**Exhibit 4.1**

 

ELDORADO RESORTS LLC andELDORADO CAPITAL CORP.,

as Issuers

 

and

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

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INDENTURE

 

Dated as of April 20, 2004

 

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$64,700,000

 

9% SENIOR NOTES DUE 2014

 

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**CROSS-REFERENCE TABLE***

 

| **Trust Indenture Act  Section** |   | **Indenture  Section** |
|----------------------------------|--------|------------------------|
| 310(a)(1)                        |   | 7.10                   |
| (a)(2)                           |   | 7.10                   |
| (a)(3)                           |   | N.A.                   |
| (a)(4)                           |   | N.A.                   |
| (b)                              |   | 7.08; 7.10; 10.02      |
| (c)                              |   | N.A.                   |
| 311(a)                           |   | 7.11                   |
| (b)                              |   | 7.11                   |
| (c)                              |   | N.A.                   |
| 312(a)                           |   | 2.05                   |
| (b)                              |   | 10.03                  |
| (c)                              |   | 10.03                  |
| 313(a)                           |   | 7.06                   |
| (b)(1)                           |   | N.A.                   |
| (b)(2)                           |   | 7.06                   |
| (c)                              |   | 7.06; 10.02            |
| (d)                              |   | 7.06                   |
| 314(a)(1)                        |   | 4.02; 10.02            |
| 314(a)(2)                        |   | 4.02; 10.02            |
| 3.14(a)(3)                       |   | 4.02; 10.02            |
| 3.14(a)(4)                       |   | 4.03; 10.02            |
| (b)                              |   | N.A.                   |
| (c)(1)                           |   | 10.04                  |
| (c)(2)                           |   | 10.04                  |
| (c)(3)                           |   | 10.04                  |
| (d)                              |   | N.A.                   |
| (e)                              |   | 10.05                  |
| (f)                              |   | N.A.                   |
| 315(a)                           |   | 7.01(b)                |
| (b)                              |   | 7.05; 10.02            |
| (c)                              |   | 7.01(a)                |
| (d)                              |   | 7.01 (c)               |
| (e)                              |   | 6.11                   |
| 316(a)(last sentence)            |   | 6.05                   |
| (a)(1)(A)                        |   | 6.05                   |
| (a)(1)(B)                        |   | 6.04                   |
| (a)(2)                           |   | N.A                    |
| (b)                              |   | 6.07                   |
| 317(a)(1)                        |   | 6.08                   |
| (a)(2)                           |   | 6.09                   |
| (b)                              |   | 2.04                   |
| 318(a)                           |   | 10.01                  |

 

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N.A. means not applicable.

 

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*This Cross-Reference Table is not part of the Indenture.

 

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**TABLE OF CONTENTS**

 
| ARTICLE I  DEFINITIONS AND INCORPORATION BY REFERENCE |              |
|------------------------------------------------------------|-------------------|
|                                                       | Section 1.01 | Definitions. |   |
|                                                       | Section 1.02 | Other  Definitions. |   |
|                                                       | Section 1.03 | Incorporation  by Reference of Trust Indenture Act. |   |
|                                                       | Section 1.04 | Rules  of Construction. |   |
| ARTICLE II  THE NOTES                                 |              |
|                                                       | Section 2.01 | Form  and Dating. |   |
|                                                       | Section 2.02 | Execution  and Authentication. |   |
|                                                       | Section 2.03 | Registrar;  Paying Agent; Depositary; Global Note Holder. |   |
|                                                       | Section 2.04 | Paying  Agent to Hold Money in Trust. |   |
|                                                       | Section 2.05 | Noteholder  Lists. |   |
|                                                       | Section 2.06 | Transfer  and Exchange. |   |
|                                                       | Section 2.07 | Replacement  Notes. |   |
|                                                       | Section 2.08 | Outstanding  Notes. |   |
|                                                       | Section 2.09 | When  Treasury Notes Disregarded. |   |
|                                                       | Section 2.10 | Temporary  Notes. |   |
|                                                       | Section 2.11 | Gaming  Redemption. |   |
|                                                       | Section 2.12 | Cancellation. |   |
|                                                       | Section 2.13 | Defaulted  Interest. |   |
|                                                       | Section 2.14 | CUSIP  Number. |   |
| ARTICLE III  REDEMPTION AND PREPAYMENT                |              |
|                                                       | Section 3.01 | Notices  to Trustee. |   |
|                                                       | Section 3.02 | Selection  of Notes to be Redeemed. |   |
|                                                       | Section 3.03 | Notice  of Redemption. |   |
|                                                       | Section 3.04 | Effect  of Notice of Redemption. |   |
|                                                       | Section 3.05 | Deposit  of Redemption Price. |   |
|                                                       | Section 3.06 | Notes  Redeemed in Part. |   |
|                                                       | Section 3.07 | Optional  Redemption. |   |
|                                                       | Section 3.08 | Mandatory  Redemption. |   |
|                                                       | Section 3.09 | Offer  to Purchase by Application of Excess Proceeds. |   |
|                                                       | Section 3.10 | Compliance  with Tender Offer Rules. |   |
| ARTICLE IV  COVENANTS OF THE ISSUERS                  |              |
|                                                       | Section 4.01 | Payment  of Notes. |   |
|                                                       | Section 4.02 | SEC  Reports. |   |
|                                                       | Section 4.03 | Compliance  Certificate. |   |
|                                                       | Section 4.04 | Maintenance  of Office or Agency. |   |
|                                                       | Section 4.05 | Limitations  on Restricted Payments. |   |
|                                                       | Section 4.06 | Continued  Existence; Restrictions on Activities of Capital. |   |
|                                                       | Section 4.07 | Taxes. |   |
|                                                       | Section 4.08 | Change  of Control. |   |
|                                                       | Section 4.09 | Limitation  on Indebtedness. |   |
|                                                       | Section 4.10 | Limitations  on Liens. |   |
|                                                       | Section 4.11 | Dividend  and Other Payment Restrictions Affecting Subsidiaries. |   |

 

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|                                                       | Section 4.12 | Limitations  on Transactions with Affiliates.              |   |
|------------------------------------------------------------|-------------------|------------------------------------------------------------|--------|
|                                                       | Section 4.13 | Stay,  Extension and Usury Laws.                           |   |
|                                                       | Section 4.14 | Limitation  on Sales of Assets.                            |   |
|                                                       | Section 4.15 | Subsidiary  Guarantees.                                    |   |
|                                                       | Section 4.16 | Payments  for Consent.                                     |   |
|                                                       | Section 4.17 | Designation  of an Unrestricted Subsidiary as Restricted.  |   |
|                                                       | Section 4.18 | Designation  of a Subsidiary as Unrestricted.              |   |
|                                                       | Section 4.19 | Business  Activities.                                      |   |
|                                                       | Section 4.20 | Further  Assurance to the Trustee.                         |   |
|                                                       | Section 4.21 | Maintenance  of Properties.                                |   |
|                                                       | Section 4.22 | Insurance.                                                 |   |
|                                                       | Section 4.23 | Investment  Company Act.                                   |   |
|                                                       | Section 4.24 | Maintenance  of Rating.                                    |   |
|                                                       | Section 4.25 | Redemption  of Subordinated Notes.                         |   |
| ARTICLE V  SUCCESSORS                                 |              |
|                                                       | Section 5.01 | Merger,  Consolidation, Etc.                               |   |
|                                                       | Section 5.02 | Successor  Corporation Substituted.                        |   |
|                                                       | Section 5.03 | Purchase  Offer on Change of Control.                      |   |
| ARTICLE VI  DEFAULTS AND REMEDIES                     |              |
|                                                       | Section 6.01 | Events  of Default.                                        |   |
|                                                       | Section 6.02 | Acceleration.                                              |   |
|                                                       | Section 6.03 | Other  Remedies.                                           |   |
|                                                       | Section 6.04 | Waiver  of Past Defaults.                                  |   |
|                                                       | Section 6.05 | Control  by Majority.                                      |   |
|                                                       | Section 6.06 | Limitation  on Suits.                                      |   |
|                                                       | Section 6.07 | Rights  of Holders to Receive Payment.                     |   |
|                                                       | Section 6.08 | Collection  Suit by Trustee.                               |   |
|                                                       | Section 6.09 | Trustee  May File Proofs of Claim.                         |   |
|                                                       | Section 6.10 | Priorities.                                                |   |
|                                                       | Section 6.11 | Undertaking  for Costs.                                    |   |
| ARTICLE VII  TRUSTEE                                  |              |
|                                                       | Section 7.01 | Duties  of Trustee.                                        |   |
|                                                       | Section 7.02 | Rights  of Trustee.                                        |   |
|                                                       | Section 7.03 | Individual  Rights of Trustee.                             |   |
|                                                       | Section 7.04 | Trustee’s  Disclaimer.                                |   |
|                                                       | Section 7.05 | Notice  of Defaults.                                       |   |
|                                                       | Section 7.06 | Reports  by Trustee to Holders.                            |   |
|                                                       | Section 7.07 | Compensation  and Indemnity.                               |   |
|                                                       | Section 7.08 | Replacement  of Trustee.                                   |   |
|                                                       | Section 7.09 | Successor  Trustee by Merger, etc.                         |   |
|                                                       | Section 7.10 | Eligibility;  Disqualification.                            |   |
|                                                       | Section 7.11 | Preferential  Collection of Claims Against Issuers.        |   |
| ARTICLE VIII  SATISFACTION AND DISCHARGE OF INDENTURE |              |
|                                                       | Section 8.01 | Option  To Effect Legal Defeasance Or Covenant Defeasance. |   |
|                                                       | Section 8.02 | Legal  Defeasance And Discharge.                           |   |
|                                                       | Section 8.03 | Covenant  Defeasance.                                      |   |

 

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|                               | Section 8.04                                                   | Conditions  To Legal Or Covenant Defeasance.                                                     |   |
|------------------------------------|---------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|--------|
|                               | Section 8.05                                                   | Deposited  Money And Government Securities To Be Held In Trust; Other Miscellaneous  Provisions. |   |
|                               | Section 8.06                                                   | Repayment  To The Issuers.                                                                       |   |
|                               | Section 8.07                                                   | Reinstatement.                                                                                   |   |
| ARTICLE IX  AMENDMENTS        |                                                                |
|                               | Section 9.01                                                   | Without  Consent of Holders.                                                                     |   |
|                               | Section 9.02                                                   | With  Consent of Holders.                                                                        |   |
|                               | Section 9.03                                                   | Compliance  with Trust Indenture Act.                                                            |   |
|                               | Section 9.04                                                   | Revocation  and Effect of Consents.                                                              |   |
|                               | Section 9.05                                                   | Notation  on or Exchange of Notes.                                                               |   |
|                               | Section 9.06                                                   | Trustee  Protected.                                                                              |   |
| ARTICLE X  GENERAL PROVISIONS |                                                                |
|                               | Section 10.01                                                  | Trust  Indenture Act Controls.                                                                   |   |
|                               | Section 10.02                                                  | Notices.                                                                                         |   |
|                               | Section 10.03                                                  | Communication  by Holders with Other Holders.                                                    |   |
|                               | Section 10.04                                                  | Certificate  and Opinion as to Conditions Precedent.                                             |   |
|                               | Section 10.05                                                  | Statements  Required in Certificate or Opinion.                                                  |   |
|                               | Section 10.06                                                  | Rules  by Trustee and Agents.                                                                    |   |
|                               | Section 10.07                                                  | No  Recourse Against Others.                                                                     |   |
|                               | Section 10.08                                                  | Counterparts.                                                                                    |   |
|                               | Section 10.09                                                  | Other  Provisions.                                                                               |   |
|                               | Section 10.10                                                  | Governing  Law.                                                                                  |   |
|                               | Section 10.11                                                  | No  Adverse Interpretation of Other Agreements.                                                  |   |
|                               | Section 10.12                                                  | Successors.                                                                                      |   |
|                               | Section 10.13                                                  | Severability.                                                                                    |   |
|                               | Section 10.14                                                  | Table  of Contents, Headings, Etc.                                                               |   |
|                               |                                                                |                                                                                             |   |
| EXHIBITS                           |                                                                |
| Exhibit  A                         | Form  of Note                                                       |                                                                                             |
| Exhibit  B                         | Certificate  to be Delivered Upon Registration of Transfer of Notes |                                                                                             |
| Exhibit  C                         | Form  of Legal Opinion on Transfer                                  |                                                                                             |
| Exhibit  D                         | Form  of Subsidiary Guarantee                                       |                                                                                             |
|                                    |                                                                     |                                                                                                  |        |  |

 

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THIS INDENTURE, datedApril 20, 2004, is entered into between Eldorado Resorts LLC, a Nevadalimited-liability company (the “Company”) and Eldorado Capital Corp., aNevada corporation (“Capital” and, together with the Company, the “Issuers”),and U.S. Bank National Association, a national banking association, as trustee(the “Trustee”).

 

The Issuers and Trusteeagree as follows for the benefit of each other and for the equal and ratablebenefit of the Holders of the Issuers’ 9% Senior Notes due April 15, 2014(the “Notes”).

 

ARTICLE I

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01           Definitions.

 

“Acquired Debt”means, with respect to any specified Person, (i) Indebtedness of any otherPerson existing at the time such other Person is merged with or into or becamea Restricted Subsidiary of such specified Person, including, withoutlimitation, Indebtedness incurred in connection with, or in contemplation of,such other Person merging with or into or becoming a Restricted Subsidiary ofsuch specified Person, and (ii) Indebtedness secured by a Lien encumbering anyasset acquired by such specified Person.

 

“Adjusted Net Assets”of a Guarantor at any date means the amount by which the book value of theproperty and assets of such Guarantor exceeds the total amount of liabilities,including without limitation contingent liabilities (after giving effect to allother fixed and contingent liabilities incurred or assumed on such date), butexcluding liabilities under the Guarantee, of such Guarantor at such date.

 

“Affiliate” of anyspecified Person means any other Person directly or indirectly controlling orcontrolled by or under direct or indirect common control with such specifiedPerson. For purposes of this definition, “control” (including, with correlativemeanings, the terms “controlling,” “controlled by” and “under common controlwith”), as used with respect to any Person, shall mean the possession, directlyor indirectly, of the power to direct or cause the direction of the managementor policies of such Person, whether through the ownership of voting securities,by agreement or otherwise; provided that Beneficial Ownership of 10% or more ofthe voting securities of a Person shall be deemed to be control.

 

“Agent” means anyRegistrar, Paying Agent or Co-Registrar.

 

“Assets” means anytangible or intangible assets or rights or real or personal properties of anyPerson.

 

“Asset Sale” means(i) the sale, lease, conveyance or other disposition of any assets (including,without 1imitation, by way of a sale and leaseback) and (ii) the issue or saleby the Issuers or any of their Restricted Subsidiaries of Equity Interests ofany of the Issuers’ Restricted Subsidiaries, in the case of either clause (i)or (ii) of this definition, whether in a single transaction or a series ofrelated transactions for net proceeds in excess of $1.0 million.Notwithstanding the foregoing, the following shall be deemed not to be AssetSales: (A) the

 

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disposition of Cash Equivalents or the sale of inventory or obsoletefurniture, fixtures, equipment or other property (real or personal) in theordinary course of business; (B) dispositions of gaming equipment in theordinary course of business pursuant to an established program for themaintenance and upgrading of such equipment; (C) the surrender or waiver ofcontract rights or the settlement, release or surrender of contract, tort orother claims of any kind in the ordinary course of business; (D) the grant inthe ordinary course of business of, or lapse of, any license of patents,trademarks and other similar intellectual property, including transfer ofintellectual property relating exclusively to the conduct of the business of TheBrew Brothers, provided that, in such event, the Company shall be granted alicense to use such transferred intellectual property for a nominal fee; (E)any disposition of assets pursuant to the foreclosure of any Lien on assetssecuring any FF&E Financing or Capital Lease Obligation permitted pursuantto the provisions of Section 4.09, provided that such FF&E Financingor Capital Lease Obligation is secured by a Lien that relates only to assetspurchased with such FF&E Financing or Capital Lease Obligation, andprovided, further, that such foreclosure or other remedy is conducted in acommercially reasonable manner or in accordance with applicable law; (F) anydisposition of assets involving only the lease or sublease for a term not toexceed ten years (other than a sale and a leaseback transaction or similartransaction in which the owner, prior to the transaction, does not retain theresidual interest of the property at the conclusion of the term of the lease)of real or personal property in the ordinary course of business and providedthat, with respect to a lease or sublease for which (i) the aggregate rentalpayments exceed $1.0 million per annum the Company delivers to the Trustee aresolution of the Management Committee set forth in an Officers’ Certificatecertifying that the lease has been approved unanimously by the ManagementCommittee and (ii) the aggregate rental payments exceed $5.0 million per annumthe Company delivers to the Trustee an opinion as to the fairness to theCompany of such lease from a financial point of view by an accounting,appraisal or investment banking firm of national standing; (G) any dispositionof assets resulting from (i) the designation of any Restricted Subsidiary as anUnrestricted Subsidiary, or contribution to the capital of any UnrestrictedSubsidiary, in accordance with the applicable provisions of the Indenture, or(ii) the sale of Capital Stock of any Unrestricted Subsidiary or the sale ofall or substantially all of the assets of any Unrestricted Subsidiary; (H) atransfer of assets by the Issuers to a Consolidated Subsidiary or by aConsolidated Subsidiary to the Issuers or to another Consolidated Subsidiary;(I) an issuance of Equity Interests by a Consolidated Subsidiary to the Issuersor to another Consolidated Subsidiary; (J) a Permitted Investment, RestrictedPayment or other payment or distribution that is permitted by the provisions ofSection 4.05; (K) the contribution, in exchange for an equity interest ordebt obligation, of Development Property to a joint venture in which theCompany, directly or indirectly, holds an equity interest; and (L) the sale ofinterests in Tamarack Crossings, LLC conducted pursuant toSection 3.07(b)(ii).

 

“Bankruptcy Law”means Title 11, U.S. Code or any similar federal or state law for the relief ofdebtors.

 

“Beneficial Owner”(including, with correlative meanings, “Beneficially Owned” and “BeneficialOwnership”) means, with respect to any Capital Stock, a “ person,” as such termis used in Section 13(d)(3) of the Exchange Act, that is a “beneficialowner,” as such term is defined in Rule 13d-3 and Rule 13d-5 under the ExchangeAct, of such Capital Stock.

 

“Business Day”means any day other than a Saturday, Sunday or a Legal Holiday.

 

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“Capital LeaseObligation” means, at the time any determination thereof is to be made, theamount of liability in respect of a capital lease that would at such time berequired to be capitalized on a balance sheet in accordance with GAAP.

 

“Capital Stock”means, (i) in the case of a corporation, corporate stock, (ii) in the case ofan association or business entity, any and all shares, interests,participations, rights or other equivalents (however designated) of corporatestock, (iii) in the case of a partnership, partnership interests (whethergeneral or limited), (iv) in the case of a limited-liability company,membership interests and (v) any other interest or participation that conferson a Person the right to receive a share of the profits and losses of, ordistribution of assets or, the issuing Person.

 

“Carano Interests”means Donald L. Carano, his spouse, lineal descendants (including adoptedchildren and their lineal descendants) and any trust or entity owned,controlled by or established for the exclusive benefit of, or the estate of,any of the foregoing.

 

“Cash Equivalents”means (i) United States dollars, (ii) securities issued or directly and fullyguaranteed or insured by the United States government or any agency orinstrumentality thereof having maturities of not more than six months from thedate of acquisition, (iii) certificates of deposit and eurodollar time depositswith maturities of six months or less from the date of acquisition, bankers’acceptances with maturities not exceeding six months and overnight bankdeposits, in each case with any domestic commercial bank having capital andsurplus in excess of $500.00 million and a credit rating of P-1 or higher fromMoody’s or A-1 or higher from S&P or better, (iv) repurchase obligationswith a term of not more than seven days for underlying securities of the typesdescribed in clauses (ii) and (iii) of this definition entered into with anyfinancial institution meeting the qualifications specified in clause (iii) ofthis definition, (v) commercial paper having the highest rating obtainable fromMoody’s or S&P and in each case maturing within six months after the dateof acquisition and (vi) shares of any fund investing exclusively in investmentsof the type described in clauses (i), (ii), (iii) and (iv) of this definitionif such fund has net assets of not less than $500.00 million.

 

“Change of Control”means the occurrence of any of the following: (i) the sale, lease, transfer,conveyance or other disposition (other than by way of merger or consolidation),in one or a series of related transactions, of all or substantially all of theassets of the Company and its Restricted Subsidiaries, taken as a whole, to any“person” (as such term is used in Section 13(d)(3) of the Exchange Act)other than the Carano Interests or an Included Person, (ii) the adoption of aplan relating to the liquidation or dissolution of the Company, (iii) prior tothe consummation of an Initial Public Offering, the consummation of anytransaction (including, without limitation, any merger or consolidation) theresult of which is that the Carano Interests cease to control a majority of thevoting power of the Company (other than in connection with an Initial PublicOffering and sales or other dispositions of Capital Stock that do not result inthe Carano Interests as a group no longer Beneficially Owning such CapitalStock and related voting power), (iv) after an Initial Public Offering, theCompany’s becoming aware of (by way of a report or any other filing pursuant toSection 13(d) of the Exchange Act, proxy vote, written notice orotherwise) the acquisition by any Person or related group (within the meaningof Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or anysuccessor provision to either of the foregoing, including any “group” actingfor the purpose of acquiring, holding or disposing of securities within themeaning of Rule 13d-5(b)(1) under the Exchange Act), other than the

 

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Carano Interests, in a single transaction or in a related series oftransactions, by way of merger, consolidation or other business combination orpurchase of Beneficial Ownership of 35% or more of the total voting powerentitled to vote in the election of the Management Committee or Board ofDirectors, as the case may be, or such other Person surviving the transactionand, at such time, the Carano Interests shall fail to Beneficially Own,directly or indirectly, securities representing greater than the combinedvoting power of the Company’s or such other Person’s Capital Stock as isBeneficially Owned by such Person or group, (v) the first day on which theCompany fails to own 100% of the issued and outstanding Equity Interests ofCapital, other than by reason of a merger of Capital with and into a corporatesuccessor to the Company, and (vi) during any period of two consecutive years,individuals who at the beginning of such period constituted the ManagementCommittee (together with any new managers whose election or appointment by suchcommittee or whose nomination for election by the members of the Company wasapproved by a vote of a majority of the managers then still in office who wereeither managers at the beginning of such period or whose election or nominationfor election was previously so approved) cease for any reason to constitute amajority of the Management Committee then in office; provided, however, thatthe sale or transfer by the Carano Interests to an Included Person shall not bea Change of Control so long as such Included Person maintains an ownershipinterest that, if held by the Carano Interests, would not constitute a Changeof Control; and provided, further, that for purposes of this definition (exceptclause (v) of this definition) the term “Company” shall mean “Parent” shouldParent exist and for purpose of clause (vi) of this definition, ManagementCommittee and managers shall mean board of directors and directors shouldParent exist.

 

“Consolidated CashFlow” means, with respect to any Person for any period, the ConsolidatedNet Income of such Person for such period plus, to the extent deducted incomputing Consolidated Net Income, (i) an amount equal to any extraordinaryloss plus any net loss realized in connection with an Asset Sale, (ii) provisionfor taxes based on income or profits or, so long as such Person is treated as apartnership or other pass through entity for United States federal income taxpurposes, the Tax Amount of such Person and its Restricted Subsidiaries forsuch period, (iii) consolidated interest expense of such Person and itsRestricted Subsidiaries for such period, whether paid or accrued and whether ornot capitalized (including, without limitation, amortization of original issuediscount, non-cash interest payments, the interest component of any deferredpayment obligations, the interest component of all payments associated withCapital Lease Obligations, commissions, discounts and other fees and chargesincurred in respect of letter of credit or bankers’ acceptance financings, andnet payments (if any) pursuant to Hedging Obligations), (iv) depreciation andamortization (including amortization of goodwill and other intangibles butexcluding amortization of prepaid cash expenses that were paid in a priorperiod) and other non-cash charges (excluding any such non-cash charge to theextent that it represents an accrual of or reserve for cash charges in anyfuture period or amortization of a prepaid cash expense that was paid in aprior period) of such Person and its Restricted Subsidiaries for such period,(v) pre-opening expenses to the extent that such pre-opening expenses werededucted in computing Consolidated Net Income, in each case, on a consolidatedbasis and determined in accordance with GAAP and (vi) any abandonment lossincurred in connection with the expansion of the Eldorado which was reflectedon the Company’s Consolidated Statement of Income for the period endedDecember 31, 2003. Notwithstanding the foregoing, the provision for taxeson the income or profits of, and the depreciation, amortization and othernon-cash charges of, a Restricted Subsidiary of the referent Person shall beadded to

 

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Consolidated Net Income to compute Consolidated Cash Flow only to theextent (and in same proportion) that the Net Income of such RestrictedSubsidiary was included in calculating the Consolidated Net Income of suchPerson and only if a corresponding amount would be permitted at the date ofdetermination to be dividended to the Issuers by such Restricted Subsidiarywithout prior governmental approval (that has not been obtained), and withoutdirect or indirect restriction pursuant to the terms of its charter and allagreements, instruments, judgments, decrees, orders, statutes, rules andgovernmental regulation applicable to such Restricted Subsidiary or its equityinterest holders.

 

“Consolidated NetIncome” means, with respect to any Person for any period, the aggregate ofthe Net Income of such Person and its Restricted Subsidiaries for such period,on a consolidated basis, determined in accordance with GAAP; provided that (i)the Net Income (but not loss) of any Person that is not a Restricted Subsidiaryor that is accounted for by the equity method of accounting (including withoutlimitation ELLC) shall be included only to the extent of the amount ofdividends or distribution paid in cash to the referent Person or a ConsolidatedSubsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall beexcluded to the extent that the declaration or payment of dividends or similardistributions by such Restricted Subsidiary of such Net Income is not at thedate of determination of Consolidated Net Income for such period permittedwithout any prior governmental approval (that has not been obtained) or,directly or indirectly, by operation of the terms of its charter or anyagreement, instrument, judgments, decrees, orders, statutes, rules orgovernmental regulation applicable to such Restricted Subsidiary or its equityinterest holders, (iii) the Net Income of any Person acquired in a pooling ofinterests transaction for any period prior to the date of such acquisitionshall be excluded, (iv) the cumulative effect of a change in accountingprinciples and any losses resulting from the application of Statement ofFinancial Accounting Standards No. 121 shall be excluded and (v) the Net Incomeof any Unrestricted Subsidiary, other than ELLC, shall be excluded, whether ornot distributed to the Issuers or their Restricted Subsidiaries.

 

“Consolidated NetWorth” means, with respect to any Person, the amount by which the totalassets of such Person and its Restricted Subsidiaries exceed the sum of (i) thetotal liabilities of such Person and its Restricted Subsidiaries plus (ii) anyDisqualified Stock of such Person and its Restricted Subsidiaries (other thanany such Disqualified Stock issued to such Person or any of its RestrictedSubsidiaries), in each case determined in accordance with GAAP.

 

“ConsolidatedSubsidiary” of any Person means a Restricted Subsidiary of such Personwhich could be included with such Person in a consolidated group of such Personfor federal income tax reporting.

 

“Continuing Member”means, as of any date of determination, any member of the Management Committee who(i) was a member of the Management Committee as of the date of this Indentureor (ii) was nominated for election to the Management Committee with theapproval of at least a majority of the Continuing Members who were members ofthe Management Committee at the time of such nomination or election.

 

“Daniels Notes”means Indebtedness in an amount not to exceed $3.5 million incurred to financethe acquisition of the Daniels Property.

 

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“Daniels Property”means that certain parcel of real property together with improvements thereonlocated in the City of Reno, County of Washoe, State of Nevada, located onWashoe Assessor Parcels 007-292-18, 007-292-20 and 007-292-25, and morecommonly known as Daniel’s Motor Lodge, 275 North Sierra Street, Reno, Nevada89501.

 

“Default” meansany event that is, or with the passage of time or the giving of notice or bothwould be, an Event of Default.

 

“Depositary”means, with respect to the Notes issuable or issued in whole or in part inglobal form, the Person specified in Section 2.03 hereof as the Depositarywith respect to the Notes, and any successor thereto.

 

“Development Property”means a parcel of real property that is not part of a Gaming Facility and that(i) was owned as of the date of this Indenture by the Company, (ii) was ownedas of the date of this Indenture by Affiliates of the Company and transferredto the Company or a joint venture in which the Company participates and valuedat the acquisition cost of such parcels by such Affiliate plus an amount equalto interest at the rate of 10% per annum on such acquisition cost from the dateof acquisition by such Affiliate, (iii) the Daniels Property or (iv) isacquired by the Company after the date of this Indenture and has a fair marketvalue of less than $1.0 million on the date of determination.

 

“Disqualified Stock”means any Capital Stock that, by its terms (or by the terms of any securityinto which it is convertible or for which it is exchangeable), or upon the happeningof any event, matures or is mandatorily redeemable, pursuant to a sinking fundobligation or otherwise, or redeemable at the option of the holder thereof, inwhole or in part, on or prior to the date that is 91 days after the MaturityDate.

 

“Eldorado” meansthe casino/hotel owned and operated by the Company and located at Fourth andVirginia Streets in Reno, Nevada.

 

“ELLC” meansEldorado Limited Liability Company, a Nevada limited liability company.

 

“Equity Interests”means Capital Stock and all warrants, options or other rights to acquireCapital Stock (but excluding any debt security that is convertible into, orexchangeable for, Capital Stock).

 

“Event of Default”has the meaning set forth in Section 6.01 hereof.

 

“Exchange Act”means the Securities Exchange Act of 1934, as amended, or any successorstatute.

 

“Existing Indebtedness”means Indebtedness of the Issuers and their Restricted Subsidiaries inexistence on the date of the Indenture, until such amounts are repaid.

 

“FF&E” meansfurniture, fixtures and equipment, including gaming equipment, used inconnection with any Gaming Business.

 

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“FF&E Financing”means the incurrence of Indebtedness, the proceeds of which shall be used tofinance the acquisition by the Company or a Restricted Subsidiary of FF&Eused in connection with any Gaming Facility whether or not secured by a Lien onsuch FF&E; provided that such Indebtedness does not exceed the fair marketvalue of such FF&E at the time of its acquisition.

 

“Fixed Charges”means, with respect to any Person for any period, the sum of (withoutduplication) (i) the consolidated interest expense of such Person and itsRestricted Subsidiaries for such period, whether paid or accrued (including, withoutlimitation, amortization of original issue discount, non-cash interestpayments, the interest component of any deferred payment obligations, theinterest component of all payments associated with Capital Lease Obligations,commissions, discounts and other fees and charges incurred in respect of letterof credit or bankers’ acceptance financings, and net payments (if any) pursuantto Hedging Obligations, but excluding all other amortization of debt issuancecosts) and (ii) the consolidated interest expense of such Person and itsRestricted Subsidiaries that was capitalized during such period and (iii) anyinterest expense on Indebtedness of another Person that is Guaranteed by suchPerson or one of its Restricted Subsidiaries or secured by a Lien on assets ofsuch Person or one of its Restricted Subsidiaries (whether or not suchGuarantee or Lien is called upon) and (iv) the product of (a) all cash dividendpayments or other distributions (and non-cash dividend payments in the case ofa Person that is a Restricted Subsidiary) on any series of Disqualified Stockof such Person (other than payments to such Person and its ConsolidatedSubsidiaries), times (b) a fraction, the numerator of which is one and thedenominator of which is one minus the then current combined federal, state and1ocal statutory tax rate of such Person (or, in the case of a Person that is apartnership, the combined federal, state and local tax rate to which suchPerson would be subject if it were a Nevada corporation filing separate taxreturns with respect to its Taxable Income), expressed as a decimal, in eachcase, on a consolidated basis and in accordance with GAAP.

 

“Fixed Charge CoverageRatio” means with respect to any Person for any period, the ratio of theConsolidated Cash Flow of such Person for such period to the Fixed Charges ofsuch Person for such period; provided, however, that (i) in the event that suchPerson or any of its Restricted Subsidiaries incurs, assumes, Guarantees orredeems any Indebtedness (other than revolving credit borrowings) or issues orredeems any preferred stock subsequent to the commencement of the period forwhich the Fixed Charge Coverage Ratio is being calculated but prior to the dateon which the event for which the calculation of the Fixed Charge Coverage Ratiois made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall becalculated giving pro forma effect to such incurrence, assumption, Guarantee orredemption of Indebtedness, or such issuance or redemption of preferred stock, asif the same had occurred at the beginning of the applicable four-quarterreference period; (ii) in the event that such Person or any of its RestrictedSubsidiaries designates an Unrestricted Subsidiary as a Restricted Subsidiaryin accordance with Section 4.17 hereof, or makes any acquisitions ordispositions (including Asset Sales), including through mergers orconsolidations and including any related financing transactions, during thefour-quarter reference period or subsequent to such reference period and on orprior to the Calculation Date, then the Fixed Charge Coverage Ratio shall becalculated giving pro forma effect to such acquisitions or dispositions, as ifthe same had occurred at the beginning of the applicable four-quarter referenceperiod, and, in the case of a redesignation of an Unrestricted Subsidiary as aRestricted Subsidiary, Consolidated Cash Flow

 

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for such reference period shall be calculated without giving effect toclause (iii) of the proviso set forth in the definition of Consolidated NetIncome; (iii) the Consolidated Cash Flow attributable to discontinuedoperations, as determined in accordance with GAAP, and operations or businessesdisposed of prior to the Calculation Date, shall be excluded; and (iv) theFixed Charges attributable to discontinued operations, as determined inaccordance with GAAP, and operations or businesses disposed of prior to theCalculation Date, shall be excluded, but only to the extent that the obligationsgiving rise to such Fixed Charges will not be obligations of the referentPerson or any of its Restricted Subsidiaries following the Calculation Date.

 

“GAAP” meansgenerally accepted accounting principles set forth in the opinions andpronouncements of the Accounting Principles Board of the American Institute ofCertified Public Accountants and statements and pronouncements of the FinancialAccounting Standards Board or in such other statements by such other entity ashave been approved by a significant segment of the accounting profession, whichare in effect on the date of the Indenture.

 

“Gaming Authority”means any agency, authority, board, bureau, commission, department, office orinstrumentality of any nature whatsoever of the United States federal orforeign government, any state, province or any city or other politicalsubdivision or otherwise, and whether now or hereafter in existence, or anyofficer or official thereof, including the Nevada State Gaming Commission, theNevada State Gaming Control Board and any other applicable gaming regulatoryauthority with authority to regulate any gaming operation (or proposed gamingoperation) owned, managed or operated by the Company or any of itsSubsidiaries.

 

“Gaming Business”means the gaming business and includes all businesses necessary for, incidentto, connected with or arising out of the operation of a gaming establishment orfacility (including developing and operating lodging, retail and restaurantfacilities, sports or entertainment facilities, transportation services orother related activities or enterprises and any additions or improvementsthereto) and any businesses incident and useful to the Gaming Business,including without limitation food and beverage distribution operations to theextent that they are operated in connection with a gaming business.

 

“Gaming Facility”means any tangible vessel, building, or other structure used to enclose spacein which a Gaming Business is conducted and (i) wholly or partially owned,directly or indirectly, by the Company or any Restricted Subsidiary or (ii) anyportion or aspect of which is managed or used, or expected to be managed orused, by the Company or a Restricted Subsidiary; provided that the term GamingFacility does not include any real property whether or not such vessel,building or other structure is located thereon or adjacent thereto or anyfurniture, fixtures and equipment, including gaming equipment, used inconnection with any Gaming Business.

 

“Gaming License”means any license, permit, franchise or other authorization from any GamingAuthority required on the date of the Indenture or at any time thereafter toown, lease, operate or otherwise conduct the Gaming Business of the Company andits Subsidiaries, including all licenses granted under the gaming laws of ajurisdiction or jurisdictions to which the Company or any of its Subsidiariesis, or may at any time after the date of the Indenture, be subject.

 

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“Global Note Holder”means the Person specified in Section 2.03 hereof as custodian withrespect to the Global Notes, or any successor thereto.

 

“Government Securities”means direct obligations of, or obligations guaranteed by, the United States ofAmerica for the payment of which guarantee or obligations the full faith andcredit of the United States is pledged.

 

“Guarantee” meansa guarantee (other than by endorsement of negotiable instruments for collectionin the ordinary course of business), direct or indirect, in any manner (including,without limitation, letters of credit and reimbursement agreements in respectthereof), of all or any part of any Indebtedness.

 

“Guarantor” meanseach Subsidiary that executes a Guarantee of the Issuers’ payment obligationsunder the Notes and the Indenture in accordance with the provisions of theIndenture, and their respective successors and assigns.

 

“HCM” means HotelCasino Management, Inc., a Nevada corporation.

 

“Hedging Obligations”means, with respect to any Person, the obligations of such Person under (i)interest and currency rate swap agreements, interest rate cap agreements andinterest rate collar agreements and (ii) other agreements or arrangementsdesigned to protect such Person against fluctuations in interest or currencyexchange rates.

 

“Holder” or “Noteholder”means a person in whose name a Note is registered in the Registrar’s books.

 

“Included Persons”means any Person that (i) has a class of equity securities that is traded onthe New York Stock Exchange, the American Stock Exchange or the Nasdaq StockMarket, (ii) has equity market value as of the date of determination of $2billion or more, (iii) has senior unsecured debt securities rated in a ratingscategory higher than the Notes, as rated by both of Moody’s Investors Service andStandard & Poor’s Ratings Group and (iv) engages primarily in the GamingBusiness.

 

“Incur” means,with respect to any Indebtedness or other obligation of any Person, to create,issue, incur (by conversion, exchange, in connection with an acquisition or otherwise),assume, guaranty or otherwise become liable in respect of such Indebtedness orother obligation or the recording, as required pursuant to GAAP or otherwise,of any such Indebtedness or other obligation on the balance sheet of suchPerson (and “incurrence,” “incurred,” “incurable” and “incurring” shall havemeanings correlative to the foregoing).

 

“Indebtedness”means, without duplication with respect to any Person, any indebtedness of suchPerson, whether or not contingent, in respect of borrowed money or evidenced bybonds, notes, debentures or similar instruments or letters of credit (orreimbursement agreements in respect thereof) or banker’s acceptances orrepresenting Capital Lease Obligations or the balance deferred and unpaid ofthe purchase price of any property or representing any Hedging Obligations orthe amount of any Person’s obligation to the redemption, repayment or otherrepurchase of its Disqualified Stock, except any such balance that constitutesan accrued expense or trade payable, if and to the extent any of the foregoingindebtedness (other than letters of

 

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credit and Hedging Obligations) would appear as a liability upon abalance sheet of such Person prepared in accordance with GAAP, as well as allindebtedness of others secured by a Lien on any asset of such Person (whetheror not such indebtedness is assumed by such Person) and, to the extent nototherwise included, the Guarantee by such Person of any indebtedness of any otherPerson.

 

“Indenture” meansthis Indenture as amended or supplemented from time to time.

 

“Initial PublicOffering” means the first underwritten public offering of common CapitalStock of the Company or Parent registered under the Securities Act (other thana public offering registered on Form S-8 under the Securities Act) that resultsin net proceeds of at least $20.0 million to the Company or Parent, as the casemay be.

 

“Initial Purchasers”means the institution(s) and/or fund(s) designated as the initial purchaser(s)of the Notes pursuant to the Purchase Agreement, dated as of April 20,2004, between the Company and such initial purchaser(s).

 

“Interest Payment Date”when used with respect to any of the Notes means the stated maturity of aninstallment of interest specified in such Note.

 

“Interest Record Date”when used with respect to any of the Notes means the date for determining thepayee of an installment of interest specified in such Note.

 

“Investments”means, with respect to any Person, all investments by such Person in otherPersons in the forms of direct or indirect loans (including guarantees ofIndebtedness or other obligations), advances (other than advances to vendorsand customers in the ordinary course of business that are recorded as accountsreceivable in accordance with GAAP and excluding commission, travel, relocationand similar advances to officers and employees made in the ordinary course ofbusiness), capital contributions, purchases or other acquisitions forconsideration of Indebtedness, Equity Interests or other securities, togetherwith all items that are or would be classified as investments on a balancesheet prepared in accordance with GAAP; provided that an acquisition of assets,Equity Interests or other securities by the Issuers or any of their RestrictedSubsidiaries for consideration consisting of Equity Interests (other thanDisqualified Stock) of the Company shall not be deemed to be an Investment. Ifthe Issuers or any of their Restricted Subsidiaries sells or otherwise disposesof any Equity Interests of any Restricted Subsidiary of the Issuers such that,after giving effect to any such sale or disposition, such Person is no longer aRestricted Subsidiary of either Issuer, the Issuers shall be deemed to havemade an Investment on the date of any such sale or disposition equal to thefair market value of the Equity Interests of such Restricted Subsidiary notsold or disposed of.

 

“Issue Date” meansthe date on which the Notes are originally issued under this Indenture.

 

“Issuers” meanseach of the parties named as such above until a successor replaces it inaccordance with Article 5 of this Indenture and thereafter means eachsuccessor and each successor thereto replaced in accordance with Article 5of this Indenture.

 

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“Joint VentureAgreement” means that certain Agreement of Joint Venture of Circus andEldorado Joint Venture dated as of March 1, 1994 by and between ELLC andGalleon, Inc., as amended and restated on April 22, 2002 effective as ofJanuary 1, 2001, and relating to the Silver Legacy.

 

“Legal Holiday”means a day which banking institutions in the City of New York, the City ofHartford, Connecticut or the State of Nevada are not required to be open.

 

“Legended Note”means any Note required to contain the legend set forth in Section 2.06(h)hereof.

 

“Lien” means, withrespect to any asset, any mortgage, lien, pledge, charge, security interest orencumbrance of any kind in respect of such asset, whether or not filed,recorded or otherwise perfected under applicable law (including any conditionalsale or other title retention agreement, any lease in the nature thereof, anyoption or other agreement to sell or give a security interest in and any filingof or agreement to give any financing statement under the Uniform CommercialCode (or equivalent statutes) of any jurisdiction).

 

“Liquidated Damages”means all liquidated damages owed pursuant to Section 4 of theRegistration Rights Agreement.

 

“Make-Whole-Premium”means, with respect to any Note at any redemption date, the excess, if any, of(a) the present value of the sum of the principal amount that would be payableat the first Redemption Determination Date of such Note and all remaininginterest payments (not including any portion of such payments of interestaccrued as of the redemption date) to and including such RedemptionDetermination Date, discounted on a semi-annual bond equivalent basis from suchRedemption Determination Date to the redemption date at a per annum interestrate equal to the sum of the Treasury Yield (determined on the Business Dayimmediately preceding the date of such redemption), plus 150 basis points, over(b) the aggregate principal amount of the Note being redeemed.

 

“Management Agreement”means that certain Management agreement, dated as of June 28, 1996,between the Company, REC and HCM.

 

“Management Committee”means (i) for so long as the Company is a limited liability company, the Boardof Managers appointed pursuant to Article V of the Operating Agreement,(ii) if the Company is a partnership, the general partners or a committee orboard generally managing the business of such partnership and (iii) otherwise,the board of directors of the Company.

 

“Managers” meansREC and HCM, or any successors thereto.

 

“Material GamingFacility” means on any date any Gaming Facility that is owned by theCompany or a Restricted Subsidiary (i) which has contributed more than 10% ofthe Net Revenues of the Company during the Company’s most recently completedfour full fiscal quarters for which internal financial statements are availablepreceding such date (such contribution to be annualized if such Gaming Facilityhas not been in full operation for all of such four fiscal quarters) or (ii)the book value of which on such date constitutes more than 10%

 

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of the total assets of the Company and its Restricted Subsidiaries asof the end of the most recently completed fiscal quarter for which internalfinancial statements are available.

 

“Maturity Date”means April 15, 2014.

 

“Member Notes”shall mean a series of notes of the Company that: (i) are issued pro rata, tothe members of the Company in contemplation of the Initial Public Offering;(ii) have terms specifying that principal amounts thereof may be paid only byproceeds from the Initial Public Offering; (iii) shall automatically beconverted into membership interests, pro rata, (a) if not paid with proceeds ofthe Initial Public Offering within 90 days of issuance or (b) upon theoccurrence of an event of default under the Notes; (iv) have a stated maturityafter the Notes; (v) are expressly subordinated in right of payment to theprior payment in full of the Notes; (vi) have stated interest payment dates nomore often than semi-annually; (vii) have a stated interest rate of less than10%; (viii) are unsecured; (ix) are not redeemable prior to stated maturityexcept from the proceeds of the Initial Public Offering; and (x) do not containany terms or covenants which would cause the Member Notes to be in defaultprior to the Notes.

 

“Moody’s” meansMoody’s Investor Service, Inc., or its successor.

 

“Net Income”means, with respect to any Person for any period, (i) the net income (loss) ofsuch Person for such period, determined in accordance with GAAP and before anyreduction in respect of preferred stock dividends, excluding, however, (a) anygain (but not loss), together with any related provision for taxes on such gain(but not loss), realized in connection with (a) any Asset Sale (including,without limitation, dispositions pursuant to sale and leaseback transactions)or (b) the disposition of any securities by such Person or any of itsRestricted Subsidiaries or the extinguishment of any Indebtedness of suchPerson or any of its Restricted Subsidiaries and (b) any extraordinary ornonrecurring gain (but not loss), together with any related provision for taxeson such extraordinary or nonrecurring gain (but not loss), less (ii) in thecase of any Person that is treated as a partnership or other pass throughentity for United States federal or state income tax purposes, the Tax Amountof such Person for such period.

 

“Net Proceeds”means the aggregate cash proceeds received by the Issuers, any of their RestrictedSubsidiaries or ELLC in respect of any Asset Sale (including, withoutlimitation, any cash received upon the sale or other disposition of anynon-cash consideration received in any Asset Sale), net of the direct costsrelating to such Asset Sale (including, without limitation, legal, accountingand investment banking fees, and sales commissions), any relocation expensesincurred as a result thereof, any taxes or Tax Distributions paid or payable bythe Issuers, any of their Restricted Subsidiaries or ELLC as a result thereof(after taking into account any available tax credits or deductions and any taxsharing arrangements), any purchase money obligations relating to the assetscomprising such Asset Sale (to the extent repaid with the proceeds thereof) andany reserve for adjustment in respect of the sale price of such asset or assetsestablished in accordance with GAAP.

 

“Net Revenues”means the net revenues as determined under GAAP of the Company and itsRestricted Subsidiaries as shown on the Company’s financial statements.

 

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“Non-Recourse Debt”means Indebtedness (i) as to which neither the Issuers nor any of theirRestricted Subsidiaries (a) provides credit support of any kind (including anyundertaking, agreement or instrument that would constitute Indebtedness), (b)is directly or indirectly liable (as a guarantor or otherwise), or (c)constitutes the lender, (ii) no default with respect to which (including anyrights that the holders thereof may have to take enforcement action against anUnrestricted Subsidiary) would permit (upon notice, lapse of time or both) anyholder of any other Indebtedness of the Issuers or any of their RestrictedSubsidiaries to declare a default on such other Indebtedness or cause thepayment thereof to be accelerated or payable prior to its stated maturity and(iii) as to which the lenders have been notified in writing that they will nothave any recourse to the stock or assets of the Issuers or any of theirRestricted Subsidiaries.

 

“Notes” has themeaning ascribed thereto in the preamble hereof.

 

“Obligations”means any principal, interest, penalties, fees, indemnifications,reimbursements, damages and other liabilities payable under the documentationgoverning any Indebtedness.

 

“Officer” means,with respect to any person, Chairman of the Board, the Chief Executive Officer,the President, the Chief Financial Officer, the Chief Accounting Officer, anyVice President, the Treasurer, the Secretary, any Assistant Treasurer or anyAssistant Secretary of such Person.

 

“Officers’ Certificate”means a certificate signed by two Officers, one of whom must be the Chairman ofthe Board, the President, the Treasurer or a Vice President of the Company.

 

“Operating Agreement”means the Operating Agreement of Eldorado Resorts LLC, dated June 28,1996, as amended to the date hereof.

 

“Opinion of Counsel”means a written opinion in form and substance, and from legal counsel,reasonably acceptable to the recipient of such opinion, which opinion may besubject to any necessary or customary qualifications, exceptions, orlimitations. The counsel may be an employee of or counsel to the Issuers or theTrustee.

 

“Outstanding Notes”means the Issuers’ 10-1/2% Senior Subordinated Note due 2006.

 

“Parent” means acorporation to be formed which shall own all or substantially all of the commonequity interests of the Company.

 

“Participants” means thosePersons designated as participants by the Depositary.

 

“Permitted Investments”means (i) any Investment in the Issuers or in a Consolidated Subsidiary of theIssuers, including without limitation any investment in the Gaming Business ofthe Issuers or any such Consolidated Subsidiaries of the Issuers; (ii) anyInvestment in Cash Equivalents; (iii) any Investment by the Issuers or any oftheir Restricted Subsidiaries in a Person if, as a result of such Investment,(a) such Person becomes a Consolidated Subsidiary of the Company engaged in theGaming Business or (b) such Person is merged, consolidated or amalgamated withor into, or transfers or conveys substantially all of its assets to, or isliquidated into, the Company or a Consolidated Subsidiary of the Companyengaged in the Gaming

 

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Business; (iv) any Restricted Investment made as a result of thereceipt of non-cash consideration from an Asset Sale that was made pursuant toand in compliance with Section 4.14 hereof; (v) advances and loans toemployees of the Company and its Restricted Subsidiaries in the ordinary courseof business; (vi) Investments acquired by the Company or any of its RestrictedSubsidiaries (a) in exchange for any other Investment or accounts receivableheld by the Company or such Restricted Subsidiary in connection with or as a resultof a bankruptcy workout, reorganization or recapitalization of the issuer ofsuch Investment or accounts receivable or (b) as a result of a foreclosure bythe Company or such Restricted Subsidiary or other transfer of title withrespect to any secured Investment in default; (vii) the contribution, inexchange for an equity interest or debt obligation, of Development Property toa joint venture in which the Company, directly or indirectly, holds an equityinterest; (viii) any Hedging Obligation permitted by Section 4.09; and(ix) capital expenditures including the acquisition of other tangible assets orthe payment of costs of construction of real property improvements, in eachcase to be used or useful in the Gaming Business of the Company or its RestrictedSubsidiaries.

 

“Permitted Liens”means (i) Liens securing the Senior Credit Agreement and Indebtedness ofRestricted Subsidiaries that is permitted to be incurred pursuant toSection 4.09 hereof; (ii) liens securing Indebtedness that is pari passu inright of payment with the Notes, provided that the Notes are equally andratably secured; (iii) Liens securing intercompany Indebtedness permitted bythis Indenture in favor of the Issuers or any of their Restricted Subsidiaries;(iv) Liens on property of a Person existing at the time such Person is mergedinto or consolidated with the Issuers or any of their Restricted Subsidiaries,provided that such Liens were in existence prior to the contemplation of suchmerger or consolidation and do not extend to any assets other than those of thePerson merged into or consolidated with the Issuers or any such RestrictedSubsidiary; (v) Liens on property existing at the time of acquisition thereofby the Issuers or any of their Restricted Subsidiaries, provided that suchLiens were in existence prior to the contemplation of such acquisition; (vi)Liens to secure the performance of statutory obligations, surety or appealbonds, performance bonds or other obligations of a like nature incurred in theordinary course of business; (vii) Liens to secure Indebtedness (includingCapital Lease Obligations) permitted by Section 4.09(b)(iv) hereofcovering only the assets acquired with such Indebtedness; (viii) Liens existingon the date hereof; (ix) Liens for taxes, assessments or governmental chargesor claims that are not yet delinquent or that are being contested in good faithby appropriate proceedings promptly instituted and diligently concluded,provided that any reserve or other appropriate provision as shall be requiredin conformity with GAAP shall have been made therefor; (x) Liens of landlordsor of mortgagees of landlords arising by operation of law, provided that therental payments secured thereby are not yet due and payable; (xi) Liensincurred or deposits made in the ordinary course of business in connection withworkers’ compensation, unemployment insurance and other types of socialsecurity, (xii) easements, rights-of-way, restrictions, minor defects orirregularities in title and other similar charges or encumbrances notinterfering in any material respect with the business of the Company or any ofits Restricted Subsidiaries; (xiii) judgment or attachment Liens not givingrise to an Event of Default; (xiv) Liens arising out of the purchase,consignment, shipment or storage of inventory or other goods in the ordinarycourse of business; (xv) any interest or title of a lessor in property subjectto any Capital Lease Obligation or other lease permitted by this Indenture;(xvi) Liens arising from filing Uniform Commercial Code financing statementsregarding leases permitted by this Indenture; (xvii) leases or subleasespermitted pursuant to Section 4.14 hereof and that

 

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are granted to others and that do not interfere in any material respectwith the business of the Company or any Restricted Subsidiary; (xviii) anyinterest or title of a lessor in the property subject to any lease, whethercharacterized as capitalized or operating other than any such interest or titleresulting from or arising out of a default by the Company or any RestrictedSubsidiary of its obligations under such lease; and (xix) Liens incurred in theordinary course of business of the Issuers or any of their RestrictedSubsidiaries that (a) are not incurred in connection with the borrowing ofmoney or the obtaining of advances or credit (other than trade credit in theordinary course of business) and (b) do not in the aggregate materially detractfrom the value of the property or materially impair the use thereof in theoperation of business by the Issuers or any such Restricted Subsidiary.

 

“Permitted RefinancingIndebtedness” means any Indebtedness of the Issuers or any of theirRestricted Subsidiaries issued in exchange for, or the net proceeds of whichare used to extend, refinance, renew, replace, defease or refund otherIndebtedness of the Issuers or any such Restricted Subsidiary; provided that:(i) the principal amount (or accreted value, if applicable) of such PermittedRefinancing Indebtedness does not exceed the principal amount (or accretedvalue, if applicable) of the Indebtedness so extended, refinanced, renewed,replaced, defeased or refunded (plus the amount of reasonable expenses incurredin connection therewith); (ii) such Permitted Refinancing Indebtedness has afinal maturity date no earlier than the final maturity date of, and has aWeighted Average Life to Maturity equal to or greater than the Weighted AverageLife to Maturity of, the Indebtedness being extended, refinanced, renewed,replaced, defeased or refunded; (iii) if the Indebtedness being extended,refinanced, renewed, replaced, defeased or refunded is subordinated in right ofpayment to the Notes, such Permitted Refinancing Indebtedness is subordinatedin right of payment to the Notes on terms at least as favorable to the Holdersof Notes as those contained in the documentation governing the Indebtednessbeing extended, refinanced, renewed, replaced, defeased or refunded; and (iv)such Indebtedness is incurred only by the Issuer or the Restricted Subsidiarythat is the obligor on the Indebtedness being extended, refinanced, renewed,replaced, defeased or refunded.

 

“Person” means anindividual, partnership, limited-liability company, corporation, trust, jointventure, association, joint stock company or unincorporated organization and agovernment or agency or a political subdivision thereof.

 

“pro forma” means,with respect to any calculation made or required to be made pursuant to theterms of this Indenture, a calculation in accordance with Article 11 ofRegulation S-X under the Securities Act.

 

“Public EquityOffering” means an underwritten public offering of common Capital Stock ofthe Company or Parent registered under the Securities Act (other than a publicoffering registered on Form S-8 under the Securities Act) that results in netproceeds of a least $20.0 million to the Company.

 

“QualifiedInstitutional Buyer” has the meaning assigned to that term in Rule 144Aunder the Securities Act.

 

“REC” meansRecreational Enterprises, Inc., a Nevada corporation.

 

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“Registration RightsAgreement” means the Registration Rights Agreement, dated as of the datehereof, between the Issuers and the Initial Purchasers.

 

“Representative”means the indenture trustee or other trustee, agent or representative.

 

“Restricted Investment”means an Investment other than a Permitted Investment.

 

“Restricted Subsidiary”of a Person means any Subsidiary of such Person that is not an Unrestricted Subsidiary.

 

“S&P” meansStandard & Poor’s Rating Services, a division of McGraw-Hill, Inc., or itssuccessor.

 

“SEC” means theSecurities and Exchange Commission.

 

“Securities Act”means the Securities Act of 1933, as amended, or any successor statute.

 

“Senior CreditAgreement” means that certain Second Amended and Restated Loan Agreementdated as of June 29, 2001 among the Company, certain lenders and Bank ofAmerica, N. A., as administrative agent, together with the Guaranteeissued by Capital and all instruments, documents and agreements executed inconnection therewith, and any further substitution of lenders, amendments,modifications, restatements, renewals, supplements, refundings, replacements orrefinancings thereof.

 

“Shelf RegistrationStatement” means a registration statement filed with the Commissionpursuant to the Securities Act and Rule 145 promulgated thereunder inconnection with the public resale of Notes pursuant to the terms set forth inthe Registration Rights Agreement.

 

“Significant Guarantor”means any Guarantor with Adjusted Net Assets in excess of $5.0 million.

 

“SignificantSubsidiary” means any Restricted Subsidiary that would be a “significantsubsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,promulgated pursuant to the Securities Act, as such Regulation is in effect onthe date hereof.

 

“Silver Legacy JointVenture” means the Circus and Eldorado Joint Venture, a Nevada generalpartnership.

 

“Subordinated Notes”means the Issuers’ 10-1/2% Senior Subordinated Notes due 2006.

 

“Subsidiary” or “subsidiary”means, with respect to any Person, (i) any corporation, association or otherbusiness entity of which more than 50% of the total voting power of shares ofCapital Stock entitled (without regard to the occurrence of any contingency) tovote in the election of directors, managers or trustees thereof is at the timeowned or controlled, directly or indirectly, by such Person or one or more ofthe other Subsidiaries of such Person (or a combination thereof) and (ii) any partnership(a) the sole general partner or the managing general partner of which is suchPerson or a Subsidiary of such Person or (b) the only general partners of

 

16

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which are such Person or of one or more Subsidiaries of such Person (orany combination thereof).

 

“Tax Amount”means, with respect to any period, without duplication, the amount of taxableincome of any Person for such period multiplied by the highest marginalcombined federal, state and local tax rates applicable to individuals duringsuch period, but only at such blended state and local tax rates at which suchPerson would have been subject to taxation if such Person had been taxed as acorporation during such period.

 

“Tax Distribution”means a distribution in respect of taxes to the partners of the Companypursuant to Section 4.05(b)(iv) hereof.

 

“TIA” means theTrust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effecton the date of execution of this Indenture.

 

“Treasury Yield”means the yield to maturity at the time of computation of Treasury Securitieswith a constant maturity (as compiled by and published in the most recentFederal Reserve Statistical Release H.15 (519) which has become publiclyavailable at least two business days prior to the date fixed for redemption(or, if such Statistical Release is no longer published, any publicly availablesource of similar data)) most nearly equal to the then remaining period to andincluding the first Redemption Determination Date, provided that if such periodis not equal to the constant maturity of a Treasury Security for which a weeklyaverage yield is given, the Treasury yield shall be obtained by linearinterpolation (calculated to the nearest one-twelfth of a year) from the weeklyaverage yields of Treasury Securities for which such yields are given, exceptthat if such period is less than one year, the weekly average yield on actuallytraded Treasury Securities adjusted to a constant maturity of one year shall beused.

 

“Trust Officer”means any officer or assistant officer of the Trustee assigned by the Trusteeto administer its corporate trust matters.

 

“Trustee” meansthe party named as such above until a successor replaces it in accordance withthe applicable provisions of this Indenture and thereafter means the successor.

 

“UnrestrictedSubsidiary” means any Subsidiary, other than Capital, that is designated bythe Management Committee as an Unrestricted Subsidiary pursuant to a BoardResolution, but only to the extent that such Subsidiary (i) has no Indebtednessother than Non-Recourse Debt, (ii) is not party to any agreement, contract,arrangement or understanding with the Issuers or any of their RestrictedSubsidiaries unless the terms of any such agreement, contract, arrangement orunderstanding are no less favorable to the Issuers or such RestrictedSubsidiary than those that might be obtained at the time from Persons who arenot Affiliates of the Issuers, (iii) is a Person with respect to which neitherthe Issuers nor any of their Restricted Subsidiaries has any direct or indirectobligation (a) to subscribe for additional Equity Interests or (b) to maintainor preserve such Person’s financial condition or to cause such Person toachieve any specified levels of operating results and (iv) is not a guarantorof, and is not otherwise directly or indirectly providing credit support for,any Indebtedness of the Issuers or any of their Restricted Subsidiaries. Anysuch designation by the Management Committee shall be evidenced to the Trusteeby filing with the Trustee a certified copy of the board resolution givingaffect to such

 

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designation and an Officers’ Certificate certifying that suchdesignation complied with the foregoing conditions and was permitted bySection 4.18 hereof.  If, at anytime, any Unrestricted Subsidiary would fail to meet the foregoing requirementsas an Unrestricted Subsidiary, it shall thereafter cease to be an UnrestrictedSubsidiary for purposes of the Indenture and any Indebtedness of suchSubsidiary shall be deemed to be incurred by a Restricted Subsidiary of theIssuers as of such date (and, if such Indebtedness is not permitted to beincurred as of such date under Section 4.09 hereof, the Issuers shall bein default of such section).

 

“Weighted Average Lifeto Maturity” means, when applied to any Indebtedness at any date, thenumber of years obtained by dividing (i) the sum of the products obtained bymultiplying (a) the amount of each then remaining installment, sinking fund,serial maturity or other required payments of principal, including payment atfinal maturity, in respect thereof, by (b) the number of years (calculated tothe nearest one-twelfth) that will elapse between such date and the making ofsuch payment, by (ii) the then-outstanding principal amount of suchIndebtedness.

 

Section 1.02           OtherDefinitions.

 
| **Term**                                    |   | **Defined in  Section** |
|---------------------------------------------|--------|-------------------------|
| “Affiliate Transaction”           |   | 4.12                    |
| “Alternative Offer”               |   | 4.08(d)                 |
| “Asset Sale Offer”                |   | 4.14(c)                 |
| “Certificated Notes”              |   | 2.01                    |
| “Change of Control Offer”         |   | 4.08(a)                 |
| “Change of Control Offer Price”   |   | 4.08(a)                 |
| “Change of Control Payment Date”  |   | 4.08(a)                 |
| “Co-Registrar”                    |   | 2.03                    |
| “Covenant Defeasance”             |   | 8.03                    |
| “Event of Default”                |   | 6.01                    |
| “Excess Proceeds”                 |   | 4.14(b)                 |
| “Global Note”                     |   | 2.01                    |
| “Legal Defeasance”                |   | 8.02                    |
| “New York Office”                 |   | 2.03                    |
| “Non-Global Purchasers”           |   | 2.01                    |
| “Offer Amount”                    |   | 3.09                    |
| “Offer Period”                    |   | 3.09                    |
| “Paying Agent”                    |   | 2.03                    |
| “Payment Blockage Notice”         |   | 10.03                   |
| “Purchase Date”                   |   | 3.09                    |
| “Purchase Offer”                  |   | 3.01 (b)                |
| “Redemption Determination Date”   |   | 3.07(a)                 |
| “Redemption Failure”              |   | 4.25(a)                 |
| “Redemption Failure Offer Price”  |   | 4.25(a)                 |
| “Redemption Failure Payment Date” |   | 4.25(a)                 |
| “Registrar”                       |   | 2.03                    |
| “Regulation S”                    |   | 2.06(a)(ii)(B)          |
| “Restricted Payment”              |   | 4.05                    |

 

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| “Trustee Office” |   | 2.03 |
|----------------------------|--------|------|

 

Section 1.03           Incorporationby Reference of Trust Indenture Act.

 

Whenever this Indenturerefers to a provision of the TIA, the provision is incorporated by reference inand made a part of this Indenture.

 

The following TIA termsused in this Indenture have the following meanings:

 

“Commission” meansthe SEC;

 

“indenture securities”means the Notes;

 

“indenture securityholder” means a Noteholder or Holder;

 

“indenture to bequalified” means this Indenture;

 

“indenture trustee” or“institutional trustee” means the Trustee; and

 

“obligor” on theNotes means the Issuers or any other obligor on the Notes.

 

All other terms used inthis Indenture that are defined by the TIA, defined by TIA reference to anotherstatute or defined by SEC rule under the TIA have the meanings so assigned tothem.

 

Section 1.04           Rulesof Construction.

 

Unless the contextotherwise requires:

 

###### (1)           a term has the meaningassigned to it;

######  

###### (2)           an accounting term nototherwise defined has the meaning assigned to it in accordance with GAAP as ineffect at the date hereof;

######  

###### (3)           “or” is notexclusive;

######  

###### (4)           provisions apply to successive events andtransactions;

######  

###### (5)           references to sectionsof or rules under the Securities Act shall be deemed to include substitute,replacement or successor sections or rules adopted by the SEC from time totime;

######  

###### (6)           words in the singularinclude the plural, and in the plural include the singular; and

######  

###### (7)           the words “herein,”“hereof’ and “hereunder” and other words of similar import refer to thisIndenture as a whole and not to any particular Article, Section or othersubdivision.

 

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ARTICLE II

 

THE NOTES

 

Section 2.01           Formand Dating.

 

The Notes shall besubstantially in the form set forth in Exhibit A, which exhibit is part of thisIndenture, with such appropriate insertions, omissions, substitutions and othervariations as are required or permitted by this Indenture. The Notes may havenotations, legends or endorsements required by law, stock exchange rule orusage. The Issuers shall approve the forms of the Notes and any notation,legend or endorsement on them. Each Note shall be dated the date of itsauthentication. The aggregate principal amount of the Notes shall be no greaterthan $64.7 million.

 

The Notes will beinitially issued in global form, substantially in the form of Exhibit A(including footnotes 1 and 2 thereto and the text referred to therein)hereinafter referred to as a “Global Note”. Each Global Note willrepresent such of the outstanding Notes as shall be specified therein and willprovide that it represents the aggregate amount of outstanding Notes from timeto time endorsed thereon and that the aggregate amount of outstanding Notesrepresented thereby may from time to time be reduced or increased, asappropriate, to reflect transfers, exchanges and redemptions. Any endorsementof a Global Note to reflect the amount of any increase or decrease in theamount of outstanding Notes represented thereby shall be made by the Trustee orthe Global Note Holder, at the direction of the Trustee, in accordance withinstructions given by the Holder thereof.

 

Holders of Notes whoelect to take physical delivery of their certificates (collectively, the “Non-GlobalPurchasers”) will be issued certificates in the registered form ofcertificated Notes, substantially in the form of Exhibit A (excluding footnotes1 and 2 thereto and the text referred to therein) (the “Certificated Notes”).

 

Payment of the principalof, premium, interest and Liquidated Damages on any Certificated Note shall bemade to the Holder thereof by wire transfer of immediately available funds tothe accounts specified by the Holders thereof, or if no such account isspecified, by mailing a check to each Holder’s registered address.

 

Payment of the principalof, premium, interest and Liquidated Damages on the Global Note will be made bywire transfer of immediately available funds to the accounts specified by theGlobal Note Holder.

 

The terms and provisionscontained in the Notes shall constitute, and are hereby expressly made, a partof this Indenture and, to the extent applicable, the Issuers and the Trustee,by their execution and delivery of this Indenture, expressly agree to suchterms and provisions and to be bound thereby. To the extent any provision in any Note conflicts with the expressprovisions of this Indenture, the provisions of this Indenture shall govern andbe controlling.

 

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Section 2.02           Executionand Authentication.

 

Two Officers of eachIssuer shall sign the Notes for the Issuers by manual or facsimile signature.

 

If an Officer whosesignature is on a Note no longer holds that office at the time the Note isauthenticated, the Note shall nevertheless be valid.

 

A Note shall not be validuntil authenticated by the manual signature of the Trustee. Such signatureshall be conclusive evidence that the Note has been authenticated under thisIndenture.

 

Upon a written order ofthe Issuers signed by an Officer of each Issuer, the Trustee shall authenticateNotes for original issue up to the aggregate principal amount of$64.7 million. The aggregate principal amount of Notes outstanding at anytime may not exceed that amount except as provided in Section 2.07.

 

The Notes shall beissuable only in registered form without coupons and only in minimumdenominations of $100,000 or larger denominations that are an integral multipleof $25,000.

 

The Trustee may appointan authenticating agent acceptable to the Issuers to authenticate Notes. Unlesslimited by the terms of its appointment, an authenticating agent mayauthenticate Notes whenever the Trustee may do so. Each reference in thisIndenture to authentication by the Trustee includes authentication by suchagent. An authenticating agent has the same right as an Agent to deal with theIssuers or an Affiliate.

 

Section 2.03           Registrar;Paying Agent; Depositary; Global Note Holder.

 

The Issuers shallmaintain or cause to be maintained in The City of New York, State of New York(the “Trustee Office”), and, to the extent required by applicable law,(including without limitation any regulation or rule of a national securitiesexchange), in the Borough of Manhattan, The City of New York (the “New YorkOffice”), State of New York, and in such other locations as it shall determine:(i) an office or agency where securities may be presented for registration oftransfer or for exchange (“Registrar”); and (ii) an office or agency whereNotes may be presented for payment (“Paying Agent”). The Registrar shall keep aregister of the Notes and of their transfer and exchange. The Issuers mayappoint one or more co-registrars (a “Co-Registrar”), and one or moreadditional paying agents. The term Paying Agent includes any additional payingagent. The Issuers may change any Paying Agent, Registrar or Co-Registrarwithout prior notice to the Holders. The Issuers shall promptly notify theTrustee in writing of the name and address of any Agent not a party to thisIndenture and shall enter into an appropriate agency agreement with anyRegistrar, Paying Agent or Co-Registrar not a party to this Indenture. Theagreement shall implement the provisions of this Indenture that relate to suchAgent. Except as otherwise provided herein, the Issuers may act as PayingAgent, Registrar or Co-Registrar. If the Issuers fail to appoint or maintainanother entity as Registrar or Paying Agent, the Trustee shall act as such andshall be entitled to appropriate compensation in accordance with Section 7.07.The Trustee shall cause to be maintained the Trustee Office and the New YorkOffice (to the extent required by applicable law) as long as it acts asRegistrar or Paying Agent.

 

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The Issuers initiallyappoint The Depository Trust Company to act as Depositary with respect to theGlobal Notes and initially the Trustee, to act as the Registrar and PayingAgent and to act as Global Note Holder with respect to the Global Notes.

 

Section 2.04           PayingAgent to Hold Money in Trust.

 

Not later than twoBusiness Days prior to each due date for the payment of the principal of,premium, interest and Liquidated Damages, if any, on any of the Notes, theIssuers shall deposit with a Paying Agent available funds sufficient to makesuch payments so becoming due to Holders. The Issuers shall require each PayingAgent (other than the Trustee, who hereby so agrees), to agree in writing thatthe Paying Agent will hold in trust for the benefit of Noteholders or the Trusteeall money held by the Paying Agent for the payment of the principal of,premium, interest or Liquidated Damages, if any, on the Notes, and willpromptly notify the Trustee in writing of any, delay or default by the Issuersin making any such payment. While any such delay in payment or defaultcontinues, the Trustee may require a Paying Agent to pay all money held by itto the Trustee. The Issuers at any time may require a Paying Agent to pay allmoney held by it to the Trustee. Upon payment over to the Trustee, the PayingAgent (if other than the Issuers or their Restricted Subsidiary) shall have nofurther liability for such money. If the Issuers or their Restricted Subsidiaryact as Paying Agent, such Person shall segregate and hold in a separate trust fundfor the benefit of the Noteholders all money held by such Person as PayingAgent. Upon any bankruptcy or reorganization proceedings relating to eitherIssuer or their Restricted Subsidiaries, the Trustee shall serve as PayingAgent.

 

Section 2.05           NoteholderLists.

 

The Trustee shallpreserve in as current a form as is reasonably practicable the most recent listavailable to it of the names and addresses of all Noteholders and shallotherwise comply with TIA Section 312(a). If the Trustee is not the Registrar,the Issuers shall furnish to the Trustee at least five (5) Business Days beforeeach Interest Payment Date and at such other times as the Trustee may requestin writing a list in such form and as of such date as the Trustee mayreasonably require of the names and addresses of all Noteholders, including theaggregate principal amount of Notes held by each thereof, and the Issuers shallotherwise comply with TIA Section 312(a).

 

Section 2.06           Transferand Exchange.

 

### (a)           Transferand Exchange of Certificated Notes. When Certificated Notes are presented to the Registrar or Co-Registrarwith a request to register the transfer of the Certificated Notes or toexchange such Certificated Notes for an equal principal amount of CertificatedNotes of other authorized denominations, the Registrar or Co-Registrar shallregister the transfer or make the exchange as requested if its requirements forsuch transactions are met; provided, however, that the Certificated Notespresented or surrendered for registration of transfer or exchange:

###  

#### (i)            shallbe duly endorsed or accompanied by a written instruction of transfer in formsatisfactory to the Registrar or Co-Registrar, duly executed by the Holderthereof or by such Holder’s attorney, duly authorized in writing; and

 

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#### (ii)           inthe case of Legended Notes that are Certificated Notes, shall be accompanied bythe following additional information and documents, as applicable:

####  

##### (A)          ifsuch Legended Note is being delivered to the Registrar or Co-Registrar by aNoteholder for registration in the name of such Noteholder, without transfer, acertification from such Noteholder to that effect (in substantially the form ofExhibit B hereto); or

#####  

##### (B)           ifsuch Legended Note is being transferred to a Qualified Institutional Buyer inaccordance with Rule 144A under the Securities Act or pursuant to an exemptionfrom registration in accordance with Rule 144 under the Securities Act or atransaction meeting the requirements of Regulation S under the Securities Act(“Regulation S”) or pursuant to an effective registration statement under theSecurities Act, a certification to that effect (in substantially the form ofExhibit B hereto); or

#####  

##### (C)           ifsuch Legended Note is being transferred in reliance on another exemption fromthe registration requirements of the Securities Act or in a transaction exemptfrom the registration requirements of the Securities Act, a certification tothat affect (in substantially the form of Exhibit B hereto) and an Opinion ofCounsel to the effect that such transfer does not require registration underthe Securities Act (in substantially the form of Exhibit C hereto).

#####  

### (b)           Restrictionson Transfer of a Certificated Note for a Beneficial Interest in a Global Note.  A Certificated Note may not be exchanged fora beneficial interest in a Global Note except upon satisfaction of therequirements set forth below. Upon receipt by the Trustee of a CertificatedNote, duly endorsed or accompanied by appropriate instruments of transfer, inform satisfactory to the Trustee, together with:

###  

#### (i)            ifsuch Certificated Note is a Legended Note, certification (in substantially theform of Exhibit B hereto) that such Certificated Note is being transferred (w)to a Qualified Institutional Buyer in accordance with Rule 144A under theSecurities Act, (x) in a transaction meeting the requirements of Regulation S,(y) pursuant to an effective registration statement under the Securities Act or(z) in reliance on another exemption from the registration requirements of theSecurities Act or in a transaction exempt from the registration requirements ofthe Securities Act, in either case based on an Opinion of Counsel to the effectthat such transfer does not require registration under the Securities Act (insubstantially the form of Exhibit C hereto); and

####  

#### (ii)           whetheror not such Certificated Note is a Legended Note, written instructionsdirecting the Trustee to make, or to direct the Global Note Holder to make, anendorsement on the Global Notes to reflect an increase in the aggregateprincipal amount of the Notes represented by the Global Notes;

 

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then the Trustee shall cancel such Certificated Note in accordance withSection 2.12 hereof and cause, or direct the Global Note Holder to cause,in accordance with the standing instructions and procedures existing betweenthe Depositary and the Global Note Holder, the aggregate principal amount ofNotes represented by the Global Notes to be increased accordingly. If no GlobalNotes are then-outstanding, the Issuers shall issue and, upon receipt of anauthentication order in accordance with Section 2.02 hereof, the Trusteeshall authenticate a new Global Note in the appropriate principal amount.

 

### (c)           Transferand Exchange of Global Notes.  Thetransfer and exchange of Global Notes or beneficial interests therein shall beeffected through the Depositary, in accordance with this Indenture (includingthe restrictions on transfer set forth herein) and the procedures of theDepositary therefor, which shall include restrictions on transfer comparable tothose set forth herein to the extent required by the Securities Act.

###  

### (d)           Transferand Exchange of a Beneficial Interest in a Global Note for a Certificated Note.  Any Person having a beneficial interest in aGlobal Note may upon request exchange such beneficial interest for aCertificated Note. Upon receipt by the Trustee of written instructionsincluding registration instructions from the Depositary or its nominee onbehalf of any Person having a beneficial interest in a Global Note, and, in thecase of a beneficial interest in a Legended Note only, the following additionalinformation and documents:

###  

#### (i)            ifsuch beneficial interest is being transferred to the Person designated by theDepositary as being the beneficial owner, a certification from such Person tothat effect (in substantially the form of Exhibit B hereto);

####  

#### (ii)           ifsuch beneficial interest is being transferred to a Qualified InstitutionalBuyer in accordance with Rule 144A under the Securities Act or pursuant to anexemption from registration in accordance with Rule 144 or in a transactionmeeting the requirements of Regulation S or pursuant to an effectiveregistration statement under the Securities Act, a certification to that effectfrom the transferee or transferor (in substantially the form of Exhibit Bhereto); or

####  

#### (iii)          ifsuch beneficial interest is being transferred in reliance on an exemption fromthe registration requirements of the Securities Act other than set forth inclauses (i) and (ii) of this Section 2.06(d), a certification to thateffect from the transferee or transferor (in substantially the form of ExhibitB hereto) and an Opinion of Counsel to the effect that such transfer does not requireregistration under the Securities Act (in substantially the form of Exhibit Chereto);

 

then the Trustee, or the Global Note Holder at the direction of theTrustee, will cause, in accordance with the standing instructions andprocedures existing between the Depositary and the Global Note Holder, theaggregate principal amount of the Global Note to be reduced and, following suchreduction, the Issuers will execute and the Trustee will authenticate anddeliver a Certificated Note to the transferee. Certificated Notes issued inexchange for a beneficial interest in a Global Note pursuant to thisSection 2.06(d) shall be registered in such names and in such authorizeddenominations as the Depositary, pursuant to instructions from its direct orindirect

 

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Participants or otherwise, shall instruct the Trustee. The Trusteeshall deliver such Certificated Notes to the Persons in whose names such Notesare so registered.

 

### (e)           Restrictionson Transfer and Exchange of Global Notes. Notwithstanding any otherprovisions of this Indenture (other than the provisions set forth inSection 2.06(f)), a Global Note may not be transferred as a whole exceptby the Depositary to a nominee of the Depositary or by a nominee of theDepositary to the Depositary or another nominee of the Depositary or by theDepositary or any such nominee to a successor Depositary or a nominee of suchsuccessor Depositary.

###  

### (f)            Authenticationof Certificated Notes in Absence of Depositary or at the Issuer’s Election.If at any time (i) the Depositary for a Global Note notifies the Issuers thatthe Depositary is unwilling or unable to continue as Depositary for the GlobalNote and a successor Depositary for the Global Note is not appointed by the Issuerswithin 90 days after delivery of such notice, or (ii) the Issuers, at theirsole discretion, notify the Trustee in writing that they elect to cause theissuance of Certificated Notes under this Indenture, then, the Issuers willexecute, and the Trustee, upon receipt of an Officers’ Certificate requestingthe authentication and delivery of Certificated Notes, shall authenticate anddeliver Certificated Notes, in an aggregate principal amount equal to theprincipal amount of the Global Note, in exchange for such Global Note.

###  

### (g)           Cancellationand/or Adjustment of Global Note. At such time as all beneficial interestsin a Global Note have either been exchanged for Certificated Notes, redeemed,converted, repurchased or canceled, such Global Note shall be returned to orretained by and canceled by the Trustee in accordance with Section 2.11hereof. At any time prior to such cancellation, if any beneficial interest in aGlobal Note is exchanged for Certificated Notes, redeemed, converted,repurchased or canceled, the aggregate principal amount of Notes represented bysuch Global Note shall be reduced and an endorsement shall be made on suchGlobal Note, by the Trustee or the Global Note Holder at the direction of theTrustee, to reflect such reduction.

###  

### (h)           Legends.

###  

#### (i)            Except as otherwise provided by thefollowing paragraph (ii) each certificate evidencing the Global Notes and theCertificated Notes (and all Notes issued in exchange therefor or substitutionthereof) shall bear a legend in substantially the following form:

####  

“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLYISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THEUNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANDTHE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERREDIN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACHPURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT

 

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THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OFSECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THEHOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERSTHAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY(i) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIEDINSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), IN ATRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETINGTHE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITEDSTATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROMTHE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINIONOF COUNSEL IF THE ISSUERS SO REQUEST), (ii) TO THE ISSUERS, (iii) PURSUANT TOAN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE,IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITEDSTATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACHSUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITYEVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.”

 

#### (ii)           Upon (x) any sale or transfer of aLegended Note, (including any Legended Note represented by a Global Note)pursuant to Rule 144 under the Securities Act, pursuant to an effectiveregistration statement under the Securities Act or in connection with which theTrustee receives an Opinion of Counsel to the effect that such Note will nolonger be subject to resale restrictions under federal and state securitieslaws or (y) request of a Holder in connection with which the Trusteereceives an Opinion of Counsel to the effect that a Legended Note (includingany Legended Note represented by a Global Note) will no longer be subject toresale restrictions under federal and state securities laws:

####  

##### (A)          in the case of any Legended Note that is aCertificated Note, the Registrar shall permit the Holder thereof to exchangesuch Legended Note for a Certificated Note that does not bear the legend setforth in (i) above and rescind any restriction on the transfer of such LegendedNote; and

#####  

##### (B)           in the case of any Legended Note representedby a Global Note, such Legended Note shall not be required to bear the legendset forth in (i) above, but shall continue to be subject to the provisions ofSection 2.06(c) hereof; provided, however, that with respect to any request

 

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##### for an exchange of a Legended Note that is represented by a Global Notefor a Certificated Note that does not bear the legend set forth in (i) above,which request is made in reliance upon Rule 144, the Holder thereof shallcertify in writing to the Registrar that such request is being made pursuant toRule 144 (such certification to be substantially in the form of Exhibit Bhereto).

 

### (i)            Obligationswith respect to Transfers and Exchanges of Certificated Notes.

###  

#### (i)            To permit registrations of transfers andexchanges, the Issuers shall execute and the Trustee shall authenticateCertificated Notes and Global Notes at the Registrar’s or Co-Registrar’srequest.

####  

#### (ii)           No service charge shall be made to aNoteholder for any registration of transfer or exchange, but the Issuers mayrequire payment of a sum sufficient to cover any transfer tax or similargovernmental charges payable in connection therewith (other than any suchtransfer taxes or similar governmental charges payable upon exchange ortransfer pursuant to Sections 2.10, 3.06, 4.08, 4.14, 4.25 and 9.05 hereof).

####  

#### (iii)          The Registrar or Co-Registrar shall not berequired to register the transfer or exchange of any Certificated Note selectedfor repurchase pursuant to an offer to purchase Notes required to be made bythe Issuers pursuant to Sections 4.08, 4.14 and 4.25 in whole or in part,except the unpurchased portion of any Certificated Note being repurchased inpart.

####  

#### (iv)          All Certificated Notes and Global Notesissued upon any registration of transfer or exchange of Certificated Notes orGlobal Notes shall be the valid obligations of the Issuers, evidencing the samedebt, and entitled to the same benefits under this Indenture, as the CertificatedNotes or Global Notes surrendered upon such registration of transfer orexchange.

####  

#### (v)           The Issuers shall not be required to (A)issue, register the transfer of, or exchange Notes during a period beginning atthe opening of business 15 days before the date on which a notice of redemptionis mailed under Section 3.03 hereof and ending at the close of business onsuch the date on which such notice is mailed, (B) to register the transfer orexchange of any Note redeemed in whole or in part, except the unpurchasedportion of any Note being purchased in part, or (C) to register the transfer orexchange of a Note between the record date and the next succeeding interestpayment date.

####  

#### (vi)          Prior to due presentment for registration ortransfer of any Note, the Trustee, any Agent and the Issuers shall deem andtreat the Person in whose name any Note is registered as the absolute owner ofsuch Note for the purpose of receiving payment of principal of, premium,interest and Liquidated Damages, if any, on such Note, and for all otherpurposes whatsoever, whether or

 

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#### not such Note is overdue, and neither the Trustee, any Agent nor theIssuers shall be affected by notice to the contrary.

####  

#### (vii)         The Trustee shall authenticate CertificatedNotes and the Global Notes in accordance with the provisions ofSection 2.02 hereof.

####  

Section 2.07           ReplacementNotes.

 

If any mutilated Note issurrendered to the Trustee or any Holder claims, to the satisfaction of theTrustee and the Issuers, that any Note has been lost, destroyed or wrongfullytaken, the Issuers shall issue and the Trustee shall authenticate a replacementNote if the Trustee’s requirements are met. In the case of a lost, destroyed or wrongfully taken Note, if requiredby the Trustee or the Issuers as a condition of receiving a replacement Note,the Holder shall provide an indemnity bond sufficient, in the judgment of theIssuers and the Trustee, to fully protect the Issuers, the Trustee, any PayingAgent and any authenticating agent from any loss that any of them may suffer ifsuch Note is replaced. The Issuers shall be entitled to charge the holders ofsuch Notes for the Issuers’ reasonable expenses in replacing any such Note.

 

Each replacement Noteshall be an additional Obligation of the Issuers and shall be entitled to allthe benefits of this Indenture equally with all other Notes issued hereunder.

 

Section 2.08           OutstandingNotes.

 

The Notes outstanding atany time are all the Notes properly authenticated by the Trustee except forthose canceled by the Trustee, those delivered to it for cancellation, andthose described in this Section 2.08 as not outstanding.

 

If a Note is replacedpursuant to Section 2.07 (other than a mutilated Note surrendered forreplacement), it shall cease to be outstanding unless the Trustee receivesproof satisfactory to it that the replaced Note is held by a bona fidepurchaser. A mutilated Note shall cease to be outstanding upon surrender ofsuch Note and replacement thereof pursuant to Section 2.07.

 

If Notes are consideredpaid in full under Section 4.01, they cease to be outstanding and intereston them ceases to accrue.

 

Subject toSection 2.09, a Note does not cease to be outstanding because the Issuersor an Affiliate of the Issuers holds the Note.

 

Section 2.09           WhenTreasury Notes Disregarded.

 

In determining whetherthe Holders of the required aggregate principal amount of Notes have concurredin any direction, waiver or consent, Notes owned by the Issuers or an Affiliateof the Issuers shall be considered as though they are not outstanding, exceptthat for the purposes of determining whether the Trustee shall be protected inrelying on any such direction, waiver or consent, only Notes which the Trusteeknows are so owned shall be so disregarded.

 

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Section 2.10           TemporaryNotes.

 

Until Notes incertificated form are ready for delivery, the Issuers may prepare and theTrustee shall authenticate temporary Notes. Temporary Notes shall be substantiallyin the form of Notes in certificated form but may have variations that theIssuers consider appropriate for temporary Notes and as shall be acceptable tothe Trustee.  Without unreasonabledelay, the Issuer shall prepare and the Trustee shall, as soon as practicableupon its receipt of an authentication order, authenticate Notes in certificatedform in exchange for temporary Notes. Until such exchange, such temporary Notesshall be entitled to the same rights, benefits and privileges as the Notes incertificated form.

 

Section 2.11           GamingRedemption.

 

Notwithstanding any otherprovision of this Indenture, if any Gaming Authority requires that a Holder orbeneficial owner of Notes must be licensed, qualified or found suitable underany applicable gaming law and such Holder or beneficial owner fails to applyfor a license, qualification or a finding of suitability within 30 days afterbeing requested to do so by the Gaming Authority (or such 1esser period thatmay be required by such Gaming Authority), or if such Holder or such beneficialowner is not so licensed, qualified or found suitable, the Company shall havethe right, at its option, (i) to require such Holder or beneficial owner todispose of such Holders or beneficial owner’s Notes within 30 days of receiptof such notice of such finding by the applicable Gaming Authority or suchearlier date as may be ordered by such Gaming Authority or (ii) to redeem theNotes of such Holder or beneficial owner at a redemption price equal to thelesser of (A) the principal amount thereof or (B) the price at which suchHolder or beneficial owner acquired such Notes (in the case of (A) or (B),together with accrued and unpaid interest and Liquidated Damages, if any,thereon to the earlier of the date of redemption or such earlier date as may berequired by such Gaming Authority or the date of the finding of unsuitabilityby such Gaming Authority, which may be less than 30 days following the noticeof redemption, if so ordered by such Gaming Authority), or (C) such otheramount as may be required by applicable law or by order of any GamingAuthority.  The Holder or beneficialowner of Notes applying for a license, qualification or a finding ofsuitability with any Gaming Authority must pay all costs of the licensure orinvestigation for such qualification or finding of suitability. The Companyshall not be required to pay or reimburse any Holder or beneficial owner ofNotes who is required to apply for such license, qualification or a finding ofsuitability for the costs of the licensure or investigation for suchqualification or finding of suitability.

 

Section 2.12           Cancellation.

 

The Issuers at any timemay deliver Notes to the Trustee for cancellation. The Registrar and PayingAgent shall forward to the Trustee any Notes surrendered to them forregistration of transfer, exchange, or payment. The Trustee and no one elseshall cancel all Notes surrendered for registration of transfer, exchange,payment, replacement, or cancellation, shall dispose of canceled Notes subjectto record retention requirements of the Exchange Act, and shall promptlyprovide the Issuers with a certificate executed by an authorized signatorycertifying such destruction. The Issuers may not issue new Notes to replaceNotes that it has paid or that have been delivered to the Trustee forcancellation.

 

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Section 2.13           DefaultedInterest.

 

If (a) the Issuersdefault in a payment of interest, Make-Whole Premium or Liquidated Damages onthe Notes, they shall pay the defaulted interest in any lawful manner plus, tothe extent lawful, interest payable on the defaulted interest, Make-WholePremium or Liquidated Damages, or (b) the Issuers default in a payment ofprincipal on the Notes, they shall pay default interest on the overdueprincipal to the Persons who are Holders on a subsequent special record date,which date shall be at the earliest practicable date but in all events at leastfive Business Days prior to the payment date, in each case at the rate providedin the Notes and in Section 4.01 hereof. The Issuers shall notify the Trustee in writing of the amount ofdefaulted interest proposed to be paid on each Note and the date of theproposed payment. The Issuers shall, with the consent of the Trustee, fix orcause to be fixed each such special record date and payment date. At least 15days before the special record date, the Issuers (or, upon the written requestof the Issuers, the Trustee in the name and at the expense of the Issuers)shall mail or cause to be mailed to the Holders a notice that states thespecial record date, the related payment date and the amount of such interestto be paid.

 

Section 2.14           CUSIPNumber.

 

The Issuers in issuingthe Notes may use one or more CUSIP numbers to identify the Notes, and if so,such CUSIP number shall be included in notices of redemption or exchange as aconvenience to Holders; provided, however, that any such notice may state thatno representation is made as to the correctness or accuracy of such CUSIPnumber printed in the notice or on the Notes and that reliance may be placedonly on the other identification numbers printed on the Notes. The Issuersshall promptly notify the Trustee of any change in the CUSIP number.

 

ARTICLE III

 

REDEMPTION AND PREPAYMENT

 

Section 3.01           Noticesto Trustee.

 

### (a)           Ifthe Issuers elect to redeem Notes pursuant to the optional redemptionprovisions of Section 3.07 hereof, they shall furnish to the Trustee, atleast 30 days but not more than 60 days before a redemption date, an Officers’Certificate setting forth (i) the Section of this Indenture pursuant towhich the redemption shall occur, (ii) the redemption date, (iii) the principalamount of Notes to be redeemed and (iv) the redemption price.

###  

### (b)           Ifthe Issuers are required to make an offer to redeem Notes pursuant to theprovisions of Section 4.08, 4.14 or 4.25 hereof (a “Purchase Offer”), theyshall furnish to the Trustee at least 30 days but not more than 60 days beforea redemption date, an Officers’ Certificate setting forth (i) theSection of this Indenture pursuant to which the repurchase shall occur,(ii) the repurchase date, (iii) the maximum principal amount of Notes to berepurchased, (iv) the repurchase price, and (v) further setting forth astatement to the effect that (a) either Issuer or a Restricted Subsidiary haseffected an Asset Sale and the conditions set forth in Section 4.14 havebeen satisfied, (b) a Change of Control has occurred and the conditions set 

 

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forth in Section 4.08 have been satisfied or (c) a RedemptionFailure has occurred and the conditions set forth in Section 4.25 havebeen satisfied.

 

### (c)           Ifthe Issuers are required to redeem Notes pursuant to a redemption required byany Gaming Authority pursuant to the provisions of Section 2.11 hereof,the Issuers shall furnish substantially similar notice to the Trustee as setforth in Section 3.01(b) to the extent permitted by such Gaming Authority.

###  

Section 3.02           Selectionof Notes to be Redeemed.

 

If less than all of theNotes are to be redeemed at any time, the Trustee shall select the Notes to beredeemed among the Holders (other than as provided in Section 2.11 hereof)in compliance with the requirements of the principal national securitiesexchange, if any, on which the Notes are listed or, if the Notes are not solisted, on a pro rata basis, by lot or in accordance with any other method theTrustee considers fair and appropriate; provided that no Notes of $1,000 orless shall be redeemed in part. In the event of partial redemption by lot, theparticular Notes to be redeemed shall be selected, unless otherwise providedherein, not less than 30 nor more than 60 days prior to the redemption date bythe Trustee from the outstanding Notes not previously called for redemption.

 

The Issuers shallpromptly notify the Trustee in writing of the listing of the Notes on anynational securities exchange.

 

The Trustee shallpromptly notify the Issuers in writing of the Notes selected for redemptionand, in the case of any Note selected for partial redemption, the principalamount thereof to be redeemed. Notes and portions of them selected shall be inamounts of $1,000 or whole multiples of $1,000; except that if all Notes of aHolder are to be redeemed, the entire outstanding amount of Notes held by suchHolder, even if not a multiple of $1,000, shall be redeemed. Except as providedin the preceding sentence, provisions of this Indenture that apply to Notescalled for redemption also apply to portions of Notes called for redemption.

 

In the event the Issuersare required to make an offer to repurchase Notes pursuant to Sections 3.09 and4.14 hereof and the amount of the Excess Proceeds from the Asset Sale are notevenly divisible by $1,000, the Trustee shall promptly refund to the Issuersany remaining Excess Proceeds.

 

Section 3.03           Noticeof Redemption.

 

Subject to the provisionsof Section 3.09 hereof, at least 30 days but not more than 60 days beforea redemption date (except in the case of a redemption effected pursuant toSection 2.11 hereof, which may be less than 30 days), the Issuers shallmail or cause to be mailed, by first-class mail, a notice of redemption to eachHolder whose Notes are to be redeemed at its registered address.

 

The notice shall identifythe Notes to be redeemed (including CUSIP numbers) and shall state:

 

### (a)           theredemption date;

 

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### (b)           theredemption price and, if the redemption price includes a Make-Whole Premium,the amount thereof and the calculation of such amount;

###  

### (c)           ifany Note is being redeemed in part, that, after the redemption date, uponsurrender of such Note, a new Note or Notes in principal amount equal to theunredeemed portion shall be issued upon cancellation of the original Note;

###  

### (d)           ifany Note is being redeemed in part, the portion of the principal amount thereofto be redeemed;

###  

### (e)           thename and address of the Paying Agent;

###  

### (f)            thatNotes called for redemption must be surrendered to the Paying Agent to collectthe redemption price;

###  

### (g)           that,unless the Issuers default in making such redemption payment, interest on Notescalled for redemption ceases to accrue on and after the redemption date;

###  

### (h)           theparagraph of the Notes and/or Section of this Indenture pursuant to whichthe Notes called for redemption are being redeemed; and

###  

### (i)            thatno representation is made as to the correctness or accuracy of the CUSIPnumber, 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 theIssuers’ expense; provided, however, that the Issuers shall have delivered tothe Trustee, at least 45 days prior to the redemption date, an Officers’Certificate requesting that the Trustee give such notice and setting forth theinformation to be stated in such notice as provided in the preceding paragraph.

 

Section 3.04           Effectof Notice of Redemption.

 

Once notice of redemptionis mailed in accordance with Section 3.03 hereof, Notes called forredemption become irrevocably due and payable on the redemption date at theredemption price. A notice of redemption may not be conditional.

 

Section 3.05           Depositof Redemption Price.

 

One Business Day prior tothe redemption date, the Issuers shall deposit with the Trustee or with thePaying Agent money sufficient to pay the redemption price of, plus premium,accrued interest and Liquidated Damages, if any, on all Notes to be redeemed onthat date. The Trustee or the Paying Agent shall promptly return to the Issuersany money deposited with the Trustee or the Paying Agent by the Issuers inexcess of the amounts necessary to pay the redemption price of, plus premium,accrued interest and Liquidated Damages, if any, on all Notes to be redeemed.

 

If the Issuers complywith the provisions of the preceding paragraph, on and after the redemptiondate, interest shall cease to accrue on the Notes or the portions of Notescalled for

 

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redemption. 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 andunpaid interest shall be paid to the Person in whose name such Note wasregistered at the close of business on such Interest Record Date. If any Notecalled for redemption shall not be so paid upon surrender for redemptionbecause of the failure of the Issuers to comply with the preceding paragraph,interest shall be paid on the unpaid principal from the redemption date untilsuch principal is paid and, to the extent lawful, on any premium, interest andLiquidated Damages not paid on such unpaid principal, in such case at the rateprovided in the Notes and in Section 4.01 hereof.

 

Section 3.06           NotesRedeemed in Part.

 

Upon surrender of a Notethat is redeemed in part, the Issuers shall issue and, upon receipt of theIssuers’ written request, the Trustee shall as soon as practicable authenticatefor the Holder at the expense of the Issuers, a new Note equal in principalamount to the unredeemed portion of the Note surrendered.

 

Section 3.07           OptionalRedemption.

 

### (a)           Exceptas set forth in Section 3.07(b) or as required by applicable gaming law,the Issuers shall not be entitled to redeem the Notes prior to April 15,2009.  Thereafter the Issuers shall havethe option to redeem the Notes, in whole or in part, at redemption prices(expressed as a percentage of the principal amount) set forth below plusaccrued and unpaid interest and Liquidated Damages, if any, thereon to theapplicable redemption date, if redeemed during the twelve month periodbeginning on April 15 of the years indicated below (the first day of eachsuch period being a “Redemption Determination Date”):

###  

| **Year**             |   | **Percentage** |   |
|----------------------|--------|----------------|--------|
|                 |   |           |   |
| 2009                 |   | 104.50         | %      |
| 2010                 |   | 103.00         | %      |
| 2011                 |   | 101.50         | %      |
| 2012 and  thereafter |   | 100.00         | %      |

 

### (b)           (i)Prior to April 15, 2009, upon not less than 30 nor more than 60 days’notice, the Issuers may redeem the Notes in whole or in part, at a redemptionprice equal to 100% of the principal amount thereof plus the Make-Whole Premium,together with accrued and unpaid interest thereon and Liquidated Damages, ifany, to the applicable redemption date; and (ii) if the Company consummates thesale of its interests in Tamarack Crossing, LLC on or before June 30,2005, the Issuers may, upon not less than 30 nor more than 60 days’ notice, useproceeds from such sale to redeem up to $5.0 million principal amount of theNotes at a redemption price equal to 100% of the principal amount thereoftogether with accrued and unpaid interest thereon and Liquidated Damages, ifany, to the applicable redemption date.

###  

### (c)           Anyredemption pursuant to this Section 3.07 shall be made, to the extentapplicable, pursuant to the provisions of Sections 3.01 through 3.06 hereof andnot inconsistent with this Section 3.07.

 

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Section 3.08           MandatoryRedemption.

 

Except as set forth underSections 4.08, 4.14 and 4.25 hereof, the Issuers shall not be required to makemandatory redemption or sinking fund payments with respect to the Notes.

 

Section 3.09           Offerto Purchase by Application of Excess Proceeds.

 

In the event that,pursuant to Section 4.14 hereof, the Issuers shall be required to commencean Asset Sale Offer, they shall follow the procedures specified below.

 

The Asset Sale Offershall remain open for a period of 20 Business Days following its commencementand no longer, except to the extent that a longer period is required byapplicable law (the “Offer Period”). No later than three Business Daysafter the termination of the Offer Period (the “Purchase Date”), theIssuers shall purchase the principal amount of Notes required to be purchasedpursuant to Section 4.14 hereof (the “Offer Amount”) or, if lessthan the Offer Amount has been tendered, all Notes tendered in response to theAsset Sale Offer. Payment for any Notes so purchased shall be made in the samemanner as interest payments are made.

 

If the Purchase Date ison or after an Interest Record Date and on or before the related InterestPayment Date, any accrued and unpaid interest shall be paid to the Person inwhose name a Note is registered at the close of business on such InterestRecord Date, and no additional interest shall be payable to Holders who tenderNotes pursuant to the Asset Sale Offer.

 

Upon the commencement ofan Asset Sale Offer, the Issuers shall send, by first-class mail, a notice tothe Trustee and to each of the Holders, with a copy to the Trustee. The noticeshall contain all instructions and materials necessary to enable such Holdersto tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall bemade to all Holders of notes. The notice, which shall govern the terms of theAsset Sale Offer, shall state:

 

### (a)           thatthe Asset Sale Offer is being made pursuant to this Section 3.09 andSection 4.14 hereof and the length of time the Asset Sale Offer shallremain open;

###  

### (b)           theOffer Amount, the purchase price and the Purchase Date;

###  

### (c)           thatany Note not tendered or accepted for payment shall continue to accrueinterest;

###  

### (d)           that,unless the Issuers default in making such payment, any Note accepted forpayment pursuant to the Asset Sale Offer shall cease to accrue interest afterthe Purchase Date;

###  

### (e)           thateach Holder electing to have its Notes purchased pursuant to an Asset SaleOffer may elect to have all or part (in integral multiples of $1,000) of suchNotes purchased;

###  

### (f)            thatHolders electing to have a Note purchased pursuant to any Asset Sale Offershall be required to surrender the Note, with the form titled “Option of Holderto Elect Purchase” on the reverse of the Note completed, or transfer bybook-entry transfer, to the Issuers, a depositary, if appointed by the Issuers,or a Paying Agent at the address specified in the notice at least three daysbefore the Purchase Date;

 

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### (g)           thatHolders shall be entitled to withdraw their election if the Issuers, thedepositary or the Paying Agent, as the case may be, receive, not later than theexpiration of the Offer Period, a facsimile transmission or letter settingforth the name of the Holder, the principal amount of the Note the Holderdelivered for purchase and a statement that such Holder is withdrawing itselection to have such Note purchased;

###  

### (h)           that,if the aggregate principal amount of Notes surrendered by Holders exceeds theOffer Amount, the Issuers shall select the Notes to be purchased on a pro ratabasis (with such adjustments as may be deemed appropriate by the Issuers sothat only Notes in denominations of $1,000, or integral multiples thereof,shall be purchased); and

###  

### (i)            thatHolders whose Notes were purchased only in part shall be issued new Notes inprincipal amount equal to the unpurchased portion of the Notes surrendered (ortransferred by book-entry transfer).

###  

On or before the PurchaseDate, the Issuers shall, to the extent lawful, accept for payment, on a prorata basis to the extent necessary, the Offer Amount of Notes or portionsthereof tendered pursuant to the Asset Sale Offer, or if less than the OfferAmount has been tendered, all Notes tendered, and shall deliver to the Trusteean Officers’ Certificate stating that such Notes or portions thereof wereaccepted for payment by the Issuers in accordance with the terms of thisSection 3.09. The Issuers, the Depositary or the Paying Agent, as the casemay be, shall promptly (but in any case not later than three Business Daysafter the Purchase Date) mail or deliver to each tendering Holder an amountequal to the purchase price of the Notes tendered by such Holder and acceptedby the Issuers for purchase, and the Issuers shall promptly issue a new Note,and the Trustee, upon written request from the Issuers, shall authenticate andmail or deliver such new Note to such Holder, in a principal amount equal toany unpurchased portion of the Note surrendered. Any Note not so accepted shallbe promptly mailed or delivered by the Issuers to the Holder thereof. TheIssuers shall publicly announce the results of the Asset Sale Offer on thePurchase Date.

 

Other than asspecifically provided in this Section 3.09, any purchase pursuant to thisSection 3.09 shall be made pursuant to the provisions of Sections 3.01through 3.06 hereof to the extent not inconsistent with the provisions ofSection 4.14 hereof.

 

Section 3.10           Compliancewith Tender Offer Rules.

 

Any offer to redeem orpurchase Notes shall be made by the Issuers in compliance with all tender offerrules, including but not limited to, Section 14(e) under the Exchange Actand Rule 14e-1 thereunder, to the extent applicable to such offer, and shallinclude all instructions and materials necessary to enable Noteholders totender their Notes.

 

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ARTICLE IV

 

COVENANTS OF THE ISSUERS

 

Section 4.01           Paymentof Notes.

 

The Issuers shall pay orcause to be paid the principal of and premium, interest and Liquidated Damages,if any, on the Notes on the dates and in the manner provided in the Notes orthe Registration Rights Agreement, as applicable. Principal of, and premium,interest and Liquidated Damages, if any, on the Notes shall be considered paidon the date due if the Paying Agent, if other than the Issuers or a RestrictedSubsidiary or Affiliate thereof, (i) holds as of 10:00 a.m. Eastern Time on thedate due money deposited by the Issuers in immediately available funds anddesignated for and sufficient to pay all principal of, and premium, interestand Liquidated Damages, if any, on the Notes then due, and (ii) is notprohibited from paying such money to the Holders pursuant to the terms of thisIndenture or the Notes. The Paying Agent shall return to the Issuers, no laterthan five days following the date of payment, any money (including accruedinterest) that exceeds such amount of principal of, and premium, interest andLiquidated Damages, if any, paid on the Notes.

 

Section 4.02           SECReports.

 

### (a)           Whetheror not required by the rules and regulations of the Commission, so long as anyNotes are outstanding, the Issuers shall furnish to the Holders of Notes (i) allquarterly and annual financial information that would be required to becontained in a filing with the Commission on Forms 10-Q and 10-K if the Issuerswere required to file such Forms, including a “Management’s Discussion andAnalysis of Financial Condition and Results of Operations” that describes thefinancial position and results of operations of the Company and its RestrictedSubsidiaries and, with respect to the annual information only, a report thereonby the Issuers’ certified independent accountants and (ii) all information thatwould be required to be contained in a filing with the Commission on Form 8-Kif the Issuers were required to file such reports. The information required tobe delivered pursuant to clause (i) of the preceding sentence shall bedelivered for each fiscal quarter and fiscal year in each case no later thanthe date the Issuers would be required to file a Form 10-Q or Form 10-K, as thecase may be, if the Issuers were then required to make filings pursuant toSection 15(d) of the Exchange Act, and the information required to bedelivered pursuant to clause (ii) of the preceding sentence shall be deliveredin each case no later than the date the Issuers would be required to file aForm 10-Q or Form 10-K, as the case may be, covering the period during whichthe reportable information would be required to be reported on Form 8-K if theIssuers were then required to make filings pursuant to Section 15(d) ofthe Exchange Act, provided, however, that this Section 4.02(a) shall notbe applicable to any period for which the Issuers are required to file reportswith the Commission pursuant to Section 4.02(b).

###  

### (b)           Whetheror not required by the rules and regulations of the Commission, if the Issuersbecome obligated by the terms of the Registration Rights Agreement to registerthe Notes under the Securities Act, the Issuers shall file with the Commissionfor public availability such reports or other filings as are required of anentity which is subject to the reporting requirements under Section 15(d)of the Exchange Act, (unless the Commission will not accept such filings) andmake such information available to securities analysts and prospectiveinvestors upon request, beginning on the date the Issuers become required tobegin making filings with the Commission pursuant to Section 15(d) of theExchange Act as a result of the registration of the Notes pursuant toSection 5 of the Securities Act and continuing for so long thereafter asany of the Notes continue to be outstanding.

 

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### (c)           TheIssuers agree that, for so long as any Notes remain outstanding, they willfurnish to the Holders and to securities analysts and prospective investors,upon their request, the information required to be delivered pursuant to Rule144A(d)(4) under the Securities Act.

###  

### (d)           TheIssuers also shall comply with the other provisions of TIA Section 314(a).

###  

Section 4.03           ComplianceCertificate.

 

### (a)           TheIssuers shall deliver to the Trustee (and, so long as no registration statementis required to be filed with the SEC pursuant to the Registration RightsAgreement, deliver to the Holders) within 90 days after the end of each fiscalyear of the Company, an Officers’ Certificate stating that a review of theactivities of the Issuers and the Restricted Subsidiaries during the precedingfiscal year has been made under the supervision of the signing Officers with aview to determining whether the Issuers have fully performed their obligationsunder this Indenture, and further stating, as to each such Officer signing suchcertificate, that to the best of his or her knowledge the Issuers have kept,observed, performed and fulfilled each and every covenant contained in thisIndenture and are not in default in the performance or observance of any of theterms and conditions hereof (or, if a Default or Event of Default shall haveoccurred, describing all such Defaults or Events of Default of which he or shemay have knowledge and whatever action the Issuers are taking or plan to taketo cure all such Defaults or Events of Default) and that no event has occurredand remains in existence by reason of which payments on account of principaland interest on the Notes is prohibited.

###  

### (b)           Solong as not contrary to the then current recommendations of the AmericanInstitute of Certified Public Accountants, at the time the Officers’Certificate required by Section 4.03 (a) is delivered, the Issuers shallcause to be delivered to the Trustee (and, so long as no registration statementis required to be filed with the SEC pursuant to the Registration RightsAgreement, cause to be delivered to the Holders) a letter or statement of theIssuers’ independent accountants who shall be a firm of established nationalreputation who shall have certified the financial statements of the Issuers forits preceding fiscal year in connection with the annual report of the Issuersto the Company’s Equity Interests for such year to the affect that, in makingthe examination necessary for certification of such financial statements,nothing came to their attention that caused them to believe that the Issuerswere not in compliance with any of the terms or conditions contained inSections 4.01, 4.05, 4.06, 4.07, 4.09, 4.10, 4.11, 4.12, 4.14, 4.19, 4.21 and4.22 and Article 5 of this Indenture, which Default remains uncured at thedate of such letter or statement or, if they shall have obtained knowledge ofany such uncured Default, specifying in such letter or statement such Defaultor Defaults and the nature thereof, it being understood that such accountantsshall not be liable directly or indirectly for failure to obtain knowledge ofany such Default or Defaults and that their examination was not directedprimarily toward obtaining knowledge of such noncompliance.

###  

### (c)           TheIssuers shall, so long as any of the Notes are outstanding, deliver to theTrustee (and, so long as no registration statement is required to be filed withthe SEC pursuant to the Registration Rights Agreement, deliver to the Holders)forthwith upon any officer of the Issuers becoming aware of (i) any Default,Event of Default or default in the performance

 

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of any term or condition in this Indenture or (ii) any event of defaultunder any other Indebtedness, an Officers’ Certificate specifying such Default,Event of Default or default.

###  

Section 4.04           Maintenanceof Office or Agency.

 

### (a)           TheIssuers shall maintain, or cause to be maintained, the office or agencyrequired by Section 2.03. The Issuers shall give prompt written notice tothe Trustee of the location, and any change in the location, of such office andagency not maintained by or with the Trustee. If at any time the Issuers shallfail to maintain any such required office or agency or shall fail to furnishthe Trustee with the address thereof, such presentations, surrenders, noticesand demands may be made or served at the address of the Trustee set forth inSection 10.09.

###  

### (b)           TheIssuers may also from time to time designate one or more other offices oragencies where the Notes may be presented or surrendered for any or all suchpurposes and may from time to time rescind such designation; provided, however,that no such designation or rescission shall in any manner relieve the Issuersof their joint and several obligation to maintain or cause to be maintained anoffice or agency in the City of New York for such purpose to the extentrequired by any applicable law, regulation or rule. The Issuers will giveprompt written notice to the Trustee of such rescission or designation.

###  

Section 4.05           Limitationson Restricted Payments.

 

### (a)           TheIssuers shall not, and shall not permit or cause any of their RestrictedSubsidiaries to, directly or indirectly, (i) declare or pay any dividend ormake any other distribution on account of the Company’s Equity Interests(including, without limitation, any payment in connection with any merger orconsolidation involving the Company), other than the Member Notes and dividendsor distributions payable in Equity Interests (other than Disqualified Stock) ofthe Company or dividends or distributions payable to the Company or anyConsolidated Subsidiary of the Company; (ii) purchase, redeem or otherwiseacquire or retire for value any Equity Interests of the Company or any director indirect parent of the Company, other than any such Equity Interests ownedby the Company or any Consolidated Subsidiary of the Company; (iii) make anyprincipal payment on, or purchase, redeem, defease or otherwise acquire orretire for value any Indebtedness that is subordinated to the Notes (other thanthe Outstanding Notes and the Member Notes), except at final maturity orscheduled sinking fund payments set forth in the original documentationgoverning such Indebtedness; or (iv) make any Restricted Investment (all suchpayments and other actions set forth in clauses (i) through (iv) of thisparagraph being collectively referred to as “Restricted Payments”), unless, atthe time of and after giving effect to such Restricted Payment:

###  

##### (A)          no Default or Event of Default shall haveoccurred and be continuing or would occur as a consequence thereof,

#####  

##### (B)           the Issuers would, after giving pro formaeffect to such Restricted Payment as if such Restricted Payment had been madeat the beginning of the Company’s most recently completed four full fiscalquarters for which internal financial statements are available preceding thedate of such Restricted Payment, have been permitted to incur at least

 

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##### $1.00 of additional Indebtedness pursuant to the Fixed Charge CoverageRatio test under the provisions of Section 4.09(a); and

 

##### (C)           such Restricted Payment, together with theaggregate of all other Restricted Payments made by the Issuers and theirRestricted Subsidiaries after January 1, 2004 (excluding the RestrictedPayments permitted by the next succeeding paragraph), is less than the sum of$5 million plus (w) 50% of the Consolidated Net Income of the Company for theperiod (taken as one accounting period) from January 1, 2004 to the end ofthe Company’s most recently ended fiscal quarter for which internal financialstatements are available at the time of such Restricted Payment (or, if suchConsolidated Net Income for such period is a deficit, less 100% of suchdeficit), plus (x) 100% of the aggregate net cash proceeds, or the fair marketvalue of assets (as determined in good faith by the Management Committee),received by the Company from capital contributions (other than the conversionof the Member Notes into equity interests of the Company in accordance with theterms thereof) or the issue or sale after the date of the Indenture of EquityInterests of the Company or of debt securities of the Company that have beenconverted into such Equity Interests (other than Equity Interests (orconvertible debt securities) sold to a Subsidiary of the Company and other thanDisqualified Stock or debt securities that have been converted intoDisqualified Stock), less any amounts paid to holders of the Member Notes, plus(y) 50% of the net cash proceeds received by the Company from the sale or otherliquidation of the Company’s interest in ELLC or the sale by ELLC of all orsubstantially all its assets, plus (z) 100% of the net cash proceeds receivedby the Company from a distribution by, or from the sale or other liquidationof, any Restricted Investment or Unrestricted Subsidiary other than cashproceeds received from ELLC and other than cash proceeds received fromInvestments and applied pursuant to clause (vi) of Section 4.05(b).

#####  

### (b)           Section 4.05(a)shall not be construed to prohibit (i) the payment of any dividend or otherdistribution by the Issuers within 60 days after the date of declarationthereof, if at said date of declaration such payment would have complied withthe provisions of the Indenture; (ii) the making of any Restricted Investmentor the redemption, repurchase, retirement or other acquisition of any EquityInterests of the Company (A) in exchange for, or out of the proceeds of, asubstantially concurrent capital contribution (other than the conversion of theMember Notes into equity interests of the Company in accordance with the termsthereof) or sale (other than to a Subsidiary of the Company) of other EquityInterests of the Company or its Parent (other than any Disqualified Stock),provided that the amount of any such net cash proceeds that are utilized forany such redemption, repurchase, retirement or other acquisition shall beexcluded from clause (C) of Section 4.05(a), or (B) to the extent requiredby the final order of a Gaming Authority; (iii) the defeasance, redemption orrepurchase of the Outstanding Notes; (iv) the defeasance, redemption orrepurchase of subordinated Indebtedness with the net cash proceeds from anincurrence of Permitted Refinancing Indebtedness or a substantially concurrentcapital contribution or sale (other than to a Subsidiary of the Company) ofEquity

 

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Interests of the Company (other than Disqualified Stock); provided thatthe amount of any such net cash proceeds that are utilized for any suchredemption, repurchase, retirement or other acquisition shall be excluded fromclause (C) of Section 4.05(a); (v) so long as the Company is treated as apartnership or other pass through entity for United States federal income taxpurposes, distributions to equity owners of the Company in an amount not toexceed the Tax Amount for such period; (vi) payment of a fee not to exceed 1.5%of Net Revenues to the Managers pursuant to the Management Agreement as ineffect on the date of the Indenture; (vii) Investments in an amount not toexceed $15.0 million in any Person or Persons primarily engaged in the GamingBusiness, plus, to the extent not included in the Consolidated Net Income of theIssuers, 100% of net cash proceeds received by the Issuers from a distributionby, or from the sale or other liquidation of, any Investment made pursuant tothis clause (vii), provided in no event shall amounts permitted to be investedpursuant to this clause (vii) exceed $15.0 million; and (viii) any redemptionrequired pursuant to the provisions of Section 2.11 hereof.

###  

### (c)           TheManagement Committee may designate any Restricted Subsidiary, other thanCapital, to be an Unrestricted Subsidiary if such designation would not cause aDefault. For purposes of making such determination, all outstanding Investmentsby the Issuers and their Restricted Subsidiaries (except to the extent repaidin cash) in the Subsidiary so designated shall be deemed to be RestrictedPayments at the time of such designation and shall reduce the amount availablefor Restricted Payments under the paragraph (a) of this Section 4.05. Allsuch outstanding Investments shall be deemed to constitute Investments in anamount equal to the greatest of (i) the net book value of such Investments atthe time of such designation, (ii) the fair market value of such Investments atthe time of such designation and (iii) the original fair market value of suchInvestments at the time they were made. Such designation shall only bepermitted if such Restricted Payment would be permitted at such time and ifsuch Restricted Subsidiary otherwise meets the definition of an UnrestrictedSubsidiary.

###  

### (d)           Theamount of all Restricted Payments (other than cash) shall be the fair marketvalue (which value shall be based upon an opinion or appraisal issued by anaccounting, appraisal or investment banking firm of national standing if suchvalue exceeds $10.0 million, or evidenced by a resolution of the Management Committeeset forth in an Officers’ Certificate delivered to the Trustee) on the date ofthe Restricted Payment of the asset(s) proposed to be transferred by theCompany or such Subsidiary, as the case may be, pursuant to the RestrictedPayment. Not later than ten business days following the end of each fiscalquarter, the Company shall deliver to the Trustee an Officers’ Certificateidentifying each Restricted Payment made by the Company during such fiscalquarter and stating that each such Restricted Payment is permitted and settingforth the basis (including any appraisals) upon which the calculations requiredby the provisions of Section 4.05 hereof were computed, which calculationsmay be based upon the Company’s latest available financial statements.

###  

Section 4.06           ContinuedExistence; Restrictions on Activities of Capital.

 

### (a)           Subjectto Article 5 hereof, the Issuers shall do or cause to be done all thingsnecessary to preserve and keep in full force and effect their existence as alimited-liability company or a corporation, as applicable, and the corporate,limited liability company, partnership or other existence of each RestrictedSubsidiary, in accordance with the respective organizational documents (as thesame may be amended from time to time) of the Issuers or each

 

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Restricted Subsidiary and the rights (charter and statutory), licensesand franchises of the Issuers and each Restricted Subsidiary; provided,however, that the Issuers shall not be required to preserve any such right,license or franchise, or the limited-liability company, corporate, partnershipor other existence of any of their Restricted Subsidiaries, if the ManagementCommittee shall determine that the preservation thereof is no longer desirablein the conduct of the business of the Issuers and their RestrictedSubsidiaries, taken as a whole, and that the loss thereof is not adverse in anymaterial respect to the Holders.

###  

### (b)           Capitalmay not hold any material assets, become liable for any material obligations orengage in any significant business activities; provided, that Capital may be aco-obligor or guarantor with respect to Indebtedness if the Company is aprimary obligor of such Indebtedness and the net proceeds of such Indebtednessare retained by the Company or loaned to one or more of the Company’sRestricted Subsidiaries other than Capital.

###  

Section 4.07           Taxes.

 

The Issuers shall, andshall cause each of their Subsidiaries to, pay prior to delinquency all taxes,assessments and governmental levies, except as contested in good faith and byappropriate proceedings or where the failure to do so would not have a materialadverse effect on the Issuers and their Subsidiaries, taken as a whole.

 

Section 4.08           Changeof Control.

 

### (a)           Uponthe occurrence of a Change of Control each Holder of Notes shall have the rightto require the Issuers to repurchase all or any part of such Holder’s Notes. Inthe event of a Change of Control the Issuers shall promptly notify the Trusteeand the Holders in writing of such occurrence and shall make an offer (a “Changeof Control Offer”) to repurchase all or any part (equal to $1,000 or anintegral multiple thereof) of each Holder’s Notes at an offer price in cashequal to 101% of the aggregate principal amount thereof plus accrued and unpaidinterest and Liquidated Damages, if any, thereon to the date of repurchase (the“Change of Control Offer Price,” and such date of payment being the “Changeof Control Payment Date”) which date is required to be no earlier than 30days nor later than 60 days from the date such notice is mailed (unless alonger period is required by law). Within 30 days following any Change ofControl, the Issuers shall mail a notice to each Holder stating (1) that theChange of Control Offer is being made pursuant to this Section 4.08 andthat all Notes tendered shall be accepted for payment; (2) the purchase priceand purchase date, which shall, unless required by applicable law, be noearlier than 30 days nor later than 60 Business Days from the date such noticeis mailed; (3) that any Note not tendered shall continue to accrue interest;(4) that, unless the Issuers default in the payment of the Change of ControlPayment, all Notes accepted for payment pursuant to the Change of Control Offershall cease to accrue interest after the Change of Control Payment Date; (5)that Holders electing to have any Notes purchased pursuant to a Change ofControl Offer shall be required to surrender the Notes, with the form entitled“Option of Holder to Elect Purchase” on the reverse of the Notescompleted, to the Paying Agent at the address specified in the notice prior tothe close of business on the third Business Day preceding the Change of ControlPayment Date; (6) that Holders shall be entitled to withdraw their election ifthe Paying Agent receives, not later than the close of business on the secondBusiness Day preceding the Change of Control Payment Date, a facsimiletransmission or letter setting forth

 

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the name of the Holder, the principal amount of Notes delivered forpurchase, and a statement that such Holder is withdrawing his election to havethe Notes purchased; (7) that each Holder may elect to tender all or a portionof the Notes held by such Holder and each Holder whose Notes are beingpurchased only in part shall be issued new Notes equal in principal amount tothe unpurchased portion of the Notes surrendered, which unpurchased portionmust be equal to $1,000 in principal amount or an integral multiple thereof;and (8) the circumstances and relevant facts regarding such Change ofControl.  The Issuers shall comply withthe requirements of Rule 14e-1 under the Exchange Act and any other securitieslaws and regulations thereunder to the extent such laws and regulations areapplicable in connection with the repurchase of the Notes as a result of aChange of Control.

###  

### (b)           Onthe Change of Control Payment Date, the Issuers shall, to the extent lawful,(i) accept for payment all of the Notes or portions thereof properly tenderedpursuant to the Change of Control Offer, (ii) deposit with the Paying Agent anamount equal to the Change of Control Payment in respect of all of the Notes orportions thereof so tendered and (iii) deliver or cause to be delivered to theTrustee the Notes so accepted together with an Officers’ Certificate statingthe aggregate principal amount of the Notes or portions thereof being purchasedby the Issuers. The Paying Agent shall promptly mail to each Holder of the Notesso tendered the Change of Control Payment for such Notes, and the Trustee shallpromptly authenticate and mail (or cause to be transferred by book-entry) toeach holder a new Note equal in principal amount to any unpurchased portion ofthe Notes surrendered, if any; provided that each such new Note will be in aprincipal amount of $1,000 or an integral multiple thereof.

###  

### (c)           TheIssuers shall publicly announce the results of the Change of Control Offer onor as soon as practicable after the Change of Control Payment Date.

###  

### (d)           Notwithstandingthe foregoing, the Issuers shall not be required to make a Change of ControlOffer as provided in Section 4.08(a) if, in connection with any Change ofControl, the Issuers have made an offer to purchase (an “Alternative Offer”)any and all Notes validly tendered at a cash price equal to or higher than theChange of Control Offer Price and has purchased all Notes properly tendered inaccordance with the terms of such Alternative Offer.

###  

### (e)           Otherthan as specifically provided in this Section 4.08, any purchase pursuantto this Section 4.08 shall be made pursuant to the provisions ofSection 3.01 through 3.06 hereof.

###  

Section 4.09           Limitationon Indebtedness.

 

### (a)           TheIssuers shall not, and shall not permit or cause any of their RestrictedSubsidiaries to, directly or indirectly, incur any Indebtedness (includingAcquired Debt), provided, however, that, so long as no Default or Event ofDefault has occurred and is continuing, the Issuers and any of their RestrictedSubsidiaries may incur Indebtedness (including Acquired Debt) if the FixedCharge Coverage Ratio for the Company’s most recently ended four full fiscalquarters for which internal financial statements are available immediatelypreceding the date on which such additional Indebtedness is incurred would havebeen at least 2.0 to 1, in each case determined on a pro forma basis (includinga pro forma application of the net proceeds therefrom including, withoutlimitation, the application of any such net proceeds to

 

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repay Indebtedness), as if the additional Indebtedness had beenincurred or had been issued at the beginning of such four-quarter period.

###  

### (b)           Thelimitations set forth in Section 4.09(a) hereof shall not apply to:

###  

#### (i)            the incurrence by the Issuers and theirRestricted Subsidiaries of Indebtedness pursuant to the bank lines of credit(including revolving and term loans and letters of credit) in an amount not toexceed $50.0 million at any time outstanding, less the aggregate amount ofall permanent reductions thereto pursuant to the provisions ofSection 4.14 hereof;

####  

#### (ii)           the incurrence by the Issuers of ExistingIndebtedness;

####  

#### (iii)          the incurrence by the Issuers of Indebtednessrepresented by the Notes and the Indenture;

####  

#### (iv)          the incurrence by the Issuers or any of theirRestricted Subsidiaries of Indebtedness in one or more FF&E Financings andCapital Lease Obligations to acquire or refinance furniture, fixtures orequipment incident to and useful in the Gaming Business, in an aggregateprincipal amount, together with amounts permitted bySection 4.09(b)(viii), not to exceed $15.0 million outstanding at any onetime;

####  

#### (v)           the incurrence of intercompany Indebtednessbetween or among the Issuers and any of their Consolidated Subsidiaries;provided that such Indebtedness is expressly subordinated to the prior paymentin full of the Notes and any subsequent issuance or transfer of EquityInterests that results in any such Indebtedness being held by a Person otherthan an Issuer or a Consolidated Subsidiary of an Issuer, or any sale or othertransfer of any such Indebtedness to a Person that is not either an Issuer or aConsolidated Subsidiary of an Issuer, shall be deemed to constitute anincurrence of such Indebtedness by the Issuers or such Restricted Subsidiary,as the case may be;

####  

#### (vi)          the incurrence by the Issuers or any of theirRestricted Subsidiaries of Hedging Obligations that are incurred for thepurpose of fixing or hedging interest rate risk with respect to any floatingrate Indebtedness that is permitted by the terms of this Indenture to beoutstanding or for the purpose of fixing or hedging any currency exchange raterisk;

####  

#### (vii)         the incurrence by the Issuers or any of theirRestricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for,or the net proceeds of which are used to extend, refinance, renew, replace,defease or refund Indebtedness that was permitted by the provisions of thisSection 4.09 hereof to be incurred;

####  

#### (viii)        the incurrence of other Indebtedness by theCompany or its Restricted Subsidiaries in an amount, together with amountspermitted by Section 4.09(b)(iv), not to exceed $15.0 million outstandingat any time to fund

 

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#### expansions, renovations, land acquisitions and construction of realproperty improvements with respect to the Eldorado;

####  

#### (ix)           the incurrence of Indebtedness pursuant tothe Member Notes or the Daniels Notes; and

####  

#### (x)            to the extent that such incurrence does notresult in the incurrence by the Company or any Restricted Subsidiary of anyobligation for the payment of borrowed money of others, Indebtedness incurredsolely as a result of the execution by the Company or its RestrictedSubsidiaries of letters of credit relating to workers compensation or selfinsurance, performance bonds or similar instruments; provided, however, thatthe foregoing exception shall not be applicable to Indebtedness incurred inconnection with the performance by the Company or its Restricted Subsidiariesof such bonds or instruments or payment of such letters of credit.

####  

Section 4.10           Limitationson Liens.

 

The Issuers shall not,and shall not permit any of their Restricted Subsidiaries to, directly orindirectly, create, incur, assume or suffer to exist, any Lien on any asset nowowned or hereafter acquired, or any income or profits therefrom or assign orconvey any right to receive income therefrom, except Permitted Liens.

 

Section 4.11           Dividendand Other Payment Restrictions Affecting Subsidiaries.

 

The Issuers shall not,and shall not permit or cause any of their Restricted Subsidiaries to, directlyor indirectly, create or otherwise cause or suffer to exist or become effectiveany encumbrance or restriction on the ability of any Restricted Subsidiary to(i)(a) pay dividends or make any other distributions to the Issuers or any oftheir Restricted Subsidiaries on its Capital Stock or with respect to any otherinterest or participation in, or measured by, its profits, or (b) pay anyindebtedness owed to the Issuers or any of their Restricted Subsidiaries, (ii)make loans or advances to the Issuers or any of their Restricted Subsidiariesor (iii) transfer any of its properties or assets to the Issuers or any oftheir Restricted Subsidiaries, except for such encumbrances or restrictionsexisting under or by reason of (a) the Senior Credit Agreement as in effect onthe date of the Indenture, and any amendments, modifications, restatements,renewals, supplements, refundings, replacements or refinancings thereof thatcontain restrictions that are no more restrictive than those contained in theSenior Credit Agreement as in effect on the date of the Indenture, (b)agreements existing and as in effect on the date of the Indenture, (c) anyinstrument governing Indebtedness permitted to be incurred pursuant to theterms of the Indenture, (d) applicable law, (e) any instrument governingIndebtedness or Capital Stock of a Person acquired by the Issuers or any oftheir Restricted Subsidiaries as in effect at the time of such acquisition(except to the extent such Indebtedness was incurred in connection with or incontemplation of such acquisition), which encumbrance or restriction is notapplicable to any Person, or the properties or assets of any Person, other thanthe Person, or the property or assets of the Person, so acquired; providedthat, in the case of Indebtedness, such Indebtedness was permitted to beincurred by this Indenture, (f) customary non-assignment, provisions in leasesor other agreements entered into in the ordinary course of business, (g)purchase money obligations

 

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for property acquired in the ordinary course of business that imposerestrictions of the nature described in clause (iii) above on the property soacquired, (h) any restriction or encumbrance contained in contracts for thesale of assets permitted by the Indenture, provided that such restrictionsrelate only to the assets being sold pursuant to such contracts and (i)Permitted Refinancing Indebtedness, provided that the restrictions contained inthe agreements governing such Permitted Refinancing Indebtedness are no morerestrictive than those contained in the agreements governing the Indebtednessbeing refinanced.

 

Section 4.12           Limitationson Transactions with Affiliates.

 

The Issuers shall not,and shall not permit any of their Restricted Subsidiaries to, make any paymentto, or sell, lease, transfer or otherwise dispose of any of its properties orassets to, or purchase any property (except Development Property) or assetsfrom, or enter into or make or amend (for the purpose of increasing theobligations of either Issuer or their Restricted Subsidiaries thereunder ordecreasing the obligations of any Affiliate thereunder without a commensuratedecrease of the obligations of such Issuer or such Restricted Subsidiarythereunder) any contract, agreement, understanding, loan, advance or guarantywith, or for the benefit of, any Affiliate (each of the foregoing, an “AffiliateTransaction”), unless (i) such Affiliate Transaction is on terms that are noless favorable to such Issuer or the relevant Restricted Subsidiary than thosethat would have been obtained in a comparable transaction with an unrelatedPerson and (ii) such Issuer delivers to the Trustee (a) with respect to anyAffiliate Transaction or series of related Affiliate Transactions involvingaggregate consideration in excess of $1.0 million, a resolution of theManagement Committee set forth in an Officers’ Certificate certifying that suchAffiliate Transaction complies with clause (i) above and that such AffiliateTransaction has been approved unanimously by the Management Committee and (b)with respect to any Affiliate Transaction or series of related AffiliateTransactions involving aggregate consideration in excess of $5.0 million, anopinion as to the fairness to the Company of such Affiliate Transaction from afinancial point of view issued by an accounting, appraisal or investmentbanking firm of national standing; provided that (1) any compensation paid to,indemnity provided on behalf of, or employment agreement entered into with, anyofficer or director of the Issuers or any of their Restricted Subsidiaries inthe ordinary course of business, (2) transactions between or among the Issuersand their Restricted Subsidiaries and (3) Restricted Payments, PermittedInvestments and other payments and distributions that are permitted by theprovisions of Section 4.05, in each case, shall not be deemed AffiliateTransactions.

 

Section 4.13           Stay,Extension and Usury Laws.

 

The Issuers jointly andseverally covenant (to the extent that they may lawfully do so) that they shallnot, and shall cause their Restricted Subsidiaries not to, at any time insistupon, plead, or in any manner whatsoever claim or take the benefit or advantageof, any stay, extension or waiver law or any usury law or other law that wouldprohibit or forgive the Issuers from paying all or any portion of the principalof, premium, interest or Liquidated Damages, if any, on the Notes ascontemplated herein, wherever in force, now or at any time hereafter in force,or that may materially affect the covenants or the performance of thisIndenture or the Notes in a manner inconsistent with the provisions hereof orthereof and (to the extent that it may lawfully do so) the Issuers herebyexpressly waive all benefit or advantage of any such law, and covenant thatthey shall not, and shall cause their Restricted Subsidiaries not to, hinder,delay or impede

 

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the execution of any power granted to the Trustee under this Indentureor the Notes, but will suffer and permit the execution of every such power asthough no such law existed.

 

Section 4.14           Limitationon Sales of Assets.

 

### (a)           TheIssuers shall not, and shall not permit or cause any of their RestrictedSubsidiaries or ELLC to, engage in an Asset Sale unless:

###  

#### (i)            no Default or Event of Default exists or iscontinuing immediately prior to and after giving effect to such Asset Sale;

####  

#### (ii)           the Issuers, the Restricted Subsidiary orELLC, as the case may be, receives (A) consideration at the time of such AssetSale at least equal to the fair market value of the assets or Equity Interestsissued or sold or otherwise disposed of or (B) in the case of a lease of assetswhich constitutes an Asset Sale, a lease providing for rent and otherconsideration which are no less favorable to the Company, the RestrictedSubsidiary or ELLC, as the case may be, than the then prevailing marketconditions (in the case of either (A) or (B) of this clause, evidenced by aresolution of the Management Committee set forth in an Officers’ Certificatedelivered to the Trustee); and

####  

#### (iii)          at least 80% of the consideration thereforreceived by the Issuers, such Restricted Subsidiary or ELLC, as the case maybe, is in the form of cash or Cash Equivalents; provided that (A) the amount ofany liabilities (as shown on the most recent balance sheet of the Issuers, suchRestricted Subsidiary or ELLC, as the case may be) of the Issuers, anyRestricted Subsidiary or ELLC (other than liabilities that are by their termssubordinated to the Notes) that are assumed by the transferee of any suchassets pursuant to a customary novation agreement that releases the Issuers,such Restricted Subsidiary or ELLC, as the case may be, from further liability,shall be deemed to be Cash Equivalents for purposes of this covenant, (B) theamount of any notes or other obligations received by the Issuers, such RestrictedSubsidiary or ELLC from such transferee that are promptly (but in any event,within 30 days) converted by the Issuers, such Restricted Subsidiary or ELLCinto cash (to the extent of the cash received) shall be deemed to be cash forpurposes of this Section 4.14, (C) with respect to an Asset Sale ofDevelopment Property or other real property except a hotel/casino (1) realproperty received in exchange therefor and to be used or useful in any businessin which the Company is permitted to engage pursuant to the provisions ofSection 4.19 hereof shall be deemed to be Cash Equivalents for purposes ofthis Section 4.14 and shall be deemed to have been applied in accordancewith the first sentence of Section 4.14(b) hereof and (2) notes or otherevidences of indebtedness received in exchange therefor shall be deemed CashEquivalents for purposes of this Section 4.14, provided that cash paymentsreceived in respect thereof shall be applied by the Company in accordance withSection 4.14(b) hereof, (D) with respect to an Asset Sale by ELLC,consideration received by ELLC in the form of a note pursuant toSection 12.2 of the Joint Venture Agreement shall be deemed to be CashEquivalents for purposes of this provision

 

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#### and payments received by ELLC in respect of such note shall be appliedby ELLC as specified in Section 4.14(b) hereof and (E) with respect to anAsset Sale by the Company of its interest in ELLC or an Asset Sale by ELLC,voting equity securities issued by an Included Person that are registered andfreely-tradeable by the Company under applicable state and federal securitieslaws and listed for trading on a national securities exchange shall be deemedto be Cash Equivalents for purposes of this Section 4.14, provided thatthe sale, transfer or other distribution by the Company of such equitysecurities shall be subject to this Section 4.14; and provided, further,that contingent liabilities that are assumed by the transferee of any suchassets shall not be deemed to be the receipt of consideration if suchcontingent liabilities are not shown as liabilities on the most recent balancesheet of the Issuers, such Restricted Subsidiary or ELLC, as the case may be.

####  

### (b)           Within270 days after the receipt of any Net Proceeds from an Asset Sale, the Issuersmay either (i) apply such Net Proceeds to permanently reduce the obligationsunder the Senior Credit Agreement or long-term Indebtedness of a RestrictedSubsidiary of the Company (and, in either case, to correspondingly reducecommitments with respect thereto); (ii) reinvest, or to commit itself bycontract to reinvest, the Net Proceeds in a Permitted Investment (other thanCash Equivalents); or (iii) in the case of the sale of the Company’s interestin Tamarack Crossing, LLC, redeem Notes to the extent permitted bySection 3.07(b); provided, however, that, so long as ELLC is anUnrestricted Subsidiary, in the case of an Asset Sale by ELLC, (A) the NetProceeds shall be distributed to the members of ELLC, in accordance with theirmembership interests, and (B) of the Net Proceeds received by the Companypursuant to clause (A), 50% shall be subject to this Section 4.14, andprovided, further, however, that in the case of an Asset Sale by the Company ofits interest in ELLC, only 50% of the Net Proceeds received by the Companyshall be subject to this Section 4.14, so long as ELLC is an UnrestrictedSubsidiary prior to any such Asset Sale. Any Net Proceeds from Asset Sales thatare not applied or invested as provided in the first sentence of this paragraphshall be deemed to constitute “Excess Proceeds.”

###  

### (c)           Withinfive Business Days of each date on which the aggregate amount of ExcessProceeds exceeds $5 million, the Issuers shall make an offer to all holders ofNotes (an “Asset Sale Offer”) to purchase the maximum principal amount of Notesthat may be purchased out of the Excess Proceeds, at an offer price in cash inan amount equal to 100% of the principal amount thereof plus accrued and unpaidinterest and Liquidated Damages, if any, thereon to the date of purchase, inaccordance with the procedures set forth in Section 3.09 hereof. To theextent that the aggregate amount of Notes tendered pursuant to an Asset SaleOffer is less than the Excess Proceeds, the Company may use any remainingExcess Proceeds for general corporate purposes (subject to the restrictions ofthe provisions of this Article 4). If the aggregate principal amount ofNotes surrendered by Holders thereof exceeds the amount of Excess Proceeds, theTrustee shall select the Notes to be purchased on a pro rata basis.  Upon completion of such offer to purchase,the amount of Excess Proceeds shall be reset at zero. Pending the finalapplication of any such Net Proceeds, the Issuers may temporarily reduce theindebtedness outstanding under the Senior Credit Agreement, without a permanentreduction of availability thereunder, or otherwise invest such Net Proceeds inPermitted Investments.

 

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### (d)           Notwithstandingany provision of this Section 4.14, the sale, lease, conveyance or otherdisposition of substantially all of the assets of the Issuers and theirRestricted Subsidiaries (when taken as a whole) shall be governed by theprovisions of Section 4.08 and Article V and not by the provisions ofthis Section 4.14.

###  

Section 4.15           SubsidiaryGuarantees.

 

### (a)           EachRestricted Subsidiary shall, and, if the Issuers or any of their RestrictedSubsidiaries shall acquire or create another Subsidiary after the date of theIndenture, then such Restricted Subsidiary or such newly acquired or createdSubsidiary shall execute a Guarantee in substantially the form of Exhibit Eattached hereto and deliver an opinion of counsel relating to theenforceability and authorization of such Guarantee in accordance with the termsof the Indenture, pursuant to which such Subsidiary shall become a Guarantor,on a senior basis, of the Issuers’ payment obligations under the Notes and theIndenture; provided, that this Section 4.15 shall not apply to anySubsidiary during such period as such Subsidiary (i) is incorporated in anyjurisdiction outside the United States, (ii) has been properly designated as anUnrestricted Subsidiary in accordance with the Indenture for so long as itcontinues to constitute an Unrestricted Subsidiary, (iii) has Adjusted NetAssets of less than $3.0 million or (iv) has less than $5.0 million ofoutstanding Indebtedness owed to any Person other than the Issuers or anyRestricted Subsidiary.

###  

### (b)           Inthe event of a sale or other disposition of all of the assets of any Guarantor,by way of merger, consolidation or otherwise, or a sale or other disposition ofall of the capital stock of any Guarantor, then such Guarantor (in the event ofa sale or other disposition, by way of such a merger, consolidation orotherwise, of all of the capital stock of such Guarantor) or the corporationacquiring the property (in the event of a sale or other disposition of all ofthe assets of such Guarantor) shall be released and relieved of any obligationsunder its Subsidiary Guarantee; provided that the Net Proceeds of such sale orother disposition are applied in accordance with the provisions ofSection 4.14 hereof. In addition, in the event the Management Committeedesignates a Guarantor to be an Unrestricted Subsidiary, then such Guarantorshall be released and relieved of any obligations under its Guarantee; providedthat such designation is conducted in accordance with the provisions ofSection 4.18 hereof.

###  

Section 4.16           Paymentsfor Consent.

 

The Issuers shall not,and shall not permit any of their Restricted Subsidiaries to, directly orindirectly, pay or cause to be paid any consideration, whether by way ofinterest, fee or otherwise, to any Holder of any Notes for or as an inducementto obtain any consent, waiver or amendment of any of the terms or provisions ofthe Indenture or the Notes unless such consideration is offered to be paid oris paid to all Holders of the Notes that consent, waive or agree to amend inthe time frame set forth in the solicitation documents relating to suchconsent, waiver or agreement.

 

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Section 4.17           Designationof an Unrestricted Subsidiary as Restricted.

 

Any UnrestrictedSubsidiary may be designated by the Management Committee as a RestrictedSubsidiary; provided that (i) at the time of such designation after giving proforma effect thereto as if such designation had occurred, and any Non-RecourseDebt previously incurred by such Unrestricted Subsidiary had been incurred, atthe beginning of the Company’s most recently completed four fiscal quarters forwhich internal financial statements are available preceding the date of suchdesignation, the Issuers would be permitted to incur $1.00 of additional Indebtednesspursuant to the Fixed Charge Coverage Ratio test contained in the provisionsdescribed in the first paragraph of Section 4.09(a) hereof; (ii) if suchnewly designated Restricted Subsidiary has Adjusted Net Assets of $3.0 millionor more or $5.0 million or more of outstanding Indebtedness owed to any Personother than the Issuers or any Restricted Subsidiary, such newly designatedRestricted Subsidiary executes and delivers a Guarantee substantially in theform of Exhibit D attached hereto and an opinion of counsel relating to theenforceability and authorization of such Guarantee as required by theIndenture; and (iii) no Default has occurred and is continuing immediatelypreceding such designation and after giving pro forma effect thereto.

 

Section 4.18           Designationof a Subsidiary as Unrestricted.

 

Any newly-organizedSubsidiary of the Issuers may be designated by the Management Committee as anUnrestricted Subsidiary at the time of its formation, provided that suchSubsidiary has total assets of $1,000 or less at the time of such designation.Any Restricted Subsidiary may be designated by the Management Committee as anUnrestricted Subsidiary (at which time such Restricted Subsidiary’s Guaranteeshall terminate); provided that (i) at the time of such designation aftergiving pro forma effect thereto as if such designation had occurred at thebeginning of the Issuers’ most recently completed four fiscal quarters forwhich internal financial statements are available preceding the date of suchdesignation, (A) the Issuers would be permitted to incur $1.00 of additionalIndebtedness pursuant to the Fixed Charge Coverage Ratio test contained inSection 4.09(a) hereof and (B) the Fixed Charge Coverage Ratio is not lessthan 80% of the Fixed Charge Coverage Ratio for such period without giving proforma effect to such designation; and (ii) no Default has occurred and iscontinuing immediately preceding such designation and after giving pro formaeffect thereto, including the provisions of Section 4.05(c) hereof.

 

Section 4.19           BusinessActivities.

 

The Company shall not,and shall not permit any Restricted Subsidiary to, engage, directly orindirectly, in any business other than (i) a Gaming Business and (ii) suchother businesses as the Company or any of its Restricted Subsidiaries isengaged in on the date of this Indenture. Neither the Company nor any of itsSubsidiaries shall conduct a Gaming Business in any gaming jurisdiction inwhich the Company or such Subsidiary is not licensed on the date of the Indenture,if the holders of the Notes would be required to be licensed as a resultthereof; provided that the provisions described in this sentence shall notprohibit the Company or any of its Subsidiaries from conducting a GamingBusiness in any jurisdiction that does not require the licensing orqualification of all of the holders of the Notes, but reserves thediscretionary right to require the licensing or qualification of any Holder ofNotes.

 

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Until such time as ELLCis designated as a Restricted Subsidiary or merged with the Company, in eachcase in accordance with the terms hereof, the Issuers shall not permit ELLC to(i) engage, directly or indirectly in any business or activity other thanholding an interest in the Silver Legacy Joint Venture, subject to the right ofELLC to dispose of such interest in the Silver Legacy Joint Venture inaccordance with the provisions of Section 4.14 hereof, (ii) become theowner of any capital stock or other ownership interest in any other entity,(iii) incur any Indebtedness to any other entity other than Indebtednesspayable to the Issuers or any Restricted Subsidiaries and Indebtedness incurredpursuant to the Joint Venture Agreement or (iv) issue membership interests representingmore than 10% of the outstanding equity interests of ELLC prior to suchissuance without first obtaining an opinion of fairness to ELLC of theconsideration to be received by ELLC in respect of such issuance of membershipinterests from an investment banking firm of national standing.

 

Section 4.20           FurtherAssurance to the Trustee.

 

The Issuers shall, uponrequest of the Trustee, execute and deliver such further instruments and dosuch further acts as may reasonably be necessary or proper to carry out moreeffectively the provisions of this Indenture and the Notes.

 

Section 4.21           Maintenanceof Properties.

 

The Issuers shall, andshall cause each of their Subsidiaries to, take reasonable action to maintainin appropriate condition each of their principal properties that in thejudgment of management is significant to the business operations of the Issuersand the Subsidiaries, taken as a whole, and the loss of which would have amaterial adverse effect on the financial condition of the Issuers and theirSubsidiaries, taken as a whole.

 

Section 4.22           Insurance.

 

From and at all timesafter the Issue Date, the Issuers and their Subsidiaries shall have in effectcustomary insurance (including self-insurance) for general liabilities andother risks on terms and in amounts as are customarily carried by similarbusinesses and reasonably sufficient to avoid a material adverse change in thefinancial condition or results of operation of the Issuers and theirSubsidiaries taken as a whole. The Issuers shall provide to the Trustee asummary of all insurance coverage prepared by the Issuers’ insurance broker,which expressly states the expiration date for such coverage and which shallappear as an exhibit to the Officers’ Certificate delivered to the Trustee pursuantto Section 4.03(a).

 

Section 4.23           InvestmentCompany Act.

 

Neither the Issuers norany their Restricted Subsidiaries shall become an investment company subject toregistration under the Investment Company Act of 1940, as amended.

 

Section 4.24           Maintenanceof Rating.

 

The Issuers shallmaintain, or cause to be maintained, a credit rating for the Notes by S&P,Moody’s or another nationally recognized rating agency reasonably acceptable tothe Noteholders, as evidenced by the written consent of the Holders of at leasta majority in

 

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aggregate principal amount of the then outstanding Notes, provided,however, that this Section 4.24 shall not be deemed to require the Issuersto maintain any minimum credit rating for the Notes.

 

Section 4.25           Redemptionof Subordinated Notes.

 

### (a)           Inthe event the Issuers fail to redeem the Subordinated Notes on or prior to May24, 2004 (a “Redemption Failure”) each Holder of Notes shall have theright to require the Issuers to repurchase all or any part of such Holder’sNotes.  In the event of a RedemptionFailure the Issuers shall promptly notify the Trustee and the Holders inwriting of such occurrence and shall make an offer (a “Redemption FailureOffer”) to repurchase all or any part (equal to $1,000 or an integralmultiple thereof) of each Holder’s Notes at an offer price in cash equal to101% of the aggregate principal amount thereof plus accrued and unpaid interestand Liquidated Damages, if any, thereon to the date of repurchase (the “RedemptionFailure Offer Price,” and such date of payment being the “RedemptionFailure Payment Date”) which date is required to be no earlier than 30 daysnor later than 60 days from the date such notice is mailed (unless a longerperiod is required by law). Within 30 days following any Redemption Failure,the Issuers shall mail a notice to each Holder stating (1) that a RedemptionFailure Offer is being made pursuant to this Section 4.25 and that allNotes tendered shall be accepted for payment; (2) the purchase price andpurchase date, which shall, unless required by applicable law, be no earlierthan 30 days nor later than 60 Business Days from the date such notice ismailed; (3) that any Note not tendered shall continue to accrue interest; (4)that, unless the Issuers default in the payment of the Redemption Failure OfferPrice, all Notes accepted for payment pursuant to the Redemption Failure Offershall cease to accrue interest after the Redemption Failure Payment Date; (5)that Holders electing to have any Notes purchased pursuant to the RedemptionFailure Offer shall be required to surrender the Notes, with the form entitled“Option of Holder to Elect Purchase” on the reverse of the Notescompleted, to the Paying Agent at the address specified in the notice prior tothe close of business on the third Business Day preceding the RedemptionFailure Payment Date; (6) that Holders shall be entitled to withdraw theirelection if the Paying Agent receives, not later than the close of business onthe second Business Day preceding the Redemption Failure Payment Date, afacsimile transmission or letter setting forth the name of the Holder, theprincipal amount of Notes delivered for purchase, and a statement that suchHolder is withdrawing his election to have the Notes purchased; (7) that eachHolder may elect to tender all or a portion of the Notes held by such Holderand each Holder whose Notes are being purchased only in part shall be issuednew Notes equal in principal amount to the unpurchased portion of the Notessurrendered, which unpurchased portion must be equal to $1,000 in principalamount or an integral multiple thereof; and (8) the circumstances and relevantfacts regarding the Redemption Failure. The Issuers shall comply with the requirements of Rule 14e-1 under theExchange Act and any other securities laws and regulations thereunder to theextent such laws and regulations are applicable in connection with therepurchase of the Notes as a result of a Redemption Failure.

###  

### (b)           Onthe Redemption Failure Payment Date, the Issuers shall, to the extent lawful,(i) accept for payment all of the Notes or portions thereof properly tenderedpursuant to the Redemption Failure Control Offer, (ii) deposit with the PayingAgent an amount equal to the Redemption Failure Offer Price in respect of allof the Notes or portions thereof so tendered and (iii) deliver or cause to bedelivered to the Trustee the Notes so accepted together with an

 

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Officers’ Certificate stating the aggregate principal amount of theNotes or portions thereof being purchased by the Issuers. The Paying Agentshall promptly mail to each Holder of the Notes so tendered the RedemptionFailure Offer Price for such Notes, and the Trustee shall promptly authenticateand mail (or cause to be transferred by book-entry) to each holder a new Noteequal in principal amount to any unpurchased portion of the Notes surrendered,if any; provided that each such new Note will be in a principal amount of$1,000 or an integral multiple thereof.

###  

### (c)           TheIssuers shall publicly announce the results of the Redemption Failure Offer onor as soon as practicable after the Redemption Failure Payment Date.

###  

### (d)           Otherthan as specifically provided in this Section 4.25, any purchase pursuantto this Section 4.25 shall be made pursuant to the provisions ofSection 3.01 through 3.06 hereof.

###  

ARTICLE V

 

SUCCESSORS

 

Section 5.01           Merger,Consolidation, Etc.

 

Neither Issuer shall, ina single transaction or series of transactions, consolidate or merge with orinto (whether or not such Issuer is the surviving Person), or sell, assign,transfer, lease, convey or otherwise dispose of all or substantially all of itsproperties or assets in one or more related transactions, to anotherlimited-liability company, corporation, Person or entity, unless (a) suchIssuer is the surviving entity or the entity or the Person formed by orsurviving any such consolidation or merger (if other than such Issuer) or towhich such sale, assignment, transfer, lease, conveyance or other dispositionshall have been made is a limited-liability company, partnership or acorporation organized or existing under the laws of the United States, anystate thereof or the District of Columbia; (b) the entity or Person formed byor surviving any such consolidation or merger (if other than such Issuer) orthe entity or Person to which such sale, assignment, transfer, lease,conveyance or other disposition shall have been made assumes all the obligationsof such Issuer under the Notes and the Indenture pursuant to a supplementalindenture in a form reasonably satisfactory to the Trustee; (c) immediatelybefore and after such transaction, no Default or Event of Default exists; (d)such Issuer or any entity or Person formed by or surviving any suchconsolidation or merger, or to which such sale, assignment, transfer, lease,conveyance or other disposition shall have been made (i) will have ConsolidatedNet Worth immediately after the transaction equal to or greater than theConsolidated Net Worth of such Issuer immediately preceding the transaction and(ii) will, at the time of such transaction and after giving pro forma effectthereto as if such transaction had occurred at the beginning of the applicablefour-quarter period, be permitted to incur at least $1.00 of additionalIndebtedness pursuant to the Fixed Charge Coverage Ratio test set forth inSection 4.09(a) hereof; (e) any such transaction would not require anyHolder of Notes to obtain a Gaming License or be qualified under the laws ofany applicable gaming jurisdiction in the absence of such transactions,provided that a transaction involving a jurisdiction that does not require thelicensing or qualification of all of the holders of the Notes, but reserves thediscretionary right to require the licensing or qualification of any holder ofNotes, shall not be prohibited pursuant to the terms of this clause (e); (f)any such transaction would not result in the loss of any qualification or any

 

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material license of the Company or its Subsidiaries necessary for anyGaming Business then operated by the Company or its Subsidiary; and (g) theIssuers have delivered to the Trustee an opinion of counsel reasonablysatisfactory to the Trustee confirming that the holders of the outstandingNotes will not recognize income, gain or loss for federal income tax purposesas a result of such transaction and will be subject to federal income tax inthe same manner and at the same times as would have been the case if suchtransaction had not occurred.

 

Upon creation of Parentor upon the other transfer of sufficient membership interests to cause adissolution for purposes of Section 708 of the Internal Revenue Code of1986, as amended, and any successor provision thereto, the Company shalldeliver to the Trustee an opinion of counsel reasonably satisfactory to theTrustee confirming that the Holders of the outstanding Notes will not recognizeincome, gain or loss for federal income tax purposes as a result of suchtransaction and will be subject to federal income tax in the same manner and atthe same times as would have been the case if such transaction had notoccurred.

 

Section 5.02           SuccessorCorporation Substituted.

 

Upon any consolidation ormerger, or any sale, lease, conveyance or other disposition of all orsubstantially all of the assets of the Issuers in accordance withSection 5.01, the successor corporation formed by such consolidation orinto which such Issuer is merged or to which such sale, assignment, transfer,lease, conveyance or other disposition is made shall succeed to, and besubstituted for (so that, in the case of any consolidation or merger, or anysale, assignment transfer, lease, conveyance or other disposition of all orsubstantially all of the assets of either Issuer, from and after the date ofsuch event, the provisions of this Indenture referring to such Issuer shallrefer instead to the successor corporation and not to such Issuer), and mayexercise every right and power of, such Issuer under this Indenture with thesame affect as if such successor Person had been named as such Issuer herein;provided, however, that the predecessor Issuer in the case of a sale, lease,conveyance or other disposition shall not be released from the obligation topay the principal of, premium, interest, if any, on the Notes in accordancewith the terms of the Notes and this Indenture.

 

Section 5.03           PurchaseOffer on Change of Control.

 

This Article 5 shallnot affect the obligations of the Issuers under Sections 4.08, 4.14 and 4.25hereof.

 

ARTICLE VI

 

DEFAULTS AND REMEDIES

 

Section 6.01           Eventsof Default.

 

The following are “Eventsof Default”:

 

#### (i)            default for 30 days in the payment when dueof interest or Liquidated Damages, if any, on the Notes ;

 

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#### (ii)           default in payment when due of the principalof or premium, if any, on the Notes ;

####  

#### (iii)          failure by the Issuers to comply with therepurchase provisions of Sections 3.09, 4.08, 4.14 or 4.25 hereof or thecovenants contained in Section 4.05 or 4.09 hereof;

####  

#### (iv)          failure by the Issuers for 30 days afternotice from the Trustee or any Holder to comply with any of its otheragreements in the Indenture or the Notes;

####  

#### (v)           default under any mortgage, indenture orinstrument under which there may be issued or by which there may be secured orevidenced any Indebtedness for money borrowed by the Issuers or any of theirRestricted Subsidiaries (or the payment of which is guaranteed by the Issuersor any of their Restricted Subsidiaries) whether such Indebtedness or guaranteenow exists, or is created after the date of the Indenture having an outstandingprincipal amount of more than $5.0 million, individually or in the aggregate,if such Indebtedness has been accelerated (or has matured) or any default inthe payment of principal of such Indebtedness which entitles the holder of suchIndebtedness to accelerate the maturity thereof regardless of acceleration ofmaturity;

####  

#### (vi)          failure by the Issuers or any of theirRestricted Subsidiaries to pay final non-appealable judgments aggregating inexcess of $5.0 million, which judgments are not paid, discharged or stayed fora period of 60 days;

####  

#### (vii)         any Guarantee of a Significant Guarantor shallbe held in a judicial proceeding to be unenforceable or invalid or shall ceasefor any reason to be in full force and effect, or any Significant Guarantor, orany Person acting on behalf of any Significant Guarantor, shall deny ordisaffirm its obligations under its Guarantee;

####  

#### (viii)        any Gaming License relating to a MaterialGaming Facility is revoked, terminated or suspended or otherwise ceases to beeffective, resulting in the cessation or suspension of operation for a periodof more than 30 days of any material portion or aspect of the Gaming Businessof any Gaming Facility;

####  

#### (ix)           the Member Notes represent Indebtedness formore than 90 days;

####  

#### (x)            either Issuer, any Significant Subsidiaryof either Issuer, or any group of Subsidiaries of either Issuer that,considered together, would constitute a Significant Subsidiary of eitherIssuer, pursuant to or within the meaning of any Bankruptcy Law:

####  

##### (A)          commences a voluntary case,

 

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##### (B)           consents to the entry of an order for reliefagainst it in an involuntary case,

#####  

##### (C)           consents to the appointment of a custodianof it or for all or substantially all of its property,

#####  

##### (D)          makes a general assignment for the benefit ofits creditors, or

#####  

##### (E)           admits in writing its inability to pay itsdebts as they become due; and

#####  

#### (xi)           a court of competent jurisdiction enters anorder or decree under any Bankruptcy Law that:

####  

##### (A)          is for relief against either Issuer, anySignificant Subsidiary of either Issuer, or any group of Subsidiaries of eitherIssuer that, considered together, would constitute a Significant Subsidiary ofeither Issuer, in an involuntary case,

#####  

##### (B)           appoints a custodian of either Issuer or anySignificant Subsidiary of either Issuer, or for all or substantially all of theproperty of either Issuer or any Significant Subsidiary of either Issuer, or

#####  

##### (C)           orders the liquidation of either Issuer, anySignificant Subsidiary of either Issuer, or any group of Subsidiaries that,considered together, would constitute a Significant Subsidiary of eitherIssuer;

#####  

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

 

Section 6.02           Acceleration.

 

### (a)           Ifany Event of Default occurs and is continuing, the Trustee by notice in writingto the Issuers, or the Holders of at least 25% in principal amount of thethen-outstanding Notes by notice in writing to the Issuers and the Trustee,and, in each case, notice to the agent for the lenders under the Senior CreditAgreement at such address as the Issuers shall have previously provided to theTrustee, may declare all the Notes to be due and payable. Notwithstanding theforegoing, if an Event of Default specified in Section 6.01(x) or 6.01(xi)occurs with respect to either Issuer, any Significant Subsidiary of the Issuersor any group of Restricted Subsidiaries of the Issuers that, taken together,would constitute a Significant Subsidiary of the Issuers, all outstanding Notesshall become due and payable without further action or notice. Holders of the Notesmay not enforce this Indenture or the Notes except as provided in thisIndenture. Subject to the provisions of Section 6.05 hereof, Holders of amajority in principal amount of the then-outstanding Notes may direct theTrustee in its exercise of any trust or power. The Trustee may withhold fromHolders of the Notes notice of any continuing Default or Event of Default(except a Default or Event of Default relating to the payment of

 

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principal or interest or event which would result in the payment ofLiquidated Damages) if it determines that withholding notice is in theirinterest.

###  

### (b)           Inthe case of any Event of Default occurring by reason of any willful action (orinaction) taken (or not taken) by or on behalf of the Issuers with theintention of avoiding payment of the premium that the Issuers would have had topay if the Issuers then had elected to redeem the Notes pursuant toSection 3.07 hereof, an equivalent premium shall also become and be immediatelydue and payable to the extent permitted by law upon the acceleration of theNotes. If an Event of Default occurs prior to April 15, 2009 by reason ofany willful action (or inaction) taken (or not taken) by or on behalf of theCompany with the intention of avoiding the prohibition on redemption of theNotes prior to such date, then, upon acceleration of the Notes, an additionalpremium shall also become and be immediately due and payable in an amount, foreach of the years beginning on April 15 of the years set forth below, asset forth below:

###  

| **Year** |   | **Percentage** |   |
|----------|--------|----------------|--------|
|     |   |           |   |
| 2004     |   | 109.00         | %      |
| 2005     |   | 108.10         | %      |
| 2006     |   | 107.20         | %      |
| 2007     |   | 106.30         | %      |
| 2008     |   | 105.40         | %      |

 

Section 6.03           OtherRemedies.

 

If an Event of Defaultoccurs and is continuing, the Trustee may pursue any available remedy byproceeding at law or in equity to collect the payment of principal of orpremium, if any, or interest on the Notes or to enforce the performance of anyprovision of the Notes or this Indenture.

 

The Trustee may maintaina proceeding even if it does not possess any of the Notes or does not produceany of them in the proceeding. A delay or omission by the Trustee or anyNoteholder in exercising any right or remedy accruing upon an Event of Defaultshall not impair the right or remedy or constitute a waiver of or acquiescencein the Event of Default. All remedies are cumulative to the extent permitted bylaw.

 

Section 6.04           Waiverof Past Defaults.

 

At any time before orafter declaration of acceleration with respect to the Notes has been made andbefore a judgment or decree for payment of the money due has been obtained bythe Trustee or the Holders, where applicable, the Holders of a majority inaggregate principal amount of the then-outstanding Notes, by written notice tothe Issuers and the Trustee, may rescind and annul such declaration and itsconsequences if (a) the Issuers have paid or deposited with the Trustee a sumsufficient to pay (i) all overdue installments of interest on all the Notes,(ii) the principal of any Notes that have become due otherwise than by suchdeclaration of acceleration and interest thereon at the rate or ratesprescribed therefor in the Notes, (iii) to the extent that payment of suchinterest is lawful, interest on the defaulted interest at the rate or rates prescribedtherefor in the Notes, and (iv) all money paid or advanced by the Trustee underthis

 

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Indenture and the reasonable compensation, expenses, disbursements andadvances of the Trustee, its agents, counsel and other advisors and (b) allDefaults and Events of Default, other than the non-payment of the principal ofNotes that have become due solely by such declaration of acceleration, havebeen cured or waived as provided in this Indenture.  No such rescission will affect any subsequent Default or impairany right consequent thereon.

 

When a Default is waived,it is cured and stops continuing. No waiver shall extend to any subsequent orother Default or impair any right consequent thereto, but any Event of Defaultarising from such Default shall be deemed to have been cured for every purposeof this Indenture. This Section 6.04 shall be in lieu of TIASection 316(a)(1)(B) and said TIA section is hereby expresslyexcluded from this Indenture, as permitted by the TIA.

 

Section 6.05           Controlby Majority.

 

The Holders of a majorityin aggregate principal amount of the then-outstanding Notes shall have theright to direct the time, method and place of conducting any proceeding for anyremedy available to the Trustee or exercising any trust or power conferred onsuch Trustee, provided that (a) such direction is not in conflict with any ruleof law or with this Indenture and (b) the Trustee may take any other action itdeems proper that is not inconsistent with such direction. The Trustee mayrefuse to follow any direction that conflicts with law or this Indenture, isunduly prejudicial to the rights of other Noteholders, or would result in theincurrence of liability by the Trustee. This Section 6.05 shall be in lieuof TIA Section 316(a)1(A) and said TIA section is hereby expresslyexcluded from this Indenture, as permitted by the TIA.

 

Section 6.06           Limitationon Suits.

 

No Holder shall have anyright to institute any proceeding, judicial or otherwise, with respect to thisIndenture, or for the appointment of a receiver or trustee or for any otherremedy under this Indenture, unless (a) such Holder has previously givenwritten notice to the Trustee of a continuing Event of Default, (b) the Holdersof not less than 25% in aggregate principal amount of the then-outstandingNotes have made written request to the Trustee to institute proceedings inrespect of such Event of Default in its own name as trustee under thisIndenture, (c) such Holder or Holders have offered to the Trustee, ifrequested, an indemnity, adequate in the sole reasonable discretion of theTrustee, against the costs, expenses and liabilities to be incurred incompliance with such request, (d) the Trustee for 30 days after its receipt ofsuch notice, request and offer of indemnity has failed to institute any suchproceeding, and (e) no direction inconsistent with such written request hasbeen given to the Trustee during such 30-day period by the Holders of amajority in aggregate principal amount of the outstanding Notes.

 

A Noteholder may not usethis Indenture to prejudice the rights of another Noteholder or to give orobtain a preference or priority over another Noteholder.

 

Section 6.07           Rightsof Holders to Receive Payment.

 

Each Holder shall have theright, which is absolute and unconditional, to receive payment of the principalof, premium, interest and Liquidated Damages, if any, on, such Note on the

 

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stated maturity thereof and to institute suit for the enforcement ofany such payment, and such right may not be impaired without the consent ofsuch Holder.

 

Section 6.08           CollectionSuit by Trustee.

 

If an Event of Defaultspecified in Section 6.01 occurs and is continuing, the Trustee mayrecover judgment in its own name and as trustee of an express trust against theIssuers for the whole amount of principal and interest remaining unpaid on theNotes and interest on overdue principal and, to the extent lawful, interest andsuch further amounts as shall be sufficient to cover the costs and expenses ofcollection, including the reasonable compensation, expenses, disbursements andadvances of the Trustee, its agents, counsel and other advisors.

 

Section 6.09           TrusteeMay File Proofs of Claim.

 

The Trustee may file suchproofs of claim and other papers or documents as may be necessary or advisablein order to have the claims of the Trustee and the Noteholders allowed in anyjudicial proceedings relative to the Issuers, their Subsidiaries, their creditorsor their property. Nothing contained herein shall be deemed to authorize theTrustee to authorize or consent to or accept or adopt on behalf of anyNoteholder any plan of reorganization, arrangement, adjustment or compositionaffecting the Notes or the rights of any Holder thereof, or to authorize theTrustee to vote in respect of the claim of any Noteholder in any suchproceeding.

 

Section 6.10           Priorities.

 

If the Trustee collectsany money pursuant to this Article 6, it shall pay out the money in thefollowing order:

 

First:  to the Trustee for amounts due underSection 7.07;

 

Second:  to Noteholders for amounts due and unpaid onthe Notes for principal, interest, defaulted interest, Make-Whole Premium andLiquidated Damages, if any, ratably, without preference or priority of anykind, according to the amounts due and payable on the Notes for principal,interest, defaulted interest, Make-Whole Premium and Liquidated Damages, ifany, respectively; and

 

Third:  to the Issuers or such Person as a court ofcompetent jurisdiction shall direct.

 

The Trustee may fix arecord date and payment date for any payment or distribution of property orsecurities to Noteholders in accordance with Section 2.12 and may set arecord date or payment date as necessary to effectuate its obligations underthis Indenture and the Notes.

 

Section 6.11           Undertakingfor Costs.

 

In any suit for theenforcement of any right or remedy under this Indenture or in any suit againstthe Trustee for any action taken or omitted by it as a Trustee, a court in itsdiscretion may require the filing by any party litigant in the suit of anundertaking to pay the costs of the suit, and the court in its discretion mayassess reasonable costs, including reasonable attorneys’ fees,

 

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against any party litigant in the suit, having due regard to the meritsand good faith of the claims or defenses made by the party litigant. ThisSection 6.11 does not apply to a suit by the Trustee, a suit by a Holderpursuant to Section 6.07, or a suit by Holders of more than 10% inaggregate principal amount of the then-outstanding Notes.

 

ARTICLE VII

 

TRUSTEE

 

The Trustee herebyaccepts the trust imposed upon it by this Indenture and covenants and agrees toperform the same, as herein expressed.

 

Section 7.01           Dutiesof Trustee.

 

### (a)           Ifan Event of Default has occurred and is continuing, the Trustee shall exercisesuch of the rights and powers vested in it by this Indenture, and use the samedegree of care and skill in their exercise, as a prudent person would exerciseor use under the circumstances in the conduct of his or her own affairs.

###  

### (b)           Exceptduring the continuance of an Event of Default:

###  

#### (i)            the Trustee need perform only those dutiesthat are specifically set forth in this Indenture and no others, and no impliedcovenants shall be read into this Indenture against the Trustee; and

####  

#### (ii)           in the absence of willful misconduct, grossnegligence or bad faith on its part, the Trustee may conclusively rely, as tothe truth of the statements and the correctness of the opinions expressedtherein, upon certificates or opinions furnished to the Trustee and conformingto the requirements of this Indenture. However, in the case of an Officer’sCertificate or Opinion of Counsel required to be furnished to the Trustee, theTrustee shall examine the certificates and opinions to determine whether or notthey conform on their face to the requirements of this Indenture, but need notverify the contents thereof.

####  

### (c)           TheTrustee may not be relieved from liability for its own negligent action, itsown negligent failure to act or its own willful misconduct, except that:

###  

#### (i)            this paragraph does not limit the effect ofparagraph (b) of this Section;

####  

#### (ii)           the Trustee shall not be liable for anyerror of judgment made in good faith by a Trust Officer, unless it is provedthat the Trustee was negligent in ascertaining the pertinent facts; and

####  

#### (iii)          the Trustee shall not be liable with respectto any action it takes or omits to take in good faith in accordance with adirection received by it pursuant to Sections 6.02, 6.04 or 6.05.

 

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Subparagraph (c)(iii)shall be in 1ieu of TIA Section 315(d)(3) and said TIA section ishereby expressly excluded from this Indenture, as permitted by the TIA.

 

### (d)           Everyprovision of this Indenture that in any way relates to the Trustee is subjectto paragraphs (a), (b), (c), (e) and (f) of this Section 7.01 andSection 7.02.

###  

### (e)           TheTrustee may refuse to perform any duty or exercise any right or power unless itis provided with adequate funds or indemnity, adequate in the sole reasonablediscretion of the Trustee, against any loss, liability or expense.

###  

### (f)            TheTrustee shall not be liable for interest on any money received by it, except asthe Trustee may agree in writing with the Issuers. Money held in trust by theTrustee need not be segregated from other funds except to the extent requiredby law.

###  

Section 7.02           Rightsof Trustee.

 

### (a)           TheTrustee may rely upon, and shall be fully protected from acting or refrainingfrom acting upon any document believed by it to be genuine and to have beensigned or presented by the proper person. The Trustee need not investigate anyfact or matter stated in the document.

###  

### (b)           Beforethe Trustee acts or refrains from acting with respect to any mattercontemplated by this Indenture, it may require an Officers’ Certificate or anOpinion of Counsel, or both. The Trustee shall not be liable for any action ittakes or omits to take in good faith in reliance on such Officers’ Certificateor Opinion of Counsel.

###  

### (c)           TheTrustee may act through attorneys and agents and shall not be responsible forthe misconduct or negligence of any attorney or agent appointed with due care.

###  

### (d)           TheTrustee shall not be liable for any action it takes or omits to take in goodfaith which it believes to be authorized or within its rights or powers.

###  

### (e)           TheTrustee may consult with counsel, and the advice of such counsel or any Opinionof Counsel shall be full and complete authorization and protection fromliability irrespective of any action taken, suffered or omitted by it hereunderin good faith and in reliance thereon.

###  

### (f)            TheTrustee shall not be bound to make any investigation into the facts or matters statedin any resolution, certificate, statement, instrument, opinion, report, notice,request, direction, consent, order, bond, debenture, note, other evidence ofindebtedness or other paper or document, but the Trustee, in its discretion,may make such further inquiry or investigation into such facts or matters as itmay see fit, and, if the Trustee shall determine to make such further inquiryor investigation, it shall be entitled to examine the books, records andpremises of the Issuers and their Subsidiaries, personally or by agent orattorney.

###  

### (g)           Exceptwith respect to Section 4.01, the Trustee shall have no duty to inquire asto the performance of the Issuers’ covenants in Article 3, 4 and 5hereof.  In addition, the Trustee shallnot be deemed to have knowledge of any Default or Event of Default except (i)

 

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any Event of Default occurring pursuant to Sections 6.01(a)(i) (otherthan a failure of the Issuers to repurchase the Notes duly tendered for purchasefollowing a Change of Control Offer, an Asset Sale Offer or a RedemptionFailure Offer), Section 6.01(a)(ii) and Section 4.01, or (ii) anyDefault or Event of Default of which the Trustee shall have received writtennotification or obtained actual knowledge.

###  

### (h)           Noprovision of this Indenture shall require the Trustee to expend or risk its ownfunds or otherwise incur any financial liability in the performance of any ofits duties hereunder or in the exercise of any of its rights or powers, unlessrepayment of such funds shall reasonably be assured to it or the Trustee isprovided adequate indemnity in its sole reasonable discretion.

###  

### (i)            TheTrustee shall not be required to give any bond or survey in respect of theperformance of its powers and duties hereunder.

###  

### (j)            Deliveryof reports, information and documents to the Trustee under Section 4.03 isfor informational purposes only and the Trustee’s receipt of the foregoingshall not constitute constructive notice of any information contained thereinor determinable from information contained therein, including the Issuers’compliance with any of their covenants hereunder (as to which the Trustee isentitled to rely exclusively on Officers’ Certificates).

###  

### (k)           TheTrustee shall not be charged with knowledge of any Defaults or Events ofDefault unless either (1) a Trust Officer of the Trustee shall have actualknowledge of such Default or Event of Default or (2) written notice of suchDefault or Event of Default shall have been given to the Trustee by any Holderor by either of the Issuers or any other obligor on the Notes or any lenderunder the Senior Credit Facility or any representative thereof.

###  

Section 7.03           IndividualRights of Trustee.

 

The Trustee may becomethe owner or pledgee of Notes and may otherwise deal with the Issuers or anAffiliate with the same rights it would have if it were not Trustee.  However, in the event that the Trusteeacquires any conflicting interest, it must eliminate such conflict within 90days, apply to the Commission for permission to continue as trustee or resign.Any Agent may do the same with like rights and duties. However, the Trustee issubject to Sections 7.10 and 7.11.

 

Section 7.04           Trustee’sDisclaimer.

 

The Trustee shall not beresponsible and makes no representation as to the validity or adequacy of thisIndenture or the Notes, it shall not be accountable for any statement made bythe Issuers or for the Issuers’ use of the proceeds from the Notes, and itshall not be responsible for any statement in this Indenture or any statementin the Notes other than its authentication.

 

Section 7.05           Noticeof Defaults.

 

If a Default of Event ofDefault occurs and is continuing and if it is known to the Trustee, the Trusteeshall mail to each Noteholder a notice of the Default within 90 days after thesame becomes known to the Trustee. Except in the case of a Default in any payment due on any Note

 

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(including any failure to make any mandatory redemption paymentrequired hereunder), the Trustee may withhold the notice if and so long as acommittee of its Trust Officers in good faith determines that withholding thenotice is in the interests of Noteholders. The second sentence of this Section 7.05 shall be in lieu of the provisoto TIA Section 315(b) and said TIA section is hereby expresslyexcluded from this Indenture, as permitted by the TIA.

 

Section 7.06           Reportsby Trustee to Holders.

 

Within 60 days after thereporting date stated in Section 10.09, the Trustee shall mail toNoteholders, if required by TIA Section 313(a), a brief report dated as ofsuch reporting date that complies with such TIA Section 313(a). TheTrustee also shall comply with TIA Section 313(b)(2) and transmit by mailall reports as required by TIA Section 313(c).

 

After this Indenture hasbeen qualified under the TIA, a copy of each report at the time of its mailingto Noteholders shall be filed with the SEC and each stock exchange on which theNotes are listed.  The Issuers shallpromptly notify the Trustee in writing when the Notes are listed on any stockexchange.

 

Section 7.07           Compensationand Indemnity.

 

The Issuers shall pay tothe Trustee, paying agents and registrars from time to time reasonablecompensation for their respective services hereunder. The Trustee’scompensation shall not be limited by any law on compensation of a trustee of anexpress trust. The Issuers shall reimburse the Trustee upon request for allreasonable out-of-pocket expenses incurred by it. Such expenses may include thereasonable compensation and out-of-pocket expenses of the Trustee’s agents,counsel and other advisors.

 

The Issuers shall jointlyand severally indemnify the Trustee, paying agents and registrars (if otherthan the Issuers or an Affiliate), and their respective agents, employees,officers, counsel and other advisors, and shall hold them harmless against, anyclaim or demand (including, but not limited to, attorney’s fees and expenses)made against, or as incurred by, them in connection with the acceptance of thistrust or the administration of this Indenture and their respective dutieshereunder, except as set forth in the next paragraph. The Trustee shall notifythe Issuers promptly of any claim for which it may seek indemnity.  However, failure of the Trustee to do soshall not relieve the Issuers of their obligations hereunder.  At the Trustee’s sole discretion, theIssuers shall defend the claim at their own expense with counsel, who may beoutside counsel to the Issuers, but shall, in all events, be reasonablysatisfactory to the Trustee, and the Trustee shall cooperate in the defense atthe Issuers’ expense; provided, however, that the Trustee may, at its option,retain its own separate counsel to defend such claim and the Issuers shall paythe reasonable fees and expenses of such separate counsel. In addition, if theIssuers do not so defend the Trustee or if at any time the counsel so selectedis ethically prohibited from representing the Trustee (whether because of aconflict of interest or because of the provisions of the TIA), then the Trusteemay retain one separate counsel and the Issuers shall pay the reasonable feesand expenses of such separate counsel. The indemnification herein extends to any settlement, provided that theIssuers shall not be liable for any settlement made without their consent, andprovided further that such consent shall not be unreasonably withheld.

 

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The Issuers need notreimburse any expense or indemnify against any loss or liability incurred bythe Trustee through negligence or bad faith or from the unreasonable refusal orfailure of the Trustee to perform any of its duties or obligations hereunder.

 

To secure the Issuers’payment obligations in this Section, the Trustee and any such predecessortrustee shall have a lien prior to the Notes on all money or property held orcollected by the Trustee or the Holders, except that held in trust to payprincipal of and premium, if any, and interest on the Notes.

 

When the Trustee, or itsagents, counsel or advisors, incurs expenses or renders services after an Eventof Default specified in Section 6.01(x) or (xi) occurs, the expenses andthe compensation for the services are intended to constitute expenses ofadministration under any Bankruptcy Law.

 

Section 7.08           Replacementof Trustee.

 

A resignation or removalof the Trustee and appointment of a successor Trustee shall become effectiveonly upon the successor Trustee’s acceptance of appointment as provided in thisSection.

 

The Trustee may resign byso notifying the Issuers.  The Holdersof a majority in aggregate principal amount of the then-outstanding Notes mayremove the Trustee by so notifying the removed Trustee and the Issuers and may appointa successor Trustee with the Issuers’ consent. The Issuers may remove theTrustee if:

 

###### (1)           the Trustee fails to comply withSection 7.10;

######  

###### (2)           the Trustee is adjudged a bankrupt or aninsolvent or an order for relief is entered with respect to the Trustee underany Bankruptcy Law;

######  

###### (3)           a Custodian or public officer takes chargeof the Trustee or its property; or

######  

###### (4)           the Trustee becomes incapable of acting.

######  

If the Trustee resigns oris removed or if a vacancy exists in the office of Trustee for any reason, theIssuers shall promptly appoint a successor Trustee. Within one year after thesuccessor Trustee takes office, the Holders of a majority in aggregateprincipal amount of the then-outstanding Notes may appoint a successor Trusteeto replace the successor Trustee appointed by the Issuers.

 

If a successor Trusteedoes not take office within 60 days after the retiring Trustee resigns or isremoved, the retiring Trustee, the Issuers or the Holders of at least 10% inaggregate principal amount of the then-outstanding Notes may petition any courtof competent jurisdiction for the appointment of a successor Trustee.

 

If the Trustee fails tocomply with Section 7.10, any Noteholder may petition any court ofcompetent jurisdiction for the removal of the Trustee and the appointment of asuccessor Trustee.

 

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A successor Trustee shalldeliver a written acceptance of its appointment to the retiring Trustee and tothe Issuers. Thereupon the resignation or removal of the retiring Trustee shallbecome effective without any further act, deed or conveyance, and the successorTrustee shall have all the rights, powers and duties of the Trustee under thisIndenture.  The successor Trustee shallmail a notice of its succession to Noteholders.  The retiring Trustee shall promptly transfer all property held byit as Trustee to the successor Trustee. Notwithstanding the replacement of theTrustee pursuant to this Section 7.08, the Issuers’ obligations and theTrustee’s rights under Section 7.07 hereof shall continue for the benefitof the retiring Trustee with respect to expenses and liabilities incurred by itprior to such replacement.

 

Section 7.09           SuccessorTrustee by Merger, etc.

 

Subject toSection 7.10, if the Trustee consolidates with, merges or converts into,or transfers all or substantially all of its corporate trust business to,another corporation, the resulting, surviving or transferee corporation withoutany further act shall be the successor Trustee.

 

Section 7.10           Eligibility;Disqualification.

 

This Indenture shallalways have a Trustee who satisfies the requirements of TIASection 310(a)(1).  The Trusteeshall always have a combined capital and surplus as stated inSection 10.09.  The Trustee issubject to TIA Section 310(b), including TIA Section 310(b)(9);provided, however, that there shall be excluded from the operation ofSection 310(b)(1) any indenture or indentures under which other securitiesare outstanding if the requirements of TIA Section 310(b)(1) are met.  If at any time the Trustee shall cease to beeligible in accordance with the provisions of this Section, it shall resignimmediately in the manner and with the effect specified herein.

 

Section 7.11           PreferentialCollection of Claims Against Issuers.

 

The Trustee shall complywith TIA Section 311(a), excluding any creditor relationship set forth inTIA Section 311(b).  A Trustee whohas resigned or been removed shall be subject to TIA Section 311(a) to theextent indicated therein.

 

ARTICLE VIII

 

SATISFACTION AND DISCHARGE OF INDENTURE

 

Section 8.01           OptionTo Effect Legal Defeasance Or Covenant Defeasance.

 

The Issuers may, at theoption of the Management Committee evidenced by a resolution set forth in anOfficers’ Certificate, at any time, elect to have either Section 8.02 or8.03 hereof be applied to all outstanding Notes upon compliance with theconditions set forth below in this Article 8.

 

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Section 8.02           LegalDefeasance And Discharge.

 

Upon the Issuers’exercise under Section 8.01 hereof of the option applicable to thisSection 8.02, the Issuers shall, subject to the satisfaction of theconditions set forth in Section 8.04 hereof, be deemed to have beendischarged from their obligations with respect to all outstanding Notes on thedate the conditions set forth below are satisfied (hereinafter, “LegalDefeasance”).  For this purpose, LegalDefeasance means that the Issuers shall be deemed to have paid and dischargedthe entire Indebtedness represented by the outstanding Notes, which shallthereafter be deemed to be outstanding only for the purposes ofSection 8.05 hereof and the other Sections of this Indenture referred toin (i) and (ii) below, and to have satisfied all their other obligations undersuch Notes and this Indenture (and the Trustee, on demand of and at the expenseof the Issuers, shall execute proper instruments acknowledging the same),except for the following provisions which shall survive until otherwiseterminated or discharged hereunder: (i) the rights of Holders of outstandingNotes to receive payments in respect of the principal of, and premium, interestand Liquidated Damages (if any) on, the Notes when such payments are due fromthe trust referred to in Section 8.04 hereof, (ii) the Issuers,obligations with respect to such Notes under Article 2 andSection 4.04 hereof, (iii) the rights, powers, trusts, duties andimmunities of the Trustee hereunder, and the Issuers’ obligations in connectiontherewith and (iv) this Article 8. Subject to compliance with this Article 8, the Issuers may exercisetheir option under this Section 8.02 notwithstanding the prior exercise oftheir option under Section 8.03.

 

Section 8.03           CovenantDefeasance.

 

Upon the Issuers’exercise under Section 8.01 hereof of the option applicable to thisSection 8.03, the Issuers shall, subject to the satisfaction of theconditions set forth in Section 8.04 hereof, be released from theirobligations under the covenants contained in Sections 4.05, 4.06, 4.08, 4.09,4.10, 4.11, 4.12, 4.14, 4.15, 4.16 and 4.25 hereof with respect to theoutstanding Notes on and after the date the conditions set forth below aresatisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafterbe deemed not outstanding for the purposes of any direction, waiver, consent ordeclaration or act of Holders (and the consequences of any thereof) inconnection with such covenants, but shall continue to be deemed “outstanding”for all other purposes hereunder (it being understood that such Notes shall notbe deemed outstanding for accounting purposes).  For this purpose, Covenant Defeasance means that, with respect tothe outstanding Notes, the Issuers may omit to comply with, and shall have noliability in respect of, any term, condition or limitation set forth in anysuch covenant, whether directly or indirectly, by reason of any referenceelsewhere herein to any such covenant or by reason of any reference in any suchcovenant to any other provision herein or in any other document and suchomission to comply shall not constitute a Default or an Event of Default underSection 6.01 hereof, but, except as specified above, the remainder of thisIndenture and such Notes shall be unaffected thereby.  In addition, upon the Issuers’ exercise under Section 8.01hereof of the option applicable to this Section 8.03, subject to thesatisfaction of the conditions set forth in Section 8.04 hereof, Sections6.01(iii) through 6.01(ix) hereof shall not constitute Events of Default.

 

Section 8.04           ConditionsTo Legal Or Covenant Defeasance.

 

The following shall bethe conditions to the application of either Section 8.02 or 8.03 hereof tothe outstanding Notes:

 

In order to exerciseeither Legal Defeasance or Covenant Defeasance:

 

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#### (i)            the Issuers must irrevocably deposit withthe Trustee, in trust, for the benefit of the Holders of the Notes, cash inUnited States dollars, non-callable Government Securities, or a combinationthereof, in such amounts as shall be sufficient, without reinvestment, in theopinion of a nationally recognized firm of independent public accountants, topay the principal of, and premium, interest and Liquidated Damages (if any) on,the outstanding Notes on the stated maturity or on the applicable redemptiondate, as the case may be, and the Issuers must specify whether the Notes arebeing defeased to maturity or to a particular redemption date;

####  

#### (ii)           in the case of an election underSection 8.02 hereof, the Issuers shall have delivered to the Trustee anOpinion of Counsel in the United States reasonably acceptable to the Trusteeconfirming that (a) the Issuers have received from, or there has been publishedby, the Internal Revenue Service a ruling or (b) since the date of thisIndenture, there has been a change in the applicable federal income tax law, ineither case to the effect that, and based thereon such Opinion of Counsel shallconfirm that, the Holders of the outstanding Notes will not recognize income,gain or loss for federal income tax purposes as a result of such LegalDefeasance and will be subject to federal income tax on the same amounts, inthe same manner and at the same times as would have been the case if such LegalDefeasance had not occurred;

####  

#### (iii)          in the case of an election underSection 8.03 hereof, the Issuers shall have delivered to the Trustee anOpinion of Counsel in the United States reasonably acceptable to the Trusteeconfirming that the Holders of the outstanding Notes will not recognize income,gain or loss for federal income tax purposes as a result of such CovenantDefeasance and will be subject to federal income tax on the same amounts, inthe same manner and at the same times as would have been the case if suchCovenant Defeasance had not occurred;

####  

#### (iv)          no Default or Event of Default shall haveoccurred and be continuing on the date of such deposit (other than a Default orEvent of Default resulting from the borrowing of funds to be applied to suchdeposit) or insofar as Sections 6.01(x) or 6.01(xi) hereof are concerned, atany time in the period ending on the 91st day after the date of deposit;

####  

#### (v)           such Legal Defeasance or Covenant Defeasancewill not result in a breach or violation of, or constitute a default under, anymaterial agreement or instrument (other than this Indenture) to which theIssuers or any of their Subsidiaries is a party or by which the Issuers or anyof their Subsidiaries is bound;

####  

#### (vi)          the Issuers shall have delivered to theTrustee an Opinion of Counsel to the effect that after the 91st day followingthe deposit, the trust funds will not be subject to the effect of anyapplicable bankruptcy, insolvency, reorganization or similar laws affectingcreditors’ rights generally;

 

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#### (vii)         the Company shall have delivered to theTrustee an Officers’ Certificate stating that the deposit was not made by theIssuers with the intent of preferring the Holders of Notes over the othercreditors of the Issuers with the intent of defeating, hindering, delaying ordefrauding creditors of the Issuers or others; and

####  

#### (viii)        the Issuers shall have delivered to the Trusteean Officers’ Certificate and an Opinion of Counsel, each stating that allconditions precedent provided for relating to the Legal Defeasance or theCovenant Defeasance have been complied with.

####  

Section 8.05           DepositedMoney And Government Securities To Be Held In Trust; Other MiscellaneousProvisions.

 

Subject toSection 8.06 hereof, all money and non-callable Government Securities(including the proceeds thereof) deposited with the Trustee (or otherqualifying trustee, collectively for purposes of this Section 8.05, theTrustee) pursuant to Section 8.04 hereof in respect of the outstandingNotes shall be held in trust and applied by the Trustee, in accordance with theprovisions of such Notes and this Indenture, to the payment, either directly orthrough any Paying Agent (including the Issuers acting as Paying Agent) as theTrustee may determine, to the Holders of such Notes of all sums due and tobecome due thereon in respect of principal, premium, interest and LiquidatedDamages, if any, but such money need not be segregated from other funds, exceptto the extent required by law.

 

The Issuers shall pay andindemnify the Trustee against any tax, fee or other charge imposed on orassessed against the cash or non-callable Government Securities depositedpursuant to Section 8.04 hereof or the principal and interest received inrespect thereof other than any such tax, fee or other charge which by law isfor the account of the Holders of the outstanding Notes.

 

Anything in thisArticle 8 to the contrary notwithstanding, the Trustee shall deliver orpay to the Issuers from time to time upon the request of the Issuers any moneyor non-callable Government Securities held by it as provided inSection 8.04 hereof which, in the opinion of a nationally recognized firmof independent public accountants expressed in a written certification thereofdelivered to the Trustee (which may be the opinion delivered underSection 8.04(i) hereof), are in excess of the amount thereof that wouldthen be required to be deposited to effect an equivalent Legal Defeasance orCovenant Defeasance.

 

Section 8.06           RepaymentTo The Issuers.

 

Any money deposited withthe Trustee or any Paying Agent, or then held by the Issuers, in trust for thepayment of the principal of, or premium, interest or Liquidated Damages, ifany, on, any Note and remaining unclaimed for two years after such principal,premium, interest or Liquidated Damages has become due and payable, shall bepaid to the Issuers on their request or (if then held by the Issuers) shall bedischarged from such trust; and the Holder of such Note shall thereafter lookonly to the Issuers for payment thereof, and all liability of the Trustee orsuch Paying Agent with respect to such trust money, and all liability of theIssuers as trustee

 

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thereof, shall thereupon cease; provided, however, that the Trustee orsuch Paying Agent, before being required to make any such repayment, may at theexpense of the Issuers cause to be published once, in the New York Times andThe Wall Street Journal (national edition), notice that such money remainsunclaimed and that, after a date specified therein, which shall not be less than30 days from the date of such notification or publication, any unclaimedbalance of such money then remaining will be repaid to the Issuers.

 

Section 8.07           Reinstatement.

 

If the Trustee or PayingAgent is unable to apply any United States dollars or non-callable GovernmentSecurities in accordance with Section 8.02 or 8.03 hereof, as the case maybe, by reason of any order or judgment of any court or governmental authorityenjoining, restraining or otherwise prohibiting such application, then theIssuers’ obligations under this Indenture and the Notes shall be revived andreinstated as though no deposit had occurred pursuant to Section 8.02 or8.03 hereof, until such time as the Trustee or Paying Agent is permitted toapply all such money in accordance with Section 8.02 or 8.03 hereof, asthe case may be; provided, however, that, if the Issuers make any payment ofprincipal of, or premium, interest or Liquidated Damages, if any, on any Notefollowing the reinstatement of its obligations, the Issuers shall be subrogatedto the rights of the Holders of such Notes to receive such payment from themoney held by the Trustee or Paying Agent.

 

# ARTICLE IX

#  

# AMENDMENTS

#  

Section 9.01           WithoutConsent of Holders.

 

The Issuers, whenauthorized by a resolution of the Management Committee, and the Trustee may,without the consent of the Holders of any outstanding Notes, amend, waive orsupplement this Indenture or the Notes for certain specified purposes,including, among other things:

 

###### (1)           to cure any ambiguity, defect orinconsistency;

######  

###### (2)           to comply with Section 5.01;

######  

###### (3)           to provide for uncertificated Notes inaddition to or in place of Certificated Notes;

######  

###### (4)           to make any change that does not adverselyaffect the legal rights hereunder of any Noteholder;

######  

###### (5)           to add to the covenants, conditions andrestrictions of the Issuers, for the benefit of the Noteholders, or tosurrender any right or power herein conferred upon the Issuers, or

 

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###### (6)           to modify, eliminate or add to theprovisions of this Indenture to such extent as shall be necessary to effect thequalification of this Indenture under the TIA, or under any similar federalstatute hereafter enacted.

######  

Upon the request of theIssuers accompanied by a resolution of the Management Committee of the Companyand a resolution of the board of directors of Capital authorizing the executionof any such amended or supplemental Indenture, and upon the receipt by theTrustee of an Officer’s Certificate and an Opinion of Counsel stating that theexecution of such amended or supplemental Indenture is authorized or permittedby this Indenture, the Trustee shall join the Issuers in its execution of anysuch amended or supplemental Indenture and shall make such further appropriateagreements and stipulations as may be therein contained; provided that theTrustee shall not be obligated to enter into any such amended or supplementalIndenture that affects its own rights, duties or immunities under thisIndenture or otherwise.

 

Section 9.02           WithConsent of Holders.

 

### (a)           Exceptas provided in Section 9.02(b) hereof and subject to Sections 6.02, 6.04and 6.07, (i) the Issuers and the Trustee may amend, modify or supplement thisIndenture or the Notes with the written consent of the Holders of at least amajority in aggregate principal amount of the then-outstanding Notes(including, without limitation, consents obtained in connection with a purchaseof, or tender offer in exchange for, the Notes) and (ii) the Holders of amajority in aggregate principal amount of the Notes then-outstanding may bywritten instrument waive any existing default or compliance in a particularinstance by the Issuers with any provision of this Indenture or the Notes.

###  

### (b)           Notwithstandinganything to the contrary contained herein, without the written consent of eachHolder affected thereby, no amendment, modification or supplement of thisIndenture or the Notes, and no waiver of any default of rights thereunder may(with respect to any of the Notes held by any non-consenting Holder):

###  

#### (i)            reduce the principal amount of Notes whoseHolders must consent to an amendment, supplement or waiver;

####  

#### (ii)           reduce the principal of or change the fixedmaturity of any Note or alter the provisions with respect to the redemption ofthe Notes (other than provisions relating to Sections 2.11, 3.09, 4.08, 4.14and 4.25 hereof);

####  

#### (iii)          reduce the rate of, or change the time forpayment of, interest (including default interest) on any Note;

####  

#### (iv)          waive a Default or Event of Default in thepayment of principal of, or premium, interest or Liquidated Damages (if any)on, the Notes (except a rescission of acceleration of the Notes by Holders ofat least a majority in aggregate principal amount of the Notes and a waiver ofthe payment default that resulted from such acceleration);

####  

#### (v)           make any Note payable in money other thanthat stated in the Notes;

 

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#### (vi)          make any change in Sections 6.04 or 6.07hereof or in the foregoing amendment and waiver provisions; or

####  

#### (vii)         waive a redemption payment with respect to anyNote (other than a payment required by the provisions described in Sections2.11, 3.09, 4.08, 4.14 and 4.25 hereof).

####  

### (c)           Tosecure a consent of the Holders under this Section 9.02, it shall not benecessary for the Holders to approve the particular form of any proposedamendment or waiver, but it shall be sufficient if such consent approves thesubstance thereof. The calculation of holders so consenting shall be madepursuant to Section 2.09 hereof.

###  

### (d)           Afteran amendment or waiver under this Section 9.02 becomes effective, theIssuers shall mail to Noteholders and the Trustee a notice describing theamendment or waiver, provided that failure to give the required notice shallnot affect the validity and effect of such amendment or waiver.

###  

Section 9.03           Compliancewith Trust Indenture Act.

 

Every amendment to thisIndenture or the Notes shall be set forth in a supplemental indenture thatcomplies with the TIA as then in effect.

 

Section 9.04           Revocationand Effect of Consents.

 

Until the earlier of thetime that an amendment or waiver becomes effective, or for a period of 90 daysfrom the date the consent was given, a consent to an amendment or waiver by aHolder of a Note is a continuing consent by the Holder and every subsequentHolder of a Note or portion of a Note that evidences the same debt as theconsenting Holder’s Note, even if notation of the consent is not made on anyNote.

 

The Trustee may, uponwritten direction of the Issuers, or as otherwise required hereunder or byjudgment, decree, order, statute, rule or governmental regulation, fix a recorddate for the purpose of determining the Holders entitled to consent to anyamendment or waiver. If a record date is fixed, then notwithstanding theprovisions of the immediately preceding paragraph, those Persons who wereHolders at such record date (or their duly designated proxies), and only thosePersons, shall be entitled to consent to such amendment or waiver or to revokeany consent previously given, whether or not such Persons continue to beHolders after such record date. No consent shall be valid or effective for morethan 90 days after such record date unless consents from Holders of theaggregate principal amount of Notes required hereunder for such amendment orwaiver to be effective shall have also been given and not revoked within such90-day period.

 

After an amendment orwaiver becomes effective it shall bind every Noteholder, unless it is of thetype described in any of clauses (i) through (vii) ofSection 9.02(b).  In such case, theamendment or waiver shall bind each Holder of a Note who has consented to it.

 

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Section 9.05           Notationon or Exchange of Notes.

 

If an amendment, supplementor waiver changes the terms of the Notes, the Trustee may require each Holderthereof to deliver its Notes to the Trustee. The Trustee may place anappropriate notation about an amendment or waiver on any Note thereafterauthenticated. The Issuers in exchange for all Notes may issue and the Trusteeshall authenticate new Notes that reflect the amendment or waiver. Failure tomake the appropriate notation or issue a new Note shall not affect the validityor effect of such amendment or waiver.

 

Section 9.06           TrusteeProtected.

 

The Trustee shall signall supplemental indentures and amendments authorized pursuant to thisArticle 9, except that the Trustee need not sign any supplementalindenture that adversely affects its rights. The Trustee, subject to Sections7.01 and 7.02, shall be entitled to receive, if requested, an indemnitysatisfactory to it in its sole reasonable discretion and shall be entitled tobe fully protected in relying upon an Opinion of Counsel stating that anyamendment, supplement or waiver is authorized or permitted by this Indentureand that such supplemental indenture and this Indenture, as so amended orsupplemented, constitute the valid and binding obligations of the Issuers,enforceable against each of them in accordance with their respective terms(subject to customary and necessary exceptions) and all conditions precedenthave been complied with.

 

# ARTICLE X

#  

# GENERAL PROVISIONS

#  

Section 10.01         TrustIndenture Act Controls.

 

This Indenture, whetheror not qualified under the TIA, shall be subject to the terms and provisions ifthe TIA as if so qualified.

 

If any provision of thisIndenture limits, qualifies, or conflicts with another provision that isrequired to be included in this Indenture by the TIA as in effect at the datehereof or, to the extent required by law, as amended after the date hereof, therequired provision shall control.

 

Section 10.02         Notices.

 

Any notice orcommunication by the Issuers or the Trustee to the other is duly given if inwriting and delivered in person or mailed by first-class mail, certified orregistered, return receipt requested, nationally recognized overnight courier,telex or telecopier to the other’s address stated in Section 10.09. TheIssuers or the Trustee by written notice to the other may designate anadditional or different address for subsequent notices or communications.

 

Any notice orcommunication to a Noteholder shall be mailed by first-class mail to itsaddress shown on the register kept by the Registrar. Failure to mail a noticeor communication to a Noteholder or any defect in it shall not affect itssufficiency with respect to other Noteholders.

 

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If a notice orcommunication is given in the manner provided above within the time prescribed,it is duly given, whether or not the addressee receives it.

 

If the Issuers mail anotice or communication to Noteholders, they shall mail a copy to the Trusteeand each Agent at the same time.

 

All other notices orcommunications shall be in writing.

 

Section 10.03         Communicationby Holders with Other Holders.

 

Noteholders maycommunicate pursuant to TIA Section 312(b) with other Noteholders withrespect to their rights under this Indenture or the Notes. The Issuers, theTrustee, the Registrar and anyone else shall have the protection of TIASection 312(c).

 

Section 10.04         Certificateand Opinion as to Conditions Precedent.

 

Upon any request orapplication by the Issuers to the Trustee to take any action under thisIndenture, the Issuers shall furnish to the Trustee:

 

###### (1)           an Officers’ Certificate stating that, inthe opinion of the Issuers, all conditions precedent, if any, provided for inthis Indenture relating to the proposed action have been complied with; and

######  

###### (2)           an Opinion of Counsel stating that, in theopinion of such counsel, all such conditions precedent have been complied with;and

######  

###### (3)           where applicable, a certificate or opinionby an independent certified public accountant satisfactory to the Trustee thatcomplies with TIA Section 314(c).

######  

Section 10.05         StatementsRequired in Certificate or Opinion.

 

Each certificate oropinion of a Person with respect to compliance with a condition or covenantprovided for in this Indenture shall include:

 

###### (1)           a statement that the Person making such certificateor opinion has read such covenant or condition;

######  

###### (2)           a brief statement as to the nature and scopeof the examination or investigation upon which the statements or opinionscontained in such certificate or opinion are based;

######  

###### (3)           a statement that, in the opinion of suchPerson, such Person has made such examination or investigation as is necessaryto enable him to express an informed opinion as to whether or not such covenantor condition has been complied with; and

######  

###### (4)           a statement as to whether or not, in theopinion of such Person, such condition or covenant has been complied with;provided, however, that with respect to matters of fact, an Opinion of Counselmay rely on an Officers’ Certificate.

 

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Section 10.06         Rulesby Trustee and Agents.

 

The Trustee may makereasonable rules for action by or at a meeting of Noteholders. The Registrar orPaying Agent may make reasonable rules and set reasonable requirements for itsfunctions.

 

Section 10.07         NoRecourse Against Others.

 

A director, officer,employee, member, manager or stockholder, as such, of the Issuers or of anyGuarantor shall not have any liability for any obligations of the Issuers orany Guarantor under the Notes or any Guarantee thereof or under this Indenture,or for any claim based thereon, by reason of such status as director, officer,employee, member, manager or stockholder. Each Noteholder by accepting a Notewaives and releases all such liability. The waiver and release are part of theconsideration for the Notes. Each director, officer, employee, manager, memberand stockholder (other than the Company) is a third party beneficiary of thisSection 10.07.

 

Section 10.08         Counterparts.

 

This Indenture may beexecuted in any number of counterparts and by the parties hereto in separatecounterparts, each of which when so executed shall be deemed to be an originaland all of which taken together shall constitute one and the same agreement.

 

Section 10.09         OtherProvisions.

 

The Issuers initiallyappoint the Trustee as Paying Agent, Registrar and authenticating agent.

 

The first certificatepursuant to Section 4.03(a) shall be for the fiscal year ending onDecember 31, 2004. The reporting date for Section 7.06 is May 15 ofeach year. The first reporting date is May 15, 2005.

 

The Trustee shall alwayshave, or shall be a subsidiary of a bank or bank holding company that has, acombined capital and surplus of at least $100,000,000 as set forth in its mostrecent published annual report of condition pursuant to applicable law.

 

The Issuers’ address is:

 

345 North Virginia Street

Reno, Nevada 89501

Telecopier: (775) 348-7513

Attention: Chief Financial Officer

 

The Trustee’s address for notice is:

 

U.S. Bank National Association

225 Asylum Street, 23rd Floor

Goodwin Square

Hartford, Connecticut 06103

 

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Attention: Corporate Trust Department

Telecopier: (860) 241-6897

 

Section 10.10         GoverningLaw.

 

THE INTERNAL LAW OF THESTATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE NOTES, WITHOUT REGARD TOTHE CONFLICTS OF LAWS PROVISIONS THEREOF TO THE EXTENT THAT THE APPLICATION OFTHE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. IF ANY ACTION ORPROCEEDING SHALL BE BROUGHT BY A HOLDER OF ANY OF THE NOTES OR BY THE TRUSTEEIN ORDER TO ENFORCE ANY RIGHT OR REMEDY UNDER THIS INDENTURE OR UNDER THENOTES, THE ISSUERS HEREBY CONSENTS AND WILL SUBMIT TO THE JURISDICTION OF THECOURTS OF THE STATE OF NEW YORK SITTING IN THE CITY OF NEW YORK OR ANY FEDERALCOURT SITTING IN THE CITY OF NEW YORK. THE ISSUERS HEREBY AGREE TO ACCEPTSERVICE OF PROCESS BY NOTICE GIVEN TO THEM PURSUANT TO THE PROVISIONS OFSECTION 10.02. THE ISSUERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE,TO THE FULLEST EXTENT THEY MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTIONWHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT, ACTIONOR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR TO THE NOTES INANY COURT REFERRED TO IN THIS SECTION.

 

Section 10.11         NoAdverse Interpretation of Other Agreements.

 

This Indenture may not beused to interpret another indenture, loan or debt agreement of the Issuers orany of their Subsidiaries. Any such other indenture, loan or debt agreement maynot be used to interpret this Indenture.

 

Section 10.12         Successors.

 

All agreements of theIssuers in this Indenture and the Notes shall bind their successor. Allagreements of the Trustee in this Indenture shall bind its successor.

 

Section 10.13         Severability.

 

In case any provision inthis Indenture or in the Notes shall be invalid, illegal or unenforceable, thevalidity, legality and enforceability of the remaining provisions shall not inany way be affected or impaired thereby.

 

Section 10.14         Tableof Contents, Headings, Etc.

 

The Table of Contents,Cross-Reference Table and headings of the Articles and Sections of thisIndenture have been inserted for convenience of reference only, are not to beconsidered a part hereof and shall in no way modify or restrict any of theterms or provisions hereof.

 

[signature pages follow]

 

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The parties have caused this Indenture to be duly executed andattested, all as of the date first above written, signifying their agreementscontained in this Indenture.

 
|   | The Issuers:                   |
|--------|--------------------------------|
|   |                           |   |
|   | ELDORADO RESORTS, LLC          |
|   |                           |   |
|   | By:                            | /s/ Donald L. Carano |
|   |                           | Donald L. Carano |
|   |                           | Chief Executive Officer, |
|   |                           | President and Presiding Manager |
|   |                           |   |
|   |                           |   |
|   | By:                            | /s/ Gary L. Carano |
|   |                           | Gary L. Carano |
|   |                           | Corporate Representative of |
|   |                           | Recreational Enterprises, Inc., Manager |
|   |                           |   |
|   | ELDORADO CAPITAL CORP.         |
|   |                           |   |
|   | By:                            | /s/ Donald L. Carano |
|   |                           | Donald L. Carano |
|   |                           | President |
|   |                           |   |
|   | By:                            | /s/ Gregg R. Carano |
|   |                           | Gregg R. Carano |
|   |                           | Vice President |
|   |                           |   |
|   | Trustee:                       |
|   |                           |   |
|   | U.S. BANK NATIONAL ASSOCIATION |
|   |                           |   |
|   | By:                            | /s/ Michael M. Hopkins |
|   |                           | Michael M. Hopkins |
|   |                           | Vice President |

 

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**EXHIBITA**

 

**FORM OF NOTE**

 

**CUSIP NO.:**

 

**SEE REVERSE FOR TRANSFER RESTRICTIONS**

 

**ELDORADO RESORTS LLCELDORADO CAPITAL CORP.**

 

**% SENIOR NOTE DUE         , 2014**

 
| $        | New York, New York                                |
|----------|---------------------------------------------------|
|     |                                              |
| Note No. |        ,  2004 |
|     |                                              |

Interest PaymentDates:                                 and                                 

 

RecordDates:                                         and                                         

 

FOR VALUE RECEIVED, theundersigned, Eldorado Resorts LLC, a Nevada limited-liability company, andEldorado Capital Corp., a Nevada corporation (the “Issuers”), hereby jointlyand severally promise to pay to           orits registered assigns, the principal sum of$                               (orso much thereof as shall not have been prepaid) on        , 2014.

 

This is one of the NotesDated:                              mentionedin the within-mentioned Indenture.

 
|   | ELDORADO RESORTS, LLC |
|--------|-----------------------|
|   |                  |   |
|   |                  |   |
|   | By:                   |   |
|   |                  | Name: |
|   |                  | Title: |
|   |                  |   |
|   |                  |   |
|   | By:                   |   |
|   |                  | Name: |
|   |                  | Title: |
|        |                       |  |  |

 

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|   | ELDORADO CAPITAL CORP.                      |
|--------|---------------------------------------------|
|   |                                        |   |
|   |                                        |   |
|   | By:                                         |   |
|   |                                        | Name: |
|   |                                        | Title: |
|   |                                        |   |
|   | By:                                         |   |
|   |                                        | Name: |
|   |                                        | Title: |
|   |                                        |   |
|   |                                        |   |
|   | U.S. BANK NATIONAL ASSOCIATION,  as Trustee |
|   |                                        |   |
|   |                                        |   |
|   | By:                                         |   |
|   |                                        | Authorized Signatory |
|        |                                             |  |  |  |  |

 

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BACK OF NOTE

 

9% Senior NoteDue      , 2014

 

Unless this certificateis presented by an authorized representative of The Depository Trust Company,a New York corporation (“DTC”) to the Issuers or their agent for registrationof transfer, exchange or payment, and any certificate issued is registered inthe name of Cede & Co. or in such other name as is requested by anauthorized representative of DTC (and any payment is made to Cede & Co. orto such other entity as is requested by an authorized representative of DTC),ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANYPERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., hasan interest herein.(1)

 

THE SECURITY (OR ITSPREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPTFROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY MAYNOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCHREGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THESECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ONTHE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACTPROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBYAGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD,PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i)(a) TO A PERSON WHO THE SELLERREASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144AUNDER THE SECURITIES ACT), IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THESECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN ATRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR(d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OFTHE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SOREQUEST), (ii) TO THE ISSUERS, OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATIONSTATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANYAPPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHERAPPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER ISREQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OFTHE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.

 

THE FOREGOING LEGEND MAYBE REMOVED FROM THIS SECURITY ON SATISFACTION OF THE CONDITIONS SPECIFIED INTHE INDENTURE.

 

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(1)           Thisis to be included only if the Note is in global form.

 

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Unless otherwiseindicated herein, capitalized terms used herein shall have the meaningsassigned to them in the Indenture (referred to below) and if no meaning isassigned therein, the meanings assigned to them in the Registration RightsAgreement (as defined in the Indenture).

 

1.             Interest.Eldorado Resorts LLC, a Nevada limited-liability company (the “Company”)and Eldorado Capital Corp., a Nevada corporation (“Capital” and,together with the Company, the “Issuers”) promise to pay interest on theprincipal amount of this Note at the rate of 9% per annum from    , 2004 until maturity (plus any Make-Whole Premium orany Liquidated Damages required to be paid pursuant to the terms of theRegistration Rights Agreement). The Issuers shall pay interest semiannually onApril 15 and October 15 of each year, or if any such day is not aBusiness Day, on the next succeeding Business Day (each an Interest PaymentDate). Interest on the Notes will accrue from the most recent date to whichinterest has been paid or, if no interest has been paid, from the first date onwhich any Notes are issued; provided, that if there is no existing Default inthe payment of interest, and if this Note is authenticated between a RecordDate referred to on the face hereof and the next succeeding Interest Payment Date,interest shall accrue from such next succeeding Interest Payment Date; andprovided, further, that the first Interest Payment Date shall beOctober 15, 2004.  Interest will becomputed on the basis of a 360-day year of twelve 30-day months.

 

The Issuers shall paydefault interest on overdue installments of interest, Make-Whole Premium andLiquidated Damages (without regard to any applicable grace periods) at the rateas is applicable to the Notes, to the extent lawful.  The Issuers shall pay default interest on overdue principal at arate that is 2% per annum in excess of the rate as is applicable to the Notes,to the extent lawful.  Such defaultinterest shall be paid to the Persons who are Holders on a subsequent specialrecord date, which date shall be at the earliest practicable date, but in allevents at least five Business Days prior to the payment date.  The Issuers shall notify the Trustee inwriting of the amount of defaulted interest proposed to be paid on each Noteand the date of the proposed payment. The Issuers shall, with the consent of the Trustee, fix or cause to befixed each such special record date and payment date.  At least 15 days before the special record date, the Issuers (or,upon the written request of the Issuers, the Trustee in the name and at theexpense of the Issuers) shall mail or cause to be mailed to the Holders anotice that states the special record date, the related payment date and theamount of such default interest to be paid.

 

Notwithstanding theforegoing, at no time shall the maximum aggregate interest rate borne by theNotes exceed the maximum amount permitted under applicable usury laws.

 

2.             Method of Payment.  The Issuers shall pay interest on the Notes(except defaulted interest) to the Persons who are registered Holders of Notesat the close of business on the April 1 or October 1 immediatelypreceding the Interest Payment Date (each a “Record Date”) even if such Notesare cancelled after the Record Date and on or before the Interest Payment Date,except as provided in Section 2.13 of the Indenture with respect todefaulted interest. Holders must surrender Notes to a Paying Agent to collectprincipal payments and premium payments, if any. The Issuers shall payprincipal of and premium, interest and Liquidated Damages, if any, on the Notesat the office or agency of the Issuers maintained for such purpose or, at theoption of the Issuers, payment of interest may be made by check mailed to theHolders of the Notes at their respective addresses set forth in the register ofHolders of Notes; provided, that payment by wire transfer of immediatelyavailable funds will be required with respect to

 

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principal of, and premium, interest and Liquidated Damages, if any, onall Global Notes and all other Notes the Holders of which shall have providedappropriate wire transfer instructions to the Issuers or the Paying Agent.  Until otherwise designated by the Issuers,the Issuers’ office or agency will be the office of the Trustee maintained forsuch purpose.  Such payment shall be insuch coin or currency of the United States of America as at the time of paymentis legal tender for payment of public and private debts.

 

3.             Paying Agent andRegistrar.  U.S. Bank NationalAssociation, 100 Wall Street, Suite 1600, New York, New York **[zip code]**(the “Trustee”) will act as the initial Paying Agent and Registrarwithout prior notice to the Holders. Except as otherwise provided in theIndenture, the Issuers may act in any such capacity.

 

4.             Indenture.  The Issuers issued the Notes under anIndenture dated as of      , 2004 (the “Indenture”)between the Issuers and the Trustee. The terms of the Notes include those stated in the Indenture and thosemade part of the Indenture by reference to the Trust Indenture Act of 1939, asamended (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of theIndenture.  The Notes are subject to,and qualified by, all such terms, certain of which are summarized herein, andNoteholders are referred to the Indenture and such Act for a statement of suchterms. The Indenture shall govern and be controlling in the event of a conflictwith this Note. The Notes are general, unsecured obligations of the Issuerslimited to $**[         ]** inaggregate principal amount.

 

5.             OptionalRedemption.

 

(a)           Except as set forth insubparagraph (b) below of this Paragraph 5 or as required by applicable gaminglaw, the Issuers shall not be entitled to redeem the Notes prior to     , 2009. Thereafter, the Issuers shall have theoption to redeem the Notes, in whole or in part, at the redemption prices(expressed as percentages of principal amount) set forth below plus accrued andunpaid interest and Liquidated Damages, if any, thereon, to the applicableredemption date, if redeemed during the twelve-month period beginningon              ofthe years indicated below:

 
| **Year**             |   | **Percentage** |   |
|----------------------|--------|----------------|--------|
| 2009                 |   | 104.50         | %      |
| 2010                 |   | 103.00         | %      |
| 2011                 |   | 101.50         | %      |
| 2012 and  thereafter |   | 100.00         | %      |

 

(b)           (i)Prior to          , 2009, upon notless than 30 nor more than 60 days’ notice, the Issuers may redeem the Notes inwhole or in part, at a redemption price equal to 100% of the principal amountthereof plus the Make-Whole Premium, together with accrued and unpaid interestthereon and Liquidated Damages, if any, to the applicable redemption date; and(ii) if the Company consummates the sale of its interests in Tamarack Crossing,LLC on or before June 30, 2005, the Issuers may, upon not less than 30 normore than 60 days’ notice, use proceeds from such sale to redeem up to $5.0million principal amount of the Notes at a redemption price equal to 100% ofthe principal amount thereof together with accrued and unpaid interest thereonand Liquidated Damages, if any, to the applicable redemption date.

 

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6.             MandatoryRedemption.

 

Except as set forth inParagraph 7 below, the Issuers shall not be required to make mandatoryredemption or sinking fund payments with respect to the Notes.

 

7.             Repurchase at theOption of Holders.

 

(a)           If there is a Change ofControl, the Issuers shall be required to make an offer (a “Change of ControlOffer”) pursuant to Section 4.08 of the Indenture to repurchase all or anypart (equal to $1,000 or an integral multiple thereof) of each Holder’s Notesat a purchase price in cash equal to 101% of the aggregate principal amountthereof, plus accrued and unpaid interest and Liquidated Damages, if any,thereon to the date of purchase in accordance with the procedures set forth inthe Indenture.

 

(b)           If the Issuers or aRestricted Subsidiary consummates any Asset Sales, the Issuers shall berequired to make an offer to all Holders of Notes (an “Asset Sale Offer”)pursuant to Sections 3.09 and 4.14 of the Indenture to purchase the maximumprincipal amount of Notes that may be purchased out of the Excess Proceeds, ata purchase price in cash equal to 100% of the principal amount thereof, plusaccrued and unpaid interest and Liquidated Damages, if any, thereon to the dateof purchase in accordance with the procedures set forth in the Indenture.  If the aggregate principal amount of Notessurrendered by Holders thereof exceeds the amount of Excess Proceeds, theTrustee shall select the Notes to be purchased on a pro rata basis.

 

(c)           If there is a RedemptionFailure, the Issuers shall be required to make an offer (a “Redemption FailureOffer”) pursuant to Section 4.25 of the Indenture to repurchase all or anypart (equal to $1,000 or an integral multiple thereof) of each Holder’s Notesat a purchase price in cash equal to 101% of the aggregate principal amountthereof, plus accrued and unpaid interest and Liquidated Damages, if any,thereon to the date of purchase in accordance with the procedures set forth inthe Indenture.

 

(d)           Holders of Notes thatare the subject of a Change of Control Offer, an Asset Sale Offer or aRedemption Failure Offer, as applicable, will receive notice from the Issuersprior to any related purchase date and may elect to have such Notes purchasedby completing the form titled “Option of Holder to Elect Purchase” on thereverse of the Notes.

 

8.             Gaming Redemption.Notwithstanding any other provision of the Indenture, if any Gaming Authorityrequires that a Holder or beneficial owner of Notes must be licensed, qualifiedor found suitable under any applicable gaming law and such Holder or beneficialowner fails to apply for a license, qualification or a finding of suitabilitywithin 30 days after being requested to do so by the Gaming Authority (or such1esser period that may be required by such Gaming Authority), or if such Holderor such beneficial owner is not so licensed, qualified or found suitable, theCompany shall have the right, at its option, (i) to require such Holder orbeneficial owner to dispose of such Holders or beneficial owner’s Notes within30 days of receipt of such notice of such finding by the applicable GamingAuthority or such earlier date as may be ordered by such Gaming Authority or(ii) to redeem the Notes of such Holder or beneficial owner at a redemption priceequal to the lesser of (A) the principal amount thereof or (B) the price atwhich

 

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such Holder or beneficial owner acquired such Notes (in the case of (A)or (B), together with accrued and unpaid interest and Liquidated Damages, ifany, thereon to the earlier of the date of redemption or such earlier date asmay be required by such Gaming Authority or the date of the finding ofunsuitability by such Gaming Authority, which may be less than 30 days followingthe notice of redemption, if so ordered by such Gaming Authority), or (C) suchother amount as may be required by applicable law or by order of any GamingAuthority.  The Holder or beneficialowner of Notes applying for a license, qualification or a finding ofsuitability with any Gaming Authority must pay all costs of the licensure orinvestigation for such qualification or finding of suitability. The Companyshall not be required to pay or reimburse any Holder or beneficial owner ofNotes who is required to apply for such license, qualification or a finding ofsuitability for the costs of the licensure or investigation for suchqualification or finding of suitability.

 

9.             Notice ofRedemption. Except in the case of a redemption effected pursuant to Section 8hereof, notice of redemption shall be mailed by first-class mail at least 30days but not more than 60 days before the redemption date to each Holder ofNotes to be redeemed at its registered address. If any Note is to be redeemedin part only, the notice of redemption that relates to such Note shall statethe portion of the principal amount thereof to be redeemed. Notes may beredeemed in part but only in whole multiples of $1,000, unless all of the Notesheld by a Holder are to be redeemed. On and after the redemption date, interestceases to accrue on Notes or portions thereof called for redemption.

 

10.           DenominationsTransfer, Exchange. The Notes are in registered form without coupons inminimum denominations of $100,000 and larger denominations that are integralmultiples of $25,000. The transfer of Notes may be registered and Notes may beexchanged, as provided in the Indenture. The Registrar and the Trustee mayrequire a Holder, among other things, to furnish appropriate endorsements andtransfer documents and the Issuers may require a Holder to pay any taxes andfees required by law or permitted by the Indenture.  The Issuers need not exchange or register the transfer of anyNote or portion of a Note selected for redemption, except for the unredeemedportion of any Note being redeemed in part. Also, the Issuers need not exchange or register the transfer of anyNotes for a period of 15 days before the date on which a notice of redemptionis mailed or during the period between a Record Date and the correspondingInterest Payment Date.

 

11.           Persons DeemedOwners.  The registered Holder of aNote may be treated as its owner for all purposes.

 

12.           Amendment Supplementand Waiver. The Issuers and the Trustee may, without the consent of theHolders of any outstanding Notes, amend, waive or supplement the Indenture orthe Notes for certain specified purposes, including, among other things: (1) tocure any ambiguity, defect or inconsistency, (2) to comply withSection 5.01 of the Indenture, (3) to provide for uncertificated Notes inaddition to or in place of Certificated Notes, (4) to make any change that doesnot adversely affect the legal rights hereunder of any Noteholder, (5) to addto the covenants, conditions and restrictions of the Issuers, for the benefitof the Noteholders, or to surrender any right or power herein conferred uponthe Issuers, or (6) to modify, eliminate or add to the provisions of thisIndenture to such extent as shall be necessary to effect the qualification ofthis Indenture under the TIA, or under any similar federal statute hereafterenacted.

 

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(a)           Upon the request of theIssuers accompanied by a resolution of the Management Committee of the Companyand a resolution of the board of directors of Capital authorizing the executionof any such amended or supplemental Indenture, and upon the receipt by theTrustee of an Officer’s Certificate and an Opinion of Counsel stating that theexecution of such amended or supplemental Indenture is authorized or permittedby this Indenture, the Trustee shall join the Issuers in the execution of anysuch amended or supplemental Indenture and shall make such further appropriateagreements and stipulations as may be therein contained; provided that theTrustee shall not be obligated to enter into any such amended or supplementalIndenture that affects its own rights, duties or immunities under thisIndenture or otherwise.

 

(b)           Except as provided inSection 9.02(b) of the Indenture and subject to Sections 6.02, 6.04 and6.07 thereof, (i) the Issuers and the Trustee may amend, modify or supplementthe Indenture or the Notes with the written consent of the Holders of at leasta majority in aggregate principal amount of the then-outstanding Notes (includingwithout limitation consents obtained in connection with a purchase of, ortender offer in exchange for, the Notes) and (ii) the Holders of a majority inaggregate principal amount of the Notes then-outstanding may by writteninstrument waive any existing default or compliance in a particular instance bythe Issuers with any provision of the Indenture or the Notes.

 

(c)           Notwithstandinganything to the contrary contained in the Indenture or the Notes, without thewritten consent of each Holder affected thereby, no amendment, modification orsupplement of the Indenture or the Notes, and no waiver of any default ofrights thereunder may (with respect to any of the Notes held by any nonconsenting Holder): (i) reduce the principal amount of Notes whose Holders mustconsent to an amendment, supplement or waiver, (ii) reduce the principal of, orchange the fixed maturity of, any Note or alter the provisions with respect tothe redemption of the Notes (other than provisions relating to Sections 2.11,3.09, 4.08, 4.14 and 4.25 of the Indenture), (iii) reduce the rate of, orchange the time for payment of, interest on any Note, (iv) waive a Default orEvent of Default in the payment of principal of, or premium, interest orLiquidated Damages (if any) on, the Notes (except such amendment, modificationor supplement may effect a rescission of acceleration of the Notes by Holdersof at least a majority in aggregate principal amount of the Notes and a waiverof the payment default that resulted from such acceleration), (v) make any Notepayable in money other than that states in the Notes, (vi) make any change inSections 6.04 or 6.07 of the Indenture or in the foregoing amendment and waiverprovisions or (vii) waive a redemption payment with respect to any Note (otherthan a payment required by the provisions described in Sections 2.11, 3.09,4.08, 4.14 and 4.25 of the Indenture).

 

13.           Defaults andRemedies.  Events of Defaultinclude:

 

(i)            default for 30 days inthe payment when due of interest or Liquidated Damages, if any, on the Notes ;

 

(ii)           default in payment whendue of the principal of or premium, if any, on the Notes ;

 

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(iii)          failure by the Issuersto comply with the repurchase provisions of Sections 3.09, 4.08, 4.14 or 4.25of the Indenture or the covenants contained in Section 4.05 or 4.09 of theIndenture;

 

(iv)          failure by the Issuersfor 30 days after notice from the Trustee or any Holder to comply with any ofits other agreements in the Indenture or the Notes;

 

(v)           default under anymortgage, indenture or instrument under which there may be issued or by whichthere may be secured or evidenced any Indebtedness for money borrowed by theIssuers or any of their Restricted Subsidiaries (or the payment of which isguaranteed by the Issuers or any of their Restricted Subsidiaries) whether suchIndebtedness or guarantee now exists, or is created after the date of theIndenture having an outstanding principal amount of more than $5.0 million,individually or in the aggregate, if such Indebtedness has been accelerated (orhas matured) or any default in the payment of principal of such Indebtednesswhich entitles the holder of such Indebtedness to accelerate the maturitythereof regardless of acceleration of maturity;

 

(vi)          failure by the Issuersor any of their Restricted Subsidiaries to pay final non-appealable judgmentsaggregating in excess of $5.0 million, which judgments are not paid, dischargedor stayed for a period of 60 days;

 

(vii)         any Guarantee of a SignificantGuarantor shall be held in a judicial proceeding to be unenforceable or invalidor shall cease for any reason to be in full force and effect, or anySignificant Guarantor, or any Person acting on behalf of any SignificantGuarantor, shall deny or disaffirm its obligations under its Guarantee;

 

(viii)        any Gaming Licenserelating to a Material Gaming Facility is revoked, terminated or suspended orotherwise ceases to be effective, resulting in the cessation or suspension ofoperation for a period of more than 30 days of any material portion or aspectof the Gaming Business of any Gaming Facility;

 

(ix)           the Member Notesrepresent Indebtedness for more than 90 days;

 

(x)            either Issuer, anySignificant Subsidiary of either Issuer, or any group of Subsidiaries of eitherIssuer that, considered together, would constitute a Significant Subsidiary ofeither Issuer, pursuant to or within the meaning of any Bankruptcy Law: (A)commences a voluntary case, (B) consents to the entry of an order for reliefagainst it in an involuntary case, (C) consents to the appointment of acustodian of it or for all, or substantially all, of its property, (D) makes ageneral assignment for the benefit of its creditors, or (E) admits in writingits inability to pay its debts as they become due; and

 

(xi)a court of competent jurisdiction enters an order or decree under anyBankruptcy Law that: (A) is for relief against either Issuer, any SignificantSubsidiary of either Issuer, or any group of Subsidiaries of either Issuerthat,

 

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consideredtogether, would constitute a Significant Subsidiary of either Issuer, in aninvoluntary case, (B) appoints a custodian of either Issuer or any SignificantSubsidiary of either Issuer, or for all or substantially all of the property ofeither Issuer or any Significant Subsidiary of either Issuer, or (C) orders theliquidation of either Issuer, any Significant Subsidiary of either Issuer, orany group of Subsidiaries that, considered together, would constitute aSignificant Subsidiary of either Issuer; and the order or decree remainsunstayed and in effect for 60 consecutive days.

 

14.           Trustee Dealingswith the Issuers. The Trustee under the Indenture, or any of itsAffiliates, in their individual or any other capacities, may make or continueloans to or loans guaranteed by the Issuers or their Affiliates, or acceptdeposits from, and perform services for, the Issuers or their Affiliates, andmay otherwise deal with the Issuers or their Affiliates, as if the Trustee werenot Trustee.

 

15.           No Recourse AgainstOthers. A director, officer, employee, member, manager or stockholder, assuch, of the Issuers or of any Guarantor, shall not have any liability for anyobligations of the Issuers or any Guarantor under the Notes or the Indenture orfor any claim based thereon, in respect of or by reason of such status asdirector, officer, employee, member, manager or stockholder.  Each Noteholder, by accepting a Note, waivesand releases all such liability.

 

16.           Authentication.  This Note shall not be valid untilauthenticated by the manual signature of the Trustee or an authenticatingagent.

 

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

 

18.           Additional Rights ofHolders.  In addition to the rightsprovided to Holders of the Notes under the Indenture, Holders shall have allthe rights set forth in the Registration Rights Agreement.

 

19.           CUSIP Numbers.  The Issuers have caused one or more CUSIPnumbers to be printed on the Notes and the Trustee may use CUSIP numbers innotices of redemption or exchange as a convenience to the Holders.  No representation is made as to the accuracyof such numbers either as printed on the Notes or as contained in any notice ofredemption or exchange and reliance may be placed only on the otheridentification numbers placed thereon.

 

20.           GOVERNING LAW.THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUETHE INDENTURE AND THE NOTES WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONSTHEREOF TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTIONWOULD BE REQUIRED.

 

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The Issuers shall furnishto any Noteholder upon written request and without charge a copy of theIndenture and the Registration Rights Agreement.  Requests may be made to: Eldorado Resorts LLC, 345 North VirginiaStreet, Reno, Nevada 89501, Attention: Secretary.

 

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ASSIGNMENT FORM

 

To assign this Note, fillin the form below:

 

I or we assign andtransfer this Note to:

 

                                                                                               (Assignee)

 

                                                                                               (Assignee’s soc. sec. or tax I.D. no.)

 

                                                                                               (Assignee’s name, address and zip code)

 

and irrevocably appoint:

 

                                                                                     

 

as agent to transfer thisNote on the books of the Issuers. The agent may substitute another to act forhim or her.

 

 
| Dated: |                                      |   |   |
|--------|-------------------------------------------|--------|--------|
|   |                                      |
|   | (name as appears on the face of the Note) |
|   |                                      |
|   | By:                                       |   |
|   |                                      |
|   | Signature guaranteed by:                  |   |
|        |                                           |        |        |  |  |

 

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OPTION OF HOLDERTO ELECT PURCHASE

 

If you want to elect tohave this Note purchased by the Issuers pursuant to Section 3.09 andSection 4.14, Section 4.08 or Section 4.25 of the Indenture andparagraph 7 of this Note, check the box:

 

o

 

If you want to elect tohave only part of this Note purchased by the Issuers pursuant toSection 3.09 and Section 4.14, Section 4.08 or Section 4.25of the Indenture and paragraph 7 of this Note, state the amount:

 
| $                                                                                                      |                                |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (in an integral multiple of $1,000) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                     |  |

 

 
| Date:  |   |   | Your Signature: |                                     |   |
|--------|--------|--------|-----------------|------------------------------------------|--------|
|   |   |   |            |  (Sign exactly as your name appears |
|   |   |   |            |  on the other side of this Note)    |
|        |        |        |                 |                                          |        |  |  |

 

Signature Guarantee:

 

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**SCHEDULE OFEXCHANGES OF CERTIFICATED SECURITIES(2)**

 

The following exchangesof a part of this Global Note for Certificated- Notes 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  decreases  (or increases)** |   | **Signature  of  authorized  officer of Trustee  or Global Note  Holder** |
|-----------------------|--------|--------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|
|                  |   |                                                               |   |                                                               |   |                                                                                  |   |                                                                      |
|                  |   |                                                               |   |                                                               |   |                                                                                  |   |                                                                      |
|                  |   |                                                               |   |                                                               |   |                                                                                  |   |                                                                      |
|                  |   |                                                               |   |                                                               |   |                                                                                  |   |                                                                      |
|                  |   |                                                               |   |                                                               |   |                                                                                  |   |                                                                      |

 

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(2)           Thisis to be included only if the Note is in global form.

 

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EXHIBIT B

 

CERTIFICATE TO BEDELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF NOTES

 

Re:           % Senior Notedue 2014 of Eldorado Resorts LLC and Eldorado Capital Corp.

 

This Certificate relatesto$                                                    principalamount of Notes held in*                               bookentry or*                                       certificatedformby                      (the“Transferor”).

 

The Transferor*:

 

o            has requested the Trustee by written order to deliverin exchange for its beneficial interest in the Global Note held by theDepositary, a Note or Notes in certificated, registered form of authorizeddenominations and an aggregate principal amount equal to its beneficialinterest in such Global Note (or the portion thereof indicated above); or

 

o            has requested the Trustee by written order to exchangeor register the transfer of a Note or Notes.

 

In connection with suchrequest and in respect of each such Note, the Transferor does hereby certify asfollows:

 

o            Such Note is being acquired for its own account,without transfer.

 

o            Such Note is being transferred to a qualifiedinstitutional buyer (as defined in Rule 144A under the Securities Act of 1933,as amended (the “Securities Act”)), in reliance on Rule 144A or in atransaction meeting the requirements of Regulation S under the Securities Act.

 

o            Such Note is being transferred in accordance with Rule144 under the Securities Act, or pursuant to an effective registrationstatement under the Securities Act.

 

o            Such Note is being transferred in reliance on and incompliance with an exemption from the registration requirements of the SecuritiesAct, other than Rule 144A, Rule 144 or Regulation S under the Securities Act.An opinion of counsel to the effect that such transfer does not requireregistration under the Securities Act accompanies this Certificate.

 
|   | Insert Name of Transferor |
|--------|---------------------------|
|   |                      |
|   | By:                       |   |   |
|   |                      |
| Dated: |                      |
|   |                      |

 

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* Check applicable box

 

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EXHIBIT C

 

FORM OF LEGALOPINION ON TRANSFER

 

                                        ,199  

 

Eldorado Resorts LLCEldorado Capital Corp.345 Virginia StreetReno, Nevada 89501

 
| Re:    |   | % Senior Notes Due                        , |   |   |   |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|   |   | 2014 of Eldorado Resorts LLC and Eldorado  Capital Corp.                                                                                                  |   |   |   |

 

Ladies and Gentlemen:

 

This opinion is beingfurnished to you in connection with the saleby                                (the“Transferor”)to                                (the“Purchaser”) of$                     aggregateprincipal amount of          %Senior Notes due 2014 of Eldorado Resorts LLC and Eldorado Capital Corp. (the“Notes”).

 

We have examined suchdocuments and records as we have deemed appropriate. In our examination of theforegoing, we have assumed the authenticity of all documents, the genuinenessof all signatures and the due authorization, execution and delivery of theaforementioned by each of the parties thereto. We have further assumed theaccuracy of the representations contained in the documents referred to abovemade by the parties executing such documents. We have also assumed that thesale of the Notes to the Transferor was exempt from the registration andprospectus delivery requirements of the Securities Act of 1933, as amended (the“Securities Act”).

 

Based on the foregoing,we are of the opinion that the sale to the Purchaser of the Notes does notrequire registration of such Notes under the Securities Act.

 

Very truly yours,

 

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EXHIBIT D

 

Form of SubsidiaryGuarantee

 

THIS GUARANTEE (as thesame may be amended, modified or supplemented from time to time, this“Guarantee”), dated asof                     ,is madeby                             (hereinafterreferred to as the “Guarantor”) in favor of U.S. Bank National Association, anational banking association, as trustee under the Indenture hereinafterdescribed (the “Trustee”), for the ratable benefit of the holders from time totime (the “Holders”) of the Senior Notes (as hereinafter defined).

 

All terms not otherwisedefined herein shall have for the purposes hereof the meanings set forth in theIndenture (as hereinafter defined) unless the context otherwise requires.

 

Recitals

 

A.            Eldorado Resorts LLC (the “Company”) and EldoradoCapital Corp. (“Capital” and, together with the Company, the “Issuers”) areparties to that certain indenture dated asof                                    ,2004 (as amended, supplemented or otherwise modified from time to time, the“Indenture”) among the Issuers and the Trustee, pursuant to which the Issuersissued $64.7 million principal amount of their      % Senior Notes due 2014 (the “SeniorNotes”); and

 

B.            The Guarantor is a direct or indirect Subsidiary ofthe Company, and will derive both direct and indirect economic benefit from theproceeds of the Senior Notes and other financial accommodations made to theIssuers under the Indenture.

 

C.            The Indenture requires that the Guarantor execute anddeliver this Guarantee to guarantee the payment and performance by the Issuersof all of their obligations under the Indenture and the Senior Notes,including, in each case, all reasonable costs of collection and enforcementthereof and interest thereon which would be owing by the Issuers or suchGuarantor but for the effect of the Bankruptcy Code, 11 U.S.C. (S) 101 et seq.(collectively, the “Guaranteed Obligations”).

 

NOW, THEREFORE, for andin consideration of the foregoing and of any financial accommodations orextensions of credit (including, without limitation, any loan or advance byrenewal, refinancing or extension of the Indenture or otherwise) heretofore,now or hereafter made to or for the benefit of the Issuers pursuant to theIndenture or any other agreement, instrument or document executed pursuant toor in connection therewith, and for other good and valuable consideration, thereceipt and sufficiency of which are acknowledged, the Guarantor and theTrustee agree as follows:

 

1.             The Guarantee.  TheGuarantor hereby absolutely, unconditionally and irrevocably guarantees thefull and punctual payment (whether at stated maturity, upon acceleration orotherwise) of the Guaranteed Obligations; provided, however, the obligations ofthe Guarantor hereunder shall be limited to the maximum amount which may bepaid hereunder without resulting in any payment hereunder being deemed toconstitute a fraudulent conveyance. This Guarantee is a guarantee of paymentand not of collection. All payments made by the

 

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Guarantor under this Guarantee shall be paid at the place and in themanner specified in the Indenture and the Senior Notes.

 

2.             Amendments, etc. with respect to the GuaranteedObligations; Waiver of Rights. The Guarantor shall remain obligated hereundernotwithstanding that without any reservation of rights against the Guarantorand without notice to or further assent by the Guarantor any demand for paymentof any of the Guaranteed Obligations made by the Trustee or the Holders may berescinded by them and any of the Guaranteed Obligations continued, and theGuaranteed Obligations, or the liability of any other party upon or for anypart thereof, or guarantee therefore or right of offset with respect thereto,may, from time to time, in whole or in part, be renewed, extended, amended,modified, accelerated, compromised, waived, surrendered or released by theTrustee or the Holders, and the Indenture and any other documents executed anddelivered in connection therewith may be amended, modified, supplemented orterminated, in whole or in part, as the Trustee or the Holders may deemadvisable from time to time or as provided in the Indenture, and any guaranteeor right of offset at any time held by the Trustee for the payment of theGuaranteed Obligations may be sold, exchanged, waived, surrendered or released.

 

3.             Guarantee Absolute and Unconditional. The Guarantor waives any and all noticeof the creation, renewal, extension or accrual of any of the GuaranteedObligations and notice of or proof of reliance by the Trustee or the Holdersupon this Guarantee, the Guaranteed Obligations, and any of them shallconclusively be deemed to have been created, contracted or incurred, orrenewed, extended, amended or waived, in reliance upon this Guarantee; and alldealings between the Issuers and the Guarantor, on the one hand, and theTrustee and the Holders, on the other hand, likewise shall be conclusively presumedto have been had or consummated in reliance upon this Guarantee. The Guarantorwaives diligence, presentment, protest, demand for payment and notice ofdefault or nonpayment to or upon the Issuers or the Guarantor with respect tothe Guaranteed Obligations. The Guarantor understands and agrees that thisGuarantee shall be construed as a continuing, absolute and unconditionalguarantee of payment without regard to (a) the validity, regularity orenforceability of the Indenture or any of the Senior Notes, any of theGuaranteed Obligations or guarantee or right of offset with respect thereto atany time or from time to time held by the Trustee or the Holders, (b) anydefense, set-off or counterclaim (other than a defense of payment orperformance) which may at any time be available to or be asserted by theIssuers against the Trustee or the Holders, or (c) any other circumstanceswhatsoever (with or without notice to or knowledge of the Issuers or suchGuarantor) which constitute, or might be construed to constitute, an equitableor legal discharge of the Issuers for the Guaranteed Obligations, or of theGuarantor under this Guarantee, in bankruptcy or in any other instance. Whenpursuing its rights and remedies hereunder against the Guarantor, the Trusteeand/or the Holders may, but shall be under no obligation to, pursue such rightsand remedies as it or they may have against the Issuers or any other Person oragainst any guarantee for the Guaranteed Obligations or any right of offsetwith respect thereto, and any failure by the Trustee or the Holders to pursuesuch other rights or remedies or to collect any payments from the Issuers orany such other Person or to realize upon any such guarantee or to exercise anysuch right of offset, or any release of the Issuers or any such other Person orany such guarantee or right of offset, shall not relieve the Guarantor of anyliability hereunder, and shall not impair or affect the rights and remedies,whether express, implied or available as a matter of law, of the Trustee and/orthe Holders against the Guarantor. This Guarantee shall remain in full forceand effect and be binding in accordance with and to the extent of its terms

 

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upon the Guarantor and its successors and assigns thereof, and shallinure to the benefit of the Trustee, and its successors, endorsees, transfereesand assigns, and the Holders from time to time of the Senior Subordinated Notesuntil all the Guaranteed Obligations and the obligations of the Guarantor underthis Guarantee shall have been satisfied by payment in full, notwithstandingthat from time to time during the term of the Indenture the Issuers may be freefrom any Guaranteed Obligations.

 

4.             Discharge Only Upon Payment In Full Reinstatement InCertain Circumstances. The Guarantor’s obligations hereunder shall remain in full force andeffect until the Guaranteed Obligations shall have been paid in full orreleased pursuant to Section 4.15 of the Indenture. If at any time anypayment of any of the Guaranteed Obligations is rescinded or must be otherwiserestored or returned upon the insolvency, bankruptcy or reorganization of theIssuers or otherwise, the Guarantor’s obligations hereunder with respect tosuch payment shall be reinstated at such time as though such payment had beendue but not made at such time.

 

5.             Waiver by the Guarantor.  TheGuarantor irrevocably waives acceptance hereof, presentment, demand, protestand any notice not provided for herein, as well as any requirement that at anytime any action be taken by any Person against the Issuers or any other Person.

 

6.             Subrogation. Notwithstanding any payments made by the Guarantor under this Guarantee,the Guarantor shall not be entitled to be subrogated to any of the rights ofany other Guarantor, the Trustee or any Holder against the Issuers until allamounts of principal of and interest and premium on the Senior Notes and allother amounts payable by the Issuers under the Indenture and the Senior Notesand by the Guarantor under its Guarantee have been paid in full. If any amountshall be paid to the Guarantor on account of such subrogation rights at anytime when all of the Guaranteed Obligations shall not have been paid in full,such amount shall be held by the Guarantor in trust for the Trustee segregatedfrom other funds of the Guarantor, and shall, forthwith upon receipt by theGuarantor, be turned over to the Trustee in the exact form received by theGuarantor (duly indorsed by the Guarantor to the Trustee, if required), to beapplied against the Guaranteed Obligations, whether matured or unmatured, atsuch time and in such order as the Trustee may determine.

 

7.             Stay of Acceleration.  In the eventthat acceleration of the time for payment of any of the Guaranteed Obligationsis stayed upon insolvency, bankruptcy or reorganization of the Issuers, allsuch amounts otherwise subject to acceleration under the terms of the Indentureand the Senior Notes shall nonetheless be payable by the Guarantor forthwith ondemand by the Trustee.

 

8.             Merger Consolidation or Sale of Assets.

 

(a)           The Guarantor may not, in a single transaction orseries of transactions, consolidate with or merge with or into (whether or notthe Guarantor is the surviving Person) another corporation, Person or entity,whether or not affiliated with the Guarantor, unless (i) subject to theprovisions of Section 8(b), the Person formed by or surviving any suchconsolidation or merger (if other than the Guarantor) assumes all theobligations of the Guarantor, pursuant to a supplemental Guarantee in form andsubstance reasonably satisfactory to the Trustee, under the Guarantee; (ii)immediately after giving effect to such transaction, no

 

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Default or Event of Default exists; (iii) the Guarantor, or any Personformed by or surviving any such consolidation or merger, would haveConsolidated Net Worth (immediately after giving effect to such transaction)equal to or greater than the Consolidated Net Worth of the Guarantorimmediately preceding the transaction; and (iv) the Company would be permittedby virtue of the Company’s pro forma Fixed Charge Coverage Ratio, immediatelyafter giving effect to such transaction, to incur at least $1.00 of additionalIndebtedness pursuant to the Fixed Charge Coverage Ratio test set forth inSection 4.09 of the Indenture; provided, however, that the foregoing willnot apply to the consolidation or merger of the Guarantor with and into eitherIssuer or another Guarantor.

 

(b)           In the event of a sale or other disposition of all ofthe assets of the Guarantor, by way of merger, consolidation or otherwise, or asale or other disposition of all of the capital stock of the Guarantor, thenthe Guarantor (in the event of a sale or other disposition, by way of such amerger, consolidation or otherwise, of all of the capital stock of theGuarantor) or the corporation acquiring the property (in the event of a sale orother disposition of all of the assets of the Guarantor) will be released and relievedof any obligations under this Guarantee; provided that the Net Proceeds of suchsale or other disposition are applied in accordance with Section 4.14 ofthe Indenture. In addition, in the event the Management Committee designatesthe Guarantor to be an Unrestricted Subsidiary, then the Guarantor shall bereleased and relieved of any obligations under this Guarantee; provided thatsuch designation is conducted in accordance with Section 4.05 of theIndenture.

 

9.             Miscellaneous.

 

(a)           Benefits of Guarantee , Successors and Assigns. Nothing in this Guarantee, expressed orimplied, shall give to any person, other than Trustee, the Holders and theirrespective successors, transferees and assigns hereunder, any benefit or anylegal or equitable rights, remedy or claim under this Guarantee. This Guaranteeshall be binding upon the Guarantor, its successors and assigns, and inure,together with the rights and remedies of Trustee hereunder, to the benefit ofTrustee, the Holders and their respective successors, transferees and assigns.The Guarantor shall not, without the prior written consent of Trustee, assignany rights, duties or obligations under this Guarantee.

 

(b)           Notices. All notices, demands and other communicationshereunder shall be given and shall be effective in accordance with theIndenture, except that notices to the Guarantor shall be given to its addressset forth on the signature page hereof, or to such other address as theGuarantor may specify in writing from time to time to the Trustee.

 

(c)           Amendments. Neither this Guarantee nor any provision hereof maybe amended, modified, waived, discharged or terminated other than pursuant tothe provisions of the Indenture.

 

(d)           No Personal Liability of Directors Officers EmployeesPartners and Stockholders. No past, present or future director, officer, employee, incorporator,partner or stockholder of the Guarantor, as such, shall have any liability forany obligations of the Guarantor under this Guarantee or for any claim basedon, in respect of, or by reason of, this

 

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Guarantee. Each Holder by accepting a Note has waived and released allsuch liability. The waiver and release are part of the consideration forissuance of this Guarantee.

 

(e)           Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUTREGARD TO PRINCIPLES OF CONFLICTS OF LAWS, SHALL GOVERN AND BE USED TO CONSTRUETHIS GUARANTEE.

 

(f)            No Adverse Interpretation of Other Agreements. This Guarantee may not be used tointerpret any other guarantee, indenture, loan or debt agreement of theIssuers, the Guarantor or their respective Subsidiaries or of any other Person.Any such guarantee, indenture, loan or debt agreement may not be used tointerpret this Guarantee.

 

(g)           Successors. All agreements of the Guarantor in this Guaranteeshall bind its successors.  Allagreements of the Trustee in this Guarantee shall bind its successors.

 

(h)           Severability. In case any provision in this Guarantee shall beinvalid, illegal or unenforceable, the validity, legality and enforceability ofthe remaining provisions shall not in any way be affected or impaired thereby.

 

(i)            Counterpart Originals. The parties may sign any number of copies of thisGuarantee. Each signed copy shall be an original, but all of them togetherrepresent the same agreement.

 

(j)            Headings, etc. The headings of the sections of this Guarantee havebeen inserted for convenience of reference only, are not to be considered apart of this Guarantee and shall in no way modify or restrict any of the termsor provisions hereof.

 

**[Signature Pages Follow]**

 

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IN WITNESS WHEREOF, theundersigned Guarantor has caused this instrument to be duly executed anddelivered to the Trustee as of the date first above written.

 
|   | **[GUARANTOR]** |
|--------|-----------------|
|   |            |
|   | **[Address]**   |
|   |            |
|   |            |
|   | By:             |   |   |
|   |            | Name: |
|   |            | Title: |

 

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