithstanding the termination of this Agreement; and”

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(ix) A new Section 14(c)(iii) is added to be and read as follows:

“(iii) Seller shall be entitled to retain all monies paid to Seller by Buyer as described in the First Amendment to Purchase Agreement”

(x) The introductory paragraph of Section 18 of the Purchase Agreement is amended to be and read as follows:

“All notices or other communications required or permitted to be given hereunder shall be in writing and shall be sent, postage prepaid, by registered, certified or express mail, return receipt requested or by reputable national overnight courier service guaranteeing next business day delivery and shall be deemed given if received, three days after mailing, and in the case of overnight courier service (one business day after mailing), as follows.”

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

BIM3 INVESTMENTS, a Louisiana Partnership
By:	/s/    KEVIN MOODY
Name:	Kevin Moody
Title:	Managing Partner
THE OLD EVANGELINE DOWNS, L.C.
By:	/s/    MICHAEL S. LUZICH
Name:	Michael S. Luzich
Title:	President
OED ACQUISITION, L.L.C.
By:	/s/    Michael S. Luzich
Name:	Michael S. Luzich
Title:	President

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EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

ARTICLES OF ORGANIZATION

OF

THE OLD EVANGELINE DOWNS, L.L.C.

(formerly The Old Evangeline Downs, L.C.)

Pursuant to La. R.S. 12:1309, OED Acquisition, LLC, the sole member of The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (the “Company”), does hereby executed these Amended and Restated Articles of Organization of the Company (these “Amended Articles”) and does hereby certify as follows:

FIRST: The Company was created by those certain Articles of Organization executed, acknowledged and filed with the Secretary of State of Louisiana on October 27, 1994.

SECOND: The Articles of Organization of the Company were amended and restated by those certain Amended and Restated Articles of Organization executed, acknowledged and filed with the Secretary of State of Louisiana on August 30,2002 (the “2002 Amended and Restated Articles of Organization”).

THIRD: The sole member of the Company, acting by written consent, authorized the 2002 Amended and Restated Articles of Organization to be amended and restated in their entirety.

FOURTH: The 2002 Amended and Restated Articles of Organization are hereby amended and restated in their entirety to read as follows:

ARTICLE I

Name

The name of this limited liability company (hereinafter, the “Company”) shall be:

The Old Evangeline Downs, L.L.C.

ARTICLE II

Purpose

The purpose of the Company is to engage in any lawful activity for which limited liability companies may be formed under Chapter 22 of Title 12 of the Louisiana Revised Statutes, as amended from time to time (the “Act”).

ARTICLE III

Limitation on Liability

No member of the Company shall be liable under a judgment, decree or order of a court, or in any other manner, for a debt, obligation or liability of the Company or for monetary damages for breach of any duty provided for in Section 1314 of the Act.

IN WITNESS WHEREOF, the undersigned has executed these Amended and Restated Articles of Organization on February 19, 2003.

THE OLD EVANGELINE DOWNS, L.L.C.
/s/ Natalie A. Schramm
Name:	Natalie A. Schramm
Title:	Chief Financial Officer

ACKNOWLEDGMENT

STATE OF NEW YORK      )

          ) SS

COUNTY OF NEW YORK  )

BEFORE ME, the undersigned authority, personally came and appeared, Natalie Schramm, Chief Financial Officer of OED Acquisition, LCC, the sole member of The Old Evangeline Downs, L.L.C., and the person who executed the foregoing instrument in such capacity, and who, having been duly sworn, acknowledged in my presence and in the presence of the undersigned witnesses, that she was authorized to and did execute the foregoing instrument in her capacity as Chief Financial Officer of OED Acquisition, LLC, the sole member of The Old Evangeline Downs, L.L.C., as her and its free act and deed.

IN WITNESS WHEREOF, the appearers, witnesses and I have hereunto affixed our hands on this 19th day of February 2003.

WITNESSES:

	Natalie Schramm
NOTARY PUBLIC

EX-3.2

Exhibit 3.2

AMENDED AND RESTATED

OPERATING AGREEMENT

OF

THE OLD EVANGELINE DOWNS, L.L.C.

THIS AMENDED AND RESTATED OPERATING AGREEMENT (the “Agreement”) of The Old Evangeline Downs, L.L.C. ( the “Company”) is made and entered into to be effective for all purposes as of January 30, 2003 by and between the Company and OED Acquisition, LLC, as the sole member of the Company (the “Sole Member”).

RECITALS:

WHEREAS, the Sole Member and the Company are parties to an Amended and Restated Operating Agreement, dated as of August 30, 2002 (the “Original Agreement”) which sets forth their agreement with respect to the conduct of the affairs of the Company and the Sole Member’s rights and obligations with regard to its interests in the Company;

WHEREAS, the Company and the Sole Member desire to amend and restate the Original Agreement as set forth herein;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the undersigned hereby agree that the Original Agreement is hereby amended and restated in its entirety as follows:

1. Formation: The Company was formed as a limited liability company under the Louisiana Limited Liability Company Law as codified in Chapter 22 of Title 12 of the Louisiana Revised Statutes (the “Louisiana Act”). The Sole Member is hereby authorized to file and record any amendments to the Articles of Organization of the Company and such other documents as may be required or appropriate under the Louisiana Act or the laws of any other jurisdiction in which the Company may conduct business or own property.

2. Name and Principal Place of Business:

(a) The name of the Company is The Old Evangeline Downs, L.L.C. The Sole Member may change the name of the Company or adopt such trade or fictitious names for use by the Company as the Sole Member may from time to time determine. All business of the Company shall be conducted under such name, and title to all assets or property owned by the Company shall be held in such name.

(b) The Company shall maintain its principal business office at 3620 N.E. Evangeline Thruway, Carencro, Louisiana 70520 or at such other place or places as may be designated from time to time by the Sole Member.

3. Registered Agent and Registered Office: The registered agent of the Company (the “Registered Agent”) shall be Deborah Harkins and the registered office of the Company (the “Registered Office”) shall be located at One American Place, 9th Floor, Baton Rouge, LA 70825. The Registered Agent and the Registered Office of the Company may be changed from time to time by the Sole Member upon filing the statement required by the Louisiana Act. The Company shall maintain at its Registered Office such records as may be specified by Section 1319 of the Louisiana Act.

4. Term: The term of the Company is deemed to have commenced on the date the Articles of Organization of the Company were filed with the Louisiana Secretary of State and shall continue until terminated pursuant to the provisions of this Agreement.

5. Purpose: The principal purposes and business of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the Louisiana Act, including, without limitation, either directly or indirectly by being a member, shareholder, partner or venturer of one or more entities, and to engage in one or more of the following activities: acquire, own, hold, service, manage, develop, operate, lease, finance, refinance, mortgage, market, promote, sell and otherwise deal real and personal property interests and conduct such other activities as may be necessary, advisable, convenient or appropriate to promote or conduct the business of the Company as set forth herein, including, but not limited to, entering into partnership agreements in the capacity of a general or a limited partner, becoming a member of a joint venture or a limited liability company, owning stock in corporations and the incurring of indebtedness and the granting of liens and security interests on the real and personal property of the Company; it being agreed that each of the foregoing is an ordinary part of the Company’s business.

6. Sole Member: The Sole Member, whose address is set forth in Section 15(a) of this Agreement, is the single and sole member of the Company and shall be shown as such on the books and records of the Company. No transfer of a membership interest in the Company shall be effective, and no other person shall be admitted as a member of the Company, and no additional interest in the Company shall be issued, and any purported transfer or issuance of a membership interest in the Company or admission as a member of the Company shall be void ab initio and of no effect, unless (i) such transfer, issuance or admission is expressly permitted by this Agreement, (ii) the Sole Member approves such transfer, issuance or admission in its sole discretion, and (iii) prior to the effectiveness of such transfer, issuance or admission, the Company has received an opinion of counsel nationally recognized in federal income tax matters to the effect that such transfer, issuance or admission will not cause the Company to be treated as an association or publicly traded partnership taxable as a corporation for federal income tax purposes. The restrictions on the transfer

2

and issuance of membership interests in the Company in the immediately preceding sentence shall be equally applicable to any debt instrument or other interest in the Company as to which an opinion of counsel nationally recognized in federal income tax matters, which opinion is to the effect that such debt instrument or interest will be treated as indebtedness for federal income tax purposes, was not rendered in connection with the issuance of such debt instrument or interest.

7. Management:

(a) Generally. The business and affairs of the Company shall be managed by or under the authority of the Sole Member. The Sole Member shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members and managers under the Louisiana Act or other applicable laws of the State of Louisiana. The Sole Member shall cause the Company to comply with its obligations under this Agreement.

(b) Officers.

(i) Generally. The officers of the Company shall be appointed by the Sole Member and shall include a President, a Secretary, and a Chief Executive Officer. The Sole Member may also appoint such other officers and agents as the Sole Member shall deem appropriate. Any number of offices may be held by the same person. The officers of the Company shall only have the authority to bind the Company as the Sole Member from time to time shall prescribe.

(ii) Election. Each officer of the Company shall be appointed annually by the Sole Member and shall serve at the pleasure of the Sole Member until the earlier of (A) such officer’s death, retirement, resignation or removal, and (B) until such officer’s successor has been duly elected and qualified. Any officer of the Company may be removed by the Sole Member at any time, with or without cause, and a vacancy in any office shall be filled by the Sole Member.

(iii) Standard of Care. Each officer of the Company shall perform his or her duties as an officer in good faith, in a manner he reasonably believes to be in the best interest of the Company, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. A person who so performs his or her duties shall not have any liability by reason or being or having been an officer of the Company.

(iv) Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of the Company and shall have such functions, authority and duties as from time to time may be prescribed by the Sole Member.

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(v) President. The President shall be the president of the Company and shall have such functions, authority and duties as from time to time may be prescribed by the Sole Member.

(vi) Secretary. The Secretary shall keep a record of all proceedings of the Sole Member. The Secretary shall have such other functions, authority and duties as from time to time may be prescribed by the Sole Member. The Secretary shall have custody of the seal of the Company and the Secretary (or in the absence of the Secretary, any Assistant Secretary) shall have authority to affix the same to any instrument requiring it, and when so affixed it may be attested by the signature of the Secretary of an Assistant Secretary. The Sole Member may give general authority to any other officer to affix the seal of the Company and to attest such affixing of the seal.

(vii) Other Offices. Any officer who is elected or appointed from time to time by the Sole Member and whose duties are not specified in this Agreement shall perform such duties and have such powers as may be prescribed from time to time by the Sole Member.

(c) Limited Liability. To the fullest extent permitted under applicable law, neither the Sole Member nor any officer of the Company shall be deemed to violate this Agreement or be liable, responsible or accountable in damages or otherwise to any other member or officer or the Company for any action or failure to act, including but not limited to, under any theory of fiduciary duty or obligation, unless such violation or liability is attributable to the Sole Member or such officer’s gross negligence, willful misconduct, bad faith or a continuing material breach of this Agreement. Without limiting the generality of the foregoing, the Sole Member and each such officer shall, in the performance of his or its duties, be fully protected in relying in good faith upon the records of the Company and upon information, opinions, reports or statements presented to the Sole Member or such officer by any other person or entity as to matters the Sole Member or such officer reasonably believes are within such other person’s or entity’s professional or expert competence and that has been selected with reasonable care by or on behalf of the Company. The Sole Member shall be deemed by the execution of this Agreement to acknowledge and agree that each officer, in accepting its duties hereunder, disclaims, to the maximum extent permitted under applicable law, any fiduciary duty or obligation it may have to the Company and the Sole Member as a result of its acceptance of its duties, responsibilities and obligations hereunder.

(d) Indemnification. To the fullest extent permitted under applicable law, the Company shall severally indemnify and hold harmless any person or entity (an “Indemnified Party”) who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action by or in the right of the Company) by reason of or arising from any acts or omissions (or alleged acts or omissions) on behalf of the Company or in furtherance of the

4

interests of the Company arising out of the Indemnified Party’s activities as a member, officer, employee, trustee or agent of the Company against losses, damages or expenses (including attorneys’ fees, judgments, fines and amounts paid in settlement) actually and reasonably incurred by such Indemnified Party in connection with such action, suit or proceeding and for which such Indemnified Party has not otherwise been reimbursed, so long as such Indemnified Party did not act in bad faith or in a manner constituting gross negligence or willful misconduct or materially breach this Agreement. The termination of any action, suit or proceeding by judgment, order, settlement or upon a plea of nolo contendere or its equivalent shall not of itself (except insofar as such judgment, order, settlement or plea shall itself specifically provide) create a presumption that the Indemnified Party acted in bad faith or in a manner constituting gross negligence or willful misconduct or materially breached this Agreement.

8. Capital Contributions and Percentage Interests:

(a) The Sole Member shall be admitted as the sole member of the Company without making a contribution or being obligated to make a contribution to the Company.

(b) The Company shall issue to the Sole Member a certificate representing a Membership Interest in the Company. The “Percentage Interest” of a member of the Company shall mean (i) the number of Membership Interests owned by such member divided by (ii) the aggregate number of outstanding Membership Interests.. As the single and sole member of the Company, the Sole Member shall be issued 100 Membership Interests and the initial Percentage Interest of the Sole member is 100%.

9. Additional Capital Contributions: If, at any time or from time to time, additional funds are required by the Company to meet the obligations or needs of the Company, including, without limitation, to satisfy any operating deficit, and there are not sufficient reserves held by the Company or available cash flow (a “Shortfall”), the Sole Member may (but shall not be obligated to) make further Capital Contributions (“Additional Capital Contributions”) in the amount determined in the Sole Member’s sole discretion.

10. Tax Matters:

(a) The undersigned intends for the Company to be disregarded as an entity separate from its owner for federal income tax purposes, pursuant to Treasury Regulation Section 301.7701-3. However, if it is determined that the Company is a partnership for federal tax purposes, this Agreement shall be amended to provide for allocation provisions and other provisions necessary and consistent with partnership status.

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(b) To the extent applicable, the Sole Member shall act as the tax matters partner within the meaning of Section 6231(a)(7) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”).

(c) Except as otherwise provided in this Agreement, all elections required or permitted to be made by the Company under any applicable tax law shall be made by the Sole Member in its sole discretion. Notwithstanding anything to the contrary in this Agreement, neither the Company, the Sole Member, any officer, employee or agent of the Company, nor any other person shall elect to treat the Company as an association taxable as a corporation for U.S. federal, state or local income tax purposes.

11. Distributions:

(a) Tax Distributions. To the extent permitted by applicable law and the agreements or instruments governing any indebtedness of the Company, the Company shall distribute to the Sole Member, not later than January 10, April 10, June 10 and September 10 of each calendar year (or in the event any such day is not a business day, on the immediately next succeeding business day), cash in an amount equal to the aggregate amount of distributions the Sole Member is required to make to its members pursuant to Section 8.4 of the Sole Member’s Amended and Restated Operating Agreement, dated as of July 15, 1999 (as amended from time to time). Each such distribution to the Sole Member shall be referred to in this Agreement as a “Tax Distribution”. A Tax Distribution shall be deemed to have been made on the last day of the last full fiscal quarter of the Company ending prior to the date of such Tax Distribution, and taken into account in determining allocations with respect to such fiscal quarter, notwithstanding that such Tax Distribution is made in the following fiscal quarter.

(b) Distributions. Distributions other than Tax Distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Sole Member.

12. Dissolution and Termination:

(a) The Company shall be dissolved and its business wound up upon the earlier to occur of any of the following events:

(i) December 31, 2050, unless continued prior to such date by the written consent of the Sole Member and by amendment to the Articles of Organization of the Company;

(ii) at the election of the Sole Member;

(iii) any event that makes it unlawful for the business of the Company to be carried on by the Sole Member; or

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(iv) any other event causing a dissolution of a limited liability company under the Louisiana Act.

(b) Except as otherwise provided in this Agreement, upon dissolution of the Company, the business and affairs of the Company shall be wound up as provided in this Section 12(b). The Sole Member shall wind up the Company’s affairs. The liquidation shall take place without the appointment of a liquidator. The Company shall have the benefit of La. R.S. 12:1338 by complying therewith. Upon winding up the Company, the assets of the Company shall be distributed as follows:

(i) first, to creditors in satisfaction of liabilities of the Company (whether by payment or by establishment of reserves as determined by the Sole Member in its sole discretion); and

(ii) thereafter, to the Sole Member.

13. Liability of the Sole Member: Except as otherwise expressly provided in the Louisiana Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Sole Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being the Sole Member. Except as otherwise expressly provided in the Louisiana Act, the liability of the Sole Member shall be limited to the amount of capital contributions, if any, required to be made by the Sole Member in accordance with the provisions of this Agreement, but only when and to the extent the same shall become due pursuant to the provisions of this Agreement.

14. Books, Records, Accounting And Reports:

(a) Books and Records: The Company shall maintain, or cause to be maintained, in a manner customary and consistent with good accounting principles, practices and procedures, a comprehensive system of office records, books and accounts (which records, books and accounts shall be and remain the property of the Company) in which shall be entered fully and accurately each and every financial transaction with respect to the ownership and operation of the property of the Company. Such books and records of account shall be prepared and maintained at the principal place of business of the Company or such other place or places as may from time to time be determined by the Sole Member. The Sole Member or its duly authorized representative shall have the right to inspect, examine and copy such books and records of account at the Company’s office during reasonable business hours. A reasonable charge for copying books and records may be charged by the Company.

(b) Accounting and Fiscal Year: The books of the Company shall be kept on the accrual basis and the Company shall report its operations for tax purposes on the accrual method. The fiscal

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year of the Company shall end on December 31 of each year, unless a different fiscal year shall be required by the Code.

(c) Company Accountant: The Company shall retain as the regular accountant and auditor for the Company (the “Company Accountant”) the accounting firm designated by the Sole Member. The fees and expenses of the Company Accountant shall be a Company expense.

(d) Reserves: The Sole Member may, subject to such conditions as they shall determine, establish reserves for the purpose and requirements as they may deem appropriate.

15. Miscellaneous:

(a) Notices: All notices, demands, consents, approvals, requests or other communications which any party to this Agreement may desire or be required to give hereunder (collectively, “Notices”) shall be in writing and shall be given by (i) personal delivery, (ii) facsimile transmission or (iii) a nationally recognized overnight courier service, fees prepaid, addressed to such party at the address set forth opposite its name of the signature page of this Agreement, with a copy to:

If to the Company, to:	The Old Evangeline Downs, L.L.C.
	c/o Peninsula Gaming Partners, L.L.C.
	3rd Street Ice Harbor
	P.O. Box 1750
	Dubuque, IA 52004-1683
	Facsimile No.: (563) 690-2190
with a copy to:	Mayer, Brown, Rowe & Maw
	1675 Broadway
	New York, NY 10019
	Attention: Ronald S. Brody
	Facsimile No.: (212) 262-1910
If to the Sole Member, to:	OED Acquisition, LLC
	c/o Peninsula Gaming Partners, L.L.C.
	3rd Street Ice Harbor
	P.O. Box 1750
	Dubuque, IA 52004-1683
	Facsimile No.: (563) 690-2190
	—  and—

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	Peninsula Gaming Partners, L.L.C.
	c/o Jefferies & Company, Inc.
	11100 Santa Monica Blvd.
	10th Floor
	Los Angeles, CA 90025
	Attention: M. Brent Stevens
	Facsimile No.: (310) 515-5165
	—  and—
	Peninsula Gaming Partners, L.L.C.
	c/o Cambridge Capital Advisors LLC
	7173 Mission Hills Drive
	Las Vegas, NV 89113
	Attention: Michael S. Luzich
	Facsimile No.: (702) 247-6822
with a copy to:	Mayer, Brown, Rowe & Maw
	1675 Broadway
	New York, NY 10019
	Attention: Ronald S. Brody
	Facsimile No.: (212) 262-1910

The Sole Member may designate another addressee (and/or change its address) for Notices hereunder by a Notice given pursuant to this Section 15(a). A Notice sent in compliance with the provisions of this Section 15(a) shall be deemed given on the date of receipt.

(b) Successors and Assigns: This Agreement shall be binding upon the parties hereto and their respective executors, administrators, legal representatives, heirs, successors and assigns, and shall inure to the benefit of the parties hereto and, except as otherwise provided herein, their respective executors, administrators, legal representatives, heirs, successors and assigns.

(c) Severability: In case any one or more of the provisions contained in this Agreement or any application thereof shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and other application thereof shall not in any way be affected or impaired thereby.

(d) Amendments. This Agreement may be amended or modified only by a written instrument executed by the Sole Member.

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(e) Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana applicable to agreements made and to be performed wholly within that State.

(f) Captions: All titles or captions contained in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit, extend, or describe the scope of this Agreement or the intent of any provision in this Agreement.

(g) Creditors Not Benefited: Nothing contained in this Agreement is intended or shall be deemed to benefit any creditor of the Company or the Sole Member, and no creditor of the Company shall be entitled to require the Company or the Sole Member to solicit or accept any capital contribution for the Company or to enforce any right which the Company or the Sole Member may have under this Agreement.

(h) Indemnification of Organizer. The Sole Member hereby agree to indemnify and hold harmless the person or persons who signed the Company’s Articles of Organization, as filed with the Secretary of State of the State of Louisiana (the “Organizer”) for all other acts taken by the Organizer as organizer. The Sole Member agree to pay all costs and expense incurred by the Organizer in organizing the Company including any claims brought against the Organizer including any damages, court costs, attorneys fees and other costs related to the Organizer’s defense of any claim brought or judgment rendered against the Organizer for the Organizer’s actions as organizer.

(i) Article 8 Opt-In. Membership Interests issued under this Agreement shall constitute securities governed by Article 8 of the Louisiana Uniform Commercial Code and all such Membership Interests shall be evidenced by certificates, each of which shall bear the following legend: “This certificate evidences an interest in The Old Evangeline Downs, L.L.C. and shall be a security for purposes of Article 8 of the Uniform Commercial Code.”

* * *

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth in the introductory paragraph hereof.

OED ACQUISITION, LLC
By:	/s/    M. BRENT STEVENS
Name:	M. Brent Stevens
Title:	Chief Executive Officer

EX-3.3

Exhibit 3.3

THE OLD EVANGELINE DOWNS, L.L.C.

FIRST AMENDMENT TO

AMENDED AND RESTATED OPERATING AGREEMENT

THIS FIRST AMENDMENT TO THE AMENDED AND RESTATED OPERATING AGREEMENT OF THE OLD EVANGELINE DOWNS, L.L.C. (this “Amendment”), dated as of May 21, 2003, is made by and among The Old Evangeline Downs, L.L.C. (the “Company”), a Louisiana limited liability company, and OED Acquisition, LLC, as the sole member of the Company (the “Sole Member”).

WHEREAS, the parties wish to amend certain provisions of the Operating Agreement; and

WHEREAS, Section 15(d) of the Operating Agreement provides in relevant part that the Operating Agreement may be amended or modified by a written instrument executed by the Sole Member.

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

1.    The Sole Member hereby delegates its authority to manage the business and affairs of the Company, as set forth in Section 7(a) of the Operating Agreement, to the Executive Committee of Peninsula Gaming Partners, LLC (“PGP”), which shall have the authority specified in Section 3.7 of the Amended and Restated Operating Agreement of PGP, as amended.

2.    Except as herein amended, the Operating Agreement shall remain in full force and effect and is ratified in all respects. On and after the effectiveness of this Amendment, each reference in the Operating Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import, and each reference to the Operating Agreement in any other agreements, documents or instruments executed and delivered pursuant to the Operating Agreement, shall mean and be a reference to the Operating Agreement, as amended by this Amendment.

3.    Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Operating Agreement.

4.    Section 15 of the Operating Agreement is hereby incorporated herein by reference.

5.    This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

*     *     *     *     *     *     *

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

SOLE MEMBER:
OED ACQUISITION, LLC
By:	/S/    M. BRENT STEVENS
	Name: M. Brent Stevens Title: Chief Executive Officer

EX-3.4

Exhibit 3.4

CERTIFICATE OF INCORPORATION

OF

THE OLD EVANGELINE DOWNS CAPITAL CORP.

The undersigned, a natural person, for the purpose of organizing a corporation for conducting the business and promoting the purposes hereinafter stated, under the provisions and subject to the requirements of the laws of the State of Delaware, Chapter 1, Title 8 of the Delaware Code and known as the General Corporation Law of the State of Delaware does hereby certify that:

ARTICLE FIRST

The name of the Corporation is The Old Evangeline Downs Capital Corp.

ARTICLE SECOND

The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street in the City of Wilmington, County of New Castle 19801. The name of its registered agent at such address is The Corporation Trust Company.

ARTICLE THIRD

The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

ARTICLE FOURTH

The total number of shares of stock which the Corporation has authority to issue is 1,000 shares of Common Stock with a par value of $0.01 per share.

ARTICLE FIFTH

The Corporation is to have perpetual existence.

ARTICLE SIXTH

In furtherance and not in limitation of the powers conferred by statute, the board of directors of the Corporation is expressly authorized to make, alter or repeal the by-laws of the Corporation.

ARTICLE SEVENTH

Meetings of stockholders may be held within or without the State of Delaware, as the by-laws of the Corporation may provide. The books of the corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the board of directors in the by-laws of the Corporation. Election of the directors need not be by written ballot unless the by-laws of the Corporation so provide.

ARTICLE EIGHTH

To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. Any repeal or modification of this ARTICLE EIGHTH shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification.

ARTICLE NINTH

The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware.

ARTICLE TENTH

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation in the manner now or hereafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation.

ARTICLE ELEVENTH

The name and address of the Sole Incorporator is:

Name:	Address:
Nazim Zilkha	Mayer, Brown, Rowe & Maw 1675 Broadway New York, New York 10019

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I, THE UNDERSIGNED, being the Sole Incorporator hereinbefore named, for the purposes of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true and have accordingly hereunto set my hand this 30th day of January, 2003.

/s/    NAZIM ZILKHA        

Nazim Zilkha

Sole Incorporator

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EX-3.5

Exhibit 3.5

THE OLD EVANGELINE DOWNS CAPITAL CORP.

(a Delaware corporation)

BY-LAWS

ARTICLE 1.

OFFICES

Section 1.1. Registered Office. The registered office of The Old Evangeline Downs Capital Corp. (the “Corporation”) in the State of Delaware shall be located at 1209 Orange Street, in the City of Wilmington, County of New Castle 19801. The name of the corporation’s registered agent at such address shall be Corporation Trust Company. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors.

Section 1.2. Other Offices. The Corporation may have other offices, either within or without the State of Delaware, at such place or places at the board of directors of the Corporation (the “Board”) may from time to time appoint, or the business of the Corporation may require.

ARTICLE 2.

MEETINGS OF STOCKHOLDERS

Section 2.1. Place. All meetings of the stockholders shall be held at such place within or without the State of Delaware as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.2. Annual Meeting. The annual meeting of the stockholders shall be held each year on the date determined by the Board.

Section 2.3. Special Meetings. Subject to the provisions of statute or of the certificate of incorporation of the Corporation, as the same may be amended from time to time (the “Certificate of Incorporation”), special meetings of the stockholders, for any purpose or purposes, shall be called at any time by resolution of the Board, or by the Chairman of the Board, or at the request in writing of stockholders owning at least 10% of the entire capital stock of the Corporation issued and outstanding and entitled to vote thereat. Such request shall state the purpose or purposes of the proposed meeting.

Section 2.4. Notice of Meetings. Written notice of every meeting of stockholders, stating the purpose or purposes for which the meeting is called, the date, hour and place of the meeting, and, unless it is an annual meeting, indicating that it is being issued by or at the direction of the person or persons calling the meeting, shall be given, not less than ten nor more than fifty days before the date of the meeting, to each stockholder of record entitled to vote at

such meeting. Such notice shall be directed to a stockholder at his address as it shall appear on the books of the Corporation unless he shall have filed other address, in which case it shall be mailed to the address designated in such request.

Section 2.5. Procedure. Business transacted at all special meetings shall be confined to that which is related to the purpose or purposes stated in the notice of the meeting.

Section 2.6. Quorum. Except as otherwise provided by the Certificate of Incorporation or by these By-Laws, the holders of a majority of the shares of the Corporation issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, provided that when a specified item of business is required to be voted on by a class or series, voting as a class, the holders of a majority of the shares of such class or series shall constitute a quorum for the transaction of such specified item of business. When there is a quorum to organize a meeting, it shall not be deemed broken by the subsequent withdrawal of any stockholders. If there shall not be a quorum, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place to which the meeting shall be adjourned, until there shall be a quorum. At such adjourned meeting at which there shall be a quorum, any business may be transacted which might have been transacted on the original date of the meeting.

Section 2.7. Action Taken at Meetings. When there is a quorum to organize a meeting, the votes cast by the holders of a majority of the shares, present in person or represented by proxy, entitled to vote thereon shall decide any question and authorize any action of the Corporation (other than the election of directors) brought before such meeting, unless the question is one upon which, by express provision of statute or of the Certificate of Incorporation or of these By-Laws, a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 2.8. Voting. Each stockholder of record shall be entitled at every meeting of the stockholders of the Corporation to one vote for each share having voting power standing in his name on the record of stockholders of the Corporation, and such votes may be cast either in person or by written proxy.

Section 2.9. Proxies. Every proxy must be dated and executed by the stockholder or by his duly authorized attorney. No proxy shall be valid after the expiration of eleven months from the date of its execution unless it shall have specified therein its duration. Every proxy shall be revocable at the pleasure of the person executing it or of his personal representatives or assigns, except in those cases where an irrevocable proxy is permitted by statute.

Section 2.10. Consents. Whenever the vote of stockholders at a meeting thereof is required or permitted to be taken in connection with any action of the Corporation by any provision of statute, of the Certificate of Incorporation or of these By-Laws, such action may be taken without a meeting by written consent, setting forth the action so taken, signed by the holders of at least the minimum number of shares entitled to vote thereon that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

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Section 2.11. Organization. At each meeting of the stockholders, the Chairman of the Board, or in his absence a chairman chosen by a majority of the stockholders present in person or represented by proxy and entitled to vote thereat shall call meetings of the stockholders to order and act as chairman thereof. The Secretary shall act as secretary at each meeting of stockholders, or in his absence the presiding officer may appoint any person present to act as secretary of the meeting.

ARTICLE 3.

DIRECTORS

Section 3.1. Number. The affairs and business of the Corporation shall be managed by a Board of not less than one (1) and no more than five (5), who shall be of full age and need not be stockholders of record. The initial number of directors shall be one. The number of directors may be increased or decreased by an amendment to these By-Laws, or by action of the Board or of the stockholders, voting by class, but in no event shall the number of directors be fewer than one member. The Board may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute, by the Certificate of Incorporation or by these By-Laws required to be exercised or done by the stockholders.

Section 3.2. Tenure. Directors shall be elected at the annual meeting of the stockholders and each director shall be elected to serve for one year and until his successor shall be duly elected and shall qualify.

Section 3.3. Resignation. Any director of the Corporation may resign at any time by giving written notice to the President or Secretary of the Corporation. Such resignation shall take effect on the date of the receipt of such notice or at any later date specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 3.4. Removal. Any director may be removed with or without cause, by resolution duly adopted by the affirmative vote of the holders of a majority of the shares then issued and outstanding and who were entitled to vote for the election of the director sought to be removed, at any special meeting of stockholders duly called and held for that purpose. Any director may be removed for cause by action of the Board.

Section 3.5. Vacancies. In the event of a vacancy occurring in the Board, the remaining directors, whether or not constituting a quorum, by affirmative vote of a majority thereof, may fill such vacancy for the unexpired term, or any vacancy may be filled by the stockholders at any meeting thereof. If at any time the number of directors shall be increased, the additional directors to be elected may be elected by the directors then in office by the affirmative vote of a majority thereof, whether or not constituting a quorum, at a regular meeting or at a special meeting called for that purpose.

Section 3.6. Chairman of the Board. The Chairman of the Board shall be elected by plurality vote of the directors from the membership of the Board. As provided in Section 2.11 of these By-Laws, he shall act as Chairman at all meetings of the stockholders at which he is

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present, and, as provided in Section 4.7 of these By-Laws, he shall preside at all meetings of the Board at which he is present.

Section 3.7. Committees of Directors. The Board may, by resolution adopted by a majority of the Board, appoint or designate one or more committees, each committee of the Board to consist of two or more directors, and may delegate to such committees any of the powers of the Board except such items as are required by the General Corporation Law of the State of Delaware, as amended from time to time (the “Delaware Code”) to be approved by the Board.

ARTICLE 4.

MEETINGS OF DIRECTORS

Section 4.1. Place. The Board, or any committee thereof, may hold meetings, both regular and special, at the office of the Corporation in the State of Delaware, or at such other places, either within or without the State of Delaware, as they may from time to time determine.

Section 4.2. Regular Meetings.

(a) Entire Board. Regular meetings of the Board shall be held without notice to the newly elected directors as soon as practicable after the adjournment of, and at the same location as, the annual meeting of the stockholders and may be held without notice at such other times and places as shall from time to time be determined by resolution of the Board.

(b) Committees. The chairman of, as may have been chosen by the Board or the Chairman of the Board, or any two members of, any committee may fix the time and place of its meetings unless the Board shall otherwise provide.

Section 4.3. Special Meetings. Special meetings of the Board, or any committee thereof, may be called by the Chairman of the Board on one day’s notice by telephone or by facsimile (confirmed by telephone) to each director or each committee member, as the case may be. Special meetings shall be called by the President or Secretary on like notice on the written request of the Chairman of the Board. Notice of any special meeting need not specify the purpose of such meeting.

Section 4.4. Quorum and Voting.

(a) Entire Board. At all meetings of the Board a majority of the entire number of directors shall constitute a quorum for the transaction of business and any act of a majority present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation or by these By-Laws. A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time without notice other than announcement at the meeting. At all meetings of directors, a quorum being present, all matters except those provided by law or in the Certificate of Incorporation or other certificate filed pursuant to law or these By-Laws, shall be decided by the affirmative vote of a majority of the directors present.

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(b) Committees. At any committee meeting, one-half, but not less than two, of the members of the committee shall be present in person in order to constitute a quorum for transaction of business at such meeting, and the act of the majority present shall be the act of such committee. In the absence or disqualification of any member of any committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute(s) a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.

Section 4.5. Presence by Conference Telephone or Similar Equipment. Any one or more members of the Board or any committee thereof may participate in a meeting of such Board by means of a conference telephone or other similar communications equipment which would allow all members participating in the meeting to hear one another at the same time. Participation by such means shall constitute presence in person at a Board or committee meeting.

Section 4.6. Consents. Any action required to be taken or permitted to be taken by the Board or any committee thereof by statute, the provisions of the Certificate of Incorporation or these By-Laws may be taken without a meeting if all members of the Board or committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto shall be filed with the minutes of the proceedings of the Board.

Section 4.7. Organization. At each meeting of the Board the Chairman of the Board, or in his absence a director chosen by a majority of the directors present, shall act as chairman. The Secretary, or in his absence any person appointed by the Chairman of the Board, shall act as secretary of the meeting. Any meeting of the Board may be adjourned by the vote of a majority of the directors present at such meeting.

ARTICLE 5.

NOTICE AND WAIVER

Section 5.1. Manner; Delivery. Whenever by statute, the provisions of the Certificate of Incorporation or these By-Laws, notice is required to be given to any stockholder or director, personal notice may be given but such notice may also be given in writing by first-class mail, postage prepaid, or by telegram addressed to such stockholder or director at his address as the same appears on the books of the Corporation (except as otherwise provided in these By-Laws), and such notice shall be deemed to be given at the time when the same shall be thus mailed or wired.

Section 5.2. Waiver. Whenever by statute, the provisions of the Certificate of Incorporation or these By-Laws a stockholder, an officer or the Board is authorized to take any action after notice, such notice may be waived, in writing, before or after the holding of the meeting, by the person or persons entitled to such notice, or, in the case of a stockholder, by his attorney thereunto authorized. In addition, any stockholder attending a meeting of stockholders in person or by proxy without protesting prior to the conclusion of the meeting the lack of notice thereof to him and any director attending a meeting of the Board without protesting prior to the meeting or at its commencement such lack of notice, shall be conclusively deemed to have waived notice of such meeting.

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ARTICLE 6.

OFFICERS

Section 6.1. Executive Officers. The officers of the Corporation shall be chosen by the Board and may include a President, one or more Vice Presidents, a Secretary, a Treasurer and one or more subordinate officers as the Board may choose. Any number of offices may be held by the same person.

Section 6.2. Election; Term of Office. All officers shall be elected by the Board. Each officer shall hold office until the meeting of the Board following the next annual meeting of stockholders and until his successor has been elected and qualified. The Board may elect or appoint such other officers, agents and employees as it shall deem necessary who shall have such authority and shall perform such duties as from time to time shall be prescribed by the Board.

Section 6.3. Compensation. The salaries of all officers of the Corporation shall be fixed by the Board.

Section 6.4. Removal; Vacancies. Any officer so elected or appointed by the Board may be removed either with or without cause at any time by the Board. If an office becomes vacant for any reason, the vacancy shall be filled by the Board.

Section 6.5. The President. The President shall be the chief executive officer of the Corporation; he shall preside at all meetings of the stockholders; he shall have general powers of supervision and management of the business and affairs of the Corporation, subject to the control of the Board, and shall see that all orders and resolutions of the Board are carried into effect.

Section 6.6. The Vice Presidents. Each Vice President shall have such powers and perform such duties and functions as may from time to time be assigned to him by the Board. At the request of the President or in his absence or his disability, the Vice President shall perform all the duties and exercise the powers of the President.

Section 6.7. The Secretary. The Secretary shall attend all meetings of the Board and of the stockholders and shall keep the minutes thereof in appropriate books. He shall give or cause to be given notice of all meetings of stockholders and special meetings of the Board and shall perform such other duties incidental to the office of Secretary or as may be prescribed by the Board. He shall keep in safe custody the records and seal of the Corporation and affix it to any instrument when authorized by the Board.

Section 6.8. The Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall be responsible for the keeping of full and accurate accounts of receipts and disbursements in books belonging to the Corporation, the deposit of all moneys and other valuable effects in the name and to the credit of the Corporation; and the disbursement of the funds of the Corporation subject to the order of the Board. He shall render to the President and directors whenever they may so require an account of all his transactions as treasurer and of the financial condition of the Corporation. He shall, if required by the Board, give the Corporation a bond in such sum or sums and with such surety or sureties as shall be satisfactory to the Board, conditioned upon the faithful performance of his duties. The Board may also

6

appoint Assistant Treasurers who may perform all duties of the Treasurer in his absence or as otherwise directed by the Board.

Section 6.9. Subordinate Officers. The Corporation may have such subordinate officers as the Board may from time to time deem desirable. Each such officer shall hold office for such period and perform such duties as the Board, the Chairman of the Board or an officer designated pursuant to this ARTICLE 6 may prescribe.

Section 6.10. Delegation of Duties. In case of the absence of any officer of the Corporation, or for any other reason that the Board may deem sufficient, the President or the Board may confer for the time being the powers or duties, or any of them, of such officer upon any other officer or upon any director. In the absence of an officer, his duties shall be performed and his authority may be exercised by the next most senior officer, with seniority expressed by the order of appearance in this ARTICLE 6, and, within a category, by seniority in a particular position, with the right reserved to the Board to make the designation or supersede any designation so made.

Section 6.11. Restrictions on Investments. The officers of the Corporation may without restriction make investments for their own account or for the account of others; provided that the officers of the Corporation may not take advantage of any investment opportunity suitable for the Corporation without first presenting such opportunity to the Board for consideration.

Section 6.12. Power to Appoint Agent or Attorney. Unless otherwise ordered by the Board, the President shall have full power and authority on behalf of the Corporation to vote or to execute in the name or on behalf of the Corporation a proxy authorizing an agent or attorney-in-fact for the Corporation.

ARTICLE 7.

SHARE CERTIFICATES

Section 7.1. Signature; Form. Every holder of shares in the Corporation shall be entitled to have a certificate, signed by, or in the name of the Corporation by, the President and the Secretary, bearing the seal of the Corporation or a facsimile thereof, exhibiting the holder’s name and certifying the number of shares owned by him in the Corporation. The certificates shall be in such form as shall be determined by the Board and shall be numbered consecutively and entered in the books of the Corporation as they are issued.

Section 7.2. Lost Certificates. The Board may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation, alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost or destroyed. When authorizing such issue of a new certificate, the Board may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate, or his legal representative, to advertise the same in such manner as it shall direct and/or give the Corporation a bond in such sum and with such surety or sureties as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed.

7

Section 7.3. Transfers of Shares. Upon surrender to the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, to cancel the old certificate and to record the transaction upon its transfer books.

Section 7.4. Registered Stockholders. The Corporation shall be entitled to treat the holder of record of any share or shares as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any person whether or not it shall have express or other notice thereof, except as expressly provided by the laws of the State of Delaware.

ARTICLE 8.

GENERAL PROVISIONS

Section 8.1. Record Date. For the purpose of determining the stockholders entitled to notice of and to vote at such meeting or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining stockholders entitled to receive payment of any dividend or distribution or the allotment of any rights, or for the purpose of any other action affecting the interest of stockholders, the Board may fix, in advance, a record date. Such date shall not be more than fifty nor less than ten days before the date of any such meeting or proposed action. In each such case, except as otherwise provided by law, only such persons as shall be stockholders of record on the date so fixed shall be entitled to notice of any to vote at such meeting or to express such consent or dissent, or to receive payment of such dividend or distribution, or such allotment of rights, or otherwise to be recognized as stockholders for the related purpose, notwithstanding any registration of transfer of shares on the books of the Corporation after any such record date so fixed.

Section 8.2. Inspection of Books. The directors shall determine from time to time whether, and if allowed, when and upon what conditions the accounts and books of the Corporation (except such as may by statute be specifically opened to inspection) shall be opened to the inspection of the stockholders.

Section 8.3. Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of statute and the Certificate of Incorporation, may be declared out of the surplus of the Corporation by the Board pursuant to law.

Section 8.4. Seal. The seal of the Corporation shall be circular in form and shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

Section 8.5. Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board may from time to time by resolution direct.

Section 8.6. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board.

8

Section 8.7. Stock in Other Corporations. Shares of stock or certificates representing the voting power in other corporations held by the Corporation shall be voted by such officer or officers of the Corporation as the Board by a majority vote shall from time to time designate for that purpose or by a proxy thereunto duly authorized by like vote of the Board.

ARTICLE 9.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Section 9.1. Persons Entitled to Indemnification. Every person who was or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or a person of whom he is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation or for its benefit as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under and pursuant to any procedure specified in the Delaware Code, against all expenses, liabilities and losses (including attorneys’ fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. Such right of indemnification shall not be exclusive of any other right which such directors, officers or representatives may have or hereafter acquire and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any by-law, agreement, vote of stockholders, provision of law or otherwise, as well as their rights under this ARTICLE 9.

Section 9.2. Insurance. The Board may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person.

Section 9.3. Further By-Laws. The Board may from time to time adopt further by-laws with respect to indemnification and may amend these and such by-laws to provide at all times the fullest indemnification permitted by the Delaware Code.

Section 9.4. Advancement of Expenses. Expenses incurred in defending a civil or criminal action or proceeding of the type described in Section 9.1 shall be paid by the Corporation in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of the person requesting such advance to repay such amount in the event that such person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced by the Corporation or allowed by a court exceed the indemnification to which such person is entitled.

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ARTICLE 10.

AMENDMENTS

These By-Laws may be altered, amended, repealed or added to at any regular or special meeting of the stockholders of the Corporation by vote of such holders entitled at the time to vote for the election of directors.

10

EX-4.1

Exhibit 4.1

THE OLD EVANGELINE DOWNS, L.L.C.

AND

THE OLD EVANGELINE DOWNS CAPITAL CORP.

(as Issuers)

$123,200,000

13% Senior Secured Notes due 2010

with Contingent Interest

INDENTURE

Dated as of February 25, 2003

U.S. BANK NATIONAL ASSOCIATION

(as Trustee)

TABLE OF CONTENTS

		Page
ARTICLE I	DEFINITIONS AND INCORPORATION BY REFERENCE	1
Section 1.1	Definitions	1
Section 1.2	Other Definitions	35
Section 1.3	Incorporation by Reference of Trust Indenture Act	37
Section 1.4	Rules of Construction	37
ARTICLE II	THE NOTES	38
Section 2.1	Form and Dating	38
Section 2.2	Execution and Authentication	39
Section 2.3	Registrar, Paying Agent and depositary	39
Section 2.4	Paying Agent to Hold Money in Trust	39
Section 2.5	Holder Lists	40
Section 2.6	Transfer and Exchange	40
Section 2.7	Replacement Notes	54
Section 2.8	Outstanding Notes	54
Section 2.9	Treasury Notes	54
Section 2.10	Temporary Notes	55
Section 2.11	Cancellation	55
Section 2.12	Defaulted Interest	55
Section 2.13	CUSIP Numbers	56
Section 2.14	Issuance of Additional Notes	56
ARTICLE III	REDEMPTION	57
Section 3.1	Notices to Trustee	57
Section 3.2	Selection of Notes to Be Redeemed	57
Section 3.3	Notice of Redemption	57
Section 3.4	Effect of Notice of Redemption	58
Section 3.5	Deposit of Redemption Price	58
Section 3.6	Notes Redeemed in Part	59
Section 3.7	Optional Redemption	59
Section 3.8	Regulatory Redemption	60
Section 3.9	No Mandatory Redemption	60
ARTICLE IV	COVENANTS	61
Section 4.1	Payment of Notes	61
Section 4.2	Maintenance of Office or Agency	61
Section 4.3	SEC Reports and Reports to Holders	62
Section 4.4	Compliance Certificate	62
Section 4.5	Taxes	63
Section 4.6	Stay, Extension and Usury Laws	63

i

TABLE OF CONTENTS

(continued)

		Page
Section 4.7	Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests	63
Section 4.8	Limitation on Liens	64
Section 4.9	Limitation on Restricted Payments	64
Section 4.10	Limitation on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries	68
Section 4.11	Limitation on Impairment of Security Interests	69
Section 4.12	Limitation on Transactions with Affiliates	69
Section 4.13	Limitation on Sale Of Assets And Restricted Subsidiary Equity Interests	70
Section 4.14	Repurchase of Notes at the Option of the Holder from Excess Cash Flow	73
Section 4.15	Repurchase of Notes at the Option of the Holder Upon a Change of Control	75
Section 4.16	Subsidiary Guarantors	76
Section 4.17	Limitation on Status as Investment Company	76
Section 4.18	Maintenance of Properties and Insurance	77
Section 4.19	Corporate Existence	77
Section 4.20	Limitation on Lines of Business	77
Section 4.21	Restrictions on Activities of Capital	78
Section 4.22	Restrictions on Payment of Management Fees	78
Section 4.23	Entity Classification	78
Section 4.24	Limitation on Use of Proceeds	78
Section 4.25	Gaming Licenses and Certain Permits	79
Section 4.26	Rule 144A Information	79
ARTICLE V	SUCCESSORS	79
Section 5.1	Merger, Consolidation or Sale of Assets	79
Section 5.2	Successor Corporation Substituted	80
ARTICLE VI	DEFAULTS AND REMEDIES	80
Section 6.1	Events of Default	80
Section 6.2	Acceleration	82
Section 6.3	Other Remedies	84
Section 6.4	Waiver of Past Defaults	84
Section 6.5	Control by Majority	84
Section 6.6	Limitation on Suits	85
Section 6.7	Rights of Holders of Notes to Receive Payment	85
Section 6.8	Collection Suit by Trustee	85
Section 6.9	Trustee May File Proofs of Claim	85
Section 6.10	Priorities	86

ii

TABLE OF CONTENTS

(continued)

		Page
Section 6.11	Undertaking for Costs	87
ARTICLE VII	TRUSTEE	87
Section 7.1	Duties of Trustee	87
Section 7.2	Rights of Trustee	88
Section 7.3	Individual Rights of Trustee	89
Section 7.4	Trustee’s Disclaimer	89
Section 7.5	Notice of Defaults	90
Section 7.6	Reports by Trustee to Holders of the Notes	90
Section 7.7	Compensation and Indemnity	91
Section 7.8	Replacement of Trustee	92
Section 7.9	Successor Trustee by Merger, etc	93
Section 7.10	Eligibility; Disqualification	93
Section 7.11	Preferential Collection of Claims Against Issuers	93
ARTICLE VIII	LEGAL DEFEASANCE AND COVENANT DEFEASANCE	93
Section 8.1	Option to Effect Legal Defeasance or Covenant Defeasance	93
Section 8.2	Legal Defeasance and Discharge	93
Section 8.3	Covenant Defeasance	94
Section 8.4	Conditions to Legal or Covenant Defeasance	95
Section 8.5	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions	96
Section 8.6	Repayment to Issuers	96
Section 8.7	Reinstatement	97
Section 8.8	Satisfaction and Discharge	97
ARTICLE IX	AMENDMENT, SUPPLEMENT AND WAIVER	98
Section 9.1	Without Consent of Holders of Notes	98
Section 9.2	With Consent of Holders of Notes	99
Section 9.3	Compliance with Trust Indenture Act	101
Section 9.4	Revocation and Effect of Consents	101
Section 9.5	Notation on or Exchange of Notes	102
Section 9.6	Trustee to Sign Amendments, etc	102
ARTICLE X	COLLATERAL AND SECURITY AND GUARANTY	103
Section 10.1	Collateral Agreements; Security Interests	103
Section 10.2	Further Assurances and Security	104
Section 10.3	Opinions	105
Section 10.4	Release of Collateral	105
Section 10.5	Certificates of the Issuers	106

iii

TABLE OF CONTENTS

(continued)

		Page
Section 10.7	Authorization of Actions to be Taken by the Trustee Under the Collateral Agreements	107
Section 10.7	Authorization of Receipt of Funds by the Trustee Under the Collateral Agreements	107
Section 10.8	Guarantees	107
Section 10.9	Execution and Delivery of Guarantees	109
Section 10.10	Guarantors May Consolidate, etc., on Certain Terms	109
Section 10.11	Guaranty by Future Restricted Subsidiaries	110
Section 10.12	Release of Guarantors	111
Section 10.13	Limitation of Guarantor’s Liability; Certain Bankruptcy Events	111
Section 10.14	Application of Certain Terms and Provisions to the Guarantors	112
ARTICLE XI	MISCELLANEOUS	112
Section 11.1	Trust Indenture Act Controls	112
Section 11.2	Notices	112
Section 11.3	Communication by Holders of Notes with Other Holders of Notes	114
Section 11.4	Certificate and Opinion as to Conditions Precedent	114
Section 11.5	Statements Required in Certificate or Opinion	115
Section 11.6	Rules by Trustee and Agents	115
Section 11.7	Legal Holidays	115
Section 11.8	No Personal Liability of Directors, Officers, Employees and Stockholders	115
Section 11.9	Governing Law	116
Section 11.10	No Adverse Interpretation of Other Agreements	116
Section 11.11	Successors	116
Section 11.12	Severability	116
Section 11.13	Counterpart Originals	116
Section 11.14	Table of Contents, Headings, Etc	116

iv

CROSS-REFERENCE TABLE*

TIA Section	Indenture Section
310(a)(1)	7.10
(a)(2)	7.10
(a)(3)	N.A
(a)(4)	N.A
(a)(5)	7.8;7.10
(b)	7.8;7.10;11.2
(c)	N.A.
311(a)	7.11
(b)	7.11
(c)	N.A.
312(a)	2.5
(b)	11.3
(c)	11.3
313(a)	7.6
(b)(1)	N.A.
(b)(2)	7.6;7.7
(c)	7.5;7.6;11.2
(d)	7.6
314(a)	4.3;4.4;11.2
(b)	N.A.
(c)(1)	11.4
(c)(2)	11.4
(c)(3)	N.A.
(d)	10.5
(e)	11.5
(f)	N.A.
315(a)	7.1	(b)
(b)	7.5;11.2
(c)	7.1	(a)
(d)	7.1	(c)
(e)	6.11
316(a)(last sentence)	2.9
(a)(1)(A)	6.5
(a)(1)(B)	6.4
(a)(2)	N.A.
(b)	6.7
(c)	6.3
317(a)(1)	6.8
(a)(2)	6.9
(b)	2.4
318(a)	11.1
(c)	11.1

N.A. means not applicable

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

v

INDENTURE, dated as of February 25, 2003, among The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (the “Company”), The Old Evangeline Downs Capital Corp., a Delaware corporation (“Capital” and, together with the Company, the “Issuers”), the Guarantors (as defined), and U.S. Bank National Association, as trustee.

Each party agrees as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the 13% Series A Senior Secured Notes due 2010 with Contingent Interest (the “Series A Notes”) and the 13% Series B Senior Secured Notes due 2010 with Contingent Interest (the “Series B Notes” and, together with the Series A Notes, the “Notes”):

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 of 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” within the meaning of Rule 501(a)(1), (2), (3), or (7) of the Securities Act.

“Accrued Bankruptcy Interest” means, with respect to any Indebtedness, all interest accruing thereon after the filing of a petition by or against the Company or any of the Restricted Subsidiaries or any Parent under any Bankruptcy Law, in accordance with and at the rate (including any rate applicable upon any default or event of default, to the extent lawful) specified in the documents evidencing or governing such Indebtedness, whether or not the claim for such interest is allowed as a claim after such filing in any proceeding under such Bankruptcy Law.

“Acquired Indebtedness” means Indebtedness (including Disqualified Equity Interests) of any Person existing at the time such Person becomes a Restricted Subsidiary of the Company, including by designation, or is merged or consolidated into or with the Company or one of the Restricted 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 which may be issued after the Issue Date pursuant to this Indenture (other than pursuant to an Exchange Offer or otherwise in exchange for or in replacement of outstanding Notes). All references herein to “Notes” shall be deemed to include Additional Notes.

“Adjusted Consolidated Coverage Ratio” means, with respect to any Person for any period, the ratio of the Consolidated EBITDA of such Person and its Consolidated Subsidiaries for such period to the Adjusted Consolidated Fixed Charges of such Person and its Consolidated Subsidiaries for such period (calculated in the same manner as the Consolidated Coverage Ratio is calculated, except that Management Fees shall be deducted in calculating Consolidated EBITDA).

“Adjusted Consolidated Fixed Charges” means, with respect to any Person for any period, the Consolidated Fixed Charges of such Person and its Consolidated Subsidiaries for such period minus, to the extent included therein, any Deferred Contingent Interest of such Person and its Consolidated Subsidiaries for such period, plus any Deferred Contingent Interest accrued in respect of any prior periods that is proposed to be paid for the period in respect of which Adjusted Consolidated Fixed Charges is being determined.

“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, the Initial Purchaser shall not be deemed to be an Affiliate of PGP, PGC, OEDA, the Issuers or any of the Restricted Subsidiaries.

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

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

“Applicable Capital Gain Tax Rate” means a rate equal to the sum of:

(a) the highest marginal Federal income tax rate applicable to net capital gain of an individual who is a citizen of the United States, plus

(b) the greater of (i) an amount equal to the sum of the highest marginal state and local income tax rates applicable to net capital gain of an individual who is a resident of the State of California and (ii) an amount equal to the sum of the highest marginal state and local income tax rates applicable to net capital gain of an individual who is a resident of the State of Louisiana, multiplied by a factor equal to 1 minus the highest marginal Federal income tax rate described in clause (a) above.

“Applicable Income Tax Rate” means a rate equal to the sum of:

(a) the highest marginal Federal ordinary income tax rate applicable to an individual who is a citizen of the United States, plus

2

(b) the greater of (i) an amount equal to the sum of the highest marginal state and local ordinary income tax rates applicable to an individual who is a resident of the State of California and (ii) an amount equal to the sum of the highest marginal state and local ordinary income tax rates applicable to an individual who is a resident of the State of Louisiana, multiplied by a factor equal to 1 minus the highest marginal Federal income tax rate described in clause (a) above.

“Asset Sale” means:

(a) the conveyance, sale, transfer, assignment or other disposition of, directly or indirectly, any of the property, business or assets of the Company and the Restricted Subsidiaries, including by merger or consolidation (in the case of a Guarantor or one of the Restricted Subsidiaries); and

(b) the sale or other transfer or issuance of any Equity Interests of any of the Restricted Subsidiaries, whether by the Issuers or by one of the Restricted Subsidiaries or through the issuance, sale or transfer of Equity Interests by one of the Restricted Subsidiaries (in each case, other than directors’ qualifying shares).

Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales:

(1) any (a) conveyance, sale, transfer, assignment, lease or other disposition of inventory, equipment, accounts receivable or other assets acquired and held for resale in the ordinary course of business, consistent with past practices of the Issuers and the Restricted Subsidiaries and (b) the sale or other disposition of, or liquidation of, Cash Equivalents;

(2) any sale or disposition of damaged, worn out or other obsolete personal property so long as such property is no longer necessary for the proper conduct of the Issuers’ business or the business of such Restricted Subsidiary, as applicable;

(3) any conveyance, sale, transfer, assignment or other disposition of all or substantially all of the assets of the Company and the Restricted Subsidiaries taken as a whole that is governed by and complies with Section 4.15 and/or Section 5.1;

(4) any transaction or series of related transactions that have a fair market value (or result in gross proceeds) of less than $1,000,000, until the aggregate fair market value and gross proceeds of the transactions excluded from the definition of Asset Sale pursuant to this clause (4) exceed $5,000,000;

(5) any conveyance, sale, transfer, assignment, lease or other disposition to the Company or any of the Restricted Subsidiaries;

(6) any settlement, release or surrender of tort or other litigation claims in the ordinary course of business or any grant of any Liens not otherwise prohibited by this Indenture;

(7) any Investments that are not prohibited by Section 4.9;

3

(8) any exchange of equipment or assets for any assets or property of the type set forth in clause (b)(2) of Section 4.13; and

(9) any issuance of Equity Interests by any Restricted Subsidiary to the Company or to any other Restricted Subsidiary.

“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 obtained by multiplying (a) the number of years (calculated to the nearest one-twelfth) from the date of determination to the date or dates of each successive scheduled principal (or redemption) payment of such security or instrument, by (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 the United States Bankruptcy Code, codified at 11 U.S.C. §101-1330, as amended.

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

“Basic Management Fee” has the meaning set forth in the Management Agreement.

“Beneficial Owner” or “beneficial owner” 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.

“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 Lafayette, Louisiana or 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.

“Cash Collateral and Disbursement Agreement” means the Cash Collateral and Disbursement Agreement dated as of the date of this Indenture, among the Issuers, the Trustee, the Independent Construction Consultant and the Disbursement Agent, as in effect on the date of this Indenture or as amended in accordance with Article IX hereof.

“Cash Equivalent” means:

4

(1) 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 having maturities of not more than one year from the date of acquisition);

(2) securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, having the highest rating obtainable from either S&P or Moody’s;

(3) 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 $250,000,000 and, in each case, having maturities of not more than one year from the date of acquisition;

(4) 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 and in each case, having maturities of not more than one year from the date of acquisition;

(5) repurchase obligations for underlying securities of the types described in (1) and (2) above; or

(6) money market funds, substantially all of the assets of which constitute Cash Equivalents of the kinds described in (1) through (5) of this definition.

“Casino” means the project to design, develop, construct, equip and operate a casino and related amenities as part of the Racino, as generally described in the Issuers’ Offering Circular dated February 19, 2003, related to the Offering (the “Offering Circular”).

“Change of Control” means: (1) during any period of two consecutive calendar years, individuals who at the beginning of such period constituted the Managers of the Company (together with any new Managers whose election as a Manager or whose nominations for election by the Company’s members or stockholders, was approved by a majority of Managers then still in office who were either Managers at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of such Managers then in office; provided, however, that there shall be no Change of Control pursuant to this clause (1) if during such two-year period any of the Excluded Persons continue to (i) own, directly or indirectly, a majority of the Voting Equity Interests of the Company or (ii) control or manage, directly or indirectly, the day-to-day operations of the Company; (2) any Person (other than an Excluded Person) is or becomes the Beneficial Owner, directly or indirectly, of more than 50% of the aggregate voting power of the Voting Equity Interests of the Company; (3) the Issuers adopt a plan of liquidation; (4) except in connection with the transfer of the OTB Operations into an Unrestricted Subsidiary in accordance with this Indenture, the direct or indirect sale, 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 the Restricted Subsidiaries, in each case, taken as a whole, to any Person other than the Company, a Restricted Subsidiary or the Excluded Persons,

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or (5) the first day on which the Company fails to own 100% of the issued and outstanding Equity Interests of Capital; provided, however, that a “Change of Control” shall not occur solely by reason of a Permitted C-Corp Conversion. As used in this definition, “Person” (including any group that is deemed to be a “Person”) has the meaning given by Section 13(d) of the Exchange Act, whether or not applicable.

“Clearstream” means Clearstream Banking Luxembourg, or its successors.

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

“Collateral” means all “collateral” referred to in the Collateral Agreements.

“Collateral Accounts” means the Construction Disbursement Account, the Interest Reserve Account and the Completion Reserve Account.

“Collateral Agreements” means, collectively, the Cash Collateral and Disbursement Agreement and all mortgages, deeds of trust, security agreements, pledge agreements, control agreements, collateral assignment agreements and other agreements, instruments, financing statements and other documents evidencing, creating, setting forth or limiting any Lien on Collateral in favor of the Trustee (or, in the case of mortgages, deeds of trust or similar agreements, in favor of the Trustee or another trustee thereunder), for the benefit of the Holders.

“Completion Reserve Account” means the completion reserve account to be maintained by the Disbursement Agent and pledged to the Trustee pursuant to the terms of the Cash Collateral and Disbursement Agreement.

“consolidated” means, with respect to the Company, the consolidation of the accounts of the Restricted 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 (before deducting Management Fees either paid in cash or deferred during the applicable Reference Period) (exclusive of Consolidated EBITDA attributable to operations and businesses permanently discontinued or disposed of, as determined in accordance with GAAP) 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, as determined in accordance with GAAP, 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:

(1) Acquisitions which occurred during the Reference Period or subsequent to the Reference Period and on or prior to the Transaction Date shall be assumed to have occurred on the first day of the Reference Period,

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(2) 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,

(3) the incurrence of any Indebtedness (including issuance of any Disqualified Equity Interests) 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), other than Indebtedness incurred in the ordinary course of business for general corporate purposes pursuant to working capital facilities, shall be assumed to have occurred on the first day of the Reference Period, and

(4) the Consolidated Fixed Charges of such Person attributable to interest on any Indebtedness or dividends on any Disqualified Equity Interests 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 the Restricted Subsidiaries is a party to an Interest Swap or Hedging Obligation (which shall remain in effect for the 12-month period immediately following the Transaction Date) that has the effect of fixing the interest rate on the date of computation, then such rate (whether higher or lower) shall be used.

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

(a) to add thereto (to the extent deducted for purposes of determining Consolidated Net Income), without duplication, the sum of:

(1) consolidated income tax expense for such Person and the amount of Permitted Tax Distributions subtracted from net income in the determination of the Consolidated Net Income of such Person for such period;

(2) consolidated depreciation and amortization expense for such Person;

(3) Consolidated Fixed Charges for such Person; and

(4) all other non-cash charges reducing 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 Equity Interests to or from employees of such Person and its Consolidated Subsidiaries determined in accordance with GAAP, but (ii) excluding non-cash charges that require an accrual of or a reserve for cash charges for any future periods and normally occurring accruals such as reserves for accounts receivable; and

(b) to subtract therefrom:

(1) the amount of all cash payments made by such Person or any of the Restricted Subsidiaries during such period to the extent such payments relate to non-cash charges that were added back in determining Consolidated EBITDA for such period or any prior period; and

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(2) any extraordinary non-cash items increasing Consolidated Net Income for such period.

“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 Contingent Interest (excluding (i) amortization or write-off of deferred financing costs and debt issuance costs of such Person and the Restricted Subsidiaries during such period and any premium or penalty paid in connection with redeeming or retiring Indebtedness of such Person and the Restricted Subsidiaries prior to the stated maturity thereof pursuant to the agreements governing such Indebtedness, and (ii) the net effect of all cash payments made or received pursuant to Interest Swap and Hedging Obligations including, but not limited to, cash costs paid to unwind Interest Swap and Hedging Obligations existing on and prior to the date of this Indenture), 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, 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 Equity Interests, other than dividends payable solely in Qualified Equity Interests and other than by Restricted Subsidiaries of the Company to the Company or the Company’s Wholly Owned Restricted 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 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 Restricted 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 (but not losses) which are either extraordinary (as determined in accordance with GAAP) or are unusual and nonrecurring (including any gain from the sale or other disposition of assets outside the ordinary course of business or from the issuance or sale of any Equity Interests);

(b) the net income of any other Person, other than a Restricted 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

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Person or a Restricted 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 other Person’s net income for such period; and

(c) the net income of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that net income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its members or stockholders,

and reduced by the maximum amount of Permitted Tax Distributions attributable to such net income for such period, reduced by the amounts described in the immediately preceding clauses (a), (b) and (c).

“Consolidated Net Worth” of any Person at any date means the aggregate consolidated stockholders’ or members’ equity of such Person and its Consolidated Subsidiaries, plus the aggregate amounts that would be shown on the consolidated balance sheet of such Person prepared in accordance with GAAP, as of such date with respect to any series of Preferred Equity Interests that by their terms are not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, adjusted to exclude (to the extent included in calculating such equity), (a) the amount of any such stockholders’ (or members’) equity attributable to Disqualified Equity Interests or treasury stock of such Person and its Consolidated Subsidiaries, and (b) all upward revaluations and other write-ups in the book value of any asset of such Person or a Consolidated Subsidiary of such Person subsequent to the Issue Date made in connection with or in contemplation of the transaction which requires the calculation of Consolidated Net Worth.

“Consolidated Subsidiary” means, for any Person, each Restricted 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.

“Construction Disbursement Account” means the construction disbursement account to be maintained by the Disbursement Agent and pledged to the Trustee pursuant to the terms of the Cash Collateral and Disbursement Agreement.

“Construction Disbursement Budget” has the meaning set forth in the Cash Collateral and Disbursement Agreement.

“Construction Documents” has the meaning set forth in the Cash Collateral and Disbursement Agreement.

“Contingent Interest” means interest payable on each Interest Payment Date with respect to any principal amount of outstanding Notes in an amount equal to the product of (1) 5.0% of the Company’s Consolidated EBITDA for its two most recently completed fiscal quarters for which financial statements are available prior to the Interest Record Date applicable to that Interest Payment Date and (2) a fraction, the numerator of which is the principal amount

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of the Notes outstanding on the close of business on that Interest Record Date and the denominator of which is $123,200,000; provided, that Contingent Interest will cease to accrue during a semi-annual period on any principal amount of outstanding Notes if the aggregate amount of Contingent Interest in respect of any four consecutive fiscal quarters (excluding any Contingent Interest deferred from prior periods) exceeds the product of (a) 5.0% multiplied by the Target EBITDA and (b) a fraction, the numerator of which is such principal amount of outstanding Notes and the denominator of which is $123,200,000.

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

“Credit Agreement” means one or more debt facilities, commercial paper facilities or other debt instruments, indentures or agreements providing for revolving credit loans, term loans, receivable financings, letters of credit or other debt obligations entered into on or after the Issue Date providing for an aggregate $15,000,000 senior credit facility, including any related notes, guarantees, collateral documents, instruments and agreements to be executed in connection therewith, in each case as amended, restated, supplemented, renewed, replaced or otherwise modified from time to time, whether in whole or in part, and whether or not with the same agent, trustee, representative lenders or holders or otherwise, and, subject to the proviso to the next succeeding sentence, irrespective of any changes in the terms and conditions thereof. Without limiting the generality of the foregoing, the term “Credit Agreement” shall include agreements in respect of Interest Swap and Hedging Obligations with lenders (or Affiliates thereof) party to the Credit Agreement and shall also include any amendment, amendment and restatement, renewal, extension, restructuring, supplement or modification to any Credit Agreement and all refundings, refinancings and replacements of any Credit Agreement, including any credit agreement:

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

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

(3) 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 4.7; or

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

“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.

“Definitive Note” means one or more certificated Notes registered in the name of the Holder thereof and issued in accordance with Section 2.6 hereof, in the form of Exhibit A hereto except that such Note shall not include the information called for by footnotes 3 and 4 thereof.

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“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 hereof as the Depositary with respect to the Notes, until a successor will have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” will mean or include such successor.

“Disbursement Agent” means U.S. Bank National Association or the then acting Disbursement Agent under the Cash Collateral and Disbursement Agreement.

“Disqualified Equity Interests” means with respect to any Person, any Equity Interests of such Person that, either 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 for cash by such Person or any of the Restricted Subsidiaries, in whole or in part, on or prior to 91 days following the Stated Maturity of the Notes. Notwithstanding the foregoing, any Equity Interests that would constitute Disqualified Equity Interests solely because such Equity Interests mature or become mandatorily redeemable, or give the holders thereof the right to require the Company to repurchase such Equity Interests, in each case, upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Equity Interests if the terms of such Equity Interests provide that the Company may not repurchase or redeem any such Equity Interests pursuant to such provisions prior to the Company’s purchase of the Notes as are required to be purchased pursuant to Section 4.13 and Section 4.15.

“Distribution Compliance Period” means the 40-day restricted period as defined in Regulation S.

“Equity Holder” means each Person treated for Federal income tax purposes as (a) with respect to a corporation, an owner of stock of such corporation, (b) with respect to a limited liability company or similar entity, a member of such limited liability company or similar entity, (c) with respect to a partnership, a partner of such partnership, (d) with respect to any entity described in clause (a)(iv) of the definition of “Flow Through Entity,” the owner of such entity, and (e) with respect to a trust described in clause (a)(v) of the definition of “Flow Through Entity,” an owner thereof.

“Equity Interests” means (a) (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, and (b) all warrants, options or other rights to acquire any of the Equity Interests described in the immediately preceding clause (a) (but excluding any debt security that is convertible into, or exchangeable for, any of the Equity Interests described in the immediately preceding clause (a)).

“Euroclear” means Euroclear Bank S.A./N.V., or its successor, as operator of the Euroclear system.

“Event of Loss” means, with respect to any property or asset, (1) any loss, destruction or damage of such property or asset, (2) any condemnation, seizure or taking, by

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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 (3) any settlement in lieu of clause (2) above, in each case having a fair market value or resulting in gross proceeds in excess of $1,000,000.

“Excess Cash Flow” means, with respect to the Company for any Operating Six Months, the Consolidated EBITDA of the Company and its Restricted Subsidiaries for such Operating Six Months, minus (1) Permitted Tax Distributions for such Operating Six Months, minus (2) (i) capital expenditures of the Company and its Restricted Subsidiaries actually paid to complete the Racino (including additional deposits made in the Collateral Accounts) during such Operating Six Months and (ii) $2,000,000 of other capital expenditures for each Operating Six Months that the Casino has been Operating less amounts previously deducted pursuant to this clause 2(ii), minus (3) principal and interest payments (other than Contingent Interest), in each case, whether made at maturity or otherwise, or whether voluntary or required, made during such Operating Six Months in respect of Indebtedness permitted to be incurred pursuant to Section 4.7 (including the portion of any payments associated with Capital Lease Obligations), minus (4) Contingent Interest accrued for such Operating Six Months.

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

“Exchange Notes” means 13% Senior Secured Notes due 2010 with Contingent Interest, Series B, of the Company, including the guarantees endorsed thereon, identical in all respects to the 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 Issuers pursuant to the Registration Rights Agreement to exchange Exchange Notes for Series A Notes.

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

“Excluded Assets” means (i) the assets that secure FF&E Financing, (ii) any motor vehicles, (iii) the lease for the off track betting parlor operated by the Company in New Iberia, Louisiana and any other leases of off-track betting parlors operated by the Company in any other location after the Issue Date, (iv) Gaming Licenses and Racing Licenses, and (v) any agreements, leases, Permits or other assets or property that cannot be subjected to a Lien under the Collateral Agreements without the consent of third parties that has not been obtained (including applicable Gaming Authorities, Racing Authorities and liquor agencies and authorities).

“Excluded Person” means (i) PGC; (ii) PGP; (iii) PGP Investors, LLC; (iv) OEDA, (v) M. Brent Stevens, Michael S. Luzich and any Affiliate or Manager of PGP, PGC, PGP Investors, LLC, M. Brent Stevens or Michael S. Luzich (collectively, the “Existing Holders”), (vi) any trust, corporation, partnership or other entity (a) controlled by the Existing Holders and members of the immediate family of the Existing Holders or (b) 80% of the beneficiaries, stockholders, partners or owners of which consist solely of the Existing Holders

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and members of the immediate family of the Existing Holders or (vii) any partnership, the sole general partners of which consist solely of the Existing Holders and members of the immediate family of the Existing Holders.

“Exempted Affiliate Transaction” means (a) reasonable and customary compensation paid to officers, employees or consultants of the Company or any Restricted Subsidiary, in each case, for services provided to the Company or any Restricted Subsidiary, as determined in good faith by the Managers of the Company, (b) Restricted Payments permitted under the terms of Section 4.9, (c) transactions solely between or among the Company and any Restricted Subsidiary or solely among Restricted Subsidiaries, (d) the Management Agreement and payment of Management Amounts pursuant thereto, (e) any agreement (other than the Management Agreement) as in effect on the Issue Date among the Company, any officers or managers of the Company, one or more Restricted Subsidiaries and one or more Affiliates of the Company (including any amendments thereof so long as any such amendment is not more disadvantageous to the Company or the relevant Restricted Subsidiary in any material respect than the original agreement as in effect on the Issue Date); (f) Permitted Investments; and (g) transactions with a joint venture engaged in a Related Business; provided, that all the outstanding ownership interests of such joint venture are owned only by the Company, the Restricted Subsidiaries and Persons who are not Affiliates of the Company.

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

“fair market value” means the price that would be paid in an arm’s-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy, as determined in good faith by the Issuers.

“FF&E” means furniture, fixtures and equipment (including Gaming Equipment) acquired by the Issuers and the Restricted Subsidiaries in the ordinary course of business for use in the construction and business operations of the Company.

“FF&E Financing” means Purchase Money Indebtedness, Capital Lease Obligations and other Indebtedness (to the extent that under the terms thereof and any related contract or other agreement, no personal recourse could be had against the Person incurring such Indebtedness for the payment of the principal of or interest or premium or other amounts with respect to such Indebtedness or for any claim based on such Indebtedness and that enforcement of obligations on such Indebtedness is limited solely to recourse against interests in specified assets), the proceeds of which are used solely by the Issuers and the Restricted Subsidiaries to acquire or lease or refinance, respectively, FF&E.

“Fixed Interest” means the fixed interest payable on the Notes.

“Flow Through Entity” means an entity that (a) for Federal income tax purposes constitutes (i) an “S corporation” (as defined in Section 1361(a) of the Code), (ii) a “qualified subchapter S subsidiary” (as defined in Section 1361(b)(3)(B) of the Code), (iii) a “partnership”

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(within the meaning of Section 7701(a)(2) of the Code) other than a “publicly traded partnership” (as defined in Section 7704 of the Code), (iv) an entity that is disregarded as an entity separate from its owner under the Code, the Treasury regulations or any published administrative guidance of the Internal Revenue Service, or (v) a trust, the income of which is includible in the taxable income of the grantor or another person under sections 671 through 679 of the Code (the entities described in the immediately preceding clauses (i), (ii), (iii), (iv) and (v), a “Federal Flow Through Entity”) and (b) for state and local jurisdictions in respect of which Permitted Tax Distributions are being made, is subject to treatment on a basis under applicable state or local income tax law substantially similar to a Federal Flow Through Entity.

“Foreign Subsidiary” means any subsidiary of the Company which (i) is not organized under the laws of the United States, any state thereof or the District of Columbia and (ii) conducts substantially all of its business operations outside of the United States of America.

“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 Person 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, including, without limitation, the Louisiana Gaming Control Board, or any other agency, in each case, with authority to regulate any gaming operation (or proposed gaming operation) owned, managed or operated by the Issuers and their subsidiaries.

“Gaming Equipment” means slot machines, video poker machines, and all other gaming equipment and related, signage, accessories and peripheral equipment.

“Gaming FF&E Financing” means FF&E Financing, the proceeds of which are used solely by the Issuers and the Restricted Subsidiaries to acquire or lease FF&E that constitutes Gaming Equipment.

“Gaming Law” means the provisions of any gaming laws or regulations of any jurisdiction or jurisdictions to which any of the Issuers and the Restricted 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 activities of the Issuers and the Restricted Subsidiaries and all applicable liquor and tobacco Permits.

“General Contractor” has the meaning set forth in the Cash Collateral and Disbursement Agreement.

“Global Notes” means one or more Notes in the form of Exhibit A hereto that includes the information referred to in footnotes 3 and 4 to the form of Note, attached hereto as

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Exhibit A, issued under this Indenture, that is deposited with or on behalf of and registered in the name of the Depositary or its nominee.

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

“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. When used with respect to the Notes, a “Guarantee” means a guarantee by the Guarantors of all or any part of the Notes, in accordance with Article X hereof.

“Guarantor” means each of the Company’s present and future Restricted 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 in the register of the Notes.

“Incentive Fee” has the meaning set forth in the Management Agreement.

“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;

(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;

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(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 Equity Interests 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 Equity Interests which do not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity Interests were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Equity Interests, such fair market value shall be determined in reasonable good faith by the Managers of the Company.

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 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.

“Independent Construction Consultant” means Abacus Project Management, Inc. and its successors or replacements as provided in the Cash Collateral and Disbursement Agreement.

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

“Initial Purchaser” mean the initial purchaser of the Series A Notes under the Purchase Agreement, dated February 19, 2003, with respect to the Series A Notes.

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

“Intercreditor Agreement” means that certain Intercreditor Agreement among the Trustee and one or more lenders, substantially in the form attached hereto as Exhibit F, which may be entered into on or after the Issue Date in accordance with Section 7.1(f) hereof, including any amended or supplemented agreement or any replacement or substitute agreement, in each case substantially in the form of Exhibit F attached hereto.

“Interest” means Fixed Interest and Contingent Interest, if any.

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

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

“Interest Reserve Account” means the interest reserve account to be maintained by the Disbursement Agent and pledged to the Trustee pursuant to the terms of the Cash Collateral and Disbursement Agreement into which an amount, together with interest earned on such amount, sufficient to pay the first two Fixed Interest payments on the Notes will be deposited on the date of this Indenture.

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

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

(a) the acquisition (whether by purchase, merger, consolidation or otherwise) by such specified Person (whether for cash, property, services, securities or otherwise) of Equity Interests, 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 (i) advances to officers and employees made in the ordinary course of business and (ii) accounts receivable, trade credit, endorsements for collection or deposits arising in the ordinary course of business);

(c) other than guarantees of Indebtedness of the Issuers or any Guarantor to the extent permitted by Section 4.7, 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

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

The Company shall be deemed to make an Investment in a subsidiary of the Company in an amount equal to the fair market value of the Equity Interests of such subsidiary then held by the Company, at the time that such subsidiary is designated an Unrestricted Subsidiary, and any property transferred to an Unrestricted Subsidiary from the Company or a Restricted Subsidiary shall be deemed an Investment valued at its fair market value at the time of such transfer. The Company or any of the Restricted Subsidiaries shall be deemed to have made an Investment in a Person that is or was a Restricted Subsidiary or a Guarantor if, upon the issuance, sale or other disposition of any portion of the Company’s or the Restricted Subsidiary’s ownership in the Equity Interests of such Person, such Person ceases to be a Restricted Subsidiary or 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 Holiday” means a Saturday, Sunday or a day on which banking institutions in the City of New York or Lafayette, Louisiana or at a place of payment are authorized by law, regulation or executive order to remain closed.

“Letter of Transmittal” means the letter of transmittal to be prepared by the Issuers and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer.

“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.

“Management Agreement” means the Amended and Restated Management Services Agreement, dated as of the date of the Indenture, by and between PGC, OEDA and the Company, as in effect on the Issue Date, without giving effect to any amendment or supplement thereto or modification thereof.

“Management Amounts” shall mean Management Fees and Reimbursable Expenses.

“Management Fees” shall mean any of the Pre-Opening Services Fee, the Basic Management Fee and the Incentive Fee.

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“Manager” means, with respect to any Person (i) if such Person is a limited liability company, the members of the board of managers, or members of such other body performing similar functions for such Person, manager or managers, as appointed pursuant to the operating agreement of such Person as then in effect, or in the event that there are no managers or board of managers or similar governing body, the sole member of such Person or (ii) otherwise, the members of the board of directors (if such Person is a corporation) or other governing body of such Person.

“Maximum Credit Facility Amount” means at any time (such time, the “Time of Determination”) (a) prior to the second anniversary of the date the Casino first becomes Operating (the “Second Anniversary Date”), $15,000,000, and (b) on or after the Second Anniversary Date, the greater of (i) the borrowings outstanding under the Credit Agreement on the Second Anniversary Date less any repayments, refinancings or retirings of such borrowings made on or after the Second Anniversary Date and on or prior to the Time of Determination and (ii) $10,000,000.

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

“Net Cash Proceeds” means the aggregate amount of cash or Cash Equivalents received by (i) the Company in the case of a sale or issuance of Qualified Equity Interests or an equity contribution or (ii) the Company or a Restricted Subsidiary, as the case may be, in the case 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 or paid as the result of any Event of Loss),

(1) plus, in the case of an issuance of Qualified Equity Interests 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),

(2) plus, in the case of an Asset Sale, any cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration received in such Asset Sale,

(3) less, in each case, the sum of all the direct costs relating to such transaction, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result thereof, and

(4) less, in the case of an Asset Sale only:

(i) taxes paid or payable as a result thereof (x) by the Company and the Restricted Subsidiaries or (y) any Equity Holder of the Company (or, in the case of any Equity Holder of the Company that is a Flow Through Entity, the Upper Tier Equity Holder of such Flow Through Entity) in an amount equal to the increase in the amount of Permitted Tax Distributions in the taxable year that such Asset Sale is consummated or in the immediately succeeding taxable year attributable to income or gain from such Asset Sale, in each case, after taking into account any available operating losses and net operating loss carryovers, tax credits,

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tax credit carryforwards, or deductions and any tax sharing arrangements or similar tax attributes,

(ii) amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale, and

(iii) any amounts provided as a reserve by the Company or any of the Restricted Subsidiaries, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by the Company or such Restricted Subsidiary, as the case may be, after such Asset Sale (including, without limitation, as applicable, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations arising from such Asset Sale).

“Non-U.S. Person” means any Person other than a U.S. Person.

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

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

“OEDA” means OED Acquisition, LLC, a Delaware limited liability company and the direct parent of the Company.

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

“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or any Vice President of such Person or any other Person designated by the Manager of such Person and serving in a similar capacity.

“Officers’ Certificate” means the officers’ certificate to be delivered upon the occurrence of certain events as set forth in this Indenture.

“Operating” has the meaning set forth in the Cash Collateral and Disbursement Agreement.

“Operating Deadline” has the meaning set forth in the Cash Collateral and Disbursement Agreement.

“Operating Six Months” means the two consecutive fiscal quarter period of the Company beginning with the first full fiscal quarter immediately after the date that the Casino first becomes Operating, and each succeeding two consecutive fiscal quarter period thereafter.

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“Opinion of Counsel” means the opinion of counsel to be delivered upon the occurrence of certain events set forth in this Indenture.

“OTB Operations” means all of the assets and properties of the Company and its subsidiaries (including, but not limited to, all Gaming Licenses, Racing Licenses and Permits) related to the business operation of any off-track betting parlor or similar facility operated or owned by the Company or such subsidiary.

“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).

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

“Permitted C-Corp Conversion” means a transaction resulting in the Company becoming subject to tax under the Code as a corporation (a “C Corporation”); provided, that:

(1) the C Corporation resulting from such transaction, if a successor to The Old Evangeline Downs, L.L.C., (a) is a corporation, limited liability company or other entity organized and existing under the laws of any state of the United States or the District of Columbia, (b) assumes all of the obligations of the Company under the Notes and this Indenture pursuant to a supplemental indenture in form reasonably satisfactory to the Trustee and (c) will have Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction;

(2) after giving effect to such transaction no Default or Event of Default exists;

(3) prior to the consummation of such transaction, the Company shall have delivered to the Trustee (a) an Opinion of Counsel to the effect that the Holders will not recognize income gain or loss for Federal income tax purposes as a result of such Permitted C-Corp Conversion and will be subject to Federal income tax on the same amounts, in the same manner, and at the same times as would have been the case if such Permitted C-Corp Conversion had not occurred and (b) an Officers’ Certificate as to compliance with all of the conditions set forth in clauses (1), (2) and (3)(a) above; and

(4) such transaction would not (a) result in the loss or suspension or material impairment of any Gaming License or Racing License unless a comparable replacement Gaming License or Racing License is effective prior to or simultaneously with such loss, suspension or material impairment or (b) require any Holder or beneficial owner of Notes to obtain a Gaming License or Racing License or be qualified or found suitable under any applicable Gaming Laws or Racing Laws.

“Permitted Indebtedness” means:

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(a) Existing Indebtedness, including Indebtedness evidenced by the Notes and the Guarantees issued pursuant to this Indenture up to the amounts being issued on the Issue Date less any amounts repaid or retired in respect of such Existing Indebtedness;

(b) Permitted Refinancing Indebtedness;

(c) FF&E Financing; provided, that (1) the principal amount of such Indebtedness does not exceed the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase) of the FF&E purchased or leased with the proceeds thereof, (2) no Indebtedness incurred under the Notes is utilized for the purchase or lease of such FF&E and (3) 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 (c)) outstanding at any time (excluding any Gaming FF&E Financing incurred pursuant to this clause (c)) does not exceed $5,000,000;

(d) Indebtedness solely in respect of bankers acceptances, letters of credit payment obligations in connection with self-insurance or similar requirements, security for workers’ compensation claims, appeal bonds, surety bonds, insurance obligations or bonds, 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), and similar bonds or obligations all incurred in the ordinary course of business (including, without limitation, to maintain any license or permits) in accordance with customary industry practices, in amounts and for the purposes customary in the Company’s industry;

(e) (i) Indebtedness of the Company owed to (borrowed from) any Guarantor; (ii) Indebtedness of any Guarantor owed to (borrowed from) any other Guarantor or the Company; (iii) Indebtedness of any Restricted Subsidiary owed to (borrowed from) any Guarantor or the Company; or (iv) Disqualified Equity Interests issued by any Guarantor or Restricted Subsidiary to the Company, any other Guarantor or any other Restricted Subsidiary; provided, that (w) in the case of clause (i) of this clause (e), 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 as an Unrestricted Subsidiary) shall be deemed to be a new incurrence by the Company of such Indebtedness and any Guarantor thereof subject to Section 4.7 hereof, (x) in the case of clause (ii) of this clause (e), such obligations shall be unsecured and contractually subordinated in all respects to such Guarantor’s obligations pursuant to such Guarantor’s Guarantee and any event that causes the Guarantor lender no longer to be a Guarantor (including a designation as an Unrestricted Subsidiary) shall be deemed to be a new incurrence by such Guarantor borrower of such Indebtedness and any guarantor thereof subject to Section 4.7 hereof, (y) in the case of clause (iii) of this clause (e) 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 Restricted Subsidiary borrower of such Indebtedness and any guarantor thereof subject to Section 4.7 hereof; and (z) in the case of clause (iv) of this clause (e), any event that causes the Guarantor or Restricted Subsidiary no longer to be, as applicable, a Guarantor or Restricted Subsidiary (including a designation as an

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Unrestricted Subsidiary) shall be deemed in each case to be an issuance of such Disqualified Equity Interests subject to Section 4.7 hereof;

(f) 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.

(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business;

(h) Indebtedness represented by Capitalized Lease Obligations, mortgage financings or Purchase Money Indebtedness, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to repay, redeem, discharge, retire, defease, refund, refinance or replace any Indebtedness incurred pursuant to this clause (h), not to exceed $5,000,000 at any one time outstanding;

(i) the accrual of interest, the accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms;

(j) the guarantee of any Indebtedness of the Company, any Guarantor or any Restricted Subsidiary that was permitted to be incurred by another provision of this covenant so long as such guarantee otherwise complies with this Indenture;

(k) Indebtedness arising from agreements for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business or assets, other than guarantees of Indebtedness incurred by any person acquiring all or any portion of such business or assets for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or the applicable Guarantor or Restricted Subsidiary in connection with such disposition;

(l) Indebtedness not otherwise included as “Permitted Indebtedness” in an aggregate principal amount (or accreted value, as applicable) at any time outstanding pursuant to this clause (l), including all Permitted Refinancing Indebtedness incurred to repay, redeem, discharge, retire, defease, refund, refinance or replace any Indebtedness incurred pursuant to this clause (l), not to exceed $5,000,000; and

(m) the obligation of the Company to pay Reimbursables (as defined in the Management Agreement) to PGC and OEDA pursuant to the Management Agreement.

“Permitted Investment” means:

(a) Investments existing on the date of this Indenture;

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(b) any Investment in any of the Notes or Guarantees;

(c) any Investment in cash or Cash Equivalents;

(d) Investments of the types referred to in clause (e) of the definition of “Permitted Indebtedness;”

(e) any Investment by the Company, any Guarantor or any Restricted Subsidiary in a Person if as a result of such Investment such Person immediately becomes a Wholly Owned Restricted Subsidiary and a Guarantor or such Person is immediately merged with or into the Company or a Wholly Owned Restricted Subsidiary that is a Guarantor;

(f) 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 (f) 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 (f)) in such Person, at any time does not in the aggregate exceed $5,000,000 (measured by the value attributed to the Investment at the time made or returned, as applicable);

(g) (i) contribution of the Company’s or any Restricted Subsidiary’s OTB Operations to an Unrestricted Subsidiary or (ii) the designation of a subsidiary which holds OTB Operations as an Unrestricted Subsidiary in accordance with this Indenture, provided, that in each case, immediately after giving effect to such contribution or designation, on a pro forma basis, the Company could incur at least $1.00 of Indebtedness pursuant to the Debt Incurrence Ratio test of Section 4.7 hereof;

(h) any Investment in any Person in exchange for the Company’s Qualified Equity Interests or the Net Cash Proceeds of any substantially concurrent sale of the Company’s Qualified Equity Interests;

(i) any Investment in the Company or in a Wholly Owned Restricted Subsidiary of the Company which is a Guarantor, provided, however, that any Indebtedness evidencing such Investment is unsecured and subordinated to the Company’s obligations under the Notes;

(j) Interest Swap and Hedging Obligations;

(k) Investments in securities of trade creditors, customers or any debtor of the Company or the Restricted Subsidiaries received (i) in satisfaction of judgments, or (ii) pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors, customers or debtors; and

(l) loans and advances to employees, directors, officers and Managers of the Company and the Restricted Subsidiaries in the ordinary course of business not to exceed $2,500,000 at any one time outstanding.

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“Permitted Lien” means:

(a) Liens imposed by governmental authorities for taxes, assessments or other charges not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently pursued, if adequate reserves with respect thereto are maintained on the books of the Company in accordance with GAAP;

(b) statutory Liens of carriers, warehousemen, mechanics, material men, suppliers, 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 yet delinquent, or (2) such Liens are being contested in good faith by appropriate proceedings promptly instituted and diligently pursued and adequate reserves with respect thereto are maintained on the books of the Company in accordance with GAAP;

(c) Liens securing the performance of statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(d) 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 the Restricted Subsidiaries) or materially interfere with the ordinary conduct of the business of the Company or any of the Restricted Subsidiaries;

(e) Liens incurred or deposits made in the ordinary course of business to secure the obligations of the Company and the Restricted Subsidiaries under workers’ compensation, unemployment insurance and other types of social security legislation or otherwise to secure statutory or regulatory obligations of the Company or any of the Restricted Subsidiaries in the ordinary course of business consistent with past practice, including to secure the performance of tenders, surety and appeal bonds, bids, leases, governmental contracts, performance and return-of-money bonds and other similar obligations (exclusive in each case of obligations for the payment of borrowed money); provided, that the obligations in connection with which such Liens were incurred or deposits made shall have been incurred in the ordinary course of business and shall otherwise be permitted by this Indenture;

(f) Liens securing the Notes and the Guarantees;

(g) Liens securing Acquired Indebtedness or other Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary or is merged with or into the Company or a Restricted Subsidiary 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 of such acquisition, and do not extend to any other assets;

(h) Liens arising from Purchase Money Indebtedness permitted to be incurred pursuant to Section 4.7 herein; provided that such Liens relate solely to the property which is subject to such Purchase Money Indebtedness;

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

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

(k) Liens securing Permitted Refinancing Indebtedness incurred in compliance with this Indenture to refinance any Indebtedness that was secured by Liens;

(l) Liens securing Indebtedness (up to the Maximum Credit Facility Amount) incurred under the Credit Agreement in compliance with this Indenture;

(m) Liens in favor of the Company or any Guarantor, which are assigned to the Secured Party for the Notes or a Guarantee, as applicable.

(n) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;

(o) Liens incurred in the ordinary course of business securing Interest Swap and Hedging Obligations that are otherwise permitted under this Indenture;

(p) Liens on a pledge of the Equity Interests of any Unrestricted Subsidiary securing Indebtedness of such Unrestricted Subsidiary;

(q) Liens to secure Permitted Indebtedness of the types set forth in clauses (c) and (h) of the definition thereof covering only the assets acquired with such Permitted Indebtedness;

(r) any interest or title of a lessor under any Capitalized Lease Obligation; provided that such Liens do not extend to any property or assets which is not leased property subject to such Capitalized Lease Obligation;

(s) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; and

(t) Liens securing assets of the Company or any Restricted Subsidiary in addition to Liens described in clauses (a) through (s) above, so long as the aggregate principal amount of Indebtedness secured by Liens incurred pursuant to this clause (t) does not exceed $5,000,000 at any one time outstanding.

“Permitted Refinancing Indebtedness” means Indebtedness (including Disqualified Equity Interests) (a) issued in exchange for, or the proceeds from the issuance and

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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, extension, modification or supplement to, or a deferral or renewal of ((a) and (b) above are, collectively, a “Refinancing”), any Indebtedness (including Disqualified Equity Interests) in a principal amount or, in the case of Disqualified Equity Interests, 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 Equity Interests, liquidation preference, of the Indebtedness (including Disqualified Equity Interest) 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 Permitted Refinancing Indebtedness shall only be used to refinance outstanding Indebtedness (including Disqualified Equity Interests) of such Person issuing such Permitted Refinancing Indebtedness, (B) such Permitted Refinancing Indebtedness shall (x) not have an Average Life shorter than the Indebtedness (including Disqualified Equity Interests) to be so refinanced at the time of such Refinancing and (y) in all respects, be no less contractually subordinated or junior, if applicable, to the rights of Holders of the Notes than was the Indebtedness (including Disqualified Equity Interest) to be refinanced, (C) such Permitted 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 Equity Interests) to be so refinanced or, if sooner, 91 days after the Stated Maturity of the Notes, and (D) such Permitted Refinancing Indebtedness shall be secured (if secured) in a manner no more adverse to the Holders than the terms of the Liens (if any) securing such refinanced Indebtedness, including, without limitation, the amount of Indebtedness secured shall not be increased and the Lien is not extended to any additional assets or property that would not have been security for the Indebtedness refinanced.

“Permitted Tax Distributions” in respect of the Company means, with respect to any taxable year or portion thereof in which the Company is a Flow Through Entity, the sum of: (i) the product of (a) the excess of (1) all items of taxable income or gain (other than capital gain) of the Company for such year or portion thereof over (2) all items of taxable deduction or loss (other than capital loss) of the Company for such year or portion thereof and (b) the Applicable Income Tax Rate, plus (ii) the product of (a) the net capital gain (i.e., net long-term capital gain over net short-term capital loss), if any, of the Company for such year or portion thereof and (b) the Applicable Capital Gain Tax Rate, plus (iii) the product of (a) the net short-term capital gain (i.e., net short-term capital gain in excess of net long-term capital loss), if any, of the Company for such year or portion thereof and (b) the Applicable Income Tax Rate, minus (iv) the aggregate Tax Loss Benefit Amount for the Company for such year or portion thereof; provided, that in no event shall the Applicable Income Tax Rate or the Applicable Capital Gain Tax Rate exceed the greater of (i) the greater of (a) the highest aggregate applicable effective marginal rate of Federal, state, and local income tax to which a corporation doing business in the state of California and (b) the highest aggregate applicable effective marginal rate of Federal, state, and local income tax to which a corporation doing business in the state of Louisiana, would be subject to in the relevant year of determination (as certified to the Trustee by a nationally recognized tax accounting firm) plus 5% and (ii) 60%. For purposes of calculating the amount of the Permitted Tax Distributions the items of taxable income, gain, deduction or loss (including capital gain or loss) of any Flow Through Entity of which the Company is treated for Federal

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income tax purposes as a member (but only for periods for which such Flow Through Entity is treated as a Flow Through Entity), which items of income, gain, deduction or loss are allocated to or otherwise treated as items of income, gain, deduction or loss of the Company for Federal income tax purposes, shall be included in determining the taxable income, gain, deduction or loss (including capital gain or loss) of the Company.

Estimated tax distributions may be made within thirty days following March 15, May 15, August 15, and December 15 based upon an estimate of the excess of (x) the tax distributions that would be payable for the period beginning on January 1 of such year and ending on March 31, May 31, August 31, and December 31 if such period were a taxable year (computed as provided above) over (y) distributions attributable to all prior periods during such taxable year.

The amount of the Permitted Tax Distribution for a taxable year shall be re-computed promptly after (i) the filing by the Company and each subsidiary of the Company that is treated as a Flow Through Entity of their respective annual income tax returns and (ii) an appropriate Federal or state taxing authority finally determines that the amount of the items of taxable income, gain, deduction, or loss of the Company or any such subsidiary that is treated as a Flow Through Entity for such taxable year or the aggregate Tax Loss Benefit Amount carried forward to such taxable year should be adjusted (each of clauses (i) and (ii) a “Tax Calculation Event”). To the extent that the Permitted Tax Distributions previously distributed in respect of any taxable year are either greater than (a “Tax Distribution Overage”) or less than (a “Tax Distribution Shortfall”) the Permitted Tax Distributions with respect to such taxable year, as determined by reference to the computation of the amount of the items of income, gain, deduction, or loss of the Company and each such subsidiary in connection with a Tax Calculation Event, the amount of the estimated Permitted Tax Distributions that may be made on the estimated tax distribution date immediately following such Tax Calculation Event shall be reduced or increased as appropriate to the extent of the Tax Distribution Overage or the Tax Distribution Shortfall. To the extent that a Tax Distribution Overage remains after the estimated tax distribution date immediately following such Tax Calculation Event, the amount of the estimated Permitted Tax Distribution that may be made on the subsequent estimated tax distribution date shall be reduced to the extent of such Tax Distribution Overage.

Prior to making any Permitted Tax Distributions, the Company shall require each Equity Holder to agree that promptly after the second estimated tax distribution date following a Tax Calculation Event, such Equity Holder shall reimburse the Company to the extent of its pro rata share (based on the portion of Permitted Tax Distributions distributed to such Equity Holder for the taxable year) of any remaining Tax Distribution Overage.

“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.

“PGC” means Peninsula Gaming Company, LLC, a Delaware limited liability company.

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“PGP” means Peninsula Gaming Partners, LLC, a Delaware limited liability company.

“Plans” means the Final Plans (as defined in the Cash Collateral and Disbursement Agreement).

“Pre-Opening Services Fee” has the meaning set forth in the Management Agreement.

“Preferred Equity Interests” means any Equity Interests 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.

“Private Placement Legend” means the legend set forth in Section 2.6(g)(i)(A) hereof 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.

“Purchase Money Indebtedness” of any Person means any Indebtedness of such Person (to the extent that under the terms thereof and any related contract or other agreement, no personal recourse could be had against such Person for the payment of the principal of or interest or premium or other amounts with respect to such Indebtedness or for any claim based on such Indebtedness and that enforcement of obligations on such Indebtedness is limited solely to recourse against interests in specified assets) 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 is incurred 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 Equity Interests” means, with respect to any Person, any Equity Interests of such Person that are not Disqualified Equity Interests.

“Qualified Equity Offering” means a public or private offering of Qualified Equity Interests of the Company or an equity contribution from a holder of Qualified Equity Interests of the Company (other than an offering pursuant to a registration statement on Form S-8 or otherwise relating to equity securities issuable under any employee benefit plan of the Company).

“Qualified Exchange” means:

(1) any legal defeasance, redemption, retirement, repurchase or other acquisition of Equity Interests 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 Equity Interests (other than to a Restricted Subsidiary), or

(2) any issuance of Qualified Equity Interests of the Company in exchange for any Equity Interests or Indebtedness of the Company issued on or after the Issue Date.

“Racing 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, including, without limitation, the Louisiana State Racing Commission or any other agency, in each case, with authority to regulate any racing operation (or proposed racing operation) owned, managed or operated by the Issuers and their subsidiaries.

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

“Racing License” means any Permit required to own, lease, operate or otherwise conduct racing activities of the Issuers and their subsidiaries and all applicable liquor and tobacco Permits.

“Racino” means the project to design, develop, construct, equip and operate a casino, racetrack and related amenities, as generally described in the Offering Circular.

“Recourse Indebtedness” means Indebtedness (a) as to which the Issuers or one of the Restricted 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 Issuers or any of the Restricted 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.

“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 for which financial statements are available.

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

“Reg S Temporary Global Note” means one or more temporary Global Notes bearing the Private Placement Legend and the Reg S Temporary Global Note Legend, issued in

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an aggregate amount of denominations equal in total to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S.

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

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

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

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

“Reimbursable Expenses” shall mean (i) reasonable and documented out-of-pocket developmental, legal, licensure and other costs and expenses for the Racino previously paid by PGC, OEDA or any of their respective Affiliates on behalf of the Company or (ii) Reimbursables and Operator Advances (as such terms are defined in the Management Agreement) permitted or required to be paid to PGC or OEDA pursuant to the Management Agreement.

“Related Business” means the business conducted (or proposed to be conducted) by the Issuers and the Restricted Subsidiaries as of the Issue Date and any and all businesses that in the reasonable good faith judgment of the Managers of the Company are related, similar or ancillary businesses.

“Restricted Definitive Note” means one or more Definitive Notes bearing the Private Placement Legend, issued under this Indenture.

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

“Restricted Investment” means, in one or a series of related transactions, any Investment other than 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 or any direct or indirect parent or other Affiliate of such Person or any other payment to any direct or indirect parent or other Affiliate of such Person or to an Excluded Person;

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(b) any payment on account of the purchase, redemption or other acquisition or retirement for value of Equity Interests of such Person or any direct or indirect parent or other Affiliate of such Person (other than a Wholly Owned Restricted Subsidiary of such Person);

(c) other than with the proceeds from the substantially concurrent sale of, or in exchange for, Permitted Refinancing Indebtedness, any purchase, redemption, or other acquisition or retirement for value of, any payment in respect of any amendment of the terms of or any defeasance of, any Subordinated Indebtedness directly or indirectly, by such Person or a Restricted 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 Equity Interests of such issuer, or (2) any dividend, distribution or other payment to the Company, or to any of Restricted Subsidiaries by the Company or any of the Restricted Subsidiaries, and any Investment in any Restricted Subsidiary by the Company or any other Restricted Subsidiary.

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

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

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

“SEC” means the United States Securities and Exchange Commission, or any successor agency.

“Secured Party” means the Trustee, acting as collateral agent under the Collateral Agreements.

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

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

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

“Stated Maturity,” when used with respect to any Note, means March 1, 2010.

“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, (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 means each direct and indirect subsidiary of the Company.

“Target EBITDA” means Consolidated EBITDA of the Company of $50,000,000.

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA.

“Transfer Restricted Notes” means Global Notes and Definitive Notes that bear or are required to bear the Private Placement Legend, issued under this Indenture.

“Trustee” means U.S. Bank National Association, as trustee under this Indenture, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means such successor serving hereunder.

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

“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, issued under this Indenture.

“Unrestricted Subsidiary” means (i) any subsidiary that, at or prior to the time of determination, shall have been designated by the Managers of the Company as an Unrestricted Subsidiary; provided, that such subsidiary at the time of such designation (a) has no Recourse Indebtedness; (b) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company; (c) is a Person with respect to which neither the Company nor any of the Restricted Subsidiaries has any direct or indirect obligation (x) to subscribe for additional Equity

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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 Restricted Subsidiary of the Company, and (ii) any subsidiary of an Unrestricted Subsidiary. The Managers of the Company may designate any Unrestricted Subsidiary to be a Restricted 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 test of Section 4.7 hereof. 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.

“Upper Tier Equity Holder” means, in the case of any Flow Through Entity the Equity Holder of which is, in turn, a Flow Through Entity, the person that is ultimately subject to tax on a net income basis on the items of taxable income, gain, deduction, and loss of the Company and its subsidiaries that are Flow Through Entities.

“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.

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

“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 Restricted Subsidiary” means a Restricted Subsidiary all the Equity Interests of which (other than directors’ qualifying shares) are owned by the Company or one or more Wholly Owned Restricted Subsidiaries of the Company or a combination thereof.

Section 1.2 Other Definitions

Term	Defined in Section
“Affiliate Transaction”	4.12
“Applicable Excess Cash Flow Amount”	4.14
“Asset Sale”	4.13
“Asset Sale Offer”	4.13
“Asset Sale Offer Amount”	4.13
“Asset Sale Offer Period”	4.13
“Asset Sale Offer Price”	4.13
“Asset Sale Offer Trigger Date”	4.13
“Authentication Order”	2.2
“Benefited Party”	10.8
“C Corporation”	Definition of Permitted C-Corp Conversion
“Capital”	Preamble

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“Change of Control Offer”	4.15
“Change of Control Offer Period”	4.15
“Change of Control Purchase Date”	4.15
“Change of Control Purchase Price”	4.15
“Company”	Preamble
“Covenant Defeasance”	8.3
“Debt Incurrence Ratio”	4.7
“Defaulted Interest”	2.12
“DTC”	2.3
“Event of Default”	6.1
“Excess Cash Flow Account”	4.14
“Excess Cash Flow Balance”	4.14
“Excess Cash Flow Offer”	4.14
“Excess Cash Flow Offer Amount”	4.14
“Excess Cash Flow Purchase Price”	4.14
“Excess Proceeds”	4.13
“Existing Holders”	Definition of Excluded Person
“Federal Flow Through Entity”	Definition of Flow Through Entity
“Guarantee Obligations”	10.8
“incur” or “incurrence”	4.7
“Incurrence Date”	4.7
“Initial Excess Cash Flow Offer”	4.14
“Investment Company Act”	4.17
“Issuers”	Preamble
“Legal Defeasance”	8.2
“Notes”	Preamble
“Paying Agent”	2.3
“Refinancing	Definition of Permitted Refinancing Indebtedness
“Registrar”	2.3
“Redemption Date”	3.7
“Regulatory Redemption”	3.8
“Second Anniversary Date”	Definition of Maximum Credit Facility Amount
“Series A Notes”	Preamble
“Series B Notes”	Preamble
“Subsequent Excess Cash Flow Offer”	4.14
“Tax Calculation Event”	Definition of Permitted Tax Distributions
“Tax Distribution Overage”	Definition of Permitted Tax Distributions
“Tax Distribution Shortfall”	Definition of Permitted Tax Distributions
“Time of Determination”	Definition of Maximum Credit Facility Amount
“Transaction Date”	Definition of Consolidated Coverage Ratio
“Unapplied Excess Cash Flow Amount”	4.14

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Section 1.3 Incorporation by Reference of Trust Indenture Act

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 used in this Indenture have the following meanings:

“Commission” means the SEC;

“obligor” on the Notes means each of the Issuers, each Guarantor and any successor obligor upon the Notes.

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

Section 1.4 Rules of Construction

Unless the context otherwise requires:

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

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

(3) “or” is not exclusive;

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

(5) provisions apply to successive events and transactions;

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

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

(8) reference to “subject to the terms of the Intercreditor Agreement” shall mean if the Intercreditor Agreement is then in effect.

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ARTICLE II

THE NOTES

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 are permitted or required by the Registration Rights Agreement.

The Notes may have notations, legends or endorsements required by law, stock exchange rule, depository 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 each of the Issuers, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

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

(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 Luxembourg” and “Customer Handbook” of Clearstream Banking Luxembourg 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 Banking Luxembourg.

Section 2.2 Execution and Authentication

Two Officers shall sign the Notes for each of the Issuers 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

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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 Issuers 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 $123,200,000 in aggregate principal amount. The Trustee may appoint an authenticating agent acceptable to the Issuers 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 Issuers.

Section 2.3 Registrar, Paying Agent and Depositary

The Issuers shall maintain an office or agency in the Borough of Manhattan, The City of New York, which shall initially be U.S. Bank National Association, where (i) Notes may be presented for registration of transfer or for exchange (“Registrar”) and (ii) Notes may be presented for payment (“Paying Agent”). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuers 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 Issuers may change any Paying Agent or Registrar without notice to any Holder. The Issuers shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuers fail to appoint or maintain another entity as 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 Issuers initially appoint The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes. The Issuers initially appoint the Trustee to act as the 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 Issuers 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 Issuers 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 Issuers 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 one of its subsidiaries) shall have no further liability for the money. If the Company or one of its subsidiaries 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 Issuers, the Trustee shall serve as Paying Agent for the Notes.

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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 Issuers shall furnish, or shall cause the Registrar (if other than the Company or one of its subsidiaries) 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 Issuers 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 Issuers for Definitive Notes if (i) the Issuers deliver 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 Issuers thereupon fail 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 Issuers, in their sole discretion, determine that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee or (iii) upon request of the Trustee or Holders of a majority of the aggregate principal amount of outstanding Notes if there shall have occurred and be continuing a Default or Event of Default with respect to the Notes; provided, that in no event shall the Reg S Temporary Global Note be exchanged by the Issuers for Definitive Notes prior to (x) the expiration of the Distribution Compliance Period and (y) the receipt by the Registrar of any certificate identified by the Issuers and their counsel to be required pursuant to Rule 903 or Rule 904 under the Securities Act. Upon the occurrence of any of the preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.7 and 2.10 hereof. 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 hereof, 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) hereof.

(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:

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(1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Distribution Compliance Period, transfers of beneficial interests in the Reg S Temporary Global Note may not be made to a U.S. person (as such term is defined in Regulation S) or for the account or benefit of a U.S. person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.6(b)(1), but the Issuers 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)(1) above; provided, that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Reg S Temporary Global Note prior to (x) the expiration of the Distribution Compliance Period and (y) the receipt by the Registrar of any certificates identified by the Issuers or their counsel to be required pursuant to Rule 903 and Rule 904 under the Securities Act. Upon consummation of an Exchange Offer by the Issuers in accordance with Section 2.6(f) hereof, the requirements of this Section 2.6(b)(2) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.6(h) hereof.

(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:

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

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

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

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

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and Section 2.6(f) hereof, 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 Issuers;

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

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

(D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), an Opinion of Counsel in form, and from legal counsel, reasonably acceptable to the Registrar and the Issuers to the effect that such exchange or transfer is in compliance with the Securities Act

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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 Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.2 hereof, 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) hereof, and the Issuers 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:

(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;

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(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 Issuers or any of their respective subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof.

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

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

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and Section 2.6(f) hereof, 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 Issuers;

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

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

(D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), an Opinion of Counsel in form, and from legal counsel, reasonably acceptable to the Registrar and the Issuers to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and

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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) hereof. Any Unrestricted Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.6(c)(3) shall not bear the Private Placement Legend.

(4) Transfer or Exchange of Reg S Temporary Global Notes. Notwithstanding the other provisions of this Section 2.6, a beneficial interest in the Reg S Temporary Global Note may not be (A) exchanged for a Definitive Note prior to (x) the expiration of the Distribution Compliance Period (unless such exchange is approved by the Issuers, does not require an investment decision on the part of the Holder thereof and does not violate the provisions of Regulation S) and (y) the receipt by the Registrar of any certificates identified by the Issuers or their counsel to be required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act or (B) transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to the events set forth in clause (A) above or unless the transfer is pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.

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

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

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(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) hereof, 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 Issuers;

(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 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 Issuers 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 Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.2 hereof, 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 Issuers 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(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. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.6(e).

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

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(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 Issuers or any of their 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) hereof, 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 Issuers;

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

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

(D) the Registrar receives the following: (1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit D hereto, including the certifications in item (1)(d) thereof; or (2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), an Opinion of Counsel in form, and from legal counsel, reasonably acceptable to the Registrar and

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the Issuers 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 Issuers shall issue and, upon receipt of an Authentication Order in accordance with Section 2.2 and an Opinion of Counsel for the Issuers 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 Issuers, 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 Issuers, 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 Issuers shall execute and, upon receipt of an Authentication Order pursuant to Section 2.2, the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount.

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

(A) the issuance and sale of the Exchange Notes by the Issuers has been duly authorized and, when executed by the Issuers and authenticated by the Trustee in accordance with the provisions of this Indenture and delivered in exchange for Series A Notes in accordance with this Indenture and the Exchange Offer, the Exchange Notes will be entitled to the benefits of this Indenture and will be valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with their terms, subject to customary qualifications including exceptions for bankruptcy, fraudulent transfer and equitable principles; and

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(B) when the Exchange Notes are issued and executed by the Issuers and authenticated by the Trustee in accordance with the provisions of this Indenture and delivered in exchange for Series A Notes in accordance with this Indenture and the Exchange Offer, the Guarantees by the Guarantors endorsed thereon will be entitled to the benefits of this Indenture and will be the valid and binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their terms, subject to customary qualifications including exceptions for bankruptcy, fraudulent transfer and equitable principles.

(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.

(i) Private Placement Legend.

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

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) UNDER THE SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES BY NON-AFFILIATES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH EITHER OF THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO EITHER OF THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT

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OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER APPLICABLE JURISDICTION.”

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(3), (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.

(ii) 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 ISSUERS.”

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

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

(h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or cancelled in whole and not in part, each such Global Note shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.11 hereof. 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.

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

(ii) 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 Issuers 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, 3.6, 4.13, 4.14 and 4.15 hereof).

(iii) 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.

(iv) 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

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Issuers, evidencing the same Indebtedness, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(v) The Issuers 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 3.2 hereof 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.

(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuers 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 Issuers shall be affected by notice to the contrary.

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

(viii) 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 A, B, C, D and E 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 Issuers and the Trustee and the Issuers receive evidence (which evidence may be from the Trustee) to their satisfaction of the destruction, loss or theft of any Note, the Issuers 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 Issuers, an affidavit of lost certificate and/or an indemnity bond or other indemnity must be supplied by the requesting Holder that is sufficient in the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuers may charge for its expenses in replacing a Note, including reasonable fees and expenses of their counsel and of the Trustee and its counsel. Every replacement Note is an additional obligation of the Issuers and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

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Section 2.8 Outstanding Notes

The Notes outstanding at any time are all the Notes authenticated by the Trustee (including any Note represented by a Global Note) except for those cancelled by it or at its direction, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.8 as not outstanding. Except as set forth in Section 2.9 hereof, a Note does not cease to be outstanding because the Issuers or an Affiliate of either of the Issuers holds the Note. If a Note is replaced pursuant to Section 2.7 hereof, 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 hereof, it ceases to be outstanding and Interest on it ceases to accrue. If the Paying Agent (other than the Company, a subsidiary 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 Issuers, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuers, 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 the Trustee knows are so owned shall be so disregarded.

Section 2.10 Temporary Notes

Until certificates representing Notes are ready for delivery, the Issuers 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 Issuers considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuers 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 Issuers 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 destroy cancelled Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all cancelled Notes shall be delivered to the Issuers. The Issuers 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 hereof 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 Issuers, at their election in each case, as provided in clause (1) or (2) below:

(1) The Issuers 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 Issuers 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 Issuers 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 clause (1). 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 Issuers and the Trustee of such Special Record Date and, in the name and at the expense of the Issuers, 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 clause (2).

(2) The Issuers 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 Issuers 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 Issuers 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

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

Section 2.14 Issuance of Additional Notes

The Issuers may, subject to Section 4.7 hereof and applicable law, issue Additional Notes in an unlimited amount under this Indenture. The Notes issued on the Closing 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 Notices to Trustee

If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Section 3.7 hereof, it shall furnish to the Trustee, at least 30 days (unless a shorter period is acceptable to the Trustee) but not more than 60 days (unless a longer period is acceptable to the Trustee) before a redemption date, an Officers’ Certificate stating that such redemption is being made pursuant to Section 3.7 and setting forth (i) the redemption date, (ii) the principal amount of Notes to be redeemed and (iii) the redemption price.

Section 3.2 Selection of Notes to be Redeemed

If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes or portions thereof to be redeemed among the Holders of the Notes in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.

The Trustee shall promptly notify the Issuers in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes in denominations of larger than $1,000 selected shall be in amounts of $1,000 or integral multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not an integral multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

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Section 3.3 Notice of Redemption

Subject to the provisions of Section 3.7 hereof, at least 30 days but not more than 60 days before a redemption date (except in the case of a Regulatory Redemption requiring less notice), the Issuers shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address.

The notice shall identify the Notes to be redeemed and shall state:

(a) the redemption date;

(b) the redemption price;

(c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, on or after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note;

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

(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(f) that, unless the Issuers default in making such redemption payment, Interest on Notes called for redemption ceases to accrue on and after the redemption date;

(g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and

(h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.

At the Issuers’ request, the Trustee shall give the notice of redemption in the Issuers’ name and at its expense; provided, however, that the Issuers shall have delivered to the Trustee, at least 35 days prior to the redemption date (unless a shorter period shall be acceptable to the Trustee or is required pursuant to a Regulatory Redemption), an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

Section 3.4 Effect of Notice of Redemption

Once notice of redemption is mailed in accordance with Section 3.3 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. At any time prior to the mailing of a notice of redemption to the Holders pursuant to Section 3.3, the Issuers may withdraw, revoke or rescind any notice of redemption delivered to the Trustee without any continuing obligation to redeem the Notes as contemplated by such notice of redemption.

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Section 3.5 Deposit of Redemption Price

At or before 10:00 a.m. on the redemption date, the Issuers shall deposit with the Trustee or with the Paying Agent immediately available funds sufficient to pay the redemption price of and accrued and unpaid Interest (and Liquidated Damages, if any) on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Issuers any money deposited with the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid Interest (and Liquidated Damages, if any) on, all Notes to be redeemed.

If the Issuers comply with the provisions of the preceding paragraph, on and after the redemption date, Interest shall cease to accrue on the Notes or the portions of Notes called for redemption, regardless of whether such Notes are presented for payment. If a Note is redeemed on or after an Interest Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid Interest (and Liquidated Damages, if any) shall be paid to the Person in whose name such Note was registered at the close of business on such Interest Record Date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Issuers to comply with the preceding paragraph, Interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any Interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.1 hereof.

Section 3.6 Notes Redeemed in Part

Upon surrender of a Note that is redeemed in part, the Issuers shall issue and, upon receipt of an Authentication Order, the Trustee shall authenticate for the Holder at the expense of the Issuers a new Note equal in principal amount to the unredeemed portion of the Note surrendered.

Section 3.7 Optional Redemption

(a) Except as set forth in clause (b) of this Section 3.7, the Issuers shall not have the right to redeem any Notes pursuant to this Section 3.7 prior to March 1, 2007. The Notes will be redeemable for cash at the option of the Issuers, in whole or in part, at any time on or after March 1, 2007, at the following redemption prices (expressed as percentages of the principal amount) if redeemed during the 12-month period commencing March 1 of the years indicated below, in each case together with accrued and unpaid Interest and Liquidated Damages, if any, thereon to the date of redemption of the Notes (the “Redemption Date”):

Year	Percentage
2007	106.50%
2008	103.25%
2009 and thereafter	100.00%

(b) Notwithstanding the provisions of clause (a) of this Section 3.7, at any time on or prior to March 1, 2006, upon a Qualified Equity Offering, up to 35% of the aggregate

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principal amount of the Notes issued may be redeemed at the Issuers’ option within 120 days of such Qualified Equity Offering, with cash received by the Issuers, from the Net Cash Proceeds of such Qualified Equity Offering, at a redemption price equal to 113% of the principal amount thereof, together with accrued and unpaid Interest and Liquidated Damages, if any, thereon to the Redemption Date; provided, however, that immediately following such redemption not less than 65% of the aggregate principal amount of the Notes issued on the Issue Date remain outstanding.

If the Redemption Date hereunder is on or after an Interest Record Date on which the Holders of record have a right to receive the corresponding Interest due and Liquidated Damages, if any, 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.

(c) Any redemption pursuant to this Section 3.7 shall be made pursuant to the provisions of Sections 3.1 through 3.6 hereof.

Section 3.8 Regulatory Redemption

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

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

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Section 3.9 No Mandatory Redemption

The Issuers shall not be required to make mandatory redemption payments with respect to the Notes (except for a Required Regulatory Redemption and any offer to repurchase Notes that the Issuers are required to make in accordance with the provisions of Sections 4.13, 4.14 and 4.15 below). The Notes shall not have the benefit of any sinking fund.

ARTICLE IV

COVENANTS

Section 4.1 Payment of Notes

The Issuers shall pay or cause to be paid the principal of, premium, if any, and Interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and Interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a subsidiary thereof, holds as of 12:00 noon Eastern time on the due date money deposited by the Issuers in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and Interest then due. If Interest payable on the Notes includes Contingent Interest, the Issuers shall provide a calculation of such Contingent Interest in reasonable detail to the Trustee in the form of an Officers’ Certificate at the time of depositing the amount of such Contingent Interest with the Trustee. If Interest payable on the Notes does not include Contingent Interest, the Issuers shall provide notice to the Trustee to that effect. The Issuers shall pay all Liquidated Damages, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement and herein.

The Issuers shall pay interest (including Accrued Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue principal at the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including Accrued Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue installments of Interest and Liquidated Damages, if any, (without regard to any applicable grace period) at the same rate to the extent lawful.

Section 4.2 Maintenance of Office or Agency

The Issuers shall maintain in the Borough of Manhattan, The City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuers in respect of the Notes and this Indenture may be served. The Issuers shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuers shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office.

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

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agency in the Borough of Manhattan, The City of New York. The Issuers shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Issuers hereby designate the Corporate Trust Office of the Trustee as one such office or agency of the Issuers in accordance with Section 2.3 hereof.

Section 4.3 Sec Reports and Reports to Holders

Whether or not the Issuers are subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Issuers shall deliver to the Trustee and to each Holder, within 15 days after the Issuers are or would have been (if the Issuers were subject to such reporting obligations) required to file such with the SEC, (i) annual and quarterly financial statements substantially equivalent to financial statements that would have been included in reports on Forms 10-K or 10-Q if the Issuers were required to file such Forms, including in each case, a Management’s Discussion and Analysis of Financial Conditions and Results of Operations which would be so required, and including, with respect to annual information only, a report thereon by the Issuers’ certified independent public accountants as would be so required, and (ii) all information that would have been required to be contained in a filing with the SEC on Form 8-K, if the Issuers were required to file such reports. From and after the time the Issuers file a registration statement with the SEC with respect to the Notes, the Issuers shall file with the SEC the annual, quarterly and other reports which the Issuers are required to file with the SEC at such time as are required to be filed.

Section 4.4 Compliance Certificate

(a) The Issuers shall deliver to the Trustee, within 120 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Issuers and the Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Issuers and the Restricted Subsidiaries have kept, observed, performed and fulfilled their obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to his or her knowledge the Issuers and the Restricted Subsidiaries are not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred and be continuing, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Issuers are taking or proposes to take with respect thereto). Each of the Issuers shall provide the Trustee with timely written notice of any change in its fiscal year end, which is currently December 31.

(b) The Issuers shall, so long as any of the Notes are outstanding, deliver to the Trustee, within five Business Days of any Officer becoming aware of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action the Issuers are taking or propose to take with respect thereto.

Section 4.5 Taxes

The Issuers shall pay, and shall cause each of the Restricted Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are

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contested in good faith and by appropriate proceedings or where the failure to effect such payment would not have a material adverse effect on the ability of the Issuers and the Guarantors to satisfy their obligations under the Notes, the Guarantees and this Indenture.

Section 4.6 Stay, Extension and Usury Laws

Each of the Issuers covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and each of the Issuers (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.

Section 4.7 Limitation on Incurrence of Additional Indebtedness and Disqualified Equity Interests

Except as set forth in this Section 4.7, the Issuers shall not, and the Guarantors shall not, and neither the Issuers nor the Guarantors shall permit any of the Restricted Subsidiaries to, directly or indirectly, create, issue, assume, guarantee, incur, become directly or indirectly liable with respect to (including as a result of an Acquisition), or otherwise become responsible for, contingently or otherwise (individually and collectively, to “incur” or, as appropriate, an “incurrence”), any Indebtedness (including Disqualified Equity Interests and Acquired Indebtedness), other than Permitted Indebtedness.

Notwithstanding the limitations of the immediately preceding paragraph of this Section 4.7, the Issuers and the Guarantors may incur, and the Issuers and Guarantors may permit Restricted Subsidiaries to incur, Indebtedness (including Disqualified Equity Interests and Acquired Indebtedness) if:

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

(2) on the date of such incurrence (the “Incurrence Date”), the Issuers’ Consolidated Coverage Ratio for the Reference Period immediately preceding the Incurrence Date, after giving effect on a pro forma basis (as set forth in the definition of Consolidated Coverage Ratio) to such incurrence of such Indebtedness and, to the extent set forth in the definition of Consolidated Coverage Ratio, the use of proceeds thereof, would be at least 2.0 to 1.0 (the “Debt Incurrence Ratio”).

In addition, the foregoing limitations of this Section 4.7 shall not prohibit the Issuers’ incurrence of or the incurrence by any Guarantor or Restricted Subsidiary of Indebtedness pursuant to the Credit Agreement in an aggregate amount incurred and outstanding at any time pursuant to this paragraph (plus any Permitted Refinancing Indebtedness incurred to retire, defease, refinance, replace or refund such Indebtedness) of up to the Maximum Credit Facility Amount, minus the amount of any such Indebtedness retired with the Net Cash Proceeds

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from any Asset Sale applied to permanently reduce the outstanding amounts or the commitments with respect to such Indebtedness pursuant to Section 4.13 hereof.

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

Upon each incurrence of Indebtedness, (i) the Issuers may designate pursuant to which provision of this Section 4.7 such Indebtedness is being incurred, (ii) the Issuers may subdivide an amount of Indebtedness and designate more than one provision pursuant to which such amount of Indebtedness is being incurred and shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify, all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.7, and (iii) such Indebtedness shall not be deemed to have been incurred or outstanding under any other provision of this Section 4.7, except that all Indebtedness under the Notes, the Guarantees and this Indenture shall be deemed to have been incurred pursuant to clause (a) of the definition of Permitted Indebtedness.

Section 4.8 Limitation on Liens

The Issuers and the Guarantors shall not, and neither the Issuers nor the Guarantors shall permit any of the Restricted Subsidiaries to, directly or indirectly, create, incur or suffer to exist any Lien of any kind, other than Permitted Liens upon any of its or their respective assets, including, without limitation, all real, tangible or intangible property (other than Excluded Assets) now owned or acquired on or after the date of this Indenture, or upon any income or profits therefrom, or convey any right to receive any income or profits therefrom.

Section 4.9 Limitation on Restricted Payments

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

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

(2) the Issuers are not permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio test in Section 4.7 hereof; or

(3) the aggregate amount of all Restricted Payments made by the Issuers and the Restricted Subsidiaries, including after giving effect to such proposed Restricted Payment, on and after the Issue Date (excluding Restricted Payments permitted by clauses (a), (e), (f), (g) and (i) of the next succeeding paragraph), would exceed, without duplication, the sum of:

(A) 50% of the Issuers’ aggregate Consolidated Net Income for the period (taken as one accounting period), commencing on the first day of the fiscal quarter in

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which the Issue Date occurs, to and including the last day of the fiscal quarter ended immediately prior to the date of each such calculation for which the Issuers’ consolidated financial statements are required to be delivered to the Trustee or, if sooner, filed with the SEC (or, in the event Consolidated Net Income for such period is a deficit, then minus 100% of such deficit), plus

(B) 100% of the aggregate Net Cash Proceeds received by the Issuers from the issue or sale of the Issuers’ Qualified Equity Interests, (other than (i) to one of the Restricted Subsidiaries, (ii) to the extent applied in connection with a Qualified Exchange or, to avoid duplication, otherwise given credit for in any provision of this or the following paragraph or (iii) used as consideration to make a Permitted Investment pursuant to clause (h) of the definition of “Permitted Investment”), after the Issue Date, plus

(C) without duplication of any amounts included in clause (A) above, an amount equal to the sum of (i) 50% of (a) any dividends or distributions received by the Company or a Restricted Subsidiary from an Unrestricted Subsidiary, to the extent that such dividends or distributions were not otherwise included in Consolidated Net Income of the Company, minus (b) the aggregate cash distributions received by the Company from a Flow Through Entity that is not a Restricted Subsidiary that have been used to make a Permitted Tax Distribution attributable to a Flow Through Entity that is not a Restricted Subsidiary pursuant to clause (g)(iii) of the next succeeding paragraph plus (ii) to the extent not otherwise included in Consolidated Net Income of the Company, an amount equal to the net reduction in Investments in Unrestricted Subsidiaries resulting from (x) repayments of the principal of loans or advances or other transfers of assets to the Company or any Restricted Subsidiary from Unrestricted Subsidiaries or (y) the sale or liquidation of any Unrestricted Subsidiaries, plus (iii) to the extent that any Unrestricted Subsidiary of the Company is designated to be a Restricted Subsidiary, the fair market value of the Company’s Investment in such subsidiary on the date of such designation, plus

(D) without duplication of any amounts included in clause (B) above, 100% of the Net Cash Proceeds (or of the Net Cash Proceeds received upon the conversion of non-cash proceeds into cash) of any equity contributions (including the forgiveness of any Indebtedness other than Subordinated Indebtedness) received after the Issue Date by the Company from any holder (other than a Restricted Subsidiary) of the Company’s Equity Interests.

The preceding paragraph of this Section 4.9, however, shall not prohibit:

(a) (i) repurchases, redemptions, or other retirement or acquisition of Equity Interests of the Company or any Restricted Subsidiary from the Issuers’ employees, directors or managers (or their heirs or estates) or employees, directors or managers (or their heirs or estates) of the Restricted Subsidiaries or (ii) any dividend, distribution or other payment to OEDA to enable OEDA, PGC or PGP to repurchase, redeem, or otherwise retire or acquire Equity Interests of any of OEDA, PGC or PGP from any of their respective employees, directors or managers (or their heirs or estates) or employees, directors or managers (or their heirs or estates) of any of their respective subsidiaries, in the case of each of the preceding clauses (i) and (ii) upon the death, disability or termination of employment or pursuant to the terms of any subscription, stock option stockholder or other agreement or plan in effect on the Issue Date in an aggregate amount

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pursuant to this clause (a) to all such employees, directors or managers (or their heirs or estates) not to exceed $500,000 per fiscal year on and after the Issue Date, provided, that any amounts not used in a fiscal year may be carried forward to succeeding fiscal years until used;

(b) any dividend, distribution or other payments by any of the Restricted Subsidiaries on such Restricted Subsidiary’s Equity Interests that is paid pro rata to all holders of such Equity Interests;

(c) a Qualified Exchange;

(d) the payment of any dividend on Qualified Equity Interests within 60 days after the date of its declaration if such dividend could have been made on the date of such declaration in compliance with the provisions of this Section 4.9;

(e) so long as no Default or Event of Default shall have occurred and be continuing, the payment of Management Amounts, provided, that in the case of the Incentive Fee, such Incentive Fee is permitted to be paid pursuant to Section 4.22 hereof;

(f) so long as no Default or Event of Default shall have occurred and be continuing, the payment of reasonable and customary directors fees payable to, and indemnity provided on behalf of, the Managers of the Company and its Restricted Subsidiaries, indemnity provided on behalf of officers and employees of the Company and its Restricted Subsidiaries, and customary reimbursement of travel and similar expenses incurred in the ordinary course of business, and consulting or similar fees to the Managers, officers or employees of the Company pursuant to, and in accordance with, agreements in effect on the Issue Date (without giving effect to any amendment or supplement thereto or modification thereof),

(g) with respect to each tax year or portion thereof that the Company qualifies as a Flow Through Entity and so long as no Default or Event of Default shall have occurred and be continuing, the payment of Permitted Tax Distributions (whether paid in such tax year or portion thereof, or any subsequent tax year); provided, that (i) prior to the first payment of Permitted Tax Distributions during any particular calendar year the Company provides an Officers’ Certificate and an Opinion of Counsel to the effect that the Company and each other Flow Through Entity in respect of which such distributions are being made qualify as Flow Through Entities for Federal income tax purposes and for the states in respect of which such distributions are being made for such tax year or portion thereof, (ii) at the time of such distribution, the most recent audited financial statements of the Company for periods including such tax year or portion thereof provided to the Trustee pursuant to Section 4.3 provide that the Company and each subsidiary of the Company in respect of which such distributions are being made was treated as a Flow Through Entity for the period of such financial statements, and (iii) in the case of the portion, if any, of any Permitted Tax Distribution that is proposed to be distributed for a particular taxable period or portion thereof, which portion of such Permitted Tax Distribution is attributable to a Flow Through Entity that is not a Restricted Subsidiary, such portion of such proposed Permitted Tax Distribution shall be limited to the excess of (a) the aggregate actual cash distributions received by the Company or a Restricted Subsidiary from all Flow Through Entities that are not Restricted Subsidiaries of the Company during the period commencing with the Issue Date and continuing to and including the last day of the period in

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respect of which such proposed Permitted Tax Distribution is being determined over (b) the aggregate amount of such cash distributions described in the immediately preceding clause (a) that (x) have already been taken into account for purposes of making a Permitted Tax Distribution previously made and which was attributable to a Flow Through Entity that was not a Restricted Subsidiary at the time such Permitted Tax Distribution was made or (y) the Company previously used to make a Restricted Payment permitted by clause (A) or (C) of clause (3) of the first paragraph of this Section 4.9 (treating such cash distributions described in this clause (b)(y) as used to make a Restricted Payment in any previous period only to the extent that in such period, the total amount of Restricted Payments actually made during such period exceeded the excess of (m) the total amount of Restricted Payments permitted to be made in such period over (n) the amount of such cash distributions described in the immediately preceding clause (a) that were actually received by the Company or a Restricted Subsidiary during such period or any prior period and that were not previously used to make a Permitted Tax Distribution or treated as used to make a Restricted Payment pursuant to this clause (b)(y));

(h) the declaration and payment of dividends and distributions to holders of Disqualified Equity Interests of the Company or any of the Restricted Subsidiaries issued or incurred in accordance with Section 4.7;

(i) the redemption and repurchase of any Equity Interests or Indebtedness of the Company or any of the Restricted Subsidiaries to the extent required by any Gaming Authority or Racing Authority; or

(j) so long as no Default or Event of Default shall have occurred and be continuing, Restricted Payments not otherwise permitted pursuant to this Section 4.9 in an aggregate amount pursuant to this clause (j) not to exceed $2,500,000.

For purposes of this Section 4.9, the amount of any Restricted Payment made or returned, if other than in cash, shall be the fair market value thereof, as determined in the reasonable good faith judgment of the Managers of the Company, unless stated otherwise, at the time made or returned, as applicable. Additionally, within 5 days of the date of making any Restricted Payment pursuant to the first paragraph of this Section 4.9 in excess of (or series of related Restricted Payments to the same Person and its Affiliates in the aggregate in excess of) $1,000,000, the Issuers shall deliver an Officers’ Certificate to the Trustee describing in reasonable detail the nature of such Restricted Payment, stating the amount of such Restricted Payment, stating in reasonable detail the provisions of this Indenture pursuant to which such Restricted Payment was made and certifying that such Restricted Payment was made in compliance with the terms of this Indenture.

Section 4.10 Limitation on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries

The Issuers and the Guarantors shall not, and neither the Issuers nor the Guarantors shall permit any of the Restricted Subsidiaries to, directly or indirectly, incur or suffer to exist any consensual restriction on the ability of any of the Restricted Subsidiaries to (i) pay dividends or make other distributions to or on behalf of, (ii) pay any obligation to or on

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behalf of, (iii) otherwise transfer assets or property to or on behalf of, or (iv) make or pay loans or advances to or on behalf of, the Issuers or any of the Restricted Subsidiaries, except:

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

(2) restrictions imposed by applicable law;

(3) restrictions under agreements existing on the Issue Date, including with respect to Existing Indebtedness (as in effect on the Issue Date, without giving effect to any amendment, supplement or modification thereof);

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

(5) restrictions imposed by Indebtedness incurred under the Credit Agreement; provided, that such restrictions are no more restrictive in any material respect than those contained in this Indenture as in effect on the Issue Date, without giving effect to any amendment, supplement or modification thereof;

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

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

(8) customary restrictions on subletting, sublicensing or assignment and net worth provisions in any contract, lease or license entered into in the ordinary course of business;

(9) customary limitations on the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business;

(10) customary restrictions on the transfer of assets subject to a Permitted Lien imposed by a holder of such Lien;

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(11) restrictions in agreements governing Permitted Refinancing Indebtedness; provided, that such restrictions are not more restrictive in any material respect than those contained in the agreement governing the Indebtedness being so refinanced and do not apply to any other Person or assets than those that would have been covered by the restrictions contained in the agreement governing the Indebtedness being so refinanced; and

(12) restrictions under any amendment, modification, restatement, renewal, increase, supplement, refunding or replacement of any of the instruments or agreements referred to in clauses (1) through (11) above; provided, that such restrictions under any such amendment, modification, restatement, renewal, increase, supplement, refunding or replacement are no more restrictive in any material respect as determined by the Managers of the Company in their reasonable good faith judgment than those contained in the instrument or agreement being so amended, modified, restated, renewed, increased, supplemented, refunded or replaced.

Section 4.11 Limitation on Impairment of Security Interests

Except as permitted in this Indenture, the Intercreditor Agreement and the Collateral Agreements, the Issuers and the Guarantors shall not, and neither the Issuers nor the Guarantors shall permit any of the Restricted Subsidiaries to take or omit to take any action that would have the result of materially adversely affecting or impairing the Lien on the Collateral in favor of the Trustee for the benefit of the Holders.

Section 4.12 Limitation on Transactions with Affiliates

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

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

(2) if involving consideration to either party of $1,000,000 or more, unless such Affiliate Transaction(s) has been approved by a majority of the Managers of the Company that are disinterested in such transaction or, if none, a disinterested representative appointed by the Managers of the Company for such purpose; and

(3) if involving consideration to either party of $5,000,000 or more (or if no Managers of the Company are disinterested in such transaction and if no disinterested representative is appointed by the Managers of the Company as described in clause (2) above) unless, in addition the Issuers, prior to the consummation thereof, obtain a written favorable opinion as to the fairness of such transaction(s) to the Issuers from a financial point of view from an independent investment banking, accounting or appraisal firm of national reputation in the United States.

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Within 5 days of any Affiliate Transaction(s) involving consideration to either party of $5,000,000 or more, the Company shall deliver to the Trustee an Officers’ Certificate addressed to the Trustee certifying that such Affiliate Transaction(s) complied with clause (1), (2) and/or (3) of the previous paragraph, as applicable.

Section 4.13 Limitation on Sale of Assets and Restricted Subsidiary Equity Interests

(a) The Issuers and the Guarantors shall not, and neither the Issuers nor the Guarantors shall permit any of the Restricted Subsidiaries to, make any Asset Sale unless (1) at least 75% of the total consideration for such Asset Sale or series of related Asset Sales consists of cash or Cash Equivalents, and (2) the Managers of the Company determine in good faith that the Issuers will receive or such Restricted Subsidiary will receive, as applicable, consideration at the time of such Asset Sale at least equal to the fair market value of the property, assets or Equity Interests issued or sold or otherwise disposed of in such Asset Sale; provided, however, that the 75% limitation set forth in clause (1) above shall not apply to any proposed Asset Sale for which an independent certified accounting firm shall certify to the Managers of the Company and the Trustee that the after-tax cash portion of the consideration to be received by the Company or such Restricted Subsidiary in such proposed Asset Sale is equal to or greater than what the net after-tax cash proceeds would have been had such proposed Asset Sale complied with the 75% limitation set forth in clause (1) above. Solely for purposes of clause (1) of the preceding sentence, total consideration received means the total consideration received for such Asset Sale (or series of related Asset Sales) minus the amount of (i) any liabilities (other than liabilities that are by their terms subordinated to the Notes and the Guarantees) of the Company or any Restricted Subsidiary that are assumed by a transferee; provided, that the Issuers and the Restricted Subsidiaries are fully released from obligations in connection therewith, and (ii) property that within 30 days of such Asset Sale is converted into cash or Cash Equivalents; provided, that such cash and Cash Equivalents shall be treated as Net Cash Proceeds attributable to the original Asset Sale for which such property was received.

(b) Within 360 days after receipt of any Net Cash Proceeds from an Asset Sale, the Company may apply such Net Cash Proceeds at its option:

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

(2) (i) to make an investment or capital expenditure in, or otherwise acquire, (A) assets or properties that replace the assets or properties that were the subject of such Asset Sale, or (B) assets and property (other than notes, bonds, obligations and securities, except in connection with the acquisition of a Restricted Subsidiary which is a Guarantor in a Related Business) which are used or useful in a Related Business, or (ii) to acquire (A) all or substantially all of the assets of any Person engaged in a Related Business or (B) a majority of the Voting Equity Interests of a Person engaged in a Related Business that becomes a Restricted Subsidiary; provided, in each case, that such investment, capital expenditure or acquisition is made in compliance with the other provisions of this Indenture, including Section 4.9; or

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(3) any combination of the foregoing clauses (1) and (2).

All Net Cash Proceeds from an Event of Loss shall be used as follows: (i) first, the Company shall use such Net Cash Proceeds to the extent necessary to rebuild, repair, replace or restore the assets subject to such Event of Loss with comparable assets and (ii) then, to the extent any Net Cash Proceeds from an Event of Loss are not used as described in the preceding clause (i), all such remaining Net Cash Proceeds shall be reinvested or used as provided in the immediately preceding clause (1), (2) or (3).

(c) The accumulated Net Cash Proceeds from Asset Sales not applied as set forth in clauses (1), (2) and (3) of Section 4.13(b) within the 360 day period referenced therein and the accumulated Net Cash Proceeds from any Event of Loss not applied as set forth in clauses (i) and (ii) of the second paragraph of Section 4.13(b) within the 360 day period referenced therein shall constitute “Excess Proceeds.” Pending the final application of any Net Cash Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise temporarily invest or use for general corporate purposes (other than Restricted Payments that are not solely Restricted Investments) the Net Cash Proceeds in any manner that is not prohibited by this Indenture.

(d) When the Excess Proceeds equal or exceed $10,000,000 (the “Asset Sale Offer Trigger Date”), the Issuers shall offer to repurchase the Notes and any other Indebtedness ranking on a parity with the Notes and with similar provisions requiring the Issuers to make an offer to purchase such Indebtedness with the proceeds from such Asset Sale pursuant to a cash offer (subject only to conditions required by applicable law, if any), not later than 30 days following the applicable Asset Sale Offer Trigger Date, the maximum principal amount of Notes and such other pari passu Indebtedness (or accreted values in the case of Indebtedness issued with an original issue discount) that may be purchased out of the Excess Proceeds (the “Asset Sale Offer”) on a pro rata basis in proportion to the respective principal amounts of the Notes and such other pari passu Indebtedness (or accreted values in the case of Indebtedness issued with an original issue discount) at a purchase price of 100% of the principal amount (or accreted value in the case of Indebtedness issued with an original issue discount) (the “Asset Sale Offer Price”) together with accrued and unpaid interest and Liquidated Damages, if any, to the date of payment. The Asset Sale Offer shall remain open for at least 20 Business Days following its commencement (the “Asset Sale Offer Period”). Upon receiving notice of the Asset Sale Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000.

(e) Upon expiration of the Asset Sale Offer Period, the Issuers shall apply an amount equal to the Excess Proceeds (the “Asset Sale Offer Amount”) plus an amount equal to accrued and unpaid Interest and Liquidated Damages, if any, to the purchase of all Indebtedness properly tendered in accordance with the provisions of Section 4.13(d) and the terms of the Asset Sale Offer (on a pro rata basis if the Excess Proceeds are insufficient to purchase all Indebtedness so tendered) at the Asset Sale Offer Price (together with accrued and unpaid Interest and Liquidated Damages, if any, to the day of payment). The principal amount of Notes and such other pari passu Indebtedness to be purchased pursuant to an Asset Sale Offer may be reduced by the principal amount of Notes and such other pari passu Indebtedness, respectively, acquired by the Issuers through purchase or redemption (other than pursuant to a Change of Control Offer) subsequent to the date of the Asset Sale and surrendered to the Trustee for

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cancellation. To the extent that the aggregate amount of Notes and such other pari passu Indebtedness tendered or to be purchased pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuers may use any remaining Net Cash Proceeds for any purpose not otherwise prohibited by this Indenture. Following the consummation of each Asset Sale Offer in accordance with the provisions of this Section 4.13, the Excess Proceeds amount shall be reset to zero.

Following expiration of the Asset Sale Offer Period, the Issuers will deliver to the Trustee the Notes (if in certificated form) so accepted in the Asset Sale Offer together with an Officers’ Certificate listing the Notes or portions thereof being purchased by the Issuers. The Trustee promptly will authenticate and deliver to Holders a new Note (if in certificated form) or, if the Notes are in Global Form, will promptly adjust the principal amount of the relevant Global Note(s) in accordance with Section 2.6(h) hereof equal in principal amount to any unpurchased portion of the Note surrendered. Any Notes (if in certificated form) not so accepted will be delivered promptly by the Issuers to the Holder thereof. The Issuers publicly will announce the results of the Asset Sale Offer on or as soon as practicable after the expiration of the Asset Sale Offer.

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

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

Section 4.14 Repurchase of Notes at the Option of the Holder from Excess Cash Flow

(a) Not later than 60 days after each Operating Six Months of the Company, beginning with the first Operating Six Months after the Casino becomes Operating, the Company will make an offer to all Holders (the “InitialExcess Cash Flow Offer”) to purchase the maximum principal amount of Notes that is an integral multiple of $1,000 that may be purchased with an amount equal to the sum (such sum, the “Excess Cash Flow Offer Amount”) of (i) 50% of the Company’s Excess Cash Flow in respect of the Operating Six Months then ended (less all transaction costs and expenses incurred by the Issuers in connection with such Excess Cash Flow Offer) (the “Applicable Excess Cash Flow Amount”) and (ii) the then available Excess Cash Flow Balance (as defined below), at a purchase price in cash equal to 101% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the date fixed for the closing of the Excess Cash Flow Offer (the “Excess Cash Flow Purchase Price”), in accordance with the Indenture. Notwithstanding the foregoing, the Company will not be required to make an Initial Excess Cash Flow Offer to purchase Notes

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pursuant to this covenant if the then available Excess Cash Flow Offer Amount is less than $2,500,000; provided, that in such event any Applicable Excess Cash Flow Offer Amount (if positive) will be added to the Excess Cash Flow Offer Amount for each subsequent Operating Six Months until an Initial Excess Cash Flow Offer is made.

(b) If the aggregate principal amount of Notes tendered pursuant to any Initial Excess Cash Flow Offer is less than the Excess Cash Flow Offer Amount with respect thereto, Notes purchased pursuant to such Initial Excess Cash Flow Offer shall be purchased (i) first, from the Applicable Excess Cash Flow Amount and (ii) second, if such Applicable Excess Cash Flow Amount is not sufficient to purchase all Notes tendered in such Initial Excess Cash Flow Offer, from the then available Excess Cash Flow Balance.

(c) If the aggregate principal amount of Notes tendered pursuant to any Initial Excess Cash Flow Offer is less than the Applicable Excess Cash Flow Amount with respect thereto (such difference, the “Unapplied Excess Cash Flow Amount”), the Company shall as soon as practicable following the expiration of such Initial Excess Cash Flow Offer deposit into an account (the “Excess Cash Flow Account”) an amount equal to the lesser of (i) the Unapplied Excess Cash Flow Amount with respect to such Initial Excess Cash Flow Offer and (ii) the difference between $10,000,000 and the then available Excess Cash Flow Balance (as defined below) immediately preceding such deposit. The balance at any particular time in the Excess Cash Flow Account is referred to herein as the “Excess Cash Flow Balance.”

(d) The Company shall make a public announcement of the results of each Initial Excess Cash Flow Offer, including the then available Excess Cash Flow Balance taking into account any use of such funds to purchase Notes in such Initial Excess Cash Flow Offer, as soon as practicable after the expiration of such Initial Excess Cash Flow Offer.

(e) For 45 days following the expiration date with respect to each Initial Excess Cash Flow Offer, each Holder shall have the right, at such Holder’s option, to request (by providing written notice to the Trustee) that the Company make an offer to all Holders (the “Subsequent Excess Cash Flow Offer”) to purchase the maximum principal amount of Notes that is an integral multiple of $1,000 that may be purchased with then available Excess Cash Flow Balance (if any) (less all transaction costs and expenses incurred by the Issuers in connection with such Excess Cash Flow Offer) at the Excess Cash Flow Offer Price. No later than 30 days following the receipt of such a request, the Company shall make a Subsequent Excess Cash Flow Offer in accordance with this covenant. Each Initial Excess Cash Flow Offer and each Subsequent Excess Cash Flow Offer are referred to herein, collectively, as an “Excess Cash Flow Offer.” Notwithstanding the foregoing, the Company will not be required to make a Subsequent Excess Cash Flow Offer to purchase Notes pursuant to this covenant if the then available Excess Cash Flow Balance is less than $2,500,000.

(f) If the aggregate principal amount of Notes tendered pursuant to any Excess Cash Flow Offer exceeds, in the case of an Initial Excess Cash Flow Offer, the Excess Cash Flow Offer Amount or, in the case of a Subsequent Excess Cash Flow Offer, the then available Excess Cash Flow Balance, the Trustee will select the Notes to be repurchased in the manner described in Section 3.2

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(g) Each Excess Cash Flow Offer will be required to remain open for 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law. Upon the expiration of that period, the Company will apply the Excess Cash Flow Offer Amount, in the case of an Initial Excess Cash Flow Offer, or Excess Cash Flow Balance, in the case of a Subsequent Excess Cash Flow Offer, to the purchase of all Notes tendered at the Excess Cash Flow Offer Purchase Price. Following expiration of the Excess Cash Flow Offer, the Issuers will deliver to the Trustee the Notes (if in certificated form) so accepted in the Excess Cash Flow Offer together with an Officers’ Certificate listing the Notes or portions thereof being purchased by the Issuers. The Trustee promptly will authenticate and deliver to Holders a new Note (if in certificated form) or, if the Notes are in Global Form, will promptly adjust the principal amount of the relevant Global Note(s) in accordance with Section 2.6(h) hereof equal in principal amount to any unpurchased portion of the Note surrendered. Any Notes (if in certificated form) not so accepted will be delivered promptly by the Issuers to the Holder thereof. The Issuers publicly will announce the results of the Excess Cash Flow Offer on or as soon as practicable after the expiration of the Excess Cash Flow Offer.

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

(h) Notwithstanding anything to the contrary set forth in this Section 4.14, the Company shall not be required (i) to make any Subsequent Excess Cash Flow Offer pursuant to this covenant if the Company does not reasonably believe (taking into account all applicable notice periods in this covenant) that it can consummate such Subsequent Excess Cash Flow Offer prior to the first day of the next Operating Six Months period, or (ii) to make an Initial Excess Cash Flow Offer pursuant to this covenant if, on the first day of the applicable Operating Six Months period with respect to which such Initial Excess Cash Flow Offer is to be made, the immediately preceding Initial Excess Cash Flow Offer or Subsequent Excess Cash Flow Offer is still outstanding and has not yet been consummated; provided, that, in the case of an Initial Excess Cash Flow Offer, any amount of Excess Cash Flow Offer Amount with respect to such Operating Six Months period will be added to the Excess Cash Flow Offer Amount for each subsequent Operating Six Months period until an Initial Excess Cash Flow Offer is made.

Section 4.15 Repurchase of Notes at the Option of the Holder Upon a Change of Control

In the event that a Change of Control has occurred, each Holder will have the right, at such Holder’s option, pursuant to an offer (subject only to conditions required by applicable law, if any) by the Issuers (the “Change of Control Offer”), to require the Issuers to repurchase all or any part of such Holder’s Notes (provided, that the principal amount of such Notes must be $1,000 or an integral multiple thereof) on a date (the “Change of Control Purchase Date”) that is no earlier than 30 days and no later than 45 days after the date on which notice of a Change of Control Offer is mailed to the Holders (or such other time period as may be required by applicable law), at a cash price equal to 101% of the principal amount thereof (the

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“Change of Control Purchase Price”), together with accrued and unpaid Interest and Liquidated Damages, if any, to the Change of Control Purchase Date. Holders electing to have a Note purchased pursuant to a Change of Control Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice of Change of Control Offer prior to the close of business on the third Business Day prior to the Change of Control Purchase Date.

The Change of Control Offer shall be made within 30 days following a Change of Control and shall remain open for at least 20 Business Days following its commencement (the “Change of Control Offer Period”). Upon expiration of the Change of Control Offer Period, the Issuers promptly shall purchase all Notes properly tendered in response to the Change of Control Offer.

On or before the Change of Control Purchase Date, the Issuers will:

(1) accept for payment Notes or portions thereof properly tendered pursuant to the Change of Control Offer;

(2) deposit with the Paying Agent cash sufficient to pay the Change of Control Purchase Price (together with accrued and unpaid Interest and Liquidated Damages, if any, to the Change of Control Purchase Date) of all Notes so tendered; and

(3) deliver to the Trustee the Notes (if in certificated form) so accepted together with an Officers’ Certificate listing the Notes or portions thereof being purchased by the Issuers.

The Paying Agent promptly will pay the Holders of Notes so accepted an amount equal to the Change of Control Purchase Price (together with accrued and unpaid Interest and Liquidated Damages, if any, to the Change of Control Purchase Date) and the Trustee promptly will authenticate and deliver to such Holders a new Note (if in certificated form) or, if the Notes are in Global Form, will promptly adjust the principal amount of the relevant Global Note(s) in accordance with Section 2.6(h) hereof equal in principal amount to any unpurchased portion of the Note surrendered. Any Notes (if in certificated form) not so accepted will be delivered promptly by the Issuers to the Holder thereof. The Issuers publicly will announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Purchase Date.

Any Change of Control Offer will be made in compliance with all applicable laws, rules and regulations, including, if applicable, Regulation 14E under the Exchange Act and the rules thereunder and all other applicable Federal and state securities laws. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.15, the Issuers’ compliance with such laws and regulations shall not in and of itself cause a breach of its obligations under this Section 4.15.

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

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The Issuers will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

Section 4.16 Subsidiary Guarantors

All of the Issuers’ present and future Restricted Subsidiaries (other than Foreign Subsidiaries) jointly and severally shall guarantee all principal, premium, if any, Interest and Liquidated Damages, if any, on the Notes on a senior secured basis.

Section 4.17 Limitation on Status as Investment Company

The Issuers, the Guarantors and the Restricted Subsidiaries shall be prohibited from being required to register as an “investment company” (as that term is defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”)), or from otherwise becoming subject to regulation under the Investment Company Act.

Section 4.18 Maintenance of Properties and Insurance

The Issuers and the Guarantors shall cause all material properties used or useful to the conduct of their business and the business of each of the Restricted Subsidiaries to be maintained and kept in good condition, repair and working order (reasonable wear and tear excepted) in all material respects and supplied with all necessary equipment and shall cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in their reasonable judgment may be necessary, so that the business carried on in connection therewith may be properly conducted at all times; provided, however, that nothing in this Section 4.18 shall prevent the Issuers, any Guarantor or any Restricted Subsidiary from discontinuing any operation or maintenance of any of such properties, or disposing of any of them, if such discontinuance or disposal is (a) in the judgment of the Managers of each of the Issuers, desirable in the conduct of the business of such entity and (b) not otherwise prohibited by the Indenture or the Collateral Agreements.

The Issuers and Guarantors shall provide, or cause to be provided, for themselves and each of the Restricted Subsidiaries, insurance (including appropriate self-insurance) against loss or damage of the kinds that, in the reasonable, good faith opinion of the Managers of each of the Issuers is adequate and appropriate for the conduct of the business of the Issuers, the Guarantors and such Restricted Subsidiaries.

Section 4.19 Corporate Existence

Subject to Article V hereof, the Issuers shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) their limited liability company and corporate existence, as applicable, and the corporate, partnership or other existence of each of the Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Issuers or any such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Issuers and each of the Restricted

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Subsidiaries; provided, however, that the Issuers shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of the Restricted Subsidiaries, if the Company’s Managers shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuers and each of the Restricted Subsidiaries, taken as a whole, and that the loss thereof would not have a material adverse effect on the ability of the Issuers and the Guarantors to satisfy their obligations under the Notes, the Guarantees and this Indenture.

Section 4.20 Limitation on Lines of Business

The Issuers and the Guarantors shall not, and neither the Issuers nor the Guarantors shall permit the Restricted Subsidiaries to, directly or indirectly, engage to any substantial extent in any line or lines of business activity other than that which, in the reasonable good faith judgment of the Managers of the Company, is a Related Business.

Section 4.21 Restrictions on Activities of Capital

Capital shall not hold any material assets, become liable for any obligations or engage in any business activities; provided, that Capital must be a co-obligor of the Notes (including any Additional Notes incurred pursuant to Section 4.7) pursuant to the terms of this Indenture and may engage in any activities directly related or necessary in connection therewith.

Section 4.22 Restrictions on Payment of Management Fees

The Issuers and the Guarantors shall not, and neither the Issuers nor the Guarantors shall permit any of the Restricted Subsidiaries, to directly or indirectly, pay to PGP, PGC, OEDA or any of their Affiliates any Incentive Fees if:

(1) a Default or Event of Default shall have occurred and be continuing at the time of, or would occur after giving effect on a pro forma basis to, such payment; or

(2) the Issuers’ Consolidated Coverage Ratio for the Reference Period preceding the date on which such Management Fees are proposed to be paid would have been less than 2.0 to 1.0, calculated on a pro forma basis; provided, that in calculating the Consolidated Coverage Ratio for purposes of this Section 4.22, there shall be deducted in calculating Consolidated EBITDA the amount of any Management Fees (including any Management Fees deferred from a prior period) to the extent paid in cash.

Any Incentive Fees not permitted to be paid pursuant to this Section 4.22 will be deferred and will accrue and may be paid only at such time that they would otherwise be permitted to be paid under this Indenture.

Section 4.23 Entity Classification

The Company is classified as a Flow Through Entity and will not take, or fail to take, any action which would result in the Company no longer being classified as a Flow Through Entity except (i) pursuant to a Permitted C-Corp Conversion or (ii) any transaction permitted under Section 5.1 hereof.

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Section 4.24 Limitation on Use of Proceeds

The Company shall, on the Issue Date, deposit approximately $62,400,000 into the Construction Disbursement Account, approximately $23,700,000 into the Interest Reserve Account and approximately $5,000,000 into the Completion Reserve Account. Funds in the Interest Reserve Account shall be used only to pay the first three Fixed Interest payments on the Notes. The funds in the Construction Disbursement Account, the Interest Reserve Account and the Completion Reserve Account may be invested only in Cash Equivalents. All funds in the Construction Disbursement Account, the Interest Reserve Account and the Completion Reserve Account shall be disbursed only in accordance with the Cash Collateral and Disbursement Agreement.

Section 4.25 Gaming Licenses and Certain Permits

The Issuers shall, and the Guarantors shall, and the Issuers and the Guarantors shall cause the Restricted Subsidiaries to, use their commercially reasonable efforts to obtain and maintain in full force and effect at all times all Gaming Licenses, all Racing Licenses and all other Permits from or with any Gaming Authority, Racing Authority or other governmental authority that are necessary for the design, development, construction, equipping and operation of the Racino or any of the Issuers’ and the Restricted Subsidiaries’ other operations; provided, that if in the course of the exercise of its governmental or regulatory functions the applicable Gaming Authority or Racing Authority is required to suspend or revoke any Gaming License, Racing License or other Permit or close or suspend any operation of any part of the Racino or any of the Issuers’ and the Restricted Subsidiaries’ other operations as a result of any noncompliance therewith or with law, the Company shall use its commercially reasonable efforts to promptly and diligently correct such noncompliance or replace any personnel causing such noncompliance so that the Racino or such other operations, as the case may be, shall be opened and fully operating as promptly as practicable.

Section 4.26 Rule 144A Information

The Issuers shall, and the Guarantors shall, furnish to the Holders or beneficial holders of Notes, upon their request, and to prospective purchasers thereof designated by such Holders or beneficial holders of Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act for so long as is required for an offer or sale of the Notes to qualify for an exemption under Rule 144A.

ARTICLE V

SUCCESSORS

Section 5.1 Merger, Consolidation or Sale of Assets

Neither Issuer shall consolidate with or merge with or into another Person or, directly or indirectly, sell, lease, convey or transfer all or substantially all of its assets (such amounts to be computed on a consolidated basis), whether in a single transaction or a series of related transactions, to another Person or group of affiliated Persons unless:

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(1) either (a) the Company is the surviving Person or (b) the resulting, surviving or transferee Person is a Person, (provided, that at least one of the Issuers of the Notes is a corporation) organized under the laws of the United States, any state thereof or the District of Columbia and expressly assumes by supplemental indenture all of the Issuers’ Obligations in connection with the Notes, this Indenture, the Collateral Agreements and the Construction Documents;

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

(3) unless such transaction is solely the merger of such Issuer and one of its Wholly Owned Restricted Subsidiaries, immediately after giving effect to such transaction on a pro forma basis, the Consolidated Net Worth of the resulting, surviving or transferee Person is at least equal to the Consolidated Net Worth of the Issuers immediately prior to such transaction;

(4) unless such transaction is solely the merger of such Issuer and one of its Wholly Owned Restricted Subsidiaries, immediately after giving effect to such transaction on a pro forma basis, the resulting, surviving or transferee Person would immediately thereafter be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio test set forth in Section 4.7 hereof; and

(5) each Guarantor shall have, if required by the terms of this Indenture or the Collateral Agreements, confirmed in writing that its Guarantee shall apply to the Obligations of the Issuers or the resulting, surviving or transferee Person in accordance with the Notes, this Indenture and the Collateral Agreements.

Section 5.2 Successor Corporation Substituted

In the event of any transaction (other than a lease or transfer of less than all of the Issuers’ assets) in accordance with Section 5.1 hereof, in which the Company is not the surviving Person, the resulting, surviving or transferee Person shall succeed to and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such resulting, surviving or transferee Person had been named therein as the Company, and the Trustee may require any such Person to ensure, by executing and delivering appropriate instruments and opinions of counsel, that the Trustee continues to hold a Lien, having the same relative priority as was the case immediately prior to such transactions, on all Collateral for the benefit of the Holders.

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

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ARTICLE VI

DEFAULTS AND REMEDIES

Section 6.1 Events of Default

“Event of Default,” wherever used herein, means any one of the following events:

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

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

(c) the failure of the Issuers or the failure by any of the Restricted Subsidiaries to comply with the requirement to make the Asset Sale Offer, Excess Cash Flow Offer or Change of Control Offer as described under Sections 4.13, 4.14 and 4.15, respectively, or to comply with Section 5.1;

(d) the failure of the Issuers or the failure by any of the Restricted Subsidiaries to observe or perform any other covenant, condition or agreement contained in the Notes or this Indenture and the continuance of such failure for a period of 60 days after written notice is given to the Issuers by the Trustee or to the Issuers and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes outstanding;

(e) an event of default occurs (after giving effect to any waivers, amendments, applicable grace periods, applicable notice periods or any extension of any maturity date) under the Indebtedness of the Issuers or the Indebtedness of any of the Guarantors or the Restricted Subsidiaries with an aggregate amount outstanding in excess of $5,000,000 (i) resulting from the failure to pay principal of or interest on such Indebtedness; or (ii) as a result of such default, the maturity of such Indebtedness has been accelerated prior to its stated maturity;

(f) failure by the Issuers or any Restricted Subsidiary to pay final judgments not covered by insurance aggregating in excess of $5,000,000, at any one time rendered against the Issuers or any of the Restricted Subsidiaries which judgments are not stayed, bonded or discharged within 60 days after their entry;

(g) any Guarantee of a Guarantor which is a Significant Subsidiary ceases to be in full force and effect or shall be held in any judicial proceeding to be unenforceable or invalid or is declared null and void (other than in accordance with the terms of the Guarantee and this Indenture) or any Guarantor which is a Significant Subsidiary denies or disaffirms its Obligations under its Guarantee or the Collateral Agreements (in each case, other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture);

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(h) (i) any event of default occurs under the Collateral Agreements (after giving effect to any applicable grace periods, applicable notice periods, waivers or amendments) or (ii) the failure of the Issuers or the failure of any of the Restricted Subsidiaries to comply with any material agreement or covenant in, or material provision of, any of the Collateral Agreements, or any breach in any material respect of any material representation or warranty made by the Issuers or any of the Restricted Subsidiaries in any Collateral Agreement, and the continuance of such failure or breach for a period of 30 days after written notice is given to the Issuers by the Trustee or to the Issuers and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes outstanding;

(i) the Casino or the Racino is not Operating by the applicable Operating Deadline;

(j) any of the Collateral Agreements ceases to be in full force and effect or any of the Collateral Agreements ceases to give the Trustee (or, in the case of a mortgage, ceases to give the Trustee or any other trustee under such mortgage) any of the Liens, rights, powers or privileges purported to be created thereby, or any of the Collateral Agreements is declared null and void or either of the Issuers or any Guarantor denies that it has any further liability under any Collateral Agreement to which it is a party or gives notice of such effect (in each case other than by reason of the termination of this Indenture or any such Collateral Agreement in accordance with its terms or the release of any Guarantor in accordance with this Indenture) and the continuance of such failure for a period of 30 days after written notice is given to the Issuers by the Trustee or to the Issuers and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes outstanding;

(k) a court having jurisdiction in the premises enters a decree or order for (A) relief in respect of either of the Issuers, any of the Guarantors, or any Significant Subsidiary in an involuntary case under any applicable Bankruptcy Law now or hereafter in effect, (B) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of either of the Issuers, any of the Guarantors or any Significant Subsidiary or for all or substantially all of the property and assets of either of the Issuers, any of the Guarantors or any Significant Subsidiary or (C) the winding up or liquidation of the affairs of either of the Issuers, any of the Guarantors or any Significant Subsidiary and, in each case, such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

(l) either of the Issuers, any of the Guarantors or any Significant Subsidiary (A) commences a voluntary case under any applicable Bankruptcy Law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (B) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of either of the Issuers, any of the Guarantors or any Significant Subsidiary or for all or substantially all of the property and assets of the either of Issuers, any of the Guarantors or any Significant Subsidiary or (C) effects any general assignment for the benefit of creditors.

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Section 6.2 Acceleration

(a) Subject to the terms of the Intercreditor Agreement, if an Event of Default (other than an Event of Default specified in clause (k) or (l) of Section 6.1 that occurs with respect to the Issuers, any of the Guarantors or any of their Significant Subsidiaries) occurs and is continuing under this Indenture, then in every such case, unless the principal of all of the Notes shall have already become due and payable, either the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes, then outstanding, by written notice to the Issuers (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued Interest (and Liquidated Damages, if any) on the Notes to be due and payable immediately. Upon a declaration of acceleration, such principal of, premium, if any, and accrued Interest (and Liquidated Damages, if any) shall be immediately due and payable. If an Event of Default specified in clause (k) or (l) of Section 6.1, relating to the Issuers, any of the Guarantors or any of their Significant Subsidiaries occurs, all principal and accrued Interest (and Liquidated Damages, if any) thereon will be immediately due and payable on all outstanding Notes without any declaration or other act on the part of the Trustee or the Holders.

Subject to all provisions of this Indenture and applicable law, the Holders of a majority in aggregate principal amount of the Notes at the time outstanding will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee.

(b) At any time after such a declaration of acceleration being made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided in this Article VI, the Holders of not less than a majority in aggregate principal amount of then outstanding Notes, by written notice to the Issuers and the Trustee, may (i) waive such existing Default or Event of Default and its consequences under this Indenture and/or (ii) rescind, on behalf of all Holders, any such declaration of acceleration and its consequences if:

(1) the Issuers have paid or deposited with the Trustee cash sufficient to pay: (a) all overdue Interest and Liquidated Damages, if any, on all Notes; (b) the principal of (and premium, if any, applicable to) any Notes which would become due other than by reason of such declaration of acceleration, and interest thereon at the rate borne by the Notes; (c) to the extent that payment of such interest is lawful, interest upon overdue Interest at the rate borne by the Notes; and (d) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee and its agents and counsel, and all other amounts due the Trustee under Section 7.7 hereof; and

(2) all Events of Default, other than the non-payment of the principal of, premium, if any, and Interest (and Liquidated Damages, if any) on the Notes which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 6.4 hereof.

(c) Notwithstanding clause (b)(2) of this Section 6.2, no waiver shall be effective against any Holder for any Event of Default or event which with notice or lapse of time

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or both would be an Event of Default with respect to any covenant or provision which cannot be modified or amended without the consent of the Holder of each outstanding Note affected thereby, unless all such affected Holders agree, in writing, to waive such Event of Default or other event. No such waiver shall cure or waive any subsequent default or impair any right consequent thereon.

Section 6.3 Other Remedies

If an Event of Default occurs and is continuing, subject to the terms of the Intercreditor Agreement, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, Liquidated Damages, if any, and Interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

Section 6.4 Waiver of Past Defaults

Subject to Section 6.7 hereof, the Holders of a majority in principal amount of the outstanding Notes by written notice to the Issuers and to the Trustee, may, on behalf of all Holders, (a) waive any existing or past Default or Event of Default hereunder and its consequences under this Indenture, except (i) a Default in the payment of principal of, premium, if any, Liquidated Damages, if any, or Interest on any Note not yet cured as specified in clauses (a) and (b) of Section 6.1 hereof or (ii) in respect of a covenant or provision hereof which, under Article IX, cannot be modified or amended without the consent of the Holder of each outstanding Note affected, unless all such affected Holders agree, in writing, to waive such default and/or (b) rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree of a court of competent jurisdiction and if all existing Events of Default (other than the non-payment of the principal of, premium (if any) and interest and Liquidated Damages, if any, on the Notes which have become due solely by such acceleration) have been cured or waived.

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

Section 6.5 Control by Majority

Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines in good faith may be unduly prejudicial to the rights of other Holders not joining in the giving of such direction or that may involve the Trustee in personal liability and the Trustee

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may take any other action it deems proper that is not inconsistent with any such direction received from Holders.

Section 6.6 Limitation on Suits

A Holder may pursue a remedy with respect to this Indenture or the Notes only if:

(a) the Holder gives to the Trustee written notice of a continuing Event of Default;

(b) the Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;

(c) such Holder or Holders offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any costs, liability or expense;

(d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and

(e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request.

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.

Section 6.7 Rights of Holders of Notes to Receive Payment

Notwithstanding any other provision of this Indenture, except as permitted by Section 9.2 hereof, the right of any Holder to receive payment of the principal of, premium and Liquidated Damages, if any, and Interest on a Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase) or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.8 Collection Suit by Trustee

If an Event of Default specified in Section 6.1(a) or (b) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuers for the whole amount of principal of, premium and Liquidated Damages, if any, and Interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.9 Trustee May File Proofs of Claim

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including

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any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Issuers (or any other obligor upon the Notes), their creditors or their property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and may be a member of the creditor’s committee.

Section 6.10 Priorities

Subject to the terms of the Intercreditor Agreement, if the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order:

First: to the Trustee, its agents and attorneys for amounts due under Section 7.7 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection (including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel);

Second: to Holders for amounts due and unpaid on the Notes for principal and Liquidated Damages, if any, and Interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and Liquidated Damages, if any, and Interest, respectively;

Third: without duplication, to the Holders for any other Obligations owing to the Holders under the Notes or this Indenture; and

Fourth: to the Issuers or to such party as a court of competent jurisdiction shall direct.

The Trustee may fix a Record Date and payment date for any payment to Holders pursuant to this Section 6.10.

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Section 6.11 Undertaking for Costs

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

ARTICLE VII

TRUSTEE

Section 7.1 Duties of Trustee

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

(b) Except during the continuance of an Event of Default of which the Trustee has knowledge:

(i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

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

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

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

(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.5 hereof.

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(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to Sections 7.1 and 7.2 hereof.

(e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

(f) Upon request from the Issuers, the Trustee is hereby authorized to and shall enter into the Intercreditor Agreement in connection with the Credit Agreement or any amendment, restatement, supplement, renewal, replacement or other modification thereof, entered into in accordance with the terms of this Indenture, including Section 4.7 hereof.

(g) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuers. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

Section 7.2 Rights of Trustee

(a) In connection with the Trustee’s rights and duties under this Indenture, the Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting under this Indenture, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

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

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuers shall be sufficient if signed by an Officer of the Issuers.

(f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

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(g) Except with respect to Section 4.1 hereof, the Trustee shall have no duty to inquire as to the performance of the Issuers’ covenants in Article IV hereof. In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of Default except (i) any Event of Default occurring pursuant to Sections 6.1(a), 6.1(b) and 4.1 hereof or (ii) any Default or Event of Default of which the Trustee shall have received written notification in the manner set forth in this Indenture or an officer in the corporate trust administration of the Trustee shall have obtained actual knowledge. Delivery of reports, information and documents to the Trustee under Section 4.3 is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuers’ compliance with any of their covenants thereunder (as to which the Trustee is entitled to rely exclusively on an Officers’ Certificate).

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

Section 7.3 Individual Rights of Trustee

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or any Affiliate of the Issuers with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest (as defined in the TIA) it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

Section 7.4 Trustee’s Disclaimer

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers’ use of the proceeds from the Notes or any money paid to the Issuers or upon the Issuers’ direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.5 Notice of Defaults

If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders a notice in the manner and to the extent provided by Section 313(c) of the TIA of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, Liquidated Damages, if any, or Interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Officers in good faith determines that withholding the notice is in the interests of the Holders.

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Section 7.6 Reports by Trustee to Holders of the Notes

Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the 12 months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA § 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA § 313(c).

A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Issuers and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA § 313(d). The Issuers shall promptly notify the Trustee when the Notes are listed on any stock exchange.

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

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

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

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

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

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

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

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

Section 7.7 Compensation and Indemnity

The Issuers shall pay to the Trustee from time to time reasonable compensation as shall be agreed to in writing by the Issuers and the Trustee for its acceptance of this Indenture and services hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuers shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable

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compensation, disbursements and expenses of the Trustee’s agents and counsel, except such disbursements and expenses as may be attributable to its negligence or bad faith.

The Issuers shall indemnify the Trustee against any and all losses, liabilities or expenses (including reasonable attorneys’ fees) incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Issuers (including this Section 7.7) and defending itself against any claim (whether asserted by the Issuers or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except, in each case, to the extent any such loss, liability or expense may be attributable to its negligence, bad faith or willful misconduct. The Trustee shall notify the Issuers promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuers shall not relieve the Issuers of their obligations hereunder. The Issuers shall defend the claim and the Trustee shall cooperate in the defense. In the event that a conflict of interest or conflicting defenses would arise in connection with the representation of the Issuers and the Trustee by the same counsel, the Trustee may have separate counsel and the Issuers shall pay the reasonable fees and expenses of such counsel. The Issuers need not pay for any settlement made without their consent, which consent shall not be unreasonably withheld.

The obligations of the Issuers under this Section 7.7 shall survive the satisfaction and discharge of this Indenture.

To secure the Issuers’ payment obligations in this Section 7.7, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

When the Trustee incurs expenses or renders services after an Event of Default specified in Sections 6.1(l) or 6.1(m) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

The Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable.

Section 7.8 Replacement of Trustee

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.8 and upon the Issuers’ receipt of notice from the successor Trustee of such appointment.

The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuers. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuers in writing. The Issuers may remove the Trustee if:

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

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(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

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

(d) the Trustee becomes incapable of acting.

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

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the Issuers’ obligations under Section 7.7 hereof shall continue for the benefit of the retiring Trustee.

Section 7.9 Successor Trustee by Merger, etc.

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

Section 7.10 Eligibility; Disqualification

There shall at all times be a Trustee hereunder that is a corporation or trust company (or a member of a bank holding company) organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has (or the bank holding company of which it is a member has) a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

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This Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).

Section 7.11 Preferential Collection of Claims Against Issuers

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

ARTICLE VIII

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.1 Option to Effect Legal Defeasance or Covenant Defeasance

The Issuers may, at the option of their Managers evidenced by a resolution set forth in an Officers’ Certificate, elect to have either Section 8.2 or 8.3 hereof be applied to all outstanding Notes and Guarantees upon compliance with the conditions set forth below in this Article VIII.

Section 8.2 Legal Defeasance and Discharge

Upon the Issuers’ exercise under Section 8.1 hereof of the option applicable to this Section 8.2, each of the Issuers and the Guarantors, as applicable, shall, subject to the satisfaction of the applicable conditions set forth in Section 8.4 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Notes and Guarantees, as applicable, on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Issuers shall be deemed to have paid and discharged all amounts owed under the outstanding Notes and the Guarantors shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Guarantees, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.5 hereof and the other Sections of this Indenture referred to in clauses (a) and (b) of this Section 8.2 below, and to have satisfied all its other obligations under such Notes, such Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Issuers, shall execute proper instruments acknowledging the same, including instruments releasing the Collateral as security for the Notes and the Guarantees), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders to receive solely from the trust fund described in Section 8.4 hereof, and as more fully set forth in Section 8.4, payments in respect of the principal of, premium, if any, and Interest and Liquidated Damages, if any, on such Notes when such payments are due, (b) the Issuers’ obligations with respect to such Notes under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.10, 4.2, 4.6, 4.17, 4.19, 8.5, 8.6 and 8.7 hereof, and (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuers’ and the Guarantors’ obligations in connection therewith. Subject to compliance with this Article VIII, the Issuers may exercise their option under this Section 8.2 notwithstanding the prior exercise of its option under Section 8.3 hereof.

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Section 8.3 Covenant Defeasance

Upon the Issuers’ exercise under Section 8.1 hereof of the option applicable to this Section 8.3, subject to the satisfaction of the applicable conditions set forth in Section 8.4 hereof, the Issuers and the Guarantors shall be released from their respective obligations under Sections 4.3, 4.4, 4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21, 4.22, 4.23, 4.24, 4.25 and 4.26 and Article V hereof on and after the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”), and the Notes and the Guarantees shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuers and the Guarantors may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.1 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Issuers’ exercise under Section 8.1 hereof of the option applicable to this Section 8.3, subject to the satisfaction of the applicable conditions set forth in Section 8.4 hereof, (x) Sections 6.1(c) through 6.1(j) hereof shall not constitute Events of Default to the extent such events occur thereafter and (y) Sections 6.1(k) and 6.1(l) hereof shall not constitute an Event of Default to the extent they occur after the 91st day following the occurrence of the Issuers’ exercise of Covenant Defeasance; provided, however that for all other purposes as set forth herein, such Covenant Defeasance provisions shall be effective.

Section 8.4 Conditions to Legal or Covenant Defeasance

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

(a) in the case of an election under Section 8.2 or 8.3 hereof, the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in United States legal tender, U.S. Government Obligations, or a combination thereof, in amounts that will be sufficient, in the written opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and Liquidated Damages, if any, and Interest on the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be (and the Issuers must specify whether the Notes are being defeased to Stated Maturity or a particular redemption date), and the Trustee must have, for the benefit of Holders, a valid, perfected exclusive security interest in such trust;

(b) in the case of an election under Section 8.2 hereof, the Issuers must deliver to the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee from United States legal counsel confirming that (A) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a change in the applicable Federal income tax law, in either case to the effect that, the Holders will

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not recognize income, gain or loss for Federal income tax purposes as a result of such Legal Defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(c) in the case of an election under Section 8.3 hereof, the Issuers must deliver to the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee from United States legal counsel confirming that Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such Covenant Defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(d) in the case of an election under Section 8.2 or 8.3 hereof, (x) no Default or Event of Default shall have occurred and be continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit), and (y) no Event of Default specified in Section 6.1(k) or (l) hereof shall have occurred at any time from the date of the deposit to the 91st calendar day thereafter (it being understood that this condition to Legal Defeasance or Covenant Defeasance may not be satisfied until such 91^st calendar day after the date of deposit);

(e) in the case of an election under Section 8.2 or 8.3 hereof, the Legal Defeasance or Covenant Defeasance, as applicable, may not result in a breach or violation of, or constitute a default under any other material agreement or instrument (other than this Indenture) to which the Issuers, any of the Guarantors or any of the Restricted Subsidiaries is a party or by which the Issuers or any of the Restricted Subsidiaries are bound;

(f) in the case of an election under Section 8.2 or 8.3 hereof, the Issuers must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Issuers with the intent to hinder, delay or defraud any other of the Issuers’ creditors;

(g) in the case of an election under Section 8.2 or 8.3 hereof, the Issuers must deliver to the Trustee an Officers’ Certificate confirming the satisfaction of the conditions in clauses (a) through (f) above, and an Opinion of Counsel, confirming the satisfaction of the conditions in clauses (a) (with respect to the validity and perfection of the security interest) (b), (c) and (e).

Legal Defeasance and Covenant Defeasance shall be deemed to occur on the date all of the applicable conditions set forth in this Section 8.4 are satisfied.

Section 8.5 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions

Subject to Section 8.6 hereof, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.5, the “Trustee”) pursuant to Section 8.4 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of

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principal, premium, if any, and Interest (and Liquidated Damages, if any), but such money need not be segregated from other funds except to the extent required by law.

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

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

Section 8.6 Repayment to Issuers

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

Section 8.7 Reinstatement

If the Trustee or Paying Agent is unable to apply any United States legal tender or U.S. Government Obligations in accordance with Section 8.2 or 8.3 hereof, as the case may be, by reason of any order directing the repayment of the deposited money to the Issuers or otherwise making the deposit unavailable to make payments under the Notes when due, or if any court enters an order avoiding the deposit of money with the Trustee or Paying Agent or otherwise requires the payment of the money so deposited to the Issuers or to a fund for the benefit of its creditors, then (so long as the insufficiency exists or the order remains in effect) the Issuers’ and the Guarantors’ obligations under this Indenture, the Notes and the Collateral Agreements shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.3 or 8.4 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.3 or 8.4 hereof, as the case may be; provided, however, that, if the Issuers make any payment of principal of, premium, if any, Liquidated Damages, if

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any, or Interest on any Note following the reinstatement of its obligations, the Issuers shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

Section 8.8 Satisfaction and Discharge

The Issuers may terminate their obligations and the obligations of the Guarantors under this Indenture, the Notes, the Guarantees and the Collateral Agreements (except as described below) (whereupon the Issuers may obtain the release of the Collateral as security for the Notes and the Guarantees) when:

(1) either:

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

(b) (i) all Notes have been called for redemption pursuant to the provisions of Section 3.7 herein by mailing to Holders a notice of redemption or all Notes otherwise have become due and payable;

(ii) the Issuers have irrevocably deposited or caused to be irrevocably deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, and Interest and Liquidated Damages, if any, on the Notes to the date of redemption or maturity, as the case may be, together with irrevocable instructions from the Issuers directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

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

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

(2) each of the Issuers and the Guarantors has paid all other sums payable by it under this Indenture, the Notes, the Guarantees, the Intercreditor Agreement and the Collateral Agreements, and

(3) the Issuers shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel confirming the satisfaction of all conditions set forth in clauses (1) and (2) above.

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ARTICLE IX

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.1 Without Consent of Holders of Notes

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

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

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

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

(d) to evidence the release any Guarantor permitted to be released under the terms of the Indenture and the Collateral Agreements or to evidence the addition of any new Guarantor;

(e) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the rights hereunder of any Holder under the Indenture, the Notes, the Guarantees, the Registration Rights Agreement, the Collateral Agreements or the Intercreditor Agreement;

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

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

(h) to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the date hereof;

(i) to comply with applicable Gaming Laws and Racing Laws; or

(j) to enter into additional or supplemental Collateral Agreements.

Upon the request of the Issuers accompanied by a resolution of each of their Managers authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 9.6 hereof, the Trustee shall join with the Issuers in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into

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such amended or supplemental Indenture that adversely affects its own rights, duties or immunities under this Indenture or otherwise.

Section 9.2 With Consent of Holders of Notes

Except as expressly stated otherwise in this Section 9.2, and subject to Sections 6.4 and 6.7 hereof, the Issuers, the Guarantors and the Trustee may amend, supplement or otherwise modify this Indenture, the Notes and the Guarantees, with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes), and, subject to Sections 6.4 and 6.7 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or Interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Notes and the Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes).

Subject to Sections 6.4 and 6.7 hereof, and except as stated otherwise in this Section 9.2, the Holders of a majority in aggregate principal amount of the Notes then outstanding may waive compliance in a particular instance by the Issuers or any Restricted Subsidiary with any provision of this Indenture or the Notes.

It being understood that, except as expressly stated otherwise in the following paragraph, Sections 4.13, 4.14 and 4.15 hereof may be amended, waived or modified in accordance with the first two paragraphs of this Section 9.2.

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

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

(2) change the Stated Maturity on any Note;

(3) reduce the principal of, or any premium (including redemption premium but not including any redemption premium relating to Sections 4.13, 4.14 and 4.15 except as prohibited by paragraph (6) below) on, any Note;

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

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

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(6) reduce the Change of Control Purchase Price or the Asset Sale Offer Price after the corresponding Asset Sale or Change of Control has occurred or reduce the Excess Cash Flow Purchase Price after the Company becomes obligated to make the Excess Cash Flow Offer;

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

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

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

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

(11) release any Guarantor that is a Significant Subsidiary from any of its obligations under its Guarantee or the Collateral Agreements or this Indenture other than in compliance with this Indenture and the Collateral Agreements; or

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

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

Upon the request of the Issuers accompanied by a resolution of each of their Managers authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.6 hereof, the Trustee shall join with the Issuers in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture adversely affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture.

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

After an amendment, supplement, modification or waiver under this Section 9.2 becomes effective, the Issuers shall mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuers to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver.

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Section 9.3 Compliance with Trust Indenture Act

Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect.

Section 9.4 Revocation and Effect of Consents

Until an amendment, supplement or waiver becomes effective (as determined by the Issuers and which may be prior to any such amendment, supplement or waiver becoming operative), a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder that evidences the same Indebtedness as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective (as determined by the Issuers and which may be prior to any such amendment, supplement or waiver becoming operative).

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

After an amendment, supplement or waiver becomes effective, it shall bind every Holder unless it makes a change described in any of paragraphs (1) through (12) of Section 9.2 hereof, in which case, the amendment, supplement or waiver shall bind only each Holder who has consented to it and every subsequent Holder that evidences the same debt as the consenting Holder’s Note; provided, that any such waiver shall not impair or affect the right of any Holder to receive payment of principal and premium of and Interest (and Liquidated Damages, if any) on a Note, on or after the respective dates set for such amounts to become due and payable expressed in such Note, or to bring suit for the enforcement of any such payment on or after such respective dates.

Section 9.5 Notation on or Exchange of Notes

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuers in exchange for all Notes may issue and the Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

Section 9.6 Trustee to Sign Amendments, etc.

The Trustee shall sign any amendment or supplemental indenture authorized pursuant to this Article IX if the amendment or supplement does not adversely affect the rights,

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duties, liabilities or immunities of the Trustee. If such amendment or supplement does adversely affect the rights, duties, liabilities or immunities of the Trustee, the Trustee may, but need not, sign it. The Issuers may not sign an amendment or supplemental indenture until their respective Managers approve it. In executing any amendment or supplemental Indenture, the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive and (subject to Section 7.1 hereof) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amendment or supplemental indenture is authorized or permitted by this Indenture.

ARTICLE X

COLLATERAL AND SECURITY AND GUARANTY

Section 10.1 Collateral Agreements; Security Interests.

(a) The due and punctual payment of the principal and premium, if any, of, and Interest on, the Notes when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, interest on the overdue principal of and interest (to the extent permitted by law), if any, on the Notes and performance of all other Obligations under this Indenture, the Notes, the Collateral Agreements and the Registration Rights Agreement, shall be secured as provided in the Collateral Agreements.

(b) After the Issue Date, the Issuers shall, and shall cause each of the Restricted Subsidiaries to, use commercially reasonable efforts (which will be deemed not to include any obligation to pay money to any third parties other than filing fees, reasonable fees and expenses of the third party or other de minimis payments) to grant a perfected security interest in all of the Issuers’ and the Restricted Subsidiaries’ assets, including assets acquired after the Issue Date in accordance with the Collateral Agreements, but in any event excluding the Excluded Assets.

(c) Notwithstanding any provision in this Indenture or the Collateral Agreements to the contrary, in the event that the Issuers or any of the Restricted Subsidiaries grant a Lien on any of the Issuers’ or any of the Restricted Subsidiaries’ assets in connection with the Credit Agreement, the Issuers will be required to, and will be required to cause the Restricted Subsidiaries to, secure the Notes with a Lien on such assets (other than Excluded Assets) that is subordinated to the obligations under the Credit Agreement in accordance with the Intercreditor Agreement, except in circumstances where the Trustee cannot perfect such a Lien by means other than a Lien filing.

(d) The Issuers shall, and shall cause each of the Restricted Subsidiaries to, do or cause to be done all such acts and things as may be necessary or proper, or as may be required by the provisions of the Collateral Agreements, to assure and confirm to the Trustee the security interest in the Collateral contemplated hereby and by the Collateral Agreements, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Notes secured hereby, according to the intent and purposes herein and therein expressed, including (1) using all commercially reasonable efforts to obtain customary consents and waivers from landlords of premises where any of the Collateral is located, and (2) taking all

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commercially reasonable efforts to grant a perfected Lien on all real property owned by the Issuers and the Restricted Subsidiaries and to provide customary title insurance for the benefit of the Trustee with respect thereto; including, without limitation, commercially reasonable efforts to cause the removal of record of all existing monetary encumbrances such that the Collateral Agreements shall constitute a first priority Lien on all such real property. The Issuers shall, and shall cause each of the Restricted Subsidiaries to, take, upon request of the Trustee, any and all actions required to cause the Collateral Agreements to create and maintain, as security for the Obligations under this Indenture, the Notes, the Collateral Agreements and the Registration Rights Agreement, valid and enforceable, perfected (except as expressly provided herein or therein) Liens in and on all the Collateral, in favor of the Trustee, superior to and prior to the rights of all third Persons (other than holders of Purchase Money Indebtedness or Capitalized Lease Obligations that was incurred in accordance with the provisions of Section 4.7 hereof), and subject to no other Liens, other than as provided herein and therein provided, that the Trustee’s Lien securing the Collateral may be subordinated pursuant to the terms of the Intercreditor Agreement to a Lien securing Indebtedness outstanding pursuant to Section 4.7 hereof, but only to the extent provided in the Intercreditor Agreement.

(e) Each of the Issuers represents and warrants and covenants that it (or the Restricted Subsidiaries) has executed and delivered, filed and recorded and/or will execute and deliver, file and record, all instruments and documents, and has done or will do or cause to be done all such acts and other things as are necessary to subject the Collateral to the Lien of the Collateral Agreements. The Issuers (or the Restricted Subsidiaries) shall execute and deliver, file and record all instruments and do all acts and other things as may be reasonably necessary or advisable to perfect, maintain and protect the security interests created by the Collateral Agreements and shall pay all filing, recording, mortgage or other taxes or fees incidental thereto.

(f) The security interests in the Collateral created by the Collateral Agreements as now or hereafter in effect shall be held by the Trustee for the equal and ratable benefit and security of the Notes without preference, priority or distinction of any thereof over any other by reason, or difference in time, of issuance, sale or otherwise, and for the enforcement of the payment of principal of, premium, if any, and interest on the Notes in accordance with their terms.

(g) Each Holder, by its acceptance of a Note, consents and agrees to the terms of the Collateral Agreements and the Intercreditor Agreement (including, without limitation, the provisions providing for foreclosure and release of the Collateral) as the same may be in effect or may be amended from time to time in accordance with their terms and authorizes and directs the Secured Party to enter into the Collateral Agreements and to perform its obligations and exercise its rights thereunder in accordance therewith. The Issuers initially appoint the Trustee as Secured Party and/or Trustee under the Collateral Agreements. Any successor Trustee will act as Secured Party and/or Trustee under the Collateral Agreements or appoint another Person to act in such capacity.

Section 10.2 Further Assurances and Security.

Each of the Issuers represents and warrants that at the time the Collateral Agreements and this Indenture are executed, the Issuers (or the Restricted Subsidiaries) (a) will

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have full right, power and lawful authority to grant, bargain, sell, release, convey, hypothecate, assign, mortgage, pledge, transfer and confirm, absolutely, the Collateral, in the manner and form done, or intended to be done, in the Collateral Agreements, free and clear of all Liens, except for Permitted Liens, and will forever warrant and defend the title to the same against the claims of all Persons whatsoever; (b) will execute, acknowledge and deliver to the Trustee, at the Issuers’ expense, at any time and from time to time such further assignments, transfer, assurances or other instruments as may, in the opinion of the Trustee, be required to effectuate the terms of this Indenture or the Collateral Agreements; and (c) will at any time and from time to time do or cause to be done all such acts and things as may be necessary or proper, or as may be required by the Trustee, to assure and confirm to the Trustee the security interest in the Collateral contemplated hereby and by the Collateral Agreements.

Section 10.3 Opinions.

(a) The Issuers shall furnish to the Trustee (i) promptly after the recording or filing, or re-recording or re-filing of the Collateral Agreements and other security filings, an Opinion of Counsel (who may be counsel for the Issuers) stating that in the opinion of such counsel the Collateral Agreements and other security filings have been properly recorded, filed, re-recorded or re-filed so as to make effective and perfect the security interest intended to be created thereby and reciting the details of such action.

(b) The Issuers shall furnish to the Trustee within three months after each anniversary of the Issue Date, an Opinion of Counsel, dated as of such date, stating either that (i) in the opinion of such counsel, all action has been taken with respect to the recording, registering, filing, re-recording, re-registering and refiling of all supplemental indentures, financing statements, continuation statements or other instruments of further assurance as is necessary to maintain the Liens of the Collateral Agreements and reciting the details of such action, subject to customary assumptions and exclusions or (ii) in the opinion of such Counsel, no such action is necessary to maintain such Liens, which Opinion of Counsel also shall state what actions it then believes are necessary to maintain the effectiveness of such Liens during the next year, subject to customary assumptions and exclusions.

(c) In giving the Opinions of Counsel required by this Section 10.3, such counsel may rely, to the extent recited in the Opinions of Counsel, on (i) certificates of relevant public officials, (ii) certificates of an Officer or Officers of the Company, (iii) photocopies of filed and recorded documents certified by public officials as being accurate copies of such documents; (iv) the opinions of other counsel reasonably acceptable to the Trustee with respect to matters governed by law of any jurisdiction other than the state in which such counsel is licensed to practice law, and (v) title insurance policies and commitments. In addition, all such Opinions of Counsel may contain qualifications, exceptions and limitations as are appropriate for similar opinions relating to the nature of the Collateral and as are reasonably acceptable to the Trustee.

Section 10.4 Release of Collateral.

(a) The Secured Party shall release from the Liens created by the Indenture and the Collateral Agreements, from time to time at the sole cost and expense of the Issuers:

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(1) Collateral that is sold, transferred, disbursed or otherwise disposed of in accordance with the provisions of this Indenture and the Collateral Agreements or pursuant to the Intercreditor Agreement; provided, that the Secured Party will not release such Liens in the event that the transaction is subject to Section 5.1 hereof;

(2) Collateral that is released with the consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Notes as provided under Article IX hereof;

(3) all Collateral (except the funds in the trust account and except as otherwise provided) upon defeasance of the Indenture in accordance with the provisions of Article VIII hereof or discharge of the Indenture in accordance with the provisions of Section 8.8 hereof;

(4) Collateral of a Guarantor whose Guarantee is released in accordance with the Indenture and the Collateral Agreements; and

(5) funds in the Excess Cash Flow Account used to purchase Notes in accordance with Section 4.14 hereof;

provided, that the Secured Party has received all documentation required by the Trust Indenture Act in connection therewith.

(b) The release of any Collateral from the terms of the Collateral Agreements shall not be deemed to impair the security under this Indenture in contravention of the provisions hereof and of the Collateral Agreements if and to the extent the Collateral is released pursuant to the terms of this Indenture and the Collateral Agreements.

(c) For the avoidance of doubt (i) any Collateral owned by any subsidiary of the Company that is designated by the Managers of the Company as an Unrestricted Subsidiary in accordance with the terms of this Indenture shall be released from the Lien of the Indenture and the Collateral Agreements at the time of such designation and (ii) any Collateral that shall constitute an Excluded Asset at any time, or from time to time, after the date of this Indenture, shall be released from the Lien of the Indenture and the Collateral Agreements at the time such Collateral shall constitute an Excluded Asset.

Section 10.5 Certificates of the Issuers.

The Issuers shall furnish to the Trustee, prior to each proposed release of Collateral, all documents required by TIA § 314(d). The Trustee may, to the extent permitted by Sections 7.1 and 7.2 hereof, accept as conclusive evidence of compliance with the foregoing provisions the appropriate statements contained in such instruments. Any certificate or opinion required by TIA § 314(d) may be made by an Officer of the Issuers, except in cases where TIA § 314(d) requires that such certificate or opinion be made by an independent engineer, appraiser or other expert within the meaning of TIA § 314(d).

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Section 10.6 Authorization of Actions to be taken by the Trustee under the Collateral Agreements.

Subject to the terms of the Intercreditor Agreement, the Trustee may, in its sole discretion and without the consent of the Holders, on behalf of the Holders, take all actions it deems necessary or appropriate in order to (a) enforce any of the terms of the Collateral Agreements and (b) collect and receive any and all amounts payable in respect of the Obligations of the Issuers and the Guarantors hereunder and under the Notes, the Collateral Agreements and the Registration Rights Agreement. Subject to the terms of the Intercreditor Agreement, and to the extent permitted by this Indenture or the Collateral Agreements, the Trustee shall have the power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts that may be unlawful or in violation of the Collateral Agreements or this Indenture, and such suits and proceedings as the Trustee may deem expedient to preserve or protect its interest and the interests of the Holders in the Collateral (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of the Holders or the Trustee).

Section 10.7 Authorization of Receipt of Funds by the Trustee under the Collateral Agreements.

The Trustee is authorized to receive any funds for the benefit of the Holders distributed under the Collateral Agreements, and to make further distributions of such funds to the Holders according to the provisions of this Indenture and the Collateral Agreements.

Section 10.8 Guarantees

By its execution hereof, each of the Guarantors acknowledges and agrees that it receives substantial benefits from the Issuers and that such party is providing its Guarantee for good and valuable consideration, including, without limitation, such substantial benefits and services. Accordingly, subject to the provisions of this Article X, each Guarantor, jointly and severally, hereby unconditionally guarantees on a senior secured basis to each Holder of a Note authenticated and delivered by the Trustee and its successors and assigns that: (i) the principal of, premium, if any, and Interest and Liquidated Damages, if any, on the Notes shall be duly and punctually paid in full when due, whether at maturity, by acceleration, call for redemption, upon a Change of Control Offer, an Asset Sale Offer, an Excess Cash Flow Offer, or otherwise, and interest on overdue principal, premium, if any, Liquidated Damages, if any, and (to the extent permitted by law) interest on any Interest, if any, on the Notes and all other obligations of the Issuers to the Holders or the Trustee under the Notes, this Indenture, the Collateral Agreements and the Registration Rights Agreement (including fees, expenses or other) shall be promptly paid in full or performed, all in accordance with the terms hereof; and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations or under the Notes, the Collateral Agreements or Registration Rights Agreement, the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration, call for redemption, upon a Change of Control, an Asset Sale

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Offer, an Excess Cash Flow Offer, or otherwise, subject, however, in the case of clauses (i) and (ii) above, to the limitations set forth in Section 10.13 hereof (collectively, the “Guarantee Obligations”).

Subject to the provisions of this Article X, each Guarantor hereby agrees that its Guarantee hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, this Indenture, the Collateral Agreements, the Registration Rights Agreement or the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any thereof, any releases of the Collateral, the entry of any judgment against the Issuers, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor hereby waives and relinquishes: (a) any right to require the Trustee, the Holders or the Issuers (each, a “Benefited Party”) to proceed against the Issuers, the Restricted Subsidiaries or any other Person or to proceed against or exhaust any security held by a Benefited Party at any time or to pursue any other remedy in any secured party’s power before proceeding against the Guarantors; (b) any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other Person or Persons or the failure of a Benefited Party to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any other Person or Persons; (c) demand, protest and notice of any kind (except as expressly required by this Indenture), including but not limited to notice of the existence, creation or incurring of any new or additional Indebtedness or obligation or of any action or non-action on the part of the Guarantors, the Issuers, the Restricted Subsidiaries, any Benefited Party, any creditor of the Guarantors, the Issuers or the Restricted Subsidiaries or on the part of any other Person whomsoever in connection with any obligations the performance of which are hereby guaranteed; (d) any defense based upon an election of remedies by a Benefited Party, including but not limited to an election to proceed against the Guarantors for reimbursement; (e) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (f) any defense arising because of a Benefited Party’s election, in any proceeding instituted under the Bankruptcy Law, of the application of Section 1111(b)(2) of the Bankruptcy Code; and (g) any defense based on any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code. The Guarantors hereby covenant that, except as otherwise provided therein, the Guarantees shall not be discharged except by payment in full of all Guarantee Obligations, including the principal, premium, if any, and Interest on the Notes and all other costs provided for under this Indenture or as provided in Article VIII.

If any Holder or the Trustee is required by any court or otherwise to return to either the Issuers or the Guarantors, or any trustee or similar official acting in relation to either the Issuers or the Guarantors, any amount paid by the Issuers or the Guarantors to the Trustee or such Holder, the Guarantees, to the extent theretofore discharged, shall be reinstated in full force and effect. Each of the Guarantors agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guarantee Obligations hereby until payment in full of all such obligations guaranteed hereby. Each Guarantor agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI hereof for the purposes hereof, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guarantee Obligations, and (y) in the event of any acceleration of such obligations as

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provided in Article VI hereof, such Guarantee Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purpose of the Guarantee.

Section 10.9 Execution and Delivery of Guarantees

To evidence the Guarantees set forth in Section 10.8 hereof, each of the Guarantors agrees that a notation of the Guarantees substantially in the form included in Exhibit A hereto shall be endorsed on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of each of the Guarantors by an Officer of each of the Guarantors.

Each of the Guarantors agree that the Guarantees set forth in this Article X shall remain in full force and effect and apply to all the Notes notwithstanding any failure to endorse on each Note a notation of the Guarantees.

If an Officer whose facsimile signature is on a Note or a notation of Guarantee no longer holds that office at the time the Trustee authenticates the Note on which the Guarantees are endorsed, the Guarantees shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantees set forth in this Indenture on behalf of the Guarantors.

Section 10.10 Guarantors may Consolidate, etc., on Certain Terms

(a) Nothing contained in this Indenture or in the Notes shall prevent any consolidation or merger of any Guarantor with or into each other or with or into the Company. Upon any such consolidation or merger, the Guarantee of the Guarantor that does not survive the consolidation or merger shall no longer be of any force or effect.

(b) Except for a merger or consolidation in which a Guarantor is sold and its Guarantee is released in compliance with the provisions of Section 10.12 hereof, no Guarantor shall consolidate or merge with or into (whether or not such Guarantor is the surviving Person) another Person unless, subject to the provisions of the following paragraph and the other provisions of this Indenture, (i) the Person formed by, resulting from or surviving any such consolidation or merger (if other than such Guarantor) (a) expressly assumes all the obligations of such Guarantor pursuant to a supplemental indenture in form reasonably satisfactory to the Trustee, pursuant to which such Person shall unconditionally guarantee, on a senior secured basis, all of such Guarantor’s obligations under such Guarantor’s Guarantee on the terms set forth in this Indenture, (b) executes a secondary agreement and other Collateral Agreements necessary or reasonably requested by the Trustee to grant, and grants, a valid, enforceable, perfected Lien on the Collateral owned by such Person to secure such Obligations on the terms not less favorable in any material respect to the Holders than the terms set forth in the Collateral Agreements, and (c) delivers to the Trustee an Opinion of Counsel that such guarantee and Collateral Agreements have been duly authorized, executed and delivered and that each such document and this Indenture constitutes a legal, valid, binding and enforceable obligation of such Person, in each case, subject to customary qualifications; and (ii) immediately before and immediately after giving effect to such transaction on a pro forma basis, no Default or Event of

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Default shall have occurred or be continuing. The provisions of this Section 10.10(b) shall not apply to the merger of any Guarantors with or into each other or with or into the Company. In case of any such consolidation or merger and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and reasonably satisfactory in form to the Trustee, of the Guarantees endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by such Guarantor, such successor corporation shall succeed to and be substituted for such Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor corporation thereupon may cause to be signed any or all of the Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Issuers and delivered to the Trustee. All the Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Guarantees had been issued at the date of the execution hereof.

(c) The Trustee, subject to the provisions of Section 11.4 hereof, shall be entitled to receive an Officers’ Certificate as conclusive evidence that any such consolidation or merger, and any such assumption of Guarantee Obligations, comply with the provisions of this Section 10.10. Such Officers’ Certificate shall comply with the provisions of Section 11.5 hereof.

Section 10.11 Guaranty by Future Restricted Subsidiaries

The Issuers shall cause each of their existing and future Restricted Subsidiaries to (i) execute and deliver to the Trustee a supplemental indenture and a guarantee in form reasonably satisfactory to the Trustee, pursuant to which such Restricted Subsidiary shall unconditionally guarantee on a senior secured basis, all of the Issuers’ Obligations under the Notes and this Indenture on the terms set forth in this Indenture, (ii) execute a security agreement and other Collateral Agreements necessary or reasonably requested by the Trustee to grant, and grant, the Trustee a valid, enforceable, perfected Lien on the Collateral described therein, and (iii) deliver to the Trustee an Opinion of Counsel that such supplemental indenture, guarantee and Collateral Documents have been duly authorized, executed and delivered by such Restricted Subsidiary and that each of such documents and this Indenture, guarantee and Collateral Documents have constitutes a legal, valid, binding and enforceable obligation of such Restricted Subsidiary, in each case subject to customary qualifications including exceptions for bankruptcy, fraudulent transfer and equitable principles. Thereafter, such Restricted Subsidiary shall be a Guarantor for all purposes of this Indenture.

Section 10.12 Release of Guarantors

Notwithstanding Section 10.10(b) hereof, upon the sale or disposition (including by merger or sale or transfer of all of the Equity Interests) of a Guarantor (as an entirety) to a Person which is not and is not required to become a Guarantor, the designation of a Guarantor as an Unrestricted Subsidiary, or the liquidation or dissolution of a Guarantor, which transaction is otherwise in compliance with this Indenture (including, without limitation, Section 4.13), such Guarantor will be deemed released from its Obligations under its Guarantee of the Notes and the Collateral Agreements; provided, however, that any such termination shall occur only to the

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extent that all obligations of such Guarantor under all of its guarantees of, and under all of its pledges of assets or other security interests which secure, any of the Issuers’ Indebtedness or any Indebtedness of any other of the Restricted Subsidiaries shall also terminate upon such release, sale or transfer and none of its Equity Interests are pledged for the benefit of any holder of any of the Issuers’ Indebtedness or any Indebtedness of any of the Restricted Subsidiaries.

The Trustee, subject to the provisions of Section 11.4 hereof, shall be entitled to receive an Officers’ Certificate as conclusive evidence that such sale or other disposition or that such designation was made by the Issuers in accordance with the provisions of this Indenture. Except as provided in Section 10.10(a) hereof, any Guarantor not released from its obligations under its Guarantee shall remain liable for the full amount of principal of and Interest on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article X.

Notwithstanding the foregoing provisions of this Article X, (i) any Guarantor whose Guarantee would otherwise be released pursuant to the provisions of this Section 10.12 may elect, at its sole discretion, by written notice to the Trustee, to maintain such Guarantee in effect notwithstanding the event or events that otherwise would cause the release of such Guarantee (which election to maintain such Guarantee in effect may be conditional or for a limited period of time), and (ii) any subsidiary of the Issuers which is not a Guarantor may elect, at its sole discretion, by written notice to the Trustee, to become a Guarantor (which election may be conditional or for a limited period of time).

Section 10.13 Limitation of Guarantor’s Liability; Certain Bankruptcy Events

(a) Each Guarantor, and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the Guarantee Obligation of such Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law. To effectuate the foregoing intention, the Holders and such Guarantor hereby irrevocably agree that the Guarantee Obligations of such Guarantor under this Article X shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the Guarantee Obligations of such other Guarantor under this Article X, result in the Guarantee Obligations of such Guarantor under the Guarantee of such Guarantor not constituting a fraudulent transfer or conveyance.

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

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Section 10.14 Application of Certain Terms and Provisions to The Guarantors

(a) For purposes of any provision of this Indenture which provides for the delivery by any Guarantor of an Officers’ Certificate and/or an Opinion of Counsel, the definitions of such terms in Section 1.1 hereof shall apply to such Guarantor as if references therein to the Issuers were references to such Guarantor.

(b) Any request, direction, order or demand which by any provision of this Indenture is to be made by any Guarantor, shall be sufficient if evidenced as described in Section 11.2 hereof as if references therein to the Issuers were references to such Guarantor.

(c) Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders to or on any Guarantor may be given or served as described in Section 11.2 hereof as if references therein to the Issuers were references to such Guarantor.

(d) Upon any demand, request or application by any Guarantor to the Trustee to take any action under this Indenture, such Guarantor shall furnish to the Trustee such certificates and opinions as are required in Section 11.4 hereof as if all references therein to the Issuers were references to such Guarantor.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Trust Indenture Act Controls

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by the TIA § 318(c), the imposed duties shall control.

Section 11.2 Notices

Any notice or communication by the Issuers or the Trustee to the other is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Issuers or the Guarantors:
	The Old Evangeline Downs, L.L.C.
	The Old Evangeline Downs Capital Corporation
	P.O. Box 90270
	Lafayette, LA 70509-0270
	Attention: Michael S. Luzich
	Telecopier No.: 702-247-6822

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with copies (which shall not constitute notice) to:
	Mayer, Brown, Rowe & Maw
	1675 Broadway
	New York, NY 10019
	Attn: Nazim Zilkha, Esq.
	Telecopier No.: (212) 262-1910
with a copy (which shall not constitute notice) to:
	The Old Evangeline Downs, L.L.C.
	The Old Evangeline Downs Capital Corporation
	7137 Mission Hills Drive
	Las Vegas, Nevada 89113
	Attention: Michael S. Luzich
	Telecopier No.: 702-247-6822
with a copy (which shall not constitute notice) to:
	The Old Evangeline Downs, L.L.C.
	The Old Evangeline Downs Capital Corporation
	c/o Jefferies & Co., Inc.
	11100 Santa Monica Blvd.
	10th Floor
	Los Angeles, CA 90025
	Attention: M. Brent Stevens
If to the Trustee:
	U.S. Bank National Association
	180 East 5th Street
	St. Paul, MN 55101
	Attention: Corporate Trust Department
	Telecopier No.: (651) 244-0711

The Issuers or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: (i) at the time delivered by hand, if personally delivered; (ii) when answered back, if telexed; (iii) when receipt acknowledged, if telecopied; and (iv) the next

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Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Issuers mail a notice or communication to Holders, they shall mail a copy to the Trustee and each Agent at the same time.

Section 11.3 Communication by Holders of Notes with Other Holders of Notes

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

Section 11.4 Certificate and Opinion as to Conditions Precedent

Upon any request or application by the Issuers to the Trustee to take any action under this Indenture, the Issuers shall furnish to the Trustee:

(a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.5 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.5 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Section 11.5 Statements Required in Certificate or Opinion

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall include:

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

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

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

(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied;

provided, however, that with respect to matters of fact, an Opinion of Counsel may rely on an Officers’ Certificate or certificate of public officials.

Section 11.6 Rules by Trustee and Agents

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

Section 11.7 Legal Holidays

If any payment date is a Legal Holiday, payment may be made at the place of payment on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

Section 11.8 No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, manager, employee, incorporator, stockholder, member or controlling person of the Issuers, or any Guarantor in such capacity, will have any liability for any Obligations of the Issuers or any Guarantor under the Notes, this Indenture, the Guarantees, the Collateral Agreement or the Registration Rights Agreement or for any claim based on, or in respect of, or by reason of, such Obligations or their creation, provided, that this provision shall in no way limit the Obligation of any Guarantor pursuant to any Guarantees of the Notes. Each Holder by accepting a Note waives and releases all such liability. The waiver and release shall be part of the consideration for the issuance of the Notes and the Guarantees.

Section 11.9 Governing Law

THE INTERNAL LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK, SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b); PROVIDED THAT WITH RESPECT TO THE CREATION, ATTACHMENT, PERFECTION OR PRIORITY OF THE SECURITY INTEREST IN ANY REAL PROPERTY, COLLATERAL, THE GOVERNING LAW SHALL BE THE LAWS OF THE STATE OF LOUISIANA.

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Section 11.10 No Adverse Interpretation of Other Agreements

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuers or the Restricted Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 11.11 Successors

All agreements of the Issuers and the Guarantors in this Indenture and the Notes shall bind their successors. All agreements of the Trustee in this Indenture shall bind its successors.

Section 11.12 Severability

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

Section 11.13 Counterpart Originals

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

Section 11.14 Table of Contents, Headings, etc.

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

[Signatures on following page]

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SIGNATURES

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

THE ISSUERS:
THE OLD EVANGELINE DOWNS, L.L.C.
By:	/s/     M. BRENT STEVENS
Name:	M. Brent Stevens
Title:	Chief Executive Officer
By:	/s/    NATALIE A. SCHRAMM
Name:	Natalie A. Schramm
Title:	Chief Financial Officer
THE OLD EVANGELINE DOWNS CAPITAL CORP.
By:	/s/    M. BRENT STEVENS
Name:	M. Brent Stevens
Title:	Chief Executive Officer
By:	/s/    NATALIE A. SCHRAMM
Name:	Natalie A. Schramm
Title:	Chief Financial Officer
THE TRUSTEE:
U.S. BANK NATIONAL ASSOCIATION
By:	/s/    FRANK P. LESLIE III
Name:	Frank P. Leslie III
Title:	Vice President

EX-4.2

Exhibit 4.2

THE OLD EVANGELINE DOWNS, L.L.C.

THE OLD EVANGELINE DOWNS CAPITAL CORP.

$123,200,000 13% Senior Secured Notes due 2010

With Contingent Interest

REGISTRATION RIGHTS AGREEMENT

February 25, 2003

JEFFERIES & COMPANY, INC.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, California 90025

Ladies and Gentlemen:

The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (the “Company”), and The Old Evangeline Downs Capital Corp., a Delaware corporation (“Capital,” and together with the Company, the “Issuers”), are issuing and selling to Jefferies & Company, Inc. (the “Initial Purchaser”), upon the terms set forth in a purchase agreement, dated as of February 19, 2003 (the “Purchase Agreement”), by and among the Initial Purchaser, the Issuers and OED Acquisition, LLC, a Delaware limited liability company and the direct parent of the Company, $123,200,000 aggregate principal amount at maturity of the Issuers’ 13% Senior Secured Notes due 2010 With Contingent Interest, Series A, including any Guarantees (as defined below) endorsed thereon (the “Notes”). As an inducement to the Initial Purchaser to enter into the Purchase Agreement, each of the Issuers jointly and severally agrees with the Initial Purchaser, for the benefit of the holders of the Securities (as defined below) (including, without limitation, the Initial Purchaser), as follows:

1. Definitions.

Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

“Advice”: See the last paragraph of Section 6.

“Agreement”: This Registration Rights Agreement.

“Applicable Period”: See Section 2(f).

“Business Day”: Any day, other than a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized or obligated by law, regulation or executive order to be closed.

“Closing Date:” February 25, 2003.

“controlling person”: See Section 8(a).

“DTC:” See Section 6(i).

“Effectiveness Date:” The 180th day following the Closing Date; provided, however, that if the Effectiveness Date would otherwise fall on a day that is not a Business Day, then the Effectiveness Date shall be the next succeeding Business Day.

“Effectiveness Period:” See Section 3(a).

“Event:” See Section 4(a).

“Event Date:” See Section 4(a).

“Exchange Act:” The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Exchange Offer:” See Section 2(a).

“Exchange Offer Registration Statement:” See Section 2(a).

“Exchange Securities:” The 13% Senior Secured Notes due 2010 With Contingent Interest, Series B, of the Issuers, including the guarantees endorsed or to be endorsed thereon, substantially identical to the Notes and the Guarantees, except (i) that such securities shall have been registered pursuant to an effective registration statement under the Securities Act, (ii) that such securities shall not contain a restrictive legend thereon, (iii) that such securities shall not contain provisions relating to the accrual or payment of Liquidated Damages and (iv) as described in the first sentence of Section 2(e).

“Filing Date:” The 90th day following the Closing Date; provided, however, that if the Filing Date would otherwise fall on a day that is not a Business Day, then the Filing Date shall be the next succeeding Business Day.

“Guarantees:” The full and unconditional guarantee, on a senior secured basis by the Guarantors, as to payment of principal, interest, premium, if any, and the Weekly Liquidated Damages Amount, if any, with respect to the Notes.

“Guarantor:” Each subsidiary of either of the Issuers that has executed or in the future executes a Guarantee in accordance with the Indenture.

“Holder:” Each holder of Registrable Securities.

“Holder Indemnified Parties:” See Section 8(a).

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“indemnified party:” See Section 8(c).

“indemnifying parties:” See Section 8(c).

“Indenture:” The Indenture, dated as of the date hereof, by and among the Issuers, the Guarantors and U.S. Bank National Association, as trustee, pursuant to which the Notes are being issued, as amended or supplemented from time to time, in accordance with the terms thereof.

“Initial Shelf Registration:” See Section 3(a).

“Losses:” See Section 8(a).

“Maximum Contribution Amount:” See Section 8(d).

“NASD:” The National Association of Securities Dealers, Inc.

“Participating Broker-Dealer:” See Section 2(f).

“Person:” An individual, trustee, corporation, limited liability company, partnership, limited liability partnership, joint stock company, joint venture, trust, unincorporated organization or association, government or any agency or political subdivision thereof, union, business association, firm or other entity.

“Private Exchange:” See Section 2(g).

“Private Exchange Securities:” See Section 2(g).

“Prospectus:” The prospectus included in a Registration Statement at the time that such Registration Statement is declared effective (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Securities Act), as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Securities covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“Registrable Securities:” The Notes (together with the Guarantees); provided, however, that any such security shall cease to be a Registrable Security when (i) it has been exchanged for an Exchange Security in the Exchange Offer as contemplated in Section 2(a) (provided, that any Exchange Security that is included in a Prospectus for use in connection with resales by Participating Broker-Dealers shall be deemed to be a Registrable Security with respect to Sections 8 and 11 until resale of such Registrable Security has been effected pursuant to a “Plan of Distribution” within the Applicable Period; (ii) a Shelf Registration registering such security under the Securities Act has been declared or becomes effective and such security has been sold or otherwise transferred by the holder thereof pursuant to and in a manner contemplated by such effective Shelf Registration; (iii) such security is sold pursuant to Rule 144 under the Securities Act under circumstances in which any legend borne by such security relating to restrictions on

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transferability thereof, under the Securities Act or otherwise, is removed by the Issuers or pursuant to the Indenture; (iv) such security is eligible to be sold pursuant to paragraph (k) of Rule 144 under the Securities Act; or (v) such security shall cease to be outstanding.

“Registration Statement:” Any registration statement of the Issuers that covers any of the Securities and that is filed pursuant to the provisions of this Agreement, including the Prospectus included therein, all amendments and supplements to such registration statement and Prospectus (including post-effective amendments), all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference therein.

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

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

“Rule 415:” Rule 415 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

“SEC:” The Securities and Exchange Commission.

“Securities:” The Notes, the Private Exchange Securities and the Exchange Securities, collectively.

“Securities Act:” The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Shelf Effectiveness Date:” With respect to a Shelf Registration, the 60th day after the filing of such Shelf Registration.

“Shelf Filing Date:” With respect to a Shelf Registration, the 30th day following (i) in the case of an Initial Shelf Registration, delivery of the Shelf Notice triggering the obligation to file such Initial Shelf Registration, and (ii) in the case of a Subsequent Shelf Registration, the cessation of effectiveness of the prior Shelf Registration; provided, however, that if the Shelf Filing Date would otherwise fall on a day that is not a Business Day, then the Shelf Filing Date shall be the next succeeding Business Day.

“Shelf Notice:” See Section 2(i).

“Shelf Registration:” The Initial Shelf Registration and any Subsequent Shelf Registration.

“Special Counsel:” Counsel chosen by the holders of a majority in aggregate principal amount of Securities.

“Subsequent Shelf Registration:” See Section 3(b).

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“TIA:” The Trust Indenture Act of 1939, as amended.

“Trustee:” The trustee under the Indenture and, if any, the trustee under any indenture governing the Exchange Securities or the Private Exchange Securities.

“Underwritten Registration or Underwritten Offering:” A registration in which securities of the Issuers are sold to an underwriter for reoffering to the public.

“Weekly Liquidated Damages Amount”: With respect to any Event, an amount per week per $1,000 principal amount of Registrable Securities equal to $0.05 for the first 90-day period immediately following the applicable Event Date, increasing by an additional $0.05 per week per $1,000 principal amount of Registrable Securities with respect to each subsequent 90-day period, up to a maximum amount of $0.25 per week per $1,000 principal amount of Registrable Securities.

2. Exchange Offer.

(a) The Issuers and the Guarantors shall:

(i) prepare and file with the SEC promptly after the date hereof, but in no event later than the Filing Date, a registration statement (the “Exchange Offer Registration Statement”) on an appropriate form under the Securities Act with respect to a proposed offer (the “Exchange Offer”) to the Holders to exchange any and all of the Notes for a like principal amount of Exchange Securities;

(ii) use their respective reasonable best efforts to cause the Exchange Offer Registration Statement to become effective under the Securities Act as promptly as practicable after the filing thereof, but in no event later than the Effectiveness Date;

(iii) keep the Exchange Offer Registration Statement effective until the consummation of the Exchange Offer pursuant to its terms; and

(iv) unless the Exchange Offer would not be permitted by a policy of the SEC, use their respective reasonable best efforts to commence the Exchange Offer and to, on or prior to 45 days after the Exchange Offer Registration Statement is declared effective, consummate the Exchange Offer and issue Exchange Securities in exchange for all Notes validly tendered and not withdrawn prior thereto in the Exchange Offer.

The Exchange Offer shall not be subject to any conditions, other than (i) that the Exchange Offer does not violate Applicable Law or any applicable interpretation of the staff of the SEC, and (ii) no action or proceeding shall have been instituted in any court or by any governmental agency which might materially impair the ability of the Issuers or the Guarantors to proceed with the Exchange Offer or, if required to be made pursuant to Section 2(g), the Private Exchange.

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(b) The Exchange Securities shall be issued under, and entitled to the benefits of, the Indenture or a trust indenture that is substantially identical to the Indenture (other than such changes as are necessary to comply with any requirements of the SEC to effect or maintain the qualification thereof under the TIA).

(c) In connection with the Exchange Offer, the Issuers and the Guarantors shall:

(i) mail, or cause to be mailed, to each Holder of record entitled to participate in the Exchange Offer a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal that is an exhibit to the Exchange Offer Registration Statement, and any related documents;

(ii) use their respective reasonable best efforts to keep the Exchange Offer open for not less than 20 Business Days after the date notice thereof is mailed to the Holders (or longer if required by Applicable Law);

(iii) utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New York;

(iv) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York time, on the last Business Day on which the Exchange Offer shall remain open; and

(v) otherwise comply in all material respects with all laws applicable to the Exchange Offer.

(d) As soon as practicable after the close of the Exchange Offer, the Issuers and the Guarantors shall:

(i) subject to Section 2(i) hereof, accept for exchange all Notes validly tendered and not validly withdrawn pursuant to the Exchange Offer and the Private Exchange, if any;

(ii) deliver to the Trustee for cancellation all Notes so accepted for exchange; and

(iii) cause the Trustee promptly to authenticate and deliver to each Holder of Notes, Exchange Securities equal in aggregate principal amount to the Notes of such Holder so accepted for exchange; provided, that, in the case of any Notes held in global form by a depositary, authentication and delivery to such depositary of one or more replacement Exchange Securities in global form in an equivalent principal amount thereto for the account of such Holders in accordance with the Indenture shall satisfy such authentication and delivery requirement.

(e) Interest on each Exchange Security and each Private Exchange Security will accrue from the last interest payment date on which interest was paid on the Notes surrendered in exchange therefor or, if no interest has been paid on the Notes, from the date of original issue of the Notes. Each Exchange Security and each Private Exchange Security shall bear interest at the

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rate set forth thereon; provided, that interest with respect to the period prior to the issuance thereof shall accrue at the rate or rates borne by the Notes surrendered in exchange therefor from time to time during such period.

(f) The Issuers and the Guarantors shall include a “Plan of Distribution” section in the Prospectus contained in the Exchange Offer Registration Statement and indicate therein that (i) any broker or dealer registered under the Exchange Act that holds Notes that were acquired for its own account as a result of market-making activities or other trading activities (other than Notes acquired directly from the Issuers or any Affiliate of the Issuers) (a “Participating Broker-Dealer”) may exchange such Notes pursuant to the Exchange Offer, however, such Participating Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with its initial sale of any Exchange Securities received by such Participating Broker-Dealer in the Exchange Offer and (ii) the Prospectus contained in the Exchange Offer Registration Statement may be used to satisfy such prospectus delivery requirement. Such “Plan of Distribution” section shall also contain all other information with respect to such sales by such Participating Broker-Dealers that the SEC may require in order to permit such sales pursuant thereto, but such “Plan of Distribution” shall not name any such Participating Broker-Dealer or disclose the amount of Notes held by any such Participating Broker-Dealer, except to the extent required by the SEC. See the Shearman & Sterling no-action letter (available July 2, 1993). Such “Plan of Distribution” section shall also allow, to the extent and in the manner permitted by applicable policies and regulations of the SEC, the use of the Prospectus by all other Persons subject to the prospectus delivery requirements of the Securities Act. The Issuers and the Guarantors shall use their respective reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective and to amend and supplement the Prospectus in order to permit such Prospectus to be lawfully delivered by all Participating Broker-Dealers and other Persons subject to the prospectus delivery requirement of the Securities Act for such period of time as such Participating Broker-Dealers and Persons must comply with such requirements in order to resell the Exchange Securities (the “Applicable Period”).

(g) If, prior to consummation of the Exchange Offer, the Initial Purchaser holds any Notes acquired by it and having the status as an unsold allotment in the initial distribution of the Notes, the Issuers and the Guarantors shall, upon the request of the Initial Purchaser, simultaneously with the delivery of the Exchange Securities in the Exchange Offer, issue (pursuant to the same indenture as the Exchange Securities and subject to transfer restrictions thereon) and deliver to the Initial Purchaser, in exchange for such Notes held by the Initial Purchaser (the “Private Exchange”), a like principal amount of debt securities of the Issuers, including guarantees endorsed thereon (the “Private Exchange Securities”), that are substantially identical to the Exchange Securities except for the placement of a restrictive legend on such Private Exchange Securities. The Private Exchange Securities shall be issued pursuant to the same Indenture as the Exchange Securities and shall bear the same CUSIP number as the Exchange Securities.

(h) Each Person (including, without limitation, each Participating Broker-Dealer) participating in the Exchange Offer will be required to represent to the Issuers and the Guarantors in writing (which may be contained in the applicable letter of transmittal) prior to consummation of the Exchange Offer that: (i) any Exchange Securities acquired by such Person

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in the Exchange Offer will be acquired in its ordinary course of business; (ii) at the time of commencement and at the time of consummation of the Exchange Offer, such Person had and will have no arrangement or understanding with any other Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities to be received in the Exchange Offer in violation of the Securities Act; (iii) if such Person is not a Participating Broker-Dealer, it is not engaged in and does not intend to engage in, the distribution of the Exchange Securities; (iv) if such Person is a Participating Broker-Dealer, (A) it acquired the Notes for its own account as a result of market-making activities or other trading activities, (B) it may be deemed to be a statutory underwriter under the Securities Act and (C) will comply with the applicable provisions of the Securities Act (including, without limitation, the prospectus delivery requirements thereunder) in connection with any resale of Exchange Securities to be received in the Exchange Offer in exchange for such Notes; and (v) such Person is not an “affiliate” (as defined in Rule 405 of the Securities Act) of either of the Issuers or, if it is an “affiliate” (as defined in Rule 405 of the Securities Act) of either of the Issuers, that it will comply with the registration and prospectus delivery requirements of the Securities Act applicable to it. See the Exxon Holdings Capital Corp. no-action letter (available May 13, 1988), the Morgan Stanley & Co. Incorporated no-action letter (available June 5, 1991) and the Shearman & Sterling no-action letter (available July 2, 1993).

(i) If: (i) prior to the consummation of the Exchange Offer, either of the Issuers or the Holders of a majority in aggregate principal amount of Registrable Securities determines in its or their reasonable judgment that (A) the Exchange Securities would not, upon receipt, be tradeable by the Holders thereof without restriction under the Securities Act and the Exchange Act and without material restrictions under applicable Blue Sky or state securities laws, or (B) the interests of the Holders under this Agreement, taken as a whole, would be materially adversely affected by the consummation of the Exchange Offer; (ii) applicable interpretations of the staff of the SEC would not permit the consummation of the Exchange Offer prior to the Effectiveness Date; (iii) subsequent to the consummation of the Private Exchange, any Holder of Private Exchange Securities so requests; (iv) the Exchange Offer is not consummated within 225 days of the Closing Date for any reason; or (v) in the case of (A) any Holder not permitted to participate in the Exchange Offer (including any broker-dealer that holds Notes acquired directly from the Issuers or any of their respective affiliates that is not permitted to participate in the Exchange Offer), or (B) any Holder participating in the Exchange Offer that receives Exchange Securities that may not be sold without restriction under state and federal securities laws (other than due solely to the status of such Holder as an affiliate of either of the Issuers within the meaning of the Securities Act) and, in each such case contemplated by this clause (v), such Holder notifies the Issuers within six months of consummation of the Exchange Offer, then the Issuers shall promptly deliver to the Holders (or in the case of an occurrence of any event described in clause (v) of this Section 2(i), to any such Holder) and the Trustee notice thereof (the “Shelf Notice”) and shall as promptly as practicable thereafter (but in no event later than the Shelf Filing Date) file an Initial Shelf Registration pursuant to Section 3.

3. Shelf Registration.

If a Shelf Notice is required to be delivered pursuant to clause (i), (ii), (iii) or (iv) of Section 2(i), then this Section 3 shall apply to all Registrable Securities. Otherwise, upon consummation of the Exchange Offer in accordance with Section 2, the provisions of this

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Section 3 shall apply solely with respect to (i) Notes held by any Holder thereof not permitted to participate in the Exchange Offer, (ii) Notes held by any broker-dealer that acquired such Notes directly from the Issuers or any of their respective affiliates, and (iii) Exchange Securities that are not freely tradeable, in each case, as contemplated by clause (v) of Section 2(i), provided that the relevant Holder has duly notified the Issuers within six months of consummation of the Exchange Offer as required by clause (v) of Section 2(i).

(a) Initial Shelf Registration. The Issuers and the Guarantors shall prepare and file with the SEC a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the Registrable Securities (the “Initial Shelf Registration”). If the Issuers and the Guarantors have not filed an Exchange Offer Registration Statement, the Issuers and the Guarantors shall file with the SEC the Initial Shelf Registration on or prior to the Filing Date. Otherwise, the Issuers and the Guarantors shall file with the SEC the Initial Shelf Registration as promptly as practicable following the delivery of the Shelf Notice, but in no event later than the Shelf Filing Date. The Initial Shelf Registration shall be on Form S-1 or another appropriate form permitting registration of such Registrable Securities for resale by such Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings). The Issuers and the Guarantors (i) shall not permit any securities other than the Registrable Securities to be included in any Shelf Registration, and (ii) shall use their respective reasonable best efforts to cause the Initial Shelf Registration to be declared effective under the Securities Act no later than the Shelf Effectiveness Date and to keep the Initial Shelf Registration continuously effective under the Securities Act until the date that is 24 months after the date it is declared effective (subject to extension pursuant to the last paragraph of Section 6) (the “Effectiveness Period”), or such shorter period ending when (i) all Registrable Securities covered by the Initial Shelf Registration have been sold in the manner set forth and as contemplated in the Initial Shelf Registration, or (ii) a Subsequent Shelf Registration covering all of the Registrable Securities has been declared effective under the Securities Act or (iii) there cease to be any outstanding Registrable Securities; provided, however, that the Effectiveness Period shall be reduced to the extent that the applicable provisions of Rule 144(k) under the Securities Act are amended or revised to reduce the two year holding period set forth therein.

(b) Subsequent Shelf Registrations. If any Shelf Registration ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all of the Registrable Securities registered thereunder), the Issuers and the Guarantors shall use their respective reasonable best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within 30 days of such cessation of effectiveness file an amendment to the Shelf Registration in a manner reasonably expected to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional “shelf” Registration Statement pursuant to Rule 415 covering all of the Registrable Securities (a “Subsequent Shelf Registration”). If a Subsequent Shelf Registration is filed, the Issuers and the Guarantors shall use their respective reasonable best efforts to cause the Subsequent Shelf Registration to be declared effective as promptly as practicable after such filing and to keep such Subsequent Shelf Registration continuously effective for a period equal to the number of days in the Effectiveness Period less the aggregate number of days during which the Initial Shelf Registration, and any previously filed Subsequent Shelf Registration, was previously effective.

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4. Liquidated Damages.

(a) The Issuers and the Guarantors acknowledge and agree that the Holders will suffer damages, and that it would not be feasible to ascertain the extent of such damages with precision, if the Issuers and the Guarantors fail to fulfill their respective obligations under Sections 2 and 3. Accordingly, in the event of such failure, the Issuers and the Guarantors jointly and severally agree to pay liquidated damages to each Holder under the circumstances and to the extent set forth below:

(i) if the Exchange Offer Registration Statement has not been filed with the SEC on or prior to the Filing Date;

(ii) if the Exchange Offer Registration Statement is not declared effective by the SEC on or prior to the Effectiveness Date; or

(iii) if obligated to make the Exchange Offer pursuant to this Agreement, if the Issuers and the Guarantors have not exchanged Exchange Securities for all Notes validly tendered in accordance with the terms of the Exchange Offer within 45 days after the date on which the Exchange Offer Registration Statement is declared effective by the SEC;

(iv) if obligated to file an Initial Shelf Registration and the Issuers and the Guarantors fail to file such Initial Shelf Registration with the SEC on or prior to Shelf Filing Date;

(v) if an Initial Shelf Registration is filed and such Initial Shelf Registration is not declared effective on or prior to the Shelf Effectiveness Date; or

(vi) if a Shelf Registration is filed and declared effective by the SEC but thereafter shall either be withdrawn by the Issuers or shall become subject to an effective stop order issued pursuant to Section 8(d) of the Securities Act suspending the effectiveness of such Registration Statement without being succeeded within 30 days by a Subsequent Shelf Registration filed and declared effective;

(each of the foregoing an “Event,” and the date on which the Event occurs being referred to herein as an “Event Date”).

Upon the occurrence of any Event, the Issuers shall pay, or cause to be paid (and the Guarantors hereby guarantee the payment of), in addition to amounts otherwise due under the Indenture and the Registrable Securities, as liquidated damages, and not as a penalty, to each Holder for each weekly period beginning on the Event Date an amount equal to the Weekly Liquidated Damages Amount per $1,000 principal amount of Registrable Securities held by such Holder, it being understood that the Issuers shall in no event be required to pay the Weekly Liquidated Damages Amount for more than one Event at any given time; provided, that such liquidated damages will, in each case, cease to accrue (subject to the occurrence of another Event) on the date on which all Events have been cured. An Event under clause (i) above shall be cured on the date that the Exchange Offer Registration Statement (or, if an Initial Shelf Registration is required to be filed pursuant to clause (i), (ii) or (iii) of Section 2(i), the date that such Initial Shelf Registration) is filed with the SEC; an Event under clause (ii) above shall be

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cured on the date that the Exchange Offer Registration Statement (or, if an Initial Shelf Registration is required to be filed pursuant to clause (i), (ii) or (iii) of Section 2(i), the date that such Initial Shelf Registration) is declared effective by the SEC; an Event under clause (iii) above shall be cured on the earlier of the date (A) the Exchange Offer is consummated with respect to all Notes validly tendered and not withdrawn or (B) the Issuers deliver a Shelf Notice to the Holders and the Trustee pursuant to clause (i), (ii) or (iii) of Section 2(i); an Event under clause (iv) above shall be cured on the date that such Initial Shelf Registration is filed with the SEC; an Event under clause (v) above shall be cured on the date that such Initial Shelf Registration is declared effective by the SEC; and an Event under clause (vi) above shall be cured on the earlier of (1) the date on which the applicable Shelf Registration is no longer subject to an order suspending the effectiveness thereof or proceedings relating thereto or (2) a new Subsequent Shelf Registration is declared effective.

(b) The Issuers shall notify the Trustee within five Business Days after each Event Date. The Issuers shall pay the liquidated damages due on the Registrable Securities by depositing with the Trustee, in trust, for the benefit of the Holders thereof, by 12:00 noon, New York City time, on or before the applicable semi-annual interest payment date for the Registrable Securities, immediately available funds in sums sufficient to pay the liquidated damages then due. The liquidated damages amount due shall be payable in the same manner as interest payments on the Notes on each interest payment date to the record Holder entitled to receive the interest payment to be made on such date as set forth in the Indenture.

5. Gaming Consents.

Prior to consummating the Exchange Offer or filing the Initial Shelf Registration, as the case may be, the Issuers and the Guarantors shall make or obtain all Permits necessary in the Issuers’ reasonable judgment for the consummation of the transactions contemplated hereby.

6. Registration Procedures.

In connection with the registration of any Securities pursuant to Section 2 or 3, the Issuers and the Guarantors shall effect such registrations to permit the sale of such Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Issuers and the Guarantors shall:

(a) Prepare and file with the SEC, as soon as practicable after the date hereof but in any event on or prior to the Filing Date, with respect to an Exchange Offer Registration Statement, and on or prior to the Shelf Filing Date, with respect to a Shelf Registration, as prescribed by Sections 2 and 3, respectively, and use their respective reasonable best efforts to cause each such Registration Statement to become effective and remain continuously effective as provided in this Agreement; provided, that if (i) such filing is pursuant to Section 3 or (ii) a Prospectus contained in an Exchange Offer Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, (A) the Issuers shall notify the Holders of the Registrable Securities covered by such Registration Statement, their Special Counsel (if

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the Issuers have been notified of the identity of such Special Counsel), each Participating Broker-Dealer, the managing underwriters, if any, and their counsel (if the Issuers have been notified of the identity of such counsel) of such filing at least five Business Days prior to making such filing, (B) if requested, the Issuers and the Guarantors shall furnish to and afford the Holders of the Registrable Securities covered by such Registration Statement, their Special Counsel, each Participating Broker-Dealer, the managing underwriters, if any, and their counsel a reasonable opportunity to review, and shall make available for inspection by such Persons, copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed and such financial and other information and books and records of the Issuers and the Guarantors, as shall be reasonably necessary, in the opinion of Special Counsel and the respective counsels to such Participating Broker-Dealers and underwriters, to conduct a reasonable due diligence investigation within the meaning of the Securities Act, and (C) the Issuers and the Guarantors shall use their respective reasonable best efforts to cause the members, managers, officers, directors and employees of the Issuers and the Guarantors, and counsel and independent certified public accountants of the Issuers and the Guarantors, to respond to such inquiries, as shall be necessary, in the opinion of Special Counsel and the respective counsels to such Participating Broker-Dealers and underwriters, to conduct a reasonable due diligence investigation within the meaning of the Securities Act. The Issuers and the Guarantors may require each Holder, and each of such Holder’s agents and representatives to agree to keep confidential any non-public information relating to the Issuers and the Guarantors received by such Holder or such agent or representative and not to disclose such information (other than to an affiliate or prospective purchaser who agrees to respect the confidentiality provisions of this Section 6(a)) until such information has been made generally available to the public unless the release of such information is required by law or necessary to respond to inquiries of regulatory authorities. The Issuers and the Guarantors shall not file any Registration Statement or Prospectus or any amendments or supplements thereto which the Holders must be afforded an opportunity to review prior to the filing of such document, if the Holders of a majority in aggregate principal amount of the Registrable Securities covered by such Registration Statement, their Special Counsel, any Participating Broker-Dealer or the managing underwriters, if any, or their counsel shall reasonably object to such filing within five Business Days after receipt of the Issuers’ notice of filing described above in this Section 6(a).

(b) Provide an indenture trustee for the Registrable Securities or the Exchange Securities, as the case may be, and cause the Indenture (or other indenture relating to the Registrable Securities) to be qualified under the TIA not later than the effective date of the first Registration Statement; in connection therewith, effect such changes to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use their respective reasonable best efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner.

(c) Prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement as may be necessary in order to cause the

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Registration Statement to become effective and to keep such Registration Statement continuously effective for the time periods required hereby; cause the related Prospectus to be supplemented by any prospectus supplement required by Applicable Law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act, and comply fully with Rules 424, 430A and 462, as applicable, under the Securities Act in a timely manner; and comply in all material respects with the provisions of the Securities Act and the Exchange Act applicable thereto with respect to the disposition of all securities covered by such Registration Statement, as so amended, or in such Prospectus, as so supplemented, in accordance with the intended methods of distribution set forth in such Registration Statement, as so amended, and such Prospectus, as so supplemented.

(d) Furnish to such selling Holders and Participating Broker-Dealers who so request (i) upon the Issuers’ receipt, a copy of the order of the SEC declaring such Registration Statement and any post-effective amendment thereto effective, (ii) such reasonable number of copies of such Registration Statement and of each amendment and supplement thereto (in each case including any documents incorporated therein by reference and all exhibits (including exhibits incorporated by reference) to such Registration Statement and each such amendment and supplement), (iii) such reasonable number of copies of the Prospectus included in such Registration Statement (including each preliminary prospectus and each supplement thereto), and such reasonable number of copies of the final Prospectus as filed by the Issuers and the Guarantors pursuant to Rule 424(b) under the Securities Act, in conformity with the requirements of the Securities Act, and (iv) any amendments and supplements required to be filed pursuant to Section 6(c) and any documents incorporated therein by reference and all exhibits thereto, including exhibits incorporated by reference, as such Person may reasonably request. Subject to the last paragraph of this Section 6, the Issuers and the Guarantors hereby consent to the use of the Prospectus by each of the selling Holders of Registrable Securities and by each such Participating Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers (if any), in connection with the offering and sale of the Registrable Securities covered by, or the sale by Participating Broker-Dealers of the Exchange Securities pursuant to, such Prospectus and any amendment or supplement thereto.

(e) If (A) a Shelf Registration is filed pursuant to Section 3 or (B) a Prospectus contained in an Exchange Offer Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, notify the selling Holders of Registrable Securities, their Special Counsel (if the Issuers have been notified of the identity of such Special Counsel), each Participating Broker-Dealer and the managing underwriters, if any, promptly (but in any event within two Business Days), and, if requested by such Person, confirm such notice in writing, (i) when a Prospectus or any prospectus supplement or Registration Statement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective under the Securities Act, (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any Prospectus or the

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initiation of any proceedings for that purpose, (iii) if, at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Securities, the representations and warranties of the Issuers and the Guarantors contained in any agreement (including any underwriting agreement) contemplated by Section 6(n) below cease to be true and correct in any material respect, (iv) of the receipt by the Issuers or any of the Guarantors of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Securities or the Exchange Securities to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction, or the contemplation, initiation or threatening of any proceeding for such purpose, (v) of the happening of any event that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference to be untrue in any material respect or that requires the making of any additions to or changes in such Registration Statement, Prospectus or documents so that it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made, not misleading, (vi) of the Issuers’ and the Guarantors’ reasonable determination that a post-effective amendment to a Registration Statement would be appropriate, and (vii) of any written request by the SEC for post-effective amendments to the Registration Statement or supplements to the Prospectus.

(f) Use their respective reasonable best efforts to register or qualify, and, if applicable, to cooperate with the selling Holders of Registrable Securities, the underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of, Registrable Securities to be included in a Registration Statement for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer or the managing underwriters reasonably request in writing; and, if Securities are offered other than through an Underwritten Offering, the Issuers and the Guarantors shall cause their respective counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed pursuant to this Section 6(f) at the expense of the Issuers and the Guarantors; keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Securities covered by the applicable Registration Statement; provided, however, that none of the Issuers or the Guarantors shall be required to (i) register or qualify generally to do business in any jurisdiction where it is not then so qualified, (ii) take any action that would subject it to general service of process in any jurisdiction where it is not then so subject or (iii) take any action that would subject it to general taxation in respect of doing business in any such jurisdiction where it is not then so subject.

(g) Use their respective reasonable best efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Securities for sale in any jurisdiction, and, if any such order is

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issued, use their respective reasonable best efforts to obtain the withdrawal or lifting of any such order at the earliest possible time.

(h) If (i) a Shelf Registration is filed pursuant to Section 3 or (ii) a Prospectus contained in an Exchange Offer Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, and if requested by the managing underwriters, if any, such Participating Broker-Dealer or the Holders of a majority in aggregate principal amount of the Registrable Securities, (A) promptly incorporate in a Prospectus supplement or post-effective amendment such information as the managing underwriters, if any, or such Holders reasonably request to be included therein as required to comply with any Applicable Law and (B) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Issuers and the Guarantors have received notification of such matters required by Applicable Law to be incorporated in such Prospectus supplement or post-effective amendment.

(i) If (i) a Shelf Registration is filed pursuant to Section 3 or (ii) a Prospectus contained in an Exchange Offer Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, cooperate with the selling Holders, such Participating Broker-Dealer and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company (“DTC”); and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters, if any, such Participating Broker-Dealer or the Holders may request.

(j) If (i) a Shelf Registration is filed pursuant to Section 3 or (ii) a Prospectus contained in an Exchange Offer Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, upon the occurrence of any event contemplated by Section 6(e)(v), 6(e)(vi) or 6(e)(vii), as promptly as practicable prepare a post-effective amendment to the Registration Statement, a supplement to the related Prospectus or a supplement or amendment to any such document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder or to the purchasers of the Exchange Securities to whom such Prospectus will be delivered by a Participating Broker-Dealer, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and, if SEC review is required, use their respective reasonable best efforts to cause such post-effective amendment to be declared effective as soon as practicable.

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(k) Use their respective reasonable best efforts to cause the Securities covered by a Registration Statement to be rated with the appropriate rating agencies, if appropriate, and if so requested by the Holders of a majority in aggregate principal amount of Securities covered by such Registration Statement or the managing underwriters, if any.

(l) Prior to the effective date of the first Registration Statement relating to the Securities, (i) provide the applicable trustee with printed certificates for the Securities in a form eligible for deposit with DTC and (ii) provide a CUSIP number for each of the Securities.

(m) Use their respective commercially reasonable efforts to cause all Securities covered by such Registration Statement to be listed on each securities exchange, if any, on which similar debt securities issued by the Issuers are then listed.

(n) If a Shelf Registration is filed pursuant to Section 3, enter into such agreements (which, if such Shelf Registration is an Underwritten Offering, shall include an underwriting agreement in form, scope and substance as is customary in Underwritten Offerings) and take all such other reasonable actions in connection therewith (including those reasonably requested by the managing underwriters, if the offering is an Underwritten Offering, or the Holders of a majority in aggregate principal amount of Registrable Securities being sold, if the offering is not an Underwritten Offering) in order to expedite or facilitate the registration or the disposition of such Registrable Securities, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, (i) make such representations and warranties to the Holders, if the offering is not an Underwritten Offering, or the underwriters, if the offering is an Underwritten Offering, with respect to the business of the Issuers and their respective subsidiaries, if any, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by Issuers to underwriters in Underwritten Offerings of debt securities similar to the Securities, and confirm the same if and when reasonably requested; (ii) obtain opinions of counsel to the Issuers and the Guarantors and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if the offering is an Underwritten Offering, or the Holders of a majority in aggregate principal amount of the Registrable Securities being sold, if the offering is not an Underwritten Offering, provided, that with respect to the Holders of a majority in aggregate principal amount of the Registrable Securities being sold, such opinion shall be deemed to be reasonably satisfactory to such Holders if such Holders do not provide to the Issuers written notice of their objection to such opinion within five Business Days after their receipt of such opinion), addressed to each selling Holder and each of the underwriters, if any, covering the matters customarily covered in opinions requested in Underwritten Offerings of debt securities similar to the Securities; (iii) obtain “cold comfort” letters and updates thereof (which letters and updates (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters) from the independent certified public accountants of the Issuers and the Guarantors (and, if necessary, any other independent certified public accountants of any subsidiary of the

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Issuers or of any business acquired by the Issuers for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each selling Holder and each of the underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with Underwritten Offerings of debt securities similar to the Securities; and (iv) deliver such documents and certificates as may be reasonably requested by the Holders of a majority in principal amount of the Registrable Securities being sold, if the offering is not an Underwritten Offering, or the managing underwriters, if the offering is an Underwritten Offering, to evidence the continued validity of the representations and warranties of the Issuers and the Guarantors and their respective subsidiaries, if any, made pursuant to clause (i) above and to evidence compliance with any conditions contained in the underwriting agreement or other similar agreement entered into by the Issuers and the Guarantors.

(o) Comply with all applicable rules and regulations of the SEC and make generally available to their respective security holders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing on the first day of the fiscal quarter following each fiscal quarter in which Registrable Securities are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Issuers after the effective date of a Registration Statement, which statements shall cover said 12-month periods.

(p) Upon consummation of an Exchange Offer or Private Exchange, obtain an opinion of counsel to the Issuers and the Guarantors (in form, scope and substance reasonably satisfactory to the Initial Purchaser), addressed to the Trustee for the benefit of all Holders participating in the Exchange Offer or Private Exchange, as the case may be, to the effect that (i) the Issuers and the Guarantors have duly authorized, executed and delivered the Exchange Securities or the Private Exchange Securities, as the case may be, and the Indenture, (ii) the Exchange Securities or the Private Exchange Securities, as the case may be, and the Indenture constitute legal, valid and binding obligations of the Issuers and the Guarantors, enforceable against the Issuers and the Guarantors in accordance with their respective terms and (iii) all obligations of the Issuers and the Guarantors under the Exchange Securities or the Private Exchange Securities, as the case may be, and the Indenture are secured by Liens (as defined in the Indenture) on the assets securing the obligations of the Issuers and the Guarantors under the Notes and the Indenture immediately prior to the consummation of such Exchange Offer or Private Exchange, as the case may be, in the case of each of clauses (i), (ii) and (iii), subject to customary exceptions, assumptions and qualifications.

(q) If an Exchange Offer or Private Exchange is to be consummated, upon delivery of the Registrable Securities by such Holders to the Issuers and the Guarantors (or to such other Person as directed by the Issuers and the Guarantors) in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, the Issuers and the Guarantors shall request the Issuers’ exchange agent or transfer agent to mark on

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such Registrable Securities that such Registrable Securities are being cancelled in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, and that such Registrable Securities not be marked as paid or otherwise satisfied.

(r) Cooperate with each seller of Registrable Securities covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the NASD.

(s) Use their respective reasonable best efforts to take all other steps necessary to effect the registration of the Registrable Securities covered by a Registration Statement contemplated hereby.

The Issuers and the Guarantors may require each selling Holder of Registrable Securities as to which any registration is being effected (including, without limitation, any Shelf Registration) to furnish to the Issuers and Guarantors in writing such information regarding such selling Holder and the distribution of such Registrable Securities as the Issuers or the Guarantors may, from time to time, reasonably request, including the information specified in Item 507 or 508 of Regulation S-K, as applicable, under the Securities Act and any other information regarding such selling Holder and the distribution of such Registrable Securities required, in the opinion of counsel to the Issuers, under the securities laws to be included in the Registration Statement (the “SEC Required Information”). The Issuers and the Guarantors may exclude from any registration of Registrable Securities (including, without limitation, any Shelf Registration) the Registrable Securities of any selling Holder who fails to furnish to the Issuers, within 20 days after receipt of a written request therefor, the SEC Required Information. No such selling Holder shall be entitled to liquidated damages pursuant to Section 4 unless and until such selling Holder shall have provided the SEC Required Information. Each Holder whose Registrable Securities are to be included in a Shelf Registration Statement agrees to promptly furnish to the Issuers all additional information required to be disclosed in order to make the information previously furnished to the Issuers by such Holder not materially misleading.

Each Holder and each Participating Broker-Dealer agrees by acquisition of such Registrable Securities or Exchange Securities that, upon receipt of written notice from the Issuers and the Guarantors of the happening of any event of the kind described in Section 6(e)(ii), 6(e)(iv), 6(e)(v), 6(e)(vi) or 6(e)(vii), such Holder will forthwith discontinue disposition (in the jurisdictions specified in a notice of a 6(e)(iv) event, and elsewhere in a notice of a 6(e)(ii), 6(e)(v), 6(e)(vi) or 6(e)(vii) event) of such Securities covered by such Registration Statement or Prospectus until the earlier of (i) such Holder’s receipt of the copies of the amended or supplemented Prospectus contemplated by Section 6(j); or (ii) the time such Holder is advised in writing (the “Advice”) by the Issuers and the Guarantors that offers or sales in a particular jurisdiction may be resumed, or that the use of the applicable Prospectus may be resumed, as the case may be, and has received copies of any amendments or supplements thereto. If the Issuers and the Guarantors shall give such notice, each of the Effectiveness Period and the Applicable Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each seller of such Securities covered by such Registration Statement shall have received (x) the copies of the amended or supplemented Prospectus contemplated by Section 6(j) or (y) the Advice.

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7. Registration Expenses.

(a) All fees and expenses incident to the performance of or compliance with this Agreement by the Issuers and the Guarantors shall be borne by the Issuers and the Guarantors whether or not the Exchange Offer is consummated or the Exchange Offer Registration Statement or a Shelf Registration is filed or becomes effective, including, without limitation:

(i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the NASD and (B) fees and expenses of compliance with state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of counsel in connection with Blue Sky qualifications of the Registrable Securities or Exchange Securities and determination of the eligibility of the Registrable Securities or Exchange Securities for investment under the laws of such jurisdictions (x) where the Holders are located, in the case of the Exchange Securities, or (y) as provided in Section 6(f), in the case of Registrable Securities or Exchange Securities to be sold by a Participating Broker-Dealer during the Applicable Period));

(ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities or Exchange Securities in a form eligible for deposit with DTC and of printing prospectuses if the printing of prospectuses is requested by the managing underwriters, if any, or, in respect of Registrable Securities or Exchange Securities to be sold by a Participating Broker-Dealer during the Applicable Period, by the Holders of a majority in aggregate principal amount of the Registrable Securities included in any Registration Statement or of such Exchange Securities, as the case may be);

(iii) messenger, telephone, duplication, word processing and delivery expenses incurred by the Issuers and the Guarantors in the performance of their obligations hereunder;

(iv) fees and disbursements of counsel for the Issuers, the Guarantors and, subject to Section 7(b), the Holders;

(v) fees and disbursements of all independent certified public accountants referred to in Section 6(n)(iii) (including, without limitation, the expenses of any special audit and “cold comfort” letters required by or incident to such performance);

(vi) fees and expenses of any “qualified independent underwriter” or other independent appraiser participating in an offering pursuant to Section 3 of Schedule E to the By-laws of the NASD, but only where the need for such a “qualified independent underwriter” arises due to a relationship with the Issuers and the Guarantors;

(vii) Securities Act liability insurance, if the Issuers and the Guarantors so desire such insurance

(viii) fees and expenses of all other Persons, including special experts, retained by the Issuers or the Guarantors; internal expenses of the Issuers and the Guarantors

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(including, without limitation, all salaries and expenses of their respective officers and employees performing legal or accounting duties), and the expenses of any annual audit; and

(ix) rating agency fees and the fees and expenses incurred in connection with the listing (if any) of the Securities to be registered on any securities exchange.

(b) The Issuers and the Guarantors shall reimburse the Holders for the reasonable fees and disbursements of not more than one counsel (in addition to appropriate local counsel) chosen by the Holders of a majority in aggregate principal amount of the Registrable Securities to be included in any Registration Statement and other reasonable and necessary out-of-pocket expenses of the Holders incurred in connection with the registration of the Registrable Securities.

8. Indemnification.

(a) Indemnification by the Issuers and the Guarantors. The Issuers and the Guarantors, jointly and severally, shall, without limitation as to time, indemnify and hold harmless each Holder and each Participating Broker-Dealer, each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act (any of such persons being hereinafter referred to as a “controlling person”)) each such Holder and any such Participating Broker-Dealer and the members, managers, officers, directors, partners, employees, representatives and agents of each such Holder, Participating Broker-Dealer and controlling person (collectively, the “Holder Indemnified Parties”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and reasonable attorneys’ fees) and expenses (including, without limitation, costs and expenses incurred in connection with investigating, preparing, pursuing or defending against any of the foregoing) (collectively, “Losses”), as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, preliminary prospectus, Prospectus or form of prospectus, or in any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that neither the Issuers nor the Guarantors shall be obligated to indemnify or hold harmless any Person pursuant to this Section 8 for any Losses insofar as such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, Prospectus or form of prospectus, or in any amendment or supplement thereto, in reliance upon or in conformity with information relating to such Holder or Participating Broker-Dealer and furnished in writing to the Issuers and the Guarantors by such Holder or Participating Broker-Dealer expressly for use therein. The Issuers and each of the Guarantors shall also indemnify underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their members, managers, officers, directors, agents and employees and each of their respective controlling persons to the same extent as provided above with respect to the indemnification of the Holder Indemnified Parties.

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(b) Indemnification by Holders of Registrable Securities. In connection with any Registration Statement, preliminary prospectus, Prospectus or form of prospectus, or any amendment or supplement thereto, in which a Holder is participating, such Holder shall furnish to the Issuers and the Guarantors in writing such information as the Issuers and the Guarantors reasonably request for use in connection with any such Registration Statement, preliminary prospectus, Prospectus or form of prospectus, any amendment or supplement thereto, and shall, severally and not jointly, without limitation as to time, indemnify and hold harmless the Issuers and the Guarantors, their respective members, managers, directors, officers, agents and employees, each controlling person of the Issuers or any of the Guarantors and the members, managers, directors, officers, partners, representatives, agents or employees of such controlling persons, to the fullest extent lawful, from and against any and all Losses, as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any such Registration Statement, preliminary prospectus, Prospectus or form of prospectus, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading to the extent, but only to the extent, that such untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact is contained in or omitted from any information so furnished in writing by such Holder to the Issuers and the Guarantors expressly for use in any Registration Statement, preliminary prospectus, Prospectus or form of prospectus, or any amendment or supplement thereto. In no event shall the liability of any selling Holder be greater in amount than such Holder’s Maximum Contribution Amount (as defined below).

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnification hereunder (an “indemnified party”), such indemnified party shall promptly notify the party or parties from which such indemnification is sought (the “indemnifying parties”) in writing; provided, that the failure to so notify the indemnifying parties shall not relieve the indemnifying parties from any obligation or liability except to the extent (but only to the extent) that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal) that the indemnifying parties have been prejudiced materially by such failure.

The indemnifying parties shall have the right, exercisable by giving written notice to an indemnified party, within 20 Business Days after receipt of written notice from such indemnified party of such Proceeding, to assume, at their expense, the defense of any such Proceeding; provided, that an indemnified party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless: (i) the indemnifying parties have agreed to pay such fees and expenses; (ii) the indemnifying parties shall have failed promptly to assume the defense of such Proceeding or shall have failed to employ counsel reasonably satisfactory to such indemnified party; or (iii) the named parties to any such Proceeding (including any impleaded parties) include both such indemnified party and one or more indemnifying parties (or any affiliates or controlling persons of any of the indemnifying parties), and such indemnified party shall have been advised by counsel that there may be one or more defenses available to such indemnified party that are in addition to, or in conflict with, those defenses available to the indemnifying party or such affiliate or controlling person (in which case, if such indemnified party notifies the indemnifying parties in writing that it elects to

21

employ separate counsel at the expense of the indemnifying parties, the indemnifying parties shall not have the right to assume the defense thereof and the reasonable fees and expenses of such counsel shall be at the expense of the indemnifying parties; it being understood, however, that, the indemnifying parties shall not, in connection with any one such Proceeding or separate but substantially similar or related Proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for such indemnified party).

No indemnifying party shall be liable for any settlement of any such Proceeding effected without its written consent, but if settled with its written consent, or if there be a final judgment for the plaintiff in any such Proceeding, each indemnifying party jointly and severally agrees, subject to the exceptions and limitations set forth above, to indemnify and hold harmless each indemnified party from and against any and all Losses by reason of such settlement or judgment. The indemnifying party shall not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to each indemnified party of a release, in form and substance reasonably satisfactory to the indemnified party, from all liability in respect of such Proceeding for which such indemnified party would be entitled to indemnification hereunder (whether or not any indemnified party is a party thereto).

(d) Contribution. If the indemnification provided for in this Section 8 is unavailable to an indemnified party or is insufficient to hold such indemnified party harmless for any Losses in respect of which this Section 8 would otherwise apply by its terms (other than by reason of exceptions provided in this Section 8), then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall have a joint and several obligation to contribute to the amount paid or payable by such indemnified party as a result of such Losses, (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party, on the one hand, and such indemnified party, on the other hand, from the sale of Registrable Securities, or (ii) if the allocation provided by clause (i) above is not permitted by Applicable Law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such indemnifying party, on the one hand, and indemnified party, on the other hand, shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent any such statement or omission. The amount paid or payable by an indemnified party as a result of any Losses shall be deemed to include any legal or other fees or expenses incurred by such party in connection with any Proceeding, to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in Section 8(a) or 8(b) was available to such party.

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The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 8(d), an indemnifying party that is a selling Holder shall not be required to contribute, in the aggregate, any amount in excess of such Holder’s Maximum Contribution Amount. A selling Holder’s “Maximum Contribution Amount” shall equal the excess, if any, of (i) the aggregate proceeds received by such Holder pursuant to the sale of the Registrable Securities giving rise to such indemnification obligation over (ii) the aggregate amount of damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(d) are several in proportion to the respective principal amount of the Registrable Securities held by each Holder hereunder and not joint. The Issuers’ obligations to contribute pursuant to this Section 8(d) are joint and several.

The indemnity and contribution agreements contained in this Section 8 are in addition to any liability that the indemnifying parties otherwise may have to the indemnified parties.

9. Rule 144 and Rule 144A.

Each of the Issuers covenants that (a) during any period that it is required to file reports under the Securities Act or the Exchange Act, it shall file all reports required to be filed by it in a timely manner in order to comply with the current public information requirements of Rule 144 under the Securities Act and (b) during any period that it is not required to file such reports, it shall, upon the request of any Holder, make available to each Holder or beneficial owner of Registrable Securities and to any prospective purchaser of Registrable Securities designated by such Holder or beneficial owner the information required by Rule 144A(d)(4) under the Securities Act. Each of the Issuers shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act pursuant to the exemptions provided by Rule 144 and Rule 144A, subject to the expiration of the holding period required for sales under Rule 144(k) under the Securities Act. Upon the written request of any Holder, each of the Issuers and the Guarantors shall deliver to such Holder a written statement as to whether such Issuer or Guarantor has complied with such information requirements. Nothing in this Section 9 shall be deemed to require the Issuers to register any Securities pursuant to the Exchange Act.

10. Underwritten Registrations.

If any of the Registrable Securities covered by any Shelf Registration are to be sold in an Underwritten Offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such Registrable Securities included in such offering and shall be reasonably acceptable to the Issuers.

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No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

11. Miscellaneous.

(a) Remedies. In the event of a breach by either of the Issuers or any of the Guarantors of any of their respective obligations under this Agreement, each Holder, in addition to being entitled to exercise all rights provided herein, in the Indenture or, in the case of the Initial Purchaser, in the Purchase Agreement, or granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Issuers and the Guarantors agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by either of the Issuers or any of the Guarantors of any of the provisions of this Agreement and hereby further agree that, in the event of any action for specific performance in respect of such breach, the Issuers and the Guarantors shall waive the defense that a remedy at law would be adequate.

(b) No Inconsistent Agreements. The Issuers and the Guarantors have not entered into, as of the date hereof, and shall not enter into, after the date of this Agreement, any agreement with respect to any of their respective securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.

(c) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, without the written consent of (i) the Issuers and (ii) the Holders of at least a majority of the then outstanding aggregate principal amount of Registrable Securities; provided, that Sections 4(a) and 8 shall not be amended, modified or supplemented, and waivers or consents to departures from this proviso may not be given, unless the Issuers have obtained the written consent of each Holder. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority in aggregate principal amount of the Registrable Securities being sold by such Holders pursuant to such Registration Statement; provided that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence.

(d) Notices. All notices and other communications (including, without limitation, any notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, certified first-class mail with return receipt requested, next-day air courier or facsimile:

(i) if to a Holder, at the most current address of such Holder as set forth on the register kept by the Registrar (as defined in the Indenture), with a copy to Skadden,

24

Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, California 90071, facsimile number (213) 687-5600, Attention: Nicholas P. Saggese, Esq.; and

(ii) if to either of the Issuers or any of the Guarantors, initially at P.O. Box 90270, Lafayette, Louisiana 80509-0270, facsimile number: (702) 247-6822, Attention: Michael S. Luzich, with a copy to Peninsula Gaming Partners, LLC, 7137 Mission Hills Drive, Las Vegas, Nevada 89113, facsimile number: (702) 247-6822, Attention: Michael S. Luzich, and an additional copy to Mayer, Brown, Rowe & Maw, 1675 Broadway, New York, New York 10019-5820, facsimile number: (212) 262-1910, Attention: Nazim Zilkha, Esq., and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 11(d).

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

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee under the Indenture at the address specified in the Indenture.

(e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, including without limitation and without the need for an express assignment, subsequent Holders.

(f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. When a reference is made in this Agreement to a Section, paragraph, subparagraph, Schedule or Exhibit, such reference shall mean a Section, paragraph, subparagraph, Schedule or Exhibit to this Agreement unless otherwise indicated. The words “include,” “includes,” and “including” when used in this Agreement shall be deemed in each case to be followed by the words “without limitation.” The phrases “the date of this Agreement,” “the date hereof,” and terms of similar import, unless the context otherwise requires, shall be deemed to refer to February 25, 2003. The words “hereof,” “herein,” “herewith,” “hereby” and “hereunder” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.

(h) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED, AND THE RIGHTS OF THE PARTIES SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING

25

WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND RULE 327(b) OF NEW YORK CIVIL PRACTICE LAWS AND RULES. EACH ISSUER AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH ISSUER AND EACH GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH ISSUER AND EACH GUARANTOR IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH ISSUER OR SUCH GUARANTOR, AS THE CASE MAY BE, AT ITS ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OTHER PARTY TO THIS AGREEMENT IN ANY OTHER JURISDICTION.

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

(j) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement, and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Issuers and the Guarantors in respect of securities sold pursuant to the Purchase Agreement. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

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(k) Securities Held By Either of the Issuers or their Respective Affiliates. Whenever the consent or approval of Holders of a specified percentage of the principal amount of Registrable Securities is required hereunder, Registrable Securities held by either of the Issuers or their respective affiliates (as such term is defined in Rule 405 under the Securities Act) (other than Holders deemed to be such affiliates solely by reason of their holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

[signature pages follow this page]

27

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

The Old Evangeline Downs, L.L.C.
By:	/s/    M. BRENT STEVENS
Name:	M. Brent Stevens
Title:	Chief Executive Officer

The Old Evangeline Downs Capital Corp.
By:	/s/    M. BRENT STEVENS
Name:	M. Brent Stevens
Title:	Chief Executive Officer

ACCEPTED AND AGREED TO:

Jefferies & Company, Inc.
By:	/s/    STEVE CROXTON
Name:	Steve Croxton
Title:	Managing Director

EX-4.3

Exhibit 4.3

EXHIBIT A

[FORM OF NOTE]

THE OLD EVANGELINE DOWNS, L.L.C.

THE OLD EVANGELINE DOWNS CAPITAL CORP.

13% [SERIES A] [SERIES B]¹ SENIOR SECURED NOTE  

DUE 2010 WITH CONTINGENT INTEREST

CUSIP:             

No. $                        

The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (the Company”) and The Old Evangeline Downs Capital Corp., a Delaware corporation (“Capital” and, together with the Company, the “Issuers” which term includes any successors under the Indenture hereinafter referred to), for value received, hereby promise to pay to Cede& Co, or registered assigns, the principal sum of              Dollars, on March 1, 2010.

Interest Payment Dates: March 1 and September 1, commencing September 1, 2003.

Record Dates: February 15 and August 15

Reference is made to the further provisions of this Note on the reverse side, which will, for all purposes, have the same effect as if set forth at this place.

Upon request, the Issuers will promptly make available to a holder of this Note information regarding the issue price, the amount of original issue discount, the issue date, and the yield to maturity of this Note. Holders should contact The Old Evangeline Downs, L.L.C., P.O. Box 90270, Lafayette, LA 70509-0270, Attention: Michael S. Luzich.

1. Series A should be replaced with Series B in the Exchange Notes.

A-1

IN WITNESS WHEREOF, the Issuers have caused this instrument to be duly executed.

THE OLD EVANGELINE DOWNS, L.L.C.,

a Louisiana limited liability company

By:

Name:

Title:

By:

Name:

Title:

THE OLD EVANGELINE DOWNS CAPITAL CORP.,

a Delaware corporation

By:

Name:

Title:

By:

Name:

Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes described in the within-mentioned Indenture.

U.S. BANK NATIONAL ASSOCIATION
By:
	Authorized Signatory

Dated:                

A-2

(Reverse of Note)

13% [Series A] [Series B]² Senior Secured Note due 2010 with Contingent Interest

[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 ISSUERS.]³

[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY A NOMINEE OF THE DEPOSITARY, TO THE DEPOSITARY OR 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

2. Series A should be replaced with Series B in the Exchange Notes.

3. To be included only on Global Notes deposited with DTC as Depositary.

A-3

AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]⁴

[THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM ACCRUING ON THIS NOTE.]⁵

4. To be included only on Global Notes deposited with DTC as Depositary.

5. To be included only on Reg S Temporary Global Notes.

A-4

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

A-5

THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER APPLICABLE JURISDICTION.]⁶

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

6. To be included only on Transfer Restricted Notes.

A-6

1. Interest. The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (the “Company”) and The Old Evangeline Downs Capital Corp., a Delaware corporation (“Capital” and, together with the Company, the “Issuers”), promise to pay Fixed Interest on the principal amount of this Note at 13% per annum from the Issue Date until maturity and shall pay the Liquidated Damages, if any, payable pursuant to Section 4 of the Registration Rights Agreement referred to below. The Issuers will pay Fixed Interest and Liquidated Damages, if any, semi-annually on March 1 and September 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). The first Interest Payment Date shall be September 1, 2003. Fixed Interest on the Notes will accrue from the most recent date to which Fixed Interest has been paid or, if no Fixed Interest has been paid, from the Issue Date; provided that if there is no existing Default in the payment of Fixed Interest, and if this Note is authenticated between an Interest Record Date (defined below) referred to on the face hereof and the next succeeding Interest Payment Date, Interest shall accrue from such next succeeding Interest Payment Date. The Issuers shall pay Fixed Interest (including Accrued Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate then in effect; it shall pay Fixed Interest (including Accrued Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue installments of Interest and Liquidated Damages, if any, (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

In addition, the Notes will bear Contingent Interest after the Casino begins Operating. Contingent Interest will be payable semi-annually in arrears on each Interest Payment Date to the Persons in whose names such Notes are registered at the close of business on the associated Interest Record Date, unless a portion of such Contingent Interest is permitted to be deferred. The Issuers may defer payment of a portion of accrued Contingent Interest otherwise due and payable and may continue to defer the payment of a portion of accrued Contingent Interest which has already been deferred (the aggregate amount of deferred Contingent Interest at any particular time “Deferred Contingent Interest”) if, and only to the extent that:

(a) the payment of that Deferred Contingent Interest on the applicable Interest Payment Date will cause the Issuers’ Adjusted Consolidated Coverage Ratio for the Reference Period immediately prior to the applicable Interest Payment Date, after giving effect on a pro forma basis to the payment of such Contingent Interest, to be less than 1.5 to 1.0; and

(b) the principal amount of the Notes corresponding to that Deferred Contingent Interest has not then matured and become due and payable, whether at Stated Maturity, upon acceleration, upon redemption, upon maturity of repurchase obligation or otherwise.

Deferred Contingent Interest will become due and payable, in whole or in part, upon the earlier of:

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(1) the next succeeding Interest Payment Date on which all or a portion of that Deferred Contingent Interest is not permitted to be deferred; and

(2) the maturity of the corresponding principal amount of the Notes, whether at Stated Maturity, upon acceleration, upon redemption or otherwise.

The amount of Contingent Interest payable for any period will be reduced pro rata for reductions in the outstanding principal amount of the Notes prior to the immediately preceding Interest Record Date. No interest will accrue on any Deferred Contingent Interest which does not become due and payable. Contingent Interest will accrue daily on the principal amount of each Note outstanding and shall be pro rated, based on a period of 180 days, for any partial semi-annual periods.

Each installment of Contingent Interest will be calculated to accrue:

(a) from, but not including, the most recent Interest Payment Date for which Contingent Interest has been paid or through which Contingent Interest had been calculated and deferred; or

(b) if no installment of Contingent Interest has been paid or deferred, from and including the date on which the Casino begins Operating, in the case of each of the preceding clauses (a) and (b) to, and including, the earlier of:

(i) the next Interest Payment Date if the corresponding principal amount of the Notes has not become due and payable; or

(ii) the date of payment if the corresponding principal amount of the Notes has become due and payable, whether at Stated Maturity, upon acceleration, upon redemption or otherwise.

2. Method of Payment. The Issuers will pay Interest on the Notes and Liquidated Damages, if any, to the Persons who are registered Holders of Notes at the close of business on the February 15 or August 15 next preceding the Interest Payment Date (each an “Interest Record Date”), even if such Notes are cancelled after such Interest Record Date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture (as defined below) with respect to defaulted interest. The Notes will be payable as to principal, Interest, premium, if any, and Liquidated Damages, if any, at the office or agency of the Issuers maintained within the City and State of New York for such purpose, or, at the option of the Issuers, payment of Interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds to an account within the United States will be required with respect to principal of and Interest, premium, if any, and Liquidated Damages, if any, on all Global Notes. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

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3. Paying Agent and Registrar. Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuers may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its subsidiaries may act in any such capacity.

4. Indenture. The Issuers issued the Notes under an Indenture, dated as of the Issue Date (“Indenture”), by and among the Issuers, the Guarantors party thereto and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms.

The Obligations under the Indenture, the Intercreditor Agreement, the Notes and the Guarantees thereof are secured by the Collateral described in the Collateral Agreements, subject to the provisions of such agreements. Holders are referred to the Collateral Agreements for a statement of such terms.

5. Optional Redemption.

(a) Except as set forth in clause (b) of this paragraph, the Issuers shall not have the right to redeem any Notes pursuant to this paragraph 5 prior to March 1, 2007. The Notes will be redeemable for cash at the option of the Issuers, in whole or in part, at any time on or after March 1, 2007 at the following redemption prices (expressed as percentages of the principal amount) if redeemed during the 12-month period commencing March 1 of the years indicated below, in each case together with accrued and unpaid Interest and Liquidated Damages, if any, thereon to the date of redemption of the Notes (the “Redemption Date”):

Year	Percentage
2007	106.50	%
2008	103.25	%
2009 and thereafter	100.00	%

(b) Notwithstanding the provisions of clause (a) of this paragraph, at any time on or prior to March 1, 2006, upon a Qualified Equity Offering, up to 35% of the aggregate principal amount of the Notes may be redeemed at the Issuers’ option within 120 days of such Qualified Equity Offering, with cash received by the Issuers from the Net Cash Proceeds of such Qualified Equity Offering, at a redemption price equal to 113% of principal amount thereof, together with accrued and unpaid Interest and Liquidated Damages, if any, thereon to the Redemption Date; provided, however, that immediately following such redemption not less than 65% of the aggregate principal amount of the Notes issued on the Issue Date remain outstanding.

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(c) Notice of redemption will be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in integral multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, Interest ceases to accrue on Notes or portions thereof called for redemption unless the Issuers default in such payments due on the redemption date.

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

7. Mandatory Redemption. The Issuers shall not be required to make mandatory redemption payments with respect to the Notes (except for a Required Regulatory Redemption). The Notes shall not have the benefit of any sinking fund.

8. Offers to Purchase.

(a) Change of Control. In the event that a Change of Control has occurred, each Holder of Notes will have the right, at such Holder’s option, pursuant to an offer (subject only to conditions required by applicable law, if any) by the Issuers (the “Change of Control Offer”), to require the Issuers to repurchase all or any part of such Holder’s Notes (provided, that the principal amount of such Notes must be $1,000 or an integral multiple thereof) on a date (the “Change of Control Purchase Date”) earlier than 30 days and no later than 45 days after the date on which notice of a Change of Control Offer is mailed to the Holders (or such other time period as may be required by

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applicable law), at a cash price equal to 101% of the principal amount thereof (the “Change of Control Purchase Price”), together with accrued and unpaid Interest and Liquidated Damages, if any, to the Change of Control Purchase Date. Holders electing to have a Note purchased pursuant to a Change of Control Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice of Change of Control Offer prior to the close of business on the third Business Day prior to the Change of Control Purchase Date. The Change of Control Offer shall be made within 30 days following a Change of Control and shall remain open for at least 20 Business Days following its commencement (the “Change of Control Offer Period”). Upon expiration of the Change of Control Offer Period, the Issuers shall promptly purchase all Notes properly tendered pursuant to the Change of Control Offer.

On or before the Change of Control Purchase Date, the Issuers shall: (i) accept for payment Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an amount in cash sufficient to pay the Change of Control Purchase Price (together with accrued and unpaid Interest and Liquidated Damages, if any, to the Change of Control Purchase Date) of all Notes so tendered, and (iii) deliver to the Trustee the Notes so accepted together with an Officers’ Certificate listing the Notes or portions thereof being purchased by the Issuers. The Paying Agent promptly will pay the Holders of Notes so accepted an amount equal to the Change of Control Purchase Price (together with accrued and unpaid Interest and Liquidated Damages, if any to the Change of Control Purchase Date), and the Trustee promptly will authenticate and deliver to such Holders a new Note equal in principal amount to any unpurchased portion of the Note surrendered. Any Notes not so accepted will be delivered promptly by the Issuers to the Holder thereof. The Issuers publicly will announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Purchase Date.

(b) Asset Sale. Subject to certain exceptions set forth in the Indenture, the Issuers shall not, and the Guarantors shall not, and neither the Issuers nor the Guarantors shall permit any of the Restricted Subsidiaries to make any Asset Sale unless, (i) at least 75% of the total consideration received for such Asset Sale or series of related Asset Sales consists of cash or Cash Equivalents and (ii) the Managers of the Company determine in good faith that the Issuers will receive or such Restricted Subsidiary will receive, as applicable, consideration at the time of such Asset Sale at least equal to the fair market value of the property, assets or Equity Interests issued or sold or otherwise disposed of in such Asset Sale; provided, however, that the 75% limitation set forth in clause (i) above shall not apply to any proposed Asset Sale for which an independent certified accounting firm shall certify to the Managers of the Company and the Trustee that the after-tax cash portion of the consideration to be received by the Company or such Restricted Subsidiary in such proposed Asset Sale is equal to or greater than what the net after-tax cash proceeds would have been had such proposed Asset Sale complied with the 75% limitation set-forth in clause (i) above. Solely for purposes of clause (i) of the preceding sentence, total consideration received means the total consideration received for such Asset Sale minus the amount of, (i) any liabilities (other than liabilities that are by

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their terms subordinated to the Notes and the Guarantees) of the Company or any Restricted Subsidiary that are assumed by a transferee; provided, that the Issuers and the Restricted Subsidiaries are fully released from obligations in connection therewith and (ii) property that within 30 days of such Asset Sale is converted into cash or Cash Equivalents; and further provided, that such cash and Cash Equivalents shall be treated as Net Cash Proceeds attributable to the original Asset Sale for which such property was received).

Within 360 days after receipt any Net Cash Proceeds from an Asset Sale, the Company may apply such Net Cash Proceeds at its option: (a) (i) to repay any Purchase Money Indebtedness secured by the asset which was the subject of the Asset Sale; or (ii) to retire and permanently reduce Indebtedness incurred under the Credit Agreement; provided, that in the case of a revolver or similar arrangement that makes credit available, such commitment is permanently reduced by such amount; (b) (i) to make an investment or capital expenditure in, or otherwise acquire, (A) assets or properties that replace the assets or properties that were the subject of such Asset Sale, or (B) assets and property (other than notes, bonds, obligations and securities, except in connection with the acquisition of a Restricted Subsidiary which is a Guarantor in a Related Business) which are used or useful in a Related Business, or (ii) to acquire (A) all or substantially all of the assets of any Person engaged in a Related Business or (B) a majority of the Voting Equity Interests of a Person engaged in a Related Business that becomes a Restricted Subsidiary; provided, in each case, that such investment, capital expenditure or acquisition is made in compliance with the other provisions of the Indenture, including Section 4.9 of the Indenture; or (c) any combination of the foregoing clauses (a) and (b).

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

The accumulated Net Cash Proceeds from Asset Sales not applied as set forth in clauses (a) and (b) of the immediately preceding paragraphs within such 360 day period and the accumulated Net Cash Proceeds from any Event of Loss not applied as set forth in clauses (1) and (2) of the immediately preceding paragraph within such 360 day period shall constitute “Excess Proceeds.” Pending the final application of any Net Cash Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise temporarily invest or use for general corporate purposes (other than Restricted Payments that are not solely Restricted Investments) the Net Cash Proceeds in any manner that is not prohibited by the Indenture. When the Excess Proceeds equal or exceed $10,000,000, the Issuers shall offer to repurchase the Notes and any other Indebtedness ranking on a parity with the Notes and with similar provisions requiring the Issuers to make an offer to purchase such Indebtedness with the proceeds from such Asset Sale pursuant to a cash offer (subject only to conditions required by applicable law, if any), not later than 30 days following the applicable Asset Sale Offer Trigger Date, the maximum principal amount of Notes and such other pari passu Indebtedness (or accreted values in the case of

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Indebtedness issued with an original issue discount) that may be purchased out of the Excess Proceeds (the “Asset Sale Offer”) on a pro rata basis in proportion to the respective principal amounts of the Notes and such other pari passu Indebtedness (or accreted values in the case of Indebtedness issued with an original issue discount) at a purchase price of 100% of the principal amount (or accreted value in the case of Indebtedness issued with an original issue discount) (the “Asset Sale Offer Price”) together with accrued and unpaid interest and Liquidated Damages, if any, to the date of payment. The Asset Sale Offer shall remain open for at least 20 Business Days following its commencement (the “Asset Sale Offer Period”). Upon receiving notice of the Asset Sale Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000. Upon expiration of the Asset Sale Offer Period, the Issuers shall apply an amount equal to the Excess Proceeds (the “Asset Sale Offer Amount”) plus an amount equal to accrued and unpaid Interest and Liquidated Damages, if any, to the purchase of all Indebtedness properly tendered in accordance with the provisions hereof (on a pro rata basis if the Excess Proceeds are insufficient to purchase all Indebtedness so tendered) at the Asset Sale Offer Price (together with accrued and unpaid Interest and Liquidated Damages, if any, to the date of payment). The principal amount of Notes and such other pari passu Indebtedness to be purchased pursuant to an Asset Sale Offer may be reduced by the principal amount of Notes and such other pari passu Indebtedness, respectively, acquired by the Issuers through purchase or redemption (other than pursuant to a Change of Control Offer) subsequent to the date of the Asset Sale and surrendered to the Trustee for cancellation. To the extent that the aggregate amount of Notes and such other pari passu Indebtedness tendered or to be purchased pursuant to an Asset Sale Offer is less than the Excess Proceeds are, the Issuers may use any remaining Net Cash Proceeds for any purpose not otherwise prohibited by the Indenture. Following the consummation of each Asset Sale Offer in accordance with the provisions of this paragraph, the Excess Proceeds amount shall be reset to zero.

(c) Excess Cash Flow Offers. Not later than 60 days after each Operating Six Months of the Company, beginning with the first Operating Six Months after the Casino becomes Operating, the Company will make an offer to all Holders (the “Initial Excess Cash Flow Offer”) to purchase the maximum principal amount of Notes that is an integral multiple of $1,000 that may be purchased with an amount equal to the sum (such sum, the “Excess Cash Flow Offer Amount”) of (i) 50% of the Company’s Excess Cash Flow in respect of the Operating Six Months then ended (less all transaction costs and expenses incurred by the Issuers in connection with such Excess Cash Flow Offer) (the “Applicable Excess Cash Flow Amount”) and (ii) the then available Excess Cash Flow Balance (as defined below), at a purchase price in cash equal to 101% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the date fixed for the closing of the Excess Cash Flow Offer (the “Excess Cash Flow Purchase Price”), in accordance with the Indenture. Notwithstanding the foregoing, the Company will not be required to make an Initial Excess Cash Flow Offer to purchase Notes pursuant to this covenant if the then available Excess Cash Flow Offer Amount is less than $2,500,000; provided, that in such event any Applicable Excess Cash Flow Offer Amount (if positive) will be added to the Excess Cash Flow Offer Amount for each subsequent Operating Six Months until an Initial

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Excess Cash Flow Offer is made. If the aggregate principal amount of Notes tendered pursuant to any Initial Excess Cash Flow Offer is less than the Excess Cash Flow Offer Amount with respect thereto, Notes purchased pursuant to such Initial Excess Cash Flow Offer shall be purchased (i) first, from the Applicable Excess Cash Flow Amount and (ii) second, if such Applicable Excess Cash Flow Amount is not sufficient to purchase all Notes tendered in such Initial Excess Cash Flow Offer, from the then available Excess Cash Flow Balance. If the aggregate principal amount of Notes tendered pursuant to any Initial Excess Cash Flow Offer is less than the Applicable Excess Cash Flow Amount with respect thereto (such difference, the “Unapplied Excess Cash Flow Amount”), the Company shall as soon as practicable following the expiration of such Initial Excess Cash Flow Offer deposit into an account (the “Excess Cash Flow Account”) an amount equal to the lesser of (i) the Unapplied Excess Cash Flow Amount with respect to such Initial Excess Cash Flow Offer and (ii) the difference between $10,000,000 and the then available Excess Cash Flow Balance (as defined below) immediately preceding such deposit. The balance at any particular time in the Excess Cash Flow Account is referred to herein as the “Excess Cash Flow Balance.” The Company shall make a public announcement of the results of each Initial Excess Cash Flow Offer, including the then available Excess Cash Flow Balance taking into account any use of such funds to purchase Notes in such Initial Excess Cash Flow Offer, as soon as practicable after the expiration of such Initial Excess Cash Flow Offer. For 45 days following the expiration date with respect to each Initial Excess Cash Flow Offer, each Holder shall have the right, at such Holder’s option, to request (by providing written notice to the Trustee) that the Company make an offer to all Holders (the “Subsequent Excess Cash Flow Offer”) to purchase the maximum principal amount of Notes that is an integral multiple of $1,000 that may be purchased with then available Excess Cash Flow Balance (if any) (less all transaction costs and expenses incurred by the Issuers in connection with such Excess Cash Flow Offer) at the Excess Cash Flow Offer Price. No later than 30 days following the receipt of such a request, the Company shall make a Subsequent Excess Cash Flow Offer in accordance with this covenant. Each Initial Excess Cash Flow Offer and each Subsequent Excess Cash Flow Offer are referred to herein, collectively, as an “Excess Cash Flow Offer.” Notwithstanding the foregoing, the Company will not be required to make a Subsequent Excess Cash Flow Offer to purchase Notes pursuant to this covenant if the then available Excess Cash Flow Balance is less than $2,500,000. If the aggregate principal amount of Notes tendered pursuant to any Excess Cash Flow Offer exceeds, in the case of an Initial Excess Cash Flow Offer, the Excess Cash Flow Offer Amount or, in the case of a Subsequent Excess Cash Flow Offer, the then available Excess Cash Flow Balance, the Trustee will select the Notes to be repurchased in the manner described below under Section 3.2 of the Indenture. Each Excess Cash Flow Offer will be required to remain open for 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law. Upon the expiration of that period, the Company will apply the Excess Cash Flow Offer Amount, in the case of an Initial Excess Cash Flow Offer, or Excess Cash Flow Balance, in the case of a Subsequent Excess Cash Flow Offer, to the purchase of all Notes tendered at the Excess Cash Flow Offer Purchase Price. Notwithstanding anything to the contrary set forth above, the Company shall not be required (i) to make any Subsequent Excess Cash Flow Offer pursuant to this covenant if the Company does not reasonably believe (taking into

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account all applicable notice periods in this covenant) that it can consummate such Subsequent Excess Cash Flow Offer prior to the first day of the next Operating Six Months period, or (ii) to make an Initial Excess Cash Flow Offer pursuant to this covenant if, on the first day of the applicable Operating Six Months period with respect to which such Initial Excess Cash Flow Offer is to be made, the immediately preceding Initial Excess Cash Flow Offer or Subsequent Excess Cash Flow Offer is still outstanding and has not yet been consummated; provided, that, in the case of an Initial Excess Cash Flow Offer, any amount of Excess Cash Flow Offer Amount with respect to such Operating Six Months period will be added to the Excess Cash Flow Offer Amount for each subsequent Operating Six Months period until an Initial Excess Cash Flow Offer is made.

9. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and the Issuers may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuers need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between an Interest Record Date and the corresponding Interest Payment Date.

10. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes.

11. Amendment, Supplement, Modification and Waiver. Subject to certain exceptions, the Indenture, the Notes or the Guarantees may be amended, modified or supplemented with the consent of the Holders of a majority in principal amount of the then outstanding Notes, and any existing Default or compliance with any provision of the Indenture, the Notes or the Guarantees may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the Indenture, the Notes, the Guarantees or the Collateral Agreements may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Issuers’ obligations to Holders of the Notes in case of a merger or consolidation, or sale of all or substantially all of the Issuers’ assets in accordance with the Indenture and the Collateral Agreements, to evidence the release any Guarantor permitted to be released under the terms of the Indenture and the Collateral Agreements or to evidence the addition of any new Guarantor, to make any change that would provide any additional rights or benefits to the Holders of the Notes (including the addition of any Guarantor) or that does not adversely affect the rights under the Indenture, the Notes, the Guarantees, the Registration Rights Agreement, the Collateral Agreements or the Intercreditor Agreement of any such Holder, to comply with the provisions of the Depositary, Euroclear or Clearstream or the Trustee with respect to the provisions of the Indenture or the Notes relating to transfers and exchanges of Notes or beneficial interests

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therein, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, or to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, to comply with applicable Gaming Laws and Racing Laws, or to enter into additional or supplemental Collateral Agreements.

12. Defaults and Remedies. The Indenture provides that each of the following constitutes an Event of Default: (a) the failure of the Issuers to pay any installment of Interest (or Liquidated Damages, if any) on the Notes as and when the same becomes due and payable and the continuance of any such failure for 30 days; (b) the failure of the Issuers to pay all or any part of the principal, or premium, if any, on the Notes when and as the same becomes due and payable at maturity, redemption, by acceleration or otherwise, including, without limitation, payment of the Change of Control Purchase Price or the Asset Sale Offer Price, on Notes validly tendered and not properly withdrawn pursuant to a Change of Control Offer or Asset Sale Offer, as applicable; (c) the failure of the Issuers or the failure by any of the Restricted Subsidiaries to comply with the requirement to make the Asset Sale Offer, Excess Cash Flow Offer or Change of Control Offer as described under Sections 4.13, 4.14 and 4.15, respectively, of the Indenture or to comply with Section 5.1 of the Indenture; (d) the failure of the Issuers or the failure by any of the Restricted Subsidiaries to observe or perform any other covenant, condition or agreement contained in the Notes or this Indenture and the continuance of such failure for a period of 60 days after written notice is given to the Issuers by the Trustee or to the Issuers and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes outstanding; (e) an event of default occurs (after giving effect to any waivers, amendments, applicable grace periods applicable notice periods or any extension of any maturity date) under the Indebtedness of the Issuers or the Indebtedness of any of the Guarantors or any of the Restricted Subsidiaries with an aggregate amount outstanding in excess of $5,000,000 (i) resulting from the failure to pay principal of or interest on such Indebtedness; or (ii) as a result of such default, the maturity of such Indebtedness has been accelerated prior to its stated maturity; (f) failure by the Issuers or any Restricted Subsidiary to pay final judgments not covered by insurance aggregating in excess of $5,000,000, at any one time rendered against the Issuers or any of the Restricted Subsidiaries and which judgments are not stayed, bonded or discharged within 60 days; (g) any Guarantee of a Guarantor which is a Significant Subsidiary ceases to be in full force and effect or shall be held in any judicial proceeding to be unenforceable or invalid or is declared null and void (other than in accordance with the terms of the Guarantee and the Indenture) or any Guarantor which is a Significant Subsidiary denies or disaffirms its Obligations under its Guarantee or the Collateral Agreements (in each case, other than by reason of the termination of the Indenture or the release of any such Guarantee in accordance with the Indenture); (h) (i) any event of default occurs under the Collateral Agreements (after giving effect to any applicable grace periods, applicable notice periods, waivers or amendments) or (ii) the failure of the Issuers or the failure of any of the Restricted Subsidiaries to comply with any material agreement or covenant in, or material provision of, any of the Collateral Agreements, or any breach in any material respect of any material representation or warranty made by the Issuers or any of the Restricted Subsidiaries in any Collateral Agreement, and the continuance of such failure

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or breach for a period of 30 days after written notice is given to the Issuers by the Trustee or to the Issuers and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes outstanding; (i) the Casino or the Racino is not Operating by the applicable Operating Deadline; (j) any of the Collateral Agreements ceases to be in full force and effect or any of the Collateral Agreements ceases to give the Trustee (or, in the case of a mortgage, ceases to give the Trustee or any other trustee under such mortgage) any of the Liens, rights, powers or privileges purported to be created thereby, or any of the Collateral Agreements is declared null and void or either of the Issuers or any Guarantor denies that it has any further liability under any Collateral Agreement to which it is a party or gives notice of such effect (in each case other than by reason of the termination of the Indenture or any such Collateral Agreement in accordance with its terms or the release of any Guarantor in accordance with the Indenture) and the continuance of such failure for a period of 30 days after written notice is given to the Issuers by the Trustee or to the Issuers and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes outstanding; (k) a court having jurisdiction in the premises enters a decree or order for (A) relief in respect of either of the Issuers, any of the Guarantors, or any Significant Subsidiary in an involuntary case under any applicable Bankruptcy Law now or hereafter in effect, (B) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of either of the Issuers, any of the Guarantors, or any Significant Subsidiary or for all or substantially all of the property and assets of either of the Issuers, any of the Guarantors, or any Significant Subsidiary or (C) the winding up or liquidation of the affairs of either of the Issuers, any of the Guarantors, or any Significant Subsidiary and, in each case, such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (l) either of the Issuers, any of the Guarantors, or any Significant Subsidiary (A) commences a voluntary case under any applicable Bankruptcy Law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (B) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of either of the Issuers, any of the Guarantors, or any Significant Subsidiary or for all or substantially all of the property and assets of either of the Issuers, any of the Guarantors, or any Significant Subsidiary or (C) effects any general assignment for the benefit of creditors.

14. Trustee Dealings with Issuers. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuers or their Affiliates, and may otherwise deal with the Issuers or their Affiliates, as if it were not the Trustee.

15. No Recourse Against Others. No director, officer, manager, employee, incorporator, stockholder, member or controlling person of the Issuers or any Guarantor, in such capacity, will have any liability for any obligations of the Issuers or any Guarantor under the Notes, the Indenture, the Collateral Agreements or the Registration Rights Agreement or for any claim based on, or in respect of, or by reason of, such obligations or their creation; provided, that this provision shall in no way limit the obligation of any Guarantor pursuant to any Guarantee of the Notes.

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16. Authentication. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

17. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

18. Additional Rights of Holders of Transfer Restricted Notes.⁷ In addition to the rights provided to Holders of Notes under the Indenture, Holders of Transfer Restricted Notes shall have all the rights set forth in the Registration Rights Agreement dated as of the date of the Indenture, by and among the Issuers, the Guarantors and the Initial Purchaser (the “Registration Rights Agreement”).

19. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon, and any such redemption shall not be affected by any defect in or omission of such numbers.

20. Notation of Guarantee. As more fully set forth in the Indenture, to the extent permitted by law, each of the Guarantors from time to time, in accordance with Article X of the Indenture, unconditionally and jointly and severally guarantees, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, that:

By its execution of its Guarantee, each of the Guarantors acknowledges and agrees that it receives substantial benefits from the Issuers and that such party is providing its Guarantee for good and valuable consideration, including, without limitation, such substantial benefits and services. Accordingly, subject to the provisions of Article X of the Indenture, each Guarantor, jointly and severally, unconditionally guarantees on a senior secured basis to each Holder of a Note authenticated and delivered by the Trustee and its successors and assigns that: (i) the principal of, Interest, premium, if any, and Liquidated Damages, if any, on the Notes shall be duly and punctually paid in full when due, whether at maturity, by acceleration, call for redemption, upon a Change of Control Offer, an Asset Sale Offer, an Excess Cash Flow Offer, or otherwise, and interest on overdue principal, premium, if any, Liquidated Damages, if any, and (to the extent permitted by law) interest on any Interest, if any, on the Notes and all other obligations of the Issuers to the Holders or the Trustee under the Indenture or under the Notes (including fees, expenses or other) shall be promptly paid in full or performed, all in accordance with the terms of the Indenture; and (ii) in case of any extension of time of

7. To be included only on Transfer Restricted Notes.

A-18

payment or renewal of any Notes or any of such other obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration, call for redemption, upon a Change of Control, an Asset Sale Offer, an Excess Cash Flow Offer, or otherwise, subject, however, in the case of clauses (i) and (ii) above, to the limitations set forth in Section 10.8 of the Indenture.

When a successor assumes all the obligations of its predecessor under the Notes and the Indenture, the predecessor may be released from those obligations.

21. Governing Law. THE INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL LAWS AND RULES 327(B); PROVIDED THAT WITH RESPECT TO THE CREATION, ATTACHMENT, PERFECTION OR PRIORITY OF THE SECURITY INTEREST IN ANY REAL PROPERTY, COLLATERAL, THE GOVERNING LAW SHALL BE THE LAWS OF THE STATE OF LOUISIANA.

The Issuers will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to:

THE OLD EVANGELINE DOWNS, L.L.C.

THE OLD EVANGELINE DOWNS CAPITAL CORP.

P.O. Box 90270

Lafayette, LA 70509-0270

Attention: Michael S. Luzich

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Assignment Form

To assign this Note, fill in the form below: (I) or (We) assign and transfer this Note to

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                                                                                                                     

to transfer this Note on the books of the Issuers. The agent may substitute another to act for it.

Date:                 

Your Signature:                                         

(Sign exactly as your name appears on the face of this Note)

Signature Guarantee*

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

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Option of Holder to Elect Purchase

If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.13, 4.14 or Section 4.15 of the Indenture, check the box below:

Section 4.13  ¨ Section 4.14  ¨ Section 4.15  ¨

If you want to elect to have only part of the Note purchased by the Issuers pursuant to Section 4.13, 4.14 or 4.15 of the Indenture, state the amount you elect to have purchased (in denominations of $1,000 only, except if you have elected to have all of your Notes purchased):  $            

Date:	Your Signature:
	(Sign exactly as your name appears on the Note)

Social Security or Tax Identification No.:                                  

Signature Guarantee*

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

A-21

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE⁸

The following exchanges of an interest in this Global Note for an interest in another Global Notes or for a Definitive Note, or exchanges of an interest in another Global Note or a Definitive Note for an interest in this Global Note, have been made:

Date of Exchange Amount of
Decrease in
Principal Amount of
this Global Note Amount of
Increase in
Principal Amount of this
Global Note Principal Amount of
this Global Note
Following Such
Decrease or Increase Signature of
Authorized Officer
of
Trustee or Note
Custodian

8. This should be included only if the Note is issued in global form.

A-22

GUARANTEE

The Guarantors listed below (hereinafter referred to as the “Guarantors,” which term includes any successors or assigns under the Indenture, dated the date hereof, among the Guarantors, the Issuers (defined below) and U.S. Bank National Association, as trustee (the “Indenture”) and any additional Guarantors), have irrevocably and unconditionally guaranteed on a senior secured basis the Guarantee Obligations (as defined in Section 10.9 of the Indenture), which include (i) the due and punctual payment of the principal of, premium, if any, and Interest and Liquidated Damages, if any, on the 13% Senior Secured Notes due 2010 with Contingent Interest (the “Notes”) of The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (the “Company”) and The Old Evangeline Downs Capital Corp., a Delaware corporation (“Capital” and, together with the Company, the “Issuers”), whether at maturity, by acceleration, call for redemption, upon a Change of Control Offer, an Asset Sale Offer, an Excess Cash Flow Offer, or otherwise, the due and punctual payment of interest on the overdue principal and premium, if any, and (to the extent permitted by law) interest on any Interest on the Notes, and the due and punctual performance of all other obligations of the Issuers, to the Holders or the Trustee all in accordance with the terms set forth in Article X of the Indenture, and (ii) in case of any extension of time of payment or renewal of any Notes or any such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration, call for redemption, upon a Change of Control Offer, an Asset Sale Offer, an Excess Cash Flow Offer, or otherwise.

The obligations of each Guarantor to the Holders and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article X of the Indenture and reference is hereby made to such Indenture for the precise terms of this Guarantee.

No past, present or future, direct or indirect, stockholder, employee, officer or director of the Issuers, the Guarantors or any such successor entity, as such, shall have any liability for any Obligations of the Issuers or the Guarantors under the Notes, the Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such Obligations or their creation, except in their capacity as an obligor or Guarantor of the Notes in accordance with the Indenture.

This is a continuing Guarantee and shall remain in full force and effect and shall be binding upon each Guarantor and its successors and assigns until full and final payment of all of the Issuers’ obligations under the Notes and Indenture or until released or legally defeased in accordance with the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Holders, and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a Guarantee of payment and performance and not of collectibility.

A-23

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Note upon which this Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers.

The obligations of each Guarantor under this Guarantee shall be limited to the extent necessary to insure that it does not constitute a fraudulent conveyance under applicable law.

THE TERMS OF ARTICLE X OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.

Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated.

A-24

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

Dated:                 

[NAME OF GUARANTOR]

By:

Name:

Title:

[NAME OF GUARANTOR]

By:

Name:

Title:

[NAME OF GUARANTOR]

By:

Name:

Title:

EX-5.1

EXHIBIT 5.1

May 27, 2003	1675 Broadway New York, New York 10019-5820
The Old Evangeline Downs, L.L.C. The Old Evangeline Downs Capital Corp. P.O. Box 90270 Lafayette, Louisiana 70509-0270	Main Tel (212) 506-2500 Main Fax (212) 262-1910 www.mayerbrownrowe.com

Ladies and Gentlemen:

We have acted as counsel to The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (“OED”) and The Old Evangeline Downs Capital Corp., a Delaware corporation (“Capital Corp.,” together with OED, the “Issuers”), in connection with the preparation of a Registration Statement on Form S-4 (the “Registration Statement”) filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), relating to the proposed exchange of 13% Senior Secured Notes due 2010 with Contingent Interest (the “New Notes”) for any and all outstanding 13% Senior Secured Notes due 2010 with Contingent Interest (the “Old Notes”). The Old Notes were, and the New Notes will be, issued under an indenture (the “Indenture”), dated February 25, 2003, between the Issuers and U.S. Bank National Association, as trustee.

In rendering the opinions set forth below, we have examined the originals, or certified, conformed or reproduction copies, of all such records, agreements, instruments and documents as we have deemed necessary or appropriate. In all such examinations, we have relied upon the genuineness of all signatures, the authenticity of all original or certified copies and the conformity to original or certified copies of all copies submitted to us as conformed or reproduction copies. We also have assumed, with respect to all parties to agreements or instruments relevant hereto other than Capital Corp., that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), executed and delivered by such parties and that such agreements or instruments are the valid, binding and enforceable obligations of such parties. As to various questions of fact relevant to such opinions, we have relied upon, and have assumed the accuracy of, certificates and oral or written statements and other information of or from public officials, officers or representatives of the Issuers and others.

Based upon the foregoing and subject to the other limitations, qualifications and assumptions set forth herein, we are of the opinion that the Issuers have duly authorized the issuance of the New Notes and, upon the due execution and authentication of the New Notes in accordance with the terms of the Indenture and delivery thereof in exchange for the Old Notes, the New Notes will constitute valid and binding obligations of the Issuers, enforceable in accordance with their terms and entitled to the benefits of the Indenture, subject to (i)

Brussels Charlotte Chicago Cologne Frankfurt Houston London Los Angeles Manchester New York Palo Alto Paris Washington, D.C. Independent Mexico City Correspondent: Jauregui, Navarrete, Nader y Rojas, S.C.

Mayer, Brown, Rowe & Maw is a U.S. General Partnership. We operate in combination with our associated English

partnership in the offices listed above.

May 27, 2003

Page 2

bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other laws now or hereafter in effect affecting creditors’ rights generally, and (ii) general principles of equity (including, without limitation, standards of materiality, good faith, fair dealing and reasonableness) whether considered in a proceeding in equity or at law.

We hereby consent to the filing of this opinion as an Exhibit to the Registration Statement and to the reference to this firm under the caption “Legal Matters” in the Prospectus that is included in the Registration Statement. In giving this consent, we do not admit that we are “experts,” within the meaning of that term as used in the Securities Act or the rules and regulations of the Securities and Exchange Commission issued thereunder, with respect to any part of the Registration Statement, including this opinion as an Exhibit or otherwise.

The foregoing opinion is strictly limited to the matters stated herein, and no other or more extensive opinion is intended or implied or to be inferred beyond the matters expressly stated herein. The foregoing opinion is based on and is limited to, as in effect on the date hereof, the General Corporation Law of the State of Delaware, which includes those statutory provisions as well as all applicable provisions of the Delaware Constitution and the reported judicial decisions interpreting such laws, the internal laws of the State of New York and the relevant Federal law of the United States of America, and we render no opinion with respect to the law of any other jurisdiction or, without limiting the generality of the foregoing, the effect of the laws of any other jurisdiction.

It is understood that this opinion is to be used only in connection with the exchange offer of the New Notes while the Registration Statement is in effect. This opinion is not a guarantee or an opinion respecting matters of fact and should not be construed or relied on as such. Other than as expressly stated above, we express no opinion on any issue relating to the Issuers or to any investment therein. The opinions expressed herein are as of the date hereof, and we undertake no responsibility to update this opinion after the date hereof and assume no responsibility for advising you of any changes with respect to any matters described in this opinion that may occur subsequent to the date hereof or with respect to the discovery subsequent to the date hereof of information not previously known to us pertaining to events occurring prior to the date hereof. The opinions expressed herein are solely for your benefit and may not be relied upon for any purpose except as specifically provided for herein, or relied upon by any other person, firm or corporation for any purpose, without our prior written consent.

Sincerely,

Mayer, Brown, Rowe & Maw

EX-8.1

Exhibit 8.1

May 27, 2003

1675 Broadway

New York, New York 10019-5820

Main Tel (212) 506-2500

Main Fax (212) 262-1910

www.mayerbrownrowe.com

The Old Evangeline Downs, L.L.C.

P.O. Box 90270

Lafayette, LA 70509-027

Re: Exchange of 13% Senior Secured Notes due 2010 with Contingent Interest of The Old Evangeline Downs, L.L.C., for Outstanding 13% Senior Secured Notes due 2010 with Contingent Interest of The Old Evangeline Downs, L.L.C.

Ladies and Gentlemen:

We have acted as special tax counsel to The Old Evangeline Downs, L.L.C. (“OED”) and The Old Evangeline Downs Capital Corp. (together with OED, the “Issuers”), in connection with the proposed exchange offer (the “Exchange Offer”) of U.S. $123,200,000 aggregate principal amount of 13% Senior Secured Notes due 2010 with Contingent Interest (the “New Notes”) for any and all outstanding 13% Senior Secured Notes due 2010 with Contingent Interest (the “Old Notes,” and together with the New Notes, the “Notes”). Both the Old Notes and the New Notes have been or will be issued under an indenture, dated as of February 25, 2003, among the Issuers, the Guarantors¹ and U.S. Bank National Association (the “Indenture”).

In preparing our opinion, we have reviewed the registration statement on SEC Form S-4 prepared by the Issuers in connection with the Exchange Offer (the “Registration Statement”), the Indenture, and such other documents as we believed necessary for purposes of delivering this opinion. Our opinion is based on current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), applicable Treasury regulations (the “Regulations”), and public administrative and judicial interpretations of the Code and Regulations, all of which are subject to change, possibly with retroactive effect.

Based on the foregoing, we hereby confirm that the matters of law or legal conclusions as set forth under “Specific Federal Income Tax Considerations” (the “Discussion”) in the prospectus with respect to the Exchange Offer (the “Prospectus”),

¹ Capitalized terms used herein without definition have the meanings ascribed to them in the Registration Statement.

Brussels Charlotte Chicago Cologne Frankfurt Houston London Los Angeles Manchester New York Palo Alto Paris Washington, D.C.

Independent Mexico City Correspondent: Jauregui, Navarrete, Nader y Rojas, S.C.

Mayer, Brown, Rowe & Maw is a U.S. General Partnership. We operate in combination with our associated English partnership in the offices listed above.

MAYER, BROWN, ROWE & MAW

May 27, 2003

Page 2

which forms part of the Registration Statement, constitute our opinion as to the material federal income tax consequences that are expected to result from the exchange of Old Notes for New Notes and of the purchase, ownership and disposition of the Notes.

The Discussion does not cover all aspects of United States federal income taxation that may be relevant to, or the actual tax effect that matters described therein will have on, any particular holder, and it does not address foreign, state or local tax consequences.

Our opinion may change if (i) the applicable law changes, (ii) any of the facts with respect to the Exchange Offer as included in the Registration Statement or the Indenture, or (iii) the conduct of the parties is materially inconsistent with the facts reflected in the Registration Statement or the Indenture.

Our opinion represents only our legal judgment based on current law and the facts described above. Our opinion has no binding effect on the Internal Revenue Service or the courts. The Internal Revenue Service may take a position contrary to our opinion, and if the matter is litigated, a court may reach a decision contrary to our opinion.

We consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to Mayer, Brown, Rowe & Maw under the caption “Legal Matters” in the Prospectus, which forms part of the Registration Statement.

Sincerely,

MAYER, BROWN, ROWE & MAW

EX-10.1

Exhibit 10.1

AMENDED AND RESTATED

MANAGEMENT SERVICES AGREEMENT

by and between

The Old Evangeline Downs, L.L.C.,

OED Acquisition, LLC

and

Peninsula Gaming Company, LLC

DATED: As of February 25, 2003

TABLE OF CONTENTS

		Page
ARTICLE 1	TERM AND APPOINTMENT OF OPERATOR	1
1.01.	Appointment and Term	1
1.02.	Management of the Business	2
1.03.	Relation of the Parties	2
1.04.	Affiliates	2
1.05.	Consultation with Owner	2
ARTICLE 2	PRE-OPENING PROGRAM	3
2.01.	Construction of the New Facilities	3
2.02.	Pre-Opening Services	3
2.03.	Payment of Pre-Opening Expenses	4
2.04.	Compensation and Reimbursement of the Operators for Pre-Opening Services	5
ARTICLE 3	NOTICES	5
ARTICLE 4	OPERATION	7
4.01.	General	7
4.02.	Licenses, Permits, Reports and Accreditation	8
4.03.	Personnel	8
4.04.	Sales and Promotions	8
4.05.	Maintenance and Capital Replacement	8
4.06.	Contracts and Agreements	8
4.07.	Accounting Services	8
4.08.	Books and Records	9
4.09.	Financial Statements	9
4.10.	Access, Review and Audit	9
4.11.	Bank Accounts	9
4.12.	Expenses	10
4.13.	Financial Management	10
4.14.	Annual Plans	10
4.15.	Revisions to Annual Plan	13
4.16.	Remittance to Owner	13

i

TABLE OF CONTENTS

(continued)

		Page
4.17.	Insurance	13
4.18.	Waiver of Liability	13
4.19.	Legal Actions	13
ARTICLE 5	COMPENSATION OF THE OPERATORS	14
5.01.	Forms of Compensation	14
5.02.	Basic Management Fee	14
5.03.	Incentive Fee	14
5.04.	Collection of Management Fees	14
5.05.	Allocation of Management Fees and Other Amounts	14
ARTICLE 6	INDEMNITY	15
6.01.	Indemnification to the Operators	15
6.02.	Indemnification to Owner	15
6.03.	Claiming Procedure	16
6.04.	Mitigation	17
6.05.	Payment	17
ARTICLE 7	DAMAGE TO, DESTRUCTION OF OR CONDEMNATION OF THE NEW FACILITIES	17
7.01.	Damage to and Destruction of the New Facilities	17
ARTICLE 8	ASSIGNMENT	17
8.01.	Sale/Assignment	17
8.02.	Effect of Assignment	18
ARTICLE 9	TERMINATION	18
9.01.	Termination	18
9.02.	Effect of Termination	19
9.03.	Operator Responsibilities	19
9.04.	Survival	19
9.05.	Proprietary Information	19
ARTICLE 10	GENERAL PROVISIONS	20
10.01.	Entire Agreement	20
10.02.	Confidentiality	20

ii

TABLE OF CONTENTS

(continued)

		Page
10.03.	Approvals	20
10.04.	Conflicts of Interest; Non-Compete	21
10.05.	Best Evidence and Counterparts	22
10.06.	Amendment or Modification	22
10.07.	Governing Law	22
10.08.	Interpretation	22
10.09.	Severability	22
10.10.	Force Majeure	22
10.11.	Waiver	23
10.12.	Definitions	23
10.13.	Governing Document	23
10.14.	Inspection of Facilities	23
10.15.	Third-Party Beneficiaries	23
10.16.	Regulatory Information	23
10.17.	Successors and Assigns	23
10.18.	Dispute Resolution	23
10.19.	Operators; Generally	24
10.20.	Effect of Amendment and Restatement	24

iii

AMENDED AND RESTATED

MANAGEMENT SERVICES AGREEMENT

THIS AMENDED AND RESTATED MANAGEMENT SERVICES AGREEMENT (this “Agreement”) is made and entered into as of the 25th day of February, 2003, by and between The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (“Owner”), OED Acquisition, LLC, a Delaware limited liability company (“OEDA”), and Peninsula Gaming Company, LLC, a Delaware limited liability company (“PGC” and together with OEDA, each, an “Operator” and collectively, the “Operators”).

W I T N E S S E T H:

WHEREAS, Owner desires to develop a racetrack and casino gaming operation on its Site located in St. Landry Parish Louisiana;

WHEREAS, Owner and PGC have heretofore entered into a Management Services Agreement, dated as of February 15, 2002 (the “Original MSA”), pursuant to which Owner engaged PGC to manage and operate the Existing Racetrack and design, develop, construct, manage and operate the New Facilities and provide certain pre-opening services in connection therewith;

WHEREAS, the parties hereto desire to amend and restate the Original MSA pursuant to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual promises, representations, warranties, understandings, undertakings and covenants herein contained, and intending to be legally bound thereby, Owner and the Operators hereby agree that, effective as of February 15, 2002, the Original MSA be, and hereby is, amended and restated in its entirety as herein set forth:

ARTICLE 1

TERM AND APPOINTMENT OF OPERATOR

1.01. Appointment and Term. Owner hereby appoints and employs the Operators to act as its exclusive agents for the supervision, direction and control of the management of the Facilities on Owner’s behalf, upon the terms, conditions and covenants hereinafter set forth. The Operators hereby accept such appointment upon and subject to the terms, conditions, covenants and provisions set forth herein. The Operators agree to execute their duties hereunder in the best interest of Owner in good faith, subject to the budgetary limitations imposed upon the Operators, any applicable Governmental Requirements and any limitations or restrictions contained in any Related Contract, it being understood that the Operators shall not be required to pay any amounts of money except those amounts required by the terms of this Agreement. Unless sooner terminated as provided in this Agreement or extended by the mutual agreement of Owner and the Operators, this Agreement shall terminate on the later of (i) the date that is eight (8) years after

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the Opening Date and (ii) the date of sale of all of PGC’s direct or indirect ownership interest in Owner (the “Term”).

1.02. Management of the Business. Subject to the terms of this Management Agreement, the Operators shall have the authority to exclusively supervise and direct the management and operation of the Existing Racetrack and the design, development, construction, management and operation of the New Facilities for the account of Owner. The Operators shall have the authority and responsibility (i) to determine operating policy, standards of operation, quality of service, the maintenance and physical appearance of the Facilities and any other matters affecting operations and maintenance; (ii) to supervise and direct all phases of advertising, sales and business promotion for the Facilities; and (iii) to carry out all programs contemplated by the Annual Plan. Owner agrees that it will cooperate with the Operators in every reasonable and proper way to permit and assist the Operators to carry out their duties hereunder and comply with any conditions or restrictions, if any, placed upon the Operators by any Gaming Authority. The Operators shall take all actions which may, in their sole discretion, be reasonably necessary or appropriate in connection with the authority granted to it in accordance with the provisions of this Agreement.

1.03. Relation of the Parties. In taking any action pursuant to this Agreement, the Operators will be acting only as the appointed agents or representatives of Owner, and nothing in this Agreement shall be construed as: (i) creating a tenancy, partnership, joint venture or any other relationship between the parties hereto, except that of principal and agent or (ii) creating or vesting any right, title, interest, estate, equity participation or beneficial ownership interest in favor of the Operators in or to the Facilities except the contractual rights created in the Operators by this Agreement and any and all rights and remedies arising out of or in connection with the Operators’ direct or indirect ownership interests in Owner. All debts and liabilities properly incurred by either Operator in the course of its management and operation of the Facilities hereunder shall be the debts and obligations of Owner only, and neither Operator shall be liable therefor and each Operator shall be fully indemnified against such debts and obligations, except as specifically stated to the contrary herein.

1.04. Affiliates. Affiliates of either Operator may provide services to, provide loans and funds to, negotiate for, provide personnel to, and, from time to time, take actions on behalf of or for the benefit of such Operator by direct dealings with Owner or those acting for it, provided that the costs of such services shall not be charged to Owner or included in Operating Expenses without Owner’s written consent; it being understood that by entering into this Agreement, Owner hereby consents to all costs and services relating to the Jefferies Financing (including, without limitation, any and all costs and expenses of either Operator related thereto). Each Operator shall be responsible to Owner under this Agreement for the acts of Affiliates in the performance of services of such Operator under this Agreement as if such Affiliates were such Operator’s employees or agents.

1.05. Consultation with Owner. The Operators agree to furnish to Owner the monthly financial statements and Annual Plans as set forth in Article 4. Owner shall, at all times, have the right to enter the Facilities for the purpose of inspecting same and reviewing the operations. Owner agrees that it and its representatives will, at no time, act in a manner which is inconsistent with the authority granted to the Operators.

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ARTICLE 2

PRE-OPENING PROGRAM

2.01. Construction of the New Facilities. Owner hereby agrees to use its diligent good faith efforts to facilitate the construction of the New Facilities. Notwithstanding any provision to the contrary contained in this Agreement, (i) the Operators shall have the right to supervise the design, development and construction of the New Facilities, and (ii) Owner shall not, without the prior written consent of each Operator, agree or otherwise cause the Facilities to be subject to or otherwise bound by any Governmental Requirement to the extent such Governmental Requirement affects or otherwise impacts either Operator’s ability to perform the Pre-Opening Services or any of its other duties and responsibilities under this Agreement. The Operators will prepare a construction budget and construction schedule with respect to the completion of all phases of the construction and development of the New Facilities.

2.02. Pre-Opening Services. Prior to the Opening Date, the Operators, as agent of Owner, shall use their diligent good faith efforts to perform or cause others to perform all such services as the Operators deem necessary to facilitate the opening of the New Facilities and the continued operation of Owner’s’ off-track betting operations on behalf of and for the account of Owner (the “Pre-Opening Services”), subject to compliance by Owner with its reimbursement and funding obligations set forth in this Agreement, including the following.

(a) preparation of a pre-opening marketing plan;

(b) hiring of personnel in accordance with the provisions of this Agreement;

(c) coordination of initial inventories purchases;

(d) establishment of operating policies and procedures;

(e) establishment of security systems for assets, personnel and patrons;

(f) establishment of data processing hardware and software requirements and systems;

(g) establishment of accounting and internal control systems and procedures;

(h) establishment of a preventive maintenance program;

(i) establishment of risk management policies and procedures;

(j) training of all initial staff;

(k) engage and retain such architects, engineers, contractors, designers and other specialists (the “Project Architects”) as the Operators deem necessary to prepare all site plans, grading plans, construction drawings, surveys, materials, specifications, architectural plans and drawings, elevations, construction models, engineering plans and drawings,

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approved plats and all other plans, drawings, studies or reports required for the construction and/or outfitting of the New Facilities (the “Plans and Specifications”) and for the purchase and installation of the FF&E thereat (the “FF&E Specifications”);

(l) purchase all pre-opening gaming supplies and equipment, including in connection with off track betting operations;

(m) provide specific operational and functional criteria for the New Facilities for use by the Project Architects in the preparation of the Plans and Specifications and the FF&E Specifications;

(n) advise and consult with the Project Architects in the development of schematic, preliminary and working Plans and Specifications and in the selection and specifications of FF&E, wall and floor coverings, design and color, wall hangings, signage, art, accouterments, space planning requirements and functional design criteria and all other aesthetic and operational elements of design and other nonstructural elements of the New Facilities;

(o) advise and consult with the Project Architects regarding various key systems, including without limitation, mechanical, electrical, plumbing, life safety, gaming and computer-related systems for the New Facilities;

(p) determine all operational and all functional requirements of the New Facilities including without limitation, parking, recreational and gaming areas, food facilities layout and equipment, and such other areas as management information systems, energy, signage, lighting, sound, communications, housekeeping, maintenance, personnel, data processing equipment and software, point of sale systems, life safety systems, surveillance and security systems, marketing and entertainment;

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2.03. Payment of Pre-Opening Expenses.

2.03.01 Source of Funds. All costs and expenses reasonably incurred in connection with performance of the Pre-Opening Services (the “Pre-Opening Expenses”), shall be paid from the Bank Accounts. Owner shall timely deposit such sums in the Bank Accounts in accordance with the monthly schedules in the construction budget.

2.03.02 Operator Advances. The Operators may, but are not required to, advance funds to pay Pre-Opening Expenses and Reimbursables on behalf of Owner (any such advance, an “Operator Advance”). All such Operator Advances that are advanced by the Operators shall be itemized, scheduled and submitted to Owner and reimbursement to the Operators shall be made by Owner either directly or by Owner directing the Operators to withdraw such amounts from the Bank Accounts. All such Operator Advances shall be reimbursed upon the Operators’ written request.

2.04. Compensation and Reimbursement of the Operators for Pre-Opening Services. For and in consideration of the Operators providing the Pre-Opening Services, Owner agrees to (i) pay the Operators on the Target Date a Pre-Opening Services fee (the “Pre-Opening Services Fee”) accruing at a rate of $40,000 per month, commencing on June 27, 2001 and terminating on the Target Date, and (ii) upon the Operators’ written request, reimburse the Operators for all Operator Advances.

ARTICLE 3

NOTICES

Any and all written notices required by this Agreement shall be either hand-delivered or mailed, certified mail, return receipt requested, telexed, faxed, or sent via commercial courier, addressed to:

TO PGC:	Peninsula Gaming Company, LLC
	3rd Street Ice Harbor
	P.O. Box 1750
	Dubuque, IA 52004-1683
	Facsimile No.: (563) 690-2190
	- and -
	Peninsula Gaming Company, LLC
	c/o Jefferies & Company, Inc.
	11100 Santa Monica Blvd.
	10th Floor
	Los Angeles, CA 90025
	Attention: M. Brent Stevens
	Facsmile No.: (310) 515–5165
	- and - -

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	Peninsula Gaming Company, LLC
	c/o Cambridge Capital Advisors LLC
	7173 Mission Hills Drive
	Las Vegas, NV 89113
	Attention: Michael S. Luzich
	Facsimile No.: (702) 247-6822
	- and -
	OED Acquisition, LLC
	c/o Cambridge Capital Advisors LLC
	7173 Mission Hills Drive
	Las Vegas, NV 89113
	Attention: Michael S. Luzich
	Facsimile No.: (702) 247-6822
WITH COPIES TO:	Mayer, Brown, Rowe & Maw
	1675 Broadway
	New York, NY 10019
	Attn: Ronald S. Brody, Esq.
	Facsimile No.: (212)-262-1910
TO OEDA:	OEDA Acquisition, LLC
	c/o Peninsula Gaming Company, LLC
	3rd Street Ice Harbor
	P.O. Box 1750
	Dubuque, IA 52004-1683
	Facsimile No.: (563) 690-2190
WITH COPIES TO:	Mayer, Brown, Rowe & Maw
	1675 Broadway
	New York, NY 10019
	Attn: Ronald S. Brody, Esq.
	Facsimile No.: (212)-262-1910
TO OWNER:	The Old Evangeline Downs, L.L.C.
	3620 N.E. Evangeline Thruway
	Carencro, Louisiana 70520
	Facsimile No.:
	- and -

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Peninsula Gaming Company, LLC

3^rd Street Ice Harbor

P.O. Box 1750

Dubuque, IA 52004-1683

Facsimile No.: (563) 690-2190

        - and-      

Peninsula Gaming Company, LLC

c/o Jefferies & Company, Inc.

11100 Santa Monica Blvd.

10^th Floor

Los Angeles, CA 90025

Attention: M. Brent Stevens

Facsimile No.: (310) 515-5165

          - and - -      

Peninsula Gaming Company, LLC

c/o Cambridge Capital Advisors LLC

7173 Mission Hills Drive

Las Vegas, NV 89113

Attention: Michael S. Luzich

Facsimile No.: (702) 247-6822

All notices hand-delivered shall be deemed delivered as of the date actually delivered. All notices mailed shall be deemed delivered as of three (3) Business Days after the date postmarked. All notices faxed shall be deemed delivered as of the Business Day immediately following the date receipt of the facsimile is confirmed. All notices sent via commercial courier shall be deemed delivered as of the Business Day immediately following the date the notice is entrusted to the commercial courier service with directions for service within one (1) day. Any changes in any of the addresses listed herein shall be made by notice as provided in this Article 3. Notwithstanding anything to the contrary herein, the return receipt indicating the date upon which all notices were received shall be prima facie evidence that such notices were received on the date of the return receipt.

The addresses and addressees may be changed by giving notice of such change in the manner provided herein for giving notice. Unless and until such written notice is received, the last address and addressee given shall be deemed to continue in effect for all purposes. No notice to either Owner or the Operators shall be deemed given or received unless the entity notice “With a copy to” is simultaneously delivered notice in the same manner as any notice given to either Owner or the Operators.

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ARTICLE 4

OPERATION

4.01. General.

In order for the Operators to perform its duties hereunder and to comply with any applicable Governmental Requirements, Owner hereby agrees that subject to Owner’s rights and the Operators’ obligations in this Agreement, (i) the Operators shall have uninterrupted control and operation of the Facilities during the Term, free and clear from any disturbance of any claims by Owner or any third party claiming by, through or under Owner, and (ii) Owner will not unreasonably interfere or involve itself with the day-to-day operation of the Facilities.

The Operators shall perform or cause others to perform all such services as the Operators deem necessary to operate and manage the Facilities on behalf of and for the account of Owner, subject to compliance by Owner with its reimbursement and funding obligations set forth in this Agreement. The provision set forth below shall apply to both the Existing Facilities and the New Facilities, in each case to the extent applicable.

4.02. Licenses, Permits, Reports and Accreditation. The Operators and Owner shall timely apply for, obtain and maintain all licenses and permits required to operate the Business (other then gaming authority permits, licenses and approvals required to be obtained by parties other than Owner or the Operators), at Owner’s expense.

4.03. Personnel. All personnel of the Facilities, shall be personnel of Owner. However, as agents for Owner, the Operators shall have the sole and absolute discretion to hire, supervise, direct the work of, discharge and determine the compensation and other benefits of all personnel working in the Facilities. Owner shall not interfere with or give orders or instructions to personnel employed at the Facilities. The Operators, in their sole and absolute discretion, shall determine the fitness and qualifications of such personnel. The Operators shall in no way be liable to said personnel or to Owner for any and all claims for wages, compensation or other benefits (including, without limitation, severance, pension, superannuation, retirement and termination pay) asserted by or on behalf of such personnel. The salaries, other compensation and benefits of such personnel shall be an Operating Expense paid by the Operators from the Bank Accounts. The Operators shall in all respects comply with all applicable federal and state employment laws and regulations, in connection with the hiring, promoting, discharging, employment and payment of employees.

4.04. Sales and Promotions. The Operators may, at their sole discretion, cause the Facilities to participate in sales and promotional campaigns and, as appropriate, activities involving complimentary items to hotels, travel agents, tourist officials and airline representatives and other hospitality industry representatives. The Operators shall have the sole right to entitle employees to grant complimentary items when the same is customary in the travel, hospitality or gaming industry or in the Operators’ standard practice or policy.

4.05. Maintenance and Capital Replacement. Owner shall be responsible for maintaining the property utilized in the Business in good repair and condition. To implement

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Owner’s responsibility, the Operators shall, on behalf of Owner, and at Owner’s expense, make or cause to be made, all repairs, replacements, corrections and maintenance items as shall be required in the normal and ordinary course of operation of the Business. Owner recognizes the necessity of capital improvements and shall expend such amount for capital improvements as shall be required in the normal and ordinary course of operation of the Business in conformity with the amounts approved as part of the Annual Plan.

4.06. Contracts and Agreements. The Operators, as agents of Owner, are authorized to make and enter into such contracts and agreements as the Operators may deem necessary for the proper operation of the Facilities. Unless this Agreement expressly provides for an item or service to be at the Operators’ expense, all costs and expenses incurred by the Operators or an Affiliate of either Operator in accordance with this Agreement and/or an Annual Plan shall be for and on behalf of Owner and for Owner’s account.

4.07. Accounting Services. The Operators shall establish and maintain an accounting system, internal controls and reporting systems in that are (i) consistent in all material respects with customary policies and procedures used by the Operators or their Affiliates engaged in such businesses, (ii) reasonably adequate to provide Owner and the Operators with the necessary information about the Business and to safeguard Owner’s assets, (iii) in compliance with all Gaming Laws and in substantial compliance with all Governmental Requirements and (iv) approved by all Governmental Authorities which are required to be obtained. The establishment of such systems shall constitute Pre-Opening Expenses and the maintenance of such systems shall constitute Operating Expenses. Upon the request of Owner, the Operators shall make available for inspection by Owner any managerial reports produced by the Operators regarding the Business in the ordinary course of business.

4.08. Books and Records. The Operators shall maintain, or cause to be maintained, at Owner’s expense, full and complete books of account and such other records as are necessary to reflect the operating results of the Facilities (“Books and Records”). The Books and Records shall be kept in a manner so that the Financial Statements may be prepared in accordance with Generally Accepted Accounting Principles consistently applied. The Operators shall keep all Books and Records, including without limitation, current vendor invoices, payroll records, general ledgers, credit transactions and other records relating to the Business at the Facilities or such other location as shall be approved by Owner in writing, subject to such record retention and storage policies and access rights required by any Lender or any applicable Governmental Requirements or Gaming Laws. All such Books and Records shall at all times be the property of Owner and shall not be removed by either Operator from the approved location without Owner’s written approval except as required by applicable Laws. Upon any termination of this Agreement, all Books and Records shall immediately be turned over to Owner to ensure the orderly continuance of the operation of the Business, but such Books and Records shall be available to the Operators for a period of five (5) years at all reasonable times and upon prior written request to Owner for inspection, audit, examination, transcription and copying of particulars relating to the period in which the Operators managed the Business. The Operators shall also prepare and file for Owner, at Owner’s expense, all informational and/or tax returns which may be required by any Governmental Authority.

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4.09. Financial Statements. The Operators shall provide Owner (i) unaudited Financial Statements of the Business for each calendar month within 20 days after the end of each calendar month, (ii) quarterly Financial Statements of the Business for each fiscal quarter within 45 days after the end of each fiscal quarter and (iii) annual Financial Statements of the Business within 90 days after the end of each fiscal year.

4.10. Access, Review and Audit. Owner, any Gaming Authority and Lender (or their respective duly appointed agents) shall have the right at reasonable times and during normal business hours, after reasonable written notice to the Operators, to examine, audit, inspect and transcribe the Books and Records. With respect to such reviews, Owner, any Lender and their respective agents shall be subject to the confidentiality covenants in Section 10.02. The annual Financial Statements shall be audited by the Auditors at Owner’s expense.

4.11. Bank Accounts. The Operators shall establish at financial institution(s) designated by the Operators such bank accounts (“Bank Accounts”) as the Operators deem necessary for the operation of the Facilities. All Bank Accounts for the Facilities shall be in the name of either Operator, as agent for Owner. Owner and the Operators shall agree on the procedures for withdrawals and deposits of funds. The Operators shall have the right to designate individuals to disburse funds from the business bank accounts to pay all costs and expenses of managing, operating and maintaining the business and its properties, including authorized capital expenditures and management fees due to either Operator. Owner agrees that at all times during the term of this Agreement, a bank balance as approved in the Annual Plan shall be maintained in an amount necessary to provide sufficient working capital to assure the uninterrupted and efficient operation of the business.

4.12. Expenses.

(a) All costs, expenses, funding of operating deficits and working capital, and other obligations and liabilities hereunder including costs incurred by either Operator under this Agreement or in connection with the transactions contemplated hereby (“Owner’s Financial Obligations”) shall be the sole and exclusive responsibility and obligation of Owner, except for those instances herein where it is expressly and specifically stated that such item shall be for the account of the Operators. The Operators shall allocate to Owner the direct expense of employees of the Operators (including compensation expenses) to the extent that such employees provide dedicated services for the benefit of the Business; provided, however, that Owner shall have no obligation to reimburse either Operator for any such direct expense (other than Reimburseables) relating to the services provided by Michael Luzich or Brent Stevens. Owner shall have no obligation for any other corporate overhead of either Operator. It is understood that statements herein indicating that the Operators shall “furnish”, “provide” or otherwise supply, present or contribute items or services hereunder shall not be interpreted or construed to mean that either Operator is liable or responsible to fund or pay for such items or services, except in those specific instances mentioned above.

(b) With respect to Owner’s Financial Obligations, the same shall be funded and/or paid for as follows: (i) first, from monies which may be available in the Bank Accounts maintained by the Operators hereunder; and (ii) second, if such Bank Accounts maintained by the Operators hereunder do not contain monies sufficient to fund and/or pay Owner’s Financial

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Obligations, from monies which shall be deposited by Owner in such Bank Accounts within three (3) days after request therefor by the Operators in writing.

(c) It is understood and agreed that the Operators shall have no obligation or duty to fund and/or pay for any of Owner’s Financial Obligations.

4.13. Financial Management. The Operators shall be responsible for the management of the day-to-day financial affairs of the Business.

4.14. Annual Plans.

4.14.01 Submission of Annual Plans. No later than thirty (30) days prior to the end of each Fiscal Year, the Operators shall submit to Owner for Owner’s approval, an annual plan for the operation of the Business for the forthcoming Fiscal Year (each such annual plan is referred to herein as an “Annual Plan”). Each proposed Annual Plan shall consist of the following:

(a) An annual marketing plan (“Annual Marketing Plan”);

(b) An annual line item operating budget (“Annual Operating Budget”);

(c) An annual estimate of key operating statistics;

(d) An annual projection of sources and uses of cash by month; and

(e) An annual capital expenditures budget regarding capital expenditures (“Annual Capital Expenditures Budget”) which shall include the proposed schedule for effecting such repairs and/or improvements.

Each proposed Annual Plan shall be prepared in such form and containing such detail as Owner may reasonably require.

4.14.02 Preparation of Annual Plan. Each proposed Annual Plan shall be prepared by the Operators based on, among other things, the actual and projected results of the current Fiscal Year, the standard of maintaining and operating the Facilities in accordance with this Agreement, information with respect to possible occurrences which may impact the marketing and/or operation of the Business in the future, changes from the previous Fiscal Year’s results, reasonable expectations for the future and such other information and assumptions that shall be reasonably requested under the circumstances.

4.14.03 Review and Approval. In connection with the preparation and submission of a proposed Annual Plan, Owner will meet with the Operators within fifteen (15) days after delivery of the proposed Annual Plan for an in-depth review, including a discussion of the marketing strategy, operations format and rationale for proposed expenditures embodied in the proposed Annual Plan. Owner shall be required, by giving written notice to the Operators, to approve or disapprove each proposed Annual Plan within fifteen (15) days after the date Owner and the Operators last meet to discuss the proposed Annual Plan. The parties shall use all reasonable efforts to complete the review of the proposed Annual Plan no later than forty-five

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(45) days after the initial delivery of the proposed Annual Plan to Owner. Any notice that disapproves a proposed Annual Plan must contain reasonably detailed specific objections along with suggestions as to what corrective measures can be taken to make such proposed Annual Plan acceptable to Owner.

4.14.04 Disagreements Regarding Annual Plan. If Owner fails to provide written notice to the Operators of its objections within fifteen (15) days after the last meeting between Owner and the Operators, such proposed Annual Plan shall be deemed to be approved as submitted, subject to any changes upon which Owner and the Operators have previously agreed. If Owner disapproves or objects to any items contained in the proposed Annual Plan or any revisions thereto, Owner and the Operators shall cooperate with each other in good faith to attempt to expeditiously resolve the disputed or objectionable proposed items. If Owner and the Operators are unable to reach a mutually acceptable agreement concerning the disputed or objectionable items within fifteen (15) days after the date Owner advises the Operators of its objections as aforesaid, either party shall be entitled to submit the dispute to arbitration in accordance with Section 10.18. If Owner’s objections relate only to certain portions of the proposed Annual Plan or a Budget contained therein, the undisputed portions of the proposed Annual Plan shall be deemed to be adopted and approved and only those Budgets under dispute shall be submitted to arbitration.

4.14.05 Disagreements Regarding Annual Operating Budgets. With respect to objectionable items in any Annual Operating Budget, but only until and to the extent that any dispute concerning such objectionable items are not resolved, the corresponding item contained in the Annual Operating Budget for the preceding Fiscal Year shall be substituted in lieu of the disputed portions of the proposed Annual Operating Budget, excluding, however, line items in the previous Annual Operating Budget for extraordinary expenses or revenues. In any instance where a portion of an Annual Operating Budget from a preceding Fiscal Year is deemed to be applicable to the Annual Operating Budget in effect until a new Annual Operating Budget is fully approved, corresponding items contained in the Annual Operating Budget for the preceding Fiscal Year shall be automatically adjusted by a percentage equal to the percentage change in the Consumer Price Index during the preceding Fiscal Year. Such calculation of percentage change in the Consumer Price Index shall be made by the Operators based upon the then most recently published Consumer Price Index data at the time the calculation is made.

4.14.06 Disagreements Regarding Annual Capital Expenditures Budgets. If Owner and the Operators are unable to agree on the amount of any item in an Annual Capital Expenditures Budget, only those capital expenditures with respect to which Owner and the Operators have reached an agreement (or the undisputed portion of an amount in dispute) that are approved by Owner or are required to be made by Lender or any Governmental Authority shall be made until Owner and the Operators otherwise agree on the terms of such Annual Capital Expenditures Budget or the matter is decided by arbitration; provided, however, that until and to the extent that any dispute concerning objectionable items are not resolved, the corresponding item contained in the Annual Capital Expenditures Budget for the preceding Fiscal Year shall be substituted in lieu of the disputed portions of the proposed Annual Capital Expenditures Budget, excluding, however, line items in the previous Annual Capital Expenditures Budget for extraordinary expenses or revenues. The applicable Annual Plan will be appropriately adjusted to reflect the effect of any delay in capital expenditures.

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4.14.07 Operator Discretion Regarding Budgets. In the event that Operating Expenses in any fiscal year would in the aggregate exceed the Operating Expenses provided in the Annual Operating Budget for such fiscal year by more than 10%, the Operators shall revise the Annual Plan and submit to Owner for Owner’s approval as set forth in Section 4.15.

4.14.08 Operator’s Disclaimer. Notwithstanding the provisions of this Section 4.14 and all other provisions of this Agreement, Owner recognizes that neither Operator is, or is intended to be, a guarantor of the Annual Operating Budget. Owner acknowledges that notwithstanding the Operators’ experience in the operation of gaming facilities, the projections contained in each Operating Budget submitted from time to time to Owner by the Operators are mere estimates and are subject to and may be affected by changes in financial, economic and other conditions and circumstances beyond the Operators’ reasonable control, and the giving of such projections or the making of such Annual Operating Budgets shall never be construed as a guarantee or warranty by the Operators to Owner that such projections or pro formas will, in fact, occur.

4.15. Revisions to Annual Plan. If, in the Operators’ sole judgment, revisions to all or any portion of the Annual Plan are appropriate, the Operators shall revise the Annual Plan and submit such revised Annual Plan to Owner for approval in accordance with the provisions set forth in Section 4.14.

4.16. Remittance to Owner. Contemporaneously with furnishing the Financial Statements for each calendar month to Owner pursuant to Section 4.09, the Operators shall remit to Owner, subject to applicable Laws and the Related Contracts, from the Bank Accounts, an amount by which the total funds in the Bank Accounts exceed the sum of working capital and the current amount on deposit in the Capital Expenditures Fund.

4.17. Insurance. Owner, for the benefit of both Owner and the Operators, shall maintain adequate insurance during the term of this Agreement, including any insurance of the Operators which may be required. The Operators shall procure all insurance on behalf of Owner and the carrier, type and amount of coverage shall be designated by the Operators in their sole discretion.

4.18. Waiver of Liability. To the extent covered by insurance, each Operator and Owner each waives, releases and discharges the other from all claims or demands which each may have or acquire against the other, or against each other’s directors, officers, agents, employees or partners, with respect to any claim for any losses, damages, liability or expenses (including attorneys’ fees) incurred or sustained by either of them on account of injury to persons or damage to property or business arising out of the ownership, management, operation and maintenance of the Business, regardless whether any such claim or demand may arise because of the fault or negligence of the other party or its officers, partners, agents or employees. Except to the extent a loss, damage or expense is a result of the other party’s gross negligence, bad faith or willful misconduct, in the event of any such loss, damage, liability or expense, Owner and each Operator each shall look to the insurance maintained with respect to the Business or otherwise by such party and shall not make any claim or seek any recovery against the other party. Each policy of insurance maintained with respect to the Business shall contain a specific waiver of subrogation reflecting the provisions of this Section 4.18, or a provision to the effect that the

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existence of the preceding waiver shall not affect the validity of any such policy or the obligation of the insurer to pay the full amount of any covered loss sustained.

4.19. Legal Actions. Subject to Section 6.03, all matters of a legal nature involving the Business or the Facilities or any portion thereof shall be handled by legal counsel selected by the Operators and reasonably acceptable to Owner (such legal counsel which shall include but not be limited to Mayer, Brown, Rowe & Maw, is hereinafter referred to as “Approved Legal Counsel”). The Operators shall notify Owner of the commencement of any legal action or proceeding concerning the Business or the Facilities or any portion thereof as soon as practicable after the Operators receive actual notice of the commencement of such legal action unless such action is for money damages only and such damages are reasonably anticipated to be either fully covered by insurance or not in excess of $500,000. Except with respect to those legal matters in which Owner advises the Operators that it desires to be directly involved, the Operators shall be responsible for directing on behalf of Owner the Approved Legal Counsel to take any reasonable or necessary legal actions to protect Owner’s assets and to ensure compliance with the contractual obligations of others and all Governmental Requirements. In any legal action or proceeding in which Owner is to be the plaintiff or complainant, then the Operators may not commence such legal action or proceeding without first obtaining the prior consent of Owner.

ARTICLE 5

COMPENSATION OF THE OPERATORS

5.01. Forms of Compensation. For and in consideration of the services rendered by the Operators pursuant to this Agreement, other than Pre-Opening Services for which Owner agrees to pay the Operators the Pre-Opening Services Fee, Owner agrees to pay to the Operators compensation in the form of (i) the Basic Management Fee, (ii) the Incentive Fee, and (iii) all Reimbursables.

5.02. Basic Management Fee. The “Basic Management Fee” shall be an amount equal to one and seventy-five one-hundredths percent (1.75%) of Net Revenue (excluding food and beverage revenue). The Basic Management Fee shall be due and payable monthly in arrears on the date the monthly Financial Statements are delivered to Owner. The Basic Management Fee shall be adjusted quarterly based on actual results reported for each such Fiscal Quarter and, if necessary, annually based on actual results reported for each Fiscal Year. A partial Fiscal Year at the beginning and end of the Term shall be treated as a Fiscal Year for purposes of this Section 5.02.

5.03. Incentive Fee. The “Incentive Fee” shall be an amount equal to (i) three percent (3%) of the first $25 million of EBITDA; (ii) four percent (4%) of EBITDA in excess of $25 million but less than $30 million of EBITDA; and (iii) five percent (5%) of EBITDA in excess of $30 million. The Incentive Fee shall be due and payable monthly in arrears on the date the monthly Financial Statements are delivered to Owner. The Incentive Fee shall be adjusted quarterly based on annual forecasts and annually based on actual results reported in the Financial Statements for each Fiscal Year. A partial Fiscal Year at the beginning and end of the Term shall be treated as a Fiscal Year for purposes of this Section 5.03.

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5.04. Collection of Management Fees. The Operators shall have the right to collect for themselves the Management Fees and Reimbursables from any of the Bank Accounts at the time such amounts are payable. If at any time the payment, in whole or in part, of the Management Fees or any Reimbursables is not permitted or is otherwise subject to any restriction against payment by any Loan Document, until such time as such payments are permitted to be made in full to the Operators, such unpaid amounts shall accrue interest from the date such payments are required to be made until the date such payments are actually made at a rate per annum equal to 12 ¹/4 %, compounded daily and calculated on the basis of a 360-day year.

5.05. Allocation of Management Fees and Other Amounts. The Management Fees, Pre-Opening Services Fees, Reimbursables and all other amounts due and payable to the Operators hereunder, whether for the account of OEDA, PGC or the Operators generally, shall be paid by Owner directly to OEDA, which payment to OEDA shall be deemed to satisfy any payment obligation in respect of such amounts to PGC. OEDA shall distribute such portion of any such amounts to PGC as is determined by mutual agreement of PGC and OEDA.

ARTICLE 6

INDEMNITY

6.01. Indemnification to the Operators. Owner agrees to indemnify and hold each Operator and each Operator Indemnified Person harmless from and against all loss, liability or cost (including reasonable attorneys’ fees and expenses) that is not covered by insurance proceeds and which either Operator and any Operator Indemnified Person may sustain, incur or assume as a result of any Claims which may be alleged, made, instituted or maintained against Operator, any Indemnified Person or Owner, jointly or severally, arising out of, resulting from or based upon (i) any breach by Owner of any of its representations, warranties, covenants or agreements contained in this Agreement, (ii) the ownership, condition or use of the Facilities, (iii) the management or operation of the Business, including, without limitation, obligations or liabilities arising out of or relating to (A) any federal, state or local tax or duty of any kind, (B) indebtedness of Owner or other obligations or liabilities of Owner necessary to operate the Business, including but not limited to the Jefferies Financing and the Operating Expenses, (C) employee or labor relations matters including, but not limited to, employee benefit or similar plans, medical benefits, life insurance, severance, workers’ compensation, (D) any claim, proceeding or other litigation involving the Business, including, without limitation, injury to person(s) and damage to property or business by reason of any cause whatsoever in and about the Facilities, whether caused, wholly or partially, by the negligence of either Operator or its members, officers, employees agents or Affiliates, (E) the failure of the Business to comply in any respect with applicable Gaming Laws, Governmental Requirements, Environmental Requirements, or other applicable laws, statutes, rules or regulations to which either Owner, either Operator or the Business is subject, or (F) the failure by Owner, either Operator or any other Person to consummate the Jefferies Financing; provided, however, Owner shall not be liable to indemnify and hold either Operator or any Operator Indemnified Person harmless from any such uninsured loss, liability or cost (including costs of defense) solely to the extent it is the

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result of gross negligence or willful misconduct or criminal conduct of the party seeking indemnification hereunder.

6.02. Indemnification to Owner. Each Operator agrees to indemnify and hold Owner and each Owner Indemnified Person free and harmless from all loss, liability or cost (including reasonable attorneys’ fees) that is not covered by insurance proceeds and which Owner and any Owner Indemnified Person may sustain, incur or assume as a result of any Claims which may be alleged, made, instituted or maintained against Owner, either Operator or any Indemnified Person, jointly or severally, arising out of or based upon (i) the operation, condition or use of the Facilities by either Operator, or (ii) the operation or management of the Business by either Operator, including, without limitation, injury to person(s) and damage to property or business by reason of any cause whatsoever in and about the Facilities or elsewhere, and any requirement or award relating to course of employment, working conditions, wages and/or compensation of employees or former employees at the Facilities, in each case solely to the extent any such injury or damage is caused by the gross negligence or willful misconduct or criminal conduct of either Operator or any of their respective employees.

6.03. Claiming Procedure.

6.03.01 Notice. Promptly after the assertion of any Claim by a third party which may give rise to a claim for indemnification from an indemnitor under this Agreement, an Indemnified Person shall notify the indemnitor in writing of such Claim and advise the indemnitor whether the Indemnified Person intends to contest such Claim. Failure to notify an indemnitor shall not relieve such indemnitor from any ability hereunder to the extent indemnitor is not materially prejudiced as a result thereof and in any event shall not relieve indemnitor from any liability which indemnitor may have otherwise than on account of this Agreement.

6.03.02 Contest and Defend. The Indemnified Person shall permit the indemnitor to contest and defend against such Claim, at the indemnitor’s expense, if the indemnitor has confirmed to the Indemnified Person in writing that it agrees that the Indemnified Person is entitled to indemnification hereunder in respect of such Claim, unless the conduct of its defense by the indemnitor could be reasonably likely to prejudice such Indemnified Person due to the nature of the Claims presented or by virtue of a conflict between the interests of such Indemnified Person and such indemnitor and another Indemnified Person whose defense has been assumed by the indemnitor. Notwithstanding a determination by the indemnitor to contest such Claim, the Indemnified Person shall have the right to be represented by its own counsel and accountants at its own expense except as set forth above. In any case, the Indemnified Person shall make available to the indemnitor and its attorneys and accountants, at all reasonable times during normal business hours, all books, records, and other documents in its possession relating to such Claim. The party contesting any such Claim shall be furnished all reasonable assistance in connection therewith by the other party (with reimbursement of reasonable expenses by the indemnitor). If the indemnitor fails to undertake the defense of or to settle or pay any such third-party Claim within fifteen (15) days after the Indemnified Person has given written notice to the indemnitor advising the indemnitor of such Claim, or if the indemnitor, after having given notice to the Indemnified Person that it intends to undertake the defense, fails forthwith to defend, settle

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or pay such Claim, then the Indemnified Person may take any and all necessary action to dispose of such Claim including, without limitation, the settlement or full payment thereof upon such terms as it shall deem appropriate, in its sole discretion, subject to the following with respect to any proposed settlement thereof.

6.03.03 Compromise or Settlement. The indemnitor shall not consent to the terms of any compromise or settlement of any third-party Claim defended by the indemnitor in accordance herewith (other than terms related solely to the payment of money damages and only after the indemnitor has furnished the Indemnified Person with such evidence as the Indemnified Person may reasonably request of the indemnitor’s ability (financial and otherwise) to pay promptly the amount of such money damages at such times as provided in the compromise or settlement and so long as any such settlement does not include any statement as to or an admission of fault, culpability or failure to act by or on behalf of any Indemnified Person) without the prior written consent of the Indemnified Person.

6.03.04 Notice. Any claim for indemnification under this Agreement which does not result from the assertion of a Claim by a third party shall be asserted by written notice given by the Indemnified Person to the indemnitor. Such indemnitor shall have a period of thirty (30) days within which to respond thereto. If such indemnitor does not respond within such thirty (30) day period, such indemnitor shall be deemed to have accepted responsibility to make payment, and shall have no further right to contest the validity of such Claim. If the indemnitor does respond within such 30-day period and rejects such Claim in whole or in part, such Indemnified Person shall be free to pursue such remedies as may be available to such party under applicable Law, including through arbitration as provided for in Section 10.18 hereof (it being understood that any such rejection shall not limit in any way such Indemnified Person’s right to indemnification under this Agreement).

6.04. Mitigation. Each indemnitor and Indemnified Person shall use reasonable efforts and shall consult and cooperate with each other with a view towards mitigating Claims that may give rise to claims for indemnification under Sections 6.01 and 6.02;

6.05. Payment. Each indemnitor agrees to pay amounts due hereunder (i) within ten (10) days of written notice in respect of its indemnity obligations which it has accepted pursuant to Section 6.03.02 or which it has been deemed to accept pursuant to Section 6.03.04, and (ii) within five (5) days of any final adjudication of any indemnity obligations as to which it has not so accepted.

ARTICLE 7

DAMAGE TO, DESTRUCTION OF OR CONDEMNATION OF THE NEW FACILITIES

7.01. Damage to and Destruction of the New Facilities.

In the event of a fire or other property loss resulting in damage to, or impairment or destruction of, the New Facilities, if Owner fails to repair, restore, rebuild or replace any damage within sixty (60) days after the date of Owner’s settlement with the insurance company

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with respect to the fire or other casualty or shall fail to complete the same diligently, the Operators, at their election, may terminate this Agreement.

7.02. Condemnation.

If the whole of the New Facilities shall be taken or condemned in any eminent domain, condemnation, compulsory acquisition or like proceeding by any competent authority for any public or quasi-public use or purpose, or transferred or conveyed to any competent authority in anticipation of such eminent domain, condemnation, compulsory acquisition or like proceeding, or if such a portion thereof shall be taken or condemned or conveyed as to have a Material Adverse Effect or otherwise make it imprudent or unreasonable to use the remaining portion in a manner satisfactory to Owner, in Owner’s reasonable judgment, then in any of such events this Agreement shall cease and terminate as of the date of such taking or condemnation.

ARTICLE 8

ASSIGNMENT

8.01. Sale/Assignment.

8.01.01 Owner Transfer. Owner shall have no right to Transfer its interests in this Agreement without the prior written consent of the Operators; provided that Owner may terminate this Agreement if the Operators do not consent to any such Transfer.

8.01.02 Operator Transfer. Neither Operator shall have the right to Transfer its interest in this Agreement without the prior written consent of Owner; provided that either Operator may assign this agreement to any wholly-owned Subsidiary of Peninsula Gaming Partners, LLC.

8.02. Effect of Assignment. In the event the necessary consent to any assignment of this Agreement is given by Owner or the Operators, no further assignment that is restricted by Section 8.01 shall be made without the express written consent of Owner or the Operators. An assignment to which Owner or the Operators has expressly consented in writing shall relieve the assignor of its obligations under this Agreement after the effective date of such assignment provided that the assignee specifically assumes all of the assignor’s obligations and duties recited herein after the effective date of such assignment pursuant to a written assignment.

ARTICLE 9

TERMINATION

9.01. Termination. This Agreement shall terminate upon the occurrence of any of the following events:

9.01.01 Expiration. The expiration of the stated Term including any extensions in accordance with the terms hereof;

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9.01.02 Mutual Agreement. Agreement by Owner and each Operator in writing to terminate this Agreement;

9.01.03 Owner Default. At the sole discretion of the Operators, upon (i) the failure by Owner to make any monetary payment required hereunder on or before the due date and such failure continues for ten (10) Business Days after receipt by the Operators of a written notice from Owner specifying such failure or (ii) the failure by Owner to perform its material obligations in this Agreement and such failure has a material adverse effect on the financial condition or results of operations of the Business and such failure shall continue for a period of thirty (30) days after written notice thereof from the Operators to Owner specifying in reasonable detail the nature of such failure;

9.01.04 Operator Default. At the sole discretion of Owner, upon the failure by the Operators to perform their material obligations contained in this Agreement and such failure has a material adverse effect on the financial condition or results of operations of the Business and such failure shall continue for a period of thirty (30) days after written notice thereof from Owner to the Operators specifying in reasonable detail the nature of such failure,

9.01.05 Operator License. At the sole discretion of Owner, if the Operators shall have been found unsuitable to provide the services contemplated by this Agreement by the Gaming Authorities and no appeal or other remedy is available or undertaken; and

9.01.06 Termination Rights. The exercise of any other termination right expressly granted under this Agreement pursuant to Section 7.01, 7.02 or 8.01.

9.02. Effect of Termination. Upon termination of this Agreement, all sums owed by Owner to the Operators or by the Operators to Owner shall be paid within thirty (30) days of the termination date. In the event of any termination of this Agreement, Owner shall, notwithstanding such termination, be liable to the Operators for the fees earned and Reimbursables incurred by the Operators hereunder prior to such termination as follows: (i) unpaid accrued and payable Management Fees, Pre-Opening Services Fees (including that pro rata portion thereof earned through the date of termination but for which payment was accrued pursuant to Section 2.04) and Operator Advances (including any unpaid accrued interest thereon), if any, (ii) the present value (calculated based on projections at the time of termination and based on a discount rate of 8%) of the projected Management Fees remaining unpaid during the eight (8) year period immediately subsequent to the Opening Date, (iii) all Reimbursables incurred prior to termination hereunder, plus (iv) a termination fee equal to $5.0 million plus an amount computed like interest at the rate of eight percent (8%) per annum (compounded semi-annually as of June 30 and December 31 of each calendar year) on such $5.0 million to the date of payment thereof; provided, however, that the amounts specified in clause (ii) above shall not be payable if the termination is made by Owner pursuant to Section 9.01.04 or 9.01.05. Owner shall pay the Operators the amounts owed the Operators described in clauses (i) through (iii) above through the date of termination, after deducting therefrom any amounts owed by the Operators to Owner and not disputed by the Operators, within 10 days after such termination. Owner shall pay the Operators the amounts owed the Operators described in clause (iv) above on the date that either OEDA no longer owns any equity interests of Owner or PGC no longer owns any equity interests of OEDA.

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9.03. Operator Responsibilities. In the event of termination of this Agreement, the Operators will relinquish control of (i) all Bank Accounts and (ii) all funds in or accounts in Operator’s control which relate to the Business, subject to the Operators’ rights set forth under Section 9.02.

9.04. Survival. Notwithstanding anything contained herein to the contrary, the parties acknowledge that: (i) the provisions of Article 6, Section 9.02, Section 9.03, Section 9.05, Section 10.02 and Section 10.04 and (ii) the obligations of either party for all amounts due and payable from the Operators to Owner or from Owner to the Operators shall survive the termination or expiration of this Agreement.

9.05. Proprietary Information. In the event of termination of this Agreement, the Operators will relinquish to Owner all of the Books and Records and the marketing, credit and customer data contained in operating records of the Business and which are generated by the Operators in connection with its duties hereunder. As of the termination of this Agreement, the Operators shall not have the right to copy such records prior to relinquishing control over them to Owner, except as provided in Section 4.08. Upon termination of this Agreement for any reason, the Operators’ marketing, credit and customer data and proprietary computer programs generated prior to the date hereof shall remain the sole property of the Operators, and shall not be used or disclosed to other Persons by Owner or its agents or Affiliates provided that the Operators’ records indicate that such information and programs were complied and/or developed prior to the date hereof. Owner and the Operators acknowledge that pursuant to the sharing of information by and among Owner, the Operators and the Operators’ respective Affiliates, Owner, the Operators and the Operators’ respective Affiliates will have information and copies of records from the Business prior to termination and nothing herein shall prevent the use of such information so obtained for the purposes contemplated hereunder and subject to the limitations contained herein.

ARTICLE 10

GENERAL PROVISIONS

10.01. Entire Agreement. This Agreement embodies the entire agreement and understanding of Owner and the Operators relating to the subject matter hereof and supersedes all prior representations, agreements and understandings, oral or written, relating to such subject matter (other than the Operating Agreement of Owner), including, without limitation, the Original MSA..

10.02. Confidentiality. Both parties shall maintain confidentiality with respect to material developments in the course of development of the Facilities and operation of the Business, subject to Governmental Requirements and applicable Law. Except as required by any Law (including, without limitation, federal securities and stock exchange or National Association of Securities Dealers, Inc. requirements) and Gaming Authorities, material confidential information shall be made available only to such of Owner’s or the Operators’ employees and consultants as are required to have access to the same in order for the recipient party to adequately use such information for the purposes for which it was furnished. Any Person to whom such information is disclosed shall be informed of its confidential nature and the party

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disclosing such information shall obtain a confidentiality agreement from such Person the terms of which shall be consistent with the provisions of this Section 10.02. Information provided by one party to the other shall be presumed confidential unless the information is (a) published or in the public domain other than as a result of any action by the recipient thereof, (b) disclosed to the recipient by a third party not known by the recipient to be subject to an agreement of confidentiality or (c) presented to the recipient under circumstances which clearly and directly indicate the delivering party does not intend such information to be confidential.

10.03. Approvals. Any consent or approval referred to herein (by whatever words used) of either party hereto shall not be unreasonably withheld, delayed or conditioned, except in those situations in which this Agreement explicitly gives the party absolute or sole discretion to give or withhold such approval or consent. Except as otherwise expressly provided herein, whenever any party has called upon the other to execute and deliver a consent or approval in accordance with the terms of this Agreement, the failure of such party to expressly disapprove within ten (10) Business Days after written request therefor in accordance with the terms of Article 3, or such other period as specifically set forth herein is given, shall be deemed to be a consent or approval. In the event that any party refuses to give its consent or approval to any request by another party, such refusing party shall indicate by written notice to the other the reason for such refusal in sufficient detail for the party requesting such consent or approval to understand the exact basis for withholding such consent or approval.

10.04. Conflicts of Interest; Non-Compete.

10.04.01 Conflicts of Interest. Owner acknowledges and agrees that the Operators may have and may distribute promotional materials for the Operators’ Affiliates’ facilities, including casinos, at the New Facilities if reciprocal arrangements are made in favor of the Business at Operators’ Affiliates’ facilities.

10.04.02 Covenant Not to Compete of Owner; Non-Solicitation. Owner agrees that during the Term, except for the Facilities, it will not either directly or indirectly: (i) own, manage or operate a casino in any jurisdiction in which either Operator or any of their respective Affiliates own, manage or operate a casino or conduct other gaming activities, now or in the future, whether as a proprietor, partner, stockholder, advisor, consultant or in any other capacity, or (ii) provide technical, marketing or other assistance to any casino or casino operator in any jurisdiction where either Operator or any of their respective Affiliates own, manage or operate a casino or conduct other gaming activities. Owner acknowledges that the foregoing restriction is reasonable in scope, duration and geographic area and is properly required to protect the legitimate business needs of the Operators. Additionally, Owner agrees that during the Term and for a period of two (2) years thereafter, without the prior written consent of the Operators, neither Owner nor any of its Affiliates shall, directly or indirectly, (i) in any manner induce or attempt to induce any employee, customer or supplier of the Business or any employee, customer or supplier of either Operator or any of their respective Affiliates with respect to any gaming operations conducted by them at such time to leave or cease doing business with either Operator or any of their respective Affiliates, as applicable, or in any way interfere with the relationship between them and either Operator or any of their respective Affiliates, as applicable, or (ii) hire or solicit for employment any employee of either Operator or any of their respective Affiliates (other than Owner) with respect to any gaming operations conducted by them; provided,

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however, that the preceding clause (ii) shall not prohibit Owner from hiring (but not soliciting) any employee of either Operator or any of their respective Affiliates to the extent such employee is employed by Owner in a business that is not, directly or indirectly, in competition with any gaming operations then conducted by either Operator or any of their respective Affiliates. The term “solicitation” as used in the preceding sentence includes, without limitation, offering any employee employed by either Operator or any of their respective Affiliates employment commencing after the non-solicitation period. The Operators shall not solicit for employment any employee of the Business for a period of six months after termination of this Agreement.

10.04.03 Right of First Offer to Future Business. If, during the Term, Owner or its Affiliates constructs, develops or owns any casino, other than the Business, located in Louisiana for which Owner or its Affiliates is seeking to engage a third party to manage and operate such casino, Owner shall offer to the Operators a right of first offer to manage and operate such casino. Owner shall provide to the Operators written notice of Owner’s or its Affiliates’ intent to construct, develop or own such casino. Upon the Operators’ receipt of such written notice, Owner and the Operators shall, for a period of ninety (90) days, commence good faith negotiations and enter into a management services agreement for the Operators management of such casino on terms and conditions similar to those contained in this Agreement and acceptable to Owner and the Operators. If: (i) Owner and the Operators, each acting in good faith, do not execute a management services agreement for such casino within the ninety (90) day period and (2) such 90-day period is not extended, in writing, by Owner and the Operators, then Owner shall have the right to enter into negotiations with and execute a management services agreement for such casino with casino operators other than the Operators.

10.05. Best Evidence and Counterparts. This Agreement shall be executed in original and photostatic copies and each copy bearing original signatures of the parties hereto in ink shall be deemed an original. This Agreement may be executed in several counterparts and all so executed shall constitute one agreement, binding on all parties hereto, notwithstanding that all of the parties are not signatory to the same counterpart.

10.06. Amendment or Modification. This Agreement may not be amended or modified except by a writing signed by all parties hereto.

10.07. Governing Law. This Agreement shall be governed by and construed under the laws of the State of New York. This Agreement shall be deemed to contain all provisions required by Gaming Laws and is subject to any approvals required under the Gaming Laws. To the extent any provision in this Agreement is inconsistent with the Gaming Laws, the Gaming Laws shall govern. Should any provision of this Agreement require judicial interpretation or as to any arbitration under this Agreement, it is agreed that the court or arbitrators interpreting or considering such provision shall not apply the presumption that the terms hereof shall be more strictly construed against a party by reason of the rule or conclusion that a document should be construed more strictly against the party who itself or through its agent prepared the same. It is agreed and stipulated that all parties hereto have participated equally in the preparation of this Agreement and that legal counsel was consulted by each party before the execution of this Agreement.

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10.08. Interpretation. The preamble recitals of this Agreement are incorporated into and made a part of this Agreement; titles of Sections and Articles are for convenience only and are not to be considered a part of this Agreement. All references to years shall mean a year commencing as of the first day of January of each year. All references to the singular shall include the plural and all references to gender shall, as appropriate, include other genders.

10.09. Severability. Except as expressly provided to the contrary herein, each section, part, term or provision of this Agreement shall be considered severable, and if for any reason any section, part, term or provision herein is determined to be invalid and contrary to or in conflict with any existing or future law or regulation by a court or governmental agency having valid jurisdiction, such determination shall not impair the operation of or have any other effect on other sections, parts, terms or provisions of this Agreement as may otherwise remain enforceable and intelligible, and the latter shall continue to be given full force and effect and bind the parties hereto unless such survival vitiates the intent of the parties hereto, and said invalid sections, parts, terms or provisions shall not be deemed to be a part of this Agreement. If any provisions are void or unenforceable if enforced to their maximum extent, the provisions in question shall be enforced to the maximum extent such provisions are enforceable.

10.10. Force Majeure. The provisions of this Section 10.10 shall be applicable if there shall occur during the Term any strike, boycott, lockout or other labor trouble; storm, fire, earthquake or Act of God; any riot, civil disturbance, or any act of war, terrorism or of the public enemy; the shortage, unavailability or disruption in the supply of labor, materials, fuels or the disruption of postal, electrical, telephone or other utility service; any future governmental law, ordinance, order rule or regulation; delay attributable to the failure to obtain any Operating Permit or any Approval for reasons that are not the fault of or beyond the reasonable control of the party obligated to obtain such Permit or Approval or any other cause or contingency beyond the respective parties’ control, but only during such time as such party is unable due to a specified reason herein to perform its obligations hereunder. If the Operators or Owner shall, as the result of any of the above-described events, fail to timely perform any of its obligations under this Agreement, then, upon written notice to the other within five (5) Business Days of such event, such failure shall be excused and not be a breach of this Agreement by the party claiming Force Majeure, but only to the extent occasioned by such event. Notwithstanding anything contained herein to the contrary, the provisions of this Section 10.10 shall not be applicable to the Operators’ or Owner’s obligation to make any payments to the other pursuant to the terms of this Agreement.

10.11. Waiver. None of the terms of this Agreement, including this Section 10.11, or any term, right or remedy hereunder shall be deemed waived unless such waiver is in writing and signed by the party to be charged therewith and in no event by reason of any failure to assert or delay in asserting any such term, right or remedy or similar term, right or remedy hereunder.

10.12. Definitions. All capitalized terms referenced or used in this Agreement and not specifically defined herein shall have the meaning set forth on Exhibit “A”, which is attached hereto and incorporated herein by this reference.

10.13. Governing Document. This Agreement shall govern in the event of any inconsistency between this Agreement and any of the Exhibits attached hereto.

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10.14. Inspection of Facilities. Owner shall have the right, at any time during the Term, to enter upon the Facilities or any portion thereof, to inspect same.

10.15. Third-Party Beneficiaries. There shall be no third-party beneficiaries with respect to this Agreement.

10.16. Regulatory Information. Owner and the Operators shall each provide to the other parties all information pertaining to this arrangement and the Business and as to their ownership structure, corporate structure, officers and directors, stockholders’ and partners’ identity, financing, transfers of interest, etc., as shall be required by any regulatory authority with jurisdiction over the other or with respect to any federal or state security law requirement.

10.17. Successors and Assigns. This Agreement and the rights of Owner and the Operators evidenced hereby shall inure to the benefit of and be binding upon the successors and, to the extent permitted hereunder, assigns of Owner and either Operator.

10.18. Dispute Resolution. The parties hereto hereby agree that any controversy, dispute or claim arising out of or relating to this Agreement or any breach of this Agreement shall be resolved in accordance with the terms and provisions of this Section 10.18.

(a) Agreement to Negotiate. Before submitting any controversy, dispute or claim arising out of or relating to this Agreement or any breach of this Agreement to arbitration, the following procedures shall be followed:

i. The party desiring to submit any such controversy, dispute or claim to arbitration (“Claimant”) first shall give written notice thereof to the other party (“Recipient”) setting forth in detail the pertinent facts and circumstances relating to such controversy, dispute or claim;

ii. Recipient shall have a period of fifteen (15) days in which to consider the controversy, dispute or claim that is the subject of the notice and to furnish in writing to Claimant a written statement of Recipient’s position with respect thereto;

iii. Within seven (7) days of Claimant’s receipt of Recipient’s written statement, Claimant and Recipient shall meet with a mediator, whose identity shall be mutually agreed upon by Claimant and Recipient, in an effort to resolve amicably any difference that may exist between the respective positions of Claimant and Recipient, and, if such resolution is not achieved, either or both of Claimant and Recipient shall have the right to submit the matter to arbitration.

(b) Procedure for Arbitration. Any controversy, dispute or claim arising out of or relating to this Agreement or any breach of this Agreement, including any dispute concerning the termination of this Agreement, that has not been resolved in accordance with Section 10.18(a) shall be settled by arbitration in Denver, Colorado in accordance with the commercial arbitration rules of the American Arbitration Association then existing. In arbitration, this Agreement (including this provision providing for arbitration in the event of any

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controversy, dispute or claim arising out of or relating to this Agreement or any breach of this Agreement that has not been resolved in accordance with Section 10.18(a)) shall be specifically enforceable. Judgment upon any award rendered by an arbitrator may be entered in any court having jurisdiction. The prevailing party to an arbitration proceeding commenced hereunder shall be entitled as a part of the arbitration award to the costs and expenses (including reasonable attorneys’ fees) of investigating, preparing and pursuing an arbitration claim as such costs and expenses are awarded by the arbitrator.

10.19. Operators; Generally. The parties hereto hereby acknowledge and agree that any and all obligations or rights of the Operators hereunder may be fulfilled or exercised by either Operator, and that upon any such fulfillment or exercise by either Operator, such obligation or right of each Operator shall be deemed fulfilled or exercised by both Operators.

10.20. Effect of Amendment and Restatement; Waiver. The parties hereto hereby acknowledge and agree that the provisions of this Agreement shall be deemed effective as of February 15, 2002, the date of the Original MSA and hereby waive any breach or default by the other party hereto that shall have occurred on or prior to the date hereof.

*        *        *        *        *

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

OWNER:
THE OLD EVANGELINE DOWNS, L.L.C.
/s/    MICHAEL S. LUZICH
By:	Michael S. Luzich
Its:	President
OPERATORS:
PENINSULA GAMING COMPANY, LLC
/s/    MICHAEL S. LUZICH
By:	Michael S. Luzich
Its:	President
OED ACQUISITION, LLC
/s/    MICHAEL S. LUZICH
By:	Michael S. Luzich
Its:	President

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EXHIBIT “A”

Definitions

All capitalized terms referenced or used in the Agreement and not specifically defined therein shall have the meaning set forth below in this “Exhibit A”. The article, section and paragraph and exhibit references herein refer to the Articles, Sections and Exhibits in and to the Agreement.

Affiliate. The term “Affiliate” shall mean a Person that directly or indirectly, or through one or more intermediaries, Controls, is Controlled by, or is under common Control with the Person in question and any stockholder or partner of any Person referred to in the preceding clause owning more than twenty-five percent (25%) or more of (i) such Person if such Person is a publicly traded corporation or (ii) an ownership or beneficial interest in any other Person.

Agreement. The term “Agreement” shall have the meaning set forth in the preamble.

Annual Plan. The term “Annual Plan” shall have the meaning set forth in Section 4.14.

Approval. The term Approval means any license (including the License), finding of suitability, qualification, approval or permit by or from any Gaming Authority.

Auditors. The term “Auditors” shall mean one of the five (5) largest independent certified public accounting firms in the United States at the time of their appointment selected by Owner to prepare the audited annual Financial Statements unless otherwise agreed by Owner and the Operators.

Bank Accounts. The term “Bank Accounts” shall have the meaning set forth in Section 4.11.

Basic Management Fee. The term “Basic Management Fee” shall have the meaning set forth in Section 5.02.

Books and Records. The term “Books and Records” shall have the meaning set forth in Section 4.08.

Budget. The term “Budget” means any budget contemplated by the Agreement that has been approved by Owner or has been arbitrated as set forth in the Agreement.

Business. The term “Business” shall mean the conduct of all operation at the Facilities, including Gaming Activities, food service, entertainment, parking activities and all racetrack activities.

Business Days. The term “Business Days” shall mean all weekdays except those that are official holidays of the State of Louisiana or the U.S. government. Unless specifically stated as “Business Days,” a reference to “days” means calendar days.

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Cash Collateral and Disbursement Agreement. The term “Cash Collateral and Disbursement Agreement” shall mean that certain Cash Collateral and Disbursement Agreement, dated as of February     , 2003, among Owner, The Old Evangeline Downs Capital Corp., U.S. Bank National Association and Abacus Project Management, Inc.

Claim. The term “Claim” shall mean any allegation, claim, civil or criminal action, proceeding, charge or prosecution which may be alleged, made, instituted or maintained against Operator, Owner, or their respective Indemnified Persons, jointly and severally, or individually, as the case may be, arising out of or based upon the ownership, condition or use of the New Facilities or the operation or management of the Business, including, without limitation, injury to person(s) and damage to property or business by reason of any cause whatsoever in and about the New Facilities or elsewhere, and any requirement or award relating to course of employment, working conditions, wages and/or compensation of employees or former employees at the New Facilities.

Control. The term “Control” (including derivations such as “Controlled” and “Controlling”) means with respect to a Person, the ownership of more than fifty percent (50%) or more of the beneficial interest or voting power of such Person.

Debt Service. The term “Debt Service” shall mean payments (including without limitation, principal, interest and expense reimbursement) with respect to (i) capitalized leases, as defined in accordance with Generally Accepted Accounting Principles, and (ii) all third party borrowed funds related to the Business.

EBITDA. The term “EBITDA” shall mean the earnings of the Business before interest, income taxes, depreciation and amortization; provided, however, that in calculating earnings hereunder, Management Fees payable under this Agreement shall not be deducted.

Employee. The term “Employee” shall mean any employee of Owner engaged by the Operators to work in or about the Facilities in connection with the conduct of the Business.

Environmental Requirements. The term “Environmental Requirements” means all applicable present and future statues, regulations, rules, ordinances, codes, licenses, permits, orders, approvals, plans, authorizations, concessions, franchises and similar items, of all governmental agencies, departments, commissions, boards, bureaus, or instrumentalities of the United States, states and political subdivisions thereof and all applicable judicial, administrative, and regulatory decrees, judgments and orders relating to the protection of human health or the environment, including without limitation: (i) all requirements, including but not limited to those pertaining to reporting, licensing, permitting, investigation and remediation of emissions, discharges, releases or threatened releases of Hazardous Materials, chemical substances, pollutants, contaminants or hazardous or toxic substances, materials or wastes whether solid, liquid or gaseous in nature, into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of chemical substances, pollutants, contaminants or hazardous or toxic substances, materials or wastes, whether solid, liquid or gaseous in nature; and (ii) all requirements pertaining to the protection of the health and safety of employees or the public.

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Existing Racetrack. The term “Existing Racetrack” shall mean the existing racetrack and related facilities located in Lafayette, Louisiana and owned by Owner.

Facilities. The term “Facilities” shall mean the Existing Racetrack and the New Facilities.

FF&E. The term “FF&E” shall mean all furniture, furnishings, equipment, and fixtures, including gaming equipment, computers, housekeeping and maintenance equipment, and other items necessary or appropriate to operate the Facilities.

Financial Statements. The term “Financial Statements” shall mean an income statement, balance sheet and a sources and uses of cash statement, all prepared in conformity with Generally Accepted Accounting Principles and on a basis consistent in all material respects with that of the preceding period (except as to those changes or exceptions disclosed in such Financial Statements).

Fiscal Quarter. The term “Fiscal Quarter” shall mean the four (4) quarters corresponding to the Fiscal Year commencing on January 1, April 1, July 1 and October 1 of each Fiscal Year. In the event the Business opens on a date other than the first day of a Fiscal Quarter, “Fiscal Quarter” also shall refer to the period commencing on the Opening Date and ending on the last day of the calendar quarter (e.g., March 31, June 30, September 30 or December 31) in which the Opening Date occurs.

Fiscal Year. The term “Fiscal Year” shall mean a period beginning and ending on January 1 and December 31, respectively. In the event the Opening Date occurs on a date other than the first day of a Fiscal Year, “Fiscal Year” shall also refer to the period commencing on the Opening Date and ending on the last day of the calendar year in which the Opening Date occurs. In the event this Agreement terminates on a date other than the last day of a calendar year, the term “Fiscal Year” shall include the period from the first day of the Fiscal Year during which this Agreement terminates to and including the date of such termination.

Force Majeure. The term “Force Majeure” shall have the meaning set forth in Section 10.10.

Gaming Activities. The term “Gaming Activities” shall mean the coin-operated machines and other casino-type games’ conducted by the Operators at the New Facilities.

Gaming Authorities. The term “Gaming Authorities” or “Authority” shall mean all agencies, authorities and instrumentalities of any state, nation or other governmental entity, or any subdivision thereof, regulating gaming or related activities in the United States and having jurisdiction over the New Facilities or the Business.

Gaming Laws. The term “Gaming Laws” shall mean any statute, ordinance, promulgation, law, rule, regulation, code, judicial or administrative precedent or order of any court or other body of the State of Louisiana or agency or subdivision thereof which regulates the conduct of the Gaming Activities.

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Generally Accepted Accounting Principles. The term “Generally Accepted Accounting Principles” shall mean generally accepted accounting principles as established from time to time by the American Institute of Certified Public Accountants.

Governmental Authorities. The term “Governmental Authorities” or “Authority” means the United States, the State of Louisiana or any other political subdivision in which the Facilities are located, and any court or political subdivision, agency, commission, board or instrumentality or officer thereof, whether federal, state, or local, having or exercising jurisdiction over Owner, the Operators or the Facilities, including without limitation, any Gaming Authority.

Governmental Requirements. The term “Governmental Requirements” means all Laws and agreements with any Governmental Authority that are applicable to the acquisition, development, construction and/or renovation of the Facilities or the management or operation of the Facilities or the business including without limitation, all Required Contracts, Approvals and any rules, guidelines or restrictions created or imposed by Governmental Authorities.

Gross Revenue. The term “Gross Revenue” means all of the revenue from the operation of the Business computed on an accrual basis from all business conducted upon, related to or from the Business in accordance with Generally Accepted Accounting Principles and shall include but not be limited to (i) the net win from gaming activities (which is the difference between gaming wins and losses), and (ii) the amount of all sales of food, beverages, goods, wares, services, or merchandise at or from the Facilities, less (a) fifty percent (50%) of any complimentaries and (b) deposits made in respect of progressive and other similar games except to the extent such deposits are allocable to expenses. Gross Revenue shall not include:

(a) Any gratuities, or service charges added to a customer’s bill or statement in lieu of gratuities, which are payable to New Facilities employees;

(b) An amount equal to all credits or refunds made to customers, guests or patrons;

(c) All sums and credits received in settlement of claims for loss or damage of FF&E or to the physical plant of the Facilities, to the extent such sums and credits are in excess of the actual amount spent or owed to remediate such loss or damage;

(d) All sales taxes, excise taxes, gross receipt taxes, admission taxes, entertainment taxes, tourist taxes or charges collected from casino customers or collected by tenants or concessionaires of Owner at the Facilities;

(e) Any and all income from the sale of FF&E outside the ordinary course of business;

(f) Any uninsured compensation payments for claims against third parties arising out of or during the course of the operation of the Facilities (net of actual damages incurred);

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(g) Income and revenue of tenants, licensees and concessionaires of the Operators or Owner from the Facilities or any part thereof; provided, however, that all fees, rents, commissions, percentages or other payments received from any tenant, licensee or concessionaire shall be included in Gross Revenue;

(h) Proceeds of financing, refinancing or sale of all or a portion of the business or the Facilities or any personal property contained therein outside the ordinary course of business;

(i) Proceeds paid as a result of an insurable loss (unless paid for the loss or interruption of business and representing payment for damage for loss of income and profits of the Business) after deducting any expenses of adjustment and collection;

(j) Operator Advances and any funds advanced or investments made by the Operators;

(k) Proceeds of condemnation and eminent domain awards, net of fees and expenses thereunder; and

(l) Interest.

Hazardous Material. The term “Hazardous Material” means any substance: (i) the presence of which requires investigation or remediation under any federal, state or local statute, regulation, ordinance, order, action, policy or common law; or (ii) which is or becomes defined as a “hazardous waste,” “hazardous substance,” pollutant or contaminant under any federal, state or local statute, regulation, rule or ordinance or amendments thereto, including without the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), and/or the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.); or (iii) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, board, agency or instrumentality of the United States, the State of Louisiana or any political subdivision thereof; or (iv) the presence of which on or about the Facilities causes or threatens to cause a nuisance upon the Facilities or to adjacent properties or poses or threatens to pose a hazard to the health or safety of persons on or about the Facilities; or (v) the presence of which on adjacent properties could constitute a trespass by Owner or Operator; or (vi) without limitation which contains gasoline, diesel fuel or other petroleum hydrocarbons, or any “regulated substance” as defined under the Underground Storage Tank Regulations, 40 C.F.R. §280.12; or (vii) without limitation which contains polychlorinated bipheynols (PCBs), asbestos or urea formaldehyde foam insulation.

Incentive Fee. The term “Incentive Fee” shall have the meaning set forth in Section 5.03.

Indemnified Person. The term “Indemnified Person” means as to either Owner or the Operators indemnified under Section 6.01 or Section 6.02, respectively, such party and any

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Affiliate of such party, and any agents, attorneys, officers, members, directors, stockholders, consultants or employees of such party or such Affiliate, and each person, if any, who controls such party within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934.

Jefferies Financing. The term “Jefferies Financing” shall mean the securities to be placed by Jefferies & Company, Inc. for the purpose of developing the New Facilities.

Law. The term “Law” means any statute, ordinance, promulgation, law, treaty, rule, regulation, code, judicial or administrative precedent, code, order, judgment, writ, injunction, decree, or award of any court or any other Governmental Authority, as well as the orders or requirements of any local board of fire underwriters or any other body which may exercise similar functions.

Lender. The term “Lender” shall mean any Person that has extended credit to Owner secured by, among other things, a mortgage encumbering the Facilities.

Loan Documents. The term “Loan Documents” means all of the documents evidencing, securing and relating to any indebtedness owing by owner to Lender, including without limitation, all promissory notes, loan agreements, mortgages, pledges, assignments, certificates, indemnities and other agreements.

Management Fees. The term “Management Fees” shall mean the Basic Management Fee and the Incentive Fee and the Reimbursables.

Material Adverse Effect. The term “Material Adverse Effect” shall mean any event, condition or occurrence reasonably expected to have a material adverse effect on (i) the condition (financial or otherwise), prospects, assets or properties of the Business, including the suspension of or material limitation on the operation thereof or (ii) this Agreement or the ability of the parties to consummate the transactions contemplated hereby.

Net Revenue. The term “Net Revenue” shall mean the difference of (i) Gross Revenue, minus (ii) promotional expenses incurred in connection with the operation of the Business.

New Facilities. The term “New Facilities” shall mean the facilities comprised of: (a) an approximately 150,000 square foot building to be developed on the Site, containing a casino and grandstand, (b) a horsetrack and (c) related amenities to the foregoing.

Opening Date. The term “Opening Date” shall mean the first date a revenue-paying customer is admitted to the New Facilities to participate in Gaming Activities.

Operating Expenses. The term “Operating Expenses” shall mean those necessary or reasonable operating expenses, including without limitation, gaming and other taxes and governmental charges, costs of Operating Supplies, payroll and benefits, marketing, administration, maintenance, energy and all costs and expenses of licensing Owner’s or the Operators’ employees, incurred on behalf of Owner after the Opening Date in connection with conducting the Business and operating the Facilities, computed on an accrual basis, deductible under Generally Accepted Accounting Principles in determining “Operating Income” (as defined

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in casino industry practice) for purpose of preparing a statement of operations for the Business; provided, however, Operating Expenses shall not include depreciation or amortization with respect to the Facilities or the FF&E or Debt Service.

Operating Permits. The term “Operating Permits” shall mean Operator Operating Permits and Owner Operating Permits.

Operating Supplies. The term “Operating Supplies” shall mean gaming supplies, paper supplies, cleaning materials, food and beverage, fuel, marketing materials, maintenance supplies, linen, china, glassware, silverware, kitchen utensils, uniforms and all other consumable supplies and materials used in the operation of the Facilities.

Operator Advances. The term “Operator Advances” shall have the meaning set forth in Section 2.03.02.

Operator Operating Permits. The term “Operator Operating Permits” shall mean all licenses, permits, approvals, consents and authorizations which the Operators are required to obtain from any Governmental Authority to perform and carry out their obligations under this Agreement, including any permits or licenses the Operators are required by Law to obtain specifically related to the operation of a casino gaming operation.

Operators. The term “Operators” shall have the meaning set forth in the preamble.

Original MSA. The term “Original MSA” shall have the meaning set forth in the preamble.

Owner. The term “Owner” shall have the meaning set forth in the preamble.

Owner Operating Permits. The term “Owner Operating Permits” shall mean all licenses, permits, approvals, consents and authorizations from Governmental Authorities that are necessary to own, open and occupy the Facilities and operate the Business, including any permits or licenses Owner is required by Law to obtain and have in effect specifically related to the operation of casino gaming facilities with respect thereto.

Owner’s Financial Obligations. The term “Owner’s Financial Obligations” shall have the meaning set forth in Section 4.12(a).

Person. The term “Person” shall mean any individual, partnership, corporation, association or other entity, including but not limited to, any government or agency or subdivision thereof, and the heirs, executors, administrators, legal representatives, successors and assigns of such Person where the context so admits.

Pre-Opening Expenses. The term “Pre-Opening Expenses” shall have the meaning set forth in Section 2.03.01.

Pre-Opening Services. The term “Pre-Opening Services” shall have the meaning set forth in Section 2.02.

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Reimbursables. The term “Reimbursables” shall mean all (i) reasonable and documented out-of-pocket developmental, legal, licensure and other out-of-pocket costs and expenses incurred by either Operator under this Agreement, and (ii) all reasonable and documented out-of-pocket tax preparation, accounting, legal and administrative fees and expenses incurred by either Operator in connection with its direct or indirect ownership of Owner.

Related Contracts. The term “Related Contracts” shall mean any agreements, contractual arrangements or Loan Documents between Owner and any Person that relate to the Facilities or the Business.

Target Date. The term “Target Date” shall mean the earlier to occur of (y) the first date on which the casino to be developed at the New Facilities shall be Operating (as such term is defined in the Cash Collateral and Disbursement Agreement), and (z) the Operating Deadline applicable to the casino (as such term is defined in the Cash Collateral and Disbursement Agreement).

Site. The term “Site” shall mean that certain feehold interest of approximately 500 acres located on the north side of Route 31, southeast of the intersection of Highway 190 and Interstate 49 in the town of Opelousas, Louisiana, as set forth on Exhibit B.

Pre-Opening Services Fee. The term “Pre-Opening Services Fee” shall have the meaning set forth in Section 2.04.

Term. The term “Term” shall have the meaning set forth in Section 1.01.

Transfer. The term “Transfer” shall mean any sale, transfer, or assignment of an interest in the Business, made directly or indirectly.

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EX-10.2

Exhibit 10.2

1997 Edition—Electronic Format

AIA Document A111-1997

Standard Form of Agreement Between Owner and Contractor

where the basis for payment is the COST OF THE WORK PLUS A FEE with a negotiated Guaranteed Maximum Price

AGREEMENT made as of the Twenty-fifth day of February in the year Two Thousand three (In words, indicate day, month and year)

BETWEEN the Owner:

(Name, address and other information)

The Old Evangeline Downs, LLC

7620 N.W. Evangeline Thruway

Carencro, Louisiana 70520

and the Contractor:

(Name, address and other information)

W.G. Yates & Sons Construction Company

200-A Lameuse Street

Biloxi, Mississippi 39530

The Project is:

(Name and location)

Evangeline Downs

P.O. Box 90270

Lafayette, Louisiana 70509-0270

The Architect is:

(Name, address and other information)

KGA Architecture

4170 South Decatur Boulevard, Suite B-5

Las Vegas, Nevada 89103

The Owner’s Construction Manager:

KGA Architecture

4170 South Decatur Boulevard, Suite B-5

Las Vegas, Nevada 89103

The Noteholders’ Consultant is:

ABACUS Project Management, Inc.

303 North Central Avenue, Suite 1207

Phoenix, Arizona 85012

The Owner and Contractor agree as follows.

ARTICLE 1 THE CONTRACT DOCUMENTS

The Contract Documents consist of this Agreement, Conditions of the Contract (General, Supplementary and other Conditions), Drawings, Specifications, Addenda issued prior to execution of this Agreement, other documents listed in this Agreement and Modifications issued after execution of this Agreement; these form the Contract, and are as fully a part of the Contract as if attached to this Agreement or repeated herein. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. An enumeration of the Contract Documents, other than Modifications, appears in Article 15. If anything in the other Contract Document is inconsistent with this Agreement, this Agreement shall govern.

ARTICLE 2 THE WORK OF THIS CONTRACT

The Contractor shall fully execute the Work described in the Contract Documents, except to the extent specifically indicated in the Contract Documents to be the responsibility of others.

ARTICLE 3 RELATIONSHIP OF THE PARTIES

The Contractor accepts the relationship of trust and confidence established by this Agreement and covenants with the Owner to cooperate with the Architect and exercise the Contractor’s skill and judgment in furthering the interests of the Owner; to furnish efficient business administration and supervision; to furnish at all times an adequate supply of workers and materials; and to perform the Work in an expeditious and economical manner consistent with the Owner’s interests. The Owner agrees to furnish and approve, in a timely manner, information required by the Contractor and to make payments to the Contractor in accordance with the requirements of the Contract Documents.

ARTICLE 4 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION

4.1 The Contractor and the Owner acknowledge that the Work is to be performed in two phases as set forth in the Schedule of Values as Phase I and Phase II. The date of commencement of Phase I shall be the date fixed in a notice to proceed issued by the Owner. The date of commencement of Phase II shall be on December 1, 2003 unless an earlier notice to proceed has been issued by the Owner.

4.2 The Contract Time for Phase I shall be measured from the date of the Notice to Proceed. The Contract Time for Phase II shall be measured from December 1, 2003 unless an earlier notice to proceed is given by the Owner for Phase II with adequate notice to Contractor in which case the Contract Time for Phase II shall be measured from the date of such notice to proceed.

4.3

4.3.1 The Contractor shall achieve Substantial Completion of the portion of the Work performed as Phase I on or before the date which is twelve (12) months from the date fixed in the notice to proceed which has been issued by the Owner pursuant to Paragraph 4.1. The Contractor acknowledges and agrees that time is of the essence as to such date of Substantial Completion and the Contract and the Owner each agree that the damages to be suffered by the Owner for the Contractor’s failure to complete Phase I by said date is not susceptible to calculation. Accordingly, the Contractor and the Owner agree that the Contract Sum shall be reduced by an amount equal to $33,333 for each day that Substantial Completion of Phase I extends beyond the date which is twelve (12) months from the date fixed in such notice to proceed subject to adjustments of this Contract Time as provided in the Contract Documents and the Owner acknowledges that such liquidated damages shall be the only damages to be recovered by the Owner with respect to failure to achieve Substantial Completion by such date. In the event that Substantial Completion of Phase I occurs prior to the date which is twelve (12) months from the date fixed in such notice to proceed subject to adjustments of this Contract Time as provided in the Contract

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Documents, the Owner shall increase the Contract Sum by an amount equal to $33,333 for each day that Substantial Completion has been achieved prior to the date which is twelve (12) months from the date fixed in such notice to proceed and Owner shall pay Contractor such amount that contract is increased as a bonus; provided, however, if the Contractor does not achieve Substantial Completion for the portion of the Work performed as Phase II on or before November 15, 2003, the bonus may be forfeited. Any such bonus amount otherwise payable to the Contractor pursuant to the preceding sentence shall be forfeited if Owner does not fulfill its completion obligation to the Louisiana Gaming Control Board and the Louisiana State Racing Commission due to Contractor not performing its work in accordance with the following paragraph. In the event of such forfeiture, Owner shall have no obligation whatsoever to increase the Contract Sum as provided herein. Adjustments to Contract Sum as set forth in this Paragraph shall be by Change Order which shall be prepared by the Architect for signature by the Owner, the Contractor and the Architect within ten (10) days after Substantial Completion of the portion of the Work to be performed as Phase II. Contractor acknowledges that any such forfeiture shall not affect its obligations to pay the amounts set forth in 4.3.2.

4.3.2 The Contractor shall achieve Substantial Completion of the portion of the Work performed as Phase II on or before November 15, 2004. The Contractor acknowledges and agrees that time is of the essence as to such date of Substantial Completion and the Contractor and the Owner each agree that the damages to be suffered by the Owner for the Contractor’s failure to complete Phase II by said date is not susceptible to calculation. Accordingly, the Contractor and the Owner agree that the Contract Sum shall be reduced by an amount equal to $20,000 for each day that Substantial Completion of Phase II extends beyond November 15, 2004 subject to adjustments of this Contract Time as provided in the Contract Documents and the Owner acknowledges that such liquidated damages shall be the only damages to be recovered by the Owner with respect to failure to achieve Substantial Completion by such date. In the event that Substantial Completion of Phase II occurs prior to the November 15, 2004 subject to adjustments of this Contract Time as provided in the Contract Documents, the Owner shall increase the Contract Sum by an amount equal to $20,000 for each day that Substantial Completion has been achieved prior to November 15, 2004 and Owner shall pay Contractor such amount that contract is increased as a bonus. Adjustments to Contract Sum as set forth in this paragraph shall be by Change Order which shall be prepared by the Architect for signature by the Owner, the Contractor and the Architect within ten (10) days after Substantial Completion of the portion of the Work to be performed as Phase II.

4.3.3 Notwithstanding anything to the contrary contained in Paragraphs 4.3.1 and 4.3.2 hereof, in addition to the liquidated damages remedy specified above, if any, Owner shall also have the right to terminate this Agreement for Contractor’s default (beyond the expiration of applicable grace, notice and 7 day or appropriate cure periods) in failing to Substantially Complete the Work on the date which is twelve (12) months from the date fixed in the notice to proceed as to Phase I and November 15, 2004 as to Phase II as both dates are subject to adjustments of this Contract Time as provided in the Contract Documents and shall maintain all other remedies provided for such termination in section 14.2 of the General Conditions.

ARTICLE 5 BASIS FOR PAYMENT

5.1 CONTRACT SUM

5.1.1 The Owner shall pay the Contractor the Contract Sum in current funds for the Contractor’s performance of the Contract. The Contract Sum is the Cost of the Work as defined in Article 7 plus the Contractor’s Fee.

5.1.2 The Contractor’s Fee is:

(State a lump sum, percentage of Cost of the Work or other provision for determining the Contractor’s Fee, and describe the method of adjustment of the Contractor’s Fee for changes in the Work.)

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4 ½% of the Cost of the Work.

5.2 GUARANTEED MAXIMUM PRICE

5.2.1 The sum of the Cost of the Work and the Contractor’s Fee is guaranteed by the Contractor not to exceed Fifty-Two Million Dollars ($52,000,000.00), subject to additions and deductions by Change Order as provided in the Contract Documents. Such maximum sum is referred to in the Contract Documents as the Guaranteed Maximum Price. Costs which would cause the Guaranteed Maximum Price to be exceeded shall be paid by the Contractor without reimbursement by the Owner. The GMP does not include the “Contract Reserve Amount” of $2,739,000 which includes an allocation of $910,000 (the “Contractor’s Allocation”). The Contractor’s Allocation will be available to fund increases to the GMP in the amounts set forth in one or more Change Orders delivered by the Contractor, the Owner and the Architect in accordance with the Contract Documents. The Contract Reserve Amount has been funded by the Owner as of the date of this Agreement. The Owner agrees that upon delivery of a Change Order signed by the Contractor, the Change Owner will be signed by the Owner and Architect and delivered to the Disbursement Agent along with all certificates required under the Cash Collateral and Disbursement Agreement (defined in paragraph 13.2.2 of the General Conditions) such that the portion of the Contractor’s Allocation set forth in such Change Order will be withdrawn from the Completion Reserve Account (as defined in the Cash Collateral and Disbursement Agreement), and deposited into the Construction Disbursement Account (as defined in the Cash Collateral and Disbursement Agreement) for further disbursement in accordance with the Cash Collateral and Disbursement Agreement.

(Insert specific provisions if the Contractor is to participate in any savings.)

5.2.1.1 Anything herein to the contrary notwithstanding, in the event that the sum of the Cost of the Work and the Contractor’s Fee is less than the GMP (bonus payments contemplated by Paragraph 4.3 as and to the extent payable pursuant thereto, shall increase both GMP and Cost of the Work), 50% of all such savings shall be retained by the Owner, with the remainder payable to Contractor in accordance with Paragraph 12.2 hereof; provided, that Contractor shall not be entitled to any savings with respect to the Contract Reserve Amount.

5.2.2 The Guaranteed Maximum Price is based on the following alternates, if any, which are described in the Contract Documents and are hereby accepted by the Owner:

(State the numbers or other identification of accepted alternates. If decisions on other alternatives are to be made by the Owner subsequent to the execution of this Agreement, attach a schedule of such other alternates showing the amount for each and the date when the amount expires.

5.2.3 Unit prices, if any, are as follows:

5.2.4 Allowances, if any, are as follows:

(Identify and state the amounts of any allowances, and state whether they include labor, materials, or both.)

Refer to Exhibit B.

5.2.5 Assumptions, if any, on which the Guaranteed Maximum Price is based are as follows:

Refer to Exhibit C.

5.2.6 As the Drawings and Specifications are not finished at the time the GMP had been agreed upon hereunder, the Contractor has provided in the GMP for further development of the Drawings and

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Specifications by the Architect that is consistent with the Contract Documents and reasonably inferable therefrom. Contractor acknowledges that in accordance with its review of the Drawings and Specifications and the budget for the Project, Contractor represents that the Work can be completed pursuant to the Drawings and Specifications completed as of the date hereof in accordance with the budget for an amount less than or equal to the GMP. The allowances set forth on Exhibit B have been agreed to by Owner and Contractor and the Owner and the Contractor believe that such allowances are reasonable.

ARTICLE 6 CHANGES IN THE WORK

6.1 Adjustments to the Guaranteed Maximum Price on account of changes in the Work may be determined by any of the methods listed in Subparagraph 7.3.3 of AIA Document A201-1997.

6.2 In calculating adjustments to subcontract (except those awarded with the Owner’s prior consent on the basis of cost plus a fee), the terms “cost” and “fee” as used in Clause 7.3.3.3 of AIA Document A201-1997 and the terms “costs” and “a reasonable allowance for overhead and profit” as used in Subparagraph 7.3.6 of AIA Document A201-1997 shall have the meanings assigned to them in AIA Document A201-1997 and shall not be modified by Articles 5, 7 and 8 of this Agreement, Adjustments to subcontracts awarded with the Owner’s prior consent on the basis of cost plus a fee shall be calculated in accordance with the terms of those subcontracts.

6.3 In calculating adjustments to the Guaranteed Maximum Price, the terms “cost” and “costs” as used in the above-referenced provisions of AIA Document A201-1997 shall mean the Cost of the Work as defined in Article 7 of this Agreement and the terms “fee” and “a reasonable allowance for overhead and profit” shall mean the Contractor’s Fee as defined as Subparagraph 5.1.2 of this Agreement.

ARTICLE 7 COSTS TO BE REIMBURSED AND INCLUDED IN GMP

7.1 COST OF THE WORK

The term Cost of the Work shall mean costs necessarily incurred by the Contractor in the proper performance of the Work. Such costs shall be at rates not higher than the standard paid at the place of the Project except with prior consent of the Owner. The Cost of the Work shall include only the items set forth in this Article 7.

7.2 LABOR COSTS

7.2.1 Wages of construction workers directly employed by the Contractor to perform the construction of the Work at the site or, with the Owner’s approval, at off-site workshops.

7.2.2 Wages or salaries of the Contractor’s supervisory and administrative personnel when at the site or engaged in the performance of Contractor’s services for this Project.

(If it is intended that the wages or salaries of certain personnel stationed at Contractor’s principal or other offices shall be included in the Cost of the Work, identify in Article 14 the personnel to be included and whether for all or only part of their time, and the rates at which their time will be charged to the Work.)

7.2.3 Wages and salaries of the Contractor’s supervisory or administrative personnel engaged, at factories, workshops or on the road, in expediting the production or transportation of materials or equipment required for the Work, but only for that portion of their time required for the Work.

7.2.4 Costs paid or incurred by the Contractor for taxes, insurance, contributions, assessments and benefits required by law or collective bargaining agreements and, for personnel not covered by such agreements, customary benefits such as sick leave, medical and health benefits, holidays, vacations and pensions, provided such costs are based on wages and salaries included in the Cost of the Work under

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Subparagraphs 7.2.1 through 7.2.3. Worker’s compensation rates shall be at manual Worker’s Compensation rates furnished by Zurich for the State of Louisiana which are applicable to the Contractor.

7.3 SUBCONTRACT COSTS

7.3.1 Amounts properly billed by Subcontractors for work which has been approved by the Contractor in accordance with the Subcontract.

7.4 COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED CONSTRUCTION

7.4.1 Costs, including transportation and storage, of materials and equipment incorporated or to be incorporated in the completed construction.

7.4.2 Costs of materials described in the preceding Subparagraph 7.4.1 in excess of those actually installed to allow for reasonable waste and spoilage. Unused excess materials, if any, shall become the Owner’s property at the completion of the Work or, at the Owner’s option, shall be sold by the Contractor. Any amounts realized from such sales shall be credited to the Owner as a deduction from the Cost of the Work.

7.5 COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED ITEMS

7.5.1 Costs, including transportation and storage, installation, maintenance, dismantling and removal of materials, supplies, temporary facilities, machinery, equipment, and hand tools not customarily owned by construction workers, that are provided by the Contractor at the site and fully consumed in the performance of the Work; and cost (less salvage value) of such items if not fully consumed, whether sold to others or retained by the Contractor. Cost for items previously used by the Contractor shall mean fair market value.

7.5.2 Rental charges for temporary facilities, machinery, equipment, and hand tools not customarily owned by construction workers that are provided by the Contractor at the site, whether rented from the Contractor or others, and costs of transportation, fuel, oil, grease, installation, minor repairs and replacements, dismantling and removal thereof. Internal rental rates of equipment shall be at 90% of current Blue Book rates.

7.5.3 Costs of removal of debris from the site.

7.5.4 Costs of document reproductions, facsimile transmissions and long-distance telephone calls, postage and parcel delivery charges, telephone service at the site, cellular phone charges and pager services, photographs, and reasonable petty cash expenses of the site office.

7.5.5 That portion of the reasonable expenses of the Contractor’s personnel incurred while traveling in discharge of duties connected with the Work.

7.5.6 Costs of materials and equipment suitably stored off the site at a mutually acceptable location, if approved in advance by the Owner.

7.6 MISCELLANEOUS COSTS

7.6.1 That portion of insurance and bond premiums that can be directly attributed to this Contract:

7.6.2 Sales, use or similar taxes imposed by a governmental authority that are related to the work including, without limitation, all taxes and fees directly attributable to the Work including all federal, state and locate taxes, duties, excise taxes, taxes on equipment and property owned by the Contractor, and all

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income taxes including sales and use taxes, initial and annual corporate filing fees, business privilege tax, tangible personal property taxes on property owned by the Contractor, the Contractor’s licenses and occupational taxes, local license taxes, unemployment insurance taxes and motor carrier and fuel taxes.

7.6.3 Fees and assessments for the building permit and for other permits, licenses and inspections for which the Contractor is required by the Contract Documents to pay.

7.6.4 Fees of laboratories for tests required by the Contract Documents, except those related to defective or nonconforming Work for which reimbursement is excluded by Subparagraph 13.5.3 of AIA Document A201-1997 or other provisions of the Contract Documents, and which do not fall within the scope of Subparagraph 7.7.3.

7.6.5 Royalties and license fees paid for the use of a particular design, process or product required by the Contract Documents; the cost of defending suits or claims for infringement of patent rights arising from such requirement of the Contract Documents; and payments made in accordance with legal judgments against the Contractor resulting from such suits or claims and payments of settlements made with the Owner’s consent. However, such costs of legal defenses, judgments and settlements shall not be included in the calculation of the Contractor’s Fee or subject to the Guaranteed Maximum Price. If such royalties, fees and costs are excluded by the last sentence of Subparagraph 3.17.1 of AIA Document A201-1997 or other provisions of the Contract Documents, then they shall not be included in the Cost of the Work.

7.6.6 Data processing costs related to the Work, including all hardware and software costs.

7.6.7 Deposits lost for causes other than the Contractor’s negligence or failure to fulfill a specific responsibility to the Owner as set forth in the Contract Documents.

7.6.8 Legal, mediation and arbitration costs, including attorneys’ fees, other than those arising from disputes between the Owner and Contractor, reasonably incurred by the Contractor in the performance of the Work and with the Owner’s prior written approval; which approval shall not be unreasonably withheld.

7.6.9 Expenses incurred in accordance with the Contractor’s standard personnel policy for relocation and temporary living allowances of personnel required for the Work, if approved by the Owner.

7.6.10 Cost of necessary safety equipment, supplies, drug testing, safety seminars, and safety incentives.

7.6.11 Meals and lodging while conducting business for the Project.

7.6.12 Offsite storage, warehousing and fabrication if necessary.

7.6.13 Costs incurred after completion of the Project for warranty items that cannot be billed to Subcontractors.

7.7 OTHER COSTS AND EMERGENCIES

7.7.1 Any cost not specifically excluded by Article 8 which Contractor incurs in the performance of the Work or furtherance of the Project.

7.7.2 Costs due to emergencies incurred in taking action to prevent threatened damage, injury or loss in case of an emergency affecting the safety of persons and property, as provided in Paragraph 10.6 of AIA Document A201-1997.

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7.7.3 Costs of repairing or correcting damaged or nonconforming Work executed by the Contractor, Subcontractors or suppliers, provided that such damaged or nonconforming Work was not caused by negligence or failure to fulfill a specific responsibility of the Contractor and only to the extent that the cost of repair or correction is not recoverable by the Contractor from insurance, sureties, Subcontractors or suppliers.

ARTICLE 8 COSTS NOT TO BE REIMBURSED OR NOT INCLUDED IN GMP

8.1 The Cost of the Work shall not include and the Owner shall have no obligation to reimburse the Contractor for:

8.1.1 Salaries and other compensation of the Contractor’s personnel stationed at the Contractor’s principal office or offices other than the site office, except as specifically provided in Subparagraphs 7.2.2 and 7.2.3 or as may be provided in Article 14.

8.1.2 Expenses of the Contractor’s principal office and offices other than the site office.

8.1.3 Overhead and general expenses, except as may be expressly included in Article 7.

8.1.4 The Contractor’s capital expenses, including interest on the Contractor’s capital employed for the Work.

8.1.5 Rental costs of machinery and equipment, except as specifically provided in Subparagraph 7.5.2.

8.1.6 Except as provided in Subparagraph 7.7.3 of this Agreement, costs due to the negligence or failure to fulfill a specific responsibility of the Contractor, Subcontractors and suppliers or anyone directly or indirectly employed by any of them for whose acts any of them may be liable.

8.1.7 Any cost not specifically and expressly described in Article 7.

8.1.8 Costs, other than costs included in Change Orders approved by the Owner, that would cause the Guaranteed Maximum Price to be exceeded.

ARTICLE 9 DISCOUNTS, REBATES AND REFUNDS

9.1 Cash discounts obtained on payments made by the Contractor shall accrue to the Owner if (1) before making the payment, the Contractor included them in an Application for Payment and received payment therefor from the Owner, or (2) the Owner has deposited funds with the Contractor with which to make payments; otherwise, cash discounts shall accrue to the Contractor. Trade discounts, rebates, refunds and amounts received from sales of surplus materials and equipments shall accrue to the Owner, and the Contractor shall make provisions so that they can be secured.

9.2 Amounts that accrue to the Owner in accordance with the provisions of Paragraph 9.1 shall be credited to the Owner dollar-for-dollar as a deduction from the Cost of the Work.

ARTICLE 10 SUBCONTRACTS AND OTHER AGREEMENTS

10.1 Those portions of the Work that the Contractor does not customarily perform with the Contractor’s own personnel shall be performed under subcontracts or by other appropriate agreements with the Contractor. Each of the Owner and the Contractor may designate specific persons or entities from whom the Contractor shall obtain bids and the Owner and the Contractor each shall have the right to approve each such person or entity and the bids submitted thereby, such approval not to be unreasonably withheld or delayed. The Contractor shall obtain bids from Subcontractors and from suppliers of

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materials or equipment fabricated especially for the Work and shall deliver such bids to the Architect. The Owner shall then determine, with the advice of the Contractor and the Architect, which bids will be accepted. The Contractor shall not be required to contract with anyone to whom the Contractor has reasonable objection.

10.2 If a specific bidder among those whose bids are delivered by the Contractor to the Architect (1) is recommended to the Owner by the Contractor, (2) is qualified to perform that portion of the Work; and (3) has submitted a bid that conforms to the requirements of the Contract Documents without reservations or exceptions, but the Owner requires that another bid be accepted, then the Contractor may require that a Change Order be issued to adjust the Guaranteed Maximum Price by the difference between the bid of the person or entity recommended to the Owner by the Contractor and the amount of the subcontract or other agreement actually signed with the person or entity designated by the Owner.

10.3 Subcontracts or other agreements shall conform to the applicable payment provisions of this Agreement, and shall not be awarded on the basis of cost plus a fee without the prior consent of the Owner.

10.4 Notwithstanding the above, Owner and Contractor agree that there has been a partnered effort in attempting to meet the Owner’s budgets by select Subcontractors. Owner and Contractor further agree that the following preferred Subcontractors will be selected by the Contractor.

Edwards Electric

Bernhard Mechanical

Ellis Steel

Ambianti USA

Yates Heavy Division

Yates Drywall

Notwithstanding the foregoing, the Contractor agrees to request at least (i) two bids from qualified Subcontractors in addition to any bid submitted by (A) Ambianti USA for the portion of Work to be performed by Ambianti USA, and (B) Yates Drywall for the portion of the Work to be performed by Yates Drywall and (ii) four bids (if available) from qualified Subcontractors in addition to any bid submitted by Yates Heavy Division for the portion of the Work to be performed by Yates Heavy Division. It is understood and agreed by the Owner and the Contractor that Ambianti USA, Yates Heavy Division and Yates Drywall shall have the right to perform their respective portions of the Work if their subcontract covering such portions of the Work is equal to or more favorable to the Owner as the subcontract which such other bidders have agreed to enter into. Contractor shall submit a bid schedule for site work which shall be reasonably approved by Owner and Contractor. If there is a delay in the site work bid process and it is affecting the schedule, Contractor shall recommend a course of action and the Owner shall approve such action, if reasonable.

ARTICLE 11 ACCOUNTING RECORDS

The Contractor shall keep full and detailed accounts and exercise such controls, in each case, as may be necessary and which is customary for projects of this type for proper financial management under this Contract, and the accounting and control systems shall be satisfactory to the Owner. The Owner and the Owner’s accountants shall be afforded access to, and shall be permitted to audit and copy, the Contractor’s records, books, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Contract, and the Contractor shall preserve these for a period of three years after final payment, or for such longer period as may be required by law.

ARTICLE 12 PAYMENTS

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12.1 PROGRESS PAYMENTS

12.1.1 Applications for Payment shall be prepared by the Contractor and delivered to the Owner’s Construction Manager on or before the last day of each calendar month covering Work completed in accordance with the Contract Documents prior to the end of such calendar month. Such Applications for Payment shall include all information required by the Form of Construction Disbursement Request and Certificate (attached to the Cash Collateral and Disbursement Agreement in the form of Exhibit D-1), the form of Certificate of General Contractor for Disbursement Request for Construction Expenses (attached to the Cash Collateral and Disbursement Agreement as Exhibit 3 to Exhibit D-1) and such other supporting information as is reasonably required by the Owner’s Construction Manager, the Architect, the Noteholders’ Consultant, the Trustee and/or the Owner. Such Application for Payment shall be approved in the following manner:

          .1 The Contractor shall execute such Application for Payment and deliver it together with all supporting materials to the Owner’s Construction Manager. Within two business days after deliver of such Application for Payment and supporting materials to the Owner’s Construction Manager, the Contractor shall execute all certificates required to be delivered by it under the Cash Collateral and Disbursement Agreement with respect to an advance of proceeds thereunder and deliver such certificates to the Owner.

          .2 Within two business days after receipt, the Owner’s Construction Manager shall review such Application for Payment and supporting materials. After such Application for Payment has been amended to include any revisions which have been approved by the Owner’s Construction Manager and the Contractor, the Owner’s Construction Manager shall acknowledge its approval of such Application for Payment and supporting materials to the Architect. Within two business days after delivery of such Application for Payment and supporting materials to the Architect, the Owner’s Construction Manager shall deliver to the Owner all certificates (duly executed) required to be delivered by it under the Cash Collateral and Disbursement Agreement with respect to an advance of proceeds thereunder.

          .3 Within two business days after receipt, the Architect shall review such Application for Payment and supporting materials. After such Application for Payment has been amended to include any revisions which have been approved by the Owner’s Construction Manager, the Contractor and the Architect, the Architect shall acknowledge its approval of such Application for Payment and supporting materials to the Noteholders’ Consultant.

          .4 Within two business days after receipt, the Noteholders’ Consultant shall review such Application for Payment and supporting materials. After such Application for Payment has been amended to include any revisions which have been approved by the Owner’s Construction Manager, the Contractor, the Architect and the Noteholders’ Consultant, the Noteholders’ Consultant shall acknowledge its approval of such Application for Payment and supporting materials and deliver such approved Application for Payment and supporting materials to the Owner together with all certificates (duly executed) required to be delivered by it under the Cash Collateral and Disbursement Agreement with respect to an advance of proceeds thereunder.

          .5 Within two days after receipt, the Owner shall review such Application for Payment and supporting materials. After such Application for Payment has been amended to include any revisions which have been approved by the Owner’s Construction Manager, the Contractor, the Architect, the Noteholders’ Consultant and the Owner, the Owner shall request the Architect to issue its Certificate of Payment. Upon receipt of such Certificate of Payment, the Owner shall deliver to the Disbursement Agent (i) such approved Application for Payment and supporting materials, (ii) the Certificate for Payment received from the Architect, (iii) all certificates to be delivered by the Owner with respect to an advance of proceeds under the Cash Collateral and Disbursement Agreement, (iv) all certificates received from the

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Owner’s Construction Manager, the Architect and the Noteholders’ Consultant pursuant to this Paragraph and (v) a request for an advance of proceeds under the Cash Collateral and Disbursement Agreement.

          .6 Based upon such Application for Payment and Certificate for Payment, the Owner shall make progress payments on account of the Contract Sum to the Contractor as provided below.

12.1.2 Provided that an Application for Payment together with all reasonable supporting information required by the Owner’s Construction Manager, the Architect, Noteholders’ Consultant and the Owner and all certificates which are required to be executed and delivered by the Contractor with respect to an advance of proceeds under the Cash Collateral and Disbursement Agreement are received by the Owner’s Construction Manager not later than the last day of a calendar month, the Owner shall make payment to the Contractor in the account set forth in the Certificate of Payment presented to the Owner by the Architect in accordance with Paragraph 12.1.1 not later than the fifteenth (15th) day of the next calendar month. If an Application for Payment is received by the Owner’s Construction Manager after the last day of a calendar month or if additional supporting or supplemental information which has been reasonably requested by the Owner’s Construction Manager, the Architect, the Noteholders’ Consultant and/or the Owner is delivered after the last day of a calendar month, payment of the amount set forth in the Certificate of Payment shall be made by the Owner not later than fifteen (15) days after the date on which the Owner’s Construction Manager receives the Application for Payment together with all required supporting information.

12.1.4 With each Application for Payment, the Contractor shall submit payrolls, petty cash accounts, receipted invoices or invoices with check vouchers attached through the end of the calendar month immediately preceding the calendar month covered by the applicable Application for Payment (other than with respect to (x) the first Application for Payment in which case such information shall be that which is reasonably available to the Contractor on the last day of the calendar month covered by such first Application for Payment and (y) the final Application for Payment in which case such information shall be current and complete), and any other evidence required by the Owner or Architect to demonstrate that cash disbursements already made by the Contractor on account of the Cost of the Work equal or exceed (1) progress payments already received by the Contractor; less (2) that portion of those payments attributable to the Contractor’s Fee; plus (3) payrolls for the period covered by the present Application for Payment.

12.1.5 Each Application for Payment shall be based on the most recent schedule of values approved by the Contractor, the Architect, the Owner, the Owner’s Construction Manager and, if necessary, the Noteholders’ Consultant in accordance with the Contract Documents. The schedule of values shall allocate the entire Guaranteed Maximum Price among the various portions of the Work, except that the Contractor’s Fee shall be shown as a single separate item. The schedule of values shall be prepared in such form and supported by such data to substantiate its accuracy as the Architect, the Owner, the Owner’s Construction Manager and the Noteholders’ Consultant may require. This schedule, unless objected to by the Architect and the Owner, the Owner’s Construction Manager and the Noteholder’s Consultant, shall be used as a basis for reviewing the Contractor’s Applications for Payment.

12.1.6 Applications for Payment shall show the percentage of completion of each portion of the Work as of the end of the period covered by the Application for Payment. The percentage of completion shall be the lesser of (1) the percentage of that portion of the Work which has actually been completed; or (2) the percentage obtained by dividing (a) the expense that has actually been incurred by the Contractor on account of that portion of the Work for which the Contractor has made or intends to make actual payment prior to the next Application for Payment by (b) the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values.

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12.1.7 Subject to other provisions of the Contract Documents, the amount of each progress payment shall be computed as follows:

          .1 take that portion of the Guaranteed Maximum Price properly allocable to completed Work as determined by multiplying the percentage of completion of each portion of the Work by the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values. Pending final determination of cost to the Owner of changes in the Work, amounts not in dispute shall be included as provided in Subparagraph 7.3.8 of AIA Document A201-1997;

          .2 add that portion of the Guaranteed Maximum Price properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work, or if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing.

          .3 add the Contractor’s Fee. The Contractor’s Fee shall be computed upon the Cost of the Work described in the two preceding Clauses at the rate stated in Subparagraph 5.1.2;

          .4 subtract the aggregate of previous payments made by the Owner;

          .5 subtract the shortfall, if any, indicated by the Contractor in the documentation required by Paragraph 12.1.4 to substantiate prior Applications for Payment, or resulting from errors subsequently discovered by the Owner’s accountants in such documentation; and

          .6 subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment as provided in Paragraph 9.5 of AIA Document A201-1997.

12.1.8 Except with the Owner’s prior approval, payments to Subcontractors shall be subject to retainage of not less than ten percent (10%). The Owner and the Contractor shall agree upon a mutually acceptable procedure for review and approval of payments and retention for Subcontractors. Retainage shall be released upon completion of each respective phase. Contractor shall not request payment from Owner for any sums being withheld as retainage from any Subcontractor until such time as the applicable retainage must be paid to the Subcontractor in accordance with its subcontract.

12.1.9 In taking action on the Contractor’s Applications for Payment, the Architect, the Owner, the Owner’s Construction Manager and the Noteholders’ Consultant shall be entitled to rely on the accuracy and completeness of the information furnished by the Contractor and shall not be deemed to represent that the Architect, the Owner, the Owner’s Construction Manager or the Noteholders’ Consultant has made a detailed examination, audit or arithmetic verification of the documentation submitted in accordance with Subparagraph 12.1.4 or other supporting data; that the Architect, the Owner, the Owner’s Construction Manager or the Noteholders’ Consultant has made exhaustive or continuous on-site inspections or that the Architect, the Owner, the Owner’s Construction Manager or the Noteholders’ Consultant has made examinations to ascertain how or for what purposes the Contractor has used amounts previously paid on account of the Contract. Such examinations, audits and verifications, if required by Owner, will be performed by the Owner’s accountants acting in the sole interest of the Owner.

12.2 FINAL PAYMENT

12.2.1 Final payment, constituting the entire unpaid balance of the Contract Sum, shall be made by the Owner to the Contractor when:

          .1 the Contractor has fully performed the Contract except for the Contractor’s responsibility to correct Work as provided in Subparagraph 12.2.2 of AIA Document A201-1997, and to satisfy other requirements, if any, which extend beyond final payment; and

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          .2 a final Certificate for Payment has been issued by the Architect after approval by the Owner’s Construction Manager, the Noteholders’ Consultant and the Owner.

12.2.2 The Owner’s final payment to the Contractor shall be made no later than 30 days after the issuance of the Architect’s final Certificate for Payment.

12.2.3 The Owner’s accountants will review and report in writing on the Contractor’s final accounting within 30 days after delivery of the final accounting to the Architect by the Contractor. Based upon such Cost of the Work as the Owner’s accountants report to be substantiated by the Contractor’s final accounting and provided the other conditions of Subparagraph 12.2.1 have been met, within seven (7) days after approval of the written report by the Owner’s accountants, the Owner’s Construction Manager and the Noteholders’ Consultant, either issue to the Owner a final Certificate for Payment with a copy to the Contractor, or notify the Contractor and the Owner in writing of the Architect’s reasons for withholding a certificate as provided in Subparagraph 9.5.1 of the AIA Document A201-1997 in the form attached to this Agreement. The time periods stated in this Subparagraph 12.2.3 supersede those stated in Subparagraph 9.4.1 of the AIA Document A201-1997.

12.2.4 If the Owner’s accountants report the Cost of the Work as substantiated by the Contractor’s final accounting to be less than claimed by the Contractor, the Contractor shall be entitled to demand arbitration of the disputed amount without a further decision of the Architect. Such demand for arbitration shall be made by the Contractor within 30 days after the Contractor’s receipt of a copy of the Architect’s final Certificate for Payment; failure to demand arbitration within this 30-day period shall result in the substantiated amount reported by the Owner’s accountants becoming binding on the Contractor. Pending a final resolution by arbitration, the Owner shall pay the Contractor the amount certified in the Architect’s final Certificate for Payment.

12.2.5 If, subsequent to final payment and at the Owner’s request, the Contractor incurs costs described in Article 7 and not excluded by Article 8 to correct defective or nonconforming Work which was not otherwise the responsibility of the Contractor to install, the Owner shall reimburse the Contractor such costs and the Contractor’s Fee applicable thereto on the same basis as if such costs had been incurred prior to final payment, but not in excess of the Guaranteed Maximum Price. If the Contractor has participated in savings as provided in Paragraph 5.2, the amount of such savings shall be recalculated and appropriate credit given to the Owner in determining the net amount to be paid by the Owner to the Contractor.

ARTICLE 13 TERMINATION OR SUSPENSION

13.1 The Contract may be terminated by the Contractor, or by the Owner for convenience, as provided in Article 14 of AIA Document A201-1997. However, the amount to be paid to the Contractor under Subparagraph 14.1.3 of AIA Document A201-1997 shall not exceed the amount the Contractor would be entitled to receive under Paragraph 13.2 below, except that the Contractor’s Fee shall be calculated on.

13.2 The Contract may be terminated by the Owner for cause as provided in Article 14 of AIA Document A201-1997. The amount, if any, to be paid to the Contractor under Subparagraph 14.2.4 of AIA Document A201-1997 shall not cause the Guaranteed Maximum Price to be exceeded, nor shall it exceed an amount calculated as follows:

13.2.1 Take the Cost of the Work incurred by the Contractor to the date of termination;

13.2.2 Add the Contractor’s Fee computed upon the Cost of the Work to the date of termination at the rate stated in Subparagraph 5.1.2; and

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13.2.3 Subtract the aggregate of previous payments made by the Owner.

13.3 The Owner shall also pay the Contractor fair compensation as identified in Paragraph 7.5.2, either by purchase or rental at the election of the Owner, for any equipment owned by the Contractor that the Owner elects to retain and that is not otherwise included in the Cost of the Work under Subparagraph 13.2.1. To the extent that the Owner elects to take legal assignment of subcontracts and purchase orders (including rental agreements), the Contractor shall, as a condition of receiving the payments referred to in this Article 13, execute and deliver all such papers and take all such steps, including the legal assignment of such subcontracts and other contractual rights of the Contractor, as the Owner may require for the purpose of fully vesting in the Owner the rights and benefits of the Contractor under such subcontracts or purchase orders.

13.4 The Work may be suspended by the Owner as provided in Article 14 of AIA Document A201-1997; in such case, the Guaranteed Maximum Price and Contract Time shall be increased as provided in Subparagraph 14.3.2 of AIA Document A201-1997 except that the term “profit” shall be understood to mean the Contractor’s Fee as described in Subparagraphs 5.1.2 and Paragraph 6.4 of this Agreement.

ARTICLE 14 MISCELLANEOUS PROVISIONS

14.1 Where reference is made in this Agreement to a provision of AIA Document A201-1997 or another Contract Document, the reference refers to that provision as amended or supplemented by other provisions of the Contract Documents.

14.2 Payments due and unpaid under the Contract from either the Contractor or the Owner to the other shall bear interest at a per annum rate equal to the Prime Rate as set forth in The Wall Street Journal plus 2%.

(Usury laws and requirements under the Federal Truth in Lending Act, similar state and local consumer credit laws and other regulations at the Owner’s and Contractor’s principal places of business, the location of the Project and elsewhere may affect the validity of this provision. Legal advice should be obtained with respect to deletions or modifications, and also regarding requirements such as written disclosures or waivers.)

14.3 The Owner’s representative is:

(Name, address and other information.)

Michael Luzich or his designee

Old Evangeline Downs, LLC

7620 N.E. Evangeline Thruway

Carencro, Louisiana 70520

14.4 The Contractor’s representative is:

(Name, address and other information.)

William Yates

W.G. Yates & Sons Construction Company

200-A Lameuse Street

Biloxi, Mississippi 39530

14.5 Neither the Owner’s nor the Contractor’s representative shall be changed without ten days’ written notice to the other party.

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14.6 Other provisions:

14.6.1 Bailey Braswell, Dan DuBose, David Bland and their respective staffs shall be available as reasonably required from time to time with the costs thereof being included in the Guaranteed Maximum Price; provided, however, that Bailey Braswell (and appropriate members of his staff) shall be present at weekly site meetings upon the commencement of construction of the Project until such time as the Contractor and the Owner have agreed that such weekly attendance is not required at which time attendance shall be reduced to at least once each calendar month.

14.6.2 The Contractor acknowledges and agrees that payments to the Contractor for the Work by Owner are being funded from the Construction Disbursement Account which will be established in accordance with the Cash Collateral and Disbursement Agreement. The Cash Collateral and Disbursement Agreement has been reviewed and approved by the Contractor and the Contractor acknowledges the terms thereof. The Noteholders’ Consultant has been appointed by the Trustee under the Cash Collateral and Disbursement Agreement to review and inspect the Work, review Applications for Payment and approve and authorize disbursements from the Construction Disbursement Account. In connection with the foregoing:

14.6.2.1 The Contractor agrees to execute and deliver to the Disbursement Agent and the Trustee the “Contracting Party’s Consent to Collateral Assignment of the Contract” in the form of Exhibit H to the Cash Collateral and Disbursement Agreement. The Contractor agrees to review and if approved execute all other documents reasonably required by the Disbursement Agent, the Trustee or the Noteholders’ Consultant with respect to the construction of the Project. The Contractor shall incorporate into all Subcontracts a provision obligating its Subcontractors to continue to perform under their subcontracts in the event the Trustee or its agents take possession of the Project site.

14.6.2.2 Notwithstanding the terms and provisions of the Contract Documents, the Contractor acknowledges that the Cash Collateral and Disbursement Agreement has conditions and requirements which must be satisfied by or on behalf of the Owner with respect to matters dealing with the Project, including without limitation, matters relevant to progress payments, retainage, change orders, changes to the Contract Documents, and inspection and approval of the Work by the Noteholders’ Consultant. The terms of the Contracting parties’ Consent to Collateral Assignment of Contract shall govern any failure by Owner to comply with this agreement as a result of complying with the Cash Collateral and Disbursement Agreement.

14.6.2.3 All reimbursements or payments made by the Contractor to the Owner shall be deposited directly into the Construction Disbursement Account.

14.6.2.4 All indemnities contained in the Contract Documents which run in favor of Owner shall also run in favor of the Noteholders’ Consultant, the Disbursement Agent and the Trustee.

14.6.2.5 All provisions in the Subcontracts which accrue specifically to the benefit of Owner shall also provide they shall also run to the benefit of the Trustee.

14.6.2.6 Contractor acknowledges it has reviewed the Cash Collateral and Disbursement Agreement including the certificates which Contractor shall be asked to provide in the forms attached to the Cash Collateral and Disbursement Agreement as (i) Exhibit 8 to Exhibit B-1, (ii) Exhibit 3 to Exhibit D-1, (iii) Exhibit 3 to Exhibit E, (iv) Exhibit 3 to Exhibit F-1, and (v) Exhibit 3 to Exhibit F-2, and to the extent that the factual assertions of Contractor required therein shall be true, Contractor shall deliver such

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certificates as and when required by the Owner in the manner and within the time periods required by the Cash Collateral and Disbursement Agreement.

ARTICLE 15 ENUMERATION OF CONTRACT DOCUMENTS

15.1 The Contract Documents, except for Modifications issued after execution of this Agreement, are enumerated as follows:

15.1.1 The Agreement is this executed 1997 edition of the Standard Form of Agreement Between Owner and Contractor, AIA Document A111-1997.

15.1.2 The General Conditions are the 1997 edition of the General Conditions of the Contract for Construction. AIA Document A201-1997 as modified by agreement of Owner and Contractor.

15.1.3 The Supplementary and other Conditions of the Contract are those contained in the Project Manual dated    , and are as follows:

Document Title Pages

15.1.4 The Specifications are those contained in the Project Manual dated as in Subparagraph 15.1.3, and are as follows:

(Either list the Specifications here or refer to an exhibit attached to this Agreement.)

Section Title Pages

15.1.5 The Drawings are as follows, and are dated , unless a different date is shown below:

(Either list the Drawings here or refer to an exhibit attached to this Agreement.)

Number Title Date

Refer to Exhibit A-1

15.1.6 The Addenda, if any, are as follows:

Number Date Pages

Portions of Addenda relating to bidding requirements are not part of the Contract Documents unless the bidding requirements are also enumerated in this Article 15.

15.1.7 Other Documents, if any, forming part of the Contract Documents are as follows:

(List here any additional documents, such as a list of alternates that are intended to form part of the Contract Documents. AIA Document A201-1997 provides that bidding requirements such as advertisement or invitation to bid, Instructions to Bidders, sample forms and the Contractor’s bid are not part of the Contract Documents unless enumerated in this Agreement. They should be listed here only if intended to be part of the Contract Documents.)

Exhibit A-1, Drawing Log

Exhibit A-2, Owners FF&E included in Division 12 of GMP Estimate

Exhibit B, Allowance

Exhibit C, Assumptions & Clarifications

Exhibit D, Schedule of Values

ARTICLE 16 INSURANCE AND BONDS

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(List required limits of liability for insurance and bonds. AIA Document A201-1997 gives other specific requirements for insurance and bonds.)

Bond premium is not to exceed 1.69% of contract amount.

This Agreement is entered into as of the day and year first written above and is executed in at least three original copies, of which one is to be delivered to the Contractor, one to the Architect for use in the administration of the Contract, and the remainder to the Owner.

The Old Evangeline Downs, LLC	W.G. Yates & Sons Construction Company
/s/    MICHAEL S. LUZICH	/s/    WILLIAM YATES
OWNER (Signature) Michael S. Luzich, President (Printed name and title)	CONTRACTOR (Signature) William Yates, President (Printed name and title

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EX-10.3

Exhibit 10.3

1997 Edition—Electronic Format

AIA Document B141-1997

Standard Form of Agreement Between Owner and Architect

with Standard Form of Architect’s Services

TABLE OF ARTICLES

1.1    INITIAL INFORMATION

1.2    RESPONSIBILITIES OF THE PARTIES

1.3    TERMS AND CONDITIONS

1.4    SCOPE OF SERVICES AND OTHER SPECIAL TERMS AND CONDITIONS

1.5    COMPENSATION

AGREEMENT made as of the 31^st day of January in the year 2003, effective as of the 10^th day of October, 2001.

BETWEEN the Architect’s client identified as the Owner:

Old Evangeline Downs, LLC

7620 N.E. Evangeline Thruway

Carenero, Louisiana 70520

and the Architect:

KGA Architecture

4170 South Decatur Boulevard, Suite B-5

Las Vegas, Nevada 89103

For the following Project: Evangeline Casino and Racetrack, Opelousas, Louisiana

The Owner and Architect agree as follows.

ARTICLE 1.1 INITIAL INFORMATION

1.1.1 This agreement is based on the letter from the Architect to Peninsula Gaming dated October 10, 2001. By signing below, Peninsula Gaming assigns all of its right, title and interest in and to said letter to the Owner. The Owner accepts such assignment and assumes all obligations thereunder. Architect consents to such assignment and agrees that Peninsula Gaming is discharged thereunder and is relieved and released from all obligations thereunder. Said letter is attached hereto as Exhibit A.

1.1.2 PROJECT PARAMETERS

1.1.2.1 The objective or use is described in Exhibit A.

1.1.2.2 The physical parameters are described in Exhibit A.

1.1.2.3 The Owner’s Program is described in Exhibit A.

1.1.2.4 The legal parameters are described in Exhibit A.

1.1.2.5 The financial parameters are described in Exhibit A.

1.1.2.6 The time parameters are described in Exhibit A.

1.1.2.7 The proposed procurement or delivery method for the Project is described in Exhibit A.

1.1.2.8 All other Other parameters are described in Exhibit A.

1.1.3 PROJECT TEAM

1.1.3.1 The Owner’s Designated Representative is Michael Luzich or his designee.

1.1.3.3 The Owner’s other consultants and contractors are:

Contractor:

W.G. Yates & Sons Construction Company

200-A Lentensa Street

Biloxi, Mississippi 39530

Owner’s Construction Manager:

KGA Architecture

4170 South Decatur Boulevard, Suite B-5

Las Vegas, Nevada 89103

1.1.3.4 The Architect’s Designated Representative is Ed Kittrell Jr. or his designee.

1.1.3.5 The consultants retained at the Architect’s expense are described in Exhibit A.

1.1.5 When the services under this Agreement include contract administration services, the General Conditions of the Contract for Construction shall be the 1997 edition of AIA Document A201 as modified and amended in the form attached to the Standard Form of Agreement between Owner and Contractor dated January 21, 2003 (the “Construction Contract”).

1.1.6 The information contained in this Article 1.1 may be reasonably relied upon by the Owner and Architect. Both parties, however, recognize that such information may change.

ARTICLE 1.2 RESPONSIBILITIES OF THE PARTIES

1.2.1 The Owner and the Architect shall cooperate with one another to fulfill their respective obligations under this Agreement. Both parties shall endeavor to maintain good working relationships among all members of the Project team.

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1.2.2 OWNER

1.2.2.1 Unless otherwise provided under this Agreement, the Owner shall provide full information in a timely manner regarding requirements for and limitations on the Project. The Owner shall furnish to the Architect, within 15 days after receipt of a written request, information necessary and relevant for the Architect to evaluate, give notice of or enforce lien rights.

1.2.2.2 The Contractor shall periodically update the budget for the Project, including that portion allocated for the Cost of the Work as set forth in the construction Contract.

1.2.2.3 The Owner’s Designated Representative identified in Paragraph 1.1.3 shall be authorized to act on the Owner’s behalf with respect to the Project. The Owner or the Owner’s Designated Representative shall render decisions in a timely manner pertaining to documents submitted by the Architect in order to avoid unreasonable delay in the orderly and sequential progress of the Architect’s services.

1.2.2.4 The Architect shall furnish the services of consultants to perform the services as set forth in Exhibit A.

1.2.2.5 The Owner or the Architect, as set forth in Exhibit A, shall furnish tests, inspections and reports required by law or the Contract Documents, such as structural, mechanical, and chemical tests, tests for air and water pollution, and tests for hazardous materials.

1.2.2.6 The Owner shall furnish all legal, insurance and accounting services, including auditing services, that may be reasonably necessary at any time for the Project to meet the Owner’s needs and interests.

1.2.2.7 The Owner shall provide prompt written notice to the Architect if the Owner becomes aware of any fault or defect in the Project, including any errors, omissions or inconsistencies in the Architect’s Instruments of Service.

1.2.3 ARCHITECT

1.2.3.1 The services performed by the Architect, Architect’s employees and Architect’s consultants shall be enumerated in Exhibit A.

1.2.3.2 The Architect’s services shall be performed as expeditiously as is consistent with professional skill and care and the orderly progress of the Project. The Architect shall submit for the Owner’s approval a schedule for the performance of the Architect’s services as set forth in Exhibit A and which shall be adjusted, if necessary, as the Project proceeds. This schedule shall include allowances for periods of time required for the Owner’s review, for the performance of the Owner’s consultants, and for approval of submissions by authorities having jurisdiction over the Project. Time limits established by this schedule approved by the Owner shall not, except for reasonable cause, be exceeded by the Architect or Owner.

1.2.3.3 The Architect’s Designated Representative identified in Paragraph 1.1.3 shall be authorized to act on the Architect’s behalf with respect to the Project.

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1.2.3.4 The Architect shall maintain the confidentiality of information specifically designated as confidential by the Owner, unless withholding such information would violate the law, or prevent the Architect from establishing a claim or defense in an adjudicatory proceeding. The Architect shall require of the Architect’s consultants similar agreements to maintain the confidentiality of information specifically designated as confidential by the Owner.

1.2.3.5 Except with the Owner’s knowledge and consent, the Architect shall not engage in any activity, or accept any employment, interest or contribution that would reasonably appear to compromise the Architect’s professional judgment with respect to this Project.

1.2.3.6 The Architect shall review laws, codes, and regulations applicable to the Architect’s services. The Architect shall respond in the design of the Project to requirements imposed by governmental authorities having jurisdiction over the Project.

1.2.3.7 The Architect shall be entitled to rely on the accuracy and completeness of services and information furnished by the Owner. The Architect shall provide prompt written notice to the Owner if the Architect becomes aware of any errors, omissions or inconsistencies in such services or information.

ARTICLE 1.3 TERMS AND CONDITIONS

1.3.1. COST OF THE WORK

1.3.1.1 The Cost of the Work shall be as defined in the Construction Contract.

1.3.1.3The Cost of the Work does not include the compensation of the Architect and the Architect’s consultants.

1.3.2 INSTRUMENTS OF SERVICE

1.3.2.1 Drawings, specifications and other documents, including those in electronic form, prepared by the Architect and the Architect’s consultants are Instruments of Service for use solely with respect to this Project. The Architect and the Architect’s consultants shall be deemed the authors and owners of their respective Instruments of Service and shall retain all common law, statutory and other reserved rights, including copyrights.

1.3.2.2 Upon execution of this Agreement, the Architect grants to the Owner, the Contractor and all subcontractors and subsubcontractors (as such terms are defined in the Construction Contract) a nonexclusive license to reproduce the Architect’s Instruments of Service solely for purposes of constructing, using and maintaining the Project, provided that the Owner shall comply with all obligations, including prompt payment of all sums when due, under this Agreement. The Architect shall obtain similar nonexclusive licenses from the Architect’s consultants consistent with this Agreement.

1.3.2.3 The Owner shall not assign, delegate, sublicense, pledge or otherwise transfer any license granted herein to another party without the prior written agreement of the Architect. However, the Owner shall be permitted to authorize the Contractor, Subcontractors, Sub-subcontractors and material or equipment suppliers to reproduce applicable portions of the Instruments of Service appropriate to and for use in their execution of the Work by license granted in Subparagraph 1.3.2.2. Submission or distribution of Instruments of Service to meet official regulatory requirements or for similar purposes in connection with the Project is not to be

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construed as publication in derogation of the reserved rights of the Architect and the Architect’s consultants. The Owner shall not use the Instruments of Service for future additions or alterations to this Project or for other projects, unless the Owner obtains the prior written agreement of the architect and the Architect’s consultants. Any unauthorized use of the Instruments of Service by the Owner shall be at the Owner’s sole risk and without liability to the Architect and the Architect’s consultants.

1.3.2.4 Exhibit A sets forth the specific conditions governing the format of such Instruments of Service or electronic data, including any special limitations or licenses not otherwise provided in this Agreement.

1.3.3 CHANGES IN SERVICES

1.3.3.1 Changes in Services of the Architect, including services required of the Architect’s consultants, may be accomplished after execution of this Agreement in the manner set forth in Exhibit A.

1.3.4 MEDIATION

1.3.4.1 Any claim, dispute or other matter in question arising out of or related to this Agreement shall be subject to mediation as a condition precedent to arbitration or the institution of legal or equitable proceedings by either party. If such matter relates to or is the subject of a lien arising out of the Architect’s services, the Architect may proceed in accordance with applicable law to comply with the lien notice or filing deadlines prior to resolution of the matter by mediation or by arbitration.

1.3.4.2 The Owner and the Architect shall endeavor to resolve claims, disputes and other matters in question between them by mediation which, unless the parties mutually agree otherwise, shall be in accordance with the Construction Industry Mediation Rules of the American Arbitration Association currently in effect. Request for mediation shall be filed in writing with the other party to this Agreement and with the American Arbitration Association. The request may be made concurrently with the filing of a demand for arbitration but, in such event, mediation shall proceed in advance of arbitration or legal or equitable proceedings, which shall be stayed pending mediation for a period of 60 days from the date of filing, unless stayed for a longer period by agreement of the parties or court order.

1.3.4.3 The parties shall share the mediator’s fee and any filing fees equally. The mediation shall be held in the place where the Project is located, unless another location is mutually agreed upon. Agreements reached in mediation shall be enforceable as settlement agreements in any court having jurisdiction thereof.

1.3.5 ARBITRATION

1.3.5.1 Any claim, dispute or other matter in question arising out of or related to this Agreement shall be subject to arbitration. Prior to arbitration, the parties shall endeavor to resolve disputes by mediation in accordance with Paragraph 1.3.4.

1.3.5.2 Claims, disputes and other matters in question between the parties that are not resolved by mediation shall be decided by arbitration which, unless the parties mutually agree otherwise, shall be in accordance with the Construction Industry Arbitration Rules of the

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American Arbitration Association currently in effect. The demand for arbitration shall be filed in writing with the other party to this Agreement and with the American Arbitration Association.

1.3.5.3 A demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations.

1.3.5.4 No arbitration arising out of or relating to this Agreement shall include, by consolidation or joinder or in any other manner, an additional person or entity not a party to this Agreement, except by written consent containing a specific reference to this Agreement and signed by the Owner, Architect, and any other person or entity sought to be joined. Consent to arbitration involving an additional person or entity shall not constitute consent to arbitration of any claim, dispute or other matter in question not described in the written consent or with a person or entity not named or described herein. The foregoing agreement to arbitrate and other agreements to arbitrate with an additional person or entity duly consented to by parties to this Agreement shall be specifically enforceable in accordance with applicable law in any court having jurisdiction thereof.

1.3.5.5 The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.

1.3.6 CLAIMS FOR CONSEQUENTIAL DAMAGES. The Architect and the Owner waive consequential damages for claims, disputes or other matters in question arising out of or relating to this Agreement. This mutual waiver is applicable, without limitation, to all consequential damages due to either party’s termination in accordance with Paragraph 1.3.8.

1.3.7 MISCELLANEOUS INFORMATION

1.3.7.1 This Agreement shall be governed by the law of the principal place of business of the Architect. The design and drawings shall be prepared in accordance with the laws, rules and regulations of the State of Louisiana. The functions of the Architect under the Construction Contract shall be interpreted in accordance with the laws, rules and regulation of the State of Louisiana.

1.3.7.2 Terms in this Agreement shall have the same meaning as those in the edition of AIA Document A201, General Conditions of the Contract for Construction attached to the Construction Contract.

1.3.7.3 Causes of action between the parties to this Agreement pertaining to acts or failures to act shall be deemed to have accrued and the applicable statutes of limitations shall commence to run not later than either the date of Substantial Completion for acts or failures to act occurring prior to Substantial Completion or the date of issuance of the final Certificate for Payment for acts or failures to act occurring after Substantial Completion. In no event shall such statutes of limitations commence to run any later than the date when the Architect’s services are substantially completed.

1.3.7.4 To the extent damages are covered by property insurance during construction, the Owner and the Architect waive all rights against each other and against the contractors,

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consultants, agents and employees of the other for damages, except such rights as they may have to the proceeds of such insurance as set forth in the edition of AIA Document A201, General Conditions of the Contract for Construction attached to the Construction Contract . The Owner or the Architect, as appropriate, shall require of the contractors, consultants, agents and employees of any of them similar waivers in favor of the other parties enumerated herein.

1.3.7.5 Nothing contained in this Agreement shall create a contractual relationship with or a cause of action in favor of a third party against either the Owner or Architect.

1.3.7.6 Unless otherwise provided in Exhibit A, the Architect and the Architect’s consultants shall have no responsibility for the discovery, presence, handling, removal or disposal of or exposure of persons to hazardous materials or toxic substances in any form at the Project site.

1.3.7.7 The Architect shall have the right to include photographic or artistic representations of the design of the Project among the Architect’s promotional and professional materials. The Architect shall be given reasonable access to the completed Project to make such representations. However, the Architect’s materials shall not include the Owner’s confidential or proprietary information. The Owner shall provide professional credit for the Architect in the Owner’s promotional materials for the Project.

1.3.7.8 The Architect shall execute certificates in the form annexed to that certain Cash Collateral and Disbursement Agreement among U.S. Bank National Association, the Owner and others, the content of which certificates shall be satisfactory to the Architect.

1.3.7.9 The Owner and the Architect, respectively, bind themselves, their partners, successors, assigns and legal representatives to the other party to this Agreement and to the partners, successors, assigns and legal representatives of such other party with respect to all covenants of this Agreement. Neither the Owner nor the Architect shall assign this Agreement without the written consent of the other, except that the Owner may assign this Agreement to an institutional lender providing financing for the Project. In such event, the lender shall assume the Owner’s rights and obligations under this Agreement. The Architect shall execute all consents reasonably required to facilitate such assignment.

1.3.8 TERMINATION OR SUSPENSION

1.3.8.1 If the Owner fails to make payments to the Architect in accordance with this Agreement, such failure shall be considered substantial nonperformance and cause for termination or, at the Architect’s option, cause for suspension of performance of services under this Agreement. If the Architect elects to suspend services, prior to suspension of services, the Architect shall give seven days’ written notice to the Owner. In the event of a suspension of services, the Architect shall have no liability to the Owner for the delay or damage caused the Owner because of such suspension of services. Before resuming services, the Architect shall be paid all sums due prior to suspension and any expenses incurred in the interruption and resumption of the Architect’s services.

1.3.8.2 If the Project is suspended by the Owner for more than 30 consecutive days, the Architect shall be compensated for services performed prior to notice of such suspension. When

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the Project is resumed, the Architect shall be compensated for expenses incurred in the interruption and resumption of the Architect’s services.

1.3.8.5 This Agreement may be terminated by the Owner upon not less than seven days’ written notice to the Architect for the Owner’s convenience and without cause.

1.3.8.6 In the event of termination not the fault of the Architect, the Architect shall be compensated for services performed prior to termination in accordance with Exhibit A.

1.3.9 PAYMENTS TO THE ARCHITECT

1.3.9.1 Payments on account of services rendered and for Reimbursable Expenses incurred shall be made in accordance with Exhibit A.

1.3.9.3 Records of expenses pertaining to of services shall be available to the Owner or the Owner’s authorized representative at mutually convenient times.

ARTICLE 1.4 SCOPE OF SERVICES AND OTHER SPECIAL TERMS AND CONDITIONS

1.4.1 Enumeration of Parts of the Agreement. This Agreement represents the entire and integrated agreement between the Owner and the Architect and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement may be amended only by written instrument signed by both Owner and Architect. This Agreement comprises the documents listed below.

1.4.1.1 Standard Form of Agreement Between Owner and Architect, AIA Document B141-1997.

1.4.1.2 Standard Form of Architect’s Services: Design and Contract Administration, AIA Document, B141-1997, or as follows:

1.4.2 Special Terms and Conditions. Special terms and conditions that modify this Agreement are as follows:

It is the intention of the Owner and the Architect that Exhibit A is incorporated into this Standard Form of Agreement and that any inconsistencies between this Agreement and Exhibit A be resolved in favor of Exhibit A.

ARTICLE 1.5 COMPENSATION

1.5.1 For the Architect’s services as described under Article 1.4, compensation shall be computed in accordance with Exhibit A.

This Agreement entered into as of the day and year first written above.

Old Evangeline Downs, LLC		KGA Architecture
	/s/    MICHAEL S. LUZICH		/s/    ED KITTRELL, Jr.
	Owner (Signature)		Architect (Signature)
	by:    Michael Luzich, President		by:    Ed Kittrell Jr., President

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1997 Edition—Electronic Format

AIA Document B141-1997

Standard Form of Architect’s Services:

Design and Contract Administration

TABLE OF ARTICLES

2.1     PROJECT ADMINISTRATION SERVICES

2.2    SUPPORTING SERVICES

2.3    EVALUATION AND PLANNING SERVICES

2.4    DESIGN SERVICES

2.5    CONSTRUCTION PROCUREMENT SERVICES

2.6    CONTRACT ADMINISTRATION SERVICES

2.7    FACILITY OPERATION SERVICES

2.8    SCHEDULE OF SERVICES

2.9    MODIFICATIONS

ARTICLE 2.1 PROJECT ADMINISTRATION SERVICES

2.1.1 The Architect shall manage the Architect’s services and administer the Project. The Architect shall consult with the Owner, research applicable design criteria, attend Project meetings, communicate with members of the Project team and issue progress reports. The Architect shall coordinate the services provided by the Architect and the Architect’s consultants with those services provided by the Owner and the Owner’s consultants.

2.1.2 When Project requirements have been sufficiently identified, the Architect shall prepare, and periodically update, a Project schedule that shall identify milestone dates for decisions required of the Owner, design services furnished by the Architect, completion of documentation provided by the Architect, commencement of construction and Substantial Completion of the Work.

2.1.3 The Architect shall consider the value of alternative materials, building systems and equipments, together with other considerations based on program, budget and aesthetics in developing the design for the Project.

2.1.4 Upon request of the Owner, the Architect shall make a presentation to explain the design of the Project to representatives of the Owner.

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2.1.5 The Architect shall submit design documents to the Owner at intervals appropriate to the design process for purposes of evaluation and approval by the Owner. The Architect shall be entitled to rely on approvals received from the Owner in the further development of the design.

2.1.6 The Architect shall assist the Owner in connection with the Owner’s responsibility for filing documents required for the approval of governmental authorities having jurisdiction over the Project.

2.1.7 EVALUATION OF BUDGET AND COST OF THE WORK

2.1.7.1 As the design process progresses through the end of the preparation of the Construction Documents, the Architect shall update and refine the preliminary estimate of the Cost of the Work. The Architect shall advise the Owner of any adjustments to previous estimates of the Cost of the Work indicated by changes in Project requirements or general market conditions. If at any time the Architect’s estimate of the Cost of the Work exceeds the Owner’s budget, the Architect shall make appropriate recommendations to the Owner to adjust the Project’s size, quality or budget, and the Owner shall cooperate with the Architect in making such adjustments.

2.1.7.2 Evaluations of the Owner’s budget for the Project, the preliminary estimate of the Cost of the Work and updated estimates of the Cost of the Work prepared by the Architect represent the Architect’s judgment as a design professional familiar with the construction industry. It is recognized, however, that neither the Architect nor the Owner has control over the cost of labor, materials or equipment, over the Contractor’s methods of determining bid prices, or over competitive bidding, market or negotiating conditions. Accordingly the Architect cannot and does not warrant or represent that bids or negotiated prices will not vary from the Owner’s budget for the Project or from any estimate of the Cost of the Work or evaluation prepared or agreed to by the Architect.

ARTICLE 2.4 DESIGN SERVICES

2.4.1 The Architect’s design services shall include normal structural, mechanical and electrical engineering services.

2.4.2. SCHEMATIC DESIGN DOCUMENTS

2.4.2.1 The Architect shall provide Schematic Design Documents in accordance with Exhibit A.

2.4.3 DESIGN DEVELOPMENT DOCUMENTS

2.4.3.1 The Architect shall provide Design development Documents based on the approved Schematic Design Documents and updated budget for the Cost of the Work in accordance with Exhibit A.

2.4.4 CONSTRUCTION DOCUMENTS

2.4.4.1 The Architect shall provide Construction Documents based on the approved Design Development Documents and updated budget for the Cost of the Work in accordance with Exhibit A.

2.4.4.2 During the development of the Construction Documents, the Architect shall assist the Owner and the Contractor in the development and preparation of: (1) bidding and procurement

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information which describes the time, place and conditions of bidding; bidding or proposal forms; and the form of agreement between the Owner and the Contractor; and (2) the Conditions of the Contract for Construction (General, Supplementary and other Conditions). The Architect also shall compile the Project Manual that includes the Conditions of the Contract for Construction and Specifications and may include bidding requirements and sample forms.

ARTICLE 2.5 CONSTRUCTION PROCUREMENT SERVICES

2.5.1 The Architect shall assist the Owner and the Contractor in obtaining either competitive bids or negotiated proposals and shall assist the Owner and the Contractor in awarding and preparing contracts for construction.

2.5.2 The Architect shall assist the Owner and the Contractor in establishing a list of prospective bidders or contractors.

2.5.3 The Architect shall assist the Owner and the Contractor in bid validation or proposal evaluation and determination of the successful bid or proposal, if any.

ARTICLE 2.6 CONTRACT ADMINISTRATION SERVICES

2.6.1 GENERAL ADMINISTRATION

2.6.1.1 The Architect shall provide administration of the Contract between the Owner and the Contractor as set forth below and in the edition of the AIA Document A201, General Conditions of the Contract for Construction annexed to the Construction Contract.

2.6.1.2 The Architect’s responsibility to provide the Contract Administration Services under this Agreement commences with the award of the initial Contract for Construction and terminates at the issuance to the Owner of the final Certificate for Payment.

2.6.1.3 The Architect shall be a representative of and shall advise and consult with the Owner during the provision of the Contract Administration Services. The Architect shall have authority to act on behalf of the Owner only to the extent provided in this Agreement.

2.6.1.4 Duties, responsibilities and limitations of authority of the Architect under this Article 2.6 shall not be restricted, modified or extended without written agreement of the Owner and Architect.

2.6.1.5 The Architect shall review properly prepared, timely requests by the Contractor for additional information about the Contract Documents. A properly prepared request for additional information about the Contract Documents shall be in a form prepared or approved by the Architect and shall include a detailed written statement that indicates the specific Drawings or Specifications in need of clarification and the nature of the clarification requested.

2.6.1.6 If deemed appropriate by the Architect, the Architect shall on the Owner’s behalf prepare, reproduce and distribute supplemental Drawings and Specifications in response to requests for information by the Contractor.

2.6.1.7 The Architect shall interpret and decide matters concerning performance of the Owner and Contractor under, and requirements of, the Contract Documents on written request of either the Owner or the Contractor. The Architect’s response to such requests shall be made in

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writing within any time limits set forth in the AIA Documents A201, General Conditions of the Contract for Construction annexed to the Construction Contract.

2.6.1.8 Interpretations and decisions of the Architect shall be consistent with the intent of and reasonably inferable from the Contract Documents and shall be in writing or in the form of drawings. The Architect shall not be liable for the results of interpretations or decisions so rendered in good faith.

2.6.1.9 The Architect shall render initial decisions on claims, disputes or other matters in question between the Owner and Contractor as provided in the Contract Documents. However, the Architect’s decisions on matters relating to aesthetic effect after consultation with the Owner.

2.6.2 EVALUATIONS OF THE WORK

2.6.2.1 The Architect, as a representative of the Owner, shall visit the site at intervals set forth in Exhibit A, or as otherwise agreed by the Owner and the Architect in Article 2.8, (1) to become generally familiar with and to keep the Owner informed about the progress and quality of the portion of the Work completed, (2) to endeavor to guard the Owner against defects and deficiencies in the Work, and (3) to determine in general if the Work is being performed in a manner indicating that the Work, when fully completed, will be in accordance with the Contract Documents. However, the Architect shall not be required to make exhaustive or continuous on-site inspections to check the quality or quantity of the Work. The Architect shall neither have control over or charge of, nor be responsible for, the construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection with the Work, since these are solely the Contractor’s rights and responsibilities under the Contract Documents.

2.6.2.2 The Architect shall report to the Owner known deviations from the Contract Documents and from the recent construction schedule submitted by the Contractor. However, the Architect shall not be responsible for the Contractor’s failure to perform the Work in accordance with the requirements of the Contract Documents. The Architect shall be responsible for the Architect’s negligent acts or omissions, but shall not have control over or charge of and shall not be responsible for acts or omissions of the Contractor, Subcontractors, or their agents or employees, or of any other persons or entities performing portions of the Work.

2.6.2.3 The Architect shall at all times have access to the Work wherever it is in preparation or progress.

2.6.2.4 Except as otherwise provided in this Agreement or when direct communications have been specifically authorized, the Owner shall endeavor to communicate with the Contractor through the Architect about matters arising out of or relating to the Contract Documents. Communications by and with the Architect’s consultants shall be through the Architect.

2.6.2.5 The Architect shall have authority to reject Work that does not conform to the Contract Documents. Whenever the Architect considers it necessary or advisable, and after consultation with the Owner, the Architect will have authority to require inspection or testing of the Work in accordance with the provisions of the Contract Documents, whether or not such Work is fabricated, installed or completed. However, neither this authority of the Architect nor a decision made in good faith either to exercise or not to exercise such authority shall give rise to a

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duty or responsibility of the Architect to the Contractor, Subcontractors, material and equipment suppliers, their agents or employees or other persons or entities performing portions of the Work.

2.6.3 CERTIFICATION OF PAYMENTS TO CONTRACTOR

2.6.3.1 The Architect shall review and certify the amounts due the Contractor and shall issue Certificates for Payment in such amounts all in accordance with the provisions set forth in the edition of AIA Document A201, General Conditions of the Contract for Construction annexed to the Construction Contract. The Architect’s certification for payment shall constitute a representation to the Owner, based on the Architect’s evaluation of the Work as provided in Paragraph 2.6.2 and on the data comprising the Contractor’s Application for Payment, that the Work has progressed to the point indicated and that, to the best of the Architect’s knowledge, information and belief, the quality of the Work is in accordance with the Contract Documents. The foregoing representations are subject (1) to an evaluation of the Work for conformance with the Contract Documents upon Substantial Completion, (2) to results of subsequent tests and inspections, (3) to correction of minor deviations from the Contract Documents prior to completion, and (4) to specific qualifications expressed by the Architect.

2.6.3.2 The issuance of a Certificate for Payment shall not be a representation that the Architect has (1) made exhaustive or continuous on-site inspections to check the quality or quantity of the Work, (2) reviewed construction mean, methods, techniques, sequences or procedures, (3) reviewed copies of requisitions received from Subcontractors and material suppliers and other data requested by the Owner to substantiate the Contractor’s right to payment, or (4) ascertained how or for what purpose the Contractor has used money previously paid on account of the Contract Sum.

2.6.3.3 The Architect shall maintain a record of the Contractor’s Application for Payment.

2.6.4 SUBMITTALS

2.6.4.1 The Architect shall review and approve or take appropriate action upon the Contractor’s submittals such as Shop Drawings, Product Data and Samples, but only for the limited purpose of checking for conformance with information given and the design concept expressed in the Contract Documents. The Architect’s action shall be taken with such reasonable promptness as to cause no delay in the work or in the activities of the Owner, Contractor or separate contractors, while allowing sufficient time in the Architect’s professional judgment to permit adequate review. Review of such submittals is not conducted for the purpose of determining the accuracy and completeness of other details such as dimensions and quantities, or for substantiating instructions for installation or performance of equipment or systems, all of which remain the responsibility of the Contractor as required by the Contract Documents. The Architect’s review shall not constitute approval of safety precautions or, unless otherwise specifically stated by the Architect, of any construction means, methods, techniques, sequences or procedures. The Architect’s approval of a specific item shall not indicate approval of an assembly of which the item is a component.

2.6.4.2 The Architect shall maintain a record of submittals and copies of submittals supplied by the Contractor in accordance with the requirements of the Contract Documents.

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2.6.4.3 If professional design services or certifications by a design professional related to systems, materials or equipment are specifically required of the Contractor by the Contract Documents, the Architect shall specify appropriate performance and design criteria that such services must satisfy. Shop Drawings and other submittals related to the Work designed or certified by the design professional retained by the Contractor shall bear such professional’s written approval when submitted to the Architect. The Architect shall be entitled to rely upon the adequacy, accuracy and completeness of the services, certifications or approvals performed by such design professionals.

2.6.5 CHANGES IN THE WORK

2.6.5.1 The Architect shall prepare Change Orders and Construction Change Directives for the Owner’s approval and execution in accordance with the Contract Documents. The Architect may authorize minor changes in the Work not involving an adjustment in Contract Sum or an extension of the Contract Time which are consistent with the intent of the Contract Documents. If necessary, the Architect shall prepare, reproduce and distribute Drawings and Specifications to describe Work to be added, deleted or modified, as provided in Paragraph 2.8.2.

2.6.5.2 The Architect shall review properly prepared, timely requests by the Owner or Contractor for changes in the Work, including adjustments to the Contract Sum or Contract Time. A properly prepared request for a change in the Work shall be accompanied by sufficient supporting data and information to permit the Architect to make a reasonable determination without extensive investigation or preparation of additional drawings or specifications. If the Architect reasonably determines that requested changes in the Work are not materially different from the requirements of the Contract Documents, the Architect may issue an order for a minor change in the Work or recommend to the Owner that the requested change be denied.

2.6.5.3 If the Architect determines that implementation of the requested changes would result in a material change to the Contract that may cause an adjustment in the Contract Time or Contract Sum, the Architect shall make a recommendation to the Owner, who may authorize further investigation of such change. Upon such authorization, and based upon information furnished by the Contractor, if any, the Architect shall estimate the additional cost and time that might result from such change, including any additional costs attributable to a Change in Services of the Architect. With the Owner’s approval, the Architect shall incorporate those estimates into a Change Order or other appropriate documentation for the Owner’s execution or negotiation with the Contractor.

2.6.5.4 The Architect shall maintain records relative to changes in the Work.

2.6.6 PROJECT COMPLETION

2.6.6.1 The Architect shall conduct inspections to determine the date or dates of Substantial Completion and the date of final completion, shall receive from the Contractor and forward to the Owner, for the Owner’s review and records, written warranties and related documents required by the Contract Documents and assembled by the Contractor, and shall issue a final Certificate for Payment based upon a final inspection indicating the Work complies with the requirements of the Contract Documents.

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2.6.6.2 The Architect’s inspection shall be conducted with the Owner’s Designated Representative to check conformance of the Work with the requirements of the Contract Documents and to verify the accuracy and completeness of the list submitted by the Contractor of Work to be completed or corrected.

2.6.6.3 When the Work is found to be substantially complete, the Architect shall inform the Owner about the balance of the Contract Sum remaining to be paid the Contractor, including any amounts needed to pay for final completion or correction of the Work.

2.6.6.4 The Architect shall receive from the Contractor and forward to the Owner: (1) consent of surety or sureties, if any, to reduction in or partial release of retainage or the making of final payment and (2) affidavits, receipts, releases and waivers of liens or bonds indemnifying the Owner against liens.

ARTICLE 2.7 FACILITY OPERATION SERVICES

2.7.1 The Architect shall meet with the Owner or the Owner’s Designated Representative promptly after Substantial Completion to review the need for facility operation services.

2.7.2 Upon request of the Owner, and prior to the expiration of one year from the date of Substantial Completion, the Architect shall conduct a meeting with the Owner and the Owner’s Designated Representative to review the facility operations and performance and to make appropriate recommendations to the Owner.

ARTICLE 2.9 MODIFICATIONS

2.9.1 Modifications to this Standard Form of Architect’s Services: Design and contract Administration, if any, are as follows:

It is the intention of the Owner and the Architect that Exhibit A is incorporated into the Standard Form of Architect’s Services: Design and Construction Administration and that any inconsistencies between this agreement and Exhibit A shall be resolved in favor of Exhibit A. In addition any inconsistencies between the Architect’s functions under the Construction Contract and such functions which are obligations of the Architect under this Standard Form of Architect’s Services and Contract Administration shall be resolved in favor of the Construction Contract.

By its execution, this Standard Form of Architect’s Services: Design and Contract Administration and modifications hereto are incorporated into the Standard Form of Agreement Between the Owner and Architect, AIA Document B141-1997, that was entered into by the parties as of the date:

Old Evangeline Downs, LLC		KGA Architecture
	/s/    MICHAEL S. LUZICH		/s/    ED KITTRELL, JR.
	Owner (Signature)		Architect (Signature)
	by:    Michael Luzich, President		by:    Ed Kittrell Jr., President

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EX-12.1

EXHIBIT 12.1

Computation of Ratio of Earnings To Fixed Charges

	Predecessor												Successor			Predecessor		Successor
	Fiscal Year Ended December 31,										January 1, through August 30, 2002		August 31, through December 31, 2002			January 1, through March 31, 2002		January 1, through March 31, 2003
	1998		1999		2000			2001
Earnings to Fixed Charges:
Earnings	$	464,223	$	216,444	$	(465,017	)	$	(4,359,563	)	$	576,637	$	(761,456	)	$	177,611	$	(3,652,696	)
Fixed Charges:
Interest expense		1,224,461		1,192,255		1,157,239			1,121,835			769,163		748,787			269,871		2,494,676
Capitalized interest		—		—		—			—			—		93,305			—		139,606
Total Fixed Charges		1,224,461		1,192,255		1,157,239			1,121,836			769,163		842,092			269,871		2,434,276
Earnings as adjusted		1,688,684		1,408,699		692,222			-3,237,728			1,345,800		80,636			447,482		-1,218,416
Ratio of earnings to fixed charges		1.4x		1.2x		0.6x			-2.9x			1.7x		0.1x			1.7x		-0.5x

EX-21.1

Exhibit 21.1

Subsidiaries

(a) The Old Evangeline Downs, L.L.C

NAME	DOMESTIC JURISDICTION
The Old Evangeline Downs Capital Corp.	Delaware

(b) The Old Evangeline Downs Capital Corp.

NAME	DOMESTIC JURISDICTION
None	Delaware

EX-23.1

Exhibit 23.1

INDEPENDENT AUDITORS’ CONSENT AND REPORT ON SCHEDULES

To the Members of

The Old Evangeline Downs, L.C. and The Old Evangeline Down, L.L.C.

Lafayette, Louisiana

We consent to the use in this Registration Statement of The Old Evangeline Downs, L.L.C. on Form S-4 of our report dated January 24, 2003 with respect to The Old Evangeline Downs, L.C. (the “Predecessor Company”), appearing in the Prospectus, which is a part of this Registration Statement, and to the reference to us under the heading “Experts” in such Prospectus.

We also consent to the use in this Registration Statement of The Old Evangeline Downs, L.L.C. on Form S-4 of our report dated January 24, 2003 (February 26, 2003 as to Notes 8 and 15) with respect to The Old Evangeline Downs, L.L.C. (a wholly-owned subsidiary of OED Acquisition, LLC) (successor), appearing in the Prospectus, which is a part of this Registration Statement, and to the reference to us under the heading “Experts” in such Prospectus.

/S/    DELOITTE & TOUCHE LLP

May 23, 2003

EX-25.1

Exhibit 25.1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER

THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

Check if an Application to Determine Eligibility of

a Trustee Pursuant to Section 305(b)(2)

U.S. BANK NATIONAL ASSOCIATION

(Exact name of Trustee as specified in its charter)

31-0841368

I.R.S. Employer Identification No.

180 East Fifth Street St. Paul, Minnesota	55101
(Address of principal executive offices)	(Zip Code)

Frank Leslie

U.S. Bank National Association

180 East Fifth Street

St. Paul, MN 55101

(651) 244-8677

(Name, address and telephone number of agent for service)

The Old Evangeline Downs, L.L.C.		The Old Evangeline Downs Capital Corp.
(Exact name of registrants as specified in their charter)		(Exact name of registrants as specified in their charter)
Louisiana	P.O. Box 90270 Lafayette, Louisiana 70509-0270 (337) 896-7223	Delaware
(State or other jurisdiction of incorporation or organization)	(Address of Principal Executive Offices)	(State or other jurisdiction of incorporation or organization)
72-1280511		25-1902805
(I.R.S. Employer Identification No.)		(I.R.S. Employer Identification No.)

13% Senior Secured Notes due 2010 with Contingent Interest

(Title of the Indenture Securities)

FORM T-1

Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee.

a) Name and address of each examining or supervising authority to which it is subject.

Comptroller of the Currency

Washington, D.C.

b) Whether it is authorized to exercise corporate trust powers.

Yes

Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation.

None

Items 3-15 Items 3-15 are not applicable because to the best of the Trustee’s knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification.

1. A copy of the Articles of Association of the Trustee.*

2. A copy of the certificate of authority of the Trustee to commence business.*

3. A copy of the certificate of authority of the Trustee to exercise corporate trust powers.*

4. A copy of the existing bylaws of the Trustee.*

5. A copy of each Indenture referred to in Item 4. Not applicable.

6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.

7. Report of Condition of the Trustee as of December 31, 2002, published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

* Incorporated by reference to Registration Number 333-67188.

2

NOTE

The answers to this statement insofar as such answers relate to what persons have been underwriters for any securities of the obligors within three years prior to the date of filing this statement, or what persons are owners of 10% or more of the voting securities of the obligors, or affiliates, are based upon information furnished to the Trustee by the obligors. While the Trustee has no reason to doubt the accuracy of any such information, it cannot accept any responsibility therefor.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of St. Paul, State of Minnesota on the 16th day of April, 2003.

U.S. Bank National Association
By:	/s/    FRANK P. LESLIE III
	Frank P. Leslie III Vice President

By:	/s/     LORI-ANNE ROSENBERG
	Lori-Anne Rosenberg Assistant Vice President

3

Exhibit 6

CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Dated: April 16, 2003

U.S. Bank National Association
By:	/s/    FRANK P. LESLIE III
	Frank P. Leslie III Vice President

By:	/s/    LORI-ANNE ROSENBERG
	Lori-Anne Rosenberg Assistant Vice President

4

Exhibit 7

U.S. Bank National Association

Statement of Financial Condition

As of 12/31/2002

($000’s)

	12/31/2002
Assets
Cash and Due From Depository Institutions	$	10,868,204
Federal Reserve Stock		0
Securities		28,139,801
Federal Funds		873,395
Loans & Lease Financing Receivables		116,078,132
Fixed Assets		1,389,233
Intangible Assets		9,218,064
Other Assets		9,482,963
Total Assets	$	176,049,792
Liabilities
Deposits	$	121,684,914
Fed Funds		5,858,510
Treasury Demand Notes		0
Trading Liabilities		402,464
Other Borrowed Money		17,397,658
Acceptances		148,979
Subordinated Notes and Debentures		5,696,532
Other Liabilities		5,200,399
Total Liabilities	$	156,389,456
Equity
Minority Interest in Subsidiaries	$	992,867
Common and Preferred Stock		18,200
Surplus		11,314,669
Undivided Profits		7,334,600
Total Equity Capital	$	19,660,336
Total Liabilities and Equity Capital	$	176,049,792

To the best of the undersigned’s determination, as of the date hereof, the above financial information is true and correct.

U.S. Bank National Association
By:	/s/    FRANK P. LESLIE III
	Vice President

Date: April 16, 2003

5

EX-99.1

Exhibit 99.1

LETTER OF TRANSMITTAL

THE OLD EVANGELINE DOWNS, L.L.C.

THE OLD EVANGELINE DOWNS CAPITAL CORP.

Offer to Exchange all Outstanding

13% Senior Secured Notes due 2010

with Contingent Interest

for

13% Senior Secured Notes due 2010

with Contingent Interest

That Have Been Registered Under

the Securities Act of 1933, as amended,

Pursuant to the Prospectus, dated                     , 2003

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON                     , 2003, UNLESS EXTENDED (THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

The Exchange Agent for the Exchange Offer is:

U.S. Bank National Association

By Mail, Hand Delivery or Overnight Courier:

180 East Fifth Street

St. Paul, MN 55101

Attention: Corporate Trust—Specialized Finance

By Facsimile Transmission:

(for Eligible Institutions Only)

(651) 244-0711

Confirm by Telephone:

(651) 244-8677

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF THIS INSTRUMENT VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY OF THIS LETTER OF TRANSMITTAL.

The undersigned acknowledges that he or she has received and reviewed the Prospectus, dated             , 2003 (the “Prospectus”), of The Old Evangeline Downs, L.L.C., d/b/a Evangeline Downs, and its wholly owned subsidiary The Old Evangeline Downs Capital Corp., a Delaware corporation (the “Issuer”) and this Letter of Transmittal (the “Letter of Transmittal” or the “Letter”), which together constitute the Issuer’s offer (the “Exchange Offer”) to exchange an

aggregate principal amount of up to $123,200,000 of the Issuer’s 13% Senior Notes due 2010 with Contingent Interest that have been registered under the Securities Act of 1933, as amended (the “New Notes”), for a like principal amount denominated in dollars, in the aggregate, of the Issuer’s issued and outstanding 13% Senior Secured Notes due 2010 with Contingent Interest (the “Old Notes”) from the registered holders thereof.

For each Old Note accepted for exchange, the holder of such Old Note will receive a New Note having a principal amount equal to that of the surrendered Old Note. The New Notes will bear interest from the most recent date to which interest has been paid. Accordingly, registered holders of New Notes on the relevant record date for the first interest payment date following the consummation of the Exchange Offer will receive interest accruing from the most recent date to which interest has been paid. Old Notes accepted for exchange will cease to accrue interest from and after the date of consummation of the Exchange Offer. Holders of Old Notes whose Old Notes are accepted for exchange will not receive any payment in respect of accrued interest on such Old Notes otherwise payable on any interest payment date the record date for which occurs on or after consummation of the Exchange Offer.

This Letter is to be completed by a holder of Old Notes either if certificates for such Old Notes are to be forwarded herewith or if a tender is to be made by book-entry transfer to the account maintained by U.S. Bank National Association, as Exchange Agent for the Exchange Offer (the “Exchange Agent”), at The Depository Trust Company (the “Book-Entry Transfer Facility”) pursuant to the procedures set forth in “The Exchange Offer—Book-Entry Transfers” section of the Prospectus and an Agent’s Message is not delivered. Tenders by book-entry transfer may also be made by delivering an Agent’s Message in lieu of this Letter. The term “Agent’s Message” means a message, transmitted by the Book-Entry Transfer Facility to and received by the Exchange Agent and forming a part of a Book-Entry Confirmation (as defined below), which states that the Book-Entry Transfer Facility has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by this Letter and that the Issuer may enforce this Letter against such participant. Holders of Old Notes whose certificates are not immediately available, or who are unable to deliver their certificates or confirmation of the book-entry tender of their Old Notes into the Exchange Agent’s account at the Book-Entry Transfer Facility (a “Book-Entry Confirmation”) and all other documents required by this Letter to the Exchange Agent on or prior to the Expiration Date, must tender their Old Notes according to the guaranteed delivery procedures set forth in “The Exchange Offer—Guaranteed Delivery Procedures” section of the Prospectus. See Instruction 1.

Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Exchange Agent.

2

The undersigned has completed the appropriate boxes below and signed this Letter to indicate the action the undersigned desires to take with respect to the Exchange Offer.

List below the Old Notes to which this Letter relates. If the space provided below is inadequate, the certificate numbers and principal amount of Old Notes should be listed on a separate signed schedule affixed hereto.

DESCRIPTION OF OLD NOTES	1	2	3
Name(s) and Address(es) of Registered Holder(s) (Please fill in, if blank)	Certificate Number(s)*	Aggregate Principal Amount of Old Note(s)	Principal Amount Tendered**
	Total
*  Need not be completed if Old Notes are being tendered by book-entry transfer. **  Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the Old Notes represented by the Old Notes indicated in column 2. See Instruction 2. Old Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. See Instruction 1.

¨ CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:

Name of Tendering Institution                                          

Account Number                          Transaction Code Number                         

By crediting the Old Notes to the Exchange Agent’s account at the Book-Entry Transfer Facility’s Automated Tender Offer Program (“ATOP”) and by complying with applicable ATOP procedures with respect to the Exchange Offer, including transmitting to the Exchange Agent a computer-generated Agent’s Message in which the holder of the Old Notes acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, the Letter, the participant in the Book-Entry Transfer Facility confirms on behalf of itself and the beneficial owners of such Old Notes all provisions of this Letter (including all representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter to the Exchange Agent.

3

¨ CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

Name(s) of Registered holder(s)                                                                                                                                                                                              

Window Ticket Number (if any)                                                                                                                                                                                             

Date of Execution of Notice of Guaranteed Delivery                                                                                                                                                      

Name of Institution Which Guaranteed Delivery                                                                                                                                                              

If Delivered by Book-entry Transfer, Complete the Following:

Account Number                                                                                                                                                                                                                           

Transaction Code Number                                                                                                                                                                                                         

Name of Tendering Institution                                                                                                                                                                                                 

¨ CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.

¨ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name:                                                                                                                                                                                                                                                

Address:                                                                                                                                                                                                                                           

If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of marketmaking activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act of 1933, as amended, in connection with any resale of such New Notes; however, by so acknowledging and by delivering such a prospectus the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act of 1933, as amended. If the undersigned is a broker-dealer that will receive New Notes, it represents that the Old Notes to be exchanged for the New Notes were acquired as a result of market-making activities or other trading activities.

4

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Issuer the aggregate principal amount of Old Notes indicated above. Subject to, and effective upon, the acceptance for exchange of the Old Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Issuer all right, title and interest in and to such Old Notes as are being tendered hereby.

The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the undersigned’s true and lawful agent and attorney-in-fact with respect to such tendered Old Notes, with full power of substitution, among other things, to cause the Old Notes to be assigned, transferred and exchanged. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Old Notes, and to acquire New Notes issuable upon the exchange of such tendered Old Notes, and that, when the same are accepted for exchange, the Issuer will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by the Issuer. The undersigned hereby further represents that any New Notes acquired in exchange for Old Notes tendered hereby will have been acquired in the ordinary course of business of the person receiving such New Notes, whether or not such person is the undersigned, that neither the holder of such Old Notes nor such other person has any arrangement or understanding with any person to participate in the distribution of such New Notes and that neither the holder of such Old Notes nor any such other person is an “affiliate,” as defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”), of the Issuer.

The undersigned acknowledges that this Exchange Offer is being made in reliance on interpretations by the staff of the Securities and Exchange Commission (the “SEC”), as set forth in no-action letters issued to third parties, that the New Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may be offered for resale, resold and otherwise transferred by holders or other persons receiving the New Notes thereof (other than any such holder or other person that is an “affiliate” of the Issuer within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of business of the person receiving such New Notes, whether or not such person is the holder, and neither the holder nor such other person has any arrangement or understanding with any person to participate in the distribution of such New Notes. However, the SEC has not considered the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Offer as in other circumstances. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes and has no arrangement or understanding to participate in a distribution of New Notes. If any holder is an affiliate of the Issuer, is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the New Notes to be acquired pursuant to the Exchange Offer, such holder (i) could not rely on the applicable interpretations of the staff of the SEC and (ii) must comply with the registration and prospectus delivery requirements of the

5

Securities Act in connection with any resale transaction. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes, it represents that the Old Notes to be exchanged for the New Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus meeting the requirements of the Securities Act, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

The undersigned will, upon request, execute and deliver any additional documents deemed by the Issuer to be necessary or desirable to complete the sale, assignment and transfer of the Old Notes tendered hereby. All authority conferred or agreed to be conferred in this Letter and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in “The Exchange Offer—Withdrawal Rights” section of the Prospectus.

Unless otherwise indicated herein in the box entitled “Special Issuance Instructions” below, please deliver the New Notes (and, if applicable, substitute certificates representing Old Notes for any Old Notes not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of Old Notes, please credit the account indicated above maintained at the Book-Entry Transfer Facility. Similarly, unless otherwise indicated under the box entitled “Special Delivery Instructions” below, please send the New Notes (and, if applicable, substitute certificates representing Old Notes for any Old Notes not exchanged) to the undersigned at the address shown above in the box entitled “Description of Old Notes.”

THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED “DESCRIPTION OF OLD NOTES” ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD NOTES AS SET FORTH IN SUCH BOX ABOVE.

6

SPECIAL ISSUANCE INSTRUCTIONS (See Instructions 3 and 4)	SPECIAL DELIVERY INSTRUCTIONS (See Instructions 3 and 4)
To be completed ONLY if certificates for Old Notes not exchanged and/or New Notes are to be issued in the name of someone other than the person or persons whose signature(s) appear(s) on this Letter above, or if Old Notes delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than the account indicated above.	To be completed ONLY if certificates for Old Notes not exchanged and/or New Notes are to be sent to someone other than the person or persons whose signature(s) appear(s) on this Letter above or to such person or persons at an address other than shown in the box entitled “Description of Old Notes” on this Letter above.
Issue: New Notes and/or Old Notes to:	Mail: New Notes and/or Old Notes to:
Name(s)
(Please Type or Print)
	Name(s)
(Please Type or Print)	(Please Type or Print)
Address
(Zip Code)
(Complete Substitute Form W-9)	(Please Type or Print)
Credit unexchanged Old Notes delivered by book-entry transfer to the Book-Entry Transfer Facility account set forth below.	Address
(Book-Entry Transfer Facility Account Number, if applicable)	(Zip Code)

IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF OR AN AGENT’S MESSAGE IN LIEU THEREOF (TOGETHER WITH THE CERTIFICATES FOR OLD NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL

CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.

7

(TO BE COMPLETED BY ALL TENDERING HOLDERS)

(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9 ON REVERSE SIDE)

Dated:                                                                                                                                                  , 2003

x                                                                                                                                                            , 2003

x                                                                                                                                                            , 2003

                            Signature(s) of Owner                                                                     Date

Area Code and Telephone Number                                                                                                              

This Letter must be signed by the registered Holder(s) as the name(s) appear(s) on the certificate(s) for the Old Notes hereby tendered or on a security position, on listing or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 3.

Name(s):                                                                                                                                                         

(Please Type or Print)

Capacity:                                                                                                                                                         

Address:                                                                                                                                                          

(Including Zip Code)

SIGNATURE GUARANTEE

(If required by Instruction 3)

Signature(s) Guaranteed

by an Eligible Institution:                                                                                                                              

(Authorized Signature)

(Title)

(Name And Firm)

Dated:                                                                                                                                                   ,  2003

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INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

1. DELIVERY OF THIS LETTER AND NOTES; GUARANTEED DELIVERY PROCEDURES.

This Letter is to be completed by holders of Old Notes either if certificates are to be forwarded herewith or if tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth in “The Exchange Offer—Book-Entry Transfers” section of the Prospectus and an Agent’s Message is not delivered. Tenders by book-entry transfer may also be made by delivering an Agent’s Message in lieu of this Letter. The term “Agent’s Message” means a message, transmitted by the Book-Entry Transfer Facility to and received by the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by the Letter of Transmittal and that the Issuer may enforce the Letter of Transmittal against such participant. Certificates for all physically tendered Old Notes, or Book-Entry Confirmation, as the case may be, as well as a properly completed and duly executed Letter (or manually signed facsimile hereof or Agent’s Message in lieu thereof) and any other documents required by this Letter, must be received by the Exchange Agent at the address set forth herein on or prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. Old Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof.

Holders whose certificates for Old Notes are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Old Notes pursuant to the guaranteed delivery procedures set forth in “The Exchange Offer—Guaranteed Delivery Procedures” section of the Prospectus. Pursuant to such procedures, (i) such tender must be made through an Eligible Institution, (ii) prior to 5:00 p.m., New York City time, on the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Issuer (by telegram, telex, facsimile transmission, mail or hand delivery), setting forth the name and address of the holder of Old Notes and the amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that within three (3) New York Stock Exchange (“NYSE”) trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter (or facsimile thereof or Agent’s Message in lieu thereof) with any required signature guarantees and any other documents required by this Letter will be deposited by the Eligible Institution with the Exchange Agent, and (iii) the certificates for all physically tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter (or facsimile thereof or Agent’s Message in lieu thereof) with any required signature guarantees and all other documents required by this Letter, are received by the Exchange Agent within three (3) NYSE trading days after the date of execution of the Notice of Guaranteed Delivery. An “Eligible

9

Institution” is a firm which is a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchanges Medallion Program.

The method of delivery of this Letter, the Old Notes and all other required documents is at the election and risk of the tendering holders, but the delivery will be deemed made only when actually received or confirmed by the Exchange Agent. If Old Notes are sent by mail, it is suggested that the mailing be registered mail, properly insured, with return receipt requested, made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. No Letters of Transmittal or Old Notes should be sent directly to the Issuer.

See “The Exchange Offer” section of the Prospectus.

2. Partial Tenders (not applicable to holders who tender by book-entry transfer).

If less than all of the Old Notes evidenced by a submitted certificate are to be tendered, the tendering holder(s) should fill in the aggregate principal amount of Old Notes to be tendered in the box above entitled “Description of Old Notes—Principal Amount Tendered.” A reissued certificate representing the balance of nontendered Old Notes will be sent to such tendering holder, unless otherwise provided in the appropriate box on this Letter, promptly after the Expiration Date. ALL OF THE OLD NOTES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.

3. Signatures on this Letter; Bond Powers and Endorsements; Guarantee of Signatures.

If this Letter is signed by the holder of the Old Notes tendered hereby, the signature must correspond exactly with the name as written on the face of the certificates or on the Book-Entry Transfer Facility’s security position listing as the holder of such Old Notes without any change whatsoever.

If any tendered Old Notes are owned of record by two or more joint owners, all of such owners must sign this Letter.

If any tendered Old Notes are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter as there are different registrations of certificates.

When this Letter is signed by the registered holder or holders of the Old Notes specified herein and tendered hereby, no endorsements of certificates or written instrument or instruments of transfer or exchange are required. If, however, the Old Notes are registered in the name of a person other than a signer of the Letter, the Old Notes surrendered for exchange must be endorsed by, or be accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by the Issuer in its sole discretion, duly executed by the registered national securities exchange with the signature thereon guaranteed by an Eligible Institution.

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If this Letter is signed by a person or persons other than the registered holder or holders of Old Notes, such Old Notes must be endorsed or accompanied by appropriate powers of attorney, in either case signed exactly as the name or names of the registered holder or holders that appear on the Old Notes.

If this Letter or any Old Notes or powers of attorneys are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Issuer, proper evidence satisfactory to the Issuer of their authority to so act must be submitted with the Letter.

Endorsements on certificates for Old Notes or signatures on powers of attorneys required by this instruction 3 must be guaranteed by an Eligible Institution.

Signatures on this Letter need not be guaranteed by an Eligible Institution, provided the Old Notes are tendered: (i) by a registered holder of Old Notes (which term, for purposes of the Exchange Offer, includes any participant in the Book-Entry Transfer Facility system whose name appears on a security position listing as the holder of such Old Notes) who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on this letter, or (ii) for the account of an Eligible Institution.

4. Special Issuance and Delivery Instructions

Tendering holders of Old Notes should indicate in the applicable box the name and address to which New Notes issued pursuant to the Exchange Offer and or substitute certificates evidencing Old Notes not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. Holders tendering Old Notes by book-entry transfer may request that Old Notes not exchanged be credited to such account maintained at the Book-Entry Transfer Facility as such holder may designate hereon. If no such instructions are given, such Old Notes not exchanged will be returned to the name and address of the person signing this Letter.

5. Taxpayer Identification Number.

Federal income tax law generally requires that a tendering holder whose Old Notes are accepted for exchange must provide the Issuer (as payor) with such holder’s correct Taxpayer Identification Number (“TIN”) on Substitute Form W-9 below, which in the case of a tendering holder who is an individual, is his or her social security number. If the Issuer is not provided with the current TIN or an adequate basis for an exemption, such tendering holder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, delivery to such tendering holder of New Notes may be subject to backup withholding in an amount equal to 31% of all reportable payments made after the exchange. If withholding results in an overpayment of taxes, a refund may be obtained.

Exempt holders of Old Notes (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. See

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the enclosed Guidelines of Certification of Taxpayer Identification Number on Substitute Form W-9 (the “W-9 Guidelines”) for additional instructions.

To prevent backup withholding, each tendering holder of Old Notes must provide its correct TIN by completing the Substitute Form W-9 set forth below, certifying that the TIN provided is correct (or that such holder is awaiting a TIN) and that (i) the holder is exempt from backup withholding, or (ii) the holder has not been notified by the Internal Revenue Service that such holder is subject to backup withholding as a result of a failure to report all interest or dividends or (iii) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding. If the tendering holder of Old Notes is a nonresident alien or foreign entity not subject to backup withholding, such holder must give the Exchange Agent a completed Form W-8, Certificate of Foreign Status. If the Old Notes are in more than one name or are not in the name of the actual owner, such holder should consult the W-9 Guidelines for information on which TIN to report. If such holder does not have a TIN, such holder should consult the W-9 Guidelines for instructions on applying for a TIN, check the box in Part 2 of the Substitute Form W-9 and write “applied for” in lieu of its TIN. Note: Checking this box and writing “applied for” on the form means that such holder has already applied for a TIN or that such holder intends to apply for one in the near future. Checking this box also requires that the holder complete the Certificate of Awaiting Taxpayer Identification Number form attached to the Substitute Form W-9. If such holder does not provide its TIN to the Exchange Agent within 60 days, backup withholding will begin and continue until such holder furnishes its TIN to the Exchange Agent.

The information requested above should be directed to the Exchange Agent at the following address:

Delivery To: U.S. Bank National Association, Exchange Agent

By Mail, Hand Delivery or Overnight Courier:

180 East Fifth Street

St. Paul, MN 55101

Attention: Corporate Trust—Specialized Finance

By Facsimile Transmission:

(for Eligible Institutions Only)

(651) 244-0711

Confirm by Telephone:

(651) 244-8677

6. Transfer Taxes.

Holders who tender their Old Notes for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, New Notes are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Old Notes tendered, or if a transfer tax is imposed for any reason other than the exchange of Old Notes in connection with the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory

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evidence of payment of such taxes or exemption therefrom is not submitted with this Letter, the amount of such transfer taxes will be billed directly to such tendering holder.

Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Old Notes specified in this Letter.

7. Waiver of Conditions.

The Issuer reserves the absolute right to waive any defects or irregularities or conditions of the Exchange Offer as to any particular Old Note prior to the Expiration Date (including the right to waive the ineligibility of any holder who seeks to tender Old Notes in the Exchange Offer).

8. No Conditional Tenders.

No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders of Old Notes, by execution of this Letter or an Agent’s Message in lieu thereof, shall waive any right to receive notice of the acceptance of their Old Notes for exchange.

Neither the Issuer, the Exchange Agent nor any other person is obligated to give notice of any defect or irregularity with respect to any tender of Old Notes nor shall any of them.

9. Mutilated, Lost, Stolen or Destroyed Old Notes.

Any holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions.

10. Withdrawal Rights

Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date.

For a withdrawal to be effective, a written notice of withdrawal must be received by the Exchange Agent at the address set forth above prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must: (i) specify the name of the person having tendered the Old Notes to be withdrawn (the “Depositor”), (ii) identify the Old Notes to be withdrawn (including the principal amount of such Old Notes), and (iii) (where certificates for Old Notes have been transmitted) specify the name in which such Old Notes are registered, if different from that of the Depositor. If certificates for Old Notes have been delivered or otherwise identified to the Exchange Agent, then prior to the release of such certificates the Depositor must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an Eligible Institution unless such Depositor is an Eligible Institution. If Old Notes have been tendered pursuant to the procedure for book-entry transfer set forth in “The Exchange Offer—Book-Entry Transfers” section of the Prospectus, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Old Notes and otherwise comply with the procedures of such facility. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Issuer, whose determination

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shall be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer and no New Notes will be issued with respect thereto unless the Old Notes so withdrawn are validly retendered. Any Old Notes that have been tendered for exchange but which are not exchanged for any reason will be returned to the holder thereof without cost to such holder (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent’s account at the Book-Entry Transfer Facility pursuant to the book-entry transfer procedures set forth in “The Exchange Offer—Book-Entry Transfers” section of the Prospectus, such Old Notes will be credited to an account maintained with the Book-Entry Transfer Facility for the Old Notes) promptly after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Old Notes may be retendered by following the procedures described above at any time on or prior to 5:00 p.m., New York City time, on the Expiration Date.

11. Requests for Assistance or Additional Copies.

Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter, and requests for Notices of Guaranteed Delivery and other related documents may be directed to the Exchange Agent, at the address and telephone number indicated above.

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TO BE COMPLETED BY ALL TENDERING HOLDERS

(See Instruction 5)

PAYOR’S NAME:    U.S. BANK NATIONAL ASSOCIATION

SUBSTITUTE Form W-9 Department of the Treasury Internal Revenue Service Payer’s Request for (TIN) and Certification	Part I—PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.	TIN:                                                                Social Security Number Or Employer Identification Number
	Part 2—TIN Applied For [    ] Payor’s Request For Taxpayer Identification Number (“TIN”) and Certification CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT: (1)    the number shown on this form is my correct Taxpayer Identification Number (or I am   waiting for a number to be issued to me), and (2)    I am not subject to backup withholding because (a) I am exempt from backup   withholding, or (b) I have not been notified by the Internal Revenue Service (the “IRS”)   that I am subject to backup withholding as a result of a failure to report all interest or   dividends, or (c) the IRS has notified me that I am no longer subject to backup   withholding, and (3)    any other information provided on this form is true and correct. Signature                                                                                                                                                     Date
	You must cross out item (2) of the above certification if you have been notified by the IRS that you are subject to backup withholding because of underreporting of interest or dividends on your tax return and you have not been notified by the IRS that you are no longer subject to backup withholding. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of the exchange, 31% of all reportable payments made to me thereafter will be withheld until I provide a number. Signature                                                                                             Date

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EX-99.2

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY

for Tender for Exchange of 13% Senior Secured Notes due 2010 with Contingent Interest of

THE OLD EVANGELINE DOWNS, L.L.C.

THE OLD EVANGELINE DOWNS CAPITAL CORP.

As set forth in the Prospectus dated                     , 2003 (the “Prospectus”) of The Old Evangeline Downs, L.L.C., d/b/a Evangeline Downs, and its wholly owned subsidiary The Old Evangeline Downs Capital Corp., a Delaware corporation (the “Company”), and in the accompanying Letter of Transmittal and instructions thereto (the “Letter of Transmittal”), this form or one substantially equivalent hereto must be used to accept the Company’s exchange offer (the “Exchange Offer”) to exchange all of its outstanding 13% Senior Secured Notes due 2010 with Contingent Interest (the “Old Notes”) if (i) certificates representing the Old Notes to be tendered for purchase and payment are not lost but are not immediately available, (ii) time will not permit the Letter of Transmittal, certificates representing such Old Notes or other required documents to reach U.S. Bank National Association (the “Exchange Agent”) on or prior to 5:00 p.m., New York City time, on the Expiration Date (as defined below) or (iii) the procedures for book-entry transfer cannot be completed prior to the Expiration Date (as defined below). This form may be delivered by an Eligible Institution by mail or hand delivery or transmitted, via telegram, telex or facsimile, to the Exchange Agent as set forth below. In addition, in order to utilize the guaranteed delivery procedures to tender the Old Notes pursuant to the Exchange Offer, a properly completed and duly executed Letter of Transmittal, any other required documents and tendered Old Notes in proper form for transfer (or confirmation of a book-entry transfer of such Old Notes into the Exchange Agent’s account at The Depository Trust Company) must also be received by the Exchange Agent prior to 5:00 p.m., New York City time, within four business days after the Expiration Date. All capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Prospectus.

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                     , 2003 (THE “EXPIRATION DATE”) UNLESS OTHERWISE EXTENDED. TENDERS OF OLD NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

To: U.S. Bank National Association, Exchange Agent, Exchange Agent

By Mail, Hand or Overnight Courier:

180 East Fifth Street

St. Paul, MN 55101

Attention: Corporate Trust—Specialized Finance

By Facsimile Transmission:

(651) 244-0711

Confirm By Telephone:

(651) 244-8677

Delivery of this instrument to an address, or transmission via telegram, telex or facsimile, other than as set forth above will not constitute a valid delivery.

This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on the Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal.

Ladies and Gentlemen:

The undersigned hereby tender(s) to the Company, upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, receipt of which is hereby acknowledged, the aggregate principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus.

The undersigned understands that tenders of Old Notes will be accepted only in authorized denominations. The undersigned understands that tenders of Old Notes pursuant to the Exchange Offer may not be withdrawn after 5:00 p.m., New York City time, on the Expiration Date. Tenders of Old Notes may also be withdrawn if the Exchange Offer is terminated without any such Old Notes being purchased thereunder or as otherwise provided in the Prospectus.

All authority herein conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall survive the death or incapacity of the undersigned and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives of the undersigned.

Name(s) of Registered Holder(s):                                                                                                                                                             

(Please Print or Type)

Principal Amount of Old Notes Tendered:^* Certificate No(s). (if available):

$                                                                                                                                                                                                                      

$                                                                                                                                                                                                                      

$                                                                                                                                                                                                                      

^* Must be in denominations of principal amount of $1,000 and any integral multiple thereof.

If Old Notes will be delivered by book-entry transfer to The Depository Trust Company (“DTC”), provide the DTC account number.

Depository Account Number:                                                                                               

PLEASE SIGN HERE

Must be signed by the holder(s) of Old Notes as their name(s) appear(s) on certificates for Old Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery.

Signature(s) of Holder(s) or Authorized Signatory	Date
Area Code and Telephone Number:

If signature is by attorney-in-fact, trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below.

Please print name(s) and address(es)

Name(s) of Holder(s)                                                                                                                                                                                                                             

Title/Capacity:                                                                                                                                                                                                                                         

Address(es):                                                                                                                                                                                                                                            

GUARANTEE

(Not to be Used for Signature Guarantee)

The undersigned, a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or a correspondent in the United States or an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees that the undersigned will deliver to the Exchange Agent the certificate(s) representing the Old Notes being tendered by this Notice of Guaranteed Delivery in proper form for transfer (or a confirmation of book-entry transfer of such Old Notes into the Exchange Agent’s account at the book-entry transfer facility of DTC) with a properly completed and duly executed Letter of Transmittal and any other required documents, all within four (4) business days after the Expiration Date.

Name of Firm                                                                                                                                                                                                                                          

(Authorized Signature)

Address                                                                                                                                                                                                                                                      

Please Print or Type

City, State                                         Zip Code

Dated                                                          

Telephone Number                                                

The institution that completes this form must communicate the guarantee to the Exchange Agent by the Expiration Date and must deliver the certificates representing any Old Notes (or a confirmation of book-entry transfer of such Old Notes into the Exchange Agent’s account at DTC), the Letter of Transmittal and any other required documents to the Exchange Agent within the time period shown in this Notice of Guaranteed Delivery. Failure to do so could result in a financial loss to such institution.

NOTE: DO NOT SEND CERTIFICATES OF OLD NOTES WITH THIS FORM. CERTIFICATES FOR OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.

EX-99.3

Exhibit 99.3

THE OLD EVANGELINE DOWNS, L.L.C.

THE OLD EVANGELINE DOWNS CAPITAL CORP.

Offer to Exchange All Outstanding

13% Senior Secured Notes due 2010

with Contingent Interest

in Exchange for

13% Senior Secured Notes due 2010

with Contingent Interest

That Have Been Registered Under

the Securities Act of 1933,

As Amended

To Our Clients:

Enclosed for your consideration is a prospectus dated                     , 2003 (the “Prospectus”), and the letter of transmittal (the “Letter of Transmittal”), relating to the offer (the “Exchange Offer”) of The Old Evangeline Downs, L.L.C., d/b/a Evangeline Downs, and its wholly owned subsidiary The Old Evangeline Downs Capital Corp. (the “Issuer”) to exchange their 13% Senior Secured Notes due 2010 with Contingent Interest that have been registered under the Securities Act of 1933, as amended, for their outstanding 13% Senior Secured Notes due 2010 with Contingent Interest (the “Old Notes”), upon the terms and subject to the conditions described in the Prospectus and the Letter of Transmittal. The Exchange Offer is being made in order to satisfy certain obligations of the Issuer contained in the exchange and registration rights agreement in respect of the Old Notes, dated February 25, 2003, by and among the Issuer and the initial purchasers referred to therein.

This material is being forwarded to you as the beneficial owner of the Old Notes held by us for your account but not registered in your name. A tender of such Old Notes may only be made by us as the holder of record and pursuant to your instructions.

Accordingly, we request instructions as to whether you wish us to tender on your behalf the Old Notes held by us for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal.

Your instructions should be forwarded to us as promptly as possible in order to permit us to tender the Old Notes on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m., New York City time, on                     , 2003 (the “Expiration Date”), unless extended by the Issuer. Any Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time before the Expiration Date.

Your attention is directed to the following:

1. The Exchange Offer is for any and all Old Notes.

2. The Exchange Offer is subject to certain conditions set forth in the Prospectus in the section captioned “The Exchange Offer—Conditions of the Exchange Offer.”

3. Subject to the terms and conditions in the Prospectus and the Letter of Transmittal, any transfer taxes incident to the transfer of Old Notes from the Holder to the Issuer will be paid by the Issuer.

4. The Exchange Offer expires at 5:00, New York City time, on                     , 2003, unless extended by the Issuer.

If you wish to have us tender your Old Notes, please so instruct us by completing, executing and returning to us the instruction form on the back of this letter. The Letter of Transmittal is furnished to you for information only and may not be used directly by you to tender Old Notes.

2

INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER

The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer made by The Old Evangeline Downs, L.L.C., d/b/a Evangeline Downs, and its wholly owned subsidiary The Old Evangeline Downs Capital Corp. with respect to their Old Notes.

This will instruct you to tender the Old Notes held by you for the account of the undersigned, upon and subject to the terms and conditions set forth in the Prospectus and the related Letter of Transmittal.

The undersigned expressly agrees to be bound by the enclosed Letter of Transmittal and that such Letter of Transmittal may be enforced against the undersigned.

Please tender the Old Notes held by you for my account as indicated below:

	Aggregate Principal Amount of Old Notes
13% Senior Secured Notes due 2010	$
Dated:                                         , 2003
	Signature(s)
	Please print name(s) here
	Address(es)
	Area Code and Telephone Number
	Tax Identification or Social Security No(s).

None of the Old Notes held by us for your account will be tendered unless we receive written instructions from you to do so. Unless a specific contrary instruction is given in the space provided, your signature(s) hereon shall constitute an instruction to us to tender all the Old Notes held by us for your account.

EX-99.4

Exhibit 99.4

THE OLD EVANGELINE DOWNS, L.L.C.

THE OLD EVANGELINE DOWNS CAPITAL CORP.

Offer to Exchange All Outstanding

13% Senior Secured Notes due 2010

With Contingent Interest

in Exchange for

13% Senior Secured Notes due 2010

With Contingent Interest

That Have Been Registered Under

the Securities Act of 1933,

As Amended

To: DTC Participants, including Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

The Old Evangeline Downs, L.L.C., d/b/a Evangeline Downs, and its wholly owned subsidiary The Old Evangeline Downs Capital Corp. (the “Issuer”) is offering, upon and subject to the terms and conditions set forth in the prospectus dated                     , 2003 (the “Prospectus”), and the enclosed letter of transmittal (the “Letter of Transmittal”), to exchange (the “Exchange Offer”) their 13% Senior Secured Notes due 2010 with Contingent Interest that have been registered under the Securities Act of 1933, as amended, for their outstanding 13% Senior Secured Notes due 2010 with Contingent Interest (the “Old Notes”). The Exchange Offer is being made in order to satisfy certain obligations of the Issuer contained in the exchange and registration rights agreement in respect of the Old Notes, dated February 25, 2003, by and among the Issuer and the initial purchasers referred to therein.

We are requesting that you contact your clients for whom you hold Old Notes regarding the Exchange Offer. For your information and for forwarding to your clients for whom you hold Old Notes registered in your name or in the name of your nominee, or who hold Old Notes registered in their own names, we are enclosing the following documents:

1. Prospectus dated                     , 2003;

2. A Letter of Transmittal relating to the Old Notes for your use and for the information of your clients;

3. A Notice of Guaranteed Delivery relating to the Old Notes, which is to be used to accept the Exchange Offer if certificates for Old Notes are not immediately available or time will not permit all required documents to reach the Exchange Agent prior to the Expiration Date (as defined below) or if the procedure for book-entry transfer cannot be completed on a timely basis;

4. A form of letter which may be sent to your clients for whose account you hold Old Notes registered in your name or the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Exchange Offer; and

5. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.

Your prompt action is requested. The Exchange Offer will expire at 5:00 p.m., New York City time, on                     , 2003, unless extended by the Issuer (each, an “Expiration Date”). Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time before the relevant Expiration Date.

To participate in the Exchange Offer, a duly executed and properly completed Letter of Transmittal relating to the proper denomination of Old Notes (or facsimile thereof or Agent’s Message in lieu thereof), with any required signature guarantees and any other required documents, should be sent to the Exchange Agent and certificates representing the Old Notes, or a timely confirmation of a book-entry transfer of such Old Notes, should be delivered to the Exchange Agent, all in accordance with the instructions set forth in the Letter of Transmittal and the Prospectus.

If a registered holder of Old Notes desires to tender, but such Old Notes are not immediately available, or time will not permit such holder’s Old Notes or other required documents to reach the Exchange Agent before the relevant Expiration Date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus under “The Exchange Offer—Guaranteed Delivery Procedures.”

The Issuer will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding the Prospectus and the related documents to the beneficial owners of Old Notes held by them as nominee or in a fiduciary capacity. The Issuer will not make any payments to brokers, dealers, or others soliciting acceptances of the Exchange Offer. The Holders will not be obligated to pay or cause to be paid all stock transfer taxes applicable to the exchange of Old Notes pursuant to the Exchange Offer.

Any inquiries you may have with respect to the Exchange Offer, or requests for additional copies of the enclosed materials, should be directed to U.S. Bank National Association, the Exchange Agent for the Exchange Offer, at its address and telephone number set forth on the front of the Letter of Transmittal.

Very truly yours,

The Old Evangeline Downs, L.L.C.

The Old Evangeline Downs Capital Corp.

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NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF THE ISSUER OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.

Enclosures

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