Exhibit 10.2

 

 

 

DIAMOND JO WORTH, LLC

 

AND

 

DIAMOND JO WORTH CORP.

 

(as Issuers)

 

$40,000,000
11% Senior Secured Notes due 2012

 

 

INDENTURE

 

Dated as of July 19, 2005

 

 

U.S. BANK NATIONAL ASSOCIATION

 

(as Trustee)

 

 

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.1

DEFINITIONS

 

SECTION 1.2 [a05-14832_1ex10d2.htm#a1_2_161843]

OTHER DEFINITIONS [a05-14832_1ex10d2.htm#a1_2_161843]

 

SECTION 1.3 [a05-14832_1ex10d2.htm#a1_3_161901]

INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
[a05-14832_1ex10d2.htm#a1_3_161901]

 

SECTION 1.4 [a05-14832_1ex10d2.htm#a1_4_161909]

RULES OF CONSTRUCTION [a05-14832_1ex10d2.htm#a1_4_161909]

 

 

 

 

ARTICLE II THE NOTES [a05-14832_1ex10d2.htm#ArticleIi_161917]

 

SECTION 2.1 [a05-14832_1ex10d2.htm#a2_1_161922]

FORM AND DATING [a05-14832_1ex10d2.htm#a2_1_161922]

 

SECTION 2.2 [a05-14832_1ex10d2.htm#a2_2_161928]

EXECUTION AND AUTHENTICATION [a05-14832_1ex10d2.htm#a2_2_161928]

 

SECTION 2.3 [a05-14832_1ex10d2.htm#a2_3_161933]

REGISTRAR, PAYING AGENT AND DEPOSITARY [a05-14832_1ex10d2.htm#a2_3_161933]

 

SECTION 2.4 [a05-14832_1ex10d2.htm#a2_4_161938]

PAYING AGENT TO HOLD MONEY IN TRUST [a05-14832_1ex10d2.htm#a2_4_161938]

 

SECTION 2.5 [a05-14832_1ex10d2.htm#a2_5_161943]

HOLDER LISTS [a05-14832_1ex10d2.htm#a2_5_161943]

 

SECTION 2.6 [a05-14832_1ex10d2.htm#a2_6_161946]

TRANSFER AND EXCHANGE [a05-14832_1ex10d2.htm#a2_6_161946]

 

SECTION 2.7 [a05-14832_1ex10d2.htm#a2_7_162010]

REPLACEMENT NOTES [a05-14832_1ex10d2.htm#a2_7_162010]

 

SECTION 2.8 [a05-14832_1ex10d2.htm#a2_8_162015]

OUTSTANDING NOTES [a05-14832_1ex10d2.htm#a2_8_162015]

 

SECTION 2.9 [a05-14832_1ex10d2.htm#a2_9_162020]

TREASURY NOTES [a05-14832_1ex10d2.htm#a2_9_162020]

 

SECTION 2.10 [a05-14832_1ex10d2.htm#a2_10_162025]

TEMPORARY NOTES [a05-14832_1ex10d2.htm#a2_10_162025]

 

SECTION 2.11 [a05-14832_1ex10d2.htm#a2_11_162028]

CANCELLATION [a05-14832_1ex10d2.htm#a2_11_162028]

 

SECTION 2.12 [a05-14832_1ex10d2.htm#a2_12_162033]

DEFAULTED INTEREST [a05-14832_1ex10d2.htm#a2_12_162033]

 

SECTION 2.13 [a05-14832_1ex10d2.htm#a2_13_162040]

CUSIP NUMBERS [a05-14832_1ex10d2.htm#a2_13_162040]

 

SECTION 2.14 [a05-14832_1ex10d2.htm#a2_14_162045]

ISSUANCE OF ADDITIONAL NOTES [a05-14832_1ex10d2.htm#a2_14_162045]

 

 

 

 

ARTICLE III REDEMPTION [a05-14832_1ex10d2.htm#ArticleIii_162052]

 

SECTION 3.1 [a05-14832_1ex10d2.htm#a3_1_162058]

NOTICES TO TRUSTEE [a05-14832_1ex10d2.htm#a3_1_162058]

 

SECTION 3.2 [a05-14832_1ex10d2.htm#a3_2_162102]

SELECTION OF NOTES TO BE REDEEMED [a05-14832_1ex10d2.htm#a3_2_162102]

 

SECTION 3.3 [a05-14832_1ex10d2.htm#a3_3_162106]

NOTICE OF REDEMPTION [a05-14832_1ex10d2.htm#a3_3_162106]

 

SECTION 3.4 [a05-14832_1ex10d2.htm#a3_4_162113]

EFFECT OF NOTICE OF REDEMPTION [a05-14832_1ex10d2.htm#a3_4_162113]

 

SECTION 3.5 [a05-14832_1ex10d2.htm#a3_5_162117]

DEPOSIT OF REDEMPTION PRICE [a05-14832_1ex10d2.htm#a3_5_162117]

 

SECTION 3.6 [a05-14832_1ex10d2.htm#a3_6_162122]

NOTES REDEEMED IN PART [a05-14832_1ex10d2.htm#a3_6_162122]

 

SECTION 3.7 [a05-14832_1ex10d2.htm#a3_7_162125]

OPTIONAL REDEMPTION [a05-14832_1ex10d2.htm#a3_7_162125]

 

SECTION 3.8 [a05-14832_1ex10d2.htm#a3_8_162133]

REGULATORY REDEMPTION [a05-14832_1ex10d2.htm#a3_8_162133]

 

SECTION 3.9 [a05-14832_1ex10d2.htm#a3_9_162137]

NO MANDATORY REDEMPTION [a05-14832_1ex10d2.htm#a3_9_162137]

 

 

 

 

ARTICLE IV COVENANTS [a05-14832_1ex10d2.htm#ArticleIv_162142]

 

SECTION 4.1 [a05-14832_1ex10d2.htm#a4_1_162146]

PAYMENT OF NOTES [a05-14832_1ex10d2.htm#a4_1_162146]

 

SECTION 4.2 [a05-14832_1ex10d2.htm#a4_2_162151]

MAINTENANCE OF OFFICE OR AGENCY [a05-14832_1ex10d2.htm#a4_2_162151]

 

SECTION 4.3 [a05-14832_1ex10d2.htm#a4_3_162157]

SEC REPORTS AND REPORTS TO HOLDERS [a05-14832_1ex10d2.htm#a4_3_162157]

 

SECTION 4.4 [a05-14832_1ex10d2.htm#a4_4_162202]

COMPLIANCE CERTIFICATE [a05-14832_1ex10d2.htm#a4_4_162202]

 

SECTION 4.5 [a05-14832_1ex10d2.htm#a4_5_162206]

TAXES [a05-14832_1ex10d2.htm#a4_5_162206]

 

SECTION 4.6 [a05-14832_1ex10d2.htm#a4_6_162214]

STAY, EXTENSION AND USURY LAWS [a05-14832_1ex10d2.htm#a4_6_162214]

 

SECTION 4.7 [a05-14832_1ex10d2.htm#a4_7_162226]

LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND DISQUALIFIED EQUITY
INTERESTS [a05-14832_1ex10d2.htm#a4_7_162226]

 

SECTION 4.8 [a05-14832_1ex10d2.htm#a4_8_162234]

LIMITATION ON LIENS [a05-14832_1ex10d2.htm#a4_8_162234]

 

 

ii

--------------------------------------------------------------------------------

 

SECTION 4.9 [a05-14832_1ex10d2.htm#a4_9_162239]

LIMITATION ON RESTRICTED PAYMENTS [a05-14832_1ex10d2.htm#a4_9_162239]

 

SECTION 4.10 [a05-14832_1ex10d2.htm#a4_10_162248]

LIMITATION ON RESTRICTIONS ON SUBSIDIARY DIVIDENDS
[a05-14832_1ex10d2.htm#a4_10_162248]

 

SECTION 4.11 [a05-14832_1ex10d2.htm#a4_11_162252]

ADDITIONAL COLLATERAL [a05-14832_1ex10d2.htm#a4_11_162252]

 

SECTION 4.12 [a05-14832_1ex10d2.htm#a4_12_162259]

LIMITATION ON TRANSACTIONS WITH AFFILIATES [a05-14832_1ex10d2.htm#a4_12_162259]

 

SECTION 4.13 [a05-14832_1ex10d2.htm#a4_13_162304]

LIMITATION ON ASSET SALES [a05-14832_1ex10d2.htm#a4_13_162304]

 

SECTION 4.14 [a05-14832_1ex10d2.htm#a4_14_162313]

RESTRICTION ON SALE AND ISSUANCE OF SUBSIDIARY STOCK
[a05-14832_1ex10d2.htm#a4_14_162313]

 

SECTION 4.15 [a05-14832_1ex10d2.htm#a4_15_162318]

REPURCHASE UPON A CHANGE OF CONTROL [a05-14832_1ex10d2.htm#a4_15_162318]

 

SECTION 4.16 [a05-14832_1ex10d2.htm#a4_16_162322]

SUBSIDIARY GUARANTORS [a05-14832_1ex10d2.htm#a4_16_162322]

 

SECTION 4.17 [a05-14832_1ex10d2.htm#a4_17_162327]

LIMITATION ON STATUS AS INVESTMENT COMPANY [a05-14832_1ex10d2.htm#a4_17_162327]

 

SECTION 4.18 [a05-14832_1ex10d2.htm#a4_18_162333]

MAINTENANCE OF PROPERTIES AND INSURANCE [a05-14832_1ex10d2.htm#a4_18_162333]

 

SECTION 4.19 [a05-14832_1ex10d2.htm#a4_19_162338]

CORPORATE EXISTENCE [a05-14832_1ex10d2.htm#a4_19_162338]

 

SECTION 4.20 [a05-14832_1ex10d2.htm#a4_20_162342]

RESTRICTIONS ON ACTIVITIES OF DJW CORP [a05-14832_1ex10d2.htm#a4_20_162342]

 

SECTION 4.21 [a05-14832_1ex10d2.htm#a4_21_162345]

ENTITY CLASSIFICATION [a05-14832_1ex10d2.htm#a4_21_162345]

 

SECTION 4.22 [a05-14832_1ex10d2.htm#a4_22_162349]

RULE 144A INFORMATION [a05-14832_1ex10d2.htm#a4_22_162349]

 

SECTION 4.23 [a05-14832_1ex10d2.htm#a4_23_162353]

LIMITATION ON USE OF PROCEEDS [a05-14832_1ex10d2.htm#a4_23_162353]

 

SECTION 4.24 [a05-14832_1ex10d2.htm#a4_24_162357]

GAMING LICENSES AND OTHER PERMITS [a05-14832_1ex10d2.htm#a4_24_162357]

 

 

 

 

ARTICLE V SUCCESSORS [a05-14832_1ex10d2.htm#ArticleV_162401]

 

SECTION 5.1 [a05-14832_1ex10d2.htm#a5_1_162405]

MERGER, CONSOLIDATION OR SALE OF ASSETS [a05-14832_1ex10d2.htm#a5_1_162405]

 

SECTION 5.2 [a05-14832_1ex10d2.htm#a5_2_162408]

SUCCESSOR CORPORATION SUBSTITUTED [a05-14832_1ex10d2.htm#a5_2_162408]

 

 

 

 

ARTICLE VI DEFAULTS AND REMEDIES [a05-14832_1ex10d2.htm#ArticleVi_162412]

 

SECTION 6.1 [a05-14832_1ex10d2.htm#a6_1_162416]

EVENTS OF DEFAULT [a05-14832_1ex10d2.htm#a6_1_162416]

 

SECTION 6.2 [a05-14832_1ex10d2.htm#a6_2_162422]

ACCELERATION [a05-14832_1ex10d2.htm#a6_2_162422]

 

SECTION 6.3 [a05-14832_1ex10d2.htm#a6_3_162426]

OTHER REMEDIES [a05-14832_1ex10d2.htm#a6_3_162426]

 

SECTION 6.4 [a05-14832_1ex10d2.htm#a6_4_162430]

WAIVER OF DEFAULTS [a05-14832_1ex10d2.htm#a6_4_162430]

 

SECTION 6.5 [a05-14832_1ex10d2.htm#a6_5_162434]

CONTROL BY MAJORITY [a05-14832_1ex10d2.htm#a6_5_162434]

 

SECTION 6.6 [a05-14832_1ex10d2.htm#a6_6_162438]

LIMITATION ON SUITS [a05-14832_1ex10d2.htm#a6_6_162438]

 

SECTION 6.7 [a05-14832_1ex10d2.htm#a6_7_162442]

RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT
[a05-14832_1ex10d2.htm#a6_7_162442]

 

SECTION 6.8 [a05-14832_1ex10d2.htm#a6_8_162445]

COLLECTION SUIT BY TRUSTEE [a05-14832_1ex10d2.htm#a6_8_162445]

 

SECTION 6.9 [a05-14832_1ex10d2.htm#a6_9_162448]

TRUSTEE MAY FILE PROOFS OF CLAIM [a05-14832_1ex10d2.htm#a6_9_162448]

 

SECTION 6.10 [a05-14832_1ex10d2.htm#a6_10_162453]

PRIORITIES [a05-14832_1ex10d2.htm#a6_10_162453]

 

SECTION 6.11 [a05-14832_1ex10d2.htm#a6_11_162458]

UNDERTAKING FOR COSTS [a05-14832_1ex10d2.htm#a6_11_162458]

 

 

 

 

ARTICLE VII TRUSTEE [a05-14832_1ex10d2.htm#ArticleVii_162504]

 

SECTION 7.1 [a05-14832_1ex10d2.htm#a7_1_162508]

DUTIES OF TRUSTEE [a05-14832_1ex10d2.htm#a7_1_162508]

 

SECTION 7.2 [a05-14832_1ex10d2.htm#a7_2_162515]

RIGHTS OF TRUSTEE [a05-14832_1ex10d2.htm#a7_2_162515]

 

SECTION 7.3 [a05-14832_1ex10d2.htm#a7_3_162521]

INDIVIDUAL RIGHTS OF TRUSTEE [a05-14832_1ex10d2.htm#a7_3_162521]

 

SECTION 7.4 [a05-14832_1ex10d2.htm#a7_4_162524]

TRUSTEE’S DISCLAIMER [a05-14832_1ex10d2.htm#a7_4_162524]

 

SECTION 7.5 [a05-14832_1ex10d2.htm#a7_5_162528]

NOTICE OF DEFAULTS [a05-14832_1ex10d2.htm#a7_5_162528]

 

SECTION 7.6 [a05-14832_1ex10d2.htm#a7_6_162533]

REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES [a05-14832_1ex10d2.htm#a7_6_162533]

 

SECTION 7.7 [a05-14832_1ex10d2.htm#a7_7_162539]

COMPENSATION AND INDEMNITY [a05-14832_1ex10d2.htm#a7_7_162539]

 

SECTION 7.8 [a05-14832_1ex10d2.htm#a7_8_162544]

REPLACEMENT OF TRUSTEE [a05-14832_1ex10d2.htm#a7_8_162544]

 

SECTION 7.9 [a05-14832_1ex10d2.htm#a7_9_162549]

SUCCESSOR TRUSTEE BY MERGER, ETC. [a05-14832_1ex10d2.htm#a7_9_162549]

 

SECTION 7.10 [a05-14832_1ex10d2.htm#a7_10_162555]

ELIGIBILITY; DISQUALIFICATION [a05-14832_1ex10d2.htm#a7_10_162555]

 

SECTION 7.11 [a05-14832_1ex10d2.htm#a7_11_162558]

PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS
[a05-14832_1ex10d2.htm#a7_11_162558]

 

 

iii

--------------------------------------------------------------------------------

 

ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE
[a05-14832_1ex10d2.htm#ArticleViii_162602]

 

SECTION 8.1 [a05-14832_1ex10d2.htm#a8_1_162606]

OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE
[a05-14832_1ex10d2.htm#a8_1_162606]

 

SECTION 8.2 [a05-14832_1ex10d2.htm#a8_2_162611]

LEGAL DEFEASANCE AND DISCHARGE [a05-14832_1ex10d2.htm#a8_2_162611]

 

SECTION 8.3 [a05-14832_1ex10d2.htm#a8_3_162617]

COVENANT DEFEASANCE [a05-14832_1ex10d2.htm#a8_3_162617]

 

SECTION 8.4 [a05-14832_1ex10d2.htm#a8_4_171308]

CONDITIONS TO LEGAL OR COVENANT DEFEASANCE [a05-14832_1ex10d2.htm#a8_4_171308]

 

SECTION 8.5 [a05-14832_1ex10d2.htm#a8_5_171318]

DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER
MISCELLANEOUS PROVISIONS [a05-14832_1ex10d2.htm#a8_5_171318]

 

SECTION 8.6 [a05-14832_1ex10d2.htm#a8_6_171405]

REPAYMENT TO ISSUERS [a05-14832_1ex10d2.htm#a8_6_171405]

 

SECTION 8.7 [a05-14832_1ex10d2.htm#a8_7_171359]

REINSTATEMENT [a05-14832_1ex10d2.htm#a8_7_171359]

 

SECTION 8.8 [a05-14832_1ex10d2.htm#a8_8_171356]

SATISFACTION AND DISCHARGE [a05-14832_1ex10d2.htm#a8_8_171356]

 

 

 

 

ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER
[a05-14832_1ex10d2.htm#Articleix_171426]

 

SECTION 9.1 [a05-14832_1ex10d2.htm#a9_1_171424]

WITHOUT CONSENT OF HOLDERS OF NOTES [a05-14832_1ex10d2.htm#a9_1_171424]

 

SECTION 9.2 [a05-14832_1ex10d2.htm#a9_2_171442]

WITH CONSENT OF HOLDERS OF NOTES [a05-14832_1ex10d2.htm#a9_2_171442]

 

SECTION 9.3 [a05-14832_1ex10d2.htm#a9_3_171515]

COMPLIANCE WITH TRUST INDENTURE ACT [a05-14832_1ex10d2.htm#a9_3_171515]

 

SECTION 9.4 [a05-14832_1ex10d2.htm#a9_4_171519]

REVOCATION AND EFFECT OF CONSENTS [a05-14832_1ex10d2.htm#a9_4_171519]

 

SECTION 9.5 [a05-14832_1ex10d2.htm#a9_5_171546]

NOTATION ON OR EXCHANGE OF NOTES [a05-14832_1ex10d2.htm#a9_5_171546]

 

SECTION 9.6 [a05-14832_1ex10d2.htm#a9_6_171553]

TRUSTEE TO SIGN AMENDMENTS, ETC. [a05-14832_1ex10d2.htm#a9_6_171553]

 

 

 

 

ARTICLE X COLLATERAL AND SECURITY [a05-14832_1ex10d2.htm#Articlex_171613]

 

SECTION 10.1 [a05-14832_1ex10d2.htm#a10_1_171626]

SECURITY DOCUMENTS; SECURITY INTERESTS [a05-14832_1ex10d2.htm#a10_1_171626]

 

SECTION 10.2 [a05-14832_1ex10d2.htm#a10_2_171712]

FURTHER ASSURANCES AND SECURITY [a05-14832_1ex10d2.htm#a10_2_171712]

 

SECTION 10.3 [a05-14832_1ex10d2.htm#a10_3_171717]

OPINIONS [a05-14832_1ex10d2.htm#a10_3_171717]

 

SECTION 10.4 [a05-14832_1ex10d2.htm#a10_4_171732]

RELEASE OF COLLATERAL [a05-14832_1ex10d2.htm#a10_4_171732]

 

SECTION 10.5 [a05-14832_1ex10d2.htm#a10_5_171900]

CERTIFICATES OF THE ISSUERS [a05-14832_1ex10d2.htm#a10_5_171900]

 

SECTION 10.6 [a05-14832_1ex10d2.htm#a10_6_171843]

AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE SECURITY DOCUMENTS
AND THE INTERCREDITOR AGREEMENT [a05-14832_1ex10d2.htm#a10_6_171843]

 

SECTION 10.7 [a05-14832_1ex10d2.htm#a10_7_171847]

AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE SECURITY DOCUMENTS
AND THE INTERCREDITOR AGREEMENT [a05-14832_1ex10d2.htm#a10_7_171847]

 

SECTION 10.8 [a05-14832_1ex10d2.htm#a10_8_171915]

INTERCREDITOR AGREEMENT [a05-14832_1ex10d2.htm#a10_8_171915]

 

 

 

 

ARTICLE XI SUBSIDIARY GUARANTIES [a05-14832_1ex10d2.htm#Articlexi_171920]

 

SECTION 11.1 [a05-14832_1ex10d2.htm#a11_1_171929]

SUBSIDIARY GUARANTIES [a05-14832_1ex10d2.htm#a11_1_171929]

 

SECTION 11.2 [a05-14832_1ex10d2.htm#a11_2_172018]

EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTIES
[a05-14832_1ex10d2.htm#a11_2_172018]

 

SECTION 11.3 [a05-14832_1ex10d2.htm#a11_3_172024]

SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
[a05-14832_1ex10d2.htm#a11_3_172024]

 

SECTION 11.4 [a05-14832_1ex10d2.htm#a11_4_172103]

SUBSIDIARY GUARANTY BY FUTURE RESTRICTED SUBSIDIARIES
[a05-14832_1ex10d2.htm#a11_4_172103]

 

SECTION 11.5 [a05-14832_1ex10d2.htm#a11_5_172111]

RELEASE OF SUBSIDIARY GUARANTORS [a05-14832_1ex10d2.htm#a11_5_172111]

 

SECTION 11.6 [a05-14832_1ex10d2.htm#a11_6_172130]

LIMITATION OF SUBSIDIARY GUARANTOR’S LIABILITY; CERTAIN BANKRUPTCY EVENTS
[a05-14832_1ex10d2.htm#a11_6_172130]

 

SECTION 11.7 [a05-14832_1ex10d2.htm#a11_7_172137]

APPLICATION OF CERTAIN TERMS AND PROVISIONS TO THE SUBSIDIARY GUARANTORS
[a05-14832_1ex10d2.htm#a11_7_172137]

 

 

iv

--------------------------------------------------------------------------------

 

ARTICLE XII MISCELLANEOUS [a05-14832_1ex10d2.htm#Articlexii_172204]

 

SECTION 12.1 [a05-14832_1ex10d2.htm#a12_1_172210]

TRUST INDENTURE ACT CONTROLS [a05-14832_1ex10d2.htm#a12_1_172210]

 

SECTION 12.2 [a05-14832_1ex10d2.htm#a12_2_172216]

NOTICES [a05-14832_1ex10d2.htm#a12_2_172216]

 

SECTION 12.3 [a05-14832_1ex10d2.htm#a12_3_172323]

COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES
[a05-14832_1ex10d2.htm#a12_3_172323]

 

SECTION 12.4 [a05-14832_1ex10d2.htm#a12_4_172335]

CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
[a05-14832_1ex10d2.htm#a12_4_172335]

 

SECTION 12.5 [a05-14832_1ex10d2.htm#a12_5_172351]

STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
[a05-14832_1ex10d2.htm#a12_5_172351]

 

SECTION 12.6 [a05-14832_1ex10d2.htm#a12_6_172400]

RULES BY TRUSTEE AND AGENTS [a05-14832_1ex10d2.htm#a12_6_172400]

 

SECTION 12.7 [a05-14832_1ex10d2.htm#a12_7_172408]

LEGAL HOLIDAYS [a05-14832_1ex10d2.htm#a12_7_172408]

 

SECTION 12.8 [a05-14832_1ex10d2.htm#a12_8_172411]

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
[a05-14832_1ex10d2.htm#a12_8_172411]

 

SECTION 12.9 [a05-14832_1ex10d2.htm#a12_9_172421]

GOVERNING LAW AND SUBMISSION TO JURISDICTION
[a05-14832_1ex10d2.htm#a12_9_172421]

 

SECTION 12.10 [a05-14832_1ex10d2.htm#a12_10_185309]

NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
[a05-14832_1ex10d2.htm#a12_10_185309]

 

SECTION 12.11 [a05-14832_1ex10d2.htm#a12_11_185313]

SUCCESSORS [a05-14832_1ex10d2.htm#a12_11_185313]

 

SECTION 12.12 [a05-14832_1ex10d2.htm#a12_12_185316]

SEVERABILITY [a05-14832_1ex10d2.htm#a12_12_185316]

 

SECTION 12.13 [a05-14832_1ex10d2.htm#a12_13_185320]

COUNTERPART ORIGINALS [a05-14832_1ex10d2.htm#a12_13_185320]

 

SECTION 12.14 [a05-14832_1ex10d2.htm#a12_14_185324]

TABLE OF CONTENTS, HEADINGS, ETC. [a05-14832_1ex10d2.htm#a12_14_185324]

 

 

v

--------------------------------------------------------------------------------

 

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; 12.2

(c)

 

N.A.

311(a)

 

7.11

(b)

 

7.11

(c)

 

N.A.

312(a)

 

2.5

(b)

 

12.3

(c)

 

12.3

313(a)

 

7.6

(b)(1)

 

N.A.

(b)(2)

 

7.6, 7.7

(c)

 

7.5, 7.6; 12.2

(d)

 

7.6

314(a)

 

4.3; 4.4; 12.2

(b)

 

N.A.

(c)(1)

 

12.4

(c)(2)

 

12.4

(c)(3)

 

N.A.

(d)

 

10.5

(e)

 

12.5

(f)

 

N.A.

315(a)

 

7.1(b)

(b)

 

7.5; 12.2

(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)

 

12.1

(c)

 

12.1

 

--------------------------------------------------------------------------------

N.A. means not applicable

 

*              This Cross-Reference table shall not, for any purpose, be deemed
to be part of this Indenture.

 

vi

--------------------------------------------------------------------------------

 

INDENTURE, dated as of July 19, 2005, by and among Diamond Jo Worth, LLC, a
Delaware limited liability company, Diamond Jo Worth Corp., a Delaware
corporation, 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 11% Senior Secured Notes due 2012 (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 shall be issued in an aggregate amount of denominations equal in
total to the outstanding principal amount of the Notes sold in reliance on Rule
144A.

 

“501 Global Note” means one or more Global Notes bearing the Private Placement
Legend that shall 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
Issuers 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 Debt” means Indebtedness of a Person or any of its subsidiaries
existing at the time such Person is merged with or into the Company or a
Restricted Subsidiary, becomes a Restricted Subsidiary or Indebtedness assumed
in connection with the acquisition of assets from such Person other than
Indebtedness incurred in connection with, or in contemplation of, such Person
merging with or into the Company or a Restricted Subsidiary or becoming a
Restricted Subsidiary or such acquisition of assets.

 

“Additional Notes” means additional Notes which may be issued after the Issue
Date pursuant to this Indenture (other than in exchange for or in replacement of
outstanding Notes).  All references herein to “Notes” shall be deemed to include
Additional Notes.

 

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person.  For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”), as used with respect to any Person, shall 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 be deemed not to be an Affiliate of PGP, PGL, the Company or any
Restricted Subsidiary.

 

“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)           (x) 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 Iowa, multiplied by (y) 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

 

(b)           (x) 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 income tax rates applicable to net
capital gain of an individual who is a resident of the State of Iowa, multiplied
by (y) a factor equal to 1 minus the highest marginal Federal income tax rate
described in clause (a) above.

 

“Asset Sale” means:

 

(i)            any direct or indirect sale, assignment, transfer, lease,
conveyance, or other disposition (including, without limitation, by way of
merger or consolidation) (collectively, a “transfer”), other than in the
ordinary course of business, of any assets of the Company or any Restricted
Subsidiary; or

 

(ii)           direct or indirect issuance or sale of any Equity Interests of
any Restricted Subsidiary (other than directors’ qualifying shares), in each
case to any Person (other than the Company or a Restricted Subsidiary).

 

2

--------------------------------------------------------------------------------

 

For purposes of this definition, (a) any series of transactions that are part of
a common plan shall be deemed a single Asset Sale and (b) the term “Asset Sale”
shall not include:

 

(1)           any exchange of gaming equipment or furniture, fixtures or other
equipment for replacement items in the ordinary course of business,

 

(2)           any transaction or series of transactions that have a fair market
value (or result in gross proceeds) of less than $1,000,000,

 

(3)           any disposition of all or substantially all of the assets of the
Company that is governed under and complies with the terms of Section 4.15 and
Article V,

 

(4)           any Investments that are not prohibited by, or any Restricted
Payment permitted by, Section 4.9,

 

(5)           (A) any transfer of inventory, equipment, receivables or other
assets acquired and held for resale in the ordinary course of business or (B)
any transfer or liquidation of cash or Cash Equivalents,

 

(6)           any transfer of damaged, worn out or other obsolete personal
property so long as such property is no longer necessary for the proper conduct
of the business of the Company or such Restricted Subsidiary, as applicable,

 

(7)           any grant of any Liens not otherwise prohibited by this Indenture,

 

(8)           any transfer of properties or assets by the Company or a
Restricted Subsidiary to the Company or any other Restricted Subsidiary, or

 

(9)           the Undeveloped Hotel Land Contribution.

 

“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.

 

“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
applicable, except that a “person” shall be deemed to have “beneficial
ownership” of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time.

 

“Business Day” means any day other than a Legal Holiday.

 

“Capital 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

 

3

--------------------------------------------------------------------------------

 

lease obligations under GAAP, and the amount of such obligations at any date
shall be the capitalized amount of such obligations at such date, determined in
accordance with GAAP.

 

“Capital Stock” means, (i) with respect to any Person that is a corporation, any
and all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (ii) with respect to a limited liability
company, any and all membership interests, (iii) with respect to any other
Person, any and all partnership or other equity interests of such Person.

 

“Cash Collateral and Disbursement Agreement” means the Cash Collateral and
Disbursement Agreement, dated as of the date of Indenture, among the Issuers,
the Trustee and the Disbursement Agent, as in effect on the Issue Date or as
amended in accordance with Article IX.

 

“Cash Equivalent” means (i) 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); (ii) time deposits and certificates of deposit
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 commercial paper issued by others rated at least A-2 or the equivalent
thereof by Standard & Poor’s Corporation or at least P-2 or the equivalent
thereof by Moody’s Investors Service, Inc. and in each case maturing within one
year after the date of acquisition; (iii) investments in money market funds
substantially all of whose assets comprise securities of the type described in
clauses (i) and (ii) above and (iv) repurchase obligations for underlying
securities of the types and with the maturities described above.

 

“Change of Control” means the occurrence of any of the following events:

 

(i)            any merger or consolidation of either of the Issuers, Parent, PGL
or PGP with or into any Person or any sale, transfer or other conveyance,
whether direct or indirect, of all or substantially all of the assets of either
of the Issuers, Parent, PGL or PGP, on a consolidated basis, in one transaction
or a series of related transactions, if, immediately after giving effect to such
transaction(s), any “person” or “group” (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) (other
than one or more Excluded Persons or any group consisting solely of Excluded
Persons) is or becomes the “beneficial owner,” directly or indirectly, of more
than 50% of the total voting power in the aggregate of the Voting Stock of the
transferee(s) or surviving entity or entities, in the event of a merger or
consolidation of either of the Issuers, or of either of the Issuers, in the
event of a merger or consolidation of Parent, PGL or PGP;

 

(ii)           any “person” or “group” (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) (other
than one or more Excluded Persons or any group consisting solely of Excluded
Persons) is or

 

4

--------------------------------------------------------------------------------

 

becomes the “beneficial owner,” directly or indirectly, of more than 50% of the
total voting power in the aggregate of the Voting Stock of either of the
Issuers;

 

(iii)          after any bona fide underwritten registered public offering of
Capital Stock of either of the Issuers, during any period of 24 consecutive
months after the Issue Date, individuals who at the beginning of any such
24-month period constituted the Managers of either of the Issuers (together with
any new Managers whose election by such Managers or whose nomination for
election by the Members in the case of the Company, or the shareholders in the
case of DJW Corp., was approved by a vote of a majority of the 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, including
new Managers designated in or provided for in an agreement regarding the merger,
consolidation or sale, transfer or other conveyance, of all or substantially all
of the assets of such Issuer, if such agreement was approved by a vote of such
majority of Managers) cease for any reason to constitute a majority of the
Managers of the Issuers then in office, provided, however, that there shall be
no Change of Control pursuant to this clause (iii) if during such 24-month
period any of the Excluded Persons continues to control or manage, directly or
indirectly, the day-to-day operations of the Issuers; or

 

(iv)          either of the Issuers adopts a plan of liquidation or dissolution;

 

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

 

“Clearstream” means Clearstream Banking Luxembourg, Société Anonyme, or any
successor securities clearing agency.

 

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

 

“Collateral” means all “collateral” referred to in the Security Documents, which
for the avoidance of doubt, shall not include any Excluded Assets

 

“Company” means Diamond Jo Worth, LLC, a Delaware limited liability company, and
its successors in accordance with the terms of this Indenture, and not any of
its subsidiaries.

 

“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” shall not include
consolidation of the accounts of any Unrestricted Subsidiary with the accounts
of the Company.

 

“Consolidated EBITDA” means, with respect to any Person (the referent Person)
for any period, the sum of Consolidated Net Income of such Person and the
Restricted Subsidiaries for such period, without duplication;

 

plus (i) consolidated income tax expense of such Person and the Restricted
Subsidiaries paid or accrued in accordance with GAAP for such period and the
amount of

 

5

--------------------------------------------------------------------------------

 

Permitted Tax Distributions subtracted from Net Income in the determination of
the Consolidated Net Income of such Person for such period;

 

plus (ii) Consolidated Interest Expense, to the extent that such Consolidated
Interest Expense was deducted in computing such Consolidated Net Income;

 

plus (iii) Consolidated Non-Cash Charges, to the extent deducted in computing
such Consolidated Net Income;

 

plus (iv) pre-opening costs and expenses and development or similar costs and
expenses related to the development, construction or acquisition of a Related
Business on or after the Issue Date, to the extent deducted in computing such
Consolidated Net Income;

 

minus (v) (x) extraordinary non-cash charges increasing such Consolidated Net
Income and (y) 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.

 

provided, however, that in determining Consolidated EBITDA with respect to the
Company for any period ending on or about: (A) June 30, 2006, Consolidated
EBITDA of the Company for such period shall be deemed to be equal to the product
of (x) Consolidated EBITDA of the Company for the period from April 1, 2006 to
the last day of such period and (y) 4, (B) September 30, 2006, Consolidated
EBITDA of the Company for such period shall be deemed to be equal to the product
of (x) Consolidated EBITDA of the Company for the period from April 1, 2006 to
the last day of such period and (y) 2, and (C) December 31, 2006, Consolidated
EBITDA of the Company for such period shall be deemed to be equal to the product
of (x) Consolidated EBITDA of the Company for the period from April 1, 2006 to
the last day of such period and (y) 1.333.

 

“Consolidated Interest Expense” means, with respect to any Person for any
period, (a) the consolidated interest expense of such Person and the Restricted
Subsidiaries for such period, net of interest income, whether capitalized, paid,
accrued or scheduled to be paid or accrued (including amortization of original
issue discount, noncash interest payment, the interest component of Capital
Lease Obligations and all commissions, discounts and other fees and charges owed
with respect to bankers’ acceptances and letters of credit financings), to the
extent such expense was deducted in computing Consolidated Net Income of such
Person for such period less (b) amortization expense, write-off of deferred
financing costs and any charge related to any premium or penalty paid, in each
case accrued during such period in connection with redeeming or retiring any
Indebtedness before its stated maturity, as determined in accordance with GAAP,
to the extent such expense, cost or charge was included in the calculation made
pursuant to clause (a) above, provided, that any premiums, fees and expenses
(including the amortization thereof) payable in connection with the offering of
the Notes and the

 

6

--------------------------------------------------------------------------------

 

application of the net proceeds therefrom or any other refinancing of
Indebtedness shall be excluded.

 

“Consolidated Net Income” means, with respect to any Person (the referent
Person) for any period, the sum of (a) the aggregate of the Net Income of such
Person and the Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP; provided, that (i) the Net Income of
any other Person (other than a Restricted Subsidiary of the referent Person)
shall be included only to the extent of the amount of dividends or distributions
paid to the referent Person or a Wholly Owned Subsidiary of the referent Person,
and (ii) the Net Income of any Restricted Subsidiary shall not be included to
the extent that declarations of dividends or similar distributions by that
Restricted Subsidiary are not at the time permitted, directly or indirectly, by
operation of the terms of its organizational documents or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its owners, and (b) Consolidated
Non-Cash Charges described in clause (b) of the definition of “Consolidated
Non-Cash Charges,” of such Person and the Restricted Subsidiaries to the extent
deducted in computing such Net Income.

 

“Consolidated Net Worth” means, with respect to any Person, the total
stockholders’ (or members’) equity of such Person determined on a consolidated
basis in accordance with GAAP, adjusted to exclude (to the extent included in
calculating such stockholders’ (or members’) equity), (i) the amount of any such
stockholders’ (or members’) equity attributable to Disqualified Capital Stock or
treasury stock of such Person and its consolidated subsidiaries, and (ii) 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,
and (iii) all Investments in subsidiaries of such Person that are not
consolidated subsidiaries and in Persons that are not subsidiaries of such
Person.

 

“Consolidated Non-Cash Charges” means, with respect to any Person for any
period, (a) the aggregate depreciation and amortization expense for such Person
and the Restricted Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP and (b) all other non-cash charges of such Person
and the Restricted Subsidiaries for such period, in each case, determined on a
consolidated basis in accordance with GAAP, including, without limitation,
non-cash charges related to (i) Management Arrangements or the pricing or
repricing or issuances of Equity Interests of PGP, PGL or the Company to
employees of the Company (whether accruing at or subsequent to the time of such
repricing or issuance), (ii) impairment of goodwill, intangibles or fixed
assets, (iii) purchase accounting adjustments, and (iv) restructuring charges,
non-capitalized transaction costs and other non-cash charges incurred in
connection with actual or proposed financings, acquisitions or divestitures
(including, without limitation, the issuance of the Notes and borrowings under
the Senior Credit Facility) of such Person and the Restricted Subsidiaries for
such period; but, in each case, excluding (x) any such charges constituting an
extraordinary item or loss, and (y) any such charge which requires an accrual of
or a reserve for cash charges for any future period.

 

7

--------------------------------------------------------------------------------

 

“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 Documents” has the meaning set forth in the Cash Collateral and
Disbursement Agreement.

 

“contractually subordinate” means subordinated in right of payment by its terms
or the terms of any document or instrument or instrument relating thereto.

 

“Corporate Overhead Allocations” means corporate overhead or similar allocations
or payments, including, but not limited to, tax preparation, insurance,
accounting, licensure, legal and administrative fees and expenses incurred on
behalf of the Issuers or their respective Subsidiaries and reasonable and
customary payments to employees or other service providers of PGL or any of its
Subsidiaries (other than Excluded Persons) for services rendered for or on
behalf of the Company or any Restricted Subsidiary.

 

“Default” means any event that is, or after notice or the passage of time 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,
substantially, in the form of Exhibit A hereto except that such Note shall not
include the information called for by footnotes 1 and 2 thereof.

 

“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 shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter “Depositary” shall mean or include such successor.

 

“Diamond Jo Worth Casino” means the project to design, develop, construct, equip
and operate a casino and related amenities as generally described in the
Offering Circular.

 

“Disbursement Agent” means U.S. Bank National Association, or the then acting
Disbursement Agent under the Cash Collateral and Disbursement Agreement.

 

“Disqualified Capital Stock” means any Equity Interest that (i) either by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable) is or upon the happening of an event would be required to be
redeemed or repurchased prior to the final stated maturity of the Notes or is
redeemable at the option of the holder thereof at any time prior to such final
stated maturity, or (ii) is convertible into or exchangeable at the option of
the issuer thereof or any other Person for debt securities that are pari passu
or senior in respect of payment to the Notes.  Notwithstanding the foregoing,
any Equity Interests that would constitute Disqualified

 

8

--------------------------------------------------------------------------------

 

Capital Stock 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 Capital Stock 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 Section 4.15 and Section 4.13.

 

“Distribution Compliance Period” means the 40-day restricted period as defined
in Regulation S.

 

“DJW Corp.” means Diamond Jo Worth Corp., a Delaware corporation, and its
successors in accordance with the terms of this Indenture, and not any of its
subsidiaries.

 

“Domestic Restricted Subsidiary” means any Restricted Subsidiary other than a
Foreign Subsidiary.

 

“Equity Holder” means (a) with respect to a corporation, each holder of stock of
such corporation, (b) with respect to a limited liability company or similar
entity, each member of such limited liability company or similar entity, (c)
with respect to a partnership, each 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 Capital Stock or warrants, options or other rights to
acquire Capital Stock (but excluding any debt security that is convertible into,
or exchangeable for, Capital Stock).

 

“Equity Offering” means (i) an underwritten offering of Qualified Capital Stock
of the Company pursuant to a registration statement filed with and declared
effective by the Commission in accordance with the Securities Act or (ii) an
offering of Qualified Capital Stock of the Company pursuant to an exemption from
the registration requirements of the Securities Act.

 

“Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear system,
or any successor securities clearing agency.

 

“Event of Loss” means, with respect to any property or asset, any (i) loss,
destruction or damage of such property or asset or (ii) 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.

 

“Excess Cash Distribution Amount for Taxes” means the excess of (x) 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

 

9

--------------------------------------------------------------------------------

 

during the period commencing with the Issue Date and continuing to and including
the date on which a proposed Permitted Tax Distribution is to be made under
Section 4.9(b)(iii) over (y) the aggregate amount of such cash distributions
described in the immediately preceding clause (x) that have already been taken
into account for purposes of making (I) Permitted Tax Distributions 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 plus
(II) Restricted Payments permitted by clause (1) or (4) of Section 4.9(a)(iii)
(treating such cash distributions described in this clause (y)(II) as used to
make a Restricted Payment during such 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 (x) that were actually received by the
Company or a Restricted Subsidiary during such period and that were not
previously used to make a Permitted Tax Distribution.

 

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

 

“Excluded Assets” means the following:

 

(i)            cash, other than cash deposited in deposit accounts and other
than funds in the Interest Reserve Account and the Construction Disbursement
Account;

 

(ii)           assets securing FF&E Financing, Purchase Money Obligations or
Capital Lease Obligations permitted to be incurred under this Indenture to the
extent acquired or refinanced with the proceeds of such FF&E Financing, Purchase
Money Obligations and Capital Lease Obligations;

 

(iii)          all Gaming Licenses;

 

(iv)          any motor vehicles;

 

(v)           any agreements, permits, licenses or the like that cannot be
subject to a Lien under the Security Documents without the consent of third
parties (including any Governmental Authority), which consent is not obtained by
the Issuers; and

 

(vi)          Equity Interests of each Foreign Restricted Subsidiary directly
owned by the Company or any of the Domestic Restricted Subsidiaries to the
extent that such Equity Interests held by the Company or such Domestic
Restricted Subsidiary, as the case may be, exceed 65% of the total combined
voting power of all classes of voting Equity Interests of such Foreign
Restricted Subsidiary, provided, however, such excess of any class of Capital
Stock of such Foreign Subsidiary shall not be an Excluded Asset to the extent
the Company is able to receive an opinion of counsel nationally recognized in
tax matters to the effect that the pledge of such excess will not result in an
income inclusion under section 951 et. seq. of the Code.

 

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provided, that Excluded Assets does not include the proceeds of assets under
clause (ii), (iii), (iv), (v) or (vi) or of any other Collateral to the extent
such proceeds do not constitute Excluded Assets.

 

“Excluded Person” means (i) PGP, (ii) PGP Investors, LLC, (iii) M. Brent
Stevens, (iv) Michael S. Luzich, (v) PGL, (vi) OED Acquisition, LLC, a Delaware
limited liability company (“OEDA”), (vii) any Affiliate or Manager of PGP, PGP
Investors, LLC, PGL, OEDA, M. Brent Stevens or Michael S. Luzich (collectively,
the “Existing Holders”), (viii) 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 (ix) any partnership the sole
general partners of which consist solely of the Existing Holders and members of
the immediate family of the Existing Holders.

 

“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
or the Restricted Subsidiaries.

 

“FF&E Financing” means Indebtedness, the proceeds of which are used solely by
the Issuers and the Restricted Subsidiaries (and concurrently with the
incurrence of such Indebtedness) to acquire or lease or improve or refinance,
respectively, FF&E; provided, that (x) the principal amount of such FF&E
Financing does not exceed the cost (including sales and excise taxes,
installation and delivery charges, capitalized interest and other direct fees,
costs and expenses) of the FF&E purchased or leased with the proceeds thereof or
the cost of such improvements, as the case may be, and (y) such FF&E Financing
is secured only by the assets so financed and assets which, immediately prior to
the incurrence of such FF&E Financing, secured other Indebtedness of the Issuers
and the Restricted Subsidiaries (to the extent such other Indebtedness and the
Liens securing such other Indebtedness are permitted under this Indenture) to
the lender of such FF&E Financing.

 

“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

 

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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 Restricted Subsidiary” means any Restricted Subsidiary that is also a
Foreign Subsidiary.

 

“Foreign Subsidiary” means any Subsidiary 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 the United
States of America.

 

“GAAP” means generally accepted accounting principles, as in effect from time to
time, set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, and in the rules and regulations of the Commission.

 

“Gaming Authorities” 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 existing,
or any officer or official thereof, including, without limitation, the Iowa
Gaming Commission and any other agency, in each case, with authority to regulate
any gaming or racing operation (or proposed gaming or racing operation) owned,
managed or operated by the Company or any of the Subsidiaries.

 

“Gaming Equipment” means slot machines, video poker machines, and all other
gaming equipment and related signage, accessories and peripheral equipment,
including, but not limited to surveillance 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 Licenses” means every material license, material franchise, material
registration, material qualification, findings of suitability or other material
approval or authorization required to own, lease, operate or otherwise conduct
or manage riverboat, dockside or land-based gaming or racing activities in any
state or jurisdiction in which the Company or any of the Restricted Subsidiaries
conducts business (including, without limitation, all such licenses granted by
the Gaming Authorities), and all applicable liquor and tobacco licenses.

 

“Global Notes” means one or more Notes in the form of Exhibit A hereto that
includes the information referred to in footnotes 1 and 2 to the form of Note,
attached

 

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hereto as 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(f)(ii) hereof,
which is required to be placed on all Global Notes issued under this Indenture.

 

“Government Securities” means (i) direct obligations of the United States of
America for the timely payment of which its full faith and credit is pledged or
(ii) obligations of a Person controlled or supervised by and acting as an agency
or instrumentality of the United States of America the timely payment of which
is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as
custodian with respect to any such Government Security or a specific payment of
principal of or interest on any such Government Security held by such custodian
for the account of the holder of such depository receipt; provided, that (except
as required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the Government Security or the specific
payment of principal of or interest on the Government Security evidenced by such
depository receipt.

 

“Governmental Authority” means any agency, authority, board, bureau, commission,
department, office or instrumentality of any nature whatsoever of the United
States or foreign government, any state, province or any city or other political
subdivision or otherwise and whether now or hereafter in existence, or any
officer or official thereof, and any maritime authority.

 

“guaranty” or “guarantee,” used as a noun, means any guaranty (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 or other Obligation. “guarantee” or “guaranty” used
as a verb, has a correlative meaning.

 

“Hedging Obligations” means, with respect to any Person, the Obligations of such
Person under (i) interest rate swap agreements, interest rate cap agreements,
interest rate exchange agreements and interest rate collar agreements and (ii)
other agreements or arrangements designed to protect such Person against
fluctuations in interest rates, including 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.

 

“Holder” means the Person in whose name a Note is registered in the register of
the Notes.

 

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“Hotel” means a hotel with at least 100 rooms, which may include a convention
center, banquet hall and/or other entertainment or business facilities, located
in Worth County, Iowa.

 

“Indebtedness” of any Person means (without duplication) (i) all liabilities and
obligations, contingent or otherwise, of such Person (a) in respect of borrowed
money (regardless of whether the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof), (b) evidenced by bonds,
debentures, notes or other similar instruments, (c) representing the deferred
purchase price of property or services (other than trade payables on customary
terms incurred in the ordinary course of business), (d) created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) representing Capital Lease Obligations, (f) under
bankers’ acceptance and letter of credit facilities, (g) to purchase, redeem,
retire, defease or otherwise acquire for value any Disqualified Capital Stock,
or (h) in respect of Hedging Obligations; (ii) all Indebtedness of others that
is guaranteed by such Person; and (iii) all Indebtedness of others that is
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness; provided, that the amount of such Indebtedness shall (to the
extent such Person has not assumed or become liable for the payment of such
Indebtedness) be the lesser of (1) the fair market value of such property at the
time of determination and (2) the amount of such Indebtedness.  The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date.  The principal amount outstanding of
any Indebtedness issued with original issue discount is the accreted value of
such Indebtedness.

 

“Indenture” means this Indenture, as amended or supplemented from time to time
in accordance with the terms hereof.

 

“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 Notes under the Purchase
Agreement, dated June 30, 2005.

 

“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 Senior Credit Facility lenders, substantially in the
form attached hereto as Exhibit F, which may be entered into after the Issue
Date in

 

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accordance with Section 7.1(f) hereof, including any amended or supplemented
agreement or any replacement or substitute agreement in accordance with this
Indenture, in each case substantially in the form of Exhibit F attached hereto.

 

“Interest” means the interest payable on the Notes.

 

“Interest Coverage Ratio” means, for any period, the ratio of (i) Consolidated
EBITDA of the Company for such period, to (ii) Consolidated Interest Expense of
the Company for such period.  In calculating Interest Coverage Ratio for any
period, (a) pro forma effect shall be given to the incurrence, repayment or
retirement by the Company or any of the Restricted Subsidiaries of any
Indebtedness (other than Indebtedness incurred in the ordinary course of
business for general corporate purposes pursuant to working capital facilities)
subsequent to the commencement of the period for which the Interest Coverage
Ratio is being calculated, as if the same had occurred at the beginning of the
applicable period; (b) acquisitions that have been made by the Company or any of
the Restricted Subsidiaries, including all mergers and consolidations,
subsequent to the commencement of such period shall be calculated on a pro forma
basis, assuming that all such acquisitions, mergers and consolidations had
occurred on the first day of such period, including giving effect to reductions
in costs for such period that are directly attributable to the elimination of
duplicative functions and expenses (regardless of whether such cost savings
could then be reflected in pro forma financial statements under GAAP, Regulation
S-X promulgated by the SEC or any other regulation or policy of the SEC) as a
result of such acquisition, merger or consolidation, provided that (x) such cost
savings were identified and quantified in an Officers’ Certificate delivered to
the Trustee at the time of the consummation of such acquisition, merger or
consolidation and such Officers’ Certificate states that such officers believe
in good faith that actions shall be commenced or initiated within 90 days of the
consummation of such acquisition, merger or consolidation to effect such cost
savings and sets forth the specific steps to be taken within the 90 days after
such acquisition, merger or consolidation to accomplish such cost savings, and
(y) with respect to each acquisition, merger or consolidation completed prior to
the 90th day preceding such date of determination, actions were commenced or
initiated by the Company or any of its Restricted Subsidiaries within 90 days of
such acquisition, merger or consolidation to effect the cost savings identified
in such Officers’ Certificate (regardless, however, of whether the corresponding
cost savings have been achieved).  Without limiting the foregoing, the financial
information of the Company with respect to any portion of such period that falls
before the Issue Date shall be adjusted to give pro forma effect to the issuance
of the Notes and the application of the proceeds therefrom as if they had
occurred at the beginning of such period.

 

“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

 

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the Cash Collateral and Disbursement Agreement into which an amount, together
with interest earned on such amount, sufficient to pay the first two Interest
payments on the Notes will be deposited on the date of this Indenture.

 

“Investments” means, with respect to any Person, all investments by such Person
in other Persons (including Affiliates) in the forms of loans, guarantees,
advances or capital contributions (excluding (i), payroll commission, travel and
similar advances to officers and employees of such Person made in the ordinary
course of business and (ii) bona fide accounts receivable arising from the sale
of goods or services in the ordinary course of business consistent with past
practice), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.

 

“Iowa Code” means the Code of Iowa (2003), as amended from time to time.

 

“Iowa Gaming Commission” means the Iowa Racing and Gaming Commission, or any
successor Gaming Authority.

 

“Issue Date” means the date upon which the Notes are first issued.

 

“Issuers” means the Company and DJW Corp. and their respective successors in
accordance with the terms of this Indenture, and not any of their respective
subsidiaries.

 

“Legal Holiday” means 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.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, regardless of whether 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 and any filing
of or agreement to give any financing statement under the Uniform Commercial
Code (or equivalent statutes) of any jurisdiction).

 

“Management Arrangements” means profits interests grants or similar equity
interest arrangements, employment agreements, consulting agreements, management
agreements, operating agreements and other similar arrangements between the
Company or any of its Affiliates or any manager, officer, member or employee
thereof or consultant thereto and any other such Person and such or similar
agreements as may be modified, supplemented, amended, entered into or restated
from time to time consistent with industry practice and approved by the Managers
of PGP or the Company, provided that the aggregate amount of payments made
(other than to the Company or any of the Restricted Subsidiaries) pursuant to
any such equity interest, employment,

 

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consulting, management, operating or similar agreements or arrangements for any
fiscal year shall not exceed 4.0% of the Consolidated EBITDA of the Company for
the immediately preceding fiscal year.

 

“Management Services Agreement” means the Management Services Agreement, to be
entered into on or prior to the Issue Date, by and among the Company and PGP,
without giving effect to any amendment or supplement thereto or modification
thereof after the Issue Date, except to the extent that such amendment,
supplement or modification would otherwise have been permitted under Section
4.12, which Management Services Agreement shall be substantially similar to the
Amended and Restated Management Services Agreement, dated as of February 25,
2003, by and among, Diamond Jo, LLC, a Delaware limited liability company, OED
Acquisition, LLC, a Delaware limited liability company, and The Old Evangeline
Downs, L.L.C., a Louisiana limited liability company, as in effect on the Issue
Date.

 

“Managers” means, with respect to any Person (i) if such Person is a limited
liability company, the board member, board members, manager or managers
appointed pursuant to the operating agreement of such Person as then in effect
or (ii) otherwise, the members of the board of directors or other governing body
of such Person.

 

“Members” means the holders of all of the Voting Stock of the Company.

 

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

 

“Mortgages” means those mortgages dated the dated hereof granting the Trustee an
interest in all of the Issuers’ real property Collateral.

 

“Net Income” means, with respect to any Person for any period, (a) the net
income (or loss) of such Person for such period, determined in accordance with
GAAP, excluding (to the extent included in calculating such net income) (i) any
gain or loss, together with any related taxes paid or accrued on such gain or
loss, realized in connection with any Asset Sales and dispositions pursuant to
sale-leaseback transactions and (ii) any extraordinary gain or loss, together
with any taxes paid or accrued on such gain or loss, reduced by (b) the maximum
amount of Permitted Tax Distributions attributable to such net income for such
period.

 

“Net Proceeds” means the aggregate proceeds received in the form of cash or Cash
Equivalents in respect of any Asset Sale (including issuance or other payments
in an Event of Loss and payments in respect of deferred payment obligations and
any cash or Cash Equivalents received upon the sale or disposition of any
non-cash consideration received in any Asset Sale, in each case when received),
net of:

 

(i)            the reasonable and customary direct out-of-pocket costs relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions), other than any such costs
payable to an Affiliate of the Company,

 

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(ii)           taxes required to be paid by the Company, any of the
Subsidiaries, or 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 connection with such Asset Sale in the
taxable year that such sale is consummated or in the immediately succeeding
taxable year, the computation of which shall take into account the reduction in
tax liability resulting from any available operating losses and net operating
loss carryovers, tax credits and tax credit carryforwards, and similar tax
attributes,

 

(iii)          amounts required to be applied to the permanent repayment of
Indebtedness in connection with such Asset Sale, and

 

(iv)          appropriate amounts provided as a reserve by the Company or any
Restricted Subsidiary, 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, interest, penalty, fee,
indemnification, reimbursement, damage (including, without limitation,
liquidated damages) and other obligation and liability payable under the
documentation governing any liability.

 

“Offering” means the offering of the Notes by the Issuers.

 

“Offering Circular” means that offering circular of the Issuers, dated June 30,
2005, without giving effect to any amendment or supplement thereto or
modification thereof.

 

“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 Managers of such Person and serving in a similar
capacity.

 

“Officers’ Certificate” means a certificate signed on behalf of the Company and
DJW Corp. by two Officers of each of the Company and DJW Corp., in each case,
one of whom must be the Manager, Chairman of the Board, President, Chief
Executive Officer, Chief Financial Officer, Treasurer, Controller or a Senior or
Executive Vice President of the Company and DJW Corp., respectively.

 

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“Opening” means the time when the Diamond Jo Worth Casino shall have been opened
to the general public, is receiving customers in the ordinary course of business
and has received, and has in full force and effect, all material Permits
required for operation.

 

“Opinion of Counsel” means an opinion from legal counsel who is reasonably
acceptable to the Trustee. Such counsel may be an employee of or counsel to any
of the Issuers, any Subsidiary of any of the Issuers or the Trustee.

 

“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 DTC, shall include Euroclear and
Clearstream).

 

“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 Company, (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, the Security Documents and this Indenture pursuant to a supplemental
indenture in form reasonably satisfactory to the Trustee and (c) shall 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 shall not recognize income gain or loss for Federal income tax purposes
as a result of such Permitted C-Corp Conversion and shall 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 unless a comparable replacement Gaming
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 be qualified or found suitable under any applicable
gaming or racing laws.

 

“Permitted Entity” means a joint venture or Unrestricted Subsidiary that
satisfies each of the following: (a) the Company owns directly or indirectly in
the aggregate at least 50% of the Voting Equity Interests of such entity;
(b) such entity satisfies the definition of Unrestricted Subsidiary; (c) neither
of the Issuers nor any

 

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Restricted Subsidiary has any direct or indirect obligation to subscribe for
additional Equity Interests of such Person or maintain or preserve the financial
condition of such entity or cause such entity to achieve or maintain any
specified levels of operating results; (d) such entity was formed for the sole
purpose of owning and developing the Undeveloped Hotel Land; (e) the Trustee, on
behalf of the Holders, subject to the terms of the Intercreditor Agreement, has
a security interest in all of the Equity Interests owned, directly or
indirectly, by the Company in such entity; and (f) unless the Company owns
directly or indirectly in the aggregate 100% of the Equity Interests of such
entity, such entity does not own, operate or manage any gaming facilities or
Gaming Equipment or otherwise engage in or conduct any other gaming or racing
activities.

 

“Permitted Investments” means:

 

(i)            Investments in the Company or in any Wholly Owned Subsidiary;

 

(ii)           Investments in Cash Equivalents;

 

(iii)          Investments in a Person, if, as a result of such Investment, such
Person (a) becomes a Wholly Owned Subsidiary, or (b) is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Wholly Owned Subsidiary;

 

(iv)          Hedging Obligations;

 

(v)           Investments as a result of consideration received in connection
with an Asset Sale made in compliance with Section 4.13;

 

(vi)          Investments existing on the Issue Date;

 

(vii)         Investments paid for solely with Capital Stock (other than
Disqualified Capital Stock) of the Company;

 

(viii)        credit extensions to gaming customers in the ordinary course of
business, consistent with industry practice;

 

(ix)           stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company (a) in
satisfaction of judgments or (b) pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of trade creditors or
customers; and

 

(x)            loans or other advances to employees of the Company and the
Subsidiaries made in the ordinary course of business in an aggregate amount not
to exceed $500,000 at any one time outstanding;

 

(xi)           intercompany Indebtedness incurred pursuant to clause (v) of
Section 4.7(b);

 

(xii)          Investments in the Notes or any Additional Notes;

 

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(xiii)         Investments not otherwise permitted by clauses (i) through (xii)
above, not to exceed $2,500,000; and

 

(xiv)        the Undeveloped Hotel Land Contribution and the interest in the
Permitted Entity received pursuant thereto; provided, that if the entity to
which the Undeveloped Hotel Land Contribution was made, or any subsequent
transferee of such Undeveloped Hotel Land, ceases to qualify as a “Permitted
Entity”, then the Issuers will be deemed to have made an Investment equal to the
value of the Issuers’ Investment in such entity at such time (valued in each
case as provided in the definition of “Investment”) and the value of such
Investment at such time will, for the period such Investment does not so
qualify, be included in the calculation of the aggregate amount of Restricted
Payments referenced in Section 4.9(a)(iii).

 

“Permitted Liens” means:

 

(i)            Liens securing Indebtedness of the Company or any of the
Restricted Subsidiaries incurred pursuant to clause (i) of Section 4.7(b);

 

(ii)           Liens arising by reason of any judgment, decree or order of any
court for an amount and for a period not resulting in an event of default with
respect thereto, so long as such Lien is being contested in good faith and is
adequately bonded, and any appropriate legal proceedings that may have been duly
initiated for the review of such judgment, decree or order shall not have been
finally adversely terminated or the period within which such proceedings may be
initiated shall not have expired;

 

(iii)          security for the performance of bids, tenders, trade, contracts
(other than contracts for the payment of borrowed money) or leases, surety and
appeal bonds, performance and return-of-money bonds and other obligations of a
like nature incurred in the ordinary course of business, consistent with
industry practice;

 

(iv)          Liens for taxes, assessments or other governmental charges either
(a) not yet delinquent or (b) that are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
on the books of the Company or the Restricted Subsidiaries in accordance with
GAAP;

 

(v)           Liens of carriers, warehousemen, mechanics, landlords,
materialmen, suppliers, repairmen or other like Liens arising by operation of
law in the ordinary course of business consistent with industry practices and
Liens on deposits made to obtain the release of such Liens if (a) the underlying
obligations are not overdue for a period of more than 30 days or (b) such Liens
are being contested in good faith and by appropriate proceedings and adequate
reserves with respect thereto are maintained on the books of the Company or the
Restricted Subsidiaries in accordance with GAAP;

 

(vi)          easements, rights of way, zoning and similar restrictions and
other similar encumbrances or title defects incurred in the ordinary course of
business, and that do not materially detract from the value of the property
subject thereto (as such property

 

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is used by the Company or a Restricted Subsidiary) or materially interfere with
the ordinary conduct of the business of the Company or any of the Restricted
Subsidiaries;

 

(vii)         Liens incurred or deposits made in the ordinary course of business
in connection with workers’ compensation, unemployment insurance and other types
of social security legislation or otherwise arising from statutory or regulatory
requirements of the Company or any of the Restricted Subsidiaries;

 

(viii)        Liens securing Refinancing Indebtedness incurred in compliance
with this Indenture to refinance Indebtedness secured by Liens; provided, (a)
such Liens do not extend to any additional property or assets; (b) if the Liens
securing the Indebtedness being refinanced were subordinated to or pari passu
with the Liens securing the Notes, the Subsidiary Guaranties or any intercompany
loan, as applicable, such new Liens are subordinated to or pari passu with such
Liens to the same extent, and any related subordination or intercreditor
agreement is confirmed; and (c) such Liens are no more adverse to the interests
of Holders than the Liens replaced or extended thereby;

 

(ix)           Liens that secure Acquired Debt or Liens on property of a Person
existing at the time such Person is merged into or consolidated with, or such
property was acquired by, the Company or any Restricted Subsidiary; provided,
that such Liens do not extend to or cover any other property or assets and were
not put in place in anticipation of such acquisition, merger or consolidation;

 

(x)            any interest or title of a lessor under any Capital Lease
Obligation or operating lease; provided that such Liens do not extend to any
property or assets which are not leased property subject to such Capital Lease
Obligation;

 

(xi)           Liens that secure Purchase Money Obligations, Capital Lease
Obligations, FF&E Financing or mortgage financings permitted to be incurred
under this Indenture; provided that such Liens do not extend to or cover any
property or assets other than those being acquired, leased or developed and
property and assets which, immediately prior to the incurrence of such Purchase
Money Obligations, Capital Lease Obligations, FF&E Financing or mortgage
financing, secured other Indebtedness of the Issuers and the Restricted
Subsidiaries (to the extent such other Indebtedness and the Liens securing such
other Indebtedness are permitted under this Indenture) to the lender of such
Purchase Money Obligations, Capital Lease Obligations, FF&E Financing or
mortgage financing;

 

(xii)          whether or not existing on the Issue Date, Liens securing
Obligations under this Indenture, the Notes, the Subsidiary Guaranties or the
Security Documents;

 

(xiii)         with respect to any vessel included in the Collateral, certain
maritime liens, including liens for crew’s wages and salvage;

 

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(xiv)        Liens in favor of the Company or any Subsidiary Guarantor, in which
a security interest has been granted to the Trustee to secure the payment of the
Notes or a Subsidiary Guaranty, respectively;

 

(xv)         Liens arising from precautionary Uniform Commercial Code financing
statement filing regarding operating leases entered into by the Company or any
of the Subsidiaries in the ordinary course of business;

 

(xvi)        Liens incurred in the ordinary course of business securing Hedging
Obligations, which Hedging Obligations relate to Indebtedness that is otherwise
permitted under this Indenture;

 

(xvii)       Liens existing on the Issue Date to the extent and in the manner
such Liens are in effect on the Issue Date;

 

(xviii)      Liens on a pledge of the Capital Stock of any Unrestricted
Subsidiary securing any Indebtedness of such Unrestricted Subsidiary;

 

(xix)         leases or subleases granted to others not interfering in any
material respect with 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;

 

(xx)          Liens securing reimbursement obligations with respect to
commercial letters of credit that encumber documents and other property relating
to such letters of credit and the products and proceeds thereof;

 

(xxi)         Liens securing intercompany Indebtedness incurred pursuant to
clause (v) of Section 4.7(b);

 

(xxii)        Liens securing guarantees by Subsidiary Guarantors of Indebtedness
issued by the Company if such guarantees are permitted by Section 4.7 and

 

(xxiii)       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.

 

“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

 

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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 Iowa, 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” means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other entity.

 

“PGL” means Peninsula Gaming, LLC, a Delaware limited liability company, the
indirect parent of the Company on the Issue Date.

 

“PGP” means Peninsula Gaming Partners, LLC, a Delaware limited liability
company, the direct parent and sole manager of PGL on the Issue Date.

 

“Private Placement Legend” means the legend set forth in Section 2.6(f)(i)
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 Obligations” means Indebtedness representing, or incurred to
finance (or to Refinance Indebtedness incurred to finance), the cost (i) of
acquiring any assets (including FF&E) and (ii) of construction or build-out of
facilities (including Purchase Money Obligations of any other Person at the time
such other Person is merged with or into or is otherwise acquired by the
Issuers); provided, that (a) the principal amount of such Indebtedness does not
exceed 75% of such cost, including construction charges, (b) any Lien securing
such Indebtedness does not extend to or cover any other asset or property other
than the asset or property being so acquired, constructed or built and assets
which, immediately prior to the incurrence of such Purchase Money Obligations,
secured other Indebtedness of the Issuers and the Restricted Subsidiaries (to
the extent such other Indebtedness and the Liens securing such other
Indebtedness are permitted under this Indenture) to the lender of such Purchase
Money Obligations, and (c) such Indebtedness is (or the Indebtedness being
Refinanced was) incurred, and any Liens with respect thereto are granted, within
180 days of the acquisition or commencement of construction or build-out of such
property or asset.

 

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

 

“Qualified Capital Stock” means, with respect to any Person, Capital Stock of
such Person other than Disqualified Capital Stock.

 

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“Reg S Permanent Global Note” means one or more permanent Global Notes bearing
the Private Placement Legend, that shall 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 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(f)(iii) hereof, which is required to be placed on all Reg S Temporary Global
Notes issued under this Indenture.

 

“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.

 

“Related Business” means any business in which PGP or any of its direct or
indirect subsidiaries was engaged on the Issue Date and any and all other
businesses that in the good faith judgment of the Managers of the Company are
similar, related, ancillary or complementary to such business, including, but
not limited to, off-track betting facilities, horse racing, dog racing or other
gaming venues, the entertainment and hotel businesses, convenience stores
(including the sale of gasoline and auto parts) and other food and beverage
distribution operations.

 

“Required Regulatory Redemption” means a redemption by the Issuers of any
Holder’s Notes pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License, or to the extent necessary in the reasonable, good faith
judgment of the Managers of the Company to prevent the loss, failure to obtain
or material impairment or to secure the reinstatement of, any Gaming License,
where such redemption or acquisition is required because the Holder or
beneficial owner of Notes is required to be found suitable or to otherwise
qualify under any gaming or similar laws and is not found suitable or so
qualified within 30 days after being requested to do so (or such lesser period
that may be required by any Governmental Authority).

 

“Responsible Officer” shall mean, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant treasurer, trust officer or any
other officer of the Trustee who customarily performs functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person’s
knowledge of and familiarity with the particular subject.

 

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“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 an Investment other than a Permitted Investment.

 

“Restricted Payments” means:

 

(i)            any dividend or other distribution declared or paid on account of
any Equity Interests of the Company or any of the Restricted Subsidiaries or any
other payment to any Excluded Person of Affiliate thereof (other than, in each
case, (a) dividends or distributions payable in Equity Interests (other than
Disqualified Capital Stock) of the Company or (b) amounts payable to the Company
or any Restricted Subsidiary);

 

(ii)           any payment to purchase, redeem or otherwise acquire or retire
for value any Equity Interest of the Company, any Restricted Subsidiary or any
other Affiliate of the Company (other than any such Equity Interest owned by the
Company or any Restricted Subsidiary);

 

(iii)          any principal payment on, or purchase, redemption, defeasance or
other acquisition or retirement for value of, any Indebtedness of the Company or
any Subsidiary Guarantor that is contractually subordinated in right of payment
to the Notes or such Subsidiary Guarantor’s Subsidiary Guaranty thereof, as the
case may be, prior to any scheduled principal payment, sinking fund payment or
other payment at the stated maturity thereof; or

 

(iv)          any Restricted Investment.

 

“Restricted Subsidiary” means any Subsidiary which at the time of determination
is not an Unrestricted Subsidiary.

 

“Return from Unrestricted Subsidiaries” means (a) 50% of 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, plus (b) 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 (i) repayments of the principal of loans or advances or other
transfers of assets to the Company or any Restricted Subsidiary from
Unrestricted Subsidiaries or (ii) the sale or liquidation of any Unrestricted
Subsidiaries, plus (c) to the extent that any Unrestricted Subsidiary of the

 

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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.

 

“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 Security
Documents.

 

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

 

“Security Agreement” means that agreement dated the date hereof granting a
security interest in the Collateral from the Issuers (and any future Subsidiary
Guarantors) in favor of the Trustee.

 

“Security Documents” means, collectively, the Cash Collateral and Disbursement
Agreement, the Security Agreement, the Mortgages 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.

 

“Senior Credit Facility” means any one or more debt facilities, commercial paper
facilities or other debt instruments, indentures or agreements providing for
revolving credit loans, term loans, letters of credit or other obligations
evidencing Indebtedness, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith and, in
each case, as amended, renewed, refunded, replaced, refinanced 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;
provided, that such agreements or instruments do not permit the Company and the
Restricted Subsidiaries, taken as a whole, to incur Indebtedness under all such
agreements or instruments in an aggregate principal amount at any time
outstanding in excess of the maximum aggregate principal amount of Indebtedness
permitted to be incurred pursuant to clause (i) of Section 4.7(b).

 

“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 April 15, 2012.

 

“subsidiary” means, with respect to any Person, (i) any corporation, association
or other business entity (including a limited liability company) of which more
than 50% of the total voting power of shares of Voting Stock thereof is at the
time owned or controlled, directly or indirectly, by such Person or one or more
of the other subsidiaries of that Person or a combination thereof and (ii) any
partnership in which such Person or any of its subsidiaries is a general
partner.

 

“Subsidiary” means any subsidiary of the Company.

 

“Subsidiary Guaranty” means an unconditional and irrevocable guaranty by a
Subsidiary Guarantor of the Obligations of the Issuers under the Notes and this
Indenture, on a senior unsecured basis, as set forth in this Indenture, as
amended from time to time in accordance with the terms thereof.

 

“Subsidiary Guarantor” means any Subsidiary that has executed and delivered in
accordance with this Indenture a Subsidiary Guaranty, and such Person’s
successors and assigns.

 

“Tax Loss Benefit Amount” means with respect to any taxable year, the amount by
which the Permitted Tax Distributions would be reduced were a net operating loss
or net capital loss from a prior taxable year of the Company ending subsequent
to the Issue Date carried forward to the applicable taxable year; provided, that
for such purpose the amount of any such net operating loss or net capital loss
shall be used only once and in each case shall be carried forward to the next
succeeding taxable year until so used.  For purposes of calculating the Tax Loss
Benefit Amount, the proportionate part of the items of taxable income, gain,
deduction, or loss (including capital gain or loss) of any Subsidiary that is a
Flow Through Entity for a taxable year of such Subsidiary ending subsequent to
the Issue Date shall be included in determining the amount of net operating loss
or net capital loss of the Company.

 

“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.

 

“Transactions” means the transactions described in the Offering Circular under
the section “Transactions.”

 

“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.

 

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“Undeveloped Hotel Land” has the meaning set forth in the definition of
“Undeveloped Hotel Land Contribution.”

 

“Undeveloped Hotel Land Contribution” means (i) the contribution to a Permitted
Entity or (ii) the lease to another Person, in each case, by the Issuers or a
Restricted Subsidiary of undeveloped and unimproved land for the purpose of
designing, developing, constructing and/or equipping a Hotel (such land, the
“Undeveloped Hotel Land”) in a transaction that satisfies each of the following:
(a) such contribution or lease, as applicable, shall have been approved by the
Managers of the Company or PGP, (b) the Managers of PGP shall have determined in
reasonable good faith that the Company will receive fair market value for such
contribution or lease, as applicable; and (c) 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 contribution or lease, as
applicable.  For the purpose of this definition, “undeveloped and unimproved”
means that no Investments have been made in, or capital expenditures or other
payments made with respect to, or any development of or improvement made on,
such land after the Issue Date (other than (x) site improvements, including,
without limitation, utility hook-ups, grading, leveling and similar or related
improvements, and (y) payments for reasonable costs incurred in connection with
such contribution or lease, as applicable, including, without limitation, for
title charges, environmental studies, surveys and legal or other professional
fees and expenses).

 

“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 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 and each subsidiary of such Subsidiary; provided, that
such Subsidiary or any of its subsidiaries does not hold any Indebtedness or
Capital Stock of, or any Lien on any assets of, the Company or any Restricted
Subsidiary.  If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary as of such date.  The Managers of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under the Interest Coverage Ratio test set forth in Section 4.7(a)
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period, and (ii) no Default or Event of
Default would be in existence following such designation.  The Company shall be
deemed to make an Investment in each Subsidiary designated as an

 

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Unrestricted Subsidiary immediately following such designation in an amount
equal to the Investment in such Subsidiary and its subsidiaries immediately
prior to such designation. Any such designation by the Managers of the Company
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the resolution of the Managers giving effect to such designation and an
Officers’ Certificate certifying that such designation complies with the
foregoing conditions and is permitted by Section 4.7(a).

 

“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 the Subsidiaries that are Flow
Through Entities.

 

“U.S. Person” means a U.S. person as defined in Rule 902(o) under the Securities
Act.

 

“Voting Stock” means, with respect to any Person, (i) one or more classes of the
Capital Stock of such Person having general voting power to elect at least a
majority of the Board of Directors, managers or trustees of such Person
(regardless of whether at the time Capital Stock of any other class or classes
have or might have voting power by reason of the happening of any contingency)
and (ii) any Capital Stock of such Person convertible or exchangeable without
restriction at the option of the holder thereof into Capital Stock of such
Person described in clause (i) above.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years (rounded to the nearest one-twelfth) obtained by
dividing (i) the then outstanding principal amount of such Indebtedness into
(ii) the total of the product obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect thereof,
by (b) the number of years (calculated to the nearest one-twelfth) that shall
elapse between such date and the making of such payment.

 

“Wholly Owned Subsidiary” of any Person means a subsidiary of such Person all
the Capital Stock of which (other than directors’ qualifying shares) is owned
directly or indirectly by such Person; provided, that with respect to the
Company, the term Wholly Owned Subsidiary shall exclude Unrestricted
Subsidiaries.

 

Section 1.2                                                              OTHER
DEFINITIONS

 

Term

 

Defined in Section

“Affiliate Transaction”

 

4.12

“Authentication Order”

 

2.2

“Benefited Party”

 

11.1

“C Corporation”

 

Definition of Permitted C-Corp Conversion

“Change of Control Offer”

 

4.15

“Change of Control Payment”

 

4.15

“Change of Control Payment Date”

 

4.15

 

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“Covenant Defeasance”

 

8.3

“Defaulted Interest”

 

2.12

“DTC”

 

2.3

“Event of Default”

 

6.1

“Excess Proceeds”

 

4.13

“Excess Proceeds Offer”

 

4.13

“Excess Proceeds Offer Period”

 

4.13

“Existing Holders”

 

Definition of Excluded Person

“Federal Flow Through Entity”

 

Definition of Flow Through Entity

“incur”

 

4.7

“Investment Company Act”

 

4.17

“Legal Defeasance”

 

8.2

“Notes”

 

Preamble

“Paying Agent”

 

2.3

“Purchase Amount”

 

4.13

“Refinance”

 

4.7

“Refinancing Indebtedness”

 

4.7

“Registrar”

 

2.3

“Subsidiary Guaranty Obligations”

 

11.1

“Tax Calculation Event”

 

Definition of Permitted Tax Distributions

“Tax Distribution Overage”

 

Definition of Permitted Tax Distributions

“Tax Distribution Shortfall”

 

Definition of Permitted Tax Distributions

 

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; and

 

“obligor” on the Notes means each of the Issuers, each Subsidiary 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;

 

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(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)           references to the “Intercreditor Agreement” shall mean if the
Intercreditor Agreement is then in effect.

 

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.

 

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 Subsidiary
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

 

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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 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 $40,000,000 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

 

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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 shall 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 Interest on the Notes, and shall 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.

 

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 shall 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 or (y) the Depositary is no
longer a clearing agency registered under the Exchange Act, and in either case,
the Issuers fail to appoint a successor Depositary within 90 days of such notice
from the Depositary, (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

 

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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) or (c) 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:

 

(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 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

 

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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 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(g) 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:

 

(A)          if the transferee shall 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 shall 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 shall 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 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

 

37

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in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.

 

If any such transfer is effected pursuant to clause (4) 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 clause (4) 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(g) 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, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;

 

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(C)           if such beneficial interest 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;

 

(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 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 clause (2), 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.

 

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

 

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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(g) 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:

 

(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

 

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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 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 clause (2), 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 clauses (2) 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

 

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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:

 

(A)          if the transfer shall be made to a QIB pursuant to Rule 144A, 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 shall 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 the Registrar
receives the following: (1) if the Holder of such Restricted Definitive Notes
proposes to exchange

 

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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 clause (2), 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 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)            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.

 

(1)           Except as permitted by subparagraph (2) 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 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 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

 

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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)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E) 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 (F) 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), (E) OR (F) 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)           Notwithstanding the foregoing, any Global Note or Definitive Note
issued pursuant to subparagraphs (b)(4), (c)(2), (c)(3), (d)(2), (d)(3), (e)(2)
or (e)(3) 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.”

 

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“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.”

 

(iii)          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.”

 

(g)           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 shall 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 shall 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

 

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may be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such increase.

 

(h)           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 Section 2.10,
3.6, 4.13 or 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 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.

 

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(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, or if the
Trustee or 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.

 

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 Subsidiary Guaranty 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.

 

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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.  Until such
exchange, 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.

 

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

 

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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 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 shall promptly notify the Trustee of any change in the
“CUSIP” numbers.

 

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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 Issue Date and any Additional Notes subsequently issued shall be treated
as a single class for all purposes under this Indenture.

 

ARTICLE III
REDEMPTION

 

Section 3.1                                                              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, provided that Notes in denominations of
$1,000 or less may not be redeemed in part.  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.

 

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

 

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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 or portions thereof 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 45 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 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 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 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.

 

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
on or before the associated Interest Payment Date, any accrued and unpaid
Interest due on such Interest Payment Date shall be paid to the Person in whose
name a Note is registered at the close of business on such Interest Record Date.

 

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 Section 3.7(b), the Notes are not
redeemable at the Issuers’ option prior to April 15, 2008.  Thereafter, the
Notes shall be subject to redemption, in whole or in part, at the option of the
Issuers at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid Interest thereon, to the applicable
redemption date, if redeemed during the 12-month period beginning on April 15 of
the years indicated below:

 

Year

 

Percentage

 

2008

 

105.500

%

2009

 

103.667

%

2010

 

101.833

%

2011 and thereafter

 

100.000

%

 

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(b)           Notwithstanding Section 3.7(a), at any time or from time to time
prior to April 15, 2007, the Issuers may redeem, at their option, up to 35% of
the aggregate principal amount of the Notes then outstanding, at a redemption
price of 111.00% of the principal amount thereof, plus accrued and unpaid
Interest thereon, if any, through the applicable redemption date, with the net
cash proceeds of one or more Equity Offerings; provided, that (i) such
redemption shall occur within 60 days of the date of closing of such Equity
Offering and (ii) at least 65% of the aggregate principal amount of Notes issued
under this Indenture remains outstanding immediately after giving effect to each
such redemption.

 

The restrictions on the optional redemption contained herein do not limit the
right of the Issuers or any of the Subsidiaries to separately make open market,
privately negotiated or other purchases of the Notes from time to time.

 

(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 provisions hereof, Notes to be redeemed pursuant to a
Required Regulatory Redemption shall be redeemable by the Issuers, in whole or
in part, at any time upon not less than 20 Business Days nor more than 60 days
notice (or such earlier date as may be ordered by any applicable Governmental
Authority) at a price equal to the lesser of (a) the Holder’s cost thereof and
(b) 100% of the principal amount thereof, plus in either case accrued and unpaid
Interest thereon, if any, to the redemption date (or such earlier period as
ordered by a Governmental Authority).  The Issuers are not required to pay or
reimburse any Holder or beneficial owner of the Notes for the expenses of any
such Holder or beneficial owner related to the application for any Gaming
License, qualification or finding of suitability in connection with a Required
Regulatory Redemption.  Such expenses of any such Holder or beneficial owner
shall, therefore, be the obligation of such Holder or beneficial owner.  Any
Required Regulatory Redemption shall be made in accordance with the provisions
of Sections 3.3, 3.4 and 3.5 unless other procedures are required by any
Governmental Authority.

 

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 and 4.15 below).  The Notes shall not have the
benefit of any sinking fund.

 

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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.

 

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 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 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

 

Regardless of whether required by the rules and regulations of the SEC, so long
as any Notes are outstanding, the Company shall furnish to the Trustee and
Holders, within 15 days after the Company is or would have been required to file
such with the SEC, (i) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Company were required to file such Forms, including for each a “Management’s
Discussion and

 

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Analysis of Financial Condition and Results of Operations” and, with respect to
the annual information only, a report thereon by the Company’s independent
certified public accountants and (ii) all information that would be required to
be contained in a filing with the SEC on Form 8-K if the Company were required
to file such reports.

 

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 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 Subsidiary Guarantors to satisfy
their obligations under the Notes, the Subsidiary Guaranties 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.

 

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Section 4.7

 

LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND DISQUALIFIED EQUITY
INTERESTS

 

(a)                                  The Issuers shall not, and shall not permit
any of the Restricted Subsidiaries to, directly or indirectly, (x) create,
incur, issue, assume, guaranty or otherwise become directly or indirectly liable
with respect to, contingently or otherwise (collectively, “incur”), any
Indebtedness (including, without limitation, Acquired Debt) or (y) issue any
Disqualified Capital Stock; provided, that the Company and the Restricted
Subsidiaries may incur Indebtedness (including, without limitation, Acquired
Debt) and issue shares of Disqualified Capital Stock if (a) no Default or Event
of Default shall have occurred and be continuing at the time of, or would occur
after giving effect on a pro forma basis to such incurrence or issuance, and (b)
the Interest Coverage Ratio for the Company’s most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Capital Stock is issued would have been not less than 2.0
to 1.0 determined on a pro forma basis (including a pro forma application of the
net proceeds therefrom), as set forth in the definition of Interest Coverage
Ratio, as if the additional Indebtedness had been incurred, or the Disqualified
Capital Stock had been issued, as the case may be, at the beginning of such
four-quarter period.

 

(b)                                 Notwithstanding the foregoing, the foregoing
limitations shall not prohibit the incurrence of:

 

(i)                                     Indebtedness under one or more Senior
Credit Facilities; provided, that the aggregate principal amount of Indebtedness
so incurred on any date, together with all other Indebtedness incurred pursuant
to this clause (i) and outstanding on such date, shall not exceed $2,500,000,
less the aggregate amount of commitment reductions contemplated by clause
(iii)(C) of Section 4.13(a);

 

(ii)                                  FF&E Financing and Indebtedness
represented by Capital Lease Obligations, mortgage financings or other Purchase
Money Obligations; provided, that (1) to the extent that Indebtedness incurred
under the Notes is utilized for the purchase or lease of FF&E financed with such
FF&E Financing or such other Indebtedness, the principal amount of such
Indebtedness incurred under the Notes shall not exceed 20% of the cost to
purchase or lease such FF&E, and (2) the aggregate principal amount of such
Indebtedness (including any Acquired Debt referred to in the parenthetical in
Section 4.7(b)(i) above and including any Refinancing Indebtedness and any other
Indebtedness incurred to repay, redeem, discharge, retire, defease, refund,
refinance or replace any Indebtedness pursuant to this clause (ii)) outstanding
at any time (excluding any Gaming FF&E Financing incurred pursuant to this
clause (ii)) does not exceed $7,500,000;

 

(iii)                               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, and similar bonds or obligations,

 

56

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all incurred in the ordinary course of business (including, without limitation,
to maintain any license or permits) in accordance with customary industry
practices;

 

(iv)                              Hedging Obligations incurred to fix or hedge
interest rate risk with respect to any fixed or variable rate Indebtedness
otherwise permitted by this Indenture; provided, that the notional principal
amount of each such Hedging Obligation does not exceed the principal amount of
the Indebtedness to which such Hedging Obligation relates;

 

(v)                                 Indebtedness of any Issuer, any Subsidiary
Guarantor or any Restricted Subsidiary owed to and held by a Subsidiary
Guarantor or an Issuer, as the case may be, that is unsecured and subordinated
in right of payment to the Notes and the Subsidiary Guaranties, as the case may
be; provided, that any subsequent issuance or transfer of any Capital Stock that
results in any such Subsidiary Guarantor or Restricted Subsidiary, as the case
may be, ceasing to be a Subsidiary Guarantor or a Restricted Subsidiary, or any
transfer of such Indebtedness (other than to an Issuer or a Subsidiary
Guarantor) shall be deemed, in each case, to constitute the incurrence of such
Indebtedness by such Issuer, such Subsidiary Guarantor or such Restricted
Subsidiary, as the case may be;

 

(vi)                              Indebtedness outstanding on the Issue Date,
including the Notes outstanding on the Issue Date;

 

(vii)                           Indebtedness arising from the honoring by a bank
or other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business;

 

(viii)                        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;

 

(ix)                                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 of
the Company, any of the Subsidiary Guarantors or any of the Restricted
Subsidiaries; 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 Subsidiary Guarantor or Restricted Subsidiary
in connection with such disposition;

 

(x)                                   any Subsidiary Guaranty of the Notes;

 

(xi)                                Indebtedness issued in exchange for, or the
proceeds of which are substantially contemporaneously used to extend, repay,
redeem, discharge, refinance, renew, replace, or refund (collectively,
“Refinance”), Indebtedness incurred pursuant to the Interest Coverage Ratio test
set forth in the immediately preceding paragraph, Section 4.7(b)(vi) above, this
clause (xi) or Section 4.7(b)(xiii) below (the

 

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“Refinancing Indebtedness”); provided, that (a) the principal amount of such
Refinancing Indebtedness does not exceed the principal amount of Indebtedness so
Refinanced (plus any required premiums and out-of-pocket expenses reasonably
incurred in connection therewith), (b) the Refinancing Indebtedness has a final
scheduled maturity that equals or exceeds the final stated maturity, and a
Weighted Average Life to Maturity that is equal to or greater than the Weighted
Average Life to Maturity, of the Indebtedness being Refinanced and (c) the
Refinancing Indebtedness ranks, in right of payment, no more favorable to the
Notes or applicable Subsidiary Guaranty, as the case may be, than the
Indebtedness being Refinanced;

 

(xii)                             guarantees by Restricted Subsidiaries of
Indebtedness of any Restricted Subsidiary or the Company or guarantees by the
Company of Indebtedness of any Restricted Subsidiaries if the Indebtedness so
guaranteed is permitted under another provision of this Section 4.7 and so long
as such guarantee otherwise complies with this Indenture;

 

(xiii)                          Indebtedness of the Company or any Restricted
Subsidiary to the extent the net proceeds thereof are substantially
contemporaneously (A) used to redeem the Notes in full or (B) deposited to
defease or discharge the Notes, in each case in accordance with the terms of
this Indenture; and

 

(xiv)                         Indebtedness not otherwise permitted by clauses
(i) through (xiii) of this Section 4.7(b) in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding pursuant to this clause
(xiv), including all Refinancing Indebtedness incurred to repay, redeem,
discharge, retire, defease, refund, refinance or replace any Indebtedness
incurred pursuant to this clause (xiv), not to exceed $2,500,000.

 

(c)                                  Upon each incurrence of Indebtedness, if
such Indebtedness could have been incurred under more than one provision of this
Section 4.7, (i) the Company may designate pursuant to which provision of this
Section 4.7 such Indebtedness is being incurred, (ii) the Company may subdivide
an amount of Indebtedness and designate more than one provision pursuant to
which such amount of Indebtedness is being incurred and 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 incurrences under the Notes, the Subsidiary Guaranties and
this Indenture shall be deemed to have been incurred pursuant to Section
4.7(b)(vi) above.

 

Section 4.8                                                             
LIMITATION ON LIENS

 

The Issuers shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume or suffer to exist any Lien on any
asset (including, without limitation, all real, tangible or intangible property)
of the Company or any Restricted Subsidiary, whether now owned or hereafter
acquired, or on any income or profits therefrom, or assign or convey any right
to receive income therefrom, except

 

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Permitted Liens, unless the Notes are secured equally and ratably simultaneously
with or prior to the creation, incurrence or assumption of such Lien.

 

Section 4.9                                                             
LIMITATION ON RESTRICTED PAYMENTS

 

(a)                                  The Issuers shall not, and shall not permit
any of the Restricted Subsidiaries to, directly or indirectly make a Restricted
Payment unless, at the time of such Restricted Payment:

 

(i)                                     no Default or Event of Default has
occurred and is continuing or would occur as a consequence thereof, and

 

(ii)                                  immediately after giving effect to such
Restricted Payment on a pro forma basis, the Company could incur at least $1.00
of additional Indebtedness under the Interest Coverage Ratio test set forth in
Section 4.7(a), and

 

(iii)                               such Restricted Payment (the value of any
such payment, if other than cash, being determined in good faith by the Managers
of the Company and evidenced by a resolution set forth in an Officers’
Certificate delivered to the Trustee), together with the aggregate of all other
Restricted Payments made after the Issue Date (including Restricted Payments
permitted by clauses (i) and (viii) of Section 4.9(b) hereof and excluding
Restricted Payments permitted by the other clauses therein), is less than the
sum of:

 

(1)                                  50% of the Consolidated Net Income of the
Company for the period (taken as one accounting period) from the beginning of
the first full fiscal quarter, immediately following the Opening to the end of
the Company’s most recently ended fiscal month or quarter, as applicable for
which internal financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a deficit, 100%
of such deficit), plus

 

(2)                                  100% of the aggregate net cash proceeds (or
of the net cash proceeds received upon the conversion of non-cash proceeds into
cash) received by the Company from (x) the issuance or sale, other than to a
Subsidiary, of Equity Interests of the Company (other than Disqualified Capital
Stock) and (y) any equity contribution from a holder of the Company’s Capital
Stock (other than a Subsidiary), in each case, after the Issue Date and on or
prior to the time of such Restricted Payment, plus

 

(3)                                  (x) 100% of the aggregate net cash proceeds
(or of the net cash proceeds received upon the conversion of non-cash proceeds
into cash) received by the Company from the issuance or sale, other than to a
Subsidiary, of any convertible or exchangeable debt security of the Company that
has been converted or exchanged into Equity Interests of the Company (other than
Disqualified Capital Stock) pursuant to the terms thereof after the Issue Date
and on or prior to the time of such Restricted Payment (including any additional
net cash proceeds received by the Company upon such conversion or exchange), or
(y) the amount by which Indebtedness of the Company or the Restricted
Subsidiaries is reduced on the Company’s balance sheet upon the conversion

 

59

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or exchange (other than by a Subsidiary) subsequent to the Issue Date of any
Indebtedness of the Company or the Restricted Subsidiaries for Equity Interests
of the Company (other than Disqualified Capital Stock) (less the amount of any
cash, or the fair market value of any other property, distributed by the Issuers
or the Restricted Subsidiaries upon such conversion or exchange), plus

 

(4)                                  the aggregate Return from Unrestricted
Subsidiaries after the Issue Date and on or prior to the time of such Restricted
Payment, and

 

(5)                                  the Opening shall have occurred.

 

(b)                                 The foregoing provisions shall not prohibit:

 

(i)                                     the payment of any dividend within 60
days after the date of declaration thereof, if at said date of declaration and
said date of payment, such payment would not have been prohibited by the
provisions of this Indenture;

 

(ii)                                  the redemption, purchase, retirement or
other acquisition of any Equity Interests of the Company or Indebtedness of the
Company or any Restricted Subsidiary in exchange for, or out of the proceeds of,
the substantially concurrent sale (other than to a Subsidiary) of, other Equity
Interests of the Company (other than Disqualified Capital Stock);

 

(iii)                               with respect to each tax year or portion
thereof that the Company qualifies as a Flow Through Entity and so long as
Section 4.9(a)(i) 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 (A) 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, (B) 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 (C) 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 Cash Distribution Amount for Taxes;

 

(iv)                              the redemption, repurchase or payoff of any
Indebtedness of the Company or a Restricted Subsidiary with proceeds of any
Refinancing Indebtedness permitted to be incurred pursuant to clause (viii) of
Section 4.7(b);

 

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(v)                                 distributions or payments to PGL in respect
of Corporate Overhead Allocations not to exceed $500,000 in the aggregate in any
twelve month period on and after the Issue Date (provided, however, that any
amounts not used in any such twelve month period may be carried forward to the
next succeeding twelve month period until used);

 

(vi)                              the redemption and repurchase of any Equity
Interests or Indebtedness of PGP, PGL, the Company or any of the Restricted
Subsidiaries to the extent required by any Gaming Authority;

 

(vii)                           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;

 

(viii)                        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; and

 

(ix)                                so long as Section 4.9(a)(i) above is
satisfied, Restricted Payments not otherwise permitted by this Section 4.9 in an
aggregate amount pursuant to this clause (ix) not to exceed $1,000,000.

 

Promptly following the end of each fiscal quarter during which any Restricted
Payment was made pursuant to clause (iii) of Section 4.9(a), the Company shall
deliver to the Trustee an Officers’ Certificate stating that each such
Restricted Payment was permitted and setting forth the basis upon which the
calculations required by this Section 4.9 were computed, which calculations may
be based upon the Company’s latest available internal financial statements. 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.

 

For purposes of determining compliance with this Section 4.9, if a Restricted
Payment meets the criteria of more than one of the exceptions described in
clauses (i) through (ix) of Section 4.9(b) above or is entitled to be made
according to Section 4.9(a), the Company may, in its sole discretion, classify
the Restricted Payment in any manner that complies with this Section 4.9.

 

Section 4.10                                                        LIMITATION
ON RESTRICTIONS ON SUBSIDIARY DIVIDENDS

 

The Issuers shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to:

 

(a)                                  pay dividends or make any other
distributions to the Company or any of the Restricted Subsidiaries (i) on such
Restricted Subsidiary’s Capital Stock or (ii)

 

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with respect to any other interest or participation in, or measured by, such
Restricted Subsidiary’s profits, or

 

(b)                                 pay any Indebtedness owed to the Company or
any of the Restricted Subsidiaries, or

 

(c)                                  make loans or advances to the Company or
any of the Restricted Subsidiaries, or

 

(d)                                 transfer any of its assets to the Company or
any of the Restricted Subsidiaries,

 

except, with respect to clauses (a) through (d) above, for such encumbrances or
restrictions existing under or by reason of:

 

(1)                                  a Senior Credit Facility containing
dividend or other payment restrictions that are not more restrictive in any
material respect than those contained in this Indenture on the Issue Date;

 

(2)                                  this Indenture, the Security Documents and
the Notes;

 

(3)                                  applicable law or any applicable rule or
order of any Governmental Authority;

 

(4)                                  Acquired Debt; provided, that such
encumbrances and restrictions are not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property or
assets of the Person, so acquired;

 

(5)                                  customary non-assignment and net worth
provisions of any contract, lease or license entered into in the ordinary course
of business;

 

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

 

(7)                                  the agreements governing Refinancing
Indebtedness; provided, that such restrictions contained in any agreement
governing such Refinancing Indebtedness are no more restrictive in any material
respect than those contained in any agreements governing the Indebtedness being
refinanced;

 

(8)                                  the provisions of any Indebtedness or other
agreements existing on the Issue Date, as such agreements are in effect on the
Issue Date, without giving effect to any amendment or supplement thereto or
modification thereof, in each case, to the extent not more restrictive in any
material respect than such provisions as in effect on the Issue Date;

 

(9)                                  any restrictions with respect to a
Restricted Subsidiary imposed pursuant to a binding agreement that has been
entered into for the sale or disposition of all or substantially all of the
Equity Interests or assets of such Restricted

 

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Subsidiary; provided, that such restrictions only apply to the Equity Interests
or assets of such Restricted Subsidiary being sold; and

 

(10)                            customary restrictions imposed on the transfer
of copyrighted, trademarked or patented materials.

 

Section 4.11                                                        ADDITIONAL
COLLATERAL

 

The Issuers shall, and shall cause each of the Subsidiary Guarantors to, grant
to the Trustee a first priority security interest in all Collateral, whether
owned on the Issue Date or thereafter acquired, and to execute and deliver all
documents and to take all action reasonably necessary to perfect and protect
such a security interest in favor of the Trustee, in each case, subject to the
terms of the Intercreditor Agreement.

 

Section 4.12                                                        LIMITATION
ON TRANSACTIONS WITH AFFILIATES

 

(a)                                  The Issuers shall not, and shall not permit
any of the Restricted Subsidiaries to, directly or indirectly, sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into any contract, agreement,
understanding, loan, advance or guaranty with, or for the benefit of, any
Affiliate of the Issuers or any of the Restricted Subsidiaries (each of the
foregoing, an “Affiliate Transaction”), except for:

 

(i)                                     Affiliate Transactions that, together
with all related Affiliate Transactions, have an aggregate value of not more
than $1,000,000; provided, that such transactions are conducted in good faith
and on terms that are no less favorable to such Issuer or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable
transaction at such time by such Issuer or such Restricted Subsidiary on an
arm’s length basis from a Person that is not an Affiliate of such Issuer or such
Restricted Subsidiary;

 

(ii)                                  Affiliate Transactions that, together with
all related Affiliate Transactions, have an aggregate value of not more than
$5,000,000; provided, that (a) a majority of the disinterested Managers of the
Company or, if none, a disinterested committee appointed by the Managers of the
Company for such purpose, determine that such transactions are conducted in good
faith and on terms that are no less favorable to such Issuer or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable
transaction at such time by such Issuer or such Restricted Subsidiary on an
arm’s length basis from a Person that is not an Affiliate of such Issuer or such
Restricted Subsidiary and (b) prior to entering into such transaction the
Company shall have delivered to the Trustee an Officers’ Certificate certifying
to such effect; or

 

(iii)                               Affiliate Transactions for which the Company
delivers to the Trustee an opinion issued by an accounting, appraisal or
investment banking firm of national standing (other than Jefferies & Company,
Inc. or any of its Affiliates) as to the fairness of such transaction to such
Issuer or such Restricted Subsidiary from a financial point of view.

 

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(b)                                 Notwithstanding the foregoing, the following
shall be deemed not to be Affiliate Transactions:

 

(i)                                     transactions between or among the
Issuers and/or any or all of the Restricted Subsidiaries;

 

(ii)                                  Restricted Payments permitted by the
provisions of this Indenture described above under Section 4.9;

 

(iii)                               Permitted Investments;

 

(iv)                              any agreement or arrangement as in effect on
the Issue Date to which the Issuers and/or one or more Restricted Subsidiaries
is a party and the transactions contemplated thereby (without giving effect to
any amendment or supplement thereto or modification thereof, except for any such
amendment, supplement, modification or replacement agreement that is not more
disadvantageous to the Holders in any material respect than the original
agreement thereof as in effect on the Issue Date);

 

(v)                                 transactions with a joint venture engaged in
a Related Business; provided, that all the outstanding ownership interests of
such joint venture are controlled only by the Company or the Restricted
Subsidiaries and Persons who are not Affiliates of the Company;

 

(vi)                              payments under any tax sharing agreement or
other agreement among PGP and other members of the Affiliated group of Persons
of which either is the common parent; and

 

(vii)                           sales, transfers or other dispositions of
inventory or other assets or property in the ordinary course of business to any
Affiliate of the Company on terms that are no less favorable to the Company than
those that could be obtained at the time of such sale, transfer or other
disposition on arm’s length dealings with a Person who is not an Affiliate,
provided that such sale, transfer or other disposition complies with the other
provisions of this Indenture, including without limitation Section 4.13.

 

Section 4.13                                                        LIMITATION
ON ASSET SALES

 

(a)                                  The Issuers shall not, and shall not permit
any Restricted Subsidiary to, make any Asset Sale unless:

 

(i)                                     such Issuer or such Restricted
Subsidiary receives consideration at the time of such Asset Sale not less than
the fair market value of the assets subject to such Asset Sale (as determined by
the Company’s Managers in good faith);

 

(ii)                                  at least 75% of the consideration for such
Asset Sale is in the form of either (a) cash or Cash Equivalents or liabilities
of the Company or any Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Notes or any Subsidiary Guaranty) that are
assumed by the transferee of such assets

 

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(provided, that following such Asset Sale, there is no further recourse to the
Company or the Restricted Subsidiaries or the Company and the Restricted
Subsidiaries are fully indemnified with respect to such liabilities; provided,
further, that the 75% limitation set forth in this clause (ii) of this Section
4.13(a) shall not apply to any proposed Asset Sale for which an independent
certified accounting firm has certified 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 this clause
(ii) of this paragraph), or (b) assets of the type described in clause (iii)(A)
of this Section 4.13(a) below; and

 

(iii)                               the Net Proceeds of such Asset Sale are
(A) promptly after such Asset Sale applied to repay Indebtedness under Purchase
Money Obligations incurred in connection with the assets so sold, (B) promptly
after such Asset Sale applied to repay Indebtedness under the Senior Credit
Facility and permanently reduce the commitment thereunder in the amount of the
Indebtedness so repaid or (C) to the extent not used as provided in clauses (A)
or (B) of this Section 4.13(a)(iii) or any combination thereof, applied to make
an offer to purchase Notes as described below (an “Excess Proceeds Offer”);
provided, that the Company shall not be required to make an Excess Proceeds
Offer until the amount of Excess Proceeds is greater than $10,000,000.

 

(b)                                 All Net Proceeds from an Event of Loss shall
be used as provided in the immediately preceding Section 4.13(a)(iii).

 

(c)                                  Pending the final application of any Net
Proceeds, the Company may temporarily reduce Indebtedness under the Senior
Credit Facility or temporarily invest such Net Proceeds in Cash Equivalents.

 

(d)                                 Net Proceeds not applied as set forth in any
of the preceding subclause (A) or (B) of Section 4.13(a)(iii) above constitute
“Excess Proceeds.” If the Company elects, or becomes obligated to make an Excess
Proceeds Offer, the Issuers shall offer to purchase Notes having an aggregate
principal amount equal to the Excess Proceeds (the “Purchase Amount”), at a
purchase price equal to 100% of the aggregate principal amount thereof, plus
accrued and unpaid Interest if any, to the purchase date. The Issuers must
commence such Excess Proceeds Offer not later than 30 days after the expiration
of the 360 day period following the Asset Sale that produced such Excess
Proceeds. If the aggregate purchase price for the Notes tendered pursuant to the
Excess Proceeds Offer is less than the Excess Proceeds, the Company and the
Restricted Subsidiaries may use the portion of the Excess Proceeds remaining
after payment of such purchase price for general corporate purposes.

 

Each Excess Proceeds Offer shall remain open for a period of 20 Business Days
and no longer, unless a longer period is required by law (the “Excess Proceeds
Offer Period”). Promptly after the termination of the Excess Proceeds Offer
Period, the Issuers shall purchase and mail or deliver payment for the Purchase
Amount for the Notes or portions thereof tendered, pro rata or by such other
method as may be required by law,

 

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or, if less than the Purchase Amount has been tendered, all Notes tendered
pursuant to the Excess Proceeds Offer. The principal amount of Notes to be
purchased pursuant to an Excess Proceeds Offer may be reduced by the principal
amount of Notes 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.

 

If the Purchase Amount for the Excess Proceeds Offer hereunder is made on or
after an Interest Record Date on which the Holders of record have a right to
receive the corresponding Interest due on or before the associated Interest
Payment Date, any accrued and unpaid Interest due on such Interest Payment Date
shall be paid to the Person in whose name a Note is registered at the close of
business on such Interest Record Date.

 

Each Excess Proceeds Offer shall be conducted in compliance with applicable
regulations under the Federal securities laws, including Exchange Act Rule
14e-1. To the extent that the provisions of any securities laws or regulations
conflict with this Section 4.13, the Issuers shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached their
obligations under this Section 4.13 by virtue thereof.

 

The Issuers shall not, and shall not permit any of the Restricted Subsidiaries
to, create or suffer to exist or become effective any restriction that would
impair the ability of the Issuers to make an Excess Proceeds Offer upon an Asset
Sale or, if such Excess Proceeds Offer is made, to pay for the Notes tendered
for purchase.

 

Section 4.14                                                        RESTRICTION
ON SALE AND ISSUANCE OF SUBSIDIARY STOCK

 

The Issuers shall not, and shall not permit any Restricted Subsidiary to, issue
or sell any Equity Interests (other than directors’ qualifying shares) of any
Restricted Subsidiary to any Person other than the Company or a Wholly Owned
Subsidiary of the Company; provided, that the Company and the Restricted
Subsidiaries may sell all (but not less than all) of the Capital Stock of a
Restricted Subsidiary owned by the Company and the Restricted Subsidiaries if
the Net Proceeds from such Asset Sale are used in accordance with the terms of
Section 4.13.

 

Section 4.15                                                        REPURCHASE
UPON A CHANGE OF CONTROL

 

(a)                                  Upon the occurrence of a Change of Control,
the Issuers shall offer to repurchase all of the Notes then outstanding (the
“Change of Control Offer”) at a purchase price equal to 101% of the principal
amount thereof, plus accrued and unpaid Interest, to the date of repurchase (the
“Change of Control Payment”). Within 30 days following any Change of Control,
the Issuers must mail or cause to be mailed a notice to each Holder stating,
among other things:

 

(i)                                     the purchase price and the purchase
date, which shall be no earlier than 30 days nor later than 45 days from the
date such notice is mailed (the “Change of Control Payment Date”);

 

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(ii)                                  that any Holder electing to have Notes
purchased pursuant to a Change of Control Offer shall be required to surrender
the Notes, with the form entitled “Option of Holder to Elect Purchase” on the
reverse of the Notes completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the third Business Day preceding
the Change of Control Payment Date; and

 

(iii)                               that the Holder shall be entitled to
withdraw such election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have such Notes
purchased.

 

(b)                                 The Issuers shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes in connection with a
Change of Control.  To the extent that the provisions of any securities laws or
regulations conflict with this Section 4.15, the Issuers shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached their obligations under this Section 4.15 by virtue thereof.

 

(c)                                  On the Change of Control Payment Date, the
Issuers shall, to the extent lawful, (i) accept for payment the Notes or
portions thereof tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered and not withdrawn, and
(iii) deliver or cause to be delivered to the Trustee the Notes so accepted,
together with an Officers’ Certificate stating that the Notes or portions
thereof tendered to the Issuers are accepted for payment. The Paying Agent shall
promptly mail to each Holder of Notes so accepted payment in an amount equal to
the purchase price for such Notes, and the Trustee shall authenticate and mail
(or cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, if any;
provided, that each such new Note shall be in the principal amount of $1,000 or
an integral multiple thereof. The Issuers shall announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.

 

(d)                                 The Issuers shall 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 Issuers, and purchases all Notes validly tendered and
not withdrawn under such Change of Control Offer.

 

(e)                                  If the Change of Control Payment 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 on or before the
associated Interest Payment Date, any accrued and unpaid Interest 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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Section 4.16                                                        SUBSIDIARY
GUARANTORS

 

All of the Issuers’ future Restricted Subsidiaries (other than Foreign
Subsidiaries) jointly and severally shall guarantee all principal, premium, if
any, and Interest on the Notes on a senior secured basis.

 

Section 4.17                                                        LIMITATION
ON STATUS AS INVESTMENT COMPANY

 

The Issuers, the Subsidiary 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 Subsidiary 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 Subsidiary
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 good faith 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 this Indenture or the Security Documents.

 

The Issuers and Subsidiary 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
Subsidiary 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 Subsidiaries; provided, however, that the Issuers
shall not be required to preserve any such right, license or franchise, or the

 

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corporate, partnership or other existence of any of the Restricted Subsidiaries,
if the Company’s Managers shall determine in good faith 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
Subsidiary Guarantors to satisfy their obligations under the Notes, the
Subsidiary Guaranties and this Indenture.

 

Section 4.20                                                        RESTRICTIONS
ON ACTIVITIES OF DJW CORP.

 

DJW Corp. shall not hold any assets, become liable for any obligations or engage
in any business activities; provided, that DJW Corp. may be a co-obligor of the
Notes (including any Additional Notes incurred pursuant to Section 4.7) pursuant
to the terms of this Indenture, may be a co-obligor of a Senior Credit Facility
and may engage in any activities directly related or necessary in connection
therewith.

 

Section 4.21                                                        ENTITY
CLASSIFICATION

 

The Company is classified as a Flow Through Entity and shall 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 Article V hereof.

 

Section 4.22                                                        RULE 144A
INFORMATION

 

The Issuers shall, and the Subsidiary Guarantors shall, furnish to the Holders
or beneficial holders of Notes, upon their written 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.

 

Section 4.23                                                        LIMITATION
ON USE OF PROCEEDS

 

The Company shall, on the Issue Date, deposit approximately $34,200,000 into the
Construction Disbursement Account and approximately $3,300,000 into the Interest
Reserve Account.  The funds in the Construction Disbursement Account and the
Interest Reserve Account may be invested only in Cash Equivalents.  Funds in the
Construction Disbursement Account shall be used solely to finance the
acquisition of real property to be used in connection with, or to complete of
the design, development, construction and equipping of, the Diamond Jo Worth
Casino.  Funds in the Interest Reserve Account shall be used only to pay the
first two Interest payments on the Notes.  All funds in the Construction
Disbursement Account and the Interest Reserve Account shall be disbursed only in
accordance with the Cash Collateral and Disbursement Agreement.

 

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Section 4.24                                                        GAMING
LICENSES AND OTHER PERMITS

 

The Issuers and the Subsidiary Guarantors shall, and 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 and all other
Permits from or with any Gaming Authority or other governmental authority that
are necessary for the design, development, construction, equipping and operation
of the Diamond Jo Worth Casino 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 is
required to suspend or revoke any Gaming License or other Permit or close or
suspend any operation of any part of the Diamond Jo Worth Casino 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 Diamond Jo Worth
Casino or such other operations, as the case may be, shall be opened and fully
operating as promptly as practicable.

 

ARTICLE V
SUCCESSORS

 

Section 5.1                                                              MERGER,
CONSOLIDATION OR SALE OF ASSETS

 

No Issuer may consolidate or merge with or into (regardless of whether such
Issuer is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets
(determined on a consolidated basis for such Issuer and its Restricted
Subsidiaries) in one or more related transactions to, any other Person, unless:

 

(a)                                  either (A) such Issuer is the surviving
Person or (B) the Person formed by or surviving any such consolidation or merger
(if other than such Issuer) or to which such sale, assignment, transfer, lease,
conveyance or other disposition has been made is either (x) a corporation
organized and existing under the laws of the United States of America, any state
thereof or the District of Columbia or (y) if at least one Issuer following any
such consolidation, merger, sale, assignment, transfer, lease, conveyance or
other disposition is a corporation organized and existing under the laws of the
United States of America, any state thereof or the District of Columbia, a
limited liability company formed and existing under the laws of the United
States of America, any state thereof or the District of Columbia;

 

(b)                                 the Person formed by or surviving any such
consolidation or merger (if other than such Issuer) or the Person to which such
sale, assignment, transfer, lease, conveyance or other disposition has been made
assumes all the Obligations of such Issuer under the Notes, this Indenture, the
Security Documents, the Construction Documents and the Intercreditor Agreement,
pursuant to a supplemental indenture to this Indenture and joinders, as
applicable, to the Security Documents and the Intercreditor Agreement, each in a
form reasonably satisfactory to the Trustee,

 

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(c)                                  immediately after giving effect to such
transaction on a pro forma basis, no Default or Event of Default exists;

 

(d)                                 such transaction would not result in the
loss or suspension or material impairment of any Gaming License unless a
comparable replacement Gaming License is effective prior to or simultaneously
with such loss, suspension or material impairment; and

 

(e)                                  such Issuer, or any Person formed by or
surviving any such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition has been made, shall be
permitted, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the applicable
four-quarter period, to incur at least $1.00 of additional Indebtedness pursuant
to the applicable Interest Coverage Ratio test set forth in Section 4.7(a).

 

Section 5.2                                                             
SUCCESSOR CORPORATION SUBSTITUTED

 

In the event of any transaction (other than a lease or a transfer of less than
all of the Issuers’ assets) described in and complying with the conditions
listed in Section 5.1 in which such Issuer is not the surviving Person, such
surviving Person or transferee shall succeed to, and be substituted for, and may
exercise every right and power of, such Issuer under, and such Issuer shall be
discharged from its Obligations under, this Indenture, the Notes and the
Security Documents, with the same effect as if such successor Person had been
named as such Issuer herein or therein.

 

ARTICLE VI
DEFAULTS AND REMEDIES

 

Section 6.1                                                              EVENTS
OF DEFAULT

 

(a)                                  Each of the following shall constitute an
“Event of Default”“ under this Indenture:

 

(i)                                     the Issuers default in the payment of
Interest on any Note when the same becomes due and payable and the Default
continues for a period of 30 days;

 

(ii)                                  the Issuers default in the payment of the
principal (or premium, if any) on any Note when the same becomes due and payable
at maturity, upon redemption, by acceleration or otherwise;

 

(iii)                               either of the Issuers defaults in the
performance of or breaches the provisions of Section 4.13, Section 4.15 or
Article V;

 

(iv)                              either of the Issuers or any Subsidiary
Guarantor fails to comply with any of its other agreements or covenants in, or
provisions of, the Notes or this Indenture and the Default continues for 60 days
after written notice thereof has been given to the Issuers by the Trustee or to
the Issuers and the Trustee by the Holders of at

 

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least 25% in aggregate principal amount of the then outstanding Notes, such
notice to state that it is a “Notice of Default”;

 

(v)                                 an event of default occurs under (after
giving effect to any waivers, amendments, applicable grace periods or any
extension of any maturity date) any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Issuers or any Restricted Subsidiary (or
the payment of which is guaranteed by the Issuers or any Restricted Subsidiary),
whether such Indebtedness or guaranty now exists or is created after the Issue
Date, if (a) either (1) such default results from the failure to pay principal
of or interest on such Indebtedness or (2) as a result of such event of default
the maturity of such Indebtedness has been accelerated, and (b) the principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness with respect to which such a payment event of default (after
the expiration of any applicable grace period or any extension of the maturity
date) has occurred, or the maturity of which has been so accelerated, exceeds
$5,000,000 in the aggregate;

 

(vi)                              a final non-appealable judgment or judgments
for the payment of money (other than to the extent of any judgment as to which a
reputable insurance company has accepted liability) is or are entered by a court
or courts of competent jurisdiction against either of the Issuers or any
Subsidiary and such judgment or judgments are not discharged, bonded or stayed
within 60 days after entry, provided that the aggregate of all such judgments
exceeds $5,000,000;

 

(vii)                           the cessation of substantially all gaming
operations of the Company and the Restricted Subsidiaries, taken as a whole, for
more than 90 days, except as a result of an Event of Loss;

 

(viii)                        any revocation, suspension, expiration (without
previous or concurrent renewal) or loss of any Gaming License of the Company or
any Restricted Subsidiary for more than 90 days;

 

(ix)                                any Subsidiary Guaranty of a Subsidiary
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 Subsidiary Guaranty and this Indenture) or any Subsidiary Guarantor which is
a Significant Subsidiary denies or disaffirms its Obligations under its
Subsidiary Guaranty or the Security Documents (in each case, other than by
reason of the termination of this Indenture or the release of any such
Subsidiary Guaranty in accordance with this Indenture);

 

(x)                                   (A) any event of default under a Security
Document (after giving effect to any applicable grace periods, applicable notice
periods, waivers or amendments) or (B) the failure of the Issuers or any
Restricted Subsidiary to comply with any material agreement or covenant in, or
material provision of, any of the Security Documents, or any breach in any
material respect of any material representation or warranty made by the Issuers
or any Restricted Subsidiary in any Security Document, and

 

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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;

 

(xi)                                any of the Security Documents ceases to be
in full force and effect or any of the Security Documents 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 Security Documents is declared
null and void, or any of the Issuers or any Subsidiary Guarantor denies that it
has any further liability under any Security Document 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 Security Document in accordance with
its terms or the release of any Subsidiary 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;

 

(xii)                             either of the Issuers or any Subsidiary
Guarantor pursuant to or within the meaning of any Bankruptcy Law:

 

(1)                                  commences a voluntary case,

 

(2)                                  consents to the entry of an order for
relief against it in an involuntary case,

 

(3)                                  consents to the appointment of a custodian
of it or for all or substantially all of its property,

 

(4)                                  makes a general assignment for the benefit
of its creditors, or

 

(5)                                  admits in writing its inability to pay
debts as the same become due; and

 

(xiii)                          a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:

 

(1)                                  is for relief against either of the Issuers
or any Subsidiary Guarantor in an involuntary case,

 

(2)                                  appoints a custodian of either of the
Issuers or any Subsidiary Guarantor or for all or substantially all of their
property, or

 

(3)                                  orders the liquidation of either of the
Issuers, or any Subsidiary Guarantor,

 

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and the order or decree remains unstayed and in effect for 60 days.

 

(b)                                 The Issuers are required, upon becoming
aware of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default and what action the Issuers are
taking or propose to take with respect thereto.

 

Section 6.2                                                             
ACCELERATION

 

Subject to the terms of the Intercreditor Agreement, if an Event of Default
(other than an Event of Default specified in clause (xii) or (xiii) of Section
6.1(a)) occurs and is continuing, the Trustee by written notice to the Issuers,
or the Holders of at least 25% in principal amount of the then outstanding Notes
by written notice to the Issuers and the Trustee, may declare the unpaid
principal of and any accrued Interest on all the Notes to be due and payable. 
Upon such declaration the principal, premium, if any, and Interest shall be due
and payable immediately.  If an Event of Default specified in clause (xii) or
(xiii) of Section 6.1(a) occurs, all outstanding Notes shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.  At any time after a declaration of
acceleration, but before a judgment or decree for payment of the money due has
been obtained by the Trustee, the Holders of a majority in aggregate principal
amount of the Notes outstanding, by written notice to the Issuers and the
Trustee, may rescind and annul such declaration and its consequences if (a) the
Issuers have paid or deposited with the Trustee a sum sufficient to pay (i) all
sums paid or advanced by the Trustee and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, (ii) all
overdue Interest (including any Interest accrued subsequent to an Event of
Default specified in clause (xii) or (xiii) of Section 6.1(a) on all Notes,
(iii) the principal of and premium, if any, on any Notes that have become due
otherwise than by such declaration or occurrence of acceleration and Interest
thereon at the rate borne by the Notes, and (iv) to the extent that payment of
such Interest is lawful, Interest upon overdue Interest at the rate borne by the
Notes; (b) all Events of Default, other than the non-payment of principal of and
Interest on the Notes that have become due solely by such declaration or
occurrence of acceleration, have been cured or waived; and (c) the rescission
would not conflict with any judgment, order or decree of any court of competent
jurisdiction.

 

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, 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.

 

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Section 6.4                                                              WAIVER
OF DEFAULTS

 

Subject to Section 6.7 hereof, Holders of a majority of the aggregate principal
amount of the then outstanding Notes by written notice to the Trustee may on
behalf of the Holders of all of the Notes (a) waive any existing or past Default
or Event of Default and its consequences under this Indenture (x) except a
continuing Default or Event of Default in the payment of the principal of,
premium, if any, or Interest on any Note or (y) a Default or 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 or
supermajority approval, which Default or Event of Default may be waived only
with the consent of each outstanding Note affected or such supermajority
approval, respectively, and/or (b) rescind an acceleration and its consequences
in accordance with the provisions of Section 6.2.  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
consequent thereon.

 

Section 6.5                                                              CONTROL
BY MAJORITY

 

Subject to all provisions of this Indenture and applicable law, the 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
the Trustee.  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 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

 

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(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 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)(i) or 6.1(a)(ii) 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 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 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

 

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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
Interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal and premium 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 applicable Issuers or Subsidiary Guarantors or to such other
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.

 

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.

 

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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 person would exercise or use under
the circumstances in the conduct of such person’s 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.

 

(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,

 

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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 and directed to and shall enter into the
Intercreditor Agreement, and any amendment, restatement, supplement, renewal,
replacement or other modification to the Intercreditor Agreement in connection
with entering into a Senior Credit Facility 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.

 

(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

 

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Default except (i) any Event of Default occurring pursuant to Sections
6.1(a)(i), 6.1(a)(ii) 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 unless written notice of any event which is in fact a
Default or Event of Default is received by the Trustee at the Corporate Trust
Office, and such notice references this Indenture and the Notes.  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, or Interest on any Note,
the Trustee may withhold the

 

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notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders.

 

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 by the Trustee to the Issuers and filed by the Trustee 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
shall 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.

 

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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 and under the Security
Documents.  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 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 and the Subsidiary Guarantors, jointly and severally, 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 and under the Security Documents, including the costs and expenses of
enforcing this Indenture and under the Security Documents 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 until such payment obligations have been paid in full.

 

When the Trustee incurs expenses or renders services after an Event of Default
specified in Sections 6.1(a)(xii) or 6.1(a)(xiii) 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.

 

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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;

 

(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 and
the Intercreditor Agreement.  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.

 

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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.

 

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 Subsidiary Guaranties 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 Subsidiary 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 Subsidiary Guaranties, 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 Subsidiary Guarantors shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Subsidiary Guaranties, which shall thereafter be deemed to be “outstanding” only
for the purposes of Section 8.5 hereof and the other Sections of this Indenture

 

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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 Subsidiary Guaranties
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
Subsidiary Guaranties), 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 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 Subsidiary Guarantors’ obligations in connection therewith.

 

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 Subsidiary 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, 4.18, 4.20, 4.21, 4.22, 4.23
and 4.24 and Article V hereof on and after the date the conditions set forth
below are satisfied (hereinafter, “Covenant Defeasance”), and the Notes and the
Subsidiary Guaranties 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 and the Subsidiary Guaranties, the Issuers and the
Subsidiary 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
and Subsidiary Guaranties 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(a)(iii) through 6.1(a)(xi) hereof shall
not constitute Events of Default to the extent such events occur thereafter and
(y) Sections 6.1(xii) and 6.1(xiii) 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.

 

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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, or cause to be
irrevocably deposited, with the Trustee, in trust, for the benefit of the
Holders, cash in United States legal tender, non-callable Government Securities,
or a combination thereof, in such amounts as shall be sufficient, in the opinion
of a nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and Interest on the outstanding Notes on the
Stated Maturity 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 confirming that:  (i) the Issuers have received
from, or there has been published by, the Internal Revenue Service a ruling or
(ii) since the Issue Date, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders shall not recognize income,
gain or loss for Federal income tax purposes as a result of such Legal
Defeasance and shall 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 shall not recognize income, gain or loss for Federal
income tax purposes as a result of such Covenant Defeasance and shall 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, 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);

 

(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 Subsidiary 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

 

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made by the Issuers with the intent of preferring the Holders over the other
creditors of the Issuers with the intent of defeating, hindering, delaying or
defrauding creditors of the Issuers or others;

 

(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 applicable conditions in clauses (a) through
(f) above, and an Opinion of Counsel, confirming the satisfaction of the
applicable conditions in clauses (a) (with respect to the validity and
perfection of the security interest) (b), (c) and (e) above.

 

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 Government Securities (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 or one of its subsidiaries 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 principal, premium, if any, and Interest, but
such money need not be segregated from other funds except to the extent required
by law.

 

The Issuers and the Subsidiary Guarantor, jointly and severally, shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the cash or Government Securities 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 Government Securities 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, or
Interest on any Note and remaining unclaimed for two years after such principal,
and premium, if

 

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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 shall 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 Government Securities 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 Subsidiary Guarantors’ obligations under this
Indenture, the Notes, the Subsidiary Guaranties and the Security Documents 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, and 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
Subsidiary Guarantors under this Indenture, the Notes, the Subsidiary Guaranties
and the Security Documents (except as described below) (whereupon the Trustee
shall release the Collateral from the Liens created by the Security Documents as
provided under Section 10.4(b)(3)) 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 Subsidiary 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 of Section 3.7 hereof 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, in trust for the benefit of
the Holders, cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, 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 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
Subsidiary Guarantors or any of the Restricted Subsidiaries are a party or by
which the Issuers, any of the Subsidiary Guarantors or any of the Restricted
Subsidiaries are bound; and

 

(2)                                  each of the Issuers and the Subsidiary
Guarantors has paid all other sums payable by it under this Indenture, the
Notes, the Subsidiary Guaranties, the Intercreditor Agreement and the Security
Documents, 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.

 

ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.1                                                              WITHOUT
CONSENT OF HOLDERS OF NOTES

 

Notwithstanding Section 9.2 hereof, the Issuers, the Subsidiary Guarantors and
the Trustee may amend or supplement this Indenture, the Notes, the Subsidiary
Guaranties, or, subject to the Intercreditor Agreement, the Security Documents,
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;

 

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(c)                                  to provide for the assumption of the
Issuers’ or the Subsidiary Guarantors’ obligations to the Holders in the case of
a merger or consolidation or sale of all or substantially all of its assets in
accordance with this Indenture;

 

(d)                                 to evidence the release of any Subsidiary
Guaranty permitted to be released under the terms of this Indenture and the
Security Documents or to evidence the addition of any new Subsidiary Guarantor;

 

(e)                                  to make any change that would provide any
additional rights or benefits to the Holders (including the addition of any
Subsidiary Guarantor) or that does not adversely affect the rights hereunder of
any Holder under this Indenture, the Notes, the Subsidiary Guaranties, the
Security Documents 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
Security Documents.

 

Upon the request of the Issuers accompanied by a resolution of the Managers of
each Issuer 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 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

 

(a)                                  Except as expressly stated otherwise in
this Section 9.2, and subject to Sections 6.4 and 6.7 hereof, the Issuers, the
Subsidiary Guarantors and the Trustee may amend, supplement or otherwise modify
this Indenture, the Notes, the Subsidiary Guaranties, or, subject to the
Intercreditor Agreement, the Security Documents, with the consent of the Holders
of a majority in aggregate principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, the Notes), and, subject to Sections
6.4 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

 

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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, the Subsidiary Guaranties, and, subject to the Intercreditor Agreement,
the Security Documents 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).

 

(b)                                 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
Section 9.2(c), Sections 4.13 and 4.15 hereof may be amended, waived or modified
in accordance with Section 9.2(a).

 

(c)                                  Without the consent of each Holder
affected, an amendment 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 or waiver;

 

(2)                                  reduce the principal of, or the premium
(including, without limitation, redemption premium but not including, except as
described in clause (3) below, any redemption premium relating to Sections 4.13
and 4.15) on, or change the fixed maturity of, any Note;

 

(3)                                  alter the price at which repurchases of the
Notes may be made pursuant to an Excess Proceeds Offer or Change of Control
Offer after the corresponding Asset Sale or Change of Control has occurred;

 

(4)                                  reduce the rate of or change the time for
payment of Interest, including default interest, on any Note (other than any
advance notice requirement with respect to any redemption of the Notes);

 

(5)                                  waive a Default or Event of Default in the
payment of principal of, or premium, if any, or Interest, on or redemption
payment with respect to, any Note (except a rescission of acceleration of the
Notes by the Holders of at least a majority in aggregate principal amount of the
Notes and a waiver of the payment default that resulted from such acceleration);

 

(6)                                  make any Note payable in money other than
that stated in the Notes;

 

(7)                                  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, payments of principal of or Interest on the Notes;

 

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(8)                                  waive a redemption payment with respect to
any Note (other than, except as described in Section 9.2(b)(3), provisions
relating to or payments required by Section 4.13 and Section 4.15;

 

(9)                                  adversely affect the contractual ranking of
the Notes or Subsidiary Guaranties; or

 

(10)                            make any changes in the foregoing amendment and
waiver provisions.

 

(d)                                 Notwithstanding the foregoing Sections
9.2(a), (b) and (c) and subject to the Intercreditor Agreement, no portion of
the Collateral may be released from the Lien of the Security Documents (except
in accordance with the provisions of this Indenture and the Security Documents),
and none of the Security Documents or the provisions of this Indenture relating
to the Collateral may be amended or supplemented, and the rights of any Holders
thereunder may not be waived or modified, without, in each case, the consent of
the Holders of at least 75% in aggregate principal amount of the then
outstanding Notes.

 

(e)                                  In connection with any amendment,
supplement 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 or waiver.

 

(f)                                    It shall not be necessary for the consent
of the Holders under Sections 9.2(a), (b), (c) or (d) to approve the particular
form of any proposed amendment or waiver, but it shall be sufficient if such
consent approves the substance thereof.

 

(g)                                 After an amendment, supplement or waiver
under this Section 9.2 becomes effective, the Trustee shall mail to the Holders
affected thereby a notice briefly describing the amendment, supplement or
waiver.  Any failure of the Trustee 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.

 

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

 

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such consent by its terms is not irrevocable and 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 by such Holders, 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
(10) of Section 9.2(c) 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 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, duties, liabilities or immunities of the Trustee.  Upon the
request of the Issuers accompanied by a resolution of the Managers of each of
Issuer 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

 

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supplemental Indenture.  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 the Managers of each Issuer 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

 

Section 10.1                                                        SECURITY
DOCUMENTS; 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
Security Documents and the Registration Rights Agreement, shall be secured as
provided in the Security Documents.

 

(b)                                 After the Issue Date, the Issuers shall, and
shall cause each of the Domestic Restricted Subsidiaries to, use commercially
reasonable efforts (which shall 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 Domestic Restricted Subsidiaries’
assets, including assets acquired after the Issue Date in accordance with the
Security Documents, but in any event excluding the Excluded Assets.

 

(c)                                  Notwithstanding any provision in this
Indenture or the Security Documents to the contrary, in the event that the
Issuers or any of the Domestic Restricted Subsidiaries grant a Lien on any of
the Issuers’ or any of the Domestic Restricted Subsidiaries’ assets in
connection with the Senior Credit Facility, the Issuers shall be required to,
and shall be required to cause the Domestic Restricted Subsidiaries to, secure
the Notes with a Lien on such assets (other than Excluded Assets) that is
subordinated to the obligations under the Senior Credit Facility 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 Domestic 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 Security Documents, to assure and confirm to the Trustee the
security interest in the Collateral contemplated hereby and by the Security
Documents, 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

 

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commercially reasonable efforts to obtain customary consents and waivers from
landlords of premises where any of the Collateral is located, and (2) taking all
commercially reasonable efforts to grant a perfected Lien on all real property
(other than real property constituting Excluded Assets) owned by the Issuers and
the Domestic 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 Security Documents shall
constitute a first priority Lien on all such real property, subject to Permitted
Liens.  The Issuers shall, and shall cause each of the Domestic Restricted
Subsidiaries to, take, upon request of the Trustee, any and all actions required
to cause the Security Documents to create and maintain, as security for the
Obligations under this Indenture, the Notes, the Security Documents 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 Permitted Liens), 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 Domestic Restricted Subsidiaries) has executed and
delivered, filed and recorded and/or shall execute and deliver, file and record,
all instruments and documents, and has done or shall do or cause to be done all
such acts and other things as are necessary to subject the Collateral to the
Lien of the Security Documents.  The Issuers (or the Domestic 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 Security
Documents and shall pay all filing, recording, mortgage or other taxes or fees
incidental thereto.

 

(f)                                    The security interests in the Collateral
created by the Security Documents 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 Security Documents 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 Security Documents and the
Intercreditor Agreement 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 Security Documents and the
Intercreditor Agreement.  Any successor Trustee shall act as Secured Party
and/or Trustee under the Security

 

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Documents and the Intercreditor Agreement 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 Security
Documents and this Indenture are executed, the Issuers (or the Restricted
Subsidiaries) (a) shall 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 Security Documents, free and clear of all Liens,
except for Permitted Liens, and shall forever warrant and defend the title to
the same against the claims of all Persons whatsoever, subject to the terms of
the Intercreditor Agreement; (b) shall 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 be required by the
Trustee to effectuate the terms of this Indenture or the Security Documents,
subject to the terms of the Intercreditor Agreement; and (c) shall 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 Security Documents, subject to the terms of the Intercreditor Agreement.

 

Section 10.3                                                        OPINIONS.

 

(a)                                  The Issuers shall, to the extent required
under the TIA, furnish to the Trustee (i) promptly after the recording or
filing, or re-recording or re-filing of the Security Documents and other
security filings, an Opinion of Counsel (who may be counsel for the Issuers)
stating that in the opinion of such counsel the Security Documents 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, to the extent required
under the TIA, 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 Security Documents, subject to the terms of the Intercreditor Agreement, and
reciting the details of such action 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.

 

(c)                                  All Opinions of Counsel required by this
Section 10.3, 12.4 or 12.5, may contain qualifications, assumptions, exceptions
and limitations as are customary or appropriate for similar opinions relating to
the nature of the Collateral.

 

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Section 10.4                                                        RELEASE OF
COLLATERAL.

 

(a)                                  Upon the full and final payment and
performance of all the Issuers’ and the Subsidiary Guarantors’ Obligations under
this Indenture, the Notes, the Subsidiary Guaranties and the Security Documents
will terminate, and all of the Liens on the Collateral created hereunder and
under the Security Documents shall be released.

 

(b)                                 In addition, the Secured Party shall release
from the Liens created by this Indenture and the Security Documents at the sole
cost and expense of the Issuers:

 

(1)                                  Collateral that is sold, transferred,
disbursed or otherwise disposed of in accordance with the provisions of this
Indenture and the Security Documents; provided, that the Secured Party shall not
release such Liens in the event that the transaction is subject to Article V
hereof;

 

(2)                                  Collateral that is released with the
consent of the Holders of not less than 75% in aggregate principal amount of the
outstanding Notes as provided under Section 9.2(d) hereof;

 

(3)                                  all Collateral upon defeasance of this
Indenture in accordance with the provisions of Article VIII hereof or discharge
of this Indenture in accordance with the provisions of Section 8.8 hereof;
provided that the funds deposited with the Trustee, in trust, for the benefit of
the Holders as required by such provisions shall not be released; and

 

(4)                                  Collateral of a Subsidiary Guarantor whose
Subsidiary Guaranty is released in accordance with this Indenture and the
Security Documents;

 

provided, that the Secured Party has received all documentation required by the
TIA in connection therewith.  Upon compliance with the above provisions, the
Trustee shall execute, deliver or acknowledge any necessary or proper
instruments of termination, satisfaction or release to evidence the release of
any Collateral permitted to be released pursuant to this Indenture or the
Security Documents.

 

(c)                                  The release of any Collateral from the
terms of the Security Documents shall not be deemed to impair the security under
this Indenture in contravention of the provisions hereof and of the Security
Documents if and to the extent the Collateral is released pursuant to the terms
of this Indenture and the Security Documents.

 

(d)                                 For the avoidance of doubt (i) any
Collateral owned by any Subsidiary that is not a Foreign Subsidiary 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
this Indenture and the Security Documents 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

 

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of this Indenture and the Security Documents 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).

 

Section 10.6                                                       
AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE SECURITY DOCUMENTS
AND THE INTERCREDITOR AGREEMENT.

 

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 Security Documents or the Intercreditor
Agreement and (b) collect and receive any and all amounts payable in respect of
the Obligations of the Issuers and the Subsidiary Guarantors hereunder and under
the Notes, the Security Documents and the Registration Rights Agreement. 
Subject to the terms of the Intercreditor Agreement, and to the extent permitted
by this Indenture or the Security Documents, 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 Security Documents 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 SECURITY DOCUMENTS
AND THE INTERCREDITOR AGREEMENT.

 

The Trustee is authorized to receive any funds for the benefit of the Holders
distributed under the Security Documents or the Intercreditor Agreement, and to
make further distributions of such funds to the Holders according to the
provisions of this Indenture and the Security Documents, subject to the terms of
the Intercreditor Agreement.

 

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Section 10.8                                                       
INTERCREDITOR AGREEMENT.

 

Notwithstanding anything herein or in any Security Document to the contrary, the
relative rights and remedies of the Trustee hereunder or under any Security
Documents and of the agents or any other Persons acting on behalf of and for the
benefit of the lender(s) under one or more Senior Credit Facilities shall be
subject to and governed by the terms of the Intercreditor Agreement at any time
the Intercreditor Agreement is in effect.  In the event of any inconsistency
between the terms hereof or of any Security Documents and the Intercreditor
Agreement, the Intercreditor Agreement shall control at any time the
Intercreditor Agreement is in effect.

 

ARTICLE XI
SUBSIDIARY GUARANTIES

 

Section 11.1                                                        SUBSIDIARY
GUARANTIES

 

On the Issue Date, there will be no Subsidary Guarantors.  With respect to any
Person that becomes a Subsidiary Guarantor after the Issue Date as required by
Section 4.16, such Subsidiary Guarantor agrees as set forth in this Article XI. 
By its execution hereof, each of the Subsidiary Guarantors acknowledges and
agrees that it receives substantial benefits from the Issuers and that such
party is providing its Subsidiary Guaranty for good and valuable consideration,
including, without limitation, such substantial benefits and services. 
Accordingly, subject to the provisions of this Article XI, each Subsidiary
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 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, or otherwise, and Interest on overdue
principal, premium, 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 Security Documents
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 under the Notes, this Indenture, the Security
Documents 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 Offer, or otherwise, subject, however, in the
case of clauses (i) and (ii) above, to the limitations set forth in Section 11.6
hereof (collectively, the “Subsidiary Guaranty Obligations”).

 

Subject to the provisions of this Article XI, each Subsidiary Guarantor hereby
agrees that its Subsidiary Guaranty hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes, this
Indenture, the Security Documents, 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

 

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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 Subsidiary Guarantor.  Each
Subsidiary 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 Subsidiary 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 Subsidiary
Guarantors, the Issuers, the Restricted Subsidiaries, any Benefited Party, any
creditor of the Subsidiary 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 Subsidiary 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 Subsidiary
Guarantors hereby covenant that, except as otherwise provided therein, the
Subsidiary Guaranties shall not be discharged except by payment in full of all
Subsidiary Guaranty 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 Subsidiary Guarantors, or any trustee or similar
official acting in relation to either the Issuers or the Subsidiary Guarantors,
any amount paid by the Issuers or the Subsidiary Guarantors to the Trustee or
such Holder, the Subsidiary Guaranties, to the extent theretofore discharged,
shall be reinstated in full force and effect.  Each of the Subsidiary Guarantors
agrees that it shall not be entitled to any right of subrogation in relation to
the Holders in respect of any Subsidiary Guaranty Obligations hereby until
payment in full of all such obligations guaranteed hereby.  Each Subsidiary
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 Subsidiary Guaranty Obligations, and (y) in
the event of any acceleration of such obligations as provided in Article VI
hereof, such Subsidiary Guaranty Obligations

 

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(whether or not due and payable) shall forthwith become due and payable by such
Subsidiary Guarantor for the purpose of the Subsidiary Guaranty.

 

Section 11.2                                                        EXECUTION
AND DELIVERY OF SUBSIDIARY GUARANTIES

 

To evidence the Subsidiary Guaranties set forth in Section 11.1 hereof, each of
the Subsidiary Guarantors agrees that a notation of the Subsidiary Guaranties
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 (with
respect to Subsidiary Guarantors as of the Issue Date) and, with respect to
Subsidiary Guarantors after the Issue Date, a Supplemental Indenture
substantially in the form of Exhibit E hereto executed in accordance with
Section 11.4 hereof, shall be executed on behalf of each of the Subsidiary
Guarantors by an Officer of each of the Subsidiary Guarantors.

 

Each of the Subsidiary Guarantors agree that the Subsidiary Guaranties set forth
in this Article XI 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
Subsidiary Guaranties.

 

If an Officer whose signature is on a Note or a notation of Subsidiary Guaranty
no longer holds that office at the time the Trustee authenticates the Note on
which the Subsidiary Guaranties are endorsed, the Subsidiary Guaranties shall be
valid nevertheless.

 

The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guaranties set forth
in this Indenture on behalf of the Subsidiary Guarantors.

 

Section 11.3                                                        SUBSIDIARY
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 Subsidiary Guarantor
with or into each other or with or into the Company; provided, however, that
such consolidation or merger shall otherwise comply with this Indenture.  Upon
any such consolidation or merger, the Subsidiary Guaranty of the Subsidiary
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 Subsidiary Guarantor is sold and its Subsidiary Guaranty is released in
compliance with the provisions of Section 11.5 hereof, no Subsidiary Guarantor
shall consolidate or merge with or into (whether or not such Subsidiary
Guarantor is the surviving Person) another Person unless, subject to the
provisions of the following paragraph and the other provisions of this Indenture
and the Security Documents, (i) the Person formed by, resulting from or
surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) (A) expressly assumes all the obligations of such Subsidiary
Guarantor pursuant to a supplemental indenture in form reasonably satisfactory
to the

 

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Trustee, pursuant to which such Person shall unconditionally guaranty, on a
senior secured basis, all of such Subsidiary Guarantor’s obligations under such
Subsidiary Guarantor’s Subsidiary Guaranty on the terms set forth in this
Indenture, (B) executes a secondary agreement and other Security Documents
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 set forth in the Security Documents, and
(C) delivers to the Trustee an Opinion of Counsel that such supplemental
indenture and such guaranty and Security Documents 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 Default shall have occurred or be continuing.  The
provisions of this Section 11.3(b) shall not apply to the merger of any
Subsidiary 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 Subsidiary
Guaranties 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
Subsidiary Guarantor, such successor corporation shall succeed to and be
substituted for such Subsidiary Guarantor with the same effect as if it had been
named herein as a Subsidiary Guarantor.  Such successor corporation thereupon
may cause to be signed any or all of the Subsidiary Guaranties 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 Subsidiary
Guaranties so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Subsidiary Guaranties theretofore and thereafter
issued in accordance with the terms of this Indenture as though all of such
Subsidiary Guaranties had been issued at the date of the execution hereof.

 

(c)                                  The Trustee, subject to the provisions of
Section 11.2 hereof, shall be entitled to receive an Officers’ Certificate as
conclusive evidence that any such consolidation or merger, and any such
assumption of Subsidiary Guaranty Obligations, comply with the provisions of
this Section 11.3.  Such Officers’ Certificate shall comply with the provisions
of Section 11.2 hereof.

 

Section 11.4                                                        SUBSIDIARY
GUARANTY BY FUTURE RESTRICTED SUBSIDIARIES

 

The Issuers shall cause each of the existing and future Restricted Subsidiaries
(other than Foreign Subsidiaries) to (i) execute and deliver to the Trustee a
supplemental indenture substantially in the form of Exhibit E hereto and a
guaranty substantially in the form included in Exhibit A hereto, pursuant to
which such Restricted Subsidiary shall unconditionally guaranty 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 Security Documents 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, guaranty and Collateral Documents have
been

 

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duly authorized, executed and delivered by such Restricted Subsidiary and that
each of such documents and this Indenture, guaranty 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 Subsidiary
Guarantor for all purposes of this Indenture.

 

Section 11.5                                                        RELEASE OF
SUBSIDIARY GUARANTORS

 

Notwithstanding Section 11.3 hereof, upon the sale or disposition (including by
merger or sale or transfer of all of the Equity Interests) of a Subsidiary
Guarantor (as an entirety) to a Person which is not and is not required to
become a Subsidiary Guarantor, the designation of a Domestic Restricted
Subsidiary as an Unrestricted Subsidiary or the liquidation, or dissolution of a
Subsidiary Guarantor, which transaction is otherwise in compliance with this
Indenture (including, without limitation, Sections 4.13 and 4.14), such
Subsidiary Guarantor shall be deemed released from its Obligations under its
Subsidiary Guaranty and the Security Documents; provided, however, that any such
termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor under all of its guarantees of, and under all of its
pledges of assets or other security interests which secure, any Indebtedness of
the Issuers 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 Indebtedness of the
Issuers or any Indebtedness of any of the Restricted Subsidiaries.

 

The Trustee, subject to the provisions of Section 12.4 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 11.3
hereof, any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guaranty shall remain liable for the full amount of principal of and
Interest on the Notes and for the other obligations of any Subsidiary Guarantor
under this Indenture as provided in this Article XI.

 

Notwithstanding the foregoing provisions of this Article XI, (i) any Subsidiary
Guarantor whose Subsidiary Guaranty would otherwise be released pursuant to the
provisions of this Section 11.5 may elect, at its sole discretion, by written
notice to the Trustee, to maintain such Subsidiary Guaranty in effect
notwithstanding the event or events that otherwise would cause the release of
such Subsidiary Guaranty (which election to maintain such Subsidiary Guaranty in
effect may be conditional or for a limited period of time), and (ii) any
subsidiary of the Issuers which is not a Subsidiary Guarantor may elect, at its
sole discretion, by written notice to the Trustee, to become a Subsidiary
Guarantor (which election may be conditional or for a limited period of time).

 

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Section 11.6                                                        LIMITATION
OF SUBSIDIARY GUARANTOR’S LIABILITY; CERTAIN BANKRUPTCY EVENTS

 

(a)                                  Each Subsidiary Guarantor, and by its
acceptance of Notes each Holder, hereby confirms that it is the intention of all
such parties that the Subsidiary Guaranty Obligation of such Subsidiary
Guarantor pursuant to its Subsidiary Guaranty 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 Subsidiary Guarantor hereby irrevocably agree that the Subsidiary Guaranty
Obligations of such Subsidiary Guarantor under this Article XI shall be limited
to the maximum amount as shall, after giving effect to all other contingent and
fixed liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the Subsidiary Guaranty Obligations of such other
Subsidiary Guarantor under this Article XI, result in the Subsidiary Guaranty
Obligations of such Subsidiary Guarantor under the Subsidiary Guaranty of such
Subsidiary Guarantor not constituting a fraudulent transfer or conveyance.

 

(b)                                 Each Subsidiary 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 Subsidiary 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 Subsidiary Guaranty 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.

 

Section 11.7                                                        APPLICATION
OF CERTAIN TERMS AND PROVISIONS TO THE SUBSIDIARY GUARANTORS

 

(a)                                  For purposes of any provision of this
Indenture which provides for the delivery by any Subsidiary 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 Subsidiary Guarantor as if
references therein to the Issuers were references to such Subsidiary Guarantor.

 

(b)                                 Any request, direction, order or demand
which by any provision of this Indenture is to be made by any Subsidiary
Guarantor, shall be sufficient if evidenced as described in Section 12.2 hereof
as if references therein to the Issuers were references to such Subsidiary
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 Subsidiary Guarantor may be given or served as
described in Section 12.2 hereof as if references therein to the Issuers were
references to such Subsidiary Guarantor.

 

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(d)                                 Upon any demand, request or application by
any Subsidiary Guarantor to the Trustee to take any action under this Indenture,
such Subsidiary Guarantor shall furnish to the Trustee such certificates and
opinions as are required in Section 12.4 hereof as if all references therein to
the Issuers were references to such Subsidiary Guarantor.

 

ARTICLE XII
MISCELLANEOUS

 

Section 12.1                                                        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 12.2                                                        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 Subsidiary Guarantors:

 

Diamond Jo Worth, LLC
Diamond Jo Worth Corp.

400 East Third Street

P.O. Box 1750

Dubuque, Iowa 52004-1750

Attention:  Chief Financial Officer
Telecopier No.:  (563) 557-0549

 

with copies (which
shall not constitute
notice) to:

 

Mayer, Brown, Rowe & Maw LLP
1675 Broadway
New York, New York 10019
Attn:  Nazim Zilkha, Esq.
Telecopier No.: (212) 262-1910

 

with a copy (which
shall not constitute
notice) to:

 

Diamond Jo, LLC
7137 Mission Hills Drive

 

F-105

--------------------------------------------------------------------------------

 

Las Vegas, Nevada 89113
Attention:  Michael S. Luzich
Telecopier No.: 702-247-6822

 

If to the Trustee:

 

U.S. Bank National Association
60 Livingston Avenue
St. Paul, Minnesota 55107-2292
Attention:  Corporate Trust Department
Telecopier No.:  (651) 495-8097

 

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) five Business Days after being deposited in the mail, postage
prepaid; (iii) when receipt acknowledged, if telecopied; and (iv) the next
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 12.3                                                       
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 12.4                                                        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:

 

106

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(a)                                  an Officers’ Certificate in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 12.5 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 12.5 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.

 

Section 12.5                                                        STATEMENTS
REQUIRED IN CERTIFICATE OR OPINION

 

Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (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;

 

(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 12.6                                                        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 12.7                                                        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.

 

107

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Section 12.8                                                        NO PERSONAL
LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS

 

No director, officer, employee, incorporator, stockholder, member or controlling
person of any of the Issuers or any Subsidiary Guarantor, as such, will have any
liability for any Obligations of any of the Issuers or any Subsidiary Guarantor
under the Notes, this Indenture, or the Security Documents for any claim based
on, in respect of, or by reason of, such Obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver
and release will be part of the consideration for issuance of the Notes and the
Subsidiary Guaranties.

 

Section 12.9                                                        GOVERNING
LAW AND SUBMISSION TO JURISDICTION

 

THIS INDENTURE AND THE NOTES SHALL 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, PRIORITY, ENFORCEMENT OF AND REMEDIES RELATING TO THE
SECURITY INTEREST IN ANY REAL PROPERTY COLLATERAL, THE GOVERNING LAW MAY BE THE
LAWS OF THE JURISDICTIONS WHERE SUCH COLLATERAL IS LOCATED WITHOUT REGARD TO THE
CONFLICT OF LAW PROVISIONS THEREOF.

 

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING
HERETO OR ANY OF THE SECURITY DOCUMENTS, OR ANY OF THE OBLIGATIONS, MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS INDENTURE, EACH
PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY SUBMITS TO
AND ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND
VENUE OF SUCH COURTS;  WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;  AGREES THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE ISSUER
OR GUARANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 12.2 OF THE
INDENTURE;  AGREES THAT SERVICE AS PROVIDED ABOVE IS SUFFICIENT TO CONFER
PERSONAL JURISDICTION OVER THE APPLICABLE PARTY IN ANY SUCH PROCEEDING IN ANY
SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT; AND AGREES EACH OTHER PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY PARTY IN THE
COURTS OF ANY OTHER JURISDICTION HAVING JURISDICTION OVER SUCH PARTY.

 

108

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Section 12.10                                                  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 12.11                                                  SUCCESSORS

 

All agreements of the Issuers and the Subsidiary Guarantors in this Indenture
and the Notes shall bind their successors.  All agreements of the Trustee in
this Indenture shall bind its successors.

 

Section 12.12                                                  SEVERABILITY

 

In case any one or more of the provisions of this Indenture or in the Notes or
in the Subsidiary Guaranties shall be held invalid, illegal or unenforceable, in
any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.

 

Section 12.13                                                 
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 12.14                                                  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]

 

109

--------------------------------------------------------------------------------

 

SIGNATURES

 

IN WITNESS WHEREOF, the parties hereto have executed this Indenture as of the
date first written above.

 

 

THE ISSUERS:

 

 

 

Diamond Jo Worth, LLC

 

 

 

By:

/s/ Natalie Schramm

 

 

Name:

Natalie Schramm

 

 

Title:

Chief Financial Officer

 

 

 

 

By:

/s/ M. Brent Stevens

 

 

Name:

M. Brent Stevens

 

 

Title:

Chief Financial Officer

 

 

 

 

 

 

Diamond Jo Worth Corp.

 

 

 

By:

 /s/ Natalie Schramm

 

 

Name:

Natalie Schramm

 

 

Title:

Chief Financial Officer

 

 

 

 

By:

/s/ M. Brent Stevens

 

 

Name:

M. Brent Stevens

 

 

Title:

Chief Financial Officer

 

 

 

 

 

 

THE TRUSTEE:

 

 

 

U.S. Bank National Association

 

 

 

 

 

By:

 /s/ Richard H. Prokosch

 

 

Name:

Richard H. Prokosch

 

 

Title:

Vice President

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

[FORM OF NOTE]

 

DIAMOND JO WORTH, LLC

 

DIAMOND JO WORTH CORP.

 

11% SENIOR SECURED NOTE
DUE 2012

 

 

 

  CUSIP:

No.

 

$

 

Diamond Jo Worth, LLC, a Delaware limited liability company (the “Company”) and
Diamond Jo Worth Corp., a Delaware corporation (“DJW Corp.” 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 April 15, 2012.

 

Interest Payment Dates:  April 15 and October 15, commencing October 15, 2005.

 

Interest Record Dates:  April 1 and October 1

 

Reference is made to the further provisions of this Note on the reverse side,
which shall, for all purposes, have the same effect as if set forth at this
place.

 

Upon request, the Issuers shall 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
Diamond Jo Worth, LLC, 3rd Street Ice Harbor, P.O. Box 1750, Dubuque, Iowa
52001, Attention: Chief Financial Officer.

 

A-1

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Issuers have caused this instrument to be duly executed.

 

 

Diamond Jo Worth, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

Diamond Jo Worth 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:

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

(Reverse of Note)

 

11% Senior Secured Note due 2012

 

[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.](1)

 

[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.](2)

 

[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

 

--------------------------------------------------------------------------------

(1)                                  To be included only on Global Notes
deposited with DTC as Depositary.

 

(2)                                  To be included only on Global Notes
deposited with DTC as Depositary.

 

 

A-3

--------------------------------------------------------------------------------

 

PERIOD WHICH SUCH HOLDER HOLDS THIS NOTE.  NOTHING IN THIS LEGEND SHALL BE
DEEMED TO PREVENT INTEREST FROM ACCRUING ON THIS NOTE.](3)

 

[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 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 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) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT
OCCUR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (E) 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 (F) 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), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS

 

--------------------------------------------------------------------------------

(3)                                  To be included only on Reg S Temporary
Global Notes.

 

A-4

--------------------------------------------------------------------------------

 

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.](4)

 

Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

 

1.                                       Interest.  The Issuers promise to pay
Interest on the principal amount of this Note at 11% per annum from the Issue
Date until maturity.  The Issuers shall pay Interest semi-annually on April 15
and October 15 of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each an “Interest Payment Date”).  The first
Interest Payment Date shall be October 15, 2005.  Interest on the Notes shall
accrue from the most recent date to which Interest has been paid or, if no
Interest has been paid, from the Issue Date; provided that if there is no
existing Default in the payment of Interest, and if this Note is authenticated
between an Interest Record Date (defined below) referred to on the face hereof
and the next succeeding Interest Payment Date, Interest shall accrue from such
next succeeding Interest Payment Date. The Issuers shall pay 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 Interest (including Accrued Bankruptcy Interest in
any proceeding under any Bankruptcy Law) on overdue installments of Interest, if
any, (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful.  Interest shall be calculated on
the basis of a 360-day year consisting of twelve 30-day months.

 

2.                                       Method of Payment.  The Issuers shall
pay Interest on the Notes to the Persons who are registered Holders of Notes at
the close of business on the April 1 or October 1 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 shall be payable as to principal,
Interest, premium, 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 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 shall be required with respect to principal of and Interest, premium, 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.

 

--------------------------------------------------------------------------------

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

 

A-5

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3.                                       Paying Agent and Registrar.  Initially,
U.S. Bank National Association, the Trustee under the Indenture, shall 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 Subsidiary 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 Subsidiary Guaranties thereof are secured by the Collateral described in the
Security Documents, subject to the provisions of such agreements and the
Intercreditor Agreement.  Holders are referred to the Security Documents and the
Intercreditor Agreement for a statement of such terms.

 

5.                                       Optional Redemption.

 

(a)                                  Except as set forth in Section 5(b), the
Notes are not redeemable at the Issuers’ option prior to April 15, 2008. 
Thereafter, the Notes shall be subject to redemption, in whole or in part, at
the option of the Issuers at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid Interest thereon, to
the applicable redemption date, if redeemed during the 12-month period beginning
on April 15 of the years indicated below:

 

Year

 

Percentage

 

2008

 

105.500

%

2009

 

103.667

%

2010

 

101.833

%

2011 and thereafter

 

100.000

%

 

(b)                                 Notwithstanding Section 5(a), at any time or
from time to time prior to April 15, 2007, the Issuers may redeem, at their
option, up to 35% of the aggregate principal amount of the Notes then
outstanding, at a redemption price of 111.00% of the principal amount thereof,
plus accrued and unpaid Interest thereon, through the applicable redemption
date, with the net cash proceeds of one or more Equity Offerings; provided, that
(i) such redemption shall occur within 60 days of the date of closing of such
Equity Offering and (ii) at least 65% of the aggregate principal amount of Notes
issued under the Indenture remains outstanding immediately after giving effect
to each such redemption.

 

(c)                                  Notice of redemption shall 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

 

A-6

--------------------------------------------------------------------------------

 

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 provisions hereof, Notes to be redeemed pursuant to a Required
Regulatory Redemption shall be redeemable by the Issuers, in whole or in part,
at any time upon not less than 20 Business Days nor more than 60 days notice (or
such earlier date as may be ordered by any applicable Governmental Authority) at
a price equal to the lesser of (a) the Holder’s cost thereof and (b) 100% of the
principal amount thereof, plus in either case accrued and unpaid Interest, if
any, to the date of redemption (or such earlier period as ordered by a
Governmental Authority).  The Issuers are not required to pay or reimburse any
Holder or beneficial owner of the Notes for the expenses of any such Holder or
beneficial owner related to the application for any Gaming License,
qualification or finding of suitability in connection with a Required Regulatory
Redemption.  Such expenses of any such Holder or beneficial owner shall,
therefore, be the obligation of such Holder or beneficial owner.  Any Required
Regulatory Redemption shall be made in accordance with the provisions of
Section 3.3, 3.4 and 3.5 of the Indenture unless other procedures are required
by any Governmental Authority.

 

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 and any offer to repurchase
Notes that the Issuers are required to make in accordance with Sections 4.13 and
4.15 of the Indenture).  The Notes shall not have the benefit of any sinking
fund.

 

8.                                       Offers to Purchase.

 

(a)                                  Change of Control.  Upon the occurrence of
a Change of Control, the Issuers shall offer to repurchase all of the Notes then
outstanding (the “Change of Control Offer”) at a purchase price equal to 101% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of repurchase (the “Change of Control Payment”). Within 30 days following
any Change of Control, the Issuers must mail or cause to be mailed a notice to
each Holder stating, among other things: (i) the purchase price and the purchase
date, which shall be no earlier than 30 days nor later than 45 days from the
date such notice is mailed (the “Change of Control Payment Date”); (ii) that any
Holder electing to have Notes purchased pursuant to a Change of Control Offer
shall be required to surrender the Notes, with the form entitled “Option of
Holder to Elect Purchase” on the reverse of the Notes completed, to the Paying
Agent at the address specified in the notice prior to the close of business on
the third Business Day preceding the Change of Control Payment Date; and
(iii) that the Holder shall be entitled to withdraw such election if the Paying
Agent receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Notes purchased.

 

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(b)                                 Asset Sale.  Subject to certain exceptions
set forth in the Indenture, the Issuers shall not, and shall not permit any
Restricted Subsidiary to, make any Asset Sale unless:  (i) such Issuer or such
Restricted Subsidiary receives consideration at the time of such Asset Sale not
less than the fair market value of the assets subject to such Asset Sale (as
determined by the Company’s Managers in good faith); (ii) at least 75% of the
consideration for such Asset Sale is in the form of either (a) cash or Cash
Equivalents or liabilities of the Company or any Restricted Subsidiary (other
than liabilities that are by their terms subordinated to the Notes or any
Subsidiary Guaranty) that are assumed by the transferee of such assets
(provided, that following such Asset Sale, there is no further recourse to the
Company or the Restricted Subsidiaries or the Company and the Restricted
Subsidiaries are fully indemnified with respect to such liabilities; provided,
further, that the 75% limitation set forth in this clause (ii) of this paragraph
shall not apply to any proposed Asset Sale for which an independent certified
accounting firm has certified 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 this clause
(ii) of this paragraph), or (b) assets of the type described in clause
(iii)(a) below; and (iii) the Net Proceeds of such Asset Sale are (a) promptly
after such Asset Sale applied to repay Indebtedness under Purchase Money
Obligations incurred in connection with the assets so sold, (b) promptly after
such Asset Sale applied to repay Indebtedness under the Senior Credit Facility
and permanently reduce the commitment thereunder in the amount of the
Indebtedness so repaid or (c) to the extent not used as provided in clauses
(a) or (b) of this paragraph or any combination thereof, applied to make an
Excess Proceeds Offer; provided, that the Company shall not be required to make
an Excess Proceeds Offer until the amount of Excess Proceeds is greater than
$10,000,000.

 

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 and Waiver.  Subject
to certain exceptions, the Indenture, the Notes, the Subsidiary Guaranties, or,
subject to the Intercreditor Agreement, the Security Documents, may be amended
or supplemented with the consent of the Holders of a majority in principal
amount of the then outstanding Notes, and any

 

A-8

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existing Default or compliance with any provision of the Indenture, the Notes or
the Subsidiary Guaranties 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 Subsidiary Guaranties or,
subject to the Intercreditor Agreement, the Security Documents 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’ or the Subsidiary Guarantors’
obligations to Holders of the Notes in case of a merger or consolidation or sale
of all or substantially all of its assets in accordance with the Indenture, to
evidence the release of any Subsidiary Guaranty permitted to be released under
the terms of the Indenture and the Security Documents or to evidence the
addition of any new Subsidiary Guarantor, to make any change that would provide
any additional rights or benefits to the Holders of the Notes (including the
addition of any Subsidiary Guarantor) or that does not adversely affect the
rights under the Indenture, the Notes, the Subsidiary Guaranties, the Security
Documents 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 therein, to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA, 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 Security Documents.  Notwithstanding Sections 9.2(a), (b) and
(c) of the Indenture and subject to the Intercreditor Agreement, no portion of
the Collateral may be released from the Lien of the Security Documents (except
in accordance with the provisions of this Indenture and the Security Documents),
and none of the Security Documents or the provisions of the Indenture relating
to the Collateral may be amended or supplemented, and the rights of any Holders
thereunder may not be waived or modified, without, in each case, the consent of
the Holders of at least 75% in aggregate principal amount of the then
outstanding Notes.

 

12.                                 Defaults and Remedies.  The Indenture
provides that each of the following constitutes an Event of Default: (i) the
Issuers default in the payment of Interest on any Note when the same becomes due
and payable and the Default continues for a period of 30 days; (ii) the Issuers
default in the payment of the principal (or premium, if any) on any Note when
the same becomes due and payable at maturity, upon redemption, by acceleration,
in connection with an Excess Proceeds Offer or a Change of Control Offer or
otherwise; (iii) either of the Issuers default in the performance of or breaches
the provisions of Section 4.13, Section 4.15 or Article V of the Indenture;
(iv) either of the Issuers or any Subsidiary Guarantor fails to comply with any
of its other agreements or covenants in, or provisions of, the Notes or this
Indenture and the Default continues for 60 days after written notice thereof has
been 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 then
outstanding Notes, such notice to state that it is a “Notice of Default”; (v) an
event of default occurs under (after giving effect to any waivers, amendments,
applicable grace periods or any extension of any maturity date) any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or

 

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evidenced any Indebtedness for money borrowed by the Issuers or any Restricted
Subsidiary (or the payment of which is guaranteed by the Issuers or any
Restricted Subsidiary), whether such Indebtedness or guaranty now exists or is
created after the Issue Date, if (a) either (1) such default results from the
failure to pay principal of or interest on such Indebtedness or (2) as a result
of such event of default the maturity of such Indebtedness has been accelerated,
and (b) the principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness with respect to which such a payment event
of default (after the expiration of any applicable grace period or any extension
of the maturity date) has occurred, or the maturity of which has been so
accelerated, exceeds $5,000,000 in the aggregate; (vi) a final non-appealable
judgment or judgments for the payment of money (other than to the extent of any
judgment as to which a reputable insurance company has accepted liability) is or
are entered by a court or courts of competent jurisdiction against either of the
Issuers or any Subsidiary and such judgment or judgments are not discharged,
bonded or stayed within 60 days after entry, provided that the aggregate of all
such judgments exceeds $5,000,000; (vii) the cessation of substantially all
gaming operations of the Company and the Restricted Subsidiaries, taken as a
whole, for more than 90 days, except as a result of an Event of Loss; (viii) any
revocation, suspension, expiration (without previous or concurrent renewal) or
loss of any Gaming License of the Company or any Restricted Subsidiary for more
than 90 days; (ix) any Subsidiary Guaranty of a Subsidiary 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 Subsidiary Guaranty and the
Indenture) or any Subsidiary Guarantor which is a Significant Subsidiary denies
or disaffirms its Obligations under its Subsidiary Guaranty or the Security
Documents (in each case, other than by reason of the termination of the
Indenture or the release of any such Subsidiary Guaranty in accordance with the
Indenture); (x) (A) any event of default under a Security Document (after giving
effect to any applicable grace periods, applicable notice periods, waivers or
amendments) or (B) the failure of the Issuers or any Restricted Subsidiary to
comply with any material agreement or covenant in, or material provision of, any
of the Security Documents, or any breach in any material respect of any material
representation or warranty made by the Issuers or any Restricted Subsidiary in
any Security Document, 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; (xi) any of the Security Documents
ceases to be in full force and effect or any of the Security Documents 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 Security Documents is
declared null and void, or any of the Issuers or any Subsidiary Guarantor denies
that it has any further liability under any Security Document 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 Security Document in accordance with
its terms or the release of any Subsidiary 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

 

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amount of the Notes outstanding; (xii) either of the Issuers or any Subsidiary
Guarantor pursuant to or within the meaning of any Bankruptcy Law: (1) commences
a voluntary case, (2) consents to the entry of an order for relief against it in
an involuntary case, (3) consents to the appointment of a custodian of it or for
all or substantially all of its property, (4) makes a general assignment for the
benefit of its creditors, or (5) admits in writing its inability to pay debts as
the same become due; and (xi) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that: (1) is for relief against either of the
Issuers or any Subsidiary Guarantor in an involuntary case, (2) appoints a
custodian of either of the Issuers or any Subsidiary Guarantor or for all or
substantially all of their property, or (3) orders the liquidation of either of
the Issuers, or any Subsidiary Guarantor, and the order or decree remains
unstayed and in effect for 60 days.

 

13.                                 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.

 

14.                                 No Recourse Against Others.  No director,
officer, employee, incorporator, stockholder, member or controlling person of
any of the Issuers or any Subsidiary Guarantor, as such, will have any liability
for any Obligations of any of the Issuers or any Subsidiary Guarantor under the
Notes, the Indenture, the Security Documents or the Registration Rights
Agreement or for any claim based on, in respect of, or by reason of, such
Obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release will be part of the
consideration for issuance of the Notes and the Subsidiary Guaranties.

 

15.                                 Authentication.  This Note shall not be
valid until authenticated by the manual signature of the Trustee or an
authenticating agent.

 

16.                                 Abbreviations.  Customary abbreviations may
be used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).

 

17.                                 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.

 

18.                                 Notation of Subsidiary Guaranty.  As more
fully set forth in the Indenture, to the extent permitted by law, each of the
Subsidiary Guarantors from time to time, in accordance with Article XI of the
Indenture, unconditionally and jointly and severally

 

A-11

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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 Subsidiary Guaranty, each of the Subsidiary Guarantors
acknowledges and agrees that it receives substantial benefits from the Issuers
and that such party is providing its Subsidiary Guaranty for good and valuable
consideration, including, without limitation, such substantial benefits and
services.  Accordingly, subject to the provisions of Article XI of the
Indenture, each Subsidiary 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, premium, if any, and Interest 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, or otherwise, and Interest
on overdue principal, premium, 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, the Indenture or the
Security Documents (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 payment or renewal of any Notes or any
of such other obligations under the Notes, the Indenture or the Security
Documents, 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, or otherwise, subject, however, in the case of clauses (i) and
(ii) above, to the limitations set forth in Section 11.6 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.

 

20.  Governing Law and Consent to Jurisdiction.  THIS INDENTURE AND THE NOTES
SHALL 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, PRIORITY,
ENFORCEMENT OF AND REMEDIES RELATING TO THE SECURITY INTEREST IN ANY REAL
PROPERTY COLLATERAL, THE GOVERNING LAW MAY BE THE LAWS OF THE JURISDICTIONS
WHERE SUCH COLLATERAL IS LOCATED WITHOUT REGARD TO THE CONFLICT OF LAW
PROVISIONS THEREOF.

 

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING
HERETO OR ANY OF THE SECURITY DOCUMENTS, OR ANY OF THE OBLIGATIONS, MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS INDENTURE, EACH
PARTY, FOR ITSELF AND IN CONNECTION WITH ITS

 

A-12

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PROPERTIES, IRREVOCABLY SUBMITS TO AND ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; WAIVES ANY DEFENSE OF FORUM
NON CONVENIENS; AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO THE APPLICABLE ISSUER OR GUARANTOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 12.2 OF THE INDENTURE; AGREES THAT SERVICE AS PROVIDED
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE PARTY IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT; AND AGREES EACH OTHER PARTY RETAINS THE RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST ANY PARTY IN THE COURTS OF ANY OTHER JURISDICTION HAVING JURISDICTION
OVER SUCH PARTY.

 

21.                                 Security.  This Note is Guaranteed and
secured by substantially all of the assets of the Issuers and the Subsidiary
Guarantors (other than Excluded Assets), subject to certain exceptions and
limitations more fully set forth in the Indenture and Security Documents.

 

The Issuers shall furnish to any Holder upon written request and without charge
a copy of the Indenture.  Requests may be made to:

 

DIAMOND JO WORTH, LLC
DIAMOND JO WORTH CORP.
3rd Street Ice Harbor

P.O. Box 1750

Dubuque, Iowa 52001

Attention:  Chief Financial Officer

 

A-13

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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 Subsidiary Guaranty*

 

 

 

 

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*NOTICE:  The Signature must be guaranteed by an Institution which is a member
of one of the following recognized signature Subsidiary Guaranty 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 guaranty program acceptable to the Trustee.

 

A-14

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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 or Section 4.15 of the Indenture, check the box below:

 

Section 4.13 o

 

Section 4.15 o

 

If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.13 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 Subsidiary Guaranty*

 

 

--------------------------------------------------------------------------------

*NOTICE:  The Signature must be guaranteed by an Institution which is a member
of one of the following recognized signature Subsidiary Guaranty 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 guaranty program acceptable to the Trustee.

 

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(5)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

(5)                                  This should be included only if the Note is
issued in global form.

 

A-16

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GUARANTEE

 

Each of the entities listed on the signature page hereto (hereinafter referred
to as the “Subsidiary Guarantors,” which term includes any successors or assigns
under the Indenture, dated the date hereof, among the Issuers (defined below)
and U.S. Bank National Association, as trustee (the “Indenture”) as supplemented
by any supplemental indenture thereto, has executed either the Indenture or a
supplemental indenture in substantially the form attached on Exhibit E to the
Indenture and has irrevocably and unconditionally guaranteed on a senior secured
basis the Subsidiary Guaranty Obligations (as defined in Section 11.1 of the
Indenture), which include (i) the due and punctual payment of the principal of,
premium, if any, and Interest, on the 11% Senior Secured Notes due 2012 (the
“Notes”) of Diamond Jo Worth, LLC, a Delaware limited liability company (the
“Company”), and Diamond Jo Worth Corp., a Delaware corporation (“DJW Corp.” and,
together with the Company, the “Issuers,” which term includes any successors
under, the Indenture hereinafter referred to), whether at maturity, by
acceleration, call for redemption, upon a Change of Control Offer, an Asset Sale
Offer, or otherwise, and 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, if any, on the Notes, and the due and punctual performance of all
other obligations of the Issuers to the Holders or the Trustee under the Notes,
the Indenture and the Security Documents (including fees, expenses or other) all
in accordance with the terms set forth in Article XI of the Indenture, and
(ii) in case of any extension of time of payment or renewal of any Notes or any
such other obligations under the Notes, the Indenture or the Security Documents,
that 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 Offer, an Asset Sale
Offer, or otherwise.

 

The obligations of each Subsidiary Guarantor to the Holders and to the Trustee
pursuant to this Subsidiary Guaranty and the Indenture are expressly set forth
in Article XI of the Indenture and reference is hereby made to such Indenture
for the precise terms of this Subsidiary Guaranty.

 

No director, officer, employee, incorporator, stockholder, member or controlling
person of any of the Issuers or any Subsidiary Guarantor, as such, will have any
liability for any Obligations of any of the Issuers or any Subsidiary Guarantor
under the Notes, the Indenture or the Security Documents or for any claim based
on, in respect of, or by reason of, such Obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver
and release will be part of the consideration for issuance of the Notes and the
Subsidiary Guaranties.

 

This is a continuing Subsidiary Guaranty and shall remain in full force and
effect and shall be binding upon each Subsidiary 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

 

A-17

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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 Subsidiary Guaranty of payment and performance
and not of collectibility.

 

This Subsidiary Guaranty shall not be valid or obligatory for any purpose until
the certificate of authentication on the Note upon which this Subsidiary
Guaranty 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 Subsidiary Guarantor under this Subsidiary Guaranty
shall be limited to the extent necessary to insure that it does not constitute a
fraudulent conveyance under applicable law.

 

THE TERMS OF ARTICLE XI OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.

 

Capitalized terms used herein have the same meanings given in the Indenture
unless otherwise indicated.

 

[signature page follows]

 

A-18

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IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this instrument to be
duly executed.

 

 

Dated:

 

 

 

 

 

 

 

 

[NAME OF SUBSIDIARY GUARANTOR]

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

[NAME OF SUBSIDIARY GUARANTOR]

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

[NAME OF SUBSIDIARY GUARANTOR]

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

Diamond Jo Worth, LLC
Diamond Jo Worth Corp.
3rd Street Ice Harbor

P.O. Box 1750

Dubuque, Iowa 52001

 

U.S. Bank National Association
60 Livingston Avenue
St. Paul, MN 55107-2292

 

Re:  11% Senior Secured Notes due 2012

 

Dear Sirs:

 

Reference is hereby made to the Indenture, dated as of July 19, 2005 (the
“Indenture”), among Diamond Jo Worth, LLC, a Delaware limited liability company
(the “Company”), and Diamond Jo Worth Corp., a Delaware corporation (“DJW Corp.”
and, together with the Company, the “Issuers,” which term includes any
successors under, and any additional “Issuers” that may become a party to the
Indenture) and U.S. Bank National Association, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.                        , (the “Transferor”) owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $                  in such Note[s] or interests (the
“Transfer”), to                             (the “Transferee”), as further
specified in Annex A hereto.  In connection with the Transfer, the Transferor
hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.  o                                                                     Check
if Transferee shall take delivery of a beneficial interest in the 144A Global
Note or of a Definitive Note Pursuant to Rule 144A.  The Transfer is being
effected pursuant to and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
“qualified institutional buyer” within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any State of the United States.  Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note shall be
subject to the restrictions on

 

B-1

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transfer enumerated in the Private Placement Legend printed on the 144A Global
Note and/or the Definitive Note and in the Indenture and the Securities Act.

 

2.  o                                                                     Check
if Transferee shall take delivery of a beneficial interest in the Regulation S
Global Note or of a Definitive Note pursuant to Regulation S.  The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a person in the United States and (x) at
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Distribution Compliance
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser) and the interest
transferred shall be held immediately thereafter through Euroclear or
Clearstream.  Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
shall be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.

 

3.  o                                                                     Check
if Transferee shall take delivery of a beneficial interest in a Global Note or
of a Definitive Note pursuant to any provision of the Securities Act other than
Rule 144A or Regulation S.  The Transfer is being effected in compliance with
the transfer restrictions applicable to beneficial interests in Restricted
Global Notes and Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act and any applicable blue sky securities laws of any State
of the United States, and accordingly the Transferor hereby further certifies
that (check one):

 

(a)                              o                        Such Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act;
or

 

(b)                             o                        Such Transfer is being
effected to the Issuers or a subsidiary thereof; or

 

(c)                              o                        Such Transfer is being
effected pursuant to an effective registration statement under the Securities
Act and in compliance with the prospectus delivery requirements of the
Securities Act; or

 

(d)                             o                        such Transfer is being
effected to an Institutional Accredited Investor and pursuant to an exemption
from the registration requirements of the Securities Act other than Rule 144A,
Rule 144 or Rule 904, and the Transferor hereby further certifies that it has
not engaged in any general solicitation within the

 

B-2

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meaning of Regulation D under the Securities Act and the Transfer complies with
the transfer restrictions applicable to beneficial interests in a Restricted
Global Note or Restricted Definitive Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed by the
Transferee in a form of Exhibit D to the Indenture and (2) if such Transfer is
in respect of a principal amount of Notes at the time of transfer of less than
$250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification and provided to
the Issuers, which has confirmed its acceptability), to the effect that such
Transfer is in compliance with the Securities Act.

 

Upon consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note shall be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Definitive Notes and in the Indenture and the Securities
Act.

 

4.  o                                                                     Check
if Transferee shall take delivery of a beneficial interest in an Unrestricted
Global Note or of an Unrestricted Definitive Note.

 

(a)                                              
o                                    Check if Transfer is Pursuant to Rule 144. 
(i) The Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
State of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act.  Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note shall no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture
and the Securities Act.

 

(b)                                             
o                                    Check if Transfer is Pursuant to Regulation
S.  (i) The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and in compliance with the
transfer restrictions contained in the Indenture and any applicable blue sky
securities laws of any State of the United States and (ii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act.  Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note shall no
longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture and the Securities Act.

 

(c)                                              
o                                    Check if Transfer is Pursuant to Other
Exemption.  (i) The Transfer is being effected pursuant to and in compliance
with an exemption from the registration requirements of the Securities Act other
than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any State of the United States and (ii) the

 

B-3

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restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities
Act.  Upon consummation of the proposed Transfer in accordance with the terms of
the Indenture, the transferred beneficial interest or Definitive Note shall not
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes or Restricted Definitive Notes and
in the Indenture.

 

[signature page follows]

 

B-4

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This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuers.

 

 

 

Dated:

 

[Insert Name of Transferor]

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

B-5

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ANNEX A TO CERTIFICATE OF TRANSFER

 

1.               The Transferor owns and proposes to transfer the following:

 

[[CHECK ONE OF (a) OR (b)]

 

 

 

 

 

(a)

 

o

 

a beneficial interest in

 

 

 

 

 

(i)

 

o

 

144A Global Note, or

 

 

 

 

 

(ii)

 

o

 

501 Global Note, or

 

 

 

 

 

(iii)

 

o

 

Reg S Global Note; or

 

 

 

 

 

(b)

 

o

 

a Restricted Definitive Note.

 

 

 

 

 

2.               After the Transfer the Transferee shall hold:

 

 

 

 

 

[CHECK ONE]

 

 

 

 

 

 

 

(a)

 

o

 

a beneficial interest in the:

 

 

 

 

 

(i)

 

o

 

144A Global Note, or

 

 

 

 

 

(ii)

 

o

 

501 Global Note, or

 

 

 

 

 

(iii)

 

o

 

Reg S Global Note,

 

 

 

 

 

(iv)

 

o

 

Unrestricted Global Note; or

 

 

 

 

 

(b)

 

o

 

a Restricted Definitive Note; or

 

 

 

 

 

(c)

 

o

 

an Unrestricted Definitive Note,

 

in accordance with the terms of the Indenture.

 

B-6

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EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

Diamond Jo Worth, LLC
Diamond Jo Worth Corp.
3rd Street Ice Harbor

P.O. Box 1750

Dubuque, Iowa 52001

 

U.S. Bank National Association
60 Livingston Avenue
St. Paul, MN 55107-2292

 

Re:  11% Senior Secured Notes due 2012

 

Dear Sirs:

 

Reference is hereby made to the Indenture, dated as of July 19, 2005 (the
“Indenture”), between Diamond Jo Worth, LLC, a Delaware limited liability
company (the “Company”), and Diamond Jo Worth Corp., a Delaware corporation
(“DJW Corp.” and, together with the Company, the “Issuers,” which term includes
any successors under the Indenture), and U.S. Bank National Association, as
trustee.  Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

 

                  , (the “Owner”) owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of
$                 in such Note[s] or interests (the “Exchange”).  In connection
with the Exchange, the Owner hereby certifies that:

 

1.  Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note.

 

(a)                                  o                                    Check
if Exchange is from beneficial interest in a Restricted Global Note to
beneficial interest in an Unrestricted Global Note.  In connection with the
Exchange of the Owner’s beneficial interest in a Restricted Global Note for a
beneficial interest in an Unrestricted Global Note in an equal principal amount,
the Owner hereby certifies (i) the beneficial interest is being acquired for the
Owner’s own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the “Securities Act”), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any State of the United States.

 

C-1

--------------------------------------------------------------------------------

 

(b)                                 o                                    Check
if Exchange is from beneficial interest in a Restricted Global Note to
Unrestricted Definitive Note.  In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for an Unrestricted Definitive
Note, the Owner hereby certifies (i) the Definitive Note is being acquired for
the Owner’s own account without transfer, (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any State of the United States.

 

(c)                                  o                                    Check
if Exchange is from Restricted Definitive Note to beneficial interest in an
Unrestricted Global Note.  In connection with the Owner’s Exchange of a
Restricted Definitive Note for a beneficial interest in an Unrestricted Global
Note, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest is being acquired in compliance
with any applicable blue sky securities laws of any State of the United States.

 

(d)                                 o                                    Check
if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. 
In connection with the Owner’s Exchange of a Restricted Definitive Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted
Definitive Note is being acquired for the Owner’s own account without transfer,
(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted Definitive
Note is being acquired in compliance with any applicable blue sky securities
laws of any State of the United States.

 

2.  Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes.

 

(a)                                  o                                    Check
if Exchange is from beneficial interest in a Restricted Global Note to
Restricted Definitive Note.  In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for a Restricted Definitive Note
with an equal principal amount, the Owner hereby certifies that (i) the
Restricted Definitive Note is being acquired for the Owner’s own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any State of the United

 

C-2

--------------------------------------------------------------------------------

 

States.  Upon consummation of the proposed Exchange in accordance with the terms
of the Indenture, the Restricted Definitive Note issued shall continue to be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Definitive Note and in the Indenture and the
Securities Act.

 

(b)                                 o                                    Check
if Exchange is from Restricted Definitive Note to beneficial interest in a
Restricted Global Note.  In connection with the Exchange of the Owner’s
Restricted Definitive Note for a beneficial interest in the:  [CHECK ONE] o 144A
Global Note, o Reg S Global Note, or o 501 Global Note with an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner’s own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, and in compliance with any applicable blue sky securities laws of any State
of the United States.  Upon consummation of the proposed Exchange in accordance
with the terms of the Indenture, the beneficial interest issued shall be subject
to the restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Note and in the Indenture and the
Securities Act.

 

[signature page follows]

 

C-3

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This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuers.

 

 

 

[Insert Name of Owner]

 

 

By:

 

 

Name:

Title:

 

 

Dated:

 

 

 

C-4

--------------------------------------------------------------------------------

 

EXHIBIT D

 

FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR

 

Diamond Jo Worth, LLC

Diamond Jo Worth Corp.
400 East Third Street

P.O. Box 1750
Dubuque, Iowa 52004-1750

 

U.S. Bank National Association
60 Livingston Avenue
St. Paul, MN 55107-2292

 

Re:  11% Senior Secured Notes due 2012

 

Dear Sirs:

 

Reference is hereby made to the Indenture, dated as of July 19, 2005 (the
“Indenture”), between Diamond Jo Worth, LLC, a Delaware limited liability
company (the “Company”), and Diamond Jo Worth Corp., a Delaware corporation
(“DJW Corp.” and, together with the Company, the “Issuers,” which term includes
any successors the Indenture), and U.S. Bank National Association, as trustee. 
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

 

In connection with our proposed purchase of $               aggregate principal
amount of: (a) a beneficial interest in a Global Note, or (b) a Definitive Note,
we confirm that:

 

1.               We understand and acknowledge that the Notes have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”),
or any other applicable securities law, are being offered for resale in
transactions not requiring registration under the Securities Act or any other
securities law, including resales pursuant to Rule 144A under the Securities Act
(“Rule 144A”), and may not be offered, sold or otherwise transferred except in
compliance with the registration requirements of the Securities Act or any other
applicable securities law, pursuant to an exemption therefrom and in each case
in compliance with the transfer set forth below.

 

2.               We are an institutional “accredited investor” under the
Securities Act within the meaning of subparagraph (a) (1), (2), (3) or (7) of
Rule 501 under the Securities Act (an “Accredited Investor”) and, if the Notes
are to be purchased for one or more accounts (“investor accounts”) for which we
are acting as fiduciary or agent, each such investor account is an Accredited
Investor on a like basis. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
purchasing the Notes and invest in or purchase securities similar to the

 

D-1

--------------------------------------------------------------------------------

 

Notes in the normal course of our business. We and any investor accounts for
which we are acting are each aware that we may be required, and are each able,
to bear the economic risk of our or its investment in the Notes for an
indefinite period of time, including the risk of an entire loss of our or such
investor account’s investment in the Notes.

 

3.               We are purchasing the Notes for our own account, or for one or
more investor accounts for which we are acting as a fiduciary or agent, in each
case for investment, and not with a view to, or for offer or sale in connection
with, any distribution thereof in violation of the Securities Act, subject to
any requirement of law that the disposition of our property or the property of
such investor account or accounts be at all times within our or their control
and subject to our or their ability to resell such Notes pursuant to Rule 144A
or any exemption from registration available under the Securities Act.

 

4.               We agree on our own behalf and on behalf of any investor
account for which we are purchasing Notes to offer, sell or otherwise transfer
such Notes prior to the date which is two years (or such other period that may
hereafter be provided under Rule 144(k) under the Securities Act as permitting
resales of restricted securities by non-affiliates without restriction) after
the later of the date of original issue and the last date on which either of the
Issuers or any affiliate of the Issuers was the owner of such Notes (or any
predecessor thereof) (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 the Notes are
eligible for resale pursuant to Rule 144A to a person we reasonably believe is a
“qualified institutional buyer” as defined in Rule 144A (a “QIB”) that purchases
for its own account or for the account of a QIB and to whom notice is given that
the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales to Non-U.S. purchasers that occur outside the United States in accordance
with Regulation S under the securities act, (e) to an Accredited Investor that
is acquiring the Notes for its own account, or for the account of such an
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 (f) pursuant to another available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in each case in compliance with any applicable securities
laws of any U.S. state or any other applicable jurisdiction. The foregoing
restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date. If any resale or other transfer of the Notes is proposed to be
made pursuant to clause (d) above prior to the Resale Restriction Termination
Date, the transferor shall deliver a letter from the transferee substantially in
the form of this letter to the Issuers and the Trustee, which shall provide,
among other things, that the transferee is an Accredited Investor and that it is
acquiring such Notes for investment purposes and not for distribution in
violation of the Securities Act. Each purchaser acknowledges that the Issuers
and the Trustee reserve the right prior to the offer, sale or other transfer
made prior to the Resale Termination Date pursuant to clause (e) or (f) above to
require the

 

D-2

--------------------------------------------------------------------------------

 

delivery of an opinion of counsel, certifications and/or other information
satisfactory to each of them.

 

5.               We understand that the Notes will be delivered in registered
form only and that the certificates delivered to us in respect of the Notes will
contain a legend substantially to the following effect:

 

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 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 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) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT
OCCUR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (E) 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 (F) 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-3

--------------------------------------------------------------------------------

 

(D), (E) OR (F) 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.               If we are acquiring any of the Notes as a fiduciary or agent
for one or more investor accounts, we represent that we have sole investment
discretion with respect to each such account and we have full power to make the
foregoing representations, warranties, acknowledgments and agreements on behalf
of each such investor account.

 

THIS LETTER SHALL 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 NEW
YORK, INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

 

[signature page follows]

 

D-4

--------------------------------------------------------------------------------

 

You and the Issuers are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

 

 

 

Dated:                                      ,      

[Insert Name of Accredited Investor]

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

D-5

--------------------------------------------------------------------------------

 

EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT
SUBSIDIARY GUARANTORS

 

Supplemental Indenture (this “Supplemental Indenture”), dated as of     , among
                                    (the “Guaranteeing Subsidiary”), Diamond Jo
Worth, LLC, a Delaware limited liability company (the “Company”), and Diamond Jo
Worth Corp., a Delaware corporation (“DJW Corp.” and, together with the Company,
the “Issuers,” which term includes any successors under the Indenture
hereinafter referred to), and U.S. Bank National Association, as trustee under
the Indenture referred to below (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, the Issuers have heretofore executed and delivered to the Trustee an
indenture (the “Indenture”), dated as of July 19, 2005, providing for the
issuance of 11% Senior Secured Notes due 2012 (the “Notes”);

 

WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture and a Subsidiary Guaranty in the form of Annex A to the Indenture
endorsed on the Notes pursuant to which it shall unconditionally guaranty all of
the Issuers’ obligations under the Notes and the Indenture on the terms and
conditions set forth herein (the “Subsidiary Guaranty”); and

 

WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is authorized to
execute and deliver this Supplemental Indenture.

 

NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing
Subsidiary and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Notes as follows:

 

1.             Capitalized Terms.  Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

 

2.             Joinder to Indenture.  The Guaranteeing Subsidiary hereby agrees
to become bound by the terms, conditions and other provisions of the Indenture
with all attendant rights, duties and obligations stated therein, with the same
force and effect as if originally named as a Subsidiary Guarantor therein and as
if such party executed the Indenture on the date thereof.

 

3.             Agreement to Subsidiary Guaranty.  The Guaranteeing Subsidiary
irrevocably and unconditionally guarantees the Subsidiary Guaranty Obligations,
which include (i) the due and punctual payment of the principal of, premium, if
any, and interest, on the Notes, whether at maturity, by acceleration, call for
redemption, upon a

 

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Change of Control Offer, an Asset Sale 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 payment of
expenses, and the due and punctual performance of all other obligations of the
Issuers, to the Holders or the Trustee under the Notes, the Indenture and the
Security Documents (including fees and expenses or other) all in accordance with
the terms set forth in Article XI of the Indenture, and (ii) in case of any
extension of time of payment or renewal of any Notes or any such other
obligations under the Notes, the Indenture and the Security Documents that 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 Offer, an Asset Sale Offer, or
otherwise.

 

The obligations of Guaranteeing Subsidiary to the Holders and to the Trustee
pursuant to this Subsidiary Guaranty 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 Subsidiary Guaranty.

 

No director, officer, employee, incorporator, stockholder, member or controlling
person of any of the Issuers or any Subsidiary Guarantor, as such, will have any
liability for any Obligations of any of the Issuers or any Subsidiary Guarantor
under the Notes, the Indenture or the Security Documents or for any claim based
on, in respect of, or by reason of, such Obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver
and release will be part of the consideration for issuance of the Notes and the
Subsidiary Guaranties including the Subsidiary Guaranty evidence hereby.

 

This is a continuing Subsidiary Guaranty and shall remain in full force and
effect and shall be binding upon the Guaranteeing Subsidiary and its successors
and assigns until full and final payment of all of the Issuers’ obligations
under the Notes and Indenture or until released 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 Subsidiary
Guaranty of payment and performance and not of collectibility.

 

The obligations of the Guaranteeing Subsidiary under its Subsidiary Guaranty
shall be limited to the extent necessary to insure that it does not constitute a
fraudulent conveyance under applicable law.

 

THE TERMS OF ARTICLE XI OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.

 

4.             NEW YORK LAW TO GOVERN AND CONSENT TO JURISDICTION.  THIS
INDENTURE AND THE NOTES SHALL 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

 

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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,
PRIORITY, ENFORCEMENT OF AND REMEDIES RELATING TO THE SECURITY INTEREST IN ANY
REAL PROPERTY COLLATERAL, THE GOVERNING LAW MAY BE THE LAWS OF THE JURISDICTIONS
WHERE SUCH COLLATERAL IS LOCATED WITHOUT REGARD TO THE CONFLICT OF LAW
PROVISIONS THEREOF.

 

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING
HERETO OR ANY OF THE SECURITY DOCUMENTS, OR ANY OF THE OBLIGATIONS, MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS INDENTURE, EACH
PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY SUBMITS TO
AND ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND
VENUE OF SUCH COURTS;  WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;  AGREES THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE ISSUER
OR GUARANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 12.2 OF THIS
INDENTURE;  AGREES THAT SERVICE AS PROVIDED ABOVE IS SUFFICIENT TO CONFER
PERSONAL JURISDICTION OVER THE APPLICABLE PARTY IN ANY SUCH PROCEEDING IN ANY
SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT; AND AGREES EACH OTHER PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY PARTY IN THE
COURTS OF ANY OTHER JURISDICTION HAVING JURISDICTION OVER SUCH PARTY.

 

5.             Counterparts.  The parties may sign any number of copies of this
Supplemental Indenture.  Each signed copy shall be an original, but all of them
together represent the same agreement.

 

6.             Effect of Headings.  The Section headings herein are for
convenience only and shall not affect the construction hereof.

 

[signature page follows]

 

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

 

 

THE ISSUERS:

 

Diamond Jo Worth, LLC

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

Diamond Jo Worth Corp.

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

GUARANTEEING SUBSIDIARY:

 

NAME:

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

THE TRUSTEE:

 

U.S. Bank National Association

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

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EXHIBIT F

 

FORM OF INTERCREDITOR AGREEMENT

 

This INTERCREDITOR AGREEMENT, dated as of [               ] (as amended,
restated, supplemented or otherwise modified from time to time, this
“Agreement”), is made by and between U.S. BANK NATIONAL ASSOCIATION, solely in
its capacity as trustee under the Indenture (as defined below) (in such
capacity, the “Trustee”), and [                     ], a [                     ]
[                     ] (“Bank”), solely in its capacity as Senior Lien Creditor
Representative (as such term is defined below).

 

RECITALS

 

1.             Diamond Jo Worth, LLC, a Delaware limited liability company
(“DJW”), Diamond Jo Worth Corp., a Delaware corporation (“DJW Corp” and,
together with DJW, the “Issuers”), the guarantors, if any, from time to time
party thereto (the “Guarantors”), and the Trustee have entered into an
Indenture, dated as of July    , 2005 (as amended, restated, supplemented or
otherwise modified from time to time, the “Indenture”), pursuant to which
indebtedness was incurred by the Issuers, the repayment of which is guaranteed
by the Guarantors, and the Issuers, Diamond Jo Worth Holdings, LLC, a Delaware
limited liability company (“Parent”), the Guarantors and the Trustee have
entered into a Pledge and Security Agreement, dated as of July   , 2005, and one
or more mortgages and/or other collateral documents pursuant to which such
indebtedness and guarantees were secured by security interests in and liens on
certain now owned and hereafter acquired assets and properties described in the
Indenture Security Documents (as defined below).

 

2.             DJW, as borrower, and Bank, as agent for itself and the lenders
(the “Senior Lien Lenders”) (in such capacity, the “Senior Lien Creditor
Representative”), have entered into a [                     ], dated as of
[                ] (as amended, restated, supplemented or otherwise modified
from time to time, the “Senior Lien Credit Agreement”), pursuant to which the
Senior Lien Creditor Representative agreed, upon the terms and conditions stated
therein, to make loans and advances to, or to issue letters of credit (or
guarantees in respect thereof) for the account of, DJW, the repayment of which
is secured by security interests in and liens on certain Collateral pursuant to
the Senior Lien Credit Agreement and the collateral security documents,
instruments and guaranties executed and delivered in connection therewith by one
or more of the Issuers, Parent and the Guarantors, together with such other
agreements, instruments and certificates entered into in connection with the
Senior Lien Credit Agreement (as such may be amended, restated, supplemented or
otherwise modified from time to time, together with the Senior Lien Credit
Agreement, the “Senior Lien Documents”).(6)

 

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(6)           May be revised to reflect actual obligors.

 

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3.             One of the conditions of the Senior Lien Documents is that the
priority of the security interests and liens on the Collateral securing the
obligations under such documents be senior to the security interests in and
liens on the Collateral in favor of the Trustee in the manner and to the extent
provided for in this Agreement.

 

4.             The Trustee and the Senior Lien Creditor Representative (on
behalf of the Senior Lien Creditors) desire to enter into this Agreement
concerning their respective rights with respect to the priority of their
respective security interests in and liens on the Collateral.

 

5.             The terms of the Indenture permit the Issuers, Parent and the
Guarantors to enter into the Senior Lien Documents and, in connection therewith,
authorize and direct the Trustee to enter into an intercreditor agreement
substantially in the form of this Agreement.

 

NOW, THEREFORE, the Parties hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1             Definitions.  In addition to the capitalized terms
defined above in the preamble and the recitals hereto, as used in this
Agreement, the following terms shall have the meanings set forth below:

 

“Collateral” shall mean all assets and properties and all interests in assets or
properties now owned or hereafter acquired by any Issuer, Parent or any
Guarantor in or upon which a Lien is granted or purported to be granted under
any of the Senior Lien Documents or the Indenture Loan Documents and all
products and proceeds of any of the foregoing, provided that the term
“Collateral” shall not include the Indenture Exclusive Collateral.

 

“Credit Facility Indebtedness” shall mean all present and future obligations
(including principal, interest, fees and reimbursement obligations under letters
of credit), contingent or otherwise, of the Issuers, Parent and the Guarantors
to the Senior Lien Creditors arising under or pursuant to the Senior Lien
Documents, including, in each case, interest, fees, and expenses accruing after
the initiation of any Insolvency Proceeding (irrespective of whether allowed as
a claim in such proceeding), and including the secured claims of any Senior Lien
Creditor in respect of the Collateral in any Insolvency Proceeding.

 

“Disbursement Accounts” shall mean the Interest Reserve Account and the
Construction Disbursement Account (each as defined in the Disbursement
Agreement).

 

“Disbursement Agreement” shall mean that certain Cash Collateral and
Disbursement Agreement by and among U.S. Bank National Association, DJW and DJW
Corp., dated as of July     , 2005.

 

2

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 “Enforcement Action” shall mean the exercise of any right or remedy with
respect to any Collateral (including any right of set-off) or the taking of any
Foreclosure Action or other action to enforce, collect or realize upon any
Collateral, or the commencement of any action, whether judicial or otherwise,
for the enforcement of such Party’s rights and remedies as a secured creditor
with respect to the Collateral, or the commencement of any receivership
proceedings or any other sale of, collection on, or disposition of, any
Collateral, including the exercise of any right, remedy or action to: 
(a) exercise any collection rights in respect of any Collateral or notify any
account debtors to make payment directly to such Party or its agents or other
Persons acting on its behalf or retain any proceeds of accounts and other
obligations receivable paid by any account debtor; (b) take or accept any
transfer of title in lieu of foreclosure upon any Collateral; (c) enforce any
claim to the proceeds of insurance upon any Collateral; (d) deliver any notice,
claim or demand relating to the Collateral to any Person (including any
securities intermediary, depositary bank or landlord) in the possession or
control of any Collateral or acting as bailee, custodian or agent for any Party
in respect of any Collateral; or (e) otherwise enforce any remedy available to
such Party upon default for the enforcement of any Lien upon the Collateral.

 

“Enforcement Event” shall mean the occurrence and continuance of an “Event of
Default” as defined under Section 6.1 of the Indenture.

 

“Enforcement Event Notice” shall have the meaning ascribed thereto in
Section 3.2.

 

“Entitled Party” shall have the meaning ascribed thereto in Section 4.1(a).

 

“Event of Default” shall mean, with respect to any Senior Lien Document, the
occurrence of an “Event of Default” under, and as defined in, such Senior Lien
Document.

 

“Financing Documents” shall mean the Indenture Documents and the Senior Lien
Documents.

 

“Foreclosure Action” shall mean any action to foreclose upon or enforce a Lien
against any of the Collateral, including (a) commencing judicial or non-judicial
foreclosure proceedings, (b) exercising any rights afforded to secured creditors
in a case under the Bankruptcy Law with respect to the Collateral, or (c) taking
any action under the Bankruptcy Law that directly relates to or directly affects
any such Collateral, other than any such action that relates to or affects all
or substantially all of the property of the bankruptcy estate.

 

“Fully Paid” shall mean (a) with respect to the Indenture Documents, the payment
in cash or cash equivalents in full of all obligations (other than contingent,
unliquidated indemnity obligations that survive payment in full) under the
Indenture Documents, and (b) with respect to any Senior Lien Document, (i) the
payment in cash or cash equivalents in full of all obligations (other than
contingent, unliquidated indemnity

 

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obligations that survive payment in full) under such Senior Lien Document (it
being agreed and understood that with respect to any Senior Lien Document, the
principal amount of such obligations shall at no time exceed the applicable
Maximum Credit Facility Amount), plus related interest, fees, costs, expenses
and reimbursement and indemnification obligations), and (ii) the termination of
all commitments or other obligations of the Senior Lien Creditors under such
Senior Lien Document to extend credit thereunder to any Issuer, Parent, any
Guarantor, or any other subsidiary of an Issuer.

 

“Indenture Documents” shall mean the Indenture, the Notes, the Indenture
Security Documents and such other agreements, instruments and certificates
executed and delivered (or issued) by the Issuers, Parent or the Guarantors
pursuant to the Indenture, as any or all of the same may be amended, restated,
supplemented or otherwise modified from time to time.

 

“Indenture Exclusive Collateral” shall mean the Disbursement Accounts, together
with all cash and other assets credited thereto and interest and earnings
thereon.

 

“Indenture Security Documents” has the meaning assigned to the term “Security
Documents” in the Indenture.

 

“Insolvency Proceeding” shall mean any proceeding for the purposes of
dissolution, winding up, liquidation, arrangement or reorganization of the
Issuers, Parent, any Guarantor, or any other subsidiary of the Issuers, or their
respective successors or assigns, whether in bankruptcy, insolvency,
arrangement, reorganization or receivership proceedings, or upon an assignment
for the benefit of creditors or any other marshaling of the assets and
liabilities of the Issuers, Parent, any Guarantor, or any other subsidiary of
the Issuers, or their respective successors or assigns.

 

“Lien Priority” shall mean, with respect to any Lien in and to the Collateral,
the order of priority of such Lien as specified in Sections 2.1 and 2.2.

 

“Maximum Credit Facility Amount” shall mean $2,500,000, which amount may be
decreased as provided in Section 4.7(b)(i) of the Indenture (as in effect on the
date hereof), in each case in aggregate principal amount of such Credit Facility
Indebtedness, plus all related interest, fees expenses and indemnification
obligations or such greater amount or amounts as the Trustee may consent to in
its discretion.

 

“Party” shall mean each of (a) the Trustee and (b) the Senior Lien Creditor
Representative.

 

“Secured Liabilities” shall mean the Credit Facility Indebtedness (up to the
Maximum Credit Facility Amount) and the Subordinated Lien Indebtedness.

 

“Security Documents” shall mean any and all Indenture Security Documents and any
and all Senior Lien Documents, in each case executed, delivered or authorized by
an Issuer, Parent or any Guarantor or any subsidiary of an Issuer pursuant

 

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to which such Person grants to the Trustee (as security for the Subordinated
Lien Indebtedness) or any Senior Lien Creditor (as security for the applicable
Credit Facility Indebtedness) a security interest in any Collateral.

 

“Senior Lien Creditors” shall mean, collectively and individually, the Senior
Lien Creditor Representative and the Senior Lien Lenders.

 

“Subordinated Lien Indebtedness” shall mean all present and future obligations,
contingent or otherwise, of the Issuers, Parent and the Guarantors to the
Trustee or Holders arising under or pursuant to the Indenture Documents,
including, in each case, interest, fees and expenses accruing after the
initiation of any Insolvency Proceeding (irrespective of whether allowed as a
claim in such proceeding), and including the secured claims of the Trustee or
the Holders in respect of the Collateral in any Insolvency Proceeding.

 

Section 1.2             Indenture Definitions.  All other capitalized terms that
are used but not defined herein shall have the respective meaning indicated in
the Indenture, as in effect on the date hereof.

 

Section 1.3             Miscellaneous.  All definitions herein (whether set
forth herein directly or by reference to definitions in other documents) shall
be equally applicable to both the singular and the plural forms of the terms
defined.  The words “hereof,” “herein” or “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.  Article and
section references are to articles and sections of this Agreement unless
otherwise specified.  The term “including” shall mean “including without
limitation.”

 

ARTICLE II
LIEN PRIORITY

 

Section 2.1             Agreement to Subordinate Liens.  The Trustee hereby
agrees that all Liens of the Trustee for the benefit of itself and the Holders
in and to the Collateral are and shall be junior to and subordinate in priority
to the Liens of any or all of the Senior Lien Creditors in and to the Collateral
securing Credit Facility Indebtedness (up to the Maximum Credit Facility
Amount); provided that, the rights of a Party under this Agreement shall be void
and of no further force and effect if, and only to the extent, that the Liens of
such Party in and to the Collateral are avoided, disallowed, set aside or
otherwise invalidated in any action or proceeding by a court, tribunal or
administrative agency of competent jurisdiction and such avoidance,
disallowance, set aside or other invalidation is permanent and is not later
reversed.  The subordination of the Liens of the Trustee for the benefit of
itself and the Holders in and to the Collateral in favor of the Senior Lien
Creditors provided for herein shall not be deemed to (a) subordinate the Liens
of the Trustee for the benefit of itself and the Holders to the Liens of any
other Person, or (b) subordinate the Subordinated Lien Indebtedness to any other
Indebtedness of the Issuers, Parent or any of the Guarantors, including the
Credit Facility Indebtedness.  The Senior Lien Creditor Representative, on
behalf of itself and the Senior Lien

 

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Creditors, hereby acknowledges and agrees that the Indenture Exclusive
Collateral does not and shall not secure any Credit Facility Indebtedness.

 

Section 2.2             Non-Contest; Excluded Assets.  Each Party agrees that it
will not attack or contest the validity, perfection, priority or enforceability
of the Liens of the other Party or finance or urge any other Person to do so;
provided that, any Party may enforce its rights and privileges hereunder without
being deemed to have violated this provision.  Any provision contained in this
Agreement to the contrary notwithstanding, the terms and conditions of this
Agreement shall not apply, as between the Senior Lien Creditor Representative on
the one hand, and the Trustee on the other hand, to any property or assets
(including property or assets that do not constitute Collateral) as to which the
Senior Lien Creditor Representative has a Lien and as to which the Trustee does
not have a Lien, or as to which the Trustee has a Lien and the Senior Lien
Creditor Representative does not have a Lien (including the Indenture Exclusive
Collateral).

 

Section 2.3             Exercise of Rights.

 

(a)           The Trustee may exercise, and nothing herein shall constitute a
waiver of, any right it may have at law or equity to receive notice of, or to
commence or join with any creditor in commencing any Insolvency Proceeding;
provided that, the exercise of any such right by the Trustee shall be
(i) subject to the Lien Priority and application of proceeds of Collateral as
provided in Section 3.4 and (ii) subject to the provisions of Sections 3.1 and
3.2.

 

(b)           Notwithstanding any other provision hereof, the Trustee may make
such demands or file such claims as may be necessary to prevent the waiver or
bar of such claims under applicable statutes of limitations or other statutes,
court orders or rules of procedure.

 

Section 2.4             Priority of Liens.  (a)  Irrespective of any priority
otherwise available to the Trustee by law or agreement or irrespective of the
order of recording of mortgages, financing statements, security agreements or
other instruments, and irrespective of the descriptions of Collateral contained
in the Financing Documents, including any financing statements, each of the
Trustee and the Senior Lien Creditor Representative hereby agree among
themselves that their respective Liens in the Collateral shall be governed by
the Lien Priority, which shall be controlling in the event of any conflict
between this Agreement and any of the Financing Documents.

 

(b)           Each Party agrees that this Agreement and the Lien Priority shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated, modified or otherwise affected by any
circumstance or occurrence whatsoever (other than in accordance with the terms
hereof), including any of the following (whether or not such Party consents
thereto or has notice thereof):  (i) any change in or waiver of the time, place
or manner of payment, or any other term, of any of the Secured Liabilities or
Financing Documents, any waiver of or any renewal, extension, increase,
refinancing, amendment or modification of or addition, consent or

 

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supplement to or deletion from, or any other action or inaction under or in
respect of, any of the Secured Liabilities or Financing Documents or any other
document, instrument or agreement referred to therein or any assignment or
transfer of any of the Secured Liabilities or Financing Documents; (ii) any
furnishing of any additional collateral for any of the Secured Liabilities or
any sale, exchange, release or surrender of, or realization on, any collateral
for any of the Secured Liabilities; (iii) any settlement, release or compromise
of any of the Secured Liabilities or Financing Documents, any collateral
therefor, or any liability of any other party (including any other Party) with
respect to any of the Secured Liabilities or Financing Documents, or any
subordination of payment of any Secured Liabilities to the payment of any other
indebtedness, liability or obligation of any of the Issuers, Parent, the
Guarantors or any subsidiary of any Issuer; (iv) any bankruptcy, insolvency,
reorganization, composition, adjustment, merger, consolidation, dissolution,
liquidation or other like proceeding or occurrence relating to any of the
Issuers, Parent, the Guarantors, or any subsidiary of any Issuer, or any other
change in the ownership, control, composition or nature of any of the Issuers,
Parent, the Guarantors, or any subsidiary of any Issuer; (v) any application of
sums paid by any of the Issuers, Parent, the Guarantors or any subsidiary of any
Issuer with respect to any of the Secured Liabilities, except to the extent
actually applied against such Secured Liabilities, regardless of what other
liabilities of the Issuers, Parent, the Guarantors, or any subsidiary of any
Issuer remain unpaid; or (vi) the failure of any Party to assert any claim or
demand or to enforce any right or remedy against the Issuers, Parent, the
Guarantors, any subsidiary of any Issuer or any other Person (including any
other Party with respect to any of the Secured Liabilities) under the provisions
of any of the Financing Documents or otherwise.

 

Section 2.5             Insolvency.  (a)  The provisions of this Agreement will
be applicable both before and after the filing or commencement of any Insolvency
Proceeding and all converted or succeeding cases in respect thereof, and all
references herein to any Issuer, Parent or any Guarantor shall be deemed to
apply to the trustee for such Issuer, Parent and/or such Guarantor and such
Issuer, Parent and/or such Guarantor as a debtor-in-possession.  The relative
rights of the Senior Lien Creditors in or to any distributions from or in
respect of any Collateral or proceeds of Collateral shall continue after the
filing of such Insolvency Proceeding on the same basis as prior to the date of
such filing, subject to any court order approving the financing of, or use of
cash collateral by, any Issuer, Parent or any Guarantor as
debtor-in-possession.  If, in any Insolvency Proceeding and at any time any
Credit Facility Indebtedness exists that has not been Fully Paid, all of the
Senior Lien Creditors (or such number of the Senior Lien Creditors as may have
the power to bind all of them):

 

(i)            consent to any order for use of cash collateral or agree to the
extension of any Credit Facility Indebtedness (including any
debtor-in-possession financing) to any Issuer, Parent or any Guarantor;

 

(ii)           consent to any order granting any priming lien, replacement lien,
cash payment or other relief on account of Credit Facility Indebtedness as
adequate protection (or its equivalent) for the

 

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interests of the Senior Lien Creditors in the property subject to such Lien of
the Senior Lien Creditor Representative;

 

(iii)          consent to any order approving post-petition financing pursuant
to Section 364 of the United States Bankruptcy Code (including any “roll-up” of
Credit Facility Indebtedness); or

 

(iv)          consent to any order relating to a sale of assets of any Issuer,
Parent or any Guarantor that provides, to the extent the sale is to be free and
clear of Liens, that all Liens of the Senior Lien Creditor Representative and
the Lien of the Trustee shall attach to the proceeds of the sale,

 

then the Trustee and the Holders will not oppose or otherwise contest the entry
of such order.

 

(b)           So long as there is any Credit Facility Indebtedness existing that
has not been Fully Paid, none of the Holders or the Trustee will:

 

(i)            request judicial relief, in an Insolvency Proceeding or in any
other court, that would hinder, delay, limit or prohibit the lawful exercise or
enforcement of any right or remedy otherwise available to the Senior Lien
Creditor Representative in respect of the Collateral or that would limit,
invalidate, avoid or set aside any Lien of the Senior Lien Creditor
Representative or Senior Lien Document or subordinate the Lien on any Collateral
of the Senior Lien Creditor Representative to the Lien on such Collateral of the
Trustee or grant the Lien on any Collateral of the Senior Lien Creditor
Representative equal ranking to the Lien on such Collateral of the Trustee;

 

(ii)           oppose or otherwise contest any motion for relief from the
automatic stay or from any injunction against foreclosure or enforcement of Lien
on any Collateral of the Senior Lien Creditor Representative made by the Senior
Lien Creditor Representative in any Insolvency Proceeding;

 

(iii)          oppose or otherwise contest any lawful exercise by the Senior
Lien Creditor Representative of the right to credit bid at any sale in
foreclosure of a Lien on any Collateral of the Senior Lien Creditor
Representative;

 

(iv)          oppose or otherwise contest any other request for judicial relief
made in any court by the Senior Lien Creditor Representative relating to the
lawful enforcement of any Lien on any Collateral of the Senior Lien Creditor
Representative;

 

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(v)           request relief from the automatic stay in any Insolvency
Proceeding with respect to any Collateral unless any Senior Lien Creditor
requests such relief; or

 

(vi)          challenge the enforceability, perfection or the validity of the
Credit Facility Indebtedness or the Lien on any Collateral of the Senior Lien
Creditor Representative.

 

(c)           The Trustee will not file or prosecute in any Insolvency
Proceeding any motion for adequate protection or for relief from the automatic
stay (in each case, or any comparable request for relief) based upon its
interests in the Collateral, except that:

 

(i)            it may freely seek and obtain relief granting a replacement lien,
additional lien, superpriority, administrative claim or other adequate
protection co-extensive in all respects with, but subordinated in accordance
with the Lien Priority in all respects to, all Liens on any Collateral granted
in such Insolvency Proceeding to the Senior Lien Creditors in connection with
Credit Facility Indebtedness;

 

(ii)           it may assert rights consistent with this Agreement in connection
with the confirmation of any plan of reorganization or similar dispositive
restructuring plan; and

 

(iii)          it may freely seek and obtain any relief upon a motion for
adequate protection or for relief from the automatic stay (in each case, or any
comparable relief), without any condition or restriction whatsoever, at any time
when all Credit Facility Indebtedness has been Fully Paid.

 

(d)           If, in any Insolvency Proceeding, debt obligations of the
reorganized debtor secured by Liens upon any property (other than the Indenture
Exclusive Collateral) of the reorganized debtor are distributed, both on account
of Credit Facility Indebtedness and on account of the Subordinated Lien
Indebtedness, then, to the extent the debt obligations distributed on account of
the Credit Facility Indebtedness and on account of the Subordinated Lien
Indebtedness are secured by Liens upon the same property (other than the
Indenture Exclusive Collateral), the provisions of this Agreement will survive
the distribution of such debt obligations pursuant to such plan and will apply
with like effect to the Liens on such property securing such debt obligations.

 

(e)           Subject to Section 3.4(a)(ii), the Trustee will not assert or
enforce, at any time when any Credit Facility Indebtedness exists that has not
been Fully Paid, any claim under §506(c) of the Bankruptcy Code senior to or on
a parity with the Lien of the Senior Lien Creditor Representative for costs or
expenses of preserving or disposing of any Collateral.

 

Section 2.6             Insurance and Condemnation Proceeds.  At any time any
Credit Facility Indebtedness exists that has not been Fully Paid, the Senior
Lien

 

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Creditor Representative will have the sole right to adjust settlement of all
insurance claims and condemnation awards in the event of any covered loss,
theft, destruction or condemnation of any Collateral and all claims under
insurance constituting Collateral, subject to the terms of the Senior Lien
Documents.

 

ARTICLE III
ACTIONS OF THE PARTIES

 

Section 3.1             Limitation on Certain Actions.  Subject to Section 3.2,
until the first date on which the Maximum Credit Facility Amount is Fully Paid,
the Trustee will not, without the prior written consent of the Senior Lien
Creditor Representative, take any Enforcement Action (it being understood and
agreed that this Agreement shall not limit any right the Trustee may have with
respect to the Indenture Exclusive Collateral or any action the Trustee may take
solely in respect thereof).

 

Section 3.2             Standstill Period.  If an Enforcement Event has occurred
and is continuing, the Trustee, on behalf of the holders of the Notes, may give
the Senior Lien Creditor Representative written notice thereof (an “Enforcement
Event Notice”), which notice shall constitute notice to each Senior Lien
Creditor.  If (a) such Enforcement Event is continuing for more than 180
consecutive days after the delivery of such Enforcement Event Notice (the
“Expiry Date”), (b) no Senior Lien Creditor Representative has, on or before the
Expiry Date, commenced (and notified the Trustee that the Senior Lien Creditor
Representative has commenced) one or more Enforcement Actions, and (c) the
Issuer, Parent or the Guarantor against which the Trustee’s proposed Enforcement
Action is to be taken is not the subject of an Insolvency Proceeding, then the
Trustee may, subject to the Lien Priority and the application of all proceeds of
the Collateral in accordance with Section 3.4, take one or more Enforcement
Actions.  If (i) the Senior Lien Creditor Representative has commenced any
Enforcement Action on or prior to the Expiry Date and, at any time after the
Expiry Date, is no longer pursuing one or more Enforcement Actions, (ii) no
Insolvency Proceeding is pending against the Issuers, Parent or the Guarantor
against which the Trustee’s proposed Enforcement Action is to be taken, and
(iii) the Enforcement Event that was the subject of, or existing on the date of,
the Enforcement Event Notice is then continuing, then the Trustee may, subject
to the Lien Priority and the prior application of all proceeds of the Collateral
in accordance with Section 3.4, take one or more Enforcement Actions.  Except as
expressly provided for in this Agreement, nothing in this Agreement shall
prevent the Parties from exercising any other remedy, or taking any other
action, under any of the Financing Documents (including any remedy or other
action by the Trustee solely in respect of the Indenture Exclusive Collateral).

 

Section 3.3             Foreclosure.  Any Party taking a permitted Enforcement
Action may enforce its Financing Documents independently as to the Issuers,
Parent and each Guarantor and independently of any other remedy or security such
Party at any time may have or hold in connection with its Secured Liabilities,
and, except as provided herein, it shall not be necessary for such Party to
marshal assets in favor of any other Party or any other Person or to proceed
upon or against or exhaust any other security or remedy before proceeding to
enforce the Financing Documents (including in the case of

 

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the Trustee or any Holder, any of the foregoing actions with respect to the
Indenture Exclusive Collateral).  Each of the Trustee (for so long as the
Maximum Credit Facility Amount is not Fully Paid) and the Senior Lien Creditor
Representative (for so long as the Trustee and the Holders are owed any
Subordinated Lien Indebtedness) expressly waives any right to require the other
Party to marshal assets in favor of any Party or to proceed against any
Collateral provided by the Issuers, Parent or any Guarantor, or any other
property, assets, or collateral provided by the Issuers, Parent, any Guarantor,
or any other Person, and agrees that the Party taking such permitted Enforcement
Action may proceed against the Issuers, Parent, any Guarantor, any Collateral or
other property, assets, or other collateral provided by any of them or by any
other Person, in such order as it shall determine in its sole and absolute
discretion.  The foregoing notwithstanding:  (a) with respect to the sale or
other disposition of any Collateral governed by Article 9 of the Uniform
Commercial Code, the Party conducting such sale or other disposition agrees in
favor of the other Parties that every aspect of such sale or other disposition,
including the method, manner, time, place, and terms, must be commercially
reasonable, (b) with respect to the sale or other disposition of any other
Collateral consisting of real property, the Party conducting such sale or other
disposition agrees in favor of the other Parties that such sale or other
disposition shall be conducted according to the normal practices of commercial
real property secured lenders generally, (c) with respect to the sale or other
disposition of any Collateral by any Party, such Party agrees to provide the
other Parties with such written notice as it is required by applicable law
(including, if applicable, the Uniform Commercial Code) to provide to the
Issuers, Parent or the Guarantors (without regard to whether the Issuers, Parent
or the Guarantors have waived their entitlement to receive such notice), and
(d) the Senior Lien Creditor Representative agrees that, at such time as the
Maximum Credit Facility Amount applicable to its Senior Lien Documents is Fully
Paid, the Senior Lien Creditor Representative thereupon promptly shall cease all
further Enforcement Actions in connection with its Senior Lien Documents.

 

Section 3.4             Distribution.  Each Party agrees that, upon any
distribution as a result of any Enforcement Action, or the receipt of any other
payment or distribution with respect to the Collateral, the proceeds thereof
shall be distributed in the order of, and in accordance with, the following
priorities:

 

(a)           FIRST:

 

(i)            if the Enforcement Action is taken by a Senior Lien Creditor, to
the payment of all reasonable costs and expenses, commissions and taxes of such
Senior Lien Creditor incurred in connection with taking such Enforcement Action
or other realization, including all reasonable expenses (including attorneys
fees and expenses), liabilities and advances made or incurred by or on behalf of
such Senior Lien Creditor in connection therewith;

 

(ii)           if the Enforcement Action is taken and entitled to be taken
hereunder by the Trustee, to the payment of all reasonable costs and expenses,
commissions and taxes of the Trustee incurred in connection with taking such
Enforcement Action or other

 

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realization, including all reasonable expenses (including attorneys fees and
expenses), liabilities and advances made or incurred by or on behalf of the
Trustee in connection therewith;

 

(b)           SECOND, to the Senior Lien Creditor Representative, for the
benefit of the Senior Lien Creditors, until the first date on which the Maximum
Credit Facility Amount is Fully Paid;

 

(c)           THIRD, to the Trustee, until all Subordinated Lien Indebtedness is
Fully Paid; and

 

(d)           FOURTH, to or at the direction of an Issuer, Parent or a
Guarantor, as applicable, or as a court of competent jurisdiction shall direct.

 

Section 3.5             Notice of Certain Events; Information.  (a)  Each Party
agrees that it will notify the other Parties (it being understood that, to the
extent this Section 3.5 applies to an obligation of the Trustee to give notice,
it may satisfy such obligation by giving notice to the Senior Lien Creditor
Representative), in writing, (x) if it receives actual notice of the occurrence
of an Event of Default or an Enforcement Event, not later than 30 days after the
date of any such occurrence, and (y) at least 15 days prior to exercising any
remedies with respect to any portion of the Collateral.  Notwithstanding the
foregoing, no Senior Lien Creditor Representative shall be obligated to provide
such prior written notice if exigent circumstances require that the Senior Lien
Creditor Representative act immediately in order to preserve, protect, or obtain
possession or control over the Collateral or any portion thereof; provided that,
if such exigent circumstances require the Senior Lien Creditor Representative to
so act immediately, the Senior Lien Creditor Representative agrees to provide
the Trustee with written notice as soon as practicable following the Senior Lien
Creditor Representative first exercising any of its secured creditor remedies
with respect to the Collateral, and no Party shall incur any liability to the
other under this Section 3.5 as a result of the failure of such Party to provide
any such notice so long as the failure to so provide such notice was not the
result of willful misconduct, bad faith or gross negligence.

 

(b)           The Senior Lien Creditor Representative, on the one hand, and the
Trustee, on the other hand, shall each be responsible for keeping themselves
informed of the financial condition of the Issuers, Parent, Guarantors and their
subsidiaries and all other circumstances bearing upon the risk of nonpayment of
the Secured Liabilities.  Neither the Senior Lien Creditor Representative, nor
the Trustee, on the other hand, shall have any duty to advise the other party of
information regarding such condition or circumstances or, except as otherwise
expressly provided herein, as to any other matter.  If the Senior Lien Creditor
Representative on the one hand, or the Trustee, on the other hand, in their
respective discretion, undertakes at any time or from time to time to provide
any such information to any Party, such first Party shall be under no obligation
to provide any similar information on any subsequent occasion, to provide any
additional information, to undertake any investigation, or to disclose any
information which, pursuant to accepted or reasonable commercial finance
practice, it wishes to maintain confidential.

 

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ARTICLE IV
ENFORCEMENT OF PRIORITIES

 

Section 4.1             In Furtherance of Lien Priorities.  Each Party agrees as
follows:

 

(a)           All payments or distributions of or with respect to the Collateral
that are received by any Party contrary to the provisions of this Agreement
(including payments or distributions in connection with any Insolvency
Proceeding) shall be segregated from other funds and property held by such Party
and shall be held in trust for the Party entitled thereto in accordance with the
provisions of Section 3.4 (the “Entitled Party”) and such Party shall forthwith
pay over such remaining proceeds to the Entitled Party in the same form as so
received (with any necessary endorsement) to be applied (in the case of cash) or
held as Collateral (in the case of non-cash property or securities) in
accordance with the provisions hereof and the provisions of the applicable
Financing Documents.

 

(b)           After the first date on which the Maximum Credit Facility Amount
relating to any Senior Lien Documents is Fully Paid, each applicable Senior Lien
Creditor Representative will promptly execute and deliver all further
instruments and documents, and take all further acts that may be necessary, or
that the Trustee may reasonably request, to permit the Trustee to evidence the
termination of the Lien Priority applicable to the Senior Lien Creditor
Representative hereunder, or in furtherance thereof; provided that, no Senior
Lien Creditor Representative shall be required to pay over any payment or
distribution, execute any instruments or documents, or take any other action
referred to in this clause (b) to the extent that such action would contravene
any law, order or other legal requirement, and in the event of a controversy or
dispute, the Senior Lien Creditor Representative may interplead any payment or
distribution in any court of competent jurisdiction.

 

(c)           Each Party is hereby authorized to demand specific performance of
this Agreement, whether or not the Issuers, Parent or any Guarantor shall have
complied with any of the provisions hereof applicable to it, at any time when
any other Party shall have failed to comply with the provisions of this
Agreement applicable to it, provided that, the remedy of specific performance
shall not be available, and the asserting Party shall be free to assert any and
all legal defenses it may possess, if such remedy would result in, or otherwise
constitute, a violation of the Employee Retirement Income Security Act of 1974,
as amended.  Each Party hereby irrevocably waives any defense based on the
adequacy of a remedy at law, which might be asserted as a bar to such remedy of
specific performance.

 

(d)           Ten Business Days after the date hereof, (i) the Trustee and the
Senior Lien Creditor Representative shall enter into a control agreement or
control agreements with respect to the deposit accounts of any Issuer, Parent or
any Guarantor at any financial institution, constituting part of the Collateral,
in form and substance reasonably acceptable to the Trustee and the Senior Lien
Creditor Representative but consistent with the terms of this Intercreditor
Agreement, which shall supersede any

 

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existing control agreements between the Trustee and such financial institution,
and (ii) the Trustee and the Senior Lien Creditor Representative agree to
terminate or amend and restate such existing control agreements.

 

(e)           This Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Secured Liabilities
is, other than as a result of any intentional fraud or gross negligence of the
applicable Party, rescinded or must otherwise be returned by the applicable
Party upon the insolvency, bankruptcy or reorganization of the Issuers, Parent
or any Guarantor or otherwise, all as though such payment had not been made.

 

Section 4.2             Perfection of Possessory or Control Security Interests. 
(a)  For the limited purpose of perfecting the security interests of the Parties
in those types or items of Collateral in which a security interest only may be
perfected by possession or control (including perfection of a security interest
in deposit accounts under Article 9 of the Uniform Commercial Code), each Party
hereby appoints the other as its representative for the limited purpose of
possessing or controlling on its behalf any such Collateral that may come into
the possession or control of such other Party from time to time, and each Party
agrees to act as the other’s representative for such limited purpose of
perfecting the other’s security interest by possession or control through a
representative, provided that, neither Party shall incur any liability to the
other by virtue of acting as the other’s representative hereunder for such
purpose.  In this regard, any Party that is in possession or control of any such
item of Collateral agrees that if it elects to relinquish possession or control
of such item of Collateral it shall deliver possession or control thereof to
another Party; provided that, no Party shall be required to deliver any such
item of Collateral or take any other action referred to in this Section 4.2 to
the extent that such action would contravene any law, order or other legal
requirements, and in the event of a controversy or dispute, such Party may
interplead any item of Collateral in any court of competent jurisdiction.

 

(b)           The Senior Lien Creditor Representative and the Trustee agree that
if the Senior Lien Creditor Representative shall enter into a control agreement
with respect to any security account or deposit account of an Issuer, Parent or
a Guarantor, the Trustee will be given notice by such Issuer, Parent or such
Guarantor and sufficient opportunity to also become a party thereto in order to
perfect its security interest in such accounts.  If and to the extent such
control agreements provide for the right of either the applicable Senior Lien
Creditor Representative or the Trustee to give notice or direction to the
depository or intermediary, as applicable, with respect to such accounts, the
Trustee hereby agrees that, subject to Section 3.2, it will not give any such
notice or direction to any such depository or intermediary unless and until all
Credit Facility Indebtedness has been Fully Paid.  The duties or
responsibilities of the Senior Lien Creditor Representative under this
Section 4.2 shall be limited solely to holding the pledged Collateral as bailee
for the Trustee for purposes of perfecting the Lien therein held by the Trustee
to secure the Subordinated Lien Obligations.  The Senior Lien Creditor
Representative shall not have any obligation to the Trustee or any Holder to
care for, protect or insure any pledged Collateral or to ensure that the Lien on
such pledged Collateral has been properly or sufficiently created or entitled to
any particular priority. 

 

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The Senior Lien Creditor Representative shall be entitled to deal with the
pledged Collateral in accordance with the terms of the Senior Lien Documents and
this Agreement.  The Senior Lien Creditor Representative shall not have any
obligation whatsoever to the Trustee or the Holders to assure that the pledged
Collateral is genuine or owned by any Issuer, Parent or any Guarantor or
otherwise or to preserve rights or benefits of any Person except as expressly
set forth in this Section.  The Senior Lien Creditor Representative shall not
have, by reason of this Agreement or any other document or instrument, a
fiduciary relationship in respect of the Trustee or the Holders.  The Trustee
shall not have any obligation to the Senior Lien Creditor Representative or any
Senior Lien Lender to care for, protect or insure any pledged Collateral or to
ensure that the Lien on such pledged Collateral has been properly or
sufficiently created or entitled to any particular priority.  The Trustee shall
be entitled to deal with the pledged Collateral in accordance with the terms of
the Senior Lien Documents and this Agreement.  The Trustee shall not have any
obligation whatsoever to the Senior Lien Creditor Representative or the Senior
Lien Lenders to assure that the pledged Collateral is genuine or owned by any
Issuer, Parent or any Guarantor or otherwise or to preserve rights or benefits
of any Person except as expressly set forth in this Section.  The Trustee shall
not have, by reason of this Agreement or any other document or instrument, a
fiduciary relationship in respect of the Senior Lien Creditor Representative or
the Senior Lien Lenders.

 

Section 4.3             Control of Dispositions of Collateral and Effect thereof
on Junior Liens.

 

(a)           Each Party hereby agrees that any Uniform Commercial Code
collection, sale, or other disposition of Collateral by the Senior Lien Creditor
Representative shall be free and clear of any Lien of the Trustee in such
Collateral; provided that, the Trustee shall retain a Lien (having the same
priority as the Lien it previously had on the item of Collateral that was
collected, sold or otherwise disposed of) on the proceeds of such collection,
sale, or other disposition (except to the extent such proceeds are applied to
the Credit Facility Indebtedness (up to the Maximum Credit Facility Amount) in
accordance with Section 3.4).

 

(b)           To the extent reasonably requested by any Party, the other Parties
will cooperate in providing any necessary or appropriate releases to permit a
collection, sale, or other disposition of Collateral, as provided in
Section 4.3(a).

 

Section 4.4             Certain Other Collateral.  Subject to Section 4.1(c),
any provision of any Indenture Security Document that requires any Debtor (as
defined in the Security Agreement referred to in the Indenture) to (a) deliver
any Collateral to the Trustee or the Senior Lien Creditor Representative,
(b) provide that the Trustee or the Senior Lien Creditor Representative have
control (as defined in the Uniform Commercial Code) over any Collateral, or
(c) list the Trustee or the Senior Lien Creditor Representative as (x) loss
payee or additional insured on any insurance policy or (y) sole lienholder on
any certificate of title relating to any Collateral, may be satisfied by (A) the
delivery of such Collateral by such Debtor to the Senior Lien Creditor
Representative (or its designee), (B) providing that the Senior Lien Creditor
Representative (or its designee)

 

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be provided with control (as defined in the Uniform Commercial Code) with
respect to such Collateral, or (C) listing the Senior Lien Creditor
Representative (or its designee) as (x) loss payee or additional insured on any
insurance policy or (y) sole lienholder on any certificate of title relating to
Collateral, in each of the foregoing cases in clauses (A), (B) and (C), for the
benefit of all of the Senior Lien Creditors and the Trustee.

 

ARTICLE V
MISCELLANEOUS

 

Section 5.1             Rights of Subrogation.  The Trustee agrees that no
payment or distribution to any Senior Lien Creditor pursuant to the provisions
of this Agreement shall entitle the Trustee to exercise any rights of
subrogation in respect thereof until the first date on which the Maximum Credit
Facility Amount of all the Senior Lien Documents shall have been Fully Paid.

 

Section 5.2             Further Assurances.  The Parties will, at their own
expense and at any time and from time to time, promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that any Party may reasonably request, in order to
protect any right or interest granted or purported to be granted hereby or to
enable any Party to exercise and enforce its rights and remedies hereunder;
provided that, no Party shall be required to pay over any payment or
distribution, execute any instruments or documents, or take any other action
referred to in this Section 5.2 to the extent that such action would contravene
any law, order or other legal requirement binding upon such Party, and in the
event of a controversy or dispute, any Party may interplead any payment or
distribution in any court of competent jurisdiction, without further
responsibility in respect of such payment or distribution under this
Section 5.2.  Without limiting the foregoing, but in furtherance thereof, the
Trustee agrees, upon the request of the Senior Lien Creditor Representative, to
execute and deliver to the Senior Lien Creditor Representative (or its
designees) a subordination of mortgage and subordination of trademark security
interests, in each case in form to be recordable with the applicable
governmental authorities and otherwise in form and substance reasonable
acceptable to the Senior Lien Creditor Representative and the Trustee but
consistent with the terms of this Intercreditor Agreement.

 

Section 5.3             Defenses Similar to Suretyship Defenses. All rights,
interests, agreements and obligations of each of the Parties under this
Agreement, shall remain in full force and effect irrespective of:

 

(a)           any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Liabilities, or any other amendment or
waiver of or any consent to departure from the Financing Documents; provided
that, this clause (a) shall not apply to, and the Trustee’s Liens in the
Collateral shall not be subordinated in priority by virtue of this Agreement to,
the Senior Lien Creditor Representative’s Liens therein if and to the extent
that the Credit Facility Indebtedness applicable to the Senior Lien Creditor
Representative’s Senior Lien Documents is increased, without the express written
consent of the Trustee, to an amount in excess of the applicable Maximum Credit
Facility Amount for such Senior Lien Document;

 

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(b)           any exchange, release, non-enforcement or non-perfection of any
Party’s Liens with respect to any Collateral, or any release, amendment or
waiver of or consent to departure from any guaranty, for all or any of the
Secured Liabilities; or

 

(c)           any failure by any Party to marshal assets in favor of any other
Party or any other Person or to proceed upon or against or exhaust any security
or remedy before proceeding to enforce the Financing Documents.

 

Section 5.4             Waiver.  Except as otherwise provided in Section 2.1 and
the other provisions hereof, to the maximum extent permitted by applicable law,
the Trustee hereby waives, solely with respect to the Collateral to which the
Lien Priority relates, any failure, omission, delay or lack on the part of any
Senior Lien Creditor to enforce, assert or exercise any right, power or remedy
conferred on such Senior Lien Creditor in any of the Senior Lien Documents or
the inability of such Senior Lien Creditor to enforce any provision of the
Senior Lien Documents or this Agreement.

 

Section 5.5             Amendments, Etc.  No amendment or waiver of any
provision of this Agreement nor consent to any departure by any Party shall in
any event be effective unless the same shall be in writing and signed by each
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided that, neither
Section 4.4 nor this Section 5.5 may be amended or otherwise modified without
the prior written consent of the Issuers.

 

Section 5.6             Addresses for Notices.  All demands, notices and other
communications provided for hereunder shall be in writing and, if to the
Trustee, mailed or sent by telecopy or delivered to it, addressed to it as
follows:

 

U.S. Bank National Association
60 Livingston Avenue
St. Paul, MN 55107
Attention:  Corporate Trust Department
Facsimile:  (651) 495-8097

 

and if to the Senior Lien Creditor Representative, mailed or sent by telecopy or
delivered to the Senior Lien Creditor Representative, addressed to it as
follows:

 

[                                  ]

 

With a copy to:

 

[                                  ]

 

or as to any Party at such other address as shall be designated by such Party in
a written notice to the other parties complying as to delivery with the terms of
this Section 5.6.  All such demands, notices and other communications shall be
effective:  when mailed, two business days after deposit in the mails, postage
prepaid; when sent by telecopy, when receipt is acknowledged by the receiving
telecopy equipment (or at the opening of the

 

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next business day if receipt is acknowledged after normal business hours); or
when delivered, as the case may be, addressed as aforesaid.

 

Section 5.7             No Waiver of Remedies.  No failure on the part of any
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right.  The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.

 

Section 5.8             Continuing Agreement.  This Agreement is a continuing
agreement and shall (a) be binding upon the Parties and their successors and
assigns (including all Holders and all Persons that become lenders or
participants under the Senior Lien Documents), and (b) inure to the benefit of
and be enforceable by the Parties, the Holders, the Senior Lien Creditors and
their respective successors, transferees and assigns.

 

Section 5.9             Governing Law; Entire Agreement.  This Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York including Sections 5-1401 and 5-1402 of the New York General Obligations
Law, except as otherwise preempted by applicable federal law.  This Agreement
constitutes the entire agreement and understanding among the Parties with
respect to the subject matter hereof and supersedes any prior agreements,
written or oral, with respect thereto.

 

Section 5.10           Counterparts.  This Agreement may be executed in any
number of counterparts, and it is not necessary that the signatures of all
Parties be contained on any one counterpart hereof, each counterpart will be
deemed to be an original, and all together shall constitute one and the same
document.

 

Section 5.11           No Third Party Beneficiary.  This Agreement is solely for
the benefit of the Parties (and their successors and assigns) and the holders of
the Secured Liabilities (including the Senior Lien Creditors and the Holders). 
No other Person (including the Issuers, Parent, any Guarantor or any subsidiary
or affiliate of the Issuers, except the Issuers, Parent and Guarantors solely
with respect to Section 4.4 and the proviso to Section 5.5) shall be deemed to
be a third-party beneficiary of this Agreement or shall have any rights to
enforce any provisions hereof.

 

Section 5.12           Headings.  The headings of the articles and sections of
this Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.

 

Section 5.13           Severability.  If any of the provisions in this Agreement
shall, for any reason, be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement and shall not invalidate the Lien Priority or any
other priority set forth in this Agreement.

 

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Section 5.14           Trustee Status.  Notwithstanding any term herein to the
contrary, it is hereby expressly agreed and acknowledged that the
lien-subordination and related agreements set forth herein by the Trustee are
made solely in its capacity as trustee and collateral agent under the Indenture
Documents and with respect to the Notes issued under the Indenture (and not in
its individual commercial capacity, except to the extent that it is or becomes a
Holder of any such Note).  The Trustee shall not have any duties, obligations,
or responsibilities to any Senior Lien Creditor or the Senior Lien Creditor
Representative under this Agreement except as expressly set forth herein. 
Nothing in this Agreement shall be construed to operate as a waiver by the
Trustee, with respect to the Issuers, Parent or the Guarantors or any holder of
any Subordinated Lien Indebtedness, of the benefit of any exculpatory
provisions, presumptions, indemnities, protections, benefits, immunities or
reliance rights contained in the Indenture, and, by its acknowledgment hereof,
each Issuer expressly agrees that as between itself and the Trustee, the Trustee
shall have such benefit with respect to all actions or omissions by the Trustee
pursuant to this Agreement.  For all purposes of this Agreement, the Trustee may
(a) rely in good faith, as to matters of fact, on any representation of fact
believed by the Trustee to be true (without any duty of investigation) and that
is contained in a written certificate of any authorized representative of the
Issuers or of any Senior Lien Creditor or the Senior Lien Creditor
Representative, (b) rely in good faith, as to matters of law, on any advice
received from its legal counsel or an opinion of its counsel, counsel to the
Issuers or counsel to any Senior Lien Creditor or the Senior Lien Creditor
Representative, and shall have no liability for any action or omission taken in
reliance thereon, and (c) assume in good faith (without any duty of
investigation), and rely upon, the genuineness, due authority, validity, and
accuracy of any certificate, instrument, notice, or other document believed by
it in good faith to be genuine and presented by the proper person.

 

[signature pages follow]

 

19

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IN WITNESS WHEREOF, each Party has caused this Agreement to be duly executed and
delivered as of the date first above written.

 

 

[                        ],

 

as Senior Lien Creditor Representative

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

U.S. BANK NATIONAL ASSOCIATION,

 

as Trustee

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

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ACKNOWLEDGMENT

 

Each of the undersigned hereby acknowledges that (a) it has received a copy of
the foregoing Intercreditor Agreement, dated as of [                  ] (the
“Intercreditor Agreement”; undefined capitalized terms used in this
Acknowledgment have the meanings assigned to them in the Intercreditor
Agreement), by and among U.S. Bank National Association, as Trustee, and
[                  ], as Senior Lien Creditor Representative, and consents
thereto, and agrees to recognize all rights granted thereby to the Parties, and
will not do any act or perform any obligation that is not in accordance with the
agreements set forth in such Intercreditor Agreement; and (b) it is not an
intended beneficiary or third party beneficiary under the Intercreditor
Agreement (other than with respect to Section 4.4 and the proviso to Section 5.5
thereof).

 

Dated as of the date first above written.

 

 

DIAMOND JO WORTH, LLC, as an Issuer

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

DIAMOND JO WORTH CORP., as an
Issuer

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

DIAMOND JO WORTH HOLDINGS,
LLC, as Parent

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

F-1

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