NOTE 7—LONG-TERM DEBT

Long-term debt obligations are summarized as follows:

	March 31, 2014		December 31, 2013

	(in thousands)
11.5% Senior Secured Second Lien Notes (net of unamortized discount of $11,300 and $11,830 in 2013 and 2012, respectively)	$	559,364	$	558,834

Senior Secured Second Lien Notes

On August 1, 2011, we completed the offering of $565.0 million 11.5% Senior Secured Second Lien Notes due August 1, 2019 at an issue price equal to 97% of the aggregate principal amount of the Notes. The Notes mature on August 1, 2019, with interest payable semi-annually in arrears on February 1 and August 1 of each year at a rate of 10.50%. The Notes were issued pursuant to an indenture, dated as of August 1, 2011 (the "Indenture"), among the Company, Mountaineer Park, Inc., Presque Isle Downs, Inc., Scioto Downs, Inc. (each, a wholly-owned subsidiary of the Company and as a guarantor, the "Guarantors") and Wilmington Trust, National Association, as Trustee and as Collateral Agent.

On September 9, 2013, we entered into the Merger Agreement with Eldorado pursuant to which the Company will combine with Eldorado. At the request of Eldorado, the Company commenced a consent solicitation with respect to obtaining certain amendments and waivers of the Indenture underlying the Notes on terms and conditions as agreed upon between Eldorado and the Company. On January 8, 2014, the consent solicitation with respect to the Notes expired, and the necessary principal amount of the Notes validly delivered duly executed consents for the proposed amendments. Accordingly, the consents received exceed the number needed to approve the proposed amendments to the Indenture, which will permit the formation of a new holding company without requiring the Company to effect a change of control offer under the Notes and Indenture. We did not pay a consent fee to any registered holder of the Notes in connection with the Consent Solicitation.

The Notes and the guarantees are the Company's and the Guarantors' senior secured obligations and are jointly and severally, fully, and unconditionally guaranteed by the Guarantors, as well as future subsidiaries, other than our immaterial subsidiaries and unrestricted subsidiaries, as defined in the Indenture. The Notes and the guarantees rank equally in right of payment with all of the Company's and the Guarantors' existing and future senior debt and senior in right of payment to all of the Company's and the Guarantors' future subordinated debt. The Notes and the guarantees will be effectively junior to any of the Company's and the Guarantors' existing and future debt that is secured by senior or prior liens on the collateral, including indebtedness under the Company's new senior secured revolving credit facility, as discussed below, to the extent of the value of the collateral securing such obligations. The Notes and the guarantees will be structurally subordinated to all existing and future liabilities of the Company's subsidiaries that do not guarantee the Notes.

The Notes are secured by a second priority lien on substantially all of the assets of the Company and the Guarantors, other than excluded property, as defined in the Indenture.

The Indenture contains a number of customary covenants and events of default. One such event of default includes the revocation, suspension or loss of any gaming license which results in the cessation of business operations for a period of more than 90 days, which if any of them occurs, would permit or require the principal of and accrued interest on such Notes to be declared due and payable. As of March 31, 2014, we are in compliance with the required covenants.

Credit Facility

On August 1, 2011, we entered into a senior secured revolving credit facility (the "Credit Facility") with a borrowing availability of $20.0 million and a maturity date of August 1, 2016. There were no borrowings outstanding as of March 31, 2014 or December 31, 2013.

On March 7, 2014, the Credit Facility was amended to modify the terms of the agreement and we received a waiver of (i) the "default" or "event of default" that would have been occurred upon consummation of the proposed mergers with Eldorado, (ii) any breach of the Credit Facility that may result from the payment of up to $35.0 million to repurchase shares of the Company's common stock in connection with the proposed mergers and (iii) that the proposed mergers transaction would not constitute a change of control for any purpose under the Credit Facility. Additionally, the Credit Facility was amended to: (i) change the maximum leverage ratio to 6.75:1.00 for the fiscal quarters ending September 30, 2014 through March 31, 2015 and 7.00:1.00 for fiscal quarters ending June 30, 2015 through December 31, 2015 and thereafter and (ii) change the interest coverage ratio to 1.25:1.00 for the fiscal quarters ending September 30, 2014 and thereafter. There was no fee incurred to obtain the amendment.

The Credit Facility is secured by substantially the same assets securing the Notes (and including securities of the Company's subsidiaries to the extent permitted by law). Borrowings under the Credit Facility are guaranteed by all of our existing and future domestic restricted subsidiaries. The security interest in the collateral that secures the Credit Facility is senior to the security interest in the collateral that secures the Notes.

The Credit Facility contains a number of customary covenants as well as certain financial covenants. These include maximum capital expenditures, maximum consolidated leverage ratios, minimum consolidated interest coverage ratios and minimum consolidated EBITDA amounts. As of March 31, 2014, the Company was in compliance with the required covenants.

The Credit Facility contains a number of customary events of default, including, which if any of them occurs, would permit the lenders to take various actions, including accelerating amounts due thereunder and taking all actions permitted to be taken by a secured creditor.