Exhibit 10.2


 




 





 


DIAMOND JO WORTH, LLC


 


AND


 


DIAMOND JO WORTH CORP.


 


(as Issuers)


 


$40,000,000

11% Senior Secured Notes due 2012


 


 


INDENTURE


 


Dated as of July 19, 2005


 


 


U.S. BANK NATIONAL ASSOCIATION


 


(as Trustee)


 




 





 





















 


TABLE OF
CONTENTS


 


	
  ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
  SECTION 1.1

  	
  DEFINITIONS

  	
   

  
	
  SECTION
  1.2

  	
  OTHER
  DEFINITIONS

  	
   

  
	
  SECTION
  1.3

  	
  INCORPORATION
  BY REFERENCE OF TRUST INDENTURE ACT

  	
   

  
	
  SECTION
  1.4

  	
  RULES
  OF CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II THE NOTES

  	
   

  
	
  SECTION
  2.1

  	
  FORM
  AND DATING

  	
   

  
	
  SECTION
  2.2

  	
  EXECUTION
  AND AUTHENTICATION

  	
   

  
	
  SECTION
  2.3

  	
  REGISTRAR,
  PAYING AGENT AND DEPOSITARY

  	
   

  
	
  SECTION
  2.4

  	
  PAYING
  AGENT TO HOLD MONEY IN TRUST

  	
   

  
	
  SECTION
  2.5

  	
  HOLDER
  LISTS

  	
   

  
	
  SECTION
  2.6

  	
  TRANSFER
  AND EXCHANGE

  	
   

  
	
  SECTION
  2.7

  	
  REPLACEMENT
  NOTES

  	
   

  
	
  SECTION
  2.8

  	
  OUTSTANDING
  NOTES

  	
   

  
	
  SECTION
  2.9

  	
  TREASURY
  NOTES

  	
   

  
	
  SECTION
  2.10

  	
  TEMPORARY
  NOTES

  	
   

  
	
  SECTION
  2.11

  	
  CANCELLATION

  	
   

  
	
  SECTION
  2.12

  	
  DEFAULTED
  INTEREST

  	
   

  
	
  SECTION
  2.13

  	
  CUSIP
  NUMBERS

  	
   

  
	
  SECTION
  2.14

  	
  ISSUANCE
  OF ADDITIONAL NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REDEMPTION

  	
   

  
	
  SECTION
  3.1

  	
  NOTICES
  TO TRUSTEE

  	
   

  
	
  SECTION
  3.2

  	
  SELECTION
  OF NOTES TO BE REDEEMED

  	
   

  
	
  SECTION
  3.3

  	
  NOTICE
  OF REDEMPTION

  	
   

  
	
  SECTION
  3.4

  	
  EFFECT
  OF NOTICE OF REDEMPTION

  	
   

  
	
  SECTION
  3.5

  	
  DEPOSIT
  OF REDEMPTION PRICE

  	
   

  
	
  SECTION
  3.6

  	
  NOTES
  REDEEMED IN PART

  	
   

  
	
  SECTION
  3.7

  	
  OPTIONAL
  REDEMPTION

  	
   

  
	
  SECTION
  3.8

  	
  REGULATORY
  REDEMPTION

  	
   

  
	
  SECTION
  3.9

  	
  NO
  MANDATORY REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV COVENANTS

  	
   

  
	
  SECTION
  4.1

  	
  PAYMENT
  OF NOTES

  	
   

  
	
  SECTION
  4.2

  	
  MAINTENANCE
  OF OFFICE OR AGENCY

  	
   

  
	
  SECTION
  4.3

  	
  SEC
  REPORTS AND REPORTS TO HOLDERS

  	
   

  
	
  SECTION
  4.4

  	
  COMPLIANCE
  CERTIFICATE

  	
   

  
	
  SECTION
  4.5

  	
  TAXES

  	
   

  
	
  SECTION
  4.6

  	
  STAY,
  EXTENSION AND USURY LAWS

  	
   

  
	
  SECTION
  4.7

  	
  LIMITATION
  ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND DISQUALIFIED EQUITY INTERESTS

  	
   

  
	
  SECTION
  4.8

  	
  LIMITATION
  ON LIENS

  	
   

  



 


ii





















 


	
  SECTION
  4.9

  	
  LIMITATION
  ON RESTRICTED PAYMENTS

  	
   

  
	
  SECTION
  4.10

  	
  LIMITATION
  ON RESTRICTIONS ON SUBSIDIARY DIVIDENDS

  	
   

  
	
  SECTION
  4.11

  	
  ADDITIONAL
  COLLATERAL

  	
   

  
	
  SECTION
  4.12

  	
  LIMITATION
  ON TRANSACTIONS WITH AFFILIATES

  	
   

  
	
  SECTION
  4.13

  	
  LIMITATION
  ON ASSET SALES

  	
   

  
	
  SECTION
  4.14

  	
  RESTRICTION
  ON SALE AND ISSUANCE OF SUBSIDIARY STOCK

  	
   

  
	
  SECTION
  4.15

  	
  REPURCHASE
  UPON A CHANGE OF CONTROL

  	
   

  
	
  SECTION
  4.16

  	
  SUBSIDIARY
  GUARANTORS

  	
   

  
	
  SECTION
  4.17

  	
  LIMITATION
  ON STATUS AS INVESTMENT COMPANY

  	
   

  
	
  SECTION
  4.18

  	
  MAINTENANCE
  OF PROPERTIES AND INSURANCE

  	
   

  
	
  SECTION
  4.19

  	
  CORPORATE
  EXISTENCE

  	
   

  
	
  SECTION
  4.20

  	
  RESTRICTIONS
  ON ACTIVITIES OF DJW CORP

  	
   

  
	
  SECTION
  4.21

  	
  ENTITY
  CLASSIFICATION

  	
   

  
	
  SECTION
  4.22

  	
  RULE
  144A INFORMATION

  	
   

  
	
  SECTION
  4.23

  	
  LIMITATION
  ON USE OF PROCEEDS

  	
   

  
	
  SECTION
  4.24

  	
  GAMING
  LICENSES AND OTHER PERMITS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V SUCCESSORS

  	
   

  
	
  SECTION
  5.1

  	
  MERGER,
  CONSOLIDATION OR SALE OF ASSETS

  	
   

  
	
  SECTION
  5.2

  	
  SUCCESSOR
  CORPORATION SUBSTITUTED

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI DEFAULTS AND REMEDIES

  	
   

  
	
  SECTION
  6.1

  	
  EVENTS
  OF DEFAULT

  	
   

  
	
  SECTION
  6.2

  	
  ACCELERATION

  	
   

  
	
  SECTION
  6.3

  	
  OTHER
  REMEDIES

  	
   

  
	
  SECTION
  6.4

  	
  WAIVER
  OF DEFAULTS

  	
   

  
	
  SECTION
  6.5

  	
  CONTROL
  BY MAJORITY

  	
   

  
	
  SECTION
  6.6

  	
  LIMITATION
  ON SUITS

  	
   

  
	
  SECTION
  6.7

  	
  RIGHTS
  OF HOLDERS OF NOTES TO RECEIVE PAYMENT

  	
   

  
	
  SECTION
  6.8

  	
  COLLECTION
  SUIT BY TRUSTEE

  	
   

  
	
  SECTION
  6.9

  	
  TRUSTEE
  MAY FILE PROOFS OF CLAIM

  	
   

  
	
  SECTION
  6.10

  	
  PRIORITIES

  	
   

  
	
  SECTION
  6.11

  	
  UNDERTAKING
  FOR COSTS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII TRUSTEE

  	
   

  
	
  SECTION
  7.1

  	
  DUTIES
  OF TRUSTEE

  	
   

  
	
  SECTION
  7.2

  	
  RIGHTS
  OF TRUSTEE

  	
   

  
	
  SECTION
  7.3

  	
  INDIVIDUAL
  RIGHTS OF TRUSTEE

  	
   

  
	
  SECTION
  7.4

  	
  TRUSTEE’S
  DISCLAIMER

  	
   

  
	
  SECTION
  7.5

  	
  NOTICE
  OF DEFAULTS

  	
   

  
	
  SECTION
  7.6

  	
  REPORTS
  BY TRUSTEE TO HOLDERS OF THE NOTES

  	
   

  
	
  SECTION
  7.7

  	
  COMPENSATION
  AND INDEMNITY

  	
   

  
	
  SECTION
  7.8

  	
  REPLACEMENT
  OF TRUSTEE

  	
   

  
	
  SECTION
  7.9

  	
  SUCCESSOR
  TRUSTEE BY MERGER, ETC.

  	
   

  
	
  SECTION
  7.10

  	
  ELIGIBILITY;
  DISQUALIFICATION

  	
   

  
	
  SECTION
  7.11

  	
  PREFERENTIAL
  COLLECTION OF CLAIMS AGAINST ISSUERS

  	
   

  



 


iii





















 


	
  ARTICLE VIII LEGAL DEFEASANCE AND COVENANT
  DEFEASANCE

  	
   

  
	
  SECTION
  8.1

  	
  OPTION
  TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE

  	
   

  
	
  SECTION
  8.2

  	
  LEGAL
  DEFEASANCE AND DISCHARGE

  	
   

  
	
  SECTION
  8.3

  	
  COVENANT
  DEFEASANCE

  	
   

  
	
  SECTION
  8.4

  	
  CONDITIONS
  TO LEGAL OR COVENANT DEFEASANCE

  	
   

  
	
  SECTION
  8.5

  	
  DEPOSITED
  MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS
  PROVISIONS

  	
   

  
	
  SECTION
  8.6

  	
  REPAYMENT
  TO ISSUERS

  	
   

  
	
  SECTION
  8.7

  	
  REINSTATEMENT

  	
   

  
	
  SECTION
  8.8

  	
  SATISFACTION
  AND DISCHARGE

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER

  	
   

  
	
  SECTION
  9.1

  	
  WITHOUT
  CONSENT OF HOLDERS OF NOTES

  	
   

  
	
  SECTION
  9.2

  	
  WITH
  CONSENT OF HOLDERS OF NOTES

  	
   

  
	
  SECTION
  9.3

  	
  COMPLIANCE
  WITH TRUST INDENTURE ACT

  	
   

  
	
  SECTION
  9.4

  	
  REVOCATION
  AND EFFECT OF CONSENTS

  	
   

  
	
  SECTION
  9.5

  	
  NOTATION
  ON OR EXCHANGE OF NOTES

  	
   

  
	
  SECTION
  9.6

  	
  TRUSTEE
  TO SIGN AMENDMENTS, ETC.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X COLLATERAL AND SECURITY

  	
   

  
	
  SECTION
  10.1

  	
  SECURITY
  DOCUMENTS; SECURITY INTERESTS

  	
   

  
	
  SECTION
  10.2

  	
  FURTHER
  ASSURANCES AND SECURITY

  	
   

  
	
  SECTION
  10.3

  	
  OPINIONS

  	
   

  
	
  SECTION
  10.4

  	
  RELEASE
  OF COLLATERAL

  	
   

  
	
  SECTION
  10.5

  	
  CERTIFICATES
  OF THE ISSUERS

  	
   

  
	
  SECTION
  10.6

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

  	
   

  
	
  SECTION
  10.7

  	
  AUTHORIZATION
  OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE SECURITY DOCUMENTS AND THE
  INTERCREDITOR AGREEMENT

  	
   

  
	
  SECTION
  10.8

  	
  INTERCREDITOR
  AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI SUBSIDIARY GUARANTIES

  	
   

  
	
  SECTION
  11.1

  	
  SUBSIDIARY
  GUARANTIES

  	
   

  
	
  SECTION
  11.2

  	
  EXECUTION
  AND DELIVERY OF SUBSIDIARY GUARANTIES

  	
   

  
	
  SECTION
  11.3

  	
  SUBSIDIARY
  GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS

  	
   

  
	
  SECTION
  11.4

  	
  SUBSIDIARY
  GUARANTY BY FUTURE RESTRICTED SUBSIDIARIES

  	
   

  
	
  SECTION
  11.5

  	
  RELEASE
  OF SUBSIDIARY GUARANTORS

  	
   

  
	
  SECTION
  11.6

  	
  LIMITATION
  OF SUBSIDIARY GUARANTOR’S LIABILITY; CERTAIN BANKRUPTCY EVENTS

  	
   

  
	
  SECTION
  11.7

  	
  APPLICATION
  OF CERTAIN TERMS AND PROVISIONS TO THE SUBSIDIARY GUARANTORS

  	
   

  



 


iv





















 


	
  ARTICLE XII MISCELLANEOUS

  	
   

  
	
  SECTION
  12.1

  	
  TRUST
  INDENTURE ACT CONTROLS

  	
   

  
	
  SECTION
  12.2

  	
  NOTICES

  	
   

  
	
  SECTION
  12.3

  	
  COMMUNICATION
  BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES

  	
   

  
	
  SECTION
  12.4

  	
  CERTIFICATE
  AND OPINION AS TO CONDITIONS PRECEDENT

  	
   

  
	
  SECTION
  12.5

  	
  STATEMENTS
  REQUIRED IN CERTIFICATE OR OPINION

  	
   

  
	
  SECTION
  12.6

  	
  RULES
  BY TRUSTEE AND AGENTS

  	
   

  
	
  SECTION
  12.7

  	
  LEGAL
  HOLIDAYS

  	
   

  
	
  SECTION
  12.8

  	
  NO
  PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS

  	
   

  
	
  SECTION
  12.9

  	
  GOVERNING
  LAW AND SUBMISSION TO JURISDICTION

  	
   

  
	
  SECTION
  12.10

  	
  NO
  ADVERSE INTERPRETATION OF OTHER AGREEMENTS

  	
   

  
	
  SECTION
  12.11

  	
  SUCCESSORS

  	
   

  
	
  SECTION
  12.12

  	
  SEVERABILITY

  	
   

  
	
  SECTION
  12.13

  	
  COUNTERPART
  ORIGINALS

  	
   

  
	
  SECTION
  12.14

  	
  TABLE
  OF CONTENTS, HEADINGS, ETC.

  	
   

  



 


v





















 


CROSS-REFERENCE TABLE*


 


	
  TIA Section

  	
   

  	
   

  	
  Indenture
  Section

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  7.8; 7.10

  
	
  (b)

  	
   

  	
  7.8; 7.10; 12.2

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.5

  
	
  (b)

  	
   

  	
  12.3

  
	
  (c)

  	
   

  	
  12.3

  
	
  313(a)

  	
   

  	
  7.6

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  7.6, 7.7

  
	
  (c)

  	
   

  	
  7.5, 7.6; 12.2

  
	
  (d)

  	
   

  	
  7.6

  
	
  314(a)

  	
   

  	
  4.3; 4.4; 12.2

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  12.4

  
	
  (c)(2)

  	
   

  	
  12.4

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  10.5

  
	
  (e)

  	
   

  	
  12.5

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.1(b)

  
	
  (b)

  	
   

  	
  7.5; 12.2

  
	
  (c)

  	
   

  	
  7.1(a)

  
	
  (d)

  	
   

  	
  7.1(c)

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a)(last sentence)

  	
   

  	
  2.9

  
	
  (a)(1)(A)

  	
   

  	
  6.5

  
	
  (a)(1)(B)

  	
   

  	
  6.4

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.7

  
	
  (c)

  	
   

  	
  6.3

  
	
  317(a)(1)

  	
   

  	
  6.8

  
	
  (a)(2)

  	
   

  	
  6.9

  
	
  (b)

  	
   

  	
  2.4

  
	
  318(a)

  	
   

  	
  12.1

  
	
  (c)

  	
   

  	
  12.1

  



 










N.A. means not applicable


 


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


 


vi





















 


INDENTURE,
dated as of July 19, 2005, by and among Diamond Jo Worth, LLC, a Delaware
limited liability company, Diamond Jo Worth Corp., a Delaware corporation, and
U.S. Bank National Association, as trustee.


 


Each party agrees as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the 11% Senior Secured Notes due 2012 (the “Notes”):


 


ARTICLE I

DEFINITIONS AND INCORPORATION

BY REFERENCE


 


Section 1.1                                                              DEFINITIONS


 


“144A Global Note” means one or more Global Notes bearing the
Private Placement Legend, that shall be issued in an aggregate amount of
denominations equal in total to the outstanding principal amount of the Notes
sold in reliance on Rule 144A.


 


“501 Global Note” means one or more Global Notes bearing the
Private Placement Legend that shall be issued in an aggregate amount of
denominations equal in total to the outstanding principal amount of the Notes
sold to institutional “accredited investors” within the meaning of Rule
501(a)(1), (2), (3), or (7) of the Securities Act.


 


“Accrued Bankruptcy Interest” means, with respect to any
Indebtedness, all interest accruing thereon after the filing of a petition by
or against the Issuers or any of the Restricted Subsidiaries or any parent
under any Bankruptcy Law, in accordance with and at the rate (including any
rate applicable upon any default or event of default, to the extent lawful)
specified in the documents evidencing or governing such Indebtedness, whether
or not the claim for such interest is allowed as a claim after such filing in
any proceeding under such Bankruptcy Law.


 


“Acquired
Debt” means Indebtedness of a Person or any of its subsidiaries
existing at the time such Person is merged with or into the Company or a
Restricted Subsidiary, becomes a Restricted Subsidiary or Indebtedness assumed
in connection with the acquisition of assets from such Person other than
Indebtedness incurred in connection with, or in contemplation of, such Person
merging with or into the Company or a Restricted Subsidiary or becoming a Restricted
Subsidiary or such acquisition of assets.


 


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


 


“Affiliate”
of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person.  For purposes of this
definition, “control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”), as used with respect to any
Person, shall mean (a) the possession, directly 


 





















 


or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise or (b)
beneficial ownership of 10% or more of the voting securities of such Person.  Notwithstanding the foregoing, the Initial
Purchaser shall be deemed not to be an Affiliate of PGP, PGL, the Company or
any Restricted Subsidiary.


 


“Agent” means any Registrar, Paying Agent or co-registrar.


 


“Applicable Procedures” means, with respect
to any transfer or exchange of or for beneficial interests in any Global Note,
the rules and procedures of the Depositary, Euroclear and Clearstream that
apply to such transfer or exchange at the relevant time.


 


“Applicable
Capital Gain Tax Rate” means a rate equal to the sum of:


 


(a)           the highest marginal Federal income
tax rate applicable to net capital gain of an individual who is a citizen of
the United States, plus


 


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


 


“Applicable Income Tax Rate” means a rate equal to the sum
of:


 


(a)           the highest
marginal Federal ordinary income tax rate applicable to an individual who is a
citizen of the United States, plus


 


(b)           (x) the greater of (i) an amount
equal to the sum of the highest marginal state and local ordinary income tax
rates applicable to an individual who is a resident of the State of California,
and (ii) an amount equal to the sum of the highest marginal state and local
income tax rates applicable to net capital gain of an individual who is a
resident of the State of Iowa, multiplied by (y) a factor equal to 1 minus the
highest marginal Federal income tax rate described in clause (a) above.


 


“Asset Sale”
means:


 


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


 


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


 


2





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(9)           the
Undeveloped Hotel Land Contribution.


 


“Bankruptcy
Code” means the United States Bankruptcy Code, codified at 11 U.S.C.
§101-1330, as amended.


 


“Bankruptcy Law” means Title 11, U.S. Code, or any similar
Federal, state or foreign law for the relief of debtors.


 


“beneficial owner” has the meaning attributed to it in Rules
13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue Date),
whether or not applicable, except that a “person” shall be deemed to have “beneficial
ownership” of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time.


 


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


 


“Capital
Lease Obligation” means, as to any Person, the obligations of such
Person under a lease that are required to be classified and accounted for as
capital 


 


3





















 


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


 


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


 


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


 


“Cash
Equivalent” means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof); (ii) time deposits and certificates of deposit and commercial paper
issued by the parent corporation of any domestic commercial bank of recognized
standing having capital and surplus in excess of $250,000,000 and commercial
paper issued by others rated at least A-2 or the equivalent thereof by Standard
& Poor’s Corporation or at least P-2 or the equivalent thereof by Moody’s
Investors Service, Inc. and in each case maturing within one year after the
date of acquisition; (iii) investments in money market funds substantially all
of whose assets comprise securities of the type described in clauses (i) and
(ii) above and (iv) repurchase obligations for underlying securities of the
types and with the maturities described above.


 


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


 


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


 


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


 


4





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“consolidated” means, with respect
to the Company, the consolidation of the accounts of the Restricted
Subsidiaries with those of the Company, all in accordance with GAAP; provided, that “consolidated” shall not
include consolidation of the accounts of any Unrestricted Subsidiary with the
accounts of the Company.


 


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


 


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


 


5





















 


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


 


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


 


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


 


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


 


minus
(v) (x) extraordinary non-cash charges increasing such Consolidated Net Income
and (y) the amount of all cash payments made by such Person or any of the
Restricted Subsidiaries during such period to the extent such payments relate
to non-cash charges that were added back in determining Consolidated EBITDA for
such period or any prior period.


 


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


 


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


 


6





















 


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


 


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


 


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


 


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


 


7





















 


“Construction Disbursement Account” means the construction
disbursement account to be maintained by the Disbursement Agent and pledged to
the Trustee pursuant to the terms of the Cash Collateral and Disbursement
Agreement.


 


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


 


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


 


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


 


“Default”
means any event that is, or after notice or the passage of time or both would
be, an Event of Default.


 


“Definitive Note” means one or more certificated Notes
registered in the name of the Holder thereof and issued in accordance with
Section 2.6 hereof, substantially, in the form of Exhibit A hereto except that
such Note shall not include the information called for by footnotes 1 and 2
thereof.


 


“Depositary” means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.3
hereof as the Depositary with respect to the Notes, until a successor shall
have been appointed and become such pursuant to the applicable provisions of
this Indenture, and thereafter “Depositary” shall mean or include such
successor.


 


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


 


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


 


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


 


8





















 


Capital Stock
solely because such Equity Interests mature or become mandatorily redeemable,
or give the holders thereof the right to require the Company to repurchase such
Equity Interests, in each case, upon the occurrence of a change of control or
an asset sale shall not constitute Disqualified Capital Stock if the terms of
such Equity Interests provide that the Company may not repurchase or redeem any
such Equity Interests pursuant to such provisions prior to the Company’s
purchase of the Notes as are required to be purchased pursuant to the
provisions of Section 4.15 and Section 4.13.


 


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


 


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


 


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


 


“Equity
Holder” means (a) with respect to a corporation, each holder of
stock of such corporation, (b) with respect to a limited liability company or
similar entity, each member of such limited liability company or similar
entity, (c) with respect to a partnership, each partner of such partnership,
(d) with respect to any entity described in clause (a)(iv) of the definition of
“Flow Through Entity,” the owner of such entity, and (e) with respect to a
trust described in clause (a)(v) of the definition of “Flow Through Entity,” an
owner thereof.


 


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


 


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


 


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


 


“Event of
Loss” means, with respect to any property or asset, any (i) loss,
destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.


 


“Excess Cash
Distribution Amount for Taxes” means the excess of (x) the aggregate
actual cash distributions received by the Company or a Restricted Subsidiary
from all Flow Through Entities that are not Restricted
Subsidiaries of the Company 


 


9





















 


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


 


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


 


“Excluded Assets” means the following:


 


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


 


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


 


(iii)          all Gaming
Licenses;


 


(iv)          any motor
vehicles;


 


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


 


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


 


10





















 


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


 


“Excluded
Person” means (i) PGP, (ii) PGP Investors, LLC, (iii) M. Brent
Stevens, (iv) Michael S. Luzich, (v) PGL, (vi) OED Acquisition, LLC, a Delaware
limited liability company (“OEDA”), (vii)
any Affiliate or Manager of PGP, PGP Investors, LLC, PGL, OEDA, M. Brent
Stevens or Michael S. Luzich (collectively, the “Existing Holders”), (viii) any
trust, corporation, partnership or other entity (a) controlled by the Existing
Holders and members of the immediate family of the Existing Holders or (b) 80%
of the beneficiaries, stockholders, partners or owners of which consist solely
of the Existing Holders and members of the immediate family of the Existing
Holders or (ix) any partnership the sole general partners of which consist
solely of the Existing Holders and members of the immediate family of the
Existing Holders.


 


“fair market value” means the price that would be paid in an arm’s-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined in
good faith by the Issuers.


 


“FF&E”
means furniture, fixtures and equipment (including Gaming Equipment) acquired
by the Issuers and the Restricted Subsidiaries in the ordinary course of
business for use in the construction and business operations of the Company or
the Restricted Subsidiaries.


 


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


 


“Flow Through
Entity” means an entity that (a) for Federal income tax purposes
constitutes (i) an “S corporation” (as defined in Section 1361(a) of the Code),
(ii) a “qualified subchapter S subsidiary” (as defined in Section 1361(b)(3)(B)
of the Code), (iii) a “partnership” (within the meaning of Section 7701(a)(2)
of the Code) other than a “publicly traded partnership” (as defined in Section
7704 of the Code), (iv) an entity that is disregarded as an entity separate
from its owner under the Code, the Treasury regulations or any published
administrative guidance of the Internal Revenue Service, or (v) a trust, the
income of which is includible in the taxable income of the grantor or another
person under sections 671 through 679 of the Code (the entities 


 


11





















 


described in
the immediately preceding clauses (i), (ii), (iii), (iv) and (v), a “Federal Flow Through Entity”) and (b) for state and local
jurisdictions in respect of which Permitted Tax Distributions are being made,
is subject to treatment on a basis under applicable state or local income tax
law substantially similar to a Federal Flow Through Entity.


 


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


 


“Foreign
Subsidiary” means any Subsidiary which (i) is not organized under
the laws of the United States, any state thereof or the District of Columbia
and (ii) conducts substantially all of its business operations outside the
United States of America.


 


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


 


“Gaming
Authorities” means any agency, authority, board, bureau, commission,
department, office or instrumentality of any nature whatsoever of the United
States Federal government, any foreign government, any state, province or city
or other political subdivision or otherwise, whether now or hereafter existing,
or any officer or official thereof, including, without limitation, the Iowa
Gaming Commission and any other agency, in each case, with authority to
regulate any gaming or racing operation (or proposed gaming or racing
operation) owned, managed or operated by the Company or any of the
Subsidiaries.


 


“Gaming
Equipment” means slot machines, video poker machines, and all other
gaming equipment and related signage, accessories and peripheral equipment,
including, but not limited to surveillance equipment.


 


“Gaming
FF&E Financing” means FF&E Financing, the proceeds of which
are used solely by the Issuers and the Restricted Subsidiaries to acquire or
lease FF&E that constitutes Gaming Equipment.


 


“Gaming
Licenses” means every material license, material franchise, material
registration, material qualification, findings of suitability or other material
approval or authorization required to own, lease, operate or otherwise conduct
or manage riverboat, dockside or land-based gaming or racing activities in any
state or jurisdiction in which the Company or any of the Restricted
Subsidiaries conducts business (including, without limitation, all such
licenses granted by the Gaming Authorities), and all applicable liquor and
tobacco licenses.


 


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


 


12





















 


hereto as Exhibit A, issued under this
Indenture, that is deposited with or on behalf of and registered in the name of
the Depositary or its nominee.


 


“Global Note Legend” means the legend set forth in Section
2.6(f)(ii) hereof, which is required to be placed on
all Global Notes issued under this Indenture.


 


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


 


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


 


“guaranty” or “guarantee,”
used as a noun, means any guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness or other Obligation. “guarantee” or “guaranty”
used as a verb, has a correlative meaning.


 


“Hedging
Obligations” means, with respect to any Person, the Obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements, interest rate exchange agreements and interest rate collar
agreements and (ii) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates, including any arrangement
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a fixed or floating
rate of interest on a stated notional amount in exchange for periodic payments
made by such Person calculated by applying a fixed or floating rate of interest
on the same notional amount.


 


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


 


13





















 


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


 


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


 


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


 


“Indirect Participant” means an entity that, with respect to
DTC, clears through or maintains a direct or indirect, custodial relationship
with a Participant.


 


“Initial Purchaser” mean the initial purchaser of the Notes
under the Purchase Agreement, dated June 30, 2005.


 


“Institutional Accredited Investor” means an institution that
is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, who is not also a QIB.


 


“Intercreditor Agreement” means that certain Intercreditor
Agreement among the Trustee, and one or more Senior Credit Facility lenders,
substantially in the form attached hereto as Exhibit F, which may be
entered into after the Issue Date in 


 


14





















 


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


 


“Interest” means the interest payable on the Notes.


 


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


 


“Interest Payment Date” means the stated due date of an
installment of Interest on the Notes.


 


“Interest Record Date” means a
Interest Record Date specified in the Notes, whether or not such date is a Business
Day.


 


“Interest Reserve Account” means the interest reserve account to be maintained by the
Disbursement Agent and pledged to the Trustee pursuant to the terms of 


 


15





















 


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


 


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


 


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


 


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


 


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


 


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


 


“Legal
Holiday” means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed.


 


“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind, regardless of whether filed, recorded or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement, any lease in the nature thereof, any option or
other agreement to sell or give a security interest in and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).


 


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


 


16





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


17





















 


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


 


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


 


(iv)          appropriate amounts provided as a
reserve by the Company or any Restricted Subsidiary, in accordance with GAAP,
against any liabilities associated with such Asset Sale and retained by the
Company or such Restricted Subsidiary, as the case may be, after such Asset
Sale (including, without limitation, as applicable, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations arising from such
Asset Sale).


 


“Non-U.S. Person” means any Person other than a U.S. Person.


 


“Notes Custodian” means the Trustee, as custodian with
respect to the Notes in global form, or any successor entity thereto.


 


“Obligation”
means any principal, premium, interest, penalty, fee, indemnification,
reimbursement, damage (including, without limitation, liquidated damages) and
other obligation and liability payable under the documentation governing any
liability.


 


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


 


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


 


“Officer” means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary, any Assistant Secretary or any Vice President of
such Person or any other Person designated by the Managers of such Person and
serving in a similar capacity.


 


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


 


18





















 


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


 


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


 


“Participant” means, with respect to the Depositary,
Euroclear or Clearstream, a Person who has an account with the Depositary,
Euroclear or Clearstream, respectively (and, with respect to DTC, shall include
Euroclear and Clearstream).


 


“Permitted
C-Corp Conversion” means a transaction resulting in the Company
becoming subject to tax under the Code as a corporation (a “C Corporation”); provided, that:


 


(1)           the C Corporation resulting from such
transaction, if a successor to the Company, (a) is a corporation, limited
liability company or other entity organized and existing under the laws of any
state of the United States or the District of Columbia, (b) assumes all of
the obligations of the Company under the Notes, the Security Documents and this
Indenture pursuant to a supplemental indenture in form reasonably satisfactory
to the Trustee and (c) shall have Consolidated Net Worth immediately after
the transaction equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the transaction;


 


(2)           after giving
effect to such transaction no Default or Event of Default exists;


 


(3)           prior to the consummation of such
transaction, the Company shall have delivered to the Trustee (a) an
Opinion of Counsel to the effect that the Holders shall not recognize income
gain or loss for Federal income tax purposes as a result of such Permitted
C-Corp Conversion and shall be subject to Federal income tax on the same
amounts, in the same manner, and at the same times as would have been the case
if such Permitted C-Corp Conversion had not occurred and (b) an Officers’
Certificate as to compliance with all of the conditions set forth in clauses
(1), (2) and (3)(a) above; and


 


(4)           such transaction would not (a) result
in the loss or suspension or material impairment of any Gaming License unless a
comparable replacement Gaming License is effective prior to or simultaneously
with such loss, suspension or material impairment or (b) require any holder or
beneficial owner of Notes to obtain a Gaming License or be qualified or found
suitable under any applicable gaming or racing laws.


 


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


 


19





















 


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


 


“Permitted
Investments” means:


 


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


 


(ii)           Investments in Cash Equivalents;


 


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


 


(iv)          Hedging
Obligations;


 


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


 


(vi)          Investments
existing on the Issue Date;


 


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


 


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


 


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


 


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


 


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


 


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


 


20





















 


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


 


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


 


“Permitted
Liens” means:


 


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


 


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


 


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


 


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


 


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


 


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


 


21





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


22





















 


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


 


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


 


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


 


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


 


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


 


(xix)         leases or subleases granted to others
not interfering in any material respect with the business of the Company or any
of the Restricted Subsidiaries or materially detracting from the value of the
relative assets of the Company or any Restricted Subsidiary;


 


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


 


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


 


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


 


(xxiii)       Liens upon specific items of inventory or
other goods and proceeds of any Person securing such Person’s obligations in
respect of bankers’ acceptances issued or created for the account of such
Person to facilitate the purchase, shipment or storage of such inventory or
other goods.


 


“Permitted
Tax Distributions” in respect of the Company means, with respect to
any taxable year or portion thereof in which the Company is a Flow Through
Entity, the sum of: (i) the product of (a) the excess of (1) all items of
taxable income or gain (other than capital gain) of the Company for such year
or portion thereof over (2) all items of taxable deduction or loss (other than
capital loss) of the Company for such year or portion thereof and (b) the
Applicable Income Tax Rate, plus (ii) the product of (a) the net capital gain
(i.e., net long-term capital gain over net short-term capital loss), if any, of
the Company for such year 


 


23





















 


or portion
thereof and (b) the Applicable Capital Gain Tax Rate, plus (iii) the product of
(a) the net short-term capital gain (i.e., net short-term capital gain in
excess of net long-term capital loss), if any, of the Company for such year or
portion thereof and (b) the Applicable Income Tax Rate, minus (iv) the
aggregate Tax Loss Benefit Amount for the Company for such year or portion
thereof; provided, that in no event shall the
Applicable Income Tax Rate or the Applicable Capital Gain Tax Rate exceed the
greater of (i) the greater of (a) the highest aggregate applicable effective
marginal rate of Federal, state, and local income tax to which a corporation
doing business in the state of California and (b) the highest aggregate
applicable effective marginal rate of Federal, state, and local income tax to
which a corporation doing business in the state of Iowa, would be subject to in
the relevant year of determination (as certified to the Trustee by a nationally
recognized tax accounting firm) plus 5% and (ii) 60%.  For purposes of calculating the amount of the
Permitted Tax Distributions the items of taxable income, gain, deduction or
loss (including capital gain or loss) of any Flow Through Entity of which the
Company is treated for Federal income tax purposes as a member (but only for
periods for which such Flow Through Entity is treated as a Flow Through
Entity), which items of income, gain, deduction or loss are allocated to or
otherwise treated as items of income, gain, deduction or loss of the Company
for Federal income tax purposes, shall be included in determining the taxable
income, gain, deduction or loss (including capital gain or loss) of the
Company.


 


Estimated tax distributions may
be made within thirty days following March 15, May 15, August 15, and December
15 based upon an estimate of the excess of (x) the tax distributions that would
be payable for the period beginning on January 1 of such year and ending on
March 31, May 31, August 31, and December 31 if such period were a taxable year
(computed as provided above) over (y) distributions attributable to all prior
periods during such taxable year.


 


The amount of the Permitted Tax
Distribution for a taxable year shall be re-computed promptly after (i) the
filing by the Company and each subsidiary of the Company that is treated as a
Flow Through Entity of their respective annual income tax returns and (ii) an
appropriate Federal or state taxing authority finally determines that the
amount of the items of taxable income, gain, deduction, or loss of the Company
or any such subsidiary that is treated as a Flow Through Entity for such
taxable year or the aggregate Tax Loss Benefit Amount carried forward to such
taxable year should be adjusted (each of clauses (i) and (ii) a “Tax Calculation Event”). 
To the extent that the Permitted Tax Distributions previously
distributed in respect of any taxable year are either greater than (a “Tax Distribution Overage”) or less than (a “Tax Distribution Shortfall”) the Permitted Tax Distributions
with respect to such taxable year, as determined by reference to the
computation of the amount of the items of income, gain, deduction, or loss of
the Company and each such subsidiary in connection with a Tax Calculation
Event, the amount of the estimated Permitted Tax Distributions that may be made
on the estimated tax distribution date immediately following such Tax
Calculation Event shall be reduced or increased as appropriate to the extent of
the Tax Distribution Overage or the Tax Distribution Shortfall.  To the extent that a Tax Distribution Overage
remains after the estimated tax distribution date immediately following such
Tax Calculation Event, the amount of the estimated Permitted Tax Distribution
that may be made on the subsequent estimated tax distribution date shall be
reduced to the extent of such Tax Distribution Overage.


 


24





















 


Prior to
making any Permitted Tax Distributions, the Company shall require each Equity
Holder to agree that promptly after the second estimated tax distribution date
following a Tax Calculation Event, such Equity Holder shall reimburse the
Company to the extent of its pro rata share
(based on the portion of Permitted Tax Distributions distributed to such Equity
Holder for the taxable year) of any remaining Tax Distribution Overage.


 


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


 


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


 


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


 


“Private Placement Legend” means the legend
set forth in Section 2.6(f)(i) hereof to be placed on all Notes issued under
this Indenture except where specifically stated otherwise by the provisions of
this Indenture.


 


“Pro Forma” or “pro forma” shall have the meaning set forth in Regulation
S-X of the Securities Act, unless otherwise specifically stated herein.


 


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


 


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


 


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


 


25





















 


“Reg S Permanent Global Note” means one or
more permanent Global Notes bearing the Private Placement Legend, that shall be
issued in an aggregate amount of denominations equal in total to the
outstanding principal amount of the Reg S Temporary Global Note upon expiration
of the Distribution Compliance Period.


 


“Reg S Temporary Global Note” means one or
more temporary Global Notes bearing the Private Placement Legend and the Reg S
Temporary Global Note Legend, issued in an aggregate amount of denominations
equal in total to the outstanding principal amount of the Notes initially sold
in reliance on Rule 903 of Regulation S.


 


“Reg S Temporary Global Note Legend” means
the legend set forth in Section 2.6(f)(iii) hereof, which is required to be
placed on all Reg S Temporary Global Notes issued under this Indenture.


 


“Regulation S” means Regulation S
promulgated under the Securities Act, as it may be amended from time to time,
and any successor provision thereto.


 


“Regulation S Global Note” means a Reg S
Temporary Global Note or a Reg S Permanent Global Note, as the case may be.


 


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


 


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


 


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


 


26





















 


“Restricted Definitive Note” means one or
more Definitive Notes bearing the Private Placement Legend, issued under this
Indenture.


 


“Restricted Global Note” means one or more
Global Notes bearing the Private Placement Legend, issued under this Indenture;
provided, that in no case shall
an Exchange Note issued in accordance with this Indenture and the terms of the
Registration Rights Agreement be a Restricted Global Note.


 


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


 


“Restricted Payments” means:


 


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


 


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


 


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


 


(iv)          any Restricted Investment.


 


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


 


“Return from Unrestricted Subsidiaries” means (a) 50% of any
dividends or distributions received by the Company or a Restricted Subsidiary
from an Unrestricted Subsidiary, to the extent that such dividends or
distributions were not otherwise included in Consolidated Net Income of the
Company, plus (b) to the extent not otherwise included in Consolidated Net
Income of the Company, an amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from (i) repayments of the principal of
loans or advances or other transfers of assets to the Company or any Restricted
Subsidiary from Unrestricted Subsidiaries or (ii) the sale or liquidation of
any Unrestricted Subsidiaries, plus (c) to the extent that any Unrestricted
Subsidiary of the 


 


27





















 


Company is designated to be a Restricted Subsidiary, the fair market
value of the Company’s Investment in such Subsidiary on the date of such
designation.


 


“Rule 144” means Rule 144 promulgated under
the Securities Act, as it may be amended from time to time, and any successor
provision thereto.


 


“Rule 144A” means Rule 144A promulgated
under the Securities Act, as it may be amended from time to time, and any
successor provision thereto.


 


“SEC” means the United States Securities
and Exchange Commission, or any successor agency.


 


“Secured Party” means the Trustee, acting
as collateral agent under the Security Documents.


 


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


 


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


 


“Security Documents” means, collectively, the Cash Collateral
and Disbursement Agreement, the Security Agreement, the Mortgages and all
mortgages, deeds of trust, security agreements, pledge agreements, control
agreements, collateral assignment agreements and other agreements, instruments,
financing statements and other documents evidencing, creating, setting forth or
limiting any Lien on Collateral in favor of the Trustee (or, in the case of
mortgages, deeds of trust or similar agreements, in favor of the Trustee or
another trustee thereunder), for the benefit of the Holders.


 


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


 


“Significant Subsidiary” shall have the meaning provided
under Regulation S-X of the Securities Act, as in effect on the Issue Date.


 


“Special Record Date” means, for payment of
any Defaulted Interest, a date fixed by the Paying Agent pursuant to Section
2.12 hereof.


 


28





















 


“S&P” means Standard & Poor’s
Ratings Services, a division of The McGraw-Hill Companies, and its successors.


 


“Stated Maturity,” when used with respect
to any Note, means April 15, 2012.


 


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


 


“Subsidiary” means any subsidiary of the
Company.


 


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


 


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


 


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


 


“TIA” means the Trust Indenture Act of 1939
(15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.


 


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


 


“Transfer Restricted Notes” means Global
Notes and Definitive Notes that bear or are required to bear the Private
Placement Legend, issued under this Indenture.


 


“Trustee” means U.S. Bank National
Association, as trustee under this Indenture, until a successor replaces it in
accordance with the applicable provisions of this Indenture and thereafter
means such successor serving hereunder.


 


29





















 


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


 


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


 


“Unrestricted Definitive Note” means one or
more Definitive Notes that do not bear and are not required to bear the Private
Placement Legend, issued under this Indenture.


 


“Unrestricted Global Note” means one or
more permanent Global Notes representing a series of Notes that does not bear
and is not required to bear the Private Placement Legend, issued under this
Indenture.


 


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


 


30





















 


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


 


“Upper Tier Equity Holder” means, in the case of any Flow
Through Entity the Equity Holder of which is, in turn, a Flow Through Entity,
the person that is ultimately subject to tax on a net income basis on the items
of taxable income, gain, deduction, and loss of the Company and the
Subsidiaries that are Flow Through Entities.


 


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


 


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


 


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


 


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


 


Section 1.2                                                              OTHER
DEFINITIONS


 


	
  Term

  	
   

  	
  Defined in Section

  
	
  “Affiliate Transaction”

  	
   

  	
  4.12

  
	
  “Authentication Order”

  	
   

  	
  2.2

  
	
  “Benefited Party”

  	
   

  	
  11.1

  
	
  “C Corporation”

  	
   

  	
  Definition of
  Permitted C-Corp Conversion

  
	
  “Change of Control Offer”

  	
   

  	
  4.15

  
	
  “Change of Control Payment”

  	
   

  	
  4.15

  
	
  “Change of Control Payment Date”

  	
   

  	
  4.15

  



 


31





















 


	
  “Covenant Defeasance”

  	
   

  	
  8.3

  
	
  “Defaulted Interest”

  	
   

  	
  2.12

  
	
  “DTC”

  	
   

  	
  2.3

  
	
  “Event of Default”

  	
   

  	
  6.1

  
	
  “Excess Proceeds”

  	
   

  	
  4.13

  
	
  “Excess Proceeds Offer”

  	
   

  	
  4.13

  
	
  “Excess Proceeds Offer Period”

  	
   

  	
  4.13

  
	
  “Existing Holders”

  	
   

  	
  Definition of
  Excluded Person

  
	
  “Federal Flow Through Entity”

  	
   

  	
  Definition of Flow
  Through Entity

  
	
  “incur”

  	
   

  	
  4.7

  
	
  “Investment Company Act”

  	
   

  	
  4.17

  
	
  “Legal Defeasance”

  	
   

  	
  8.2

  
	
  “Notes”

  	
   

  	
  Preamble

  
	
  “Paying Agent”

  	
   

  	
  2.3

  
	
  “Purchase Amount”

  	
   

  	
  4.13

  
	
  “Refinance”

  	
   

  	
  4.7

  
	
  “Refinancing Indebtedness”

  	
   

  	
  4.7

  
	
  “Registrar”

  	
   

  	
  2.3

  
	
  “Subsidiary Guaranty Obligations”

  	
   

  	
  11.1

  
	
  “Tax Calculation Event”

  	
   

  	
  Definition of
  Permitted Tax Distributions

  
	
  “Tax Distribution Overage”

  	
   

  	
  Definition of
  Permitted Tax Distributions

  
	
  “Tax Distribution Shortfall”

  	
   

  	
  Definition of
  Permitted Tax Distributions

  



 


Section 1.3                                                              INCORPORATION
BY REFERENCE OF TRUST INDENTURE ACT


 


Whenever this
Indenture refers to a provision of the TIA, such provision is incorporated by
reference in and made a part of this Indenture.


 


The following
TIA terms used in this Indenture have the following meanings:


 


“Commission” means the SEC; and


 


“obligor” on the Notes means each of the
Issuers, each Subsidiary Guarantor and any successor obligor upon the Notes.


 


All other
terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them.


 


Section 1.4                                                              RULES
OF CONSTRUCTION


 


Unless the
context otherwise requires:


 


(1)           a term has the meaning assigned to
it;


 


(2)           an accounting term not otherwise
defined has the meaning assigned to it in accordance with GAAP;


 


32





















 


(3)           “or” is not exclusive;


 


(4)           words in the singular include the
plural, and in the plural include the singular;


 


(5)           provisions apply to successive events
and transactions;


 


(6)           “herein,” “hereof” and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;


 


(7)           references to sections of or rules
under the Securities Act and the Exchange Act shall be deemed to include
substitute, replacement of successor sections or rules adopted by the SEC from
time to time; and


 


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


 


ARTICLE II

THE NOTES


 


Section 2.1                                                              FORM
AND DATING


 


(a)           General.  The Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A hereto.


 


The Notes may
have notations, legends or endorsements required by law, stock exchange rule,
depository rule or usage.  Each Note
shall be dated the date of its issuance and shall show the date of its
authentication.  The Notes shall be in
denominations of $1,000 and integral multiples thereof.


 


The terms and
provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture and each of the Issuers, the Subsidiary
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.  However, to the extent any provision of any
Note conflicts with the express provisions of this Indenture, the provisions of
this Indenture shall govern and be controlling.


 


(b)           Global
Notes.  Notes issued in global
form shall be substantially in the form of Exhibit A attached hereto (including
the Global Note Legend thereon and the “Schedule of Exchanges of Interests in
the Global Note” attached thereto). 
Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the “Schedule of Exchanges of Interests in the Global Note” attached
thereto).  Each Global Note shall
represent such of the outstanding Notes as shall be specified therein and each
shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to 


 


33





















 


reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the Notes
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.6 hereof.


 


(c)           Euroclear
and Clearstream Procedures Applicable.  The provisions of the “Operating Procedures
of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear”
and the “General Terms and Conditions of Clearstream Banking Luxembourg” and “Customer
Handbook” of Clearstream Banking Luxembourg in effect at the relevant time
shall be applicable to transfers of beneficial interests in the Regulation S
Global Notes that are held by Participants through Euroclear or Clearstream
Banking Luxembourg.


 


Section 2.2                                                              EXECUTION
AND AUTHENTICATION


 


Two Officers
shall sign the Notes for each of the Issuers by manual or facsimile
signature.  In the case of Definitive
Notes, such signatures may be imprinted or otherwise reproduced on such Notes.  If an Officer whose signature is on a Note no
longer holds that office at the time a Note is authenticated, the Note shall
nevertheless be valid.  A Note shall not
be valid until authenticated by the manual signature of the Trustee.  The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.  The Trustee shall, upon a written order of
the Issuers signed by an Officer (an “Authentication
Order”), authenticate Notes for issuance up to the aggregate
principal amount stated in such Authentication Order; provided that Notes authenticated for
issuance on the Issue Date shall not exceed $40,000,000 in aggregate principal
amount.  The Trustee may appoint an
authenticating agent acceptable to the Issuers to authenticate Notes. An
authenticating agent may authenticate Notes whenever the Trustee may do
so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights
as an Agent to deal with Holders or an Affiliate of the Issuers.


 


Section 2.3                                                              REGISTRAR,
PAYING AGENT AND DEPOSITARY


 


The Issuers
shall maintain an office or agency in the Borough of Manhattan, The City of New
York, which shall initially be U.S. Bank National Association, where (i) Notes
may be presented for registration of transfer or for exchange (“Registrar”) and (ii) Notes may be
presented for payment (“Paying Agent”).  The Registrar shall keep a register of the
Notes and of their transfer and exchange. 
The Issuers may appoint one or more co-registrars and one or more
additional paying agents.  The term “Registrar” includes any co-registrar and
the term “Paying Agent” includes
any additional paying agent.  The Issuers
may change any Paying Agent or Registrar without notice to any Holder.  The Issuers shall notify the Trustee in
writing of the name and address of any Agent not a party to this
Indenture.  If the Issuers fail to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such.  The Company or any of
its subsidiaries may act as Paying Agent or Registrar.  The Issuers initially appoint The Depository
Trust Company (“DTC”) to act as
Depositary with 


 


34





















 


respect to the Global Notes.  The
Issuers initially appoint the Trustee to act as the Registrar and Paying Agent
and to act as Notes Custodian with respect to the Global Notes.


 


Section 2.4                                                              PAYING
AGENT TO HOLD MONEY IN TRUST


 


The Issuers
shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent shall hold in trust for the benefit of Holders or the Trustee
all money held by the Paying Agent for the payment of principal, premium or
Interest on the Notes, and shall notify the Trustee of any default by the
Issuers in making any such payment. 
While any such default continues, the Trustee may require a Paying Agent
to pay all money held by it to the Trustee. 
The Issuers at any time may require a Paying Agent to pay all money held
by it to the Trustee.  Upon payment over
to the Trustee, the Paying Agent (if other than the Company or one of its
subsidiaries) shall have no further liability for the money.  If the Company or one of its subsidiaries
acts as Paying Agent, it shall segregate and hold in a separate trust fund for
the benefit of the Holders all money held by it as Paying Agent.  Upon any bankruptcy or reorganization
proceedings relating to the Issuers, the Trustee shall serve as Paying Agent
for the Notes.


 


Section 2.5                                                              HOLDER
LISTS


 


The Trustee
shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of all Holders and shall
otherwise comply with TIA § 312(a).  If
the Trustee is not the Registrar, the Issuers shall furnish, or shall cause the
Registrar (if other than the Company or one of its subsidiaries) to furnish, to
the Trustee at least seven Business Days before each Interest Payment Date and
at such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes and the Issuers shall otherwise comply with
TIA § 312(a).


 


Section 2.6                                                              TRANSFER
AND EXCHANGE


 


(a)           Transfer
and Exchange of Global Notes. 
A Global Note may not be transferred except as a whole by the Depositary
to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.  All Global Notes shall be
exchanged by the Issuers for Definitive Notes if (i) the Issuers deliver to the
Trustee notice from the Depositary that (x) the Depositary is unwilling or
unable to continue to act as Depositary for the Global Notes or (y) the
Depositary is no longer a clearing agency registered under the Exchange Act,
and in either case, the Issuers fail to appoint a successor Depositary within
90 days of such notice from the Depositary, (ii) the Issuers, in their sole
discretion, determine that the Global Notes (in whole but not in part) should
be exchanged for Definitive Notes and delivers a written notice to such effect
to the Trustee or (iii) upon request of the Trustee or Holders of a majority of
the aggregate principal amount of outstanding Notes if there shall have occurred
and be continuing a Default or Event of Default with respect to the Notes; provided, that in no event shall the Reg S
Temporary Global Note be exchanged 


 


35





















 


by the Issuers for Definitive Notes prior to
(x) the expiration of the Distribution Compliance Period and (y) the receipt by
the Registrar of any certificate identified by the Issuers and their counsel to
be required pursuant to Rule 903 or Rule 904 under the Securities Act.  Upon the occurrence of any of the preceding
events in (i), (ii) or (iii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee.  Global Notes also may be exchanged or
replaced, in whole or in part, as provided in Sections 2.7 and 2.10 hereof.  Every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
this Section 2.6 or Section 2.7 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note.  A Global Note may not be exchanged for
another Note other than as provided in this Section 2.6(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.6(b) or (c) hereof.


 


(b)           Transfer
and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. 
Beneficial interests in the Restricted Global Notes shall be subject to
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. 
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (1) or (2) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:


 


(1)           Transfer
of Beneficial Interests in the Same Global Note.  Beneficial interests in any Restricted Global
Note may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Distribution Compliance Period, transfers
of beneficial interests in the Reg S Temporary Global Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser).  Beneficial interests
in any Unrestricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note.  No written orders or instructions
shall be required to be delivered to the Registrar to effect the transfers
described in this Section 2.6(b)(1), but the Issuers or the Trustee may request
an Opinion of Counsel.


 


(2)           All
Other Transfers and Exchanges of Beneficial Interests in Global Notes
(including for Definitive Notes). 
In connection with all transfers and exchanges of beneficial interests
that are not subject to Section 2.6(b)(1) above, the transferor of such
beneficial interest must deliver to the Registrar either (A) (1) an order from
a Participant or an Indirect Participant given to the Depositary in accordance with
the Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions given
in accordance with the Applicable Procedures containing information regarding
the Participant account to be credited with such increase or (B) (1) an order
from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause to
be issued a Definitive Note in an amount equal to the beneficial interest to be



 


36





















 


transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing information regarding the
Person in whose name such Definitive Note shall be registered to effect the
transfer or exchange referred to in (B)(1) above; provided, that in no event shall Definitive Notes be issued
upon the transfer or exchange of beneficial interests in the Reg S Temporary
Global Note prior to (x) the expiration of the Distribution Compliance Period
and (y) the receipt by the Registrar of any certificates identified by the
Issuers or their counsel to be required pursuant to Rule 903 and Rule 904 under
the Securities Act.  Upon satisfaction of
all of the requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.6(g) hereof.


 


(3)           Transfer
of Beneficial Interests to Another Restricted Global Note.  A beneficial interest in any Restricted
Global Note may be transferred to a Person who takes delivery thereof in the
form of a beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.6(b)(2) above and the Registrar
receives the following:


 


(A)          if the transferee shall take delivery
in the form of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;


 


(B)           if the transferee shall take delivery
in the form of a beneficial interest in the 501 Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (3)(d) thereof; or


 


(C)           if the transferee shall take delivery
in the form of a beneficial interest in the Reg S Temporary Global Note or the
Reg S Permanent Global Note, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in item (2) thereof.


 


(4)           Transfer
and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial
Interests in an Unrestricted Global Note.  A beneficial interest in any Restricted
Global Note may be exchanged by any holder thereof for a beneficial interest in
an Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note if
the exchange or transfer complies with the requirements of Section 2.6(b)(2)
above and the Registrar receives the following: (1) if the holder of such beneficial
interest in a Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit C hereto, including
the certifications in item (1)(a) thereof; or (2) if the holder of such
beneficial interest in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note, a certificate from such
holder in the form of Exhibit B hereto, including the certifications in item
(4) thereof; and, in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form, and from legal counsel, reasonably acceptable to
the Registrar and the Issuers to the effect that such exchange or transfer is 


 


37





















 


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


 


If any such
transfer is effected pursuant to clause (4) above at a time when an
Unrestricted Global Note has not yet been issued, the Issuers shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.2 hereof,
the Trustee shall authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the aggregate principal amount of
beneficial interests transferred pursuant to clause (4) above.  Beneficial interests in an Unrestricted
Global Note cannot be exchanged for, or transferred to Persons who take
delivery thereof in the form of, a beneficial interest in a Restricted Global
Note.


 


(c)           Transfer
and Exchange of Beneficial Interests for Definitive Notes. Transfer
and exchange of beneficial interests in the Global Notes for Definitive Notes
shall be made subject to compliance with this Section 2.6(c), and the
requesting Holder shall provide any certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.6(c).  Upon receipt of such applicable
documentation, the Trustee shall cause the aggregate principal amount of the
applicable Restricted Global Note or Unrestricted Global Note, as applicable,
to be reduced accordingly pursuant to Section 2.6(g) hereof, and the Issuers
shall execute and, upon receipt of an Authentication Order pursuant to Section
2.2, the Trustee shall authenticate and deliver to the Person designated in the
instructions a Restricted Definitive Note or an Unrestricted Definitive Note,
as applicable, in the appropriate principal amount.  Any Definitive Note issued in exchange for a
beneficial interest in a Global Note pursuant to this Section 2.6(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the Holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant.  The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Definitive
Notes are so registered.


 


(1)           Beneficial
Interests in Restricted Global Notes to Restricted Definitive Notes.  If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:


 


(A)          if the holder of such beneficial
interest in a Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item (2)(a)
thereof;


 


(B)           if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item (1)
thereof;


 


38





















 


(C)           if such beneficial interest is being
transferred to a Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2) thereof;


 


(D)          if such beneficial interest is being
transferred to an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than those
listed in subparagraphs (B) and (C) above, a certificate to the effect set
forth in Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3)(d) thereof, if applicable; or


 


(E)           if such beneficial interest is being
transferred to the Issuers or any of their respective subsidiaries, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof.


 


Any Restricted
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.6(c)(1) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained therein.


 


(2)           Beneficial
Interests in Restricted Global Notes to Unrestricted Definitive Notes.  A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only if the Registrar receives the following: (1) if the holder of such
beneficial interest in a Restricted Global Note proposes to exchange such
beneficial interest for an Unrestricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the certifications in
item (1)(b) thereof; or (2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest to a
Person who shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof; and, in each such
case set forth in this clause (2), an Opinion of Counsel in form, and from
legal counsel, reasonably acceptable to the Registrar and the Issuers to the
effect that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance with
the Securities Act.


 


Beneficial
interests in an Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a Restricted
Definitive Note.


 


(3)           Beneficial
Interests in Unrestricted Global Notes to Unrestricted Definitive Notes.  If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for an
Unrestricted Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note, then such holder shall satisfy the applicable conditions set forth in
Section 2.6(b)(2) hereof.  Any
Unrestricted Definitive Note issued 


 


39





















 


in exchange for a beneficial interest
pursuant to this Section 2.6(c)(3) shall not bear the Private Placement Legend.


 


(4)           Transfer
or Exchange of Reg S Temporary Global Notes.  Notwithstanding the other provisions of this
Section 2.6, a beneficial interest in the Reg S Temporary Global Note may not
be (A) exchanged for a Definitive Note prior to (x) the expiration of the
Distribution Compliance Period (unless such exchange is approved by the
Issuers, does not require an investment decision on the part of the Holder
thereof and does not violate the provisions of Regulation S) and (y) the
receipt by the Registrar of any certificates identified by the Issuers or their
counsel to be required pursuant to Rule 903(b)(3)(ii)(B) under the Securities
Act or (B) transferred to a Person who takes delivery thereof in the form of a
Definitive Note prior to the events set forth in clause (A) above or unless the
transfer is pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 903 or Rule 904.


 


(d)           Transfer
and Exchange of Definitive Notes for Beneficial Interests.  Transfer and exchange of Definitive Notes for
beneficial interests in the Global Notes shall be made subject to compliance
with this Section 2.6(d), and the requesting Holder shall provide any
certifications, documents and information, as applicable, required pursuant to
the following provisions of this Section 2.6(d).  Upon receipt from such Holder of such applicable
documentation and the surrender to the Registrar of the Definitive Notes duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar, duly executed by such Holder or by its attorney,
duly authorized in writing, the Registrar shall register the transfer or
exchange of the Definitive Notes.  The
Trustee shall cancel such Definitive Notes so surrendered and cause the
aggregate principal amount of the applicable Restricted Global Note or
Unrestricted Global Note, as applicable, to be increased accordingly pursuant
to Section 2.6(g) hereof.


 


(1)           Restricted
Definitive Notes to Beneficial Interests in Restricted Global Notes.  If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted Global
Note or to transfer such Restricted Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in a Restricted Global
Note, then, upon receipt by the Registrar of the following documentation:


 


(A)          if the Holder of such Restricted
Definitive Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b) thereof;


 


(B)           if such Restricted Definitive Note is
being transferred to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;


 


(C)           if such Restricted Definitive Note is
being transferred to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 


 


40





















 


or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the certifications
in item (2) thereof; or


 


(D)          if such Restricted Definitive Note is
being transferred to an Institutional Accredited Investor in accordance with
Regulation D under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(d) thereof;


 


the Trustee shall cancel the Restricted Definitive Note and increase or
cause to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause (B)
above, the 144A Global Note, in the case of clause (C) above, the Regulation S
Global Note and in the case of clause (D) above, the 501 Global Note.


 


(2)           Restricted
Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Restricted Definitive Note to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note only if the
Registrar receives the following: (1) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for a beneficial interest in
the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit
C hereto, including the certifications in item (1)(c) thereof; or (2) if the
Holder of such Restricted Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of a beneficial interest in
the Unrestricted Global Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof; and, in
each such case set forth in this clause (2), an Opinion of Counsel in form, and
from legal counsel, reasonably acceptable to the Registrar and the Issuers to
the effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance with
the Securities Act.


 


(3)           Unrestricted
Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note at any time.


 


If any such
exchange or transfer from a Definitive Note to a beneficial interest is
effected pursuant to clauses (2) or (3) of this Section 2.6(d) at a time when
an Unrestricted Global Note has not yet been issued, the Issuers shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.2
hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the principal amount of Definitive Notes
so transferred.


 


(e)           Transfer
and Exchange of Definitive Notes for Definitive Notes.  Upon request by a Holder of Definitive Notes
and such Holder’s compliance with the 


 


41





















 


provisions of this Section 2.6(e), the
Registrar shall register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. 
The Trustee shall cancel any such Definitive Notes so surrendered, and
the Issuers shall execute and, upon receipt of an Authentication Order pursuant
to Section 2.2, the Trustee shall authenticate and deliver to the Person
designated in the instructions a Restricted Definitive Note or an Unrestricted
Definitive Note, as applicable, in the appropriate principal amount.  Any Definitive Note issued pursuant to this
Section 2.6(c) shall be registered in such name or names and in such authorized
denomination or denominations as the Holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and the
Participant or Indirect Participant.  The
Trustee shall deliver such Definitive Notes to the Persons in whose names such
Definitive Notes are so registered.  In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 2.6(e).


 


(1)           Restricted
Definitive Notes to Restricted Definitive Notes.  Any Restricted Definitive Note may be
transferred to and registered in the name of Persons who take delivery thereof
in the form of a Restricted Definitive Note if the Registrar receives the
following:


 


(A)          if the transfer shall be made to a QIB
pursuant to Rule 144A, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1) thereof;


 


(B)           if the transfer shall be made
pursuant to Rule 903 or Rule 904, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications in
item (2) thereof;


 


(C)           if such beneficial interest is being
transferred to an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than those
listed in subparagraphs (A) and (B) above, then the transferor must deliver a
certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)(d)
thereof, if applicable; or


 


(D)          if such beneficial interest is being
transferred to the Issuers or any of their subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof, must be delivered by the transferor.


 


(2)           Restricted
Definitive Notes to Unrestricted Definitive Notes.  Any Restricted Definitive Note may be
exchanged by the Holder thereof for an Unrestricted Definitive Note or
transferred to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if the Registrar receives the following: (1) if
the Holder of such Restricted Definitive Notes proposes to exchange 


 


42





















 


such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit D hereto, including
the certifications in item (1)(d) thereof; or (2) if the Holder of such
Restricted Definitive Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; and, in each such case set forth in this
clause (2), an Opinion of Counsel in form, and from legal counsel, reasonably
acceptable to the Registrar and the Issuers to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.


 


(3)           Unrestricted
Definitive Notes to Unrestricted Definitive Notes.  A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note.  Upon
receipt of a request to register such a transfer, the Registrar shall register
the Unrestricted Definitive Notes pursuant to the instructions from the Holder
thereof.


 


(f)            Legends.  The following legends shall appear on the
face of all Global Notes and Definitive Notes issued under this Indenture
unless specifically stated otherwise in the applicable provisions of this
Indenture.


 


(i)            Private Placement Legend.


 


(1)           Except as permitted by subparagraph
(2) below, each Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:


 


“THIS SECURITY
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.


 


THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH OTHER
PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) UNDER THE SECURITIES
ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES BY NON-AFFILIATES WITHOUT
RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE “RESALE RESTRICTION
TERMINATION DATE”) ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THIS SECURITY IS 


 


43





















 


ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E) TO
AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)
(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL “ACCREDITED
INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN ACCORDANCE WITH APPLICABLE
SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER APPLICABLE JURISDICTION.”


 


(2)           Notwithstanding the foregoing, any
Global Note or Definitive Note issued pursuant to subparagraphs (b)(4), (c)(2),
(c)(3), (d)(2), (d)(3), (e)(2) or (e)(3) to this Section 2.6 (and all Notes
issued in exchange therefor or substitution thereof) shall not bear the Private
Placement Legend.


 


(ii)           Global
Note Legend.  To the extent
required by the Depositary, each Global Note shall bear legends in
substantially the following forms:


 


“THIS GLOBAL
NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS
NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.”


 


44





















 


“UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.”


 


(iii)          Reg
S Temporary Global Note Legend. 
To the extent required by the Depositary, each Reg S Temporary Global
Note shall bear a legend in substantially the following form:


 


“THE RIGHTS
ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND
PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS SPECIFIED IN THE
INDENTURE (AS DEFINED HEREIN).  NEITHER
THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE
SHALL BE ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH
SUCH HOLDER HOLDS THIS NOTE.  NOTHING IN
THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM ACCRUING ON THIS NOTE.”


 


(g)           Cancellation
and/or Adjustment of Global Notes. 
At such time as all beneficial interests in a particular Global Note
have been exchanged for Definitive Notes or a particular Global Note has been
redeemed, repurchased or cancelled in whole and not in part, each such Global
Note shall be returned to or retained and cancelled by the Trustee in
accordance with Section 2.11 hereof.  At
any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who shall take delivery
thereof in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such Global Note
shall be reduced accordingly and an endorsement may be made on such Global Note
by the Trustee or by the Depositary at the direction of the Trustee to reflect
such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who shall take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement 


 


45





















 


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


 


(h)           General
Provisions Relating to Transfers and Exchanges.


 


(i)            To permit registrations of transfers
and exchanges, the Issuers shall execute and the Trustee shall authenticate
Global Notes and Definitive Notes upon receipt of an Authentication Order.


 


(ii)           No service charge shall be made to a
holder of a beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Issuers may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to
Section 2.10, 3.6, 4.13 or 4.15 hereof).


 


(iii)          The Registrar shall not be required to
register the transfer of or exchange any Note selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in part.


 


(iv)          All Global Notes and Definitive Notes
issued upon any registration of transfer or exchange of Global Notes or
Definitive Notes shall be the valid obligations of the Issuers, evidencing the
same Indebtedness, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration of
transfer or exchange.


 


(v)           The Issuers shall not be required (A)
to issue, to register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any selection of
Notes for redemption under Section 3.2 hereof and ending at the close of
business on the day of selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part or (C) to register the
transfer of or to exchange a Note between an Interest Record Date and the next
succeeding Interest Payment Date.


 


(vi)          Prior to due presentment for the
registration of a transfer of any Note, the Trustee, any Agent and the Issuers
may deem and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of principal
of and interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Issuers shall be affected by notice to the contrary.


 


(vii)         The Trustee shall authenticate Global
Notes and Definitive Notes in accordance with the provisions of Section 2.2
hereof.


 


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(viii)        All certifications, certificates and Opinions
of Counsel required to be submitted to the Registrar pursuant to this Section
2.6 to effect a registration of transfer or exchange may be submitted by
facsimile.


 


Notwithstanding
anything herein to the contrary, as to any certifications and certificates
delivered to the Registrar pursuant to this Section 2.6, the Registrar’s duties
shall be limited to confirming that any such certifications and certificates
delivered to it are in the form of Exhibits A, B, C, D and E attached
hereto.  The Registrar shall not be
responsible for confirming the truth or accuracy of representations made in any
such certifications or certificates.


 


Section 2.7                                                              REPLACEMENT
NOTES


 


If any
mutilated Note is surrendered to the Trustee or the Issuers, or if the Trustee
or the Issuers receive evidence (which evidence may be from the Trustee) to
their satisfaction of the destruction, loss or theft of any Note, the Issuers
shall issue and the Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Note if the Trustee’s requirements are met.  If required by the Trustee or the Issuers, an
affidavit of lost certificate and/or an indemnity bond or other indemnity must
be supplied by the requesting Holder that is sufficient in the judgment of the
Trustee and the Issuers to protect the Issuers, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced.  The Issuers may charge for its
expenses in replacing a Note, including reasonable fees and expenses of their
counsel and of the Trustee and its counsel. 
Every replacement Note is an additional obligation of the Issuers and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.


 


Section 2.8                                                              OUTSTANDING
NOTES


 


The Notes
outstanding at any time are all the Notes authenticated by the Trustee
(including any Note represented by a Global Note) except for those cancelled by
it or at its direction, those delivered to it for cancellation, those reductions
in the interest in a Global Note effected by the Trustee in accordance with the
provisions hereof, and those described in this Section 2.8 as not
outstanding.  Except as set forth in
Section 2.9 hereof, a Note does not cease to be outstanding because the Issuers
or an Affiliate of either of the Issuers holds the Note.  If a Note is replaced pursuant to Section 2.7
hereof, such Note, together with the Subsidiary Guaranty of that particular
Note endorsed thereon, ceases to be outstanding unless the Trustee receives
proof satisfactory to it that the replaced Note is held by a bona fide purchaser.  If the principal amount of any Note is
considered paid under Section 4.1 hereof, it ceases to be outstanding and
Interest on it ceases to accrue.  If the
Paying Agent (other than the Company, a subsidiary or an Affiliate of any
thereof) holds, on a redemption date or the maturity date, money sufficient to
pay Notes payable on that date, then on and after that date such Notes shall be
deemed to be no longer outstanding and shall cease to accrue Interest.


 


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Section 2.9                                                              TREASURY
NOTES


 


In determining
whether the Holders of the required principal amount of Notes have concurred in
any direction, waiver or consent, Notes owned by the Issuers, or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuers, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes that
the Trustee knows are so owned shall be so disregarded.


 


Section 2.10                                                        TEMPORARY
NOTES


 


Until
certificates representing Notes are ready for delivery, the Issuers may prepare
and the Trustee, upon receipt of an Authentication Order, shall authenticate
temporary Notes.  Temporary Notes shall
be substantially in the form of Definitive Notes but may have variations that
the Issuers considers appropriate for temporary Notes and as shall be
reasonably acceptable to the Trustee. 
Without unreasonable delay, the Issuers shall prepare and the Trustee
shall authenticate Definitive Notes in exchange for temporary Notes.  Until such exchange, holders of temporary
Notes shall be entitled to all of the benefits of this Indenture.


 


Section 2.11                                                        CANCELLATION


 


The Issuers at
any time may deliver Notes to the Trustee for cancellation.  The Registrar and Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment.  The Trustee, or at
the direction of the Trustee, the Registrar or the Paying Agent (other than the
Company or an Affiliate of the Company), and no one else shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy cancelled Notes (subject to the record retention
requirement of the Exchange Act). 
Certification of the destruction of all cancelled Notes shall be
delivered to the Issuers.  The Issuers
may not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.


 


Section 2.12                                                        DEFAULTED
INTEREST


 


Any Interest
on any Note which is payable, but is not punctually paid or duly provided for, on
any Interest Payment Date plus, to the extent lawful, any interest payable on
the defaulted Interest at the rate and in the manner provided in Section 4.1
hereof and in the Note (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the registered
Holder on the relevant Interest Record Date, and such Defaulted Interest may be
paid by the Issuers, at their election in each case, as provided in clause (1)
or (2) below:


 


(1)           The Issuers may elect to make payment
of any Defaulted Interest to the Persons in whose names the Notes are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in 


 


48





















 


the following manner.  The Issuers shall notify the Trustee and the
Paying Agent in writing of the amount of Defaulted Interest proposed to be paid
on each Note and the date of the proposed payment, and at the same time the
Issuers shall deposit with the Paying Agent an amount of cash equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements reasonably satisfactory to the Paying Agent for such
deposit prior to the date of the proposed payment, such cash when deposited to
be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as provided in this clause (1). 
Thereupon the Paying Agent shall fix a “Special Record Date” for the
payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than
10 days after the receipt by the Paying Agent of the notice of the proposed
payment.  The Paying Agent shall promptly
notify the Issuers and the Trustee of such Special Record Date and, in the name
and at the expense of the Issuers, shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at its address as it appears in the
Note register maintained by the Registrar not less than 10 days prior to such
Special Record Date.  Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall be paid
to the persons in whose names the Notes (or their respective predecessor Notes)
are registered on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).


 


(2)           The Issuers may make payment of any
Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, if, after notice given by
the Issuers to the Trustee and the Paying Agent of the proposed payment
pursuant to this clause, such manner shall be deemed practicable by the Trustee
and the Paying Agent.


 


Subject to the
foregoing provisions of this Section 2.12, each Note delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any
other Note shall carry the rights to Interest accrued and unpaid, and to
accrue, which were carried by such other Note.


 


Section 2.13                                                        CUSIP
NUMBERS


 


The Issuers in
issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if
so, the Trustee shall use “CUSIP” numbers in notices of redemption as a
convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers.  The Issuers shall promptly notify the Trustee
of any change in the “CUSIP” numbers.


 


49





















 


Section 2.14                                                        ISSUANCE
OF ADDITIONAL NOTES


 


The Issuers
may, subject to Section 4.7 hereof and applicable law, issue Additional Notes
in an unlimited amount under this Indenture. 
The Notes issued on the Issue Date and any Additional Notes subsequently
issued shall be treated as a single class for all purposes under this
Indenture.


 


ARTICLE III

REDEMPTION


 


Section 3.1                                                              NOTICES
TO TRUSTEE


 


If the Issuers
elect to redeem Notes pursuant to the optional redemption provisions of Section
3.7 hereof, it shall furnish to the Trustee, at least 30 days (unless a shorter
period is acceptable to the Trustee) but not more than 60 days (unless a longer
period is acceptable to the Trustee) before a redemption date, an Officers’
Certificate stating that such redemption is being made pursuant to Section 3.7
and setting forth (i) the redemption date, (ii) the principal amount of Notes
to be redeemed and (iii) the redemption price.


 


Section 3.2                                                              SELECTION
OF NOTES TO BE REDEEMED


 


If less than
all of the Notes are to be redeemed at any time, the Trustee shall select the
Notes or portions thereof to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance
with any other method the Trustee considers fair and appropriate, provided that Notes in denominations of
$1,000 or less may not be redeemed in part. 
In the event of partial redemption by lot, the particular Notes to be
redeemed shall be selected, unless otherwise provided herein, not less than 30
nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption.


 


The Trustee
shall promptly notify the Issuers in writing of the Notes selected for
redemption and, in the case of any Note selected for partial redemption, the
principal amount thereof to be redeemed. 
Notes and portions of Notes in denominations of larger than $1,000
selected shall be in amounts of $1,000 or integral multiples of $1,000; except
that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not an integral multiple of
$1,000, shall be redeemed.  Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.


 


Section 3.3                                                              NOTICE
OF REDEMPTION


 


Subject to the
provisions of Section 3.7 hereof, at least 30 days but not more than 60 days
before a redemption date (except in the case of a Regulatory 


 


50





















 


Redemption requiring less notice), the Issuers shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.


 


The notice
shall identify the Notes to be redeemed and shall state:


 


(a)           the redemption date;


 


(b)           the redemption price;


 


(c)           if any Note is being redeemed in
part, the portion of the principal amount of such Note to be redeemed and that,
on or after the redemption date upon surrender of such Note, a new Note or
Notes in principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;


 


(d)           the name and address of the Paying
Agent;


 


(e)           that Notes called for redemption must
be surrendered to the Paying Agent to collect the redemption price;


 


(f)            that, unless the Issuers default in
making such redemption payment, Interest on Notes or portions thereof called
for redemption ceases to accrue on and after the redemption date;


 


(g)           the paragraph of the Notes and/or
Section of this Indenture pursuant to which the Notes called for redemption are
being redeemed; and


 


(h)           that no representation is made as to
the correctness or accuracy of the CUSIP number, if any, listed in such notice
or printed on the Notes.


 


At the Issuers’
request, the Trustee shall give the notice of redemption in the Issuers’ name
and at its expense; provided, however,
that the Issuers shall have delivered to the Trustee, at least 45 days prior to
the redemption date (unless a shorter period shall be acceptable to the Trustee
or is required pursuant to a Regulatory Redemption), an Officers’ Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in the preceding paragraph.


 


Section 3.4                                                              EFFECT
OF NOTICE OF REDEMPTION


 


Once notice of
redemption is mailed in accordance with Section 3.3 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the
redemption price.  At any time prior to
the mailing of a notice of redemption to the Holders pursuant to Section 3.3,
the Issuers may withdraw, revoke or rescind any notice of redemption delivered
to the Trustee without any continuing obligation to redeem the Notes as
contemplated by such notice of redemption.


 


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Section 3.5                                                              DEPOSIT
OF REDEMPTION PRICE


 


At or before
10:00 a.m. on the redemption date, the Issuers shall deposit with the Trustee
or with the Paying Agent immediately available funds sufficient to pay the
redemption price of and accrued and unpaid Interest on all Notes to be redeemed
on that date.  The Trustee or the Paying
Agent shall promptly return to the Issuers any money deposited with the Trustee
or the Paying Agent by the Issuers in excess of the amounts necessary to pay
the redemption price of, and accrued and unpaid Interest on, all Notes to be
redeemed.


 


If the Issuers
comply with the provisions of the preceding paragraph, on and after the
redemption date, Interest shall cease to accrue on the Notes or the portions of
Notes called for redemption, regardless of whether such Notes are presented for
payment.  If a Note is redeemed on or
after an Interest Record Date but on or prior to the related Interest Payment
Date, then any accrued and unpaid Interest shall be paid to the Person in whose
name such Note was registered at the close of business on such Interest Record
Date.  If any Note called for redemption
shall not be so paid upon surrender for redemption because of the failure of
the Issuers to comply with the preceding paragraph, Interest shall be paid on
the unpaid principal, from the redemption date until such principal is paid,
and to the extent lawful on any Interest not paid on such unpaid principal, in
each case at the rate provided in the Notes and in Section 4.1 hereof.


 


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


 


Section 3.6                                                              NOTES
REDEEMED IN PART


 


Upon surrender
of a Note that is redeemed in part, the Issuers shall issue and, upon receipt
of an Authentication Order, the Trustee shall authenticate for the Holder at
the expense of the Issuers a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.


 


Section 3.7                                                              OPTIONAL
REDEMPTION


 


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


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  105.500

  	
  %

  
	
  2009

  	
   

  	
  103.667

  	
  %

  
	
  2010

  	
   

  	
  101.833

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


52





















 


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


 


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


 


(c)           Any redemption pursuant to this
Section 3.7 shall be made pursuant to the provisions of Sections 3.1 through
3.6 hereof.


 


Section 3.8                                                              REGULATORY
REDEMPTION


 


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


 


Section 3.9                                                              NO
MANDATORY REDEMPTION


 


The Issuers
shall not be required to make mandatory redemption payments with respect to the
Notes (except for a Required Regulatory Redemption and any offer to repurchase
Notes that the Issuers are required to make in accordance with the provisions
of Sections 4.13 and 4.15 below).  The
Notes shall not have the benefit of any sinking fund.


 


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ARTICLE IV

COVENANTS


 


Section 4.1                                                              PAYMENT
OF NOTES


 


The Issuers shall pay or cause to be paid
the principal of, premium, if any, and Interest on the Notes on the dates and
in the manner provided in the Notes. Principal, premium, if any, and Interest
shall be considered paid on the date due if the Paying Agent (if other than the
Company or a subsidiary thereof) holds as of 12:00 noon Eastern time on the due
date money deposited by the Issuers
in immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and Interest then due.


 


The Issuers shall pay interest (including
Accrued Bankruptcy Interest in any proceeding under any Bankruptcy Law) on
overdue principal at the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including Accrued Bankruptcy Interest in
any proceeding under any Bankruptcy Law) on overdue installments of Interest
without regard to any applicable grace period) at the same rate to the extent
lawful.


 


Section 4.2                                                              MAINTENANCE
OF OFFICE OR AGENCY


 


The Issuers shall maintain in the Borough
of Manhattan, The City of New York, an office or agency (which may be an office
of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Issuers
in respect of the Notes and this Indenture may be served.  The Issuers
shall give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. 
If at any time the Issuers
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office.


 


The Issuers may also from time to time
designate one or more other offices or agencies where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind such additional designations; provided,
that no such designation or rescission shall in any manner relieve the Issuers of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New
York.  The Issuers shall give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.


 


The Issuers hereby designate the Corporate
Trust Office of the Trustee as one such office or agency of the Issuers in accordance with Section 2.3
hereof.


 


Section 4.3                                                              SEC
REPORTS AND REPORTS TO HOLDERS


 


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


 


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


 


Section 4.4                                                              COMPLIANCE
CERTIFICATE


 


(a)           The Issuers shall deliver to the
Trustee, within 120 days after the end of each fiscal year, an Officers’
Certificate stating that a review of the activities of the Issuers and the
Restricted Subsidiaries during the preceding fiscal year has been made under
the supervision of the signing Officers with a view to determining whether the
Issuers and the Restricted Subsidiaries have kept, observed, performed and
fulfilled their obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to his or her knowledge the
Issuers and the Restricted Subsidiaries are not in default in the performance
or observance of any of the terms, provisions and conditions of this Indenture
(or, if a Default or Event of Default shall have occurred and be continuing,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Issuers are taking or proposes to take with
respect thereto).  Each of the Issuers
shall provide the Trustee with timely written notice of any change in its
fiscal year end, which is currently December 31.


 


(b)           The Issuers shall, so long as any of
the Notes are outstanding, deliver to the Trustee, within five Business Days of
any Officer becoming aware of any Default or Event of Default, an Officers’
Certificate specifying such Default or Event of Default and what action the
Issuers are taking or propose to take with respect thereto.


 


Section 4.5                                                              TAXES


 


The Issuers
shall pay, and shall cause each of the Restricted Subsidiaries to pay, prior to
delinquency, all material taxes, assessments, and governmental levies except
such as are contested in good faith and by appropriate proceedings or where the
failure to effect such payment would not have a material adverse effect on the
ability of the Issuers and the Subsidiary Guarantors to satisfy their
obligations under the Notes, the Subsidiary Guaranties and this Indenture.


 


Section 4.6                                                              STAY,
EXTENSION AND USURY LAWS


 


Each of the
Issuers covenants (to the extent that it may lawfully do so) that it shall not
at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now
or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and each of the Issuers (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it shall not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
has been enacted.


 


55





















 


	
  Section 4.7

  	
   

  	
  LIMITATION ON
  INCURRENCE OF ADDITIONAL INDEBTEDNESS AND DISQUALIFIED EQUITY INTERESTS

  



 


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


 


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


 


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


 


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


 


(iii)                               Indebtedness solely in respect of
bankers acceptances, letters of credit payment obligations in connection with
self-insurance or similar requirements, security for workers’ compensation
claims, appeal bonds, surety bonds, insurance obligations or bonds, and
performance bonds, and similar bonds or obligations, 


 


56





















 


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


 


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


 


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


 


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


 


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


 


(viii)                        the accrual of interest, the
accretion or amortization of original issue discount and the payment of
interest on any Indebtedness in the form of additional Indebtedness with the
same terms;


 


(ix)                                Indebtedness arising from agreements
for indemnification, adjustment of purchase price or similar obligations, in
each case, incurred in connection with the disposition of any business or
assets of the Company, any of the Subsidiary Guarantors or any of the
Restricted Subsidiaries; provided
that the maximum aggregate liability in respect of all such Indebtedness shall
at no time exceed the gross proceeds actually received by the Company or the
applicable Subsidiary Guarantor or Restricted Subsidiary in connection with
such disposition;


 


(x)                                   any Subsidiary Guaranty of the
Notes;


 


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


 


57





















 


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


 


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


 


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


 


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


 


(c)                                  Upon each incurrence of
Indebtedness, if such Indebtedness could have been incurred under more than one
provision of this Section 4.7, (i) the Company may designate pursuant to which
provision of this Section 4.7 such Indebtedness is being incurred, (ii) the
Company may subdivide an amount of Indebtedness and designate more than one
provision pursuant to which such amount of Indebtedness is being incurred and
shall be permitted to classify such item of Indebtedness on the date of its incurrence,
or later reclassify, all or a portion of such item of Indebtedness, in any
manner that complies with this Section 4.7, and (iii) such Indebtedness shall
not be deemed to have been incurred or outstanding under any other provision of
this Section 4.7 except that all incurrences under the Notes, the Subsidiary
Guaranties and this Indenture shall be deemed to have been incurred pursuant to
Section 4.7(b)(vi) above.


 


Section 4.8                                                              LIMITATION
ON LIENS


 


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


 


58





















 


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


 


Section 4.9                                                              LIMITATION
ON RESTRICTED PAYMENTS


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


59





















 


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


 


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


 


(5)                                  the Opening shall have occurred.


 


(b)                                 The foregoing provisions shall not
prohibit:


 


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


 


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


 


(iii)                               with respect to each tax year or
portion thereof that the Company qualifies as a Flow Through Entity and so long
as Section 4.9(a)(i) above is satisfied, the payment of Permitted Tax
Distributions (whether paid in such tax year or portion thereof, or any
subsequent tax year); provided,
that (A) prior to the first payment of Permitted Tax Distributions during any
particular calendar year the Company provides an Officers’ Certificate and an
Opinion of Counsel to the effect that the Company and each other Flow Through
Entity in respect of which such distributions are being made qualify as Flow
Through Entities for Federal income tax purposes and for the states in respect
of which such distributions are being made for such tax year or portion
thereof, (B) at the time of such distribution, the most recent audited
financial statements of the Company for periods including such tax year or
portion thereof provided to the Trustee pursuant to Section 4.3 provide that
the Company and each subsidiary of the Company in respect of which such
distributions are being made was treated as a Flow Through Entity for the
period of such financial statements, and (C) in the case of the portion, if
any, of any Permitted Tax Distribution that is proposed to be distributed for a
particular taxable period or portion thereof, which portion of such Permitted
Tax Distribution is attributable to a Flow Through Entity that is not a
Restricted Subsidiary, such portion of such proposed Permitted Tax Distribution
shall be limited to the Excess Cash Distribution Amount for Taxes;


 


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


 


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


 


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


 


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


 


(viii)                        the declaration and payment of
dividends and distributions to holders of Disqualified Equity Interests of the
Company or any of the Restricted Subsidiaries issued or incurred in accordance
with Section 4.7; and


 


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


 


Promptly
following the end of each fiscal quarter during which any Restricted Payment was
made pursuant to clause (iii) of Section 4.9(a), the Company shall deliver to the Trustee an
Officers’ Certificate stating that each such Restricted Payment was permitted
and setting forth the basis upon which the calculations required by this
Section 4.9 were computed, which calculations may be based upon the Company’s
latest available internal financial statements. For purposes of this Section
4.9, the amount of any Restricted Payment made or returned, if other than in
cash, shall be the fair market value thereof, as determined in the reasonable
good faith judgment of the Managers of the Company, unless stated otherwise, at
the time made or returned, as applicable.


 


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


 


Section 4.10                                                        LIMITATION
ON RESTRICTIONS ON SUBSIDIARY DIVIDENDS


 


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


 


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


 


61





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


62





















 


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


 


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


 


Section 4.11                                                        ADDITIONAL
COLLATERAL


 


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


 


Section 4.12                                                        LIMITATION
ON TRANSACTIONS WITH AFFILIATES


 


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


 


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


 


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


 


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


 


63





















 


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


 


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


 


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


 


(iii)                               Permitted Investments;


 


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


 


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


 


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


 


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


 


Section 4.13                                                        LIMITATION
ON ASSET SALES


 


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


 


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


 


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


 


64





















 


(provided, that following such Asset Sale,
there is no further recourse to the Company or the Restricted Subsidiaries or
the Company and the Restricted Subsidiaries are fully indemnified with respect
to such liabilities; provided, further, that the 75% limitation set forth
in this clause (ii) of this Section 4.13(a) shall not apply to any proposed
Asset Sale for which an independent certified accounting firm has certified to
the Managers of the Company and the Trustee that the after-tax cash portion of
the consideration to be received by the Company or such Restricted Subsidiary
in such proposed Asset Sale is equal to or greater than what the net after-tax
cash proceeds would have been had such proposed Asset Sale complied with the
75% limitation set forth in this clause (ii) of this paragraph), or (b) assets
of the type described in clause (iii)(A) of this Section 4.13(a) below; and


 


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


 


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


 


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


 


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


 


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


 


65





















 


or, if less than the Purchase Amount has been tendered, all Notes
tendered pursuant to the Excess Proceeds Offer. The principal amount of Notes
to be purchased pursuant to an Excess Proceeds Offer may be reduced by the
principal amount of Notes acquired by the Issuers through purchase or
redemption (other than pursuant to a Change of Control Offer) subsequent to the
date of the Asset Sale and surrendered to the Trustee for cancellation.


 


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


 


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


 


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


 


Section 4.14                                                        RESTRICTION
ON SALE AND ISSUANCE OF SUBSIDIARY STOCK


 


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


 


Section 4.15                                                        REPURCHASE
UPON A CHANGE OF CONTROL


 


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


 


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


 


66





















 


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


 


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


 


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


 


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


 


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


 


(e)                                  If the Change of Control Payment
Date hereunder is on or after an Interest Record Date on which the Holders of
record have a right to receive the corresponding Interest due and on or before
the associated Interest Payment Date, any accrued and unpaid Interest due on
such Interest Payment Date will be paid to the Person in whose name a Note is
registered at the close of business on such Interest Record Date.


 


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Section 4.16                                                        SUBSIDIARY
GUARANTORS


 


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


 


Section 4.17                                                        LIMITATION
ON STATUS AS INVESTMENT COMPANY


 


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


 


Section 4.18                                                        MAINTENANCE
OF PROPERTIES AND INSURANCE


 


The Issuers
and the Subsidiary Guarantors shall cause all material properties used or
useful to the conduct of their business and the business of each of the
Restricted Subsidiaries to be maintained and kept in good condition, repair and
working order (reasonable wear and tear excepted) in all material respects and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as
in their reasonable judgment may be necessary, so that the business carried on
in connection therewith may be properly conducted at all times; provided, however, that nothing in this
Section 4.18 shall prevent the Issuers, any Subsidiary Guarantor or any
Restricted Subsidiary from discontinuing any operation or maintenance of any of
such properties, or disposing of any of them, if such discontinuance or
disposal is (a) in the good faith judgment of the Managers of each of the
Issuers, desirable in the conduct of the business of such entity and (b) not
otherwise prohibited by this Indenture or the Security Documents.


 


The Issuers
and Subsidiary Guarantors shall provide, or cause to be provided, for
themselves and each of the Restricted Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of the Managers of each of the Issuers is
adequate and appropriate for the conduct of the business of the Issuers, the
Subsidiary Guarantors and such Restricted Subsidiaries.


 


Section 4.19                                                        CORPORATE
EXISTENCE


 


Subject to
Article V hereof, the Issuers shall do or cause to be done all things necessary
to preserve and keep in full force and effect (i) their limited liability
company and corporate existence, as applicable, and the corporate, partnership
or other existence of each of the Restricted Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time
to time) of the Issuers or any such Restricted Subsidiary and (ii) the rights
(charter and statutory), licenses and franchises of the Issuers and each of the
Restricted Subsidiaries; provided, however,
that the Issuers shall not be required to preserve any such right, license or
franchise, or the 


 


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corporate, partnership or other existence of any of the Restricted
Subsidiaries, if the Company’s Managers shall determine in good faith that the
preservation thereof is no longer desirable in the conduct of the business of
the Issuers and each of the Restricted Subsidiaries, taken as a whole, and that
the loss thereof would not have a material adverse effect on the ability of the
Issuers and the Subsidiary Guarantors to satisfy their obligations under the
Notes, the Subsidiary Guaranties and this Indenture.


 


Section 4.20                                                        RESTRICTIONS
ON ACTIVITIES OF DJW CORP.


 


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


 


Section 4.21                                                        ENTITY
CLASSIFICATION


 


The Company is
classified as a Flow Through Entity and shall not take, or fail to take, any
action which would result in the Company no longer being classified as a Flow
Through Entity except (i) pursuant to a Permitted C-Corp Conversion or (ii) any
transaction permitted under Article V hereof.


 


Section 4.22                                                        RULE
144A INFORMATION


 


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


 


Section 4.23                                                        LIMITATION
ON USE OF PROCEEDS


 


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


 


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Section 4.24                                                        GAMING
LICENSES AND OTHER PERMITS


 


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


 


ARTICLE V

SUCCESSORS


 


Section 5.1                                                              MERGER,
CONSOLIDATION OR SALE OF ASSETS


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 5.2                                                              SUCCESSOR
CORPORATION SUBSTITUTED


 


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


 


ARTICLE VI

DEFAULTS AND REMEDIES


 


Section 6.1                                                              EVENTS
OF DEFAULT


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(ix)                                any Subsidiary Guaranty of a
Subsidiary Guarantor which is a Significant Subsidiary ceases to be in full
force and effect or shall be held in any judicial proceeding to be
unenforceable or invalid or is declared null and void (other than in accordance
with the terms of the Subsidiary Guaranty and this Indenture) or any Subsidiary
Guarantor which is a Significant Subsidiary denies or disaffirms its
Obligations under its Subsidiary Guaranty or the Security Documents (in each
case, other than by reason of the termination of this Indenture or the release
of any such Subsidiary Guaranty in accordance with this Indenture);


 


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


 


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the continuance of
such failure or breach for a period of 30 days after written notice is given to
the Issuers by the Trustee or to the Issuers and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Notes outstanding;


 


(xi)                                any of the Security Documents ceases
to be in full force and effect or any of the Security Documents ceases to give
the Trustee (or, in the case of a mortgage, ceases to give the Trustee or any
other trustee under such mortgage) any of the Liens, rights, powers or
privileges purported to be created thereby, or any of the Security Documents is
declared null and void, or any of the Issuers or any Subsidiary Guarantor
denies that it has any further liability under any Security Document to which
it is a party or gives notice of such effect (in each case other than by reason
of the termination of this Indenture or any such Security Document in
accordance with its terms or the release of any Subsidiary Guarantor in
accordance with this Indenture) and the continuance of such failure for a
period of 30 days after written notice is given to the Issuers by the Trustee
or to the Issuers and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes outstanding;


 


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


 


(1)                                  commences
a voluntary case,


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 6.2                                                              ACCELERATION


 


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


 


Section 6.3                                                              OTHER
REMEDIES


 


If an Event of
Default occurs and is continuing, subject to the terms of the Intercreditor
Agreement, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and Interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.


 


The Trustee
may maintain a proceeding even if it does not possess any of the Notes or does
not produce any of them in the proceeding. 
A delay or omission by the Trustee or any Holder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default.  All remedies are cumulative to the extent
permitted by law.


 


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Section 6.4                                                              WAIVER
OF DEFAULTS


 


Subject to
Section 6.7 hereof, Holders of a majority of the aggregate principal amount of
the then outstanding Notes by written notice to the Trustee may on behalf of
the Holders of all of the Notes (a) waive any existing or past Default or Event
of Default and its consequences under this Indenture (x) except a continuing
Default or Event of Default in the payment of the principal of, premium, if
any, or Interest on any Note or (y) a Default or an Event of Default with
respect to any covenant or provision which cannot be modified or amended
without the consent of the Holder of each outstanding Note affected or
supermajority approval, which Default or Event of Default may be waived only
with the consent of each outstanding Note affected or such supermajority
approval, respectively, and/or (b) rescind an acceleration and its consequences
in accordance with the provisions of Section 6.2.  Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.


 


Section 6.5                                                              CONTROL
BY MAJORITY


 


Subject to all
provisions of this Indenture and applicable law, the Holders of a majority in
aggregate principal amount of the then outstanding Notes may direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee.  However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture, that the
Trustee determines in good faith may be unduly prejudicial to the rights of
other Holders not joining in the giving of such direction or that may involve
the Trustee in personal liability and the Trustee may take any other action it
deems proper that is not inconsistent with any such direction received from
Holders.


 


Section 6.6                                                              LIMITATION
ON SUITS


 


A Holder may
pursue a remedy with respect to this Indenture or the Notes only if:


 


(a)                                  the Holder gives to the Trustee
written notice of a continuing Event of Default;


 


(b)                                 the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes make a written request
to the Trustee to pursue the remedy;


 


(c)                                  such Holder or Holders offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any costs, liability or expense;


 


(d)                                 the Trustee does not comply with the
request within 60 days after receipt of the request and the offer and, if
requested, the provision of indemnity; and


 


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(e)                                  during such 60-day period the
Holders of a majority in principal amount of the then outstanding Notes do not
give the Trustee a direction inconsistent with the request.


 


A Holder may
not use this Indenture to prejudice the rights of another Holder or to obtain a
preference or priority over another Holder.


 


Section 6.7                                                              RIGHTS
OF HOLDERS OF NOTES TO RECEIVE PAYMENT


 


Notwithstanding
any other provision of this Indenture, except as permitted by Section 9.2
hereof, the right of any Holder to receive payment of the principal of, premium
and Interest on a Note, on or after the respective due dates expressed in the
Note (including in connection with an offer to purchase) or to bring suit for
the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.


 


Section 6.8                                                              COLLECTION
SUIT BY TRUSTEE


 


If an Event of
Default specified in Section 6.1(a)(i) or 6.1(a)(ii) hereof occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Issuers for the whole amount of
principal of, premium and Interest remaining unpaid on the Notes and interest
on overdue principal and, to the extent lawful, interest and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.


 


Section 6.9                                                              TRUSTEE
MAY FILE PROOFS OF CLAIM


 


The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Issuers (or any other obligor upon the Notes),
their creditors or their property and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof.  To the extent that
the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.7 hereof out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise.  Nothing herein
contained shall be deemed to 


 


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authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and may be a member of the creditor’s
committee.


 


Section 6.10                                                        PRIORITIES


 


Subject to the
terms of the Intercreditor Agreement, if the Trustee collects any money
pursuant to this Article, it shall pay out the money in the following order:


 


First: 
to the Trustee, its agents and attorneys for amounts due under Section
7.7 hereof, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection (including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel);


 


Second: 
to Holders for amounts due and unpaid on the Notes for principal and
Interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal and premium Interest,
respectively;


 


Third: 
without duplication, to the Holders for any other Obligations owing to
the Holders under the Notes or this Indenture; and


 


Fourth: 
to the applicable Issuers or Subsidiary Guarantors or to such other
party as a court of competent jurisdiction shall direct.


 


The Trustee
may fix a Record Date and payment date for any payment to Holders pursuant to
this Section 6.10.


 


Section 6.11                                                        UNDERTAKING
FOR COSTS


 


In any suit
for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as a Trustee, a court
in its discretion may require the filing by any party litigant in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit by
the Trustee, a suit by a Holder pursuant to Section 6.7 hereof, or a suit by
Holders of more than 10% in principal amount of the then outstanding Notes.


 


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ARTICLE VII

TRUSTEE


 


Section 7.1                                                              DUTIES
OF TRUSTEE


 


(a)                                  If an Event of Default of which the
Trustee has knowledge has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person’s own
affairs.


 


(b)                                 Except during the continuance of an
Event of Default of which the Trustee has knowledge:


 


(i)                                     the duties of the Trustee shall be
determined solely by the express provisions of this Indenture and the Trustee
need perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and


 


(ii)                                  in the absence of bad faith on its
part, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture; however, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this Indenture.


 


(c)                                  The Trustee may not be relieved from
liabilities for its own negligent action, its own negligent failure to act, or
its own willful misconduct, except that:


 


(i)                                     this paragraph (c) does not limit
the effect of paragraph (b) of this Section 7.1;


 


(ii)                                  the Trustee shall not be liable for
any error of judgment made in good faith by an Officer of the Trustee, unless
it is proved that the Trustee was negligent in ascertaining the pertinent
facts; and


 


(iii)                               the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.5 hereof.


 


(d)                                 Whether or not therein expressly so
provided, every provision of this Indenture that in any way relates to the
Trustee is subject to Sections 7.1 and 7.2 hereof.


 


(e)                                  No provision of this Indenture shall
require the Trustee to expend or risk its own funds or incur any
liability.  The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, 


 


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unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability
or expense.


 


(f)                                    Upon request from the Issuers, the
Trustee is hereby authorized and directed to and shall enter into the
Intercreditor Agreement, and any amendment, restatement, supplement, renewal,
replacement or other modification to the Intercreditor Agreement in connection
with entering into a Senior Credit Facility entered into in accordance with the
terms of this Indenture, including Section 4.7 hereof.


 


(g)                                 The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree in writing
with the Issuers.  Money held in trust by
the Trustee need not be segregated from other funds except to the extent
required by law.


 


Section 7.2                                                              RIGHTS
OF TRUSTEE


 


(a)                                  In connection with the Trustee’s
rights and duties under this Indenture, the Trustee may conclusively rely upon
any document believed by it to be genuine and to have been signed or presented
by the proper Person.  The Trustee need
not investigate any fact or matter stated in the document.


 


(b)                                 Before the Trustee acts or refrains
from acting under this Indenture, it may require an Officers’ Certificate or an
Opinion of Counsel or both.  The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers’ Certificate or Opinion of Counsel.  The Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection from liability in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.


 


(c)                                  The Trustee may act through its
attorneys and agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.


 


(d)                                 The Trustee shall not be liable for
any action it takes or omits to take in good faith that it believes to be
authorized or within the rights or powers conferred upon it by this Indenture.


 


(e)                                  Unless otherwise specifically
provided in this Indenture, any demand, request, direction or notice from the
Issuers shall be sufficient if signed by an Officer of the Issuers.


 


(f)                                    The Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.


 


(g)                                 Except with respect to Section 4.1
hereof, the Trustee shall have no duty to inquire as to the performance of the
Issuers’ covenants in Article IV hereof. 
In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of


 


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Default except (i) any Event of Default
occurring pursuant to Sections 6.1(a)(i), 6.1(a)(ii) and 4.1 hereof or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification in the manner set forth in this Indenture or unless written notice
of any event which is in fact a Default or Event of Default is received by the
Trustee at the Corporate Trust Office, and such notice references this
Indenture and the Notes.  Delivery of
reports, information and documents to the Trustee under Section 4.3 is for
informational purposes only and the Trustee’s receipt of the foregoing shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuers’
compliance with any of their covenants thereunder (as to which the Trustee is
entitled to rely exclusively on an Officers’ Certificate).


 


(h)                                 The Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee may, in its
discretion, make such further inquiry or investigation into such facts or
matters as it may see fit.


 


Section 7.3                                                              INDIVIDUAL
RIGHTS OF TRUSTEE


 


The Trustee in
its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuers or any Affiliate of the Issuers with
the same rights it would have if it were not Trustee.  However, in the event that the Trustee
acquires any conflicting interest (as defined in the TIA) it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign.  Any Agent may do the
same with like rights and duties.  The
Trustee is also subject to Sections 7.10 and 7.11 hereof.


 


Section 7.4                                                              TRUSTEE’S
DISCLAIMER


 


The Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuers’ use of the proceeds from the Notes or any money paid to the Issuers or
upon the Issuers’ direction under any provision of this Indenture, it shall not
be responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it shall not be responsible for any statement
or recital herein or any statement in the Notes or any other document in
connection with the sale of the Notes or pursuant to this Indenture other than
its certificate of authentication.


 


Section 7.5                                                              NOTICE
OF DEFAULTS


 


If a Default
or Event of Default occurs and is continuing and if it is known to the Trustee,
the Trustee shall mail to Holders a notice in the manner and to the extent
provided by Section 313(c) of the TIA of the Default or Event of Default within
90 days after it occurs.  Except in the
case of a Default or Event of Default in payment of principal of, premium, if
any, or Interest on any Note, the Trustee may withhold the 


 


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


 


Section 7.6                                                              REPORTS
BY TRUSTEE TO HOLDERS OF THE NOTES


 


Within 60 days
after each May 15 beginning with the May 15 following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee shall mail
to the Holders a brief report dated as of such reporting date that complies
with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred
within the 12 months preceding the reporting date, no report need be
transmitted).  The Trustee also shall
comply with TIA § 313(b)(2).  The Trustee
shall also transmit by mail all reports as required by TIA § 313(c).


 


A copy of each
report at the time of its mailing to the Holders of Notes shall be mailed by
the Trustee to the Issuers and filed by the Trustee with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA § 313(d).  The Issuers shall promptly notify the Trustee
when the Notes are listed on any stock exchange.


 


To the extent
requested by the Company and at the Company’s expense, the Trustee shall
provide any Gaming Authority with:


 


(a)                                  copies of all notices, reports and
other written communications that the Trustee gives to the Holders;


 


(b)                                 a list of all of the Holders
promptly after the original issuance of the Notes and periodically thereafter
if the Company so directs;


 


(c)                                  notice of any Default or Event of
Default under this Indenture, any acceleration of the Indebtedness evidenced by
the Notes, or the institution of any legal actions or proceedings before any
court or governmental authority in respect of a Default or Event of Default;


 


(d)                                 notice of the removal or resignation
of the Trustee within five Business Days of the effectiveness thereof;


 


(e)                                  notice of any transfer or assignment
of rights under this Indenture known to the Trustee within five Business Days
of the effectiveness thereof;


 


(f)                                    a copy of any amendment to the Notes
or this Indenture within five Business Days of the effectiveness thereof; and


 


(g)                                 such other information and
documentation that may be requested by any Gaming Authority or as otherwise
required by applicable law.


 


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Section 7.7                                                              COMPENSATION
AND INDEMNITY


 


The Issuers
shall pay to the Trustee from time to time reasonable compensation as shall be
agreed to in writing by the Issuers and the Trustee for its acceptance of this
Indenture and services hereunder and under the Security Documents.  The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust.  The Issuers shall reimburse the Trustee
promptly upon request for all reasonable disbursements, advances and expenses
incurred or made by it in addition to the compensation for its services.  Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee’s agents and counsel,
except such disbursements and expenses as may be attributable to its negligence
or bad faith.


 


The Issuers
and the Subsidiary Guarantors, jointly and severally, shall indemnify the
Trustee against any and all losses, liabilities or expenses (including
reasonable attorneys’ fees) incurred by it arising out of or in connection with
the acceptance or administration of its duties under this Indenture and under
the Security Documents, including the costs and expenses of enforcing this
Indenture and under the Security Documents against the Issuers (including this
Section 7.7) and defending itself against any claim (whether asserted by the
Issuers or any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except, in
each case, to the extent any such loss, liability or expense may be
attributable to its negligence, bad faith or willful misconduct.  The Trustee shall notify the Issuers promptly
of any claim for which it may seek indemnity. 
Failure by the Trustee to so notify the Issuers shall not relieve the
Issuers of their obligations hereunder. 
The Issuers shall defend the claim and the Trustee shall cooperate in
the defense.  In the event that a
conflict of interest or conflicting defenses would arise in connection with the
representation of the Issuers and the Trustee by the same counsel, the Trustee
may have separate counsel and the Issuers shall pay the reasonable fees and
expenses of such counsel.  The Issuers
need not pay for any settlement made without their consent, which consent shall
not be unreasonably withheld.


 


The
obligations of the Issuers under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.


 


To secure the
Issuers’ payment obligations in this Section 7.7, the Trustee shall have a Lien
prior to the Notes on all money or property held or collected by the Trustee,
except that held in trust to pay principal and interest on particular
Notes.  Such Lien shall survive the
satisfaction and discharge of this Indenture until such payment obligations
have been paid in full.


 


When the
Trustee incurs expenses or renders services after an Event of Default specified
in Sections 6.1(a)(xii) or 6.1(a)(xiii) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.


 


The Trustee
shall comply with the provisions of TIA § 313(b)(2) to the extent applicable.


 


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Section 7.8                                                              REPLACEMENT
OF TRUSTEE


 


A resignation
or removal of the Trustee and appointment of a successor Trustee shall become
effective only upon the successor Trustee’s acceptance of appointment as
provided in this Section 7.8 and upon the Issuers’ receipt of notice from the
successor Trustee of such appointment.


 


The Trustee
may resign in writing at any time and be discharged from the trust hereby
created by so notifying the Issuers.  The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Issuers in writing.  The Issuers may remove the Trustee if:


 


(a)                                  the Trustee fails to comply with
Section 7.10 hereof;


 


(b)                                 the Trustee is adjudged a bankrupt
or an insolvent or an order for relief is entered with respect to the Trustee
under any Bankruptcy Law;


 


(c)                                  a custodian or public officer takes
charge of the Trustee or its property; or


 


(d)                                 the Trustee becomes incapable of
acting.


 


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


 


If a successor
Trustee does not take office within 60 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Issuers, or the Holders of at least
10% in principal amount of the then outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.


 


If the
Trustee, after written request by any Holder who has been a Holder for at least
six months, fails to comply with Section 7.10 hereof, such Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.


 


A successor
Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuers.  Thereupon,
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture and the Intercreditor Agreement.  The successor Trustee shall mail a notice of
its succession to Holders.  The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee; provided all
sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.7 hereof. 
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Issuers’ obligations under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee.


 


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Section 7.9                                                              SUCCESSOR
TRUSTEE BY MERGER, ETC.


 


If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.


 


Section 7.10                                                        ELIGIBILITY;
DISQUALIFICATION


 


There shall at
all times be a Trustee hereunder that is a corporation or trust company (or a
member of a bank holding company) organized and doing business under the laws
of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to
supervision or examination by federal or state authorities and that has (or the
bank holding company of which it is a member has) a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition.


 


This Indenture
shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1),
(2) and (5).  The Trustee is subject to
TIA § 310(b).


 


Section 7.11                                                        PREFERENTIAL
COLLECTION OF CLAIMS AGAINST ISSUERS


 


The Trustee is
subject to TIA § 311(a), excluding any creditor relationship listed in TIA §
311(b).  A Trustee who has resigned or
been removed shall be subject to TIA § 311(a) to the extent indicated therein.


 


ARTICLE VIII

LEGAL DEFEASANCE AND COVENANT DEFEASANCE


 


Section 8.1                                                              OPTION
TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE


 


The Issuers
may, at the option of their Managers evidenced by a resolution set forth in an
Officers’ Certificate, elect to have either Section 8.2 or 8.3 hereof be
applied to all outstanding Notes and Subsidiary Guaranties upon compliance with
the conditions set forth below in this Article VIII.


 


Section 8.2                                                              LEGAL
DEFEASANCE AND DISCHARGE


 


Upon the
Issuers’ exercise under Section 8.1 hereof of the option applicable to this
Section 8.2, each of the Issuers and the Subsidiary Guarantors, as applicable,
shall, subject to the satisfaction of the applicable conditions set forth in
Section 8.4 hereof, be deemed to have been discharged from its obligations with
respect to all outstanding Notes and Subsidiary Guaranties, as applicable, on
the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means that
the Issuers shall be deemed to have paid and discharged all amounts owed under
the outstanding Notes and the Subsidiary Guarantors shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding
Subsidiary Guaranties, which shall thereafter be deemed to be “outstanding”
only for the purposes of Section 8.5 hereof and the other Sections of this
Indenture 


 


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referred to in clauses (a) and (b) of this Section 8.2 below, and to
have satisfied all its other obligations under such Notes, such Subsidiary
Guaranties and this Indenture (and the Trustee, on demand of and at the expense
of the Issuers, shall execute proper instruments acknowledging the same,
including instruments releasing the Collateral as security for the Notes and
the Subsidiary Guaranties), except for the following provisions which shall
survive until otherwise terminated or discharged hereunder:  (a) the rights of Holders to receive solely
from the trust fund described in Section 8.4 hereof, and as more fully set
forth in Section 8.4, payments in respect of the principal of, premium, if any,
and Interest on such Notes when such payments are due, (b) the Issuers’
obligations with respect to such Notes under Sections 2.2, 2.3, 2.4, 2.5, 2.6,
2.7, 2.8, 2.10, 4.2, 4.6, 4.17, 4.19, 8.5, 8.6 and 8.7 hereof, and (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Issuers’ and the Subsidiary Guarantors’ obligations in connection therewith.


 


Section 8.3                                                              COVENANT
DEFEASANCE


 


Upon the Issuers’
exercise under Section 8.1 hereof of the option applicable to this Section 8.3,
subject to the satisfaction of the applicable conditions set forth in Section
8.4 hereof, the Issuers and the Subsidiary Guarantors shall be released from
their respective obligations under Sections 4.3, 4.4, 4.5, 4.7, 4.8, 4.9, 4.10,
4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.18, 4.20, 4.21, 4.22, 4.23 and 4.24 and
Article V hereof on and after the date the conditions set forth below are
satisfied (hereinafter, “Covenant Defeasance”),
and the Notes and the Subsidiary Guaranties shall thereafter be deemed not “outstanding”
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed “outstanding” for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes).  For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes
and the Subsidiary Guaranties, the Issuers and the Subsidiary Guarantors may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 6.1 hereof, but, except as
specified above, the remainder of this Indenture and such Notes and Subsidiary
Guaranties shall be unaffected thereby. 
In addition, upon the Issuers’ exercise under Section 8.1 hereof of the
option applicable to this Section 8.3, subject to the satisfaction of the
applicable conditions set forth in Section 8.4 hereof, (x) Sections 6.1(a)(iii)
through 6.1(a)(xi) hereof shall not constitute Events of Default to the extent
such events occur thereafter and (y) Sections 6.1(xii) and 6.1(xiii) hereof
shall not constitute an Event of Default to the extent they occur after the
91st day following the occurrence of the Issuers’ exercise of Covenant
Defeasance; provided, however
that for all other purposes as set forth herein, such Covenant Defeasance
provisions shall be effective.


 


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Section 8.4                                                              CONDITIONS
TO LEGAL OR COVENANT DEFEASANCE


 


The following shall be the conditions to the application of either Section 8.2
or 8.3 hereof to the outstanding Notes:


 


(a)                                  in the case of an election under Section 8.2
or 8.3 hereof, the Issuers must irrevocably deposit, or cause to be irrevocably
deposited, with the Trustee, in trust, for the benefit of the Holders, cash in
United States legal tender, non-callable Government Securities, or a
combination thereof, in such amounts as shall be sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and Interest on the outstanding Notes on the
Stated Maturity or on the applicable redemption date, as the case may be (and
the Issuers must specify whether the Notes are being defeased to Stated
Maturity or a particular redemption date), and the Trustee must have, for the
benefit of Holders, a valid, perfected exclusive security interest in such
trust;


 


(b)                                 in the case of an election under Section 8.2
hereof, the Issuers must deliver to the Trustee an Opinion of Counsel
reasonably satisfactory to the Trustee confirming that:  (i) the Issuers have received from, or
there has been published by, the Internal Revenue Service a ruling or (ii) since
the Issue Date, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders shall not recognize income, gain or
loss for Federal income tax purposes as a result of such Legal Defeasance and
shall be subject to Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance had
not occurred;


 


(c)                                  in the case of an election under Section 8.3
hereof, the Issuers must deliver to the Trustee an Opinion of Counsel
reasonably satisfactory to the Trustee from United States legal counsel
confirming that Holders shall not recognize income, gain or loss for Federal
income tax purposes as a result of such Covenant Defeasance and shall be
subject to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Covenant Defeasance had not
occurred;


 


(d)                                 in the case of an election under Section 8.2
or 8.3 hereof, no Default or Event of Default shall have occurred and be
continuing on the date of the deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);


 


(e)                                  in the case of an election under Section 8.2
or 8.3 hereof, the Legal Defeasance or Covenant Defeasance, as applicable, may
not result in a breach or violation of, or constitute a default under any other
material agreement or instrument (other than this Indenture) to which the
Issuers, any of the Subsidiary Guarantors or any of the Restricted Subsidiaries
is a party or by which the Issuers or any of the Restricted Subsidiaries are
bound;


 


(f)                                    in the case of an election under Section 8.2
or 8.3 hereof, the Issuers must deliver to the Trustee an Officers’ Certificate
stating that the deposit was not 


 


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


 


(g)                                 in the case of an election under Section 8.2
or 8.3 hereof, the Issuers must deliver to the Trustee an Officers’ Certificate
confirming the satisfaction of the applicable conditions in clauses (a) through
(f) above, and an Opinion of Counsel, confirming the satisfaction of the
applicable conditions in clauses (a) (with respect to the validity and
perfection of the security interest) (b), (c) and (e) above.


 


Legal Defeasance and Covenant Defeasance shall be deemed to occur on
the date all of the applicable conditions set forth in this Section 8.4
are satisfied.


 


Section 8.5                                                              DEPOSITED
MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS
PROVISIONS


 


Subject to Section 8.6 hereof, all money and Government Securities
(including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.5, the “Trustee”) pursuant to Section 8.4
hereof in respect of the outstanding Notes shall be held in trust and applied
by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company or one of its subsidiaries acting as Paying Agent) as
the Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and Interest, but
such money need not be segregated from other funds except to the extent
required by law.


 


The Issuers and the Subsidiary Guarantor, jointly and severally, shall
pay and indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against the cash or Government Securities deposited pursuant to Section 8.4
hereof or the principal and interest received in respect thereof, other than
any such tax, fee or other charge which by law is for the account of the
Holders.


 


Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuers from time to time upon the request
of the Issuers any money or Government Securities held by it as provided in Section 8.4
hereof which, in the opinion of a firm of independent public accountants
nationally recognized in the United States expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under Section 8.4(a) hereof),
are in excess of the amount thereof that would then be required to be deposited
to effect an equivalent Legal Defeasance or Covenant Defeasance.


 


Section 8.6                                                              REPAYMENT
TO ISSUERS


 


Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuers, in trust for the payment of the principal of, premium, if any,
or Interest on any Note and remaining unclaimed for two years after such
principal, and premium, if


 


87





















 


any, or Interest has become due and payable
shall be paid to the Issuers on their written request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as a creditor, look only to the Issuers for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Issuers as trustee thereof, shall thereupon
cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuers cause to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Issuers.


 


Section 8.7                                                              REINSTATEMENT


 


If the Trustee or Paying Agent is unable to apply any United States
legal tender or Government Securities in accordance with Section 8.2 or
8.3 hereof, as the case may be, by reason of any order directing the repayment
of the deposited money to the Issuers or otherwise making the deposit
unavailable to make payments under the Notes when due, or if any court enters
an order avoiding the deposit of money with the Trustee or Paying Agent or
otherwise requires the payment of the money so deposited to the Issuers or to a
fund for the benefit of its creditors, then (so long as the insufficiency
exists or the order remains in effect) the Issuers’ and the Subsidiary
Guarantors’ obligations under this Indenture, the Notes, the Subsidiary
Guaranties and the Security Documents shall be revived and reinstated as though
no deposit had occurred pursuant to Section 8.3 or 8.4 hereof until such
time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.3 or 8.4 hereof, as the case may be; provided, however, that, if the Issuers
make any payment of principal of, premium, if any, and Interest on any Note
following the reinstatement of its obligations, the Issuers shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.


 


Section 8.8                                                              SATISFACTION
AND DISCHARGE


 


The Issuers may terminate their obligations and the obligations of the
Subsidiary Guarantors under this Indenture, the Notes, the Subsidiary
Guaranties and the Security Documents (except as described below) (whereupon
the Trustee shall release the Collateral from the Liens created by the Security
Documents as provided under Section 10.4(b)(3)) when:


 


(1)                                  either:


 


(a)                                  all the Notes previously
authenticated and delivered (except lost, stolen or destroyed Notes which have
been replaced and Notes for whose payment money has theretofore been deposited
with the Trustee or the paying agent in trust or segregated and held in trust
by the Issuers and thereafter repaid to the Issuers or a Subsidiary Guarantor
or discharged from such trust) have been delivered to the Trustee for
cancellation, or


 


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(b)                                 (i)  all Notes have been called
for redemption pursuant to the provisions of Section 3.7 hereof by mailing
to Holders a notice of redemption or all Notes otherwise have become due and
payable;


 


(ii)                                  the
Issuers have irrevocably deposited or caused to be irrevocably deposited with
the Trustee, in trust for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in an amount
sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of, and
Interest on the Notes to the date of redemption or maturity, as the case may
be, together with irrevocable instructions from the Issuers directing the
Trustee to apply such funds to the payment thereof at maturity or redemption,
as the case may be;


 


(iii)                               no
Default or Event of Default shall have occurred and be continuing on the date
of such deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit);


 


(iv)                              such
deposit shall not result in a breach or violation of, or constitute a default
under, any material agreement or instrument (other than this Indenture) to
which the Issuers, any of the Subsidiary Guarantors or any of the Restricted
Subsidiaries are a party or by which the Issuers, any of the Subsidiary
Guarantors or any of the Restricted Subsidiaries are bound; and


 


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


 


(3)                                  the
Issuers shall have delivered to the Trustee an Officers Certificate and an
Opinion of Counsel confirming the satisfaction of all conditions set forth in
clauses (1) and (2) above.


 


ARTICLE IX

AMENDMENT, SUPPLEMENT AND WAIVER


 


Section 9.1                                                              WITHOUT
CONSENT OF HOLDERS OF NOTES


 


Notwithstanding Section 9.2 hereof, the Issuers, the Subsidiary
Guarantors and the Trustee may amend or supplement this Indenture, the Notes, the
Subsidiary Guaranties, or, subject to the Intercreditor Agreement, the Security
Documents, without the consent of any Holder:


 


(a)                                  to cure any ambiguity, defect or
inconsistency;


 


(b)                                 to provide for uncertificated Notes
in addition to or in place of certificated Notes;


 


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


 


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


 


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


 


(f)                                    to comply with the provisions of the
Depositary, Euroclear or Clearstream or the Trustee with respect to the
provisions of this Indenture or the Notes relating to transfers and exchanges
of Notes or beneficial interests therein;


 


(g)                                 to comply with requirements of the
SEC in order to effect or maintain the qualification of this Indenture under
the TIA;


 


(h)                                 to provide for the issuance of
Additional Notes in accordance with the limitations set forth in this Indenture
as of the date hereof;


 


(i)                                     to comply with applicable gaming
laws and racing laws; or


 


(j)                                     to enter into additional or
supplemental Security Documents.


 


Upon the request of the Issuers accompanied by a resolution of the
Managers of each Issuer authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.6 hereof, the Trustee shall join with the Issuers
in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee
shall not be obligated to enter into such amended or supplemental Indenture
that adversely affects its own rights, duties or immunities under this
Indenture or otherwise.


 


Section 9.2                                                              WITH
CONSENT OF HOLDERS OF NOTES


 


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


 


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Interest on
the Notes, except a payment default resulting from an acceleration that has
been rescinded) or compliance with any provision of this Indenture, the Notes,
the Subsidiary Guaranties, and, subject to the Intercreditor Agreement, the
Security Documents may be waived with the consent of the Holders of a majority
in aggregate principal amount of the then outstanding Notes (including consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Notes).


 


(b)                                 Subject to Sections 6.4 and 6.7
hereof, and except as stated otherwise in this Section 9.2, the Holders of
a majority in aggregate principal amount of the Notes then outstanding may
waive compliance in a particular instance by the Issuers or any Restricted
Subsidiary with any provision of this Indenture or the Notes.


 


It being understood that, except as expressly stated otherwise in Section 9.2(c),
Sections 4.13 and 4.15 hereof may be amended, waived or modified in accordance
with Section 9.2(a).


 


(c)                                  Without the consent of each Holder
affected, an amendment or waiver may not with respect to any Notes held by a
non-consenting Holder:


 


(1)                                  reduce the principal amount of Notes
whose Holders must consent to an amendment, supplement or waiver;


 


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


 


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


 


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


 


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


 


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


 


(7)                                  make any change in the provisions of
this Indenture relating to waivers of past Defaults with respect to, or the
rights of Holders to receive, payments of principal of or Interest on the
Notes;


 


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


 


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


 


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


 


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


 


(e)                                  In connection with any amendment,
supplement or waiver under this Article IX, the Issuers may, but shall not
be obligated to, offer to any Holder who consents to such amendment, supplement
or waiver, or to all Holders, consideration for such Holder’s consent to such
amendment, supplement or waiver.


 


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


 


(g)                                 After an amendment, supplement or
waiver under this Section 9.2 becomes effective, the Trustee shall mail to
the Holders affected thereby a notice briefly describing the amendment,
supplement or waiver.  Any failure of the
Trustee to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amended or supplemental Indenture
or waiver.


 


Section 9.3                                                              COMPLIANCE
WITH TRUST INDENTURE ACT


 


Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.


 


Section 9.4                                                              REVOCATION
AND EFFECT OF CONSENTS


 


Until an amendment, supplement or waiver becomes effective (as
determined by the Issuers and which may be prior to any such amendment,
supplement or waiver becoming operative), a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder that evidences the
same Indebtedness as the consenting Holder’s Note, even if notation of the
consent is not made on any Note. 
However, any such Holder or subsequent Holder may revoke the consent as
to its Note if 


 


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such consent by its terms is not irrevocable
and the Trustee receives written notice of revocation before the date the
waiver, supplement or amendment becomes effective (as determined by the Issuers
and which may be prior to any such amendment, supplement or waiver becoming
operative).


 


The Issuers may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Issuers notwithstanding the provisions of the TIA.  If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date, and only those Persons (or their
duly designated proxies), shall be entitled to revoke any consent previously
given by such Holders, whether or not such Persons continue to be Holders after
such record date.


 


After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it makes a change described in any of paragraphs (1) through
(10) of Section 9.2(c) hereof, in which case, the amendment,
supplement or waiver shall bind only each Holder who has consented to it and
every subsequent Holder that evidences the same debt as the consenting Holder’s
Note; provided, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal and premium of and Interest on a Note, on or after the respective
dates set for such amounts to become due and payable expressed in such Note, or
to bring suit for the enforcement of any such payment on or after such
respective dates.


 


Section 9.5                                                              NOTATION
ON OR EXCHANGE OF NOTES


 


The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated.  The Issuers in exchange for all Notes may
issue and the Trustee shall authenticate new Notes that reflect the amendment,
supplement or waiver.


 


Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.


 


Section 9.6                                                              TRUSTEE
TO SIGN AMENDMENTS, ETC.


 


The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article IX if the amendment or supplement does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee.  Upon the request of the Issuers
accompanied by a resolution of the Managers of each of Issuer authorizing the
execution of any such amended or supplemental Indenture, and upon the filing
with the Trustee of evidence satisfactory to the Trustee of the consent of the
Holders as aforesaid, and upon receipt by the Trustee of the documents
described in Section 9.6 hereof, the Trustee shall join with the Issuers
in the execution of such amended or supplemental Indenture unless such amended
or supplemental Indenture adversely affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or 


 


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supplemental Indenture.  If such amendment or supplement does
adversely affect the rights, duties, liabilities or immunities of the Trustee,
the Trustee may, but need not, sign it. 
The Issuers may not sign an amendment or supplemental indenture until
the Managers of each Issuer approve it. 
In executing any amendment or supplemental Indenture, the Trustee shall
be entitled to receive indemnity reasonably satisfactory to it and to receive
and (subject to Section 7.1 hereof) shall be fully protected in relying
upon, an Officers’ Certificate and an Opinion of Counsel stating that the
execution of such amendment or supplemental indenture is authorized or
permitted by this Indenture.


 


ARTICLE X

COLLATERAL AND SECURITY


 


Section 10.1                                                        SECURITY
DOCUMENTS; SECURITY INTERESTS.


 


(a)                                  The due and punctual payment of the
principal and premium, if any, of, and Interest on, the Notes when and as the
same shall be due and payable, whether on an Interest Payment Date, at
maturity, by acceleration, repurchase, redemption or otherwise, Interest on the
overdue principal of and Interest (to the extent permitted by law), if any, on
the Notes and performance of all other Obligations under this Indenture, the
Notes, the Security Documents and the Registration Rights Agreement, shall be
secured as provided in the Security Documents.


 


(b)                                 After the Issue Date, the Issuers
shall, and shall cause each of the Domestic Restricted Subsidiaries to, use
commercially reasonable efforts (which shall be deemed not to include any
obligation to pay money to any third parties other than filing fees, reasonable
fees and expenses of the third party or other de minimis payments) to grant a
perfected security interest in all of the Issuers’ and the Domestic Restricted
Subsidiaries’ assets, including assets acquired after the Issue Date in
accordance with the Security Documents, but in any event excluding the Excluded
Assets.


 


(c)                                  Notwithstanding any provision in
this Indenture or the Security Documents to the contrary, in the event that the
Issuers or any of the Domestic Restricted Subsidiaries grant a Lien on any of
the Issuers’ or any of the Domestic Restricted Subsidiaries’ assets in
connection with the Senior Credit Facility, the Issuers shall be required to,
and shall be required to cause the Domestic Restricted Subsidiaries to, secure
the Notes with a Lien on such assets (other than Excluded Assets) that is
subordinated to the obligations under the Senior Credit Facility in accordance
with the Intercreditor Agreement, except in circumstances where the Trustee
cannot perfect such a Lien by means other than a Lien filing.


 


(d)                                 The Issuers shall, and shall cause
each of the Domestic Restricted Subsidiaries to, do or cause to be done all
such acts and things as may be necessary or proper, or as may be required by
the provisions of the Security Documents, to assure and confirm to the Trustee
the security interest in the Collateral contemplated hereby and by the Security
Documents, as from time to time constituted, so as to render the same available
for the security and benefit of this Indenture and of the Notes secured hereby,
according to the intent and purposes herein and therein expressed, including (1) using
all 


 


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commercially
reasonable efforts to obtain customary consents and waivers from landlords of
premises where any of the Collateral is located, and (2) taking all
commercially reasonable efforts to grant a perfected Lien on all real property
(other than real property constituting Excluded Assets) owned by the Issuers
and the Domestic Restricted Subsidiaries and to provide customary title
insurance for the benefit of the Trustee with respect thereto; including,
without limitation, commercially reasonable efforts to cause the removal of
record of all existing monetary encumbrances such that the Security Documents
shall constitute a first priority Lien on all such real property, subject to
Permitted Liens.  The Issuers shall, and
shall cause each of the Domestic Restricted Subsidiaries to, take, upon request
of the Trustee, any and all actions required to cause the Security Documents to
create and maintain, as security for the Obligations under this Indenture, the
Notes, the Security Documents and the Registration Rights Agreement, valid and
enforceable, perfected (except as expressly provided herein or therein) Liens
in and on all the Collateral, in favor of the Trustee, superior to and prior to
the rights of all third Persons (other than holders of Permitted Liens), and
subject to no other Liens, other than as provided herein and therein; provided, that the Trustee’s Lien securing
the Collateral may be subordinated pursuant to the terms of the Intercreditor
Agreement to a Lien securing Indebtedness outstanding pursuant to Section 4.7
hereof, but only to the extent provided in the Intercreditor Agreement.


 


(e)                                  Each of the Issuers represents and
warrants and covenants that it (or the Domestic Restricted Subsidiaries) has
executed and delivered, filed and recorded and/or shall execute and deliver,
file and record, all instruments and documents, and has done or shall do or
cause to be done all such acts and other things as are necessary to subject the
Collateral to the Lien of the Security Documents.  The Issuers (or the Domestic Restricted
Subsidiaries) shall execute and deliver, file and record all instruments and do
all acts and other things as may be reasonably necessary or advisable to
perfect, maintain and protect the security interests created by the Security
Documents and shall pay all filing, recording, mortgage or other taxes or fees
incidental thereto.


 


(f)                                    The security interests in the
Collateral created by the Security Documents as now or hereafter in effect
shall be held by the Trustee for the equal and ratable benefit and security of
the Notes without preference, priority or distinction of any thereof over any
other by reason, or difference in time, of issuance, sale or otherwise, and for
the enforcement of the payment of principal of, premium, if any, and Interest
on the Notes in accordance with their terms.


 


(g)                                 Each Holder, by its acceptance of a
Note, consents and agrees to the terms of the Security Documents and the
Intercreditor Agreement (including, without limitation, the provisions
providing for foreclosure and release of the Collateral) as the same may be in
effect or may be amended from time to time in accordance with their terms and
authorizes and directs the Secured Party to enter into the Security Documents
and the Intercreditor Agreement and to perform its obligations and exercise its
rights thereunder in accordance therewith. 
The Issuers initially appoint the Trustee as Secured Party and/or
Trustee under the Security Documents and the Intercreditor Agreement.  Any successor Trustee shall act as Secured
Party and/or Trustee under the Security 


 


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Documents and
the Intercreditor Agreement or appoint another Person to act in such capacity.


 


Section 10.2                                                        FURTHER
ASSURANCES AND SECURITY.


 


Each of the Issuers represents and warrants that at the time the
Security Documents and this Indenture are executed, the Issuers (or the
Restricted Subsidiaries) (a) shall have full right, power and lawful
authority to grant, bargain, sell, release, convey, hypothecate, assign,
mortgage, pledge, transfer and confirm, absolutely, the Collateral, in the
manner and form done, or intended to be done, in the Security Documents, free
and clear of all Liens, except for Permitted Liens, and shall forever warrant
and defend the title to the same against the claims of all Persons whatsoever,
subject to the terms of the Intercreditor Agreement; (b) shall execute,
acknowledge and deliver to the Trustee, at the Issuers’ expense, at any time
and from time to time such further assignments, transfer, assurances or other
instruments as may be required by the Trustee to effectuate the terms of this
Indenture or the Security Documents, subject to the terms of the Intercreditor
Agreement; and (c) shall at any time and from time to time do or cause to
be done all such acts and things as may be necessary or proper, or as may be
required by the Trustee, to assure and confirm to the Trustee the security
interest in the Collateral contemplated hereby and by the Security Documents,
subject to the terms of the Intercreditor Agreement.


 


Section 10.3                                                        OPINIONS.


 


(a)                                  The Issuers shall, to the extent
required under the TIA, furnish to the Trustee (i) promptly after the
recording or filing, or re-recording or re-filing of the Security Documents and
other security filings, an Opinion of Counsel (who may be counsel for the
Issuers) stating that in the opinion of such counsel the Security Documents and
other security filings have been properly recorded, filed, re-recorded or
re-filed so as to make effective and perfect the security interest intended to
be created thereby and reciting the details of such action.


 


(b)                                 The Issuers shall, to the extent
required under the TIA, furnish to the Trustee within three months after each
anniversary of the Issue Date, an Opinion of Counsel, dated as of such date,
stating either that (i) in the opinion of such counsel, all action has
been taken with respect to the recording, registering, filing, re-recording,
re-registering and refiling of all supplemental indentures, financing
statements, continuation statements or other instruments of further assurance
as is necessary to maintain the Liens of the Security Documents, subject to the
terms of the Intercreditor Agreement, and reciting the details of such action
or (ii) in the opinion of such Counsel, no such action is necessary to
maintain such Liens, which Opinion of Counsel also shall state what actions it
then believes are necessary to maintain the effectiveness of such Liens during
the next year.


 


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


 


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Section 10.4                                                        RELEASE
OF COLLATERAL.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(d)                                 For the avoidance of doubt (i) any
Collateral owned by any Subsidiary that is not a Foreign Subsidiary that is
designated by the Managers of the Company as an Unrestricted Subsidiary in
accordance with the terms of this Indenture shall be released from the Lien of
this Indenture and the Security Documents at the time of such designation and (ii) any
Collateral that shall constitute an Excluded Asset at any time, or from time to
time, after the date of this Indenture, shall be released from the Lien 


 


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of this
Indenture and the Security Documents at the time such Collateral shall
constitute an Excluded Asset.


 


Section 10.5                                                        CERTIFICATES
OF THE ISSUERS.


 


The Issuers shall furnish to the Trustee, prior to each proposed
release of Collateral, all documents required by TIA § 314(d).  The Trustee may, to the extent permitted by
Sections 7.1 and 7.2 hereof, accept as conclusive evidence of compliance with
the foregoing provisions the appropriate statements contained in such
instruments.  Any certificate or opinion
required by TIA § 314(d) may be made by an Officer of the Issuers,
except in cases where TIA § 314(d) requires that such certificate or
opinion be made by an independent engineer, appraiser or other expert within
the meaning of TIA § 314(d).


 


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


 


Subject to the terms of the Intercreditor Agreement, the Trustee may,
in its sole discretion and without the consent of the Holders, on behalf of the
Holders, take all actions it deems necessary or appropriate in order to (a) enforce
any of the terms of the Security Documents or the Intercreditor Agreement and (b) collect
and receive any and all amounts payable in respect of the Obligations of the
Issuers and the Subsidiary Guarantors hereunder and under the Notes, the
Security Documents and the Registration Rights Agreement.  Subject to the terms of the Intercreditor
Agreement, and to the extent permitted by this Indenture or the Security
Documents, the Trustee shall have the power to institute and to maintain such
suits and proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts that may be unlawful or in violation of the Security
Documents or this Indenture, and such suits and proceedings as the Trustee may
deem expedient to preserve or protect its interest and the interests of the
Holders in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance
with, such enactment, rule or order would impair the security interest
hereunder or be prejudicial to the interests of the Holders or the Trustee).


 


Section 10.7                                                        AUTHORIZATION
OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE SECURITY DOCUMENTS AND THE
INTERCREDITOR AGREEMENT.


 


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


 


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Section 10.8                                                        INTERCREDITOR
AGREEMENT.


 


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


 


ARTICLE XI

SUBSIDIARY GUARANTIES


 


Section 11.1                                                        SUBSIDIARY
GUARANTIES


 


On the Issue Date, there will be no Subsidary Guarantors.  With respect to any Person that becomes a
Subsidiary Guarantor after the Issue Date as required by Section 4.16,
such Subsidiary Guarantor agrees as set forth in this Article XI.  By its execution hereof, each of the
Subsidiary Guarantors acknowledges and agrees that it receives substantial
benefits from the Issuers and that such party is providing its Subsidiary
Guaranty for good and valuable consideration, including, without limitation,
such substantial benefits and services. 
Accordingly, subject to the provisions of this Article XI, each
Subsidiary Guarantor, jointly and severally, hereby unconditionally guarantees
on a senior secured basis to each Holder of a Note authenticated and delivered
by the Trustee and its successors and assigns that: (i) the principal of,
premium, if any, and Interest on the Notes shall be duly and punctually paid in
full when due, whether at maturity, by acceleration, call for redemption, upon
a Change of Control Offer, an Asset Sale Offer, or otherwise, and Interest on
overdue principal, premium, if any, and (to the extent permitted by law)
interest on any Interest, if any, on the Notes and all other obligations of the
Issuers to the Holders or the Trustee under the Notes, this Indenture, the
Security Documents and the Registration Rights Agreement (including fees,
expenses or other) shall be promptly paid in full or performed, all in
accordance with the terms hereof; and (ii) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations under
the Notes, this Indenture, the Security Documents or Registration Rights
Agreement, the same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration, call for redemption, upon a Change of Control, an
Asset Sale Offer, or otherwise, subject, however, in the case of clauses (i) and
(ii) above, to the limitations set forth in Section 11.6 hereof
(collectively, the “Subsidiary Guaranty
Obligations”).


 


Subject to the provisions of this Article XI, each Subsidiary
Guarantor hereby agrees that its Subsidiary Guaranty hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Notes, this Indenture, the Security Documents, the Registration Rights
Agreement or the absence of any action to enforce the same, any waiver or
consent by any Holder with respect to any thereof, any releases 


 


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of the Collateral, the entry of any judgment
against the Issuers, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Subsidiary Guarantor.  Each Subsidiary
Guarantor hereby waives and relinquishes: (a) any right to require the
Trustee, the Holders or the Issuers (each, a “Benefited
Party”) to proceed against the Issuers, the Restricted Subsidiaries
or any other Person or to proceed against or exhaust any security held by a
Benefited Party at any time or to pursue any other remedy in any Secured Party’s
power before proceeding against the Subsidiary Guarantors; (b) any defense
that may arise by reason of the incapacity, lack of authority, death or
disability of any other Person or Persons or the failure of a Benefited Party
to file or enforce a claim against the estate (in administration, bankruptcy or
any other proceeding) of any other Person or Persons; (c) demand, protest
and notice of any kind (except as expressly required by this Indenture),
including but not limited to notice of the existence, creation or incurring of
any new or additional Indebtedness or obligation or of any action or non-action
on the part of the Subsidiary Guarantors, the Issuers, the Restricted
Subsidiaries, any Benefited Party, any creditor of the Subsidiary Guarantors,
the Issuers or the Restricted Subsidiaries or on the part of any other Person
whomsoever in connection with any obligations the performance of which are
hereby guaranteed; (d) any defense based upon an election of remedies by a
Benefited Party, including but not limited to an election to proceed against
the Subsidiary Guarantors for reimbursement; (e) any defense based upon
any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than
that of the principal; (f) any defense arising because of a Benefited
Party’s election, in any proceeding instituted under the Bankruptcy Law, of the
application of Section 1111(b)(2) of the Bankruptcy Code; and (g) any
defense based on any borrowing or grant of a security interest under Section 364
of the Bankruptcy Code.  The Subsidiary
Guarantors hereby covenant that, except as otherwise provided therein, the
Subsidiary Guaranties shall not be discharged except by payment in full of all
Subsidiary Guaranty Obligations, including the principal, premium, if any, and
Interest on the Notes and all other costs provided for under this Indenture or
as provided in Article VIII.


 


If any Holder or the Trustee is required by any court or otherwise to
return to either the Issuers or the Subsidiary Guarantors, or any trustee or
similar official acting in relation to either the Issuers or the Subsidiary
Guarantors, any amount paid by the Issuers or the Subsidiary Guarantors to the
Trustee or such Holder, the Subsidiary Guaranties, to the extent theretofore
discharged, shall be reinstated in full force and effect.  Each of the Subsidiary Guarantors agrees that
it shall not be entitled to any right of subrogation in relation to the Holders
in respect of any Subsidiary Guaranty Obligations hereby until payment in full
of all such obligations guaranteed hereby. 
Each Subsidiary Guarantor agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article VI
hereof for the purposes hereof, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Subsidiary Guaranty
Obligations, and (y) in the event of any acceleration of such obligations as
provided in Article VI hereof, such Subsidiary Guaranty Obligations 


 


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


 


Section 11.2                                                        EXECUTION
AND DELIVERY OF SUBSIDIARY GUARANTIES


 


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


 


Each of the Subsidiary Guarantors agree that the Subsidiary Guaranties
set forth in this Article XI shall remain in full force and effect and
apply to all the Notes notwithstanding any failure to endorse on each Note a
notation of the Subsidiary Guaranties.


 


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


 


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


 


Section 11.3                                                        SUBSIDIARY
GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS


 


(a)                                  Nothing contained in this Indenture
or in the Notes shall prevent any consolidation or merger of any Subsidiary
Guarantor with or into each other or with or into the Company; provided,
however, that such consolidation or merger shall otherwise comply with this
Indenture.  Upon any such consolidation
or merger, the Subsidiary Guaranty of the Subsidiary Guarantor that does not
survive the consolidation or merger shall no longer be of any force or effect.


 


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


 


101





















 


Trustee,
pursuant to which such Person shall unconditionally guaranty, on a senior
secured basis, all of such Subsidiary Guarantor’s obligations under such
Subsidiary Guarantor’s Subsidiary Guaranty on the terms set forth in this
Indenture, (B) executes a secondary agreement and other Security Documents
necessary or reasonably requested by the Trustee to grant, and grants, a valid,
enforceable, perfected Lien on the Collateral owned by such Person to secure
such Obligations on the terms set forth in the Security Documents, and (C) delivers
to the Trustee an Opinion of Counsel that such supplemental indenture and such
guaranty and Security Documents have been duly authorized, executed and delivered
and that each such document and this Indenture constitutes a legal, valid,
binding and enforceable obligation of such Person, in each case, subject to
customary qualifications; and (ii) immediately before and immediately
after giving effect to such transaction on a pro
forma basis, no Default or Event of Default shall have occurred or
be continuing.  The provisions of this Section 11.3(b) shall
not apply to the merger of any Subsidiary Guarantors with or into each other or
with or into the Company.  In case of any
such consolidation or merger and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and reasonably satisfactory in form to the Trustee, of the Subsidiary
Guaranties endorsed upon the Notes and the due and punctual performance of all
of the covenants and conditions of this Indenture to be performed by such
Subsidiary Guarantor, such successor corporation shall succeed to and be
substituted for such Subsidiary Guarantor with the same effect as if it had
been named herein as a Subsidiary Guarantor. 
Such successor corporation thereupon may cause to be signed any or all
of the Subsidiary Guaranties to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Issuers and delivered to
the Trustee.  All the Subsidiary
Guaranties so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Subsidiary Guaranties theretofore and thereafter
issued in accordance with the terms of this Indenture as though all of such
Subsidiary Guaranties had been issued at the date of the execution hereof.


 


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


 


Section 11.4                                                        SUBSIDIARY
GUARANTY BY FUTURE RESTRICTED SUBSIDIARIES


 


The Issuers shall cause each of the existing and future Restricted
Subsidiaries (other than Foreign Subsidiaries) to (i) execute and deliver
to the Trustee a supplemental indenture substantially in the form of Exhibit E
hereto and a guaranty substantially in the form included in Exhibit A
hereto, pursuant to which such Restricted Subsidiary shall unconditionally
guaranty on a senior secured basis, all of the Issuers’ Obligations under the
Notes and this Indenture on the terms set forth in this Indenture, (ii) execute
a security agreement and other Security Documents necessary or reasonably
requested by the Trustee to grant, and grant, the Trustee a valid, enforceable,
perfected Lien on the Collateral described therein, and (iii) deliver to
the Trustee an Opinion of Counsel that such supplemental indenture, guaranty
and Collateral Documents have been 


 


102





















 


duly authorized, executed and delivered by such
Restricted Subsidiary and that each of such documents and this Indenture,
guaranty and Collateral Documents have constitutes a legal, valid, binding and
enforceable obligation of such Restricted Subsidiary, in each case subject to
customary qualifications including exceptions for bankruptcy, fraudulent
transfer and equitable principles. 
Thereafter, such Restricted Subsidiary shall be a Subsidiary Guarantor
for all purposes of this Indenture.


 


Section 11.5                                                        RELEASE
OF SUBSIDIARY GUARANTORS


 


Notwithstanding Section 11.3 hereof, upon the sale or disposition
(including by merger or sale or transfer of all of the Equity Interests) of a
Subsidiary Guarantor (as an entirety) to a Person which is not and is not
required to become a Subsidiary Guarantor, the designation of a Domestic
Restricted Subsidiary as an Unrestricted Subsidiary or the liquidation, or
dissolution of a Subsidiary Guarantor, which transaction is otherwise in
compliance with this Indenture (including, without limitation, Sections 4.13
and 4.14), such Subsidiary Guarantor shall be deemed released from its
Obligations under its Subsidiary Guaranty and the Security Documents; provided, however, that any such
termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor under all of its guarantees of, and under all of its
pledges of assets or other security interests which secure, any Indebtedness of
the Issuers or any Indebtedness of any other of the Restricted Subsidiaries
shall also terminate upon such release, sale or transfer and none of its Equity
Interests are pledged for the benefit of any holder of any Indebtedness of the
Issuers or any Indebtedness of any of the Restricted Subsidiaries.


 


The Trustee, subject to the provisions of Section 12.4 hereof,
shall be entitled to receive an Officers’ Certificate as conclusive evidence
that such sale or other disposition or that such designation was made by the
Issuers in accordance with the provisions of this Indenture.  Except as provided in Section 11.3
hereof, any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guaranty shall remain liable for the full amount of principal of and
Interest on the Notes and for the other obligations of any Subsidiary Guarantor
under this Indenture as provided in this Article XI.


 


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


 


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


 


(a)                                  Each Subsidiary Guarantor, and by
its acceptance of Notes each Holder, hereby confirms that it is the intention
of all such parties that the Subsidiary Guaranty Obligation of such Subsidiary
Guarantor pursuant to its Subsidiary Guaranty not constitute a fraudulent
transfer or conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law.  To effectuate the foregoing
intention, the Holders and such Subsidiary Guarantor hereby irrevocably agree
that the Subsidiary Guaranty Obligations of such Subsidiary Guarantor under
this Article XI shall be limited to the maximum amount as shall, after
giving effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by
or on behalf of any other Subsidiary Guarantor in respect of the Subsidiary
Guaranty Obligations of such other Subsidiary Guarantor under this Article XI,
result in the Subsidiary Guaranty Obligations of such Subsidiary Guarantor
under the Subsidiary Guaranty of such Subsidiary Guarantor not constituting a
fraudulent transfer or conveyance.


 


(b)                                 Each Subsidiary Guarantor hereby
covenants and agrees, to the fullest extent that it may do so under applicable
law, that in the event of the insolvency, bankruptcy, dissolution, liquidation
or reorganization of either of the Issuers, such Subsidiary Guarantor shall not
file (or join in any filing of), or otherwise seek to participate in the filing
of, any motion or request seeking to stay or to prohibit (even temporarily)
execution on the Subsidiary Guaranty and hereby waives and agrees not to take
the benefit of any such stay of execution, whether under Section 362 or
105 of the Bankruptcy Law or otherwise.


 


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


 


(a)                                  For purposes of any provision of
this Indenture which provides for the delivery by any Subsidiary Guarantor of
an Officers’ Certificate and/or an Opinion of Counsel, the definitions of such
terms in Section 1.1 hereof shall apply to such Subsidiary Guarantor as if
references therein to the Issuers were references to such Subsidiary Guarantor.


 


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


 


(c)                                  Any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the Holders to or on any Subsidiary Guarantor may be given or
served as described in Section 12.2 hereof as if references therein to the
Issuers were references to such Subsidiary Guarantor.


 


104





















 


 


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


 


ARTICLE XII

MISCELLANEOUS


 


Section 12.1                                                        TRUST
INDENTURE ACT CONTROLS


 


If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by the TIA § 318(c), the imposed duties shall control.


 


Section 12.2                                                        NOTICES


 


Any notice or communication by the Issuers or the Trustee to the other
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next day delivery, to the others’ address:


 


If to the
Issuers

or the Subsidiary Guarantors:


 


Diamond Jo
Worth, LLC

Diamond Jo Worth Corp.


400 East Third
Street


P.O. Box
1750


Dubuque, Iowa
52004-1750


Attention:  Chief Financial Officer 

Telecopier No.:  (563) 557-0549


 


with copies
(which

shall not constitute

notice) to:


 


Mayer, Brown,
Rowe & Maw LLP

1675 Broadway

New York, New York 10019

Attn:  Nazim Zilkha, Esq.

Telecopier No.: (212) 262-1910


 


with a copy (which

shall not constitute

notice) to:


 


Diamond Jo, LLC

7137 Mission Hills Drive


 


F-105





















 


Las Vegas, Nevada 89113

Attention:  Michael S. Luzich

Telecopier No.: 702-247-6822


 


If to the
Trustee:


 


U.S. Bank
National Association

60 Livingston Avenue

St. Paul, Minnesota 55107-2292

Attention:  Corporate Trust Department

Telecopier No.:  (651) 495-8097


 


The Issuers or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.


 


All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: (i) at the time delivered by hand, if
personally delivered; (ii) five Business Days after being deposited in the
mail, postage prepaid; (iii) when receipt acknowledged, if telecopied; and
(iv) the next Business Day after timely delivery to the courier, if sent
by overnight air courier guaranteeing next day delivery.


 


Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar.  Any notice or
communication shall also be so mailed to any Person described in TIA § 313(c),
to the extent required by the TIA. 
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.


 


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


 


If the Issuers mail a notice or communication to Holders, they shall
mail a copy to the Trustee and each Agent at the same time.


 


Section 12.3                                                        COMMUNICATION
BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES


 


Holders may communicate pursuant to TIA § 312(b) with other
Holders with respect to their rights under this Indenture or the Notes.  The Issuers, the Trustee, the Registrar and
anyone else shall have the protection of TIA § 312(c).


 


Section 12.4                                                        CERTIFICATE
AND OPINION AS TO CONDITIONS PRECEDENT


 


Upon any request or application by the Issuers to the Trustee to take
any action under this Indenture, the Issuers shall furnish to the Trustee:


 


106





















 


(a)                                  an Officers’ Certificate in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 12.5 hereof) stating that, in the opinion
of the signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and


 


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


 


Section 12.5                                                        STATEMENTS
REQUIRED IN CERTIFICATE OR OPINION


 


Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA § 314(a)(4)) shall include:


 


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


 


(b)                                 a brief statement as to the nature
and scope of the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;


 


(c)                                  a statement that, in the opinion of
such Person, he or she has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and


 


(d)                                 a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been satisfied;


 


provided,
however, that with respect to matters of fact, an Opinion of Counsel
may rely on an Officers’ Certificate or certificate of public officials.


 


Section 12.6                                                        RULES
BY TRUSTEE AND AGENTS


 


The Trustee may make reasonable rules for action by or at a
meeting of Holders.  The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for
its functions.


 


Section 12.7                                                        LEGAL
HOLIDAYS


 


If any payment date is a Legal Holiday, payment may be made at the
place of payment on the next succeeding day that is not a Legal Holiday, and no
Interest shall accrue for the intervening period.


 


107





















 


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


 


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


 


Section 12.9                                                        GOVERNING
LAW AND SUBMISSION TO JURISDICTION 


 


THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION,
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK
CIVIL PRACTICE LAWS AND RULES 327(b); PROVIDED, THAT WITH RESPECT TO THE
CREATION, ATTACHMENT, PERFECTION, PRIORITY, ENFORCEMENT OF AND REMEDIES
RELATING TO THE SECURITY INTEREST IN ANY REAL PROPERTY COLLATERAL, THE
GOVERNING LAW MAY BE THE LAWS OF THE JURISDICTIONS WHERE SUCH COLLATERAL
IS LOCATED WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF.


 


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


 


108





















 


Section 12.10                                                  NO
ADVERSE INTERPRETATION OF OTHER AGREEMENTS


 


This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Issuers or the Restricted Subsidiaries or of any other
Person.  Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.


 


Section 12.11                                                  SUCCESSORS


 


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


 


Section 12.12                                                  SEVERABILITY


 


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


 


Section 12.13                                                  COUNTERPART ORIGINALS


 


The parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.


 


Section 12.14                                                  TABLE
OF CONTENTS, HEADINGS, ETC.


 


The Table of Contents and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.


 


[Signatures on following page]


 


109





















 


SIGNATURES


 


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


 


	
   

  	
  THE ISSUERS:

  
	
   

  	
   

  
	
   

  	
  Diamond Jo Worth, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Natalie Schramm

  
	
   

  	
   

  	
  Name: 

  	
  Natalie Schramm

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. Brent Stevens

  
	
   

  	
   

  	
  Name: 

  	
  M. Brent Stevens

  
	
   

  	
   

  	
  Title: 

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Diamond Jo Worth Corp.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Natalie Schramm

  
	
   

  	
   

  	
  Name: 

  	
  Natalie Schramm

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. Brent Stevens

  
	
   

  	
   

  	
  Name:

  	
  M. Brent Stevens

  
	
   

  	
   

  	
  Title: 

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE TRUSTEE:

  
	
   

  	
   

  
	
   

  	
  U.S. Bank National Association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Richard H. Prokosch

  
	
   

  	
   

  	
  Name: 

  	
  Richard H. Prokosch

  
	
   

  	
   

  	
  Title: 

  	
  Vice President

  
						



 





















 


EXHIBIT A


 


[FORM OF NOTE]


 


DIAMOND JO WORTH, LLC


 


DIAMOND JO WORTH CORP.


 


11% SENIOR SECURED NOTE

DUE 2012


 


	
   

  	
   

  	
    CUSIP:

  
	
  No.

  	
   

  	
  $

  



 


Diamond Jo
Worth, LLC, a Delaware limited liability company (the “Company”) and Diamond Jo Worth Corp., a
Delaware corporation (“DJW Corp.”
and, together with the Company, the “Issuers,”
which term includes any successors under, the Indenture hereinafter referred
to), for value received, hereby promise to pay to Cede & Co, or
registered assigns, the principal sum of                     
Dollars, on April 15, 2012.


 


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


 


Interest
Record Dates:  April 1 and October 1


 


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


 


Upon request,
the Issuers shall promptly make available to a holder of this Note information
regarding the issue price, the amount of original issue discount, the issue
date, and the yield to maturity of this Note. 
Holders should contact Diamond Jo Worth, LLC, 3rd Street Ice
Harbor, P.O. Box 1750, Dubuque, Iowa 52001, Attention: Chief Financial
Officer.


 


A-1





















 


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


 


	
   

  	
  Diamond Jo
  Worth, LLC,

  
	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Diamond Jo
  Worth Corp.,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


TRUSTEE’S
CERTIFICATE OF AUTHENTICATION


 


This is one of
the Notes described in the within-mentioned Indenture.


 


	
   

  	
  U.S. Bank National Association

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  
						



 





















 


(Reverse of
Note)


 


11% Senior
Secured Note due 2012


 


[THIS GLOBAL NOTE IS HELD BY
THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE
IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.6 OF
THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.](1)


 


[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY A NOMINEE OF THE DEPOSITARY,
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.  UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55
WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](2)


 


[THE RIGHTS ATTACHING TO THIS
REGULATION S TEMPORARY GLOBAL NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING
ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS
DEFINED HEREIN).  NEITHER THE HOLDER NOR
THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE 


 










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


 


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


 


 


A-3





















 


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


 


[THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION.


 


THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS
(OR SUCH OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k)
UNDER THE SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES BY
NON-AFFILIATES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS
WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE “RESALE
RESTRICTION TERMINATION DATE”) ONLY (A) TO THE ISSUERS, (B) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES
IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’
AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS 


 










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


 


A-4





















 


AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH CASE IN ACCORDANCE WITH
APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER APPLICABLE
JURISDICTION.](4)


 


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


 


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


 


2.                                       Method of Payment.  The Issuers shall pay Interest on the Notes
to the Persons who are registered Holders of Notes at the close of business on
the April 1 or October 1 next preceding the Interest Payment Date
(each an “Interest Record Date”),
even if such Notes are cancelled after such Interest Record Date and on or
before such Interest Payment Date, except as provided in Section 2.12 of
the Indenture (as defined below) with respect to defaulted interest.  The Notes shall be payable as to principal,
Interest, premium, if any, at the office or agency of the Issuers maintained
within the City and State of New York for such purpose, or, at the option of
the Issuers, payment of Interest may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds to an account within the United
States shall be required with respect to principal of and Interest, premium, if
any, on all Global Notes.  Such payment
shall be in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.


 










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


 


A-5





















 


3.                                       Paying Agent and Registrar.  Initially, U.S. Bank National Association,
the Trustee under the Indenture, shall act as Paying Agent and Registrar.  The Issuers may change any Paying Agent or
Registrar without notice to any Holder. 
The Company or any of its subsidiaries may act in any such capacity.


 


4.                                       Indenture. 
The Issuers issued the Notes under an Indenture, dated as of the Issue
Date (“Indenture”), by and among
the Issuers, the Subsidiary Guarantors party thereto and the Trustee.  The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb).  The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms.


 


The Obligations under the Indenture, the Intercreditor Agreement, the
Notes and the Subsidiary Guaranties thereof are secured by the Collateral
described in the Security Documents, subject to the provisions of such agreements
and the Intercreditor Agreement.  Holders
are referred to the Security Documents and the Intercreditor Agreement for a
statement of such terms.


 


5.                                       Optional Redemption.


 


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


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  105.500

  	
  %

  
	
  2009

  	
   

  	
  103.667

  	
  %

  
	
  2010

  	
   

  	
  101.833

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


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


 


(c)                                  Notice
of redemption shall be mailed by first class mail at least 30 days but not more
than 60 days before the redemption date to each Holder whose Notes are to be
redeemed at its registered address. 
Notes in denominations larger than $1,000 may be redeemed in part but
only in integral multiples of $1,000, unless all of the Notes held by a Holder
are to be redeemed.  On and after the
redemption date, Interest ceases to accrue on 


 


A-6





















 


Notes or
portions thereof called for redemption unless the Issuers default in such
payments due on the redemption date.


 


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


 


7.                                       Mandatory Redemption.  The Issuers shall not be required to make
mandatory redemption payments with respect to the Notes (except for a Required
Regulatory Redemption and any offer to repurchase Notes that the Issuers are
required to make in accordance with Sections 4.13 and 4.15 of the
Indenture).  The Notes shall not have the
benefit of any sinking fund.


 


8.                                       Offers to Purchase.


 


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


 


A-7





















 


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


 


9.                                       Denominations, Transfer, Exchange.  The Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000.  The transfer of Notes may be registered and
Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents, and the Issuers may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. 
The Issuers need not exchange or register the transfer of any Note or
portion of a Note selected for redemption, except for the unredeemed portion of
any Note being redeemed in part.  Also,
it need not exchange or register the transfer of any Notes for a period of 15
days before a selection of Notes to be redeemed or during the period between an
Interest Record Date and the corresponding Interest Payment Date.


 


10.                                 Persons Deemed Owners.  The registered Holder of a Note may be
treated as its owner for all purposes.


 


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


 


A-8





















 


existing
Default or compliance with any provision of the Indenture, the Notes or the
Subsidiary Guaranties may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes.  Without the consent of any Holder of a Note,
the Indenture, the Notes, the Subsidiary Guaranties or, subject to the
Intercreditor Agreement, the Security Documents may be amended or supplemented
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Issuers’ or the Subsidiary Guarantors’ obligations to Holders
of the Notes in case of a merger or consolidation or sale of all or
substantially all of its assets in accordance with the Indenture, to evidence the
release of any Subsidiary Guaranty permitted to be released under the terms of
the Indenture and the Security Documents or to evidence the addition of any new
Subsidiary Guarantor, to make any change that would provide any additional
rights or benefits to the Holders of the Notes (including the addition of any
Subsidiary Guarantor) or that does not adversely affect the rights under the
Indenture, the Notes, the Subsidiary Guaranties, the Security Documents or the
Intercreditor Agreement of any such Holder, to comply with the provisions of
the Depositary, Euroclear or Clearstream or the Trustee with respect to the
provisions of the Indenture or the Notes relating to transfers and exchanges of
Notes or beneficial interests therein, to comply with the requirements of the
SEC in order to effect or maintain the qualification of the Indenture under the
TIA, to provide for the issuance of Additional Notes in accordance with the
limitations set forth in the Indenture, to comply with applicable gaming laws
and racing laws, or to enter into additional or supplemental Security
Documents.  Notwithstanding Sections
9.2(a), (b) and (c) of the Indenture and subject to the Intercreditor
Agreement, no portion of the Collateral may be released from the Lien of the
Security Documents (except in accordance with the provisions of this Indenture
and the Security Documents), and none of the Security Documents or the
provisions of the Indenture relating to the Collateral may be amended or
supplemented, and the rights of any Holders thereunder may not be waived or
modified, without, in each case, the consent of the Holders of at least 75% in
aggregate principal amount of the then outstanding Notes.


 


12.                                 Defaults and Remedies.  The Indenture provides that each of the
following constitutes an Event of Default: (i) the Issuers default in the
payment of Interest on any Note when the same becomes due and payable and the
Default continues for a period of 30 days; (ii) the Issuers default in the
payment of the principal (or premium, if any) on any Note when the same becomes
due and payable at maturity, upon redemption, by acceleration, in connection
with an Excess Proceeds Offer or a Change of Control Offer or otherwise; (iii) either
of the Issuers default in the performance of or breaches the provisions of Section 4.13,
Section 4.15 or Article V of the Indenture; (iv) either of the
Issuers or any Subsidiary Guarantor fails to comply with any of its other
agreements or covenants in, or provisions of, the Notes or this Indenture and
the Default continues for 60 days after written notice thereof has been given
to the Issuers by the Trustee or to the Issuers and the Trustee by the Holders
of at least 25% in aggregate principal amount of the then outstanding Notes,
such notice to state that it is a “Notice of Default”; (v) an event of
default occurs under (after giving effect to any waivers, amendments,
applicable grace periods or any extension of any maturity date) any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or 


 


A-9





















 


evidenced any
Indebtedness for money borrowed by the Issuers or any Restricted Subsidiary (or
the payment of which is guaranteed by the Issuers or any Restricted
Subsidiary), whether such Indebtedness or guaranty now exists or is created
after the Issue Date, if (a) either (1) such default results from the
failure to pay principal of or interest on such Indebtedness or (2) as a
result of such event of default the maturity of such Indebtedness has been
accelerated, and (b) the principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness with respect to which
such a payment event of default (after the expiration of any applicable grace
period or any extension of the maturity date) has occurred, or the maturity of
which has been so accelerated, exceeds $5,000,000 in the aggregate; (vi) a
final non-appealable judgment or judgments for the payment of money (other than
to the extent of any judgment as to which a reputable insurance company has
accepted liability) is or are entered by a court or courts of competent
jurisdiction against either of the Issuers or any Subsidiary and such judgment
or judgments are not discharged, bonded or stayed within 60 days after entry,
provided that the aggregate of all such judgments exceeds $5,000,000; (vii) the
cessation of substantially all gaming operations of the Company and the
Restricted Subsidiaries, taken as a whole, for more than 90 days, except as a
result of an Event of Loss; (viii) any revocation, suspension, expiration
(without previous or concurrent renewal) or loss of any Gaming License of the
Company or any Restricted Subsidiary for more than 90 days; (ix) any
Subsidiary Guaranty of a Subsidiary Guarantor which is a Significant Subsidiary
ceases to be in full force and effect or shall be held in any judicial
proceeding to be unenforceable or invalid or is declared null and void (other
than in accordance with the terms of the Subsidiary Guaranty and the Indenture)
or any Subsidiary Guarantor which is a Significant Subsidiary denies or
disaffirms its Obligations under its Subsidiary Guaranty or the Security
Documents (in each case, other than by reason of the termination of the
Indenture or the release of any such Subsidiary Guaranty in accordance with the
Indenture); (x) (A) any event of default under a Security Document (after
giving effect to any applicable grace periods, applicable notice periods,
waivers or amendments) or (B) the failure of the Issuers or any Restricted
Subsidiary to comply with any material agreement or covenant in, or material
provision of, any of the Security Documents, or any breach in any material
respect of any material representation or warranty made by the Issuers or any
Restricted Subsidiary in any Security Document, and the continuance of such
failure or breach for a period of 30 days after written notice is given to the
Issuers by the Trustee or to the Issuers and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Notes outstanding; (xi) any of
the Security Documents ceases to be in full force and effect or any of the
Security Documents ceases to give the Trustee (or, in the case of a mortgage,
ceases to give the Trustee or any other trustee under such mortgage) any of the
Liens, rights, powers or privileges purported to be created thereby, or any of
the Security Documents is declared null and void, or any of the Issuers or any
Subsidiary Guarantor denies that it has any further liability under any
Security Document to which it is a party or gives notice of such effect (in
each case other than by reason of the termination of the Indenture or any such
Security Document in accordance with its terms or the release of any Subsidiary
Guarantor in accordance with the Indenture) and the continuance of such failure
for a period of 30 days after written notice is given to the Issuers by the
Trustee or to the Issuers and the Trustee by the Holders of at least 25% in
aggregate principal 


 


A-10





















 


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


 


13.                                 Trustee
Dealings with Issuers.  The Trustee,
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Issuers or their Affiliates, and may
otherwise deal with the Issuers or their Affiliates, as if it were not the
Trustee.


 


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


 


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


 


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


 


17.                                 CUSIP Numbers.  Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Issuers have
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon, and any such redemption shall not be affected by any defect in
or omission of such numbers.


 


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


 


A-11





















 


guarantees, to
each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, that:


 


By its execution of its Subsidiary Guaranty, each of the Subsidiary
Guarantors acknowledges and agrees that it receives substantial benefits from
the Issuers and that such party is providing its Subsidiary Guaranty for good
and valuable consideration, including, without limitation, such substantial
benefits and services.  Accordingly,
subject to the provisions of Article XI of the Indenture, each Subsidiary
Guarantor, jointly and severally, unconditionally guarantees on a senior
secured basis to each Holder of a Note authenticated and delivered by the
Trustee and its successors and assigns that: (i) the principal of,
premium, if any, and Interest on the Notes shall be duly and punctually paid in
full when due, whether at maturity, by acceleration, call for redemption, upon
a Change of Control Offer, an Asset Sale Offer, or otherwise, and Interest on
overdue principal, premium, if any, and (to the extent permitted by law)
interest on any Interest, if any, on the Notes and all other obligations of the
Issuers to the Holders or the Trustee under the Notes, the Indenture or the
Security Documents (including fees, expenses or other) shall be promptly paid
in full or performed, all in accordance with the terms of the Indenture; and (ii) in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations under the Notes, the Indenture or the Security Documents, the
same shall be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration, call for redemption, upon a Change of Control, an Asset Sale
Offer, or otherwise, subject, however, in the case of clauses (i) and (ii) above,
to the limitations set forth in Section 11.6 of the Indenture.


 


When a successor assumes all the obligations of its predecessor under
the Notes and the Indenture, the predecessor may be released from those
obligations.


 


20.  Governing Law and Consent to Jurisdiction.  THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b);
PROVIDED, THAT WITH RESPECT TO THE CREATION, ATTACHMENT, PERFECTION, PRIORITY,
ENFORCEMENT OF AND REMEDIES RELATING TO THE SECURITY INTEREST IN ANY REAL
PROPERTY COLLATERAL, THE GOVERNING LAW MAY BE THE LAWS OF THE
JURISDICTIONS WHERE SUCH COLLATERAL IS LOCATED WITHOUT REGARD TO THE CONFLICT
OF LAW PROVISIONS THEREOF.


 


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


 


A-12





















 


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


 


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


 


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


 


DIAMOND JO
WORTH, LLC

DIAMOND JO WORTH CORP.

3rd Street Ice Harbor


P.O. Box
1750


Dubuque, Iowa
52001


Attention: 
Chief Financial Officer 


 


A-13





















 


Assignment Form


 


To assign this
Note, fill in the form below: (I) or (We) assign and transfer this Note to


 


	
   

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

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Print or
  type assignee’s name, address and zip code)

  
	
   

  
	
  and
  irrevocably appoint

  	
   

  	
   to
  transfer this Note 

  



on the books of the
Issuers.  The agent may substitute
another to act for it.


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
        Your
  Signature:

  	
   

  	
   

  
	
   

  	
  (Sign
  exactly as your name appears on the face of this Note) 

  	
   

  
	
  Signature
  Subsidiary Guaranty*

  
	
   

  
	
   

  	
   

  



 










*NOTICE:  The Signature must be
guaranteed by an Institution which is a member of one of the following
recognized signature Subsidiary Guaranty Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program
(SEMP); or (iv) such other guaranty program acceptable to the Trustee.


 


A-14





















 


Option of Holder to Elect Purchase


 


If you want to elect to have this Note purchased by the Issuers
pursuant to Section 4.13 or Section 4.15 of the Indenture, check the
box below:


 


	
  Section 4.13
  o

  	
   

  	
  Section 4.15
  o

  



 


If you want to elect to have only part of the Note purchased by the
Issuers pursuant to Section 4.13 or 4.15 of the Indenture, state the
amount you elect to have purchased (in denominations of $1,000 only, except if
you have elected to have all of your Notes purchased): 
$                               


 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
         Your
  Signature:

  	
   

  
	
   

  	
  (Sign
  exactly as your name appears on the Note)

  
	
   

  
	
  Social Security or Tax Identification No.:                         

  



Signature
Subsidiary Guaranty*


 


 










*NOTICE:  The Signature must be
guaranteed by an Institution which is a member of one of the following
recognized signature Subsidiary Guaranty Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program
(SEMP); or (iv) such other guaranty program acceptable to the Trustee.


 


A-15





















 


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


 


The following exchanges of an interest in this Global Note for an
interest in another Global Notes or for a Definitive Note, or exchanges of an
interest in another Global Note or a Definitive Note for an interest in this
Global Note, have been made:


 


	
  Date of Exchange

  	
   

  	
  Amount of 

  Decrease in 

  Principal Amount of 

  this Global Note

  	
   

  	
  Amount of 

  Increase in 

  Principal 

  Amount of this 

  Global Note

  	
   

  	
  Principal Amount of 

  this Global Note 

  Following Such 

  Decrease or Increase

  	
   

  	
  Signature of 

  Authorized Officer 

  of 

  Trustee or Note 

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 










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


 


A-16





















 


GUARANTEE


 


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


 


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


 


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


 


This is a continuing Subsidiary Guaranty and shall remain in full force
and effect and shall be binding upon each Subsidiary Guarantor and its
successors and assigns until full and final payment of all of the Issuers’
obligations under the Notes and Indenture or until released or legally defeased
in accordance with the Indenture and shall inure to the benefit of the
successors and assigns of the Trustee and the Holders, and, in 


 


A-17





















 


the event of
any transfer or assignment of rights by any Holder or the Trustee, the rights
and privileges herein conferred upon that party shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions hereof.  This is a Subsidiary
Guaranty of payment and performance and not of collectibility.


 


This Subsidiary Guaranty shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guaranty is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.


 


The obligations of each Subsidiary Guarantor under this Subsidiary
Guaranty shall be limited to the extent necessary to insure that it does not
constitute a fraudulent conveyance under applicable law.


 


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


 


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


 


[signature
page follows]


 


A-18





















 


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


 


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 





















 


EXHIBIT B


 


FORM OF CERTIFICATE OF TRANSFER


 


Diamond Jo Worth, LLC

Diamond Jo Worth Corp.

3rd Street Ice Harbor


P.O. Box 1750


Dubuque, Iowa 52001


 


U.S. Bank
National Association

60 Livingston Avenue

St. Paul, MN 55107-2292


 


Re:  11% Senior Secured Notes due 2012


 


Dear Sirs:


 


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


 


[CHECK ALL
THAT APPLY]


 


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


 


B-1





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


B-2





















 


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


 


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


 


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


 


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


 


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


 


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


 


B-3





















 


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


 


[signature
page follows]


 


B-4





















 


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


 


	
   

  	
   

  	
  Dated:

  	
   

  
	
  [Insert Name
  of Transferor]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
						



 


B-5





















 


ANNEX A TO
CERTIFICATE OF TRANSFER


 


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


 


	
  [[CHECK ONE
  OF (a) OR (b)]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
   

  	
  o

  	
   

  	
  a beneficial
  interest in

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  o

  	
   

  	
  144A Global
  Note, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  o

  	
   

  	
  501 Global
  Note, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  o

  	
   

  	
  Reg S Global
  Note; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  o

  	
   

  	
  a Restricted Definitive Note.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.               After
  the Transfer the Transferee shall hold:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [CHECK ONE]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
   

  	
  o

  	
   

  	
  a beneficial
  interest in the:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  o

  	
   

  	
  144A Global
  Note, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  o

  	
   

  	
  501 Global
  Note, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  o

  	
   

  	
  Reg S Global
  Note,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  o

  	
   

  	
  Unrestricted
  Global Note; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  o

  	
   

  	
  a Restricted Definitive Note; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  o

  	
   

  	
  an Unrestricted Definitive Note,

  



 


in accordance
with the terms of the Indenture.


 


B-6





















 


EXHIBIT C


 


FORM OF CERTIFICATE OF EXCHANGE


 


Diamond Jo Worth, LLC

Diamond Jo Worth Corp.

3rd Street Ice Harbor


P.O. Box 1750


Dubuque, Iowa 52001


 


U.S. Bank
National Association

60 Livingston Avenue

St. Paul, MN 55107-2292


 


Re:  11% Senior Secured Notes due 2012


 


Dear Sirs:


 


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


 


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


 


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


 


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


 


C-1





















 


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


 


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


 


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


 


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


 


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


 


C-2





















 


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


 


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


 


[signature
page follows]


 


C-3





















 


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


 


	
   

  	
   

  
	
  [Insert Name
  of Owner]

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
	
   

  
	
   

  
	
  Dated:

  	
   

  	
   

  
					



 


C-4





















 


EXHIBIT D


 


FORM OF CERTIFICATE FROM ACQUIRING

INSTITUTIONAL ACCREDITED INVESTOR


 


Diamond Jo
Worth, LLC


Diamond Jo
Worth Corp.

400 East Third Street


P.O. Box
1750

Dubuque, Iowa 52004-1750


 


U.S. Bank
National Association

60 Livingston Avenue

St. Paul, MN 55107-2292


 


Re:  11% Senior Secured Notes due 2012


 


Dear Sirs:


 


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


 


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


 


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


 


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


 


D-1





















 


Notes in the normal course of our business. We and any investor
accounts for which we are acting are each aware that we may be required, and
are each able, to bear the economic risk of our or its investment in the Notes
for an indefinite period of time, including the risk of an entire loss of our
or such investor account’s investment in the Notes.


 


3.               We
are purchasing the Notes for our own account, or for one or more investor
accounts for which we are acting as a fiduciary or agent, in each case for
investment, and not with a view to, or for offer or sale in connection with,
any distribution thereof in violation of the Securities Act, subject to any
requirement of law that the disposition of our property or the property of such
investor account or accounts be at all times within our or their control and
subject to our or their ability to resell such Notes pursuant to Rule 144A
or any exemption from registration available under the Securities Act.


 


4.               We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Notes to offer, sell or otherwise transfer such Notes prior to the
date which is two years (or such other period that may hereafter be provided
under Rule 144(k) under the Securities Act as permitting resales of
restricted securities by non-affiliates without restriction) after the later of
the date of original issue and the last date on which either of the Issuers or
any affiliate of the Issuers was the owner of such Notes (or any predecessor
thereof) (the “Resale Restriction
Termination Date”) only (a) to either of the Issuers, (b) pursuant
to a registration statement which has been declared effective under the
Securities Act, (c) for so long as the Notes are eligible for resale
pursuant to Rule 144A to a person we reasonably believe is a “qualified
institutional buyer” as defined in Rule 144A (a “QIB”) that purchases for its own account
or for the account of a QIB and to whom notice is given that the transfer is
being made in reliance on Rule 144A, (d) pursuant to offers and sales
to Non-U.S. purchasers that occur outside the United States in accordance with
Regulation S under the securities act, (e) to an Accredited Investor that
is acquiring the Notes for its own account, or for the account of such an
Accredited Investor, for investment purposes, and not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities
Act, or (f) pursuant to another available exemption from the registration
requirements of the Securities Act, subject in each of the foregoing cases to
any requirement of law that the disposition of our property or the property of
such investor account or accounts be at all times within our or their control
and in each case in compliance with any applicable securities laws of any U.S.
state or any other applicable jurisdiction. The foregoing restrictions on
resale will not apply subsequent to the Resale Restriction Termination Date. If
any resale or other transfer of the Notes is proposed to be made pursuant to
clause (d) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in the form
of this letter to the Issuers and the Trustee, which shall provide, among other
things, that the transferee is an Accredited Investor and that it is acquiring
such Notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Issuers and the Trustee
reserve the right prior to the offer, sale or other transfer made prior to the
Resale Termination Date pursuant to clause (e) or (f) above to
require the


 


D-2





















 


delivery of an opinion of counsel, certifications and/or other
information satisfactory to each of them.


 


5.               We
understand that the Notes will be delivered in registered form only and that
the certificates delivered to us in respect of the Notes will contain a legend
substantially to the following effect:


 


THIS SECURITY
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.


 


THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH OTHER
PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) UNDER THE
SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES BY NON-AFFILIATES
WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE “RESALE RESTRICTION
TERMINATION DATE”) ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL “ACCREDITED INVESTOR,” FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT
TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE 


 


D-3





















 


(D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN
EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR
ANY OTHER APPLICABLE JURISDICTION.


 


6.               If
we are acquiring any of the Notes as a fiduciary or agent for one or more
investor accounts, we represent that we have sole investment discretion with
respect to each such account and we have full power to make the foregoing
representations, warranties, acknowledgments and agreements on behalf of each
such investor account.


 


THIS
LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.


 


[signature
page follows]


 


D-4





















 


You and the Issuers
are entitled to rely upon this letter and are irrevocably authorized to produce
this letter or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered
hereby.


 


	
   

  	
   

  	
  Dated:                                      ,
       

  
	
  [Insert Name
  of Accredited Investor]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
					



 


D-5





















 


EXHIBIT E

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT

SUBSIDIARY GUARANTORS


 


Supplemental
Indenture (this “Supplemental Indenture”),
dated as of     , among                                    
(the “Guaranteeing Subsidiary”),
Diamond Jo Worth, LLC, a Delaware limited liability company (the “Company”), and Diamond Jo Worth Corp., a
Delaware corporation (“DJW Corp.”
and, together with the Company, the “Issuers,”
which term includes any successors under the Indenture hereinafter referred
to), and U.S. Bank National Association, as trustee under the Indenture
referred to below (the “Trustee”).


 


W
I  T  N  E  S  S  E  T  H


 


WHEREAS, the
Issuers have heretofore executed and delivered to the Trustee an indenture (the
“Indenture”), dated as of July 19,
2005, providing for the issuance of 11% Senior Secured Notes due 2012 (the “Notes”);


 


WHEREAS, the
Indenture provides that under certain circumstances the Guaranteeing Subsidiary
shall execute and deliver to the Trustee a supplemental indenture and a
Subsidiary Guaranty in the form of Annex A to the Indenture endorsed on the
Notes pursuant to which it shall unconditionally guaranty all of the Issuers’
obligations under the Notes and the Indenture on the terms and conditions set
forth herein (the “Subsidiary Guaranty”);
and


 


WHEREAS,
pursuant to Section 9.1 of the Indenture, the Trustee is authorized to
execute and deliver this Supplemental Indenture.


 


NOW THEREFORE,
in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing
Subsidiary and the Trustee mutually covenant and agree for the equal and
ratable benefit of the Holders of the Notes as follows:


 


1.             Capitalized Terms.  Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.


 


2.             Joinder to Indenture.  The Guaranteeing Subsidiary hereby agrees to
become bound by the terms, conditions and other provisions of the Indenture
with all attendant rights, duties and obligations stated therein, with the same
force and effect as if originally named as a Subsidiary Guarantor therein and
as if such party executed the Indenture on the date thereof.


 


3.             Agreement to Subsidiary Guaranty.  The Guaranteeing Subsidiary irrevocably and
unconditionally guarantees the Subsidiary Guaranty Obligations, which include (i) the
due and punctual payment of the principal of, premium, if any, and interest, on
the Notes, whether at maturity, by acceleration, call for redemption, upon a 


 


E-1





















 


Change of Control Offer, an
Asset Sale Offer, or otherwise, the due and punctual payment of interest on the
overdue principal and premium, if any, and (to the extent permitted by law)
interest on any interest on the Notes, and payment of expenses, and the due and
punctual performance of all other obligations of the Issuers, to the Holders or
the Trustee under the Notes, the Indenture and the Security Documents
(including fees and expenses or other) all in accordance with the terms set
forth in Article XI of the Indenture, and (ii) in case of any
extension of time of payment or renewal of any Notes or any such other
obligations under the Notes, the Indenture and the Security Documents that the
same shall be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration, call for redemption, upon a Change of Control Offer, an Asset
Sale Offer, or otherwise.


 


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


 


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


 


This is a
continuing Subsidiary Guaranty and shall remain in full force and effect and
shall be binding upon the Guaranteeing Subsidiary and its successors and
assigns until full and final payment of all of the Issuers’ obligations under
the Notes and Indenture or until released in accordance with the Indenture and
shall inure to the benefit of the successors and assigns of the Trustee and the
Holders, and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges herein conferred upon that
party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof.  This is a Subsidiary Guaranty of payment and
performance and not of collectibility.


 


The
obligations of the Guaranteeing Subsidiary under its Subsidiary Guaranty shall
be limited to the extent necessary to insure that it does not constitute a
fraudulent conveyance under applicable law.


 


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


 


4.             NEW YORK LAW TO GOVERN AND CONSENT TO JURISDICTION.  THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE 


 


E-2





















 


STATE OF NEW YORK, INCLUDING,
WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(B); PROVIDED,
THAT WITH RESPECT TO THE CREATION, ATTACHMENT, PERFECTION, PRIORITY,
ENFORCEMENT OF AND REMEDIES RELATING TO THE SECURITY INTEREST IN ANY REAL
PROPERTY COLLATERAL, THE GOVERNING LAW MAY BE THE LAWS OF THE
JURISDICTIONS WHERE SUCH COLLATERAL IS LOCATED WITHOUT REGARD TO THE CONFLICT
OF LAW PROVISIONS THEREOF.


 


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


 


5.             Counterparts.  The parties may sign any number of copies of
this Supplemental Indenture.  Each signed
copy shall be an original, but all of them together represent the same
agreement.


 


6.             Effect of Headings.  The Section headings herein are for
convenience only and shall not affect the construction hereof.


 


[signature
page follows]


 


E-3





















 


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.


 


	
   

  	
  THE ISSUERS:

  
	
   

  	
  Diamond Jo Worth, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Diamond Jo Worth Corp.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTEEING SUBSIDIARY:

  
	
   

  	
  NAME:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  THE TRUSTEE:

  
	
   

  	
  U.S. Bank National Association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


E-4





















 


EXHIBIT F


 


FORM OF INTERCREDITOR AGREEMENT


 


This INTERCREDITOR
AGREEMENT, dated as of [               ]
(as amended, restated, supplemented or otherwise modified from time to time,
this “Agreement”), is made by and between U.S. BANK NATIONAL ASSOCIATION,
solely in its capacity as trustee under the Indenture (as defined below) (in
such capacity, the “Trustee”), and [                     ],
a [                     ]
[                     ]
(“Bank”), solely in its capacity
as Senior Lien Creditor Representative (as such term is defined below).


 


RECITALS


 


1.             Diamond
Jo Worth, LLC, a Delaware limited liability company (“DJW”), Diamond Jo Worth Corp., a Delaware
corporation (“DJW Corp” and,
together with DJW, the “Issuers”),
the guarantors, if any, from time to time party thereto (the “Guarantors”), and the Trustee have entered
into an Indenture, dated as of July    , 2005 (as amended,
restated, supplemented or otherwise modified from time to time, the “Indenture”), pursuant to which indebtedness
was incurred by the Issuers, the repayment of which is guaranteed by the
Guarantors, and the Issuers, Diamond Jo Worth Holdings, LLC, a Delaware limited
liability company (“Parent”), the
Guarantors and the Trustee have entered into a Pledge and Security Agreement,
dated as of July   , 2005, and one or more mortgages and/or other
collateral documents pursuant to which such indebtedness and guarantees were
secured by security interests in and liens on certain now owned and hereafter
acquired assets and properties described in the Indenture Security Documents
(as defined below).


 


2.             DJW,
as borrower, and Bank, as agent for itself and the lenders (the “Senior Lien Lenders”) (in such capacity,
the “Senior Lien Creditor Representative”),
have entered into a [                     ],
dated as of [                ]
(as amended, restated, supplemented or otherwise modified from time to time,
the “Senior Lien Credit Agreement”),
pursuant to which the Senior Lien Creditor Representative agreed, upon the
terms and conditions stated therein, to make loans and advances to, or to issue
letters of credit (or guarantees in respect thereof) for the account of, DJW,
the repayment of which is secured by security interests in and liens on certain
Collateral pursuant to the Senior Lien Credit Agreement and the collateral
security documents, instruments and guaranties executed and delivered in
connection therewith by one or more of the Issuers, Parent and the Guarantors,
together with such other agreements, instruments and certificates entered into
in connection with the Senior Lien Credit Agreement (as such may be amended,
restated, supplemented or otherwise modified from time to time, together with
the Senior Lien Credit Agreement, the “Senior
Lien Documents”).(6)


 










(6)           May
be revised to reflect actual obligors.


 





















 


3.             One
of the conditions of the Senior Lien Documents is that the priority of the
security interests and liens on the Collateral securing the obligations under
such documents be senior to the security interests in and liens on the
Collateral in favor of the Trustee in the manner and to the extent provided for
in this Agreement.


 


4.             The
Trustee and the Senior Lien Creditor Representative (on behalf of the Senior
Lien Creditors) desire to enter into this Agreement concerning their respective
rights with respect to the priority of their respective security interests in
and liens on the Collateral.


 


5.             The
terms of the Indenture permit the Issuers, Parent and the Guarantors to enter
into the Senior Lien Documents and, in connection therewith, authorize and
direct the Trustee to enter into an intercreditor agreement substantially in
the form of this Agreement.


 


NOW,
THEREFORE, the Parties hereby agree as follows:


 


ARTICLE I

DEFINITIONS


 


Section 1.1             Definitions.  In addition
to the capitalized terms defined above in the preamble and the recitals hereto,
as used in this Agreement, the following terms shall have the meanings set
forth below:


 


“Collateral” shall mean all assets and
properties and all interests in assets or properties now owned or hereafter
acquired by any Issuer, Parent or any Guarantor in or upon which a Lien is
granted or purported to be granted under any of the Senior Lien Documents or
the Indenture Loan Documents and all products and proceeds of any of the
foregoing, provided that the term “Collateral” shall not include the Indenture
Exclusive Collateral.


 


“Credit Facility Indebtedness” shall mean
all present and future obligations (including principal, interest, fees and
reimbursement obligations under letters of credit), contingent or otherwise, of
the Issuers, Parent and the Guarantors to the Senior Lien Creditors arising
under or pursuant to the Senior Lien Documents, including, in each case,
interest, fees, and expenses accruing after the initiation of any Insolvency
Proceeding (irrespective of whether allowed as a claim in such proceeding), and
including the secured claims of any Senior Lien Creditor in respect of the
Collateral in any Insolvency Proceeding.


 


“Disbursement Accounts” shall mean the
Interest Reserve Account and the Construction Disbursement Account (each as
defined in the Disbursement Agreement).


 


“Disbursement Agreement” shall mean that
certain Cash Collateral and Disbursement Agreement by and among U.S. Bank
National Association, DJW and DJW Corp., dated as of July     ,
2005.


 


2





















 


 “Enforcement
Action” shall mean the exercise of any right or remedy with respect
to any Collateral (including any right of set-off) or the taking of any
Foreclosure Action or other action to enforce, collect or realize upon any
Collateral, or the commencement of any action, whether judicial or otherwise,
for the enforcement of such Party’s rights and remedies as a secured creditor
with respect to the Collateral, or the commencement of any receivership
proceedings or any other sale of, collection on, or disposition of, any
Collateral, including the exercise of any right, remedy or action to:  (a) exercise any collection rights in
respect of any Collateral or notify any account debtors to make payment
directly to such Party or its agents or other Persons acting on its behalf or
retain any proceeds of accounts and other obligations receivable paid by any
account debtor; (b) take or accept any transfer of title in lieu of
foreclosure upon any Collateral; (c) enforce any claim to the proceeds of
insurance upon any Collateral; (d) deliver any notice, claim or demand
relating to the Collateral to any Person (including any securities
intermediary, depositary bank or landlord) in the possession or control of any
Collateral or acting as bailee, custodian or agent for any Party in respect of
any Collateral; or (e) otherwise enforce any remedy available to such
Party upon default for the enforcement of any Lien upon the Collateral.


 


“Enforcement Event” shall mean the
occurrence and continuance of an “Event of Default” as defined under Section 6.1
of the Indenture.


 


“Enforcement Event Notice” shall have the
meaning ascribed thereto in Section 3.2.


 


“Entitled Party” shall have the meaning
ascribed thereto in Section 4.1(a).


 


“Event of Default” shall mean, with respect
to any Senior Lien Document, the occurrence of an “Event of Default” under, and
as defined in, such Senior Lien Document.


 


“Financing Documents” shall mean the
Indenture Documents and the Senior Lien Documents.


 


“Foreclosure Action” shall mean any action
to foreclose upon or enforce a Lien against any of the Collateral, including (a) commencing
judicial or non-judicial foreclosure proceedings, (b) exercising any
rights afforded to secured creditors in a case under the Bankruptcy Law with
respect to the Collateral, or (c) taking any action under the Bankruptcy
Law that directly relates to or directly affects any such Collateral, other
than any such action that relates to or affects all or substantially all of the
property of the bankruptcy estate.


 


“Fully Paid” shall mean (a) with
respect to the Indenture Documents, the payment in cash or cash equivalents in
full of all obligations (other than contingent, unliquidated indemnity
obligations that survive payment in full) under the Indenture Documents, and (b) with
respect to any Senior Lien Document, (i) the payment in cash or cash
equivalents in full of all obligations (other than contingent, unliquidated
indemnity 


 


3





















 


obligations that survive
payment in full) under such Senior Lien Document (it being agreed and
understood that with respect to any Senior Lien Document, the principal amount
of such obligations shall at no time exceed the applicable Maximum Credit
Facility Amount), plus related interest, fees, costs, expenses and
reimbursement and indemnification obligations), and (ii) the termination
of all commitments or other obligations of the Senior Lien Creditors under such
Senior Lien Document to extend credit thereunder to any Issuer, Parent, any Guarantor,
or any other subsidiary of an Issuer.


 


“Indenture Documents” shall mean the
Indenture, the Notes, the Indenture Security Documents and such other
agreements, instruments and certificates executed and delivered (or issued) by
the Issuers, Parent or the Guarantors pursuant to the Indenture, as any or all
of the same may be amended, restated, supplemented or otherwise modified from
time to time.


 


“Indenture Exclusive Collateral” shall mean
the Disbursement Accounts, together with all cash and other assets credited
thereto and interest and earnings thereon.


 


“Indenture Security Documents” has the
meaning assigned to the term “Security Documents” in the Indenture.


 


“Insolvency Proceeding” shall mean any
proceeding for the purposes of dissolution, winding up, liquidation,
arrangement or reorganization of the Issuers, Parent, any Guarantor, or any
other subsidiary of the Issuers, or their respective successors or assigns,
whether in bankruptcy, insolvency, arrangement, reorganization or receivership
proceedings, or upon an assignment for the benefit of creditors or any other
marshaling of the assets and liabilities of the Issuers, Parent, any Guarantor,
or any other subsidiary of the Issuers, or their respective successors or
assigns.


 


“Lien Priority” shall mean, with respect to
any Lien in and to the Collateral, the order of priority of such Lien as
specified in Sections 2.1 and 2.2.


 


“Maximum Credit Facility Amount” shall mean
$2,500,000, which amount may be decreased as provided in Section 4.7(b)(i) of
the Indenture (as in effect on the date hereof), in each case in aggregate
principal amount of such Credit Facility Indebtedness, plus all related
interest, fees expenses and indemnification obligations or such greater amount
or amounts as the Trustee may consent to in its discretion.


 


“Party” shall mean each of (a) the
Trustee and (b) the Senior Lien Creditor Representative.


 


“Secured Liabilities” shall mean the Credit
Facility Indebtedness (up to the Maximum Credit Facility Amount) and the
Subordinated Lien Indebtedness.


 


“Security Documents” shall mean any and all
Indenture Security Documents and any and all Senior Lien Documents, in each
case executed, delivered or authorized by an Issuer, Parent or any Guarantor or
any subsidiary of an Issuer pursuant 


 


4





















 


to which such Person grants to
the Trustee (as security for the Subordinated Lien Indebtedness) or any Senior
Lien Creditor (as security for the applicable Credit Facility Indebtedness) a
security interest in any Collateral.


 


“Senior Lien Creditors” shall mean,
collectively and individually, the Senior Lien Creditor Representative and the
Senior Lien Lenders.


 


“Subordinated Lien Indebtedness” shall mean
all present and future obligations, contingent or otherwise, of the Issuers,
Parent and the Guarantors to the Trustee or Holders arising under or pursuant
to the Indenture Documents, including, in each case, interest, fees and
expenses accruing after the initiation of any Insolvency Proceeding
(irrespective of whether allowed as a claim in such proceeding), and including
the secured claims of the Trustee or the Holders in respect of the Collateral
in any Insolvency Proceeding.


 


Section 1.2             Indenture Definitions. 
All other capitalized terms that are used but not defined herein shall
have the respective meaning indicated in the Indenture, as in effect on the
date hereof.


 


Section 1.3             Miscellaneous.  All
definitions herein (whether set forth herein directly or by reference to
definitions in other documents) shall be equally applicable to both the
singular and the plural forms of the terms defined.  The words “hereof,” “herein” or “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement.  Article and section references
are to articles and sections of this Agreement unless otherwise specified.  The term “including” shall mean “including
without limitation.”


 


ARTICLE II

LIEN PRIORITY


 


Section 2.1             Agreement to Subordinate Liens. 
The Trustee hereby agrees that all Liens of the Trustee for the benefit
of itself and the Holders in and to the Collateral are and shall be junior to
and subordinate in priority to the Liens of any or all of the Senior Lien
Creditors in and to the Collateral securing Credit Facility Indebtedness (up to
the Maximum Credit Facility Amount); provided that, the rights of a Party under
this Agreement shall be void and of no further force and effect if, and only to
the extent, that the Liens of such Party in and to the Collateral are avoided,
disallowed, set aside or otherwise invalidated in any action or proceeding by a
court, tribunal or administrative agency of competent jurisdiction and such
avoidance, disallowance, set aside or other invalidation is permanent and is
not later reversed.  The subordination of
the Liens of the Trustee for the benefit of itself and the Holders in and to
the Collateral in favor of the Senior Lien Creditors provided for herein shall
not be deemed to (a) subordinate the Liens of the Trustee for the benefit
of itself and the Holders to the Liens of any other Person, or (b) subordinate
the Subordinated Lien Indebtedness to any other Indebtedness of the Issuers,
Parent or any of the Guarantors, including the Credit Facility
Indebtedness.  The Senior Lien Creditor
Representative, on behalf of itself and the Senior Lien 


 


5





















 


Creditors,
hereby acknowledges and agrees that the Indenture Exclusive Collateral does not
and shall not secure any Credit Facility Indebtedness.


 


Section 2.2             Non-Contest; Excluded Assets. 
Each Party agrees that it will not attack or contest the validity,
perfection, priority or enforceability of the Liens of the other Party or
finance or urge any other Person to do so; provided that, any Party may enforce
its rights and privileges hereunder without being deemed to have violated this
provision.  Any provision contained in
this Agreement to the contrary notwithstanding, the terms and conditions of
this Agreement shall not apply, as between the Senior Lien Creditor
Representative on the one hand, and the Trustee on the other hand, to any
property or assets (including property or assets that do not constitute
Collateral) as to which the Senior Lien Creditor Representative has a Lien and
as to which the Trustee does not have a Lien, or as to which the Trustee has a
Lien and the Senior Lien Creditor Representative does not have a Lien
(including the Indenture Exclusive Collateral).


 


Section 2.3             Exercise of Rights.


 


(a)           The Trustee may exercise, and nothing herein shall
constitute a waiver of, any right it may have at law or equity to receive
notice of, or to commence or join with any creditor in commencing any
Insolvency Proceeding; provided
that, the exercise of any such right by the Trustee shall be (i) subject
to the Lien Priority and application of proceeds of Collateral as provided in Section 3.4
and (ii) subject to the provisions of Sections 3.1 and 3.2.


 


(b)           Notwithstanding any other provision hereof, the Trustee
may make such demands or file such claims as may be necessary to prevent the
waiver or bar of such claims under applicable statutes of limitations or other
statutes, court orders or rules of procedure.


 


Section 2.4             Priority of Liens.  (a) 
Irrespective of any priority otherwise available to the Trustee by law or
agreement or irrespective of the order of recording of mortgages, financing
statements, security agreements or other instruments, and irrespective of the
descriptions of Collateral contained in the Financing Documents, including any
financing statements, each of the Trustee and the Senior Lien Creditor
Representative hereby agree among themselves that their respective Liens in the
Collateral shall be governed by the Lien Priority, which shall be controlling
in the event of any conflict between this Agreement and any of the Financing
Documents.


 


(b)           Each Party agrees that this Agreement and the Lien
Priority shall remain in full force and effect without regard to, and shall not
be released, suspended, discharged, terminated, modified or otherwise affected
by any circumstance or occurrence whatsoever (other than in accordance with the
terms hereof), including any of the following (whether or not such Party
consents thereto or has notice thereof): 
(i) any change in or waiver of the time, place or manner of
payment, or any other term, of any of the Secured Liabilities or Financing
Documents, any waiver of or any renewal, extension, increase, refinancing,
amendment or modification of or addition, consent or 


 


6





















 


supplement
to or deletion from, or any other action or inaction under or in respect of,
any of the Secured Liabilities or Financing Documents or any other document,
instrument or agreement referred to therein or any assignment or transfer of
any of the Secured Liabilities or Financing Documents; (ii) any furnishing
of any additional collateral for any of the Secured Liabilities or any sale,
exchange, release or surrender of, or realization on, any collateral for any of
the Secured Liabilities; (iii) any settlement, release or compromise of
any of the Secured Liabilities or Financing Documents, any collateral therefor,
or any liability of any other party (including any other Party) with respect to
any of the Secured Liabilities or Financing Documents, or any subordination of
payment of any Secured Liabilities to the payment of any other indebtedness,
liability or obligation of any of the Issuers, Parent, the Guarantors or any
subsidiary of any Issuer; (iv) any bankruptcy, insolvency, reorganization,
composition, adjustment, merger, consolidation, dissolution, liquidation or
other like proceeding or occurrence relating to any of the Issuers, Parent, the
Guarantors, or any subsidiary of any Issuer, or any other change in the
ownership, control, composition or nature of any of the Issuers, Parent, the
Guarantors, or any subsidiary of any Issuer; (v) any application of sums
paid by any of the Issuers, Parent, the Guarantors or any subsidiary of any
Issuer with respect to any of the Secured Liabilities, except to the extent
actually applied against such Secured Liabilities, regardless of what other
liabilities of the Issuers, Parent, the Guarantors, or any subsidiary of any
Issuer remain unpaid; or (vi) the failure of any Party to assert any claim
or demand or to enforce any right or remedy against the Issuers, Parent, the
Guarantors, any subsidiary of any Issuer or any other Person (including any
other Party with respect to any of the Secured Liabilities) under the
provisions of any of the Financing Documents or otherwise.


 


Section 2.5             Insolvency.  (a)  The
provisions of this Agreement will be applicable both before and after the
filing or commencement of any Insolvency Proceeding and all converted or
succeeding cases in respect thereof, and all references herein to any Issuer,
Parent or any Guarantor shall be deemed to apply to the trustee for such
Issuer, Parent and/or such Guarantor and such Issuer, Parent and/or such
Guarantor as a debtor-in-possession.  The
relative rights of the Senior Lien Creditors in or to any distributions from or
in respect of any Collateral or proceeds of Collateral shall continue after the
filing of such Insolvency Proceeding on the same basis as prior to the date of
such filing, subject to any court order approving the financing of, or use of
cash collateral by, any Issuer, Parent or any Guarantor as
debtor-in-possession.  If, in any
Insolvency Proceeding and at any time any Credit Facility Indebtedness exists
that has not been Fully Paid, all of the Senior Lien Creditors (or such number
of the Senior Lien Creditors as may have the power to bind all of them):


 


(i)            consent to any order for use of cash collateral or
agree to the extension of any Credit Facility Indebtedness (including any
debtor-in-possession financing) to any Issuer, Parent or any Guarantor;


 


(ii)           consent to any order granting any priming lien,
replacement lien, cash payment or other relief on account of Credit Facility
Indebtedness as adequate protection (or its equivalent) for the 


 


7





















 


interests
of the Senior Lien Creditors in the property subject to such Lien of the Senior
Lien Creditor Representative;


 


(iii)          consent to any order approving post-petition financing
pursuant to Section 364 of the United States Bankruptcy Code (including
any “roll-up” of Credit Facility Indebtedness); or


 


(iv)          consent to any order relating to a sale of assets of
any Issuer, Parent or any Guarantor that provides, to the extent the sale is to
be free and clear of Liens, that all Liens of the Senior Lien Creditor
Representative and the Lien of the Trustee shall attach to the proceeds of the
sale,


 


then the Trustee and the Holders will not oppose or otherwise contest
the entry of such order.


 


(b)           So long as there is any Credit Facility Indebtedness
existing that has not been Fully Paid, none of the Holders or the Trustee will:


 


(i)            request judicial relief, in an Insolvency Proceeding
or in any other court, that would hinder, delay, limit or prohibit the lawful
exercise or enforcement of any right or remedy otherwise available to the
Senior Lien Creditor Representative in respect of the Collateral or that would
limit, invalidate, avoid or set aside any Lien of the Senior Lien Creditor
Representative or Senior Lien Document or subordinate the Lien on any
Collateral of the Senior Lien Creditor Representative to the Lien on such
Collateral of the Trustee or grant the Lien on any Collateral of the Senior
Lien Creditor Representative equal ranking to the Lien on such Collateral of
the Trustee;


 


(ii)           oppose or otherwise contest any motion for relief from
the automatic stay or from any injunction against foreclosure or enforcement of
Lien on any Collateral of the Senior Lien Creditor Representative made by the Senior
Lien Creditor Representative in any Insolvency Proceeding;


 


(iii)          oppose or otherwise contest any lawful exercise by the
Senior Lien Creditor Representative of the right to credit bid at any sale in
foreclosure of a Lien on any Collateral of the Senior Lien Creditor
Representative;


 


(iv)          oppose or otherwise contest any other request for
judicial relief made in any court by the Senior Lien Creditor Representative
relating to the lawful enforcement of any Lien on any Collateral of the Senior
Lien Creditor Representative;


 


8





















 


(v)           request relief from the automatic stay in any
Insolvency Proceeding with respect to any Collateral unless any Senior Lien
Creditor requests such relief; or


 


(vi)          challenge the enforceability, perfection or the
validity of the Credit Facility Indebtedness or the Lien on any Collateral of
the Senior Lien Creditor Representative.


 


(c)           The Trustee will not file or prosecute in any
Insolvency Proceeding any motion for adequate protection or for relief from the
automatic stay (in each case, or any comparable request for relief) based upon
its interests in the Collateral, except that:


 


(i)            it may freely seek and obtain relief granting a
replacement lien, additional lien, superpriority, administrative claim or other
adequate protection co-extensive in all respects with, but subordinated in
accordance with the Lien Priority in all respects to, all Liens on any
Collateral granted in such Insolvency Proceeding to the Senior Lien Creditors
in connection with Credit Facility Indebtedness;


 


(ii)           it may assert rights consistent with this Agreement in
connection with the confirmation of any plan of reorganization or similar
dispositive restructuring plan; and


 


(iii)          it may freely seek and obtain any relief upon a motion
for adequate protection or for relief from the automatic stay (in each case, or
any comparable relief), without any condition or restriction whatsoever, at any
time when all Credit Facility Indebtedness has been Fully Paid.


 


(d)           If, in any Insolvency Proceeding, debt obligations of
the reorganized debtor secured by Liens upon any property (other than the
Indenture Exclusive Collateral) of the reorganized debtor are distributed, both
on account of Credit Facility Indebtedness and on account of the Subordinated
Lien Indebtedness, then, to the extent the debt obligations distributed on
account of the Credit Facility Indebtedness and on account of the Subordinated
Lien Indebtedness are secured by Liens upon the same property (other than the Indenture
Exclusive Collateral), the provisions of this Agreement will survive the
distribution of such debt obligations pursuant to such plan and will apply with
like effect to the Liens on such property securing such debt obligations.


 


(e)           Subject to Section 3.4(a)(ii), the Trustee
will not assert or enforce, at any time when any Credit Facility Indebtedness
exists that has not been Fully Paid, any claim under §506(c) of the
Bankruptcy Code senior to or on a parity with the Lien of the Senior Lien
Creditor Representative for costs or expenses of preserving or disposing of any
Collateral.


 


Section 2.6             Insurance and Condemnation Proceeds. 
At any time any Credit Facility Indebtedness exists that has not been
Fully Paid, the Senior Lien 


 


9





















 


Creditor
Representative will have the sole right to adjust settlement of all insurance
claims and condemnation awards in the event of any covered loss, theft,
destruction or condemnation of any Collateral and all claims under insurance
constituting Collateral, subject to the terms of the Senior Lien Documents.


 


ARTICLE III

ACTIONS OF THE PARTIES


 


Section 3.1             Limitation on Certain Actions. 
Subject to Section 3.2, until the first date on which the
Maximum Credit Facility Amount is Fully Paid, the Trustee will not, without the
prior written consent of the Senior Lien Creditor Representative, take any
Enforcement Action (it being understood and agreed that this Agreement shall
not limit any right the Trustee may have with respect to the Indenture
Exclusive Collateral or any action the Trustee may take solely in respect
thereof).


 


Section 3.2             Standstill Period.  If an
Enforcement Event has occurred and is continuing, the Trustee, on behalf of the
holders of the Notes, may give the Senior Lien Creditor Representative written
notice thereof (an “Enforcement Event Notice”),
which notice shall constitute notice to each Senior Lien Creditor.  If (a) such Enforcement Event is
continuing for more than 180 consecutive days after the delivery of such
Enforcement Event Notice (the “Expiry Date”),
(b) no Senior Lien Creditor Representative has, on or before the Expiry
Date, commenced (and notified the Trustee that the Senior Lien Creditor
Representative has commenced) one or more Enforcement Actions, and (c) the
Issuer, Parent or the Guarantor against which the Trustee’s proposed
Enforcement Action is to be taken is not the subject of an Insolvency
Proceeding, then the Trustee may, subject to the Lien Priority and the
application of all proceeds of the Collateral in accordance with Section 3.4,
take one or more Enforcement Actions.  If
(i) the Senior Lien Creditor Representative has commenced any Enforcement
Action on or prior to the Expiry Date and, at any time after the Expiry Date,
is no longer pursuing one or more Enforcement Actions, (ii) no Insolvency
Proceeding is pending against the Issuers, Parent or the Guarantor against
which the Trustee’s proposed Enforcement Action is to be taken, and (iii) the
Enforcement Event that was the subject of, or existing on the date of, the
Enforcement Event Notice is then continuing, then the Trustee may, subject to
the Lien Priority and the prior application of all proceeds of the Collateral
in accordance with Section 3.4, take one or more Enforcement Actions.  Except as expressly provided for in this
Agreement, nothing in this Agreement shall prevent the Parties from exercising
any other remedy, or taking any other action, under any of the Financing
Documents (including any remedy or other action by the Trustee solely in
respect of the Indenture Exclusive Collateral).


 


Section 3.3             Foreclosure.  Any Party
taking a permitted Enforcement Action may enforce its Financing Documents
independently as to the Issuers, Parent and each Guarantor and independently of
any other remedy or security such Party at any time may have or hold in
connection with its Secured Liabilities, and, except as provided herein, it
shall not be necessary for such Party to marshal assets in favor of any other
Party or any other Person or to proceed upon or against or exhaust any other
security or remedy before proceeding to enforce the Financing Documents
(including in the case of 


 


10





















 


the
Trustee or any Holder, any of the foregoing actions with respect to the
Indenture Exclusive Collateral).  Each of
the Trustee (for so long as the Maximum Credit Facility Amount is not Fully
Paid) and the Senior Lien Creditor Representative (for so long as the Trustee
and the Holders are owed any Subordinated Lien Indebtedness) expressly waives
any right to require the other Party to marshal assets in favor of any Party or
to proceed against any Collateral provided by the Issuers, Parent or any
Guarantor, or any other property, assets, or collateral provided by the
Issuers, Parent, any Guarantor, or any other Person, and agrees that the Party
taking such permitted Enforcement Action may proceed against the Issuers,
Parent, any Guarantor, any Collateral or other property, assets, or other
collateral provided by any of them or by any other Person, in such order as it
shall determine in its sole and absolute discretion.  The foregoing notwithstanding:  (a) with respect to the sale or other
disposition of any Collateral governed by Article 9 of the Uniform
Commercial Code, the Party conducting such sale or other disposition agrees in
favor of the other Parties that every aspect of such sale or other disposition,
including the method, manner, time, place, and terms, must be commercially
reasonable, (b) with respect to the sale or other disposition of any other
Collateral consisting of real property, the Party conducting such sale or other
disposition agrees in favor of the other Parties that such sale or other
disposition shall be conducted according to the normal practices of commercial
real property secured lenders generally, (c) with respect to the sale or
other disposition of any Collateral by any Party, such Party agrees to provide
the other Parties with such written notice as it is required by applicable law
(including, if applicable, the Uniform Commercial Code) to provide to the
Issuers, Parent or the Guarantors (without regard to whether the Issuers,
Parent or the Guarantors have waived their entitlement to receive such notice),
and (d) the Senior Lien Creditor Representative agrees that, at such time
as the Maximum Credit Facility Amount applicable to its Senior Lien Documents
is Fully Paid, the Senior Lien Creditor Representative thereupon promptly shall
cease all further Enforcement Actions in connection with its Senior Lien
Documents.


 


Section 3.4             Distribution.  Each Party
agrees that, upon any distribution as a result of any Enforcement Action, or
the receipt of any other payment or distribution with respect to the
Collateral, the proceeds thereof shall be distributed in the order of, and in
accordance with, the following priorities:


 


(a)           FIRST:


 


(i)            if the Enforcement Action is taken by a Senior Lien
Creditor, to the payment of all reasonable costs and expenses, commissions and
taxes of such Senior Lien Creditor incurred in connection with taking such
Enforcement Action or other realization, including all reasonable expenses
(including attorneys fees and expenses), liabilities and advances made or
incurred by or on behalf of such Senior Lien Creditor in connection therewith;


 


(ii)           if the Enforcement Action is taken and entitled to be
taken hereunder by the Trustee, to the payment of all reasonable costs and
expenses, commissions and taxes of the Trustee incurred in connection with
taking such Enforcement Action or other 


 


11





















 


realization,
including all reasonable expenses (including attorneys fees and expenses),
liabilities and advances made or incurred by or on behalf of the Trustee in
connection therewith;


 


(b)           SECOND, to the Senior Lien Creditor Representative,
for the benefit of the Senior Lien Creditors, until the first date on which the
Maximum Credit Facility Amount is Fully Paid;


 


(c)           THIRD, to the Trustee, until all Subordinated Lien
Indebtedness is Fully Paid; and


 


(d)           FOURTH, to or at the direction of an Issuer, Parent or
a Guarantor, as applicable, or as a court of competent jurisdiction shall
direct.


 


Section 3.5             Notice of Certain Events; Information. 
(a)  Each Party agrees that it will notify the other Parties (it
being understood that, to the extent this Section 3.5 applies to an
obligation of the Trustee to give notice, it may satisfy such obligation by
giving notice to the Senior Lien Creditor Representative), in writing, (x) if
it receives actual notice of the occurrence of an Event of Default or an
Enforcement Event, not later than 30 days after the date of any such
occurrence, and (y) at least 15 days prior to exercising any remedies with
respect to any portion of the Collateral. 
Notwithstanding the foregoing, no Senior Lien Creditor Representative
shall be obligated to provide such prior written notice if exigent
circumstances require that the Senior Lien Creditor Representative act
immediately in order to preserve, protect, or obtain possession or control over
the Collateral or any portion thereof; provided that, if such exigent
circumstances require the Senior Lien Creditor Representative to so act
immediately, the Senior Lien Creditor Representative agrees to provide the
Trustee with written notice as soon as practicable following the Senior Lien
Creditor Representative first exercising any of its secured creditor remedies
with respect to the Collateral, and no Party shall incur any liability to the
other under this Section 3.5 as a result of the failure of such
Party to provide any such notice so long as the failure to so provide such
notice was not the result of willful misconduct, bad faith or gross negligence.


 


(b)           The Senior Lien Creditor Representative, on the one
hand, and the Trustee, on the other hand, shall each be responsible for keeping
themselves informed of the financial condition of the Issuers, Parent,
Guarantors and their subsidiaries and all other circumstances bearing upon the
risk of nonpayment of the Secured Liabilities. 
Neither the Senior Lien Creditor Representative, nor the Trustee, on the
other hand, shall have any duty to advise the other party of information
regarding such condition or circumstances or, except as otherwise expressly
provided herein, as to any other matter. 
If the Senior Lien Creditor Representative on the one hand, or the
Trustee, on the other hand, in their respective discretion, undertakes at any
time or from time to time to provide any such information to any Party, such
first Party shall be under no obligation to provide any similar information on
any subsequent occasion, to provide any additional information, to undertake
any investigation, or to disclose any information which, pursuant to accepted
or reasonable commercial finance practice, it wishes to maintain confidential.


 


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ARTICLE IV

ENFORCEMENT OF PRIORITIES


 


Section 4.1             In Furtherance of Lien Priorities. 
Each Party agrees as follows:


 


(a)           All payments or distributions of or with respect to
the Collateral that are received by any Party contrary to the provisions of
this Agreement (including payments or distributions in connection with any
Insolvency Proceeding) shall be segregated from other funds and property held
by such Party and shall be held in trust for the Party entitled thereto in
accordance with the provisions of Section 3.4 (the “Entitled Party”) and such Party shall
forthwith pay over such remaining proceeds to the Entitled Party in the same
form as so received (with any necessary endorsement) to be applied (in the case
of cash) or held as Collateral (in the case of non-cash property or securities)
in accordance with the provisions hereof and the provisions of the applicable
Financing Documents.


 


(b)           After the first date on which the Maximum Credit
Facility Amount relating to any Senior Lien Documents is Fully Paid, each
applicable Senior Lien Creditor Representative will promptly execute and
deliver all further instruments and documents, and take all further acts that
may be necessary, or that the Trustee may reasonably request, to permit the
Trustee to evidence the termination of the Lien Priority applicable to the
Senior Lien Creditor Representative hereunder, or in furtherance thereof; provided that, no Senior Lien Creditor
Representative shall be required to pay over any payment or distribution,
execute any instruments or documents, or take any other action referred to in
this clause (b) to the extent that such action would contravene any law,
order or other legal requirement, and in the event of a controversy or dispute,
the Senior Lien Creditor Representative may interplead any payment or
distribution in any court of competent jurisdiction.


 


(c)           Each Party is hereby authorized to demand specific
performance of this Agreement, whether or not the Issuers, Parent or any
Guarantor shall have complied with any of the provisions hereof applicable to
it, at any time when any other Party shall have failed to comply with the
provisions of this Agreement applicable to it, provided
that, the remedy of specific performance shall not be available, and the
asserting Party shall be free to assert any and all legal defenses it may
possess, if such remedy would result in, or otherwise constitute, a violation
of the Employee Retirement Income Security Act of 1974, as amended.  Each Party hereby irrevocably waives any
defense based on the adequacy of a remedy at law, which might be asserted as a
bar to such remedy of specific performance.


 


(d)           Ten Business Days after the date hereof, (i) the
Trustee and the Senior Lien Creditor Representative shall enter into a control
agreement or control agreements with respect to the deposit accounts of any
Issuer, Parent or any Guarantor at any financial institution, constituting part
of the Collateral, in form and substance reasonably acceptable to the Trustee
and the Senior Lien Creditor Representative but consistent with the terms of
this Intercreditor Agreement, which shall supersede any 


 


13





















 


existing
control agreements between the Trustee and such financial institution, and (ii) the
Trustee and the Senior Lien Creditor Representative agree to terminate or amend
and restate such existing control agreements.


 


(e)           This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Secured Liabilities is, other than as a result of any intentional fraud or
gross negligence of the applicable Party, rescinded or must otherwise be
returned by the applicable Party upon the insolvency, bankruptcy or
reorganization of the Issuers, Parent or any Guarantor or otherwise, all as
though such payment had not been made.


 


Section 4.2             Perfection of Possessory or Control Security Interests. 
(a)  For the limited purpose of perfecting the security interests
of the Parties in those types or items of Collateral in which a security
interest only may be perfected by possession or control (including perfection
of a security interest in deposit accounts under Article 9 of the Uniform
Commercial Code), each Party hereby appoints the other as its representative
for the limited purpose of possessing or controlling on its behalf any such
Collateral that may come into the possession or control of such other Party
from time to time, and each Party agrees to act as the other’s representative
for such limited purpose of perfecting the other’s security interest by
possession or control through a representative, provided that, neither Party
shall incur any liability to the other by virtue of acting as the other’s
representative hereunder for such purpose. 
In this regard, any Party that is in possession or control of any such
item of Collateral agrees that if it elects to relinquish possession or control
of such item of Collateral it shall deliver possession or control thereof to
another Party; provided that, no
Party shall be required to deliver any such item of Collateral or take any
other action referred to in this Section 4.2 to the extent that
such action would contravene any law, order or other legal requirements, and in
the event of a controversy or dispute, such Party may interplead any item of
Collateral in any court of competent jurisdiction.


 


(b)           The Senior Lien Creditor Representative and the
Trustee agree that if the Senior Lien Creditor Representative shall enter into
a control agreement with respect to any security account or deposit account of
an Issuer, Parent or a Guarantor, the Trustee will be given notice by such
Issuer, Parent or such Guarantor and sufficient opportunity to also become a party
thereto in order to perfect its security interest in such accounts.  If and to the extent such control agreements
provide for the right of either the applicable Senior Lien Creditor
Representative or the Trustee to give notice or direction to the depository or
intermediary, as applicable, with respect to such accounts, the Trustee hereby
agrees that, subject to Section 3.2, it will not give any such
notice or direction to any such depository or intermediary unless and until all
Credit Facility Indebtedness has been Fully Paid.  The duties or responsibilities of the Senior
Lien Creditor Representative under this Section 4.2 shall be
limited solely to holding the pledged Collateral as bailee for the Trustee for
purposes of perfecting the Lien therein held by the Trustee to secure the
Subordinated Lien Obligations.  The
Senior Lien Creditor Representative shall not have any obligation to the
Trustee or any Holder to care for, protect or insure any pledged Collateral or to
ensure that the Lien on such pledged Collateral has been properly or
sufficiently created or entitled to any particular priority.  


 


14





















 


The
Senior Lien Creditor Representative shall be entitled to deal with the pledged
Collateral in accordance with the terms of the Senior Lien Documents and this
Agreement.  The Senior Lien Creditor
Representative shall not have any obligation whatsoever to the Trustee or the
Holders to assure that the pledged Collateral is genuine or owned by any
Issuer, Parent or any Guarantor or otherwise or to preserve rights or benefits
of any Person except as expressly set forth in this Section.  The Senior Lien Creditor Representative shall
not have, by reason of this Agreement or any other document or instrument, a
fiduciary relationship in respect of the Trustee or the Holders.  The Trustee shall not have any obligation to
the Senior Lien Creditor Representative or any Senior Lien Lender to care for,
protect or insure any pledged Collateral or to ensure that the Lien on such
pledged Collateral has been properly or sufficiently created or entitled to any
particular priority.  The Trustee shall
be entitled to deal with the pledged Collateral in accordance with the terms of
the Senior Lien Documents and this Agreement. 
The Trustee shall not have any obligation whatsoever to the Senior Lien
Creditor Representative or the Senior Lien Lenders to assure that the pledged
Collateral is genuine or owned by any Issuer, Parent or any Guarantor or
otherwise or to preserve rights or benefits of any Person except as expressly
set forth in this Section.  The Trustee
shall not have, by reason of this Agreement or any other document or
instrument, a fiduciary relationship in respect of the Senior Lien Creditor
Representative or the Senior Lien Lenders.


 


Section 4.3             Control of Dispositions of Collateral and Effect
thereof on Junior Liens.


 


(a)           Each Party hereby agrees that any Uniform Commercial
Code collection, sale, or other disposition of Collateral by the Senior Lien
Creditor Representative shall be free and clear of any Lien of the Trustee in
such Collateral; provided that,
the Trustee shall retain a Lien (having the same priority as the Lien it
previously had on the item of Collateral that was collected, sold or otherwise
disposed of) on the proceeds of such collection, sale, or other disposition
(except to the extent such proceeds are applied to the Credit Facility
Indebtedness (up to the Maximum Credit Facility Amount) in accordance with Section 3.4).


 


(b)           To the extent reasonably requested by any Party, the
other Parties will cooperate in providing any necessary or appropriate releases
to permit a collection, sale, or other disposition of Collateral, as provided
in Section 4.3(a).


 


Section 4.4             Certain Other Collateral. 
Subject to Section 4.1(c), any provision of any Indenture
Security Document that requires any Debtor (as defined in the Security
Agreement referred to in the Indenture) to (a) deliver any Collateral to
the Trustee or the Senior Lien Creditor Representative, (b) provide that
the Trustee or the Senior Lien Creditor Representative have control (as defined
in the Uniform Commercial Code) over any Collateral, or (c) list the
Trustee or the Senior Lien Creditor Representative as (x) loss payee or
additional insured on any insurance policy or (y) sole lienholder on any
certificate of title relating to any Collateral, may be satisfied by (A) the
delivery of such Collateral by such Debtor to the Senior Lien Creditor
Representative (or its designee), (B) providing that the Senior Lien Creditor
Representative (or its designee)


 


15





















 


be
provided with control (as defined in the Uniform Commercial Code) with respect
to such Collateral, or (C) listing the Senior Lien Creditor Representative
(or its designee) as (x) loss payee or additional insured on any insurance
policy or (y) sole lienholder on any certificate of title relating to
Collateral, in each of the foregoing cases in clauses (A), (B) and (C),
for the benefit of all of the Senior Lien Creditors and the Trustee.


 


ARTICLE V

MISCELLANEOUS


 


Section 5.1             Rights of Subrogation. 
The Trustee agrees that no payment or distribution to any Senior Lien
Creditor pursuant to the provisions of this Agreement shall entitle the Trustee
to exercise any rights of subrogation in respect thereof until the first date
on which the Maximum Credit Facility Amount of all the Senior Lien Documents
shall have been Fully Paid.


 


Section 5.2             Further Assurances.  The Parties
will, at their own expense and at any time and from time to time, promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that any Party may reasonably
request, in order to protect any right or interest granted or purported to be
granted hereby or to enable any Party to exercise and enforce its rights and
remedies hereunder; provided
that, no Party shall be required to pay over any payment or distribution,
execute any instruments or documents, or take any other action referred to in
this Section 5.2 to the extent that such action would contravene
any law, order or other legal requirement binding upon such Party, and in the
event of a controversy or dispute, any Party may interplead any payment or
distribution in any court of competent jurisdiction, without further
responsibility in respect of such payment or distribution under this Section 5.2.  Without limiting the foregoing, but in
furtherance thereof, the Trustee agrees, upon the request of the Senior Lien
Creditor Representative, to execute and deliver to the Senior Lien Creditor
Representative (or its designees) a subordination of mortgage and subordination
of trademark security interests, in each case in form to be recordable with the
applicable governmental authorities and otherwise in form and substance
reasonable acceptable to the Senior Lien Creditor Representative and the
Trustee but consistent with the terms of this Intercreditor Agreement.


 


Section 5.3             Defenses Similar to Suretyship Defenses. All rights, interests, agreements
and obligations of each of the Parties under this Agreement, shall remain in
full force and effect irrespective of:


 


(a)           any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Liabilities, or any other
amendment or waiver of or any consent to departure from the Financing
Documents; provided that, this
clause (a) shall not apply to, and the Trustee’s Liens in the Collateral
shall not be subordinated in priority by virtue of this Agreement to, the
Senior Lien Creditor Representative’s Liens therein if and to the extent that
the Credit Facility Indebtedness applicable to the Senior Lien Creditor
Representative’s Senior Lien Documents is increased, without the express
written consent of the Trustee, to an amount in excess of the applicable
Maximum Credit Facility Amount for such Senior Lien Document;


 


16





















 


(b)           any exchange, release, non-enforcement or
non-perfection of any Party’s Liens with respect to any Collateral, or any
release, amendment or waiver of or consent to departure from any guaranty, for
all or any of the Secured Liabilities; or


 


(c)           any failure by any Party to marshal assets in favor of
any other Party or any other Person or to proceed upon or against or exhaust
any security or remedy before proceeding to enforce the Financing Documents.


 


Section 5.4             Waiver.  Except as
otherwise provided in Section 2.1 and the other provisions hereof,
to the maximum extent permitted by applicable law, the Trustee hereby waives,
solely with respect to the Collateral to which the Lien Priority relates, any
failure, omission, delay or lack on the part of any Senior Lien Creditor to
enforce, assert or exercise any right, power or remedy conferred on such Senior
Lien Creditor in any of the Senior Lien Documents or the inability of such
Senior Lien Creditor to enforce any provision of the Senior Lien Documents or
this Agreement.


 


Section 5.5             Amendments, Etc.  No amendment
or waiver of any provision of this Agreement nor consent to any departure by
any Party shall in any event be effective unless the same shall be in writing
and signed by each Party, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given; provided that, neither Section 4.4
nor this Section 5.5 may be amended or otherwise modified without
the prior written consent of the Issuers.


 


Section 5.6             Addresses for Notices. 
All demands, notices and other communications provided for hereunder
shall be in writing and, if to the Trustee, mailed or sent by telecopy or
delivered to it, addressed to it as follows:


 


U.S. Bank National Association

60 Livingston Avenue

St. Paul, MN 55107

Attention:  Corporate Trust Department

Facsimile:  (651) 495-8097


 


and if to the Senior Lien Creditor Representative, mailed or sent by
telecopy or delivered to the Senior Lien Creditor Representative, addressed to
it as follows:


 


[                                  ]


 


With a copy to:


 


[                                  ]


 


or as to any Party at such other address as shall be designated by such
Party in a written notice to the other parties complying as to delivery with
the terms of this Section 5.6. 
All such demands, notices and other communications shall be effective:  when mailed, two business days after deposit
in the mails, postage prepaid; when sent by telecopy, when receipt is
acknowledged by the receiving telecopy equipment (or at the opening of the 


 


17





















 


next business day if receipt is acknowledged after normal business
hours); or when delivered, as the case may be, addressed as aforesaid.


 


Section 5.7             No Waiver of Remedies. 
No failure on the part of any Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.


 


Section 5.8             Continuing Agreement. 
This Agreement is a continuing agreement and shall (a) be binding
upon the Parties and their successors and assigns (including all Holders and
all Persons that become lenders or participants under the Senior Lien
Documents), and (b) inure to the benefit of and be enforceable by the
Parties, the Holders, the Senior Lien Creditors and their respective
successors, transferees and assigns.


 


Section 5.9             Governing Law; Entire Agreement. 
This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York including
Sections 5-1401 and 5-1402 of the New York General Obligations Law, except as
otherwise preempted by applicable federal law. 
This Agreement constitutes the entire agreement and
understanding among the Parties with respect to the subject matter hereof and
supersedes any prior agreements, written or oral, with respect thereto.


 


Section 5.10           Counterparts.  This
Agreement may be executed in any number of counterparts, and it is not
necessary that the signatures of all Parties be contained on any one
counterpart hereof, each counterpart will be deemed to be an original, and all
together shall constitute one and the same document.


 


Section 5.11           No Third Party Beneficiary. 
This Agreement is solely for the benefit of the Parties (and their
successors and assigns) and the holders of the Secured Liabilities (including
the Senior Lien Creditors and the Holders). 
No other Person (including the Issuers, Parent, any Guarantor or any
subsidiary or affiliate of the Issuers, except the Issuers, Parent and
Guarantors solely with respect to Section 4.4 and the proviso to Section 5.5)
shall be deemed to be a third-party beneficiary of this Agreement or shall have
any rights to enforce any provisions hereof.


 


Section 5.12           Headings.  The headings
of the articles and sections of this Agreement are inserted for purposes of
convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.


 


Section 5.13           Severability.  If any of the
provisions in this Agreement shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and shall not invalidate
the Lien Priority or any other priority set forth in this Agreement.


 


18





















 


Section 5.14           Trustee Status. 
Notwithstanding any term herein to the contrary, it is hereby expressly
agreed and acknowledged that the lien-subordination and related agreements set
forth herein by the Trustee are made solely in its capacity as trustee and
collateral agent under the Indenture Documents and with respect to the Notes
issued under the Indenture (and not in its individual commercial capacity,
except to the extent that it is or becomes a Holder of any such Note).  The Trustee shall not have any duties,
obligations, or responsibilities to any Senior Lien Creditor or the Senior Lien
Creditor Representative under this Agreement except as expressly set forth
herein.  Nothing in this Agreement shall
be construed to operate as a waiver by the Trustee, with respect to the
Issuers, Parent or the Guarantors or any holder of any Subordinated Lien
Indebtedness, of the benefit of any exculpatory provisions, presumptions,
indemnities, protections, benefits, immunities or reliance rights contained in
the Indenture, and, by its acknowledgment hereof, each Issuer expressly agrees
that as between itself and the Trustee, the Trustee shall have such benefit
with respect to all actions or omissions by the Trustee pursuant to this
Agreement.  For all purposes of this
Agreement, the Trustee may (a) rely in good faith, as to matters of fact,
on any representation of fact believed by the Trustee to be true (without any
duty of investigation) and that is contained in a written certificate of any
authorized representative of the Issuers or of any Senior Lien Creditor or the
Senior Lien Creditor Representative, (b) rely in good faith, as to matters
of law, on any advice received from its legal counsel or an opinion of its
counsel, counsel to the Issuers or counsel to any Senior Lien Creditor or the
Senior Lien Creditor Representative, and shall have no liability for any action
or omission taken in reliance thereon, and (c) assume in good faith
(without any duty of investigation), and rely upon, the genuineness, due
authority, validity, and accuracy of any certificate, instrument, notice, or
other document believed by it in good faith to be genuine and presented by the
proper person.


 


[signature pages follow]


 


19





















 


IN WITNESS
WHEREOF, each Party has caused this Agreement to be duly executed and delivered
as of the date first above written.


 


	
   

  	
  [                        ],

  
	
   

  	
  as Senior Lien Creditor Representative

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 





















 


ACKNOWLEDGMENT


 


Each of the
undersigned hereby acknowledges that (a) it has received a copy of the
foregoing Intercreditor Agreement, dated as of [                  ]
(the “Intercreditor Agreement”; undefined capitalized terms used in this
Acknowledgment have the meanings assigned to them in the Intercreditor Agreement),
by and among U.S. Bank National Association, as Trustee, and [                  ],
as Senior Lien Creditor Representative, and consents thereto, and agrees to
recognize all rights granted thereby to the Parties, and will not do any act or
perform any obligation that is not in accordance with the agreements set forth
in such Intercreditor Agreement; and (b) it is not an intended beneficiary
or third party beneficiary under the Intercreditor Agreement (other than with
respect to Section 4.4 and the proviso to Section 5.5
thereof).


 


Dated as of
the date first above written.


 


	
   

  	
  DIAMOND JO WORTH, LLC, as an Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  DIAMOND JO WORTH CORP., as an 

  Issuer

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  DIAMOND JO WORTH HOLDINGS, 

  LLC, as Parent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


F-1