Exhibit 4.1


 


ELDORADO RESORTS LLC and

ELDORADO CAPITAL CORP.,


as Issuers


 


and


 


U.S. BANK NATIONAL ASSOCIATION, as Trustee


 












 


INDENTURE


 


Dated as of April 20, 2004


 












 


$64,700,000


 


9% SENIOR NOTES DUE 2014


 

















 


CROSS-REFERENCE TABLE*


 




	
  Trust Indenture Act

  Section

  	
   

  	
  Indenture
  Section

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  7.08; 7.10; 10.02

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.05

  
	
  (b)

  	
   

  	
  10.03

  
	
  (c)

  	
   

  	
  10.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  7.06

  
	
  (c)

  	
   

  	
  7.06; 10.02

  
	
  (d)

  	
   

  	
  7.06

  
	
  314(a)(1)

  	
   

  	
  4.02; 10.02

  
	
  314(a)(2)

  	
   

  	
  4.02; 10.02

  
	
  3.14(a)(3)

  	
   

  	
  4.02; 10.02

  
	
  3.14(a)(4)

  	
   

  	
  4.03; 10.02

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  10.04

  
	
  (c)(2)

  	
   

  	
  10.04

  
	
  (c)(3)

  	
   

  	
  10.04

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  10.05

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.01(b)

  
	
  (b)

  	
   

  	
  7.05; 10.02

  
	
  (c)

  	
   

  	
  7.01(a)

  
	
  (d)

  	
   

  	
  7.01 (c)

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a)(last sentence)

  	
   

  	
  6.05

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A

  
	
  (b)

  	
   

  	
  6.07

  
	
  317(a)(1)

  	
   

  	
  6.08

  
	
  (a)(2)

  	
   

  	
  6.09

  
	
  (b)

  	
   

  	
  2.04

  
	
  318(a)

  	
   

  	
  10.01

  






 












N.A. means not applicable.


 


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


 


ii

















 


TABLE OF CONTENTS


 


	
  ARTICLE I
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
  Section 1.01

  	
  Definitions.

  	
   

  
	
   

  	
  Section 1.02

  	
  Other
  Definitions.

  	
   

  
	
   

  	
  Section 1.03

  	
  Incorporation
  by Reference of Trust Indenture Act.

  	
   

  
	
   

  	
  Section 1.04

  	
  Rules
  of Construction.

  	
   

  
	
  ARTICLE II
  THE NOTES

  	
   

  
	
   

  	
  Section 2.01

  	
  Form
  and Dating.

  	
   

  
	
   

  	
  Section 2.02

  	
  Execution
  and Authentication.

  	
   

  
	
   

  	
  Section 2.03

  	
  Registrar;
  Paying Agent; Depositary; Global Note Holder.

  	
   

  
	
   

  	
  Section 2.04

  	
  Paying
  Agent to Hold Money in Trust.

  	
   

  
	
   

  	
  Section 2.05

  	
  Noteholder
  Lists.

  	
   

  
	
   

  	
  Section 2.06

  	
  Transfer
  and Exchange.

  	
   

  
	
   

  	
  Section 2.07

  	
  Replacement
  Notes.

  	
   

  
	
   

  	
  Section 2.08

  	
  Outstanding
  Notes.

  	
   

  
	
   

  	
  Section 2.09

  	
  When
  Treasury Notes Disregarded.

  	
   

  
	
   

  	
  Section 2.10

  	
  Temporary
  Notes.

  	
   

  
	
   

  	
  Section 2.11

  	
  Gaming
  Redemption.

  	
   

  
	
   

  	
  Section 2.12

  	
  Cancellation.

  	
   

  
	
   

  	
  Section 2.13

  	
  Defaulted
  Interest.

  	
   

  
	
   

  	
  Section 2.14

  	
  CUSIP
  Number.

  	
   

  
	
  ARTICLE III
  REDEMPTION AND PREPAYMENT

  	
   

  
	
   

  	
  Section 3.01

  	
  Notices
  to Trustee.

  	
   

  
	
   

  	
  Section 3.02

  	
  Selection
  of Notes to be Redeemed.

  	
   

  
	
   

  	
  Section 3.03

  	
  Notice
  of Redemption.

  	
   

  
	
   

  	
  Section 3.04

  	
  Effect
  of Notice of Redemption.

  	
   

  
	
   

  	
  Section 3.05

  	
  Deposit
  of Redemption Price.

  	
   

  
	
   

  	
  Section 3.06

  	
  Notes
  Redeemed in Part.

  	
   

  
	
   

  	
  Section 3.07

  	
  Optional
  Redemption.

  	
   

  
	
   

  	
  Section 3.08

  	
  Mandatory
  Redemption.

  	
   

  
	
   

  	
  Section 3.09

  	
  Offer
  to Purchase by Application of Excess Proceeds.

  	
   

  
	
   

  	
  Section 3.10

  	
  Compliance
  with Tender Offer Rules.

  	
   

  
	
  ARTICLE IV
  COVENANTS OF THE ISSUERS

  	
   

  
	
   

  	
  Section 4.01

  	
  Payment
  of Notes.

  	
   

  
	
   

  	
  Section 4.02

  	
  SEC
  Reports.

  	
   

  
	
   

  	
  Section 4.03

  	
  Compliance
  Certificate.

  	
   

  
	
   

  	
  Section 4.04

  	
  Maintenance
  of Office or Agency.

  	
   

  
	
   

  	
  Section 4.05

  	
  Limitations
  on Restricted Payments.

  	
   

  
	
   

  	
  Section 4.06

  	
  Continued
  Existence; Restrictions on Activities of Capital.

  	
   

  
	
   

  	
  Section 4.07

  	
  Taxes.

  	
   

  
	
   

  	
  Section 4.08

  	
  Change
  of Control.

  	
   

  
	
   

  	
  Section 4.09

  	
  Limitation
  on Indebtedness.

  	
   

  
	
   

  	
  Section 4.10

  	
  Limitations
  on Liens.

  	
   

  
	
   

  	
  Section 4.11

  	
  Dividend
  and Other Payment Restrictions Affecting Subsidiaries.

  	
   

  



 


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  Section 4.12

  	
  Limitations
  on Transactions with Affiliates.

  	
   

  
	
   

  	
  Section 4.13

  	
  Stay,
  Extension and Usury Laws.

  	
   

  
	
   

  	
  Section 4.14

  	
  Limitation
  on Sales of Assets.

  	
   

  
	
   

  	
  Section 4.15

  	
  Subsidiary
  Guarantees.

  	
   

  
	
   

  	
  Section 4.16

  	
  Payments
  for Consent.

  	
   

  
	
   

  	
  Section 4.17

  	
  Designation
  of an Unrestricted Subsidiary as Restricted.

  	
   

  
	
   

  	
  Section 4.18

  	
  Designation
  of a Subsidiary as Unrestricted.

  	
   

  
	
   

  	
  Section 4.19

  	
  Business
  Activities.

  	
   

  
	
   

  	
  Section 4.20

  	
  Further
  Assurance to the Trustee.

  	
   

  
	
   

  	
  Section 4.21

  	
  Maintenance
  of Properties.

  	
   

  
	
   

  	
  Section 4.22

  	
  Insurance.

  	
   

  
	
   

  	
  Section 4.23

  	
  Investment
  Company Act.

  	
   

  
	
   

  	
  Section 4.24

  	
  Maintenance
  of Rating.

  	
   

  
	
   

  	
  Section 4.25

  	
  Redemption
  of Subordinated Notes.

  	
   

  
	
  ARTICLE V
  SUCCESSORS

  	
   

  
	
   

  	
  Section 5.01

  	
  Merger,
  Consolidation, Etc.

  	
   

  
	
   

  	
  Section 5.02

  	
  Successor
  Corporation Substituted.

  	
   

  
	
   

  	
  Section 5.03

  	
  Purchase
  Offer on Change of Control.

  	
   

  
	
  ARTICLE VI
  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
  Section 6.01

  	
  Events
  of Default.

  	
   

  
	
   

  	
  Section 6.02

  	
  Acceleration.

  	
   

  
	
   

  	
  Section 6.03

  	
  Other
  Remedies.

  	
   

  
	
   

  	
  Section 6.04

  	
  Waiver
  of Past Defaults.

  	
   

  
	
   

  	
  Section 6.05

  	
  Control
  by Majority.

  	
   

  
	
   

  	
  Section 6.06

  	
  Limitation
  on Suits.

  	
   

  
	
   

  	
  Section 6.07

  	
  Rights
  of Holders to Receive Payment.

  	
   

  
	
   

  	
  Section 6.08

  	
  Collection
  Suit by Trustee.

  	
   

  
	
   

  	
  Section 6.09

  	
  Trustee
  May File Proofs of Claim.

  	
   

  
	
   

  	
  Section 6.10

  	
  Priorities.

  	
   

  
	
   

  	
  Section 6.11

  	
  Undertaking
  for Costs.

  	
   

  
	
  ARTICLE VII
  TRUSTEE

  	
   

  
	
   

  	
  Section 7.01

  	
  Duties
  of Trustee.

  	
   

  
	
   

  	
  Section 7.02

  	
  Rights
  of Trustee.

  	
   

  
	
   

  	
  Section 7.03

  	
  Individual
  Rights of Trustee.

  	
   

  
	
   

  	
  Section 7.04

  	
  Trustee’s
  Disclaimer.

  	
   

  
	
   

  	
  Section 7.05

  	
  Notice
  of Defaults.

  	
   

  
	
   

  	
  Section 7.06

  	
  Reports
  by Trustee to Holders.

  	
   

  
	
   

  	
  Section 7.07

  	
  Compensation
  and Indemnity.

  	
   

  
	
   

  	
  Section 7.08

  	
  Replacement
  of Trustee.

  	
   

  
	
   

  	
  Section 7.09

  	
  Successor
  Trustee by Merger, etc.

  	
   

  
	
   

  	
  Section 7.10

  	
  Eligibility;
  Disqualification.

  	
   

  
	
   

  	
  Section 7.11

  	
  Preferential
  Collection of Claims Against Issuers.

  	
   

  
	
  ARTICLE VIII
  SATISFACTION AND DISCHARGE OF INDENTURE

  	
   

  
	
   

  	
  Section 8.01

  	
  Option
  To Effect Legal Defeasance Or Covenant Defeasance.

  	
   

  
	
   

  	
  Section 8.02

  	
  Legal
  Defeasance And Discharge.

  	
   

  
	
   

  	
  Section 8.03

  	
  Covenant
  Defeasance.

  	
   

  



 


ii

















 


	
   

  	
  Section 8.04

  	
  Conditions
  To Legal Or Covenant Defeasance.

  	
   

  
	
   

  	
  Section 8.05

  	
  Deposited
  Money And Government Securities To Be Held In Trust; Other Miscellaneous
  Provisions.

  	
   

  
	
   

  	
  Section 8.06

  	
  Repayment
  To The Issuers.

  	
   

  
	
   

  	
  Section 8.07

  	
  Reinstatement.

  	
   

  
	
  ARTICLE IX
  AMENDMENTS

  	
   

  
	
   

  	
  Section 9.01

  	
  Without
  Consent of Holders.

  	
   

  
	
   

  	
  Section 9.02

  	
  With
  Consent of Holders.

  	
   

  
	
   

  	
  Section 9.03

  	
  Compliance
  with Trust Indenture Act.

  	
   

  
	
   

  	
  Section 9.04

  	
  Revocation
  and Effect of Consents.

  	
   

  
	
   

  	
  Section 9.05

  	
  Notation
  on or Exchange of Notes.

  	
   

  
	
   

  	
  Section 9.06

  	
  Trustee
  Protected.

  	
   

  
	
  ARTICLE X
  GENERAL PROVISIONS

  	
   

  
	
   

  	
  Section 10.01

  	
  Trust
  Indenture Act Controls.

  	
   

  
	
   

  	
  Section 10.02

  	
  Notices.

  	
   

  
	
   

  	
  Section 10.03

  	
  Communication
  by Holders with Other Holders.

  	
   

  
	
   

  	
  Section 10.04

  	
  Certificate
  and Opinion as to Conditions Precedent.

  	
   

  
	
   

  	
  Section 10.05

  	
  Statements
  Required in Certificate or Opinion.

  	
   

  
	
   

  	
  Section 10.06

  	
  Rules
  by Trustee and Agents.

  	
   

  
	
   

  	
  Section 10.07

  	
  No
  Recourse Against Others.

  	
   

  
	
   

  	
  Section 10.08

  	
  Counterparts.

  	
   

  
	
   

  	
  Section 10.09

  	
  Other
  Provisions.

  	
   

  
	
   

  	
  Section 10.10

  	
  Governing
  Law.

  	
   

  
	
   

  	
  Section 10.11

  	
  No
  Adverse Interpretation of Other Agreements.

  	
   

  
	
   

  	
  Section 10.12

  	
  Successors.

  	
   

  
	
   

  	
  Section 10.13

  	
  Severability.

  	
   

  
	
   

  	
  Section 10.14

  	
  Table
  of Contents, Headings, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
  Exhibit
  A

  	
  Form
  of Note

  	
   

  
	
  Exhibit
  B

  	
  Certificate
  to be Delivered Upon Registration of Transfer of Notes

  	
   

  
	
  Exhibit
  C

  	
  Form
  of Legal Opinion on Transfer

  	
   

  
	
  Exhibit
  D

  	
  Form
  of Subsidiary Guarantee

  	
   

  
					



 


iii

















 


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


 


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


 


ARTICLE I


 


DEFINITIONS AND INCORPORATION BY REFERENCE


 


Section 1.01           Definitions.


 


“Acquired Debt”
means, with respect to any specified Person, (i) Indebtedness of any other
Person existing at the time such other Person is merged with or into or became
a Restricted Subsidiary of such specified Person, including, without
limitation, Indebtedness incurred in connection with, or in contemplation of,
such other Person merging with or into or becoming a Restricted Subsidiary of
such specified Person, and (ii) Indebtedness secured by a Lien encumbering any
asset acquired by such specified Person.


 


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


 


“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 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; provided that Beneficial Ownership of 10% or more of
the voting securities of a Person shall be deemed to be control.


 


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


 


“Assets” means any
tangible or intangible assets or rights or real or personal properties of any
Person.


 


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


 

















 


disposition of Cash Equivalents or the sale of inventory or obsolete
furniture, fixtures, equipment or other property (real or personal) in the
ordinary course of business; (B) dispositions of gaming equipment in the
ordinary course of business pursuant to an established program for the
maintenance and upgrading of such equipment; (C) the surrender or waiver of
contract rights or the settlement, release or surrender of contract, tort or
other claims of any kind in the ordinary course of business; (D) the grant in
the ordinary course of business of, or lapse of, any license of patents,
trademarks and other similar intellectual property, including transfer of
intellectual property relating exclusively to the conduct of the business of The
Brew Brothers, provided that, in such event, the Company shall be granted a
license to use such transferred intellectual property for a nominal fee; (E)
any disposition of assets pursuant to the foreclosure of any Lien on assets
securing any FF&E Financing or Capital Lease Obligation permitted pursuant
to the provisions of Section 4.09, provided that such FF&E Financing
or Capital Lease Obligation is secured by a Lien that relates only to assets
purchased with such FF&E Financing or Capital Lease Obligation, and
provided, further, that such foreclosure or other remedy is conducted in a
commercially reasonable manner or in accordance with applicable law; (F) any
disposition of assets involving only the lease or sublease for a term not to
exceed ten years (other than a sale and a leaseback transaction or similar
transaction in which the owner, prior to the transaction, does not retain the
residual interest of the property at the conclusion of the term of the lease)
of real or personal property in the ordinary course of business and provided
that, with respect to a lease or sublease for which (i) the aggregate rental
payments exceed $1.0 million per annum the Company delivers to the Trustee a
resolution of the Management Committee set forth in an Officers’ Certificate
certifying that the lease has been approved unanimously by the Management
Committee and (ii) the aggregate rental payments exceed $5.0 million per annum
the Company delivers to the Trustee an opinion as to the fairness to the
Company of such lease from a financial point of view by an accounting,
appraisal or investment banking firm of national standing; (G) any disposition
of assets resulting from (i) the designation of any Restricted Subsidiary as an
Unrestricted Subsidiary, or contribution to the capital of any Unrestricted
Subsidiary, in accordance with the applicable provisions of the Indenture, or
(ii) the sale of Capital Stock of any Unrestricted Subsidiary or the sale of
all or substantially all of the assets of any Unrestricted Subsidiary; (H) a
transfer of assets by the Issuers to a Consolidated Subsidiary or by a
Consolidated Subsidiary to the Issuers or to another Consolidated Subsidiary;
(I) an issuance of Equity Interests by a Consolidated Subsidiary to the Issuers
or to another Consolidated Subsidiary; (J) a Permitted Investment, Restricted
Payment or other payment or distribution that is permitted by the provisions of
Section 4.05; (K) the contribution, in exchange for an equity interest or
debt obligation, of Development Property to a joint venture in which the
Company, directly or indirectly, holds an equity interest; and (L) the sale of
interests in Tamarack Crossings, LLC conducted pursuant to
Section 3.07(b)(ii).


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


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


 


3

















 


Carano Interests, in a single transaction or in a related series of
transactions, by way of merger, consolidation or other business combination or
purchase of Beneficial Ownership of 35% or more of the total voting power
entitled to vote in the election of the Management Committee or Board of
Directors, as the case may be, or such other Person surviving the transaction
and, at such time, the Carano Interests shall fail to Beneficially Own,
directly or indirectly, securities representing greater than the combined
voting power of the Company’s or such other Person’s Capital Stock as is
Beneficially Owned by such Person or group, (v) the first day on which the
Company fails to own 100% of the issued and outstanding Equity Interests of
Capital, other than by reason of a merger of Capital with and into a corporate
successor to the Company, and (vi) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Management
Committee (together with any new managers whose election or appointment by such
committee or whose nomination for election by the members of the Company 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) cease for any reason to constitute a
majority of the Management Committee then in office; provided, however, that
the sale or transfer by the Carano Interests to an Included Person shall not be
a Change of Control so long as such Included Person maintains an ownership
interest that, if held by the Carano Interests, would not constitute a Change
of Control; and provided, further, that for purposes of this definition (except
clause (v) of this definition) the term “Company” shall mean “Parent” should
Parent exist and for purpose of clause (vi) of this definition, Management
Committee and managers shall mean board of directors and directors should
Parent exist.


 


“Consolidated Cash
Flow” means, with respect to any Person for any period, the Consolidated
Net Income of such Person for such period plus, to the extent deducted in
computing Consolidated Net Income, (i) an amount equal to any extraordinary
loss plus any net loss realized in connection with an Asset Sale, (ii) provision
for taxes based on income or profits or, so long as such Person is treated as a
partnership or other pass through entity for United States federal income tax
purposes, the Tax Amount of such Person and its Restricted Subsidiaries for
such period, (iii) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers’ acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), (iv) depreciation and
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash charges (excluding any such non-cash charge to the
extent that it represents an accrual of or reserve for cash charges in any
future period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Restricted Subsidiaries for such period,
(v) pre-opening expenses to the extent that such pre-opening expenses were
deducted in computing Consolidated Net Income, in each case, on a consolidated
basis and determined in accordance with GAAP and (vi) any abandonment loss
incurred in connection with the expansion of the Eldorado which was reflected
on the Company’s Consolidated Statement of Income for the period ended
December 31, 2003. Notwithstanding the foregoing, the provision for taxes
on the income or profits of, and the depreciation, amortization and other
non-cash charges of, a Restricted Subsidiary of the referent Person shall be
added to


 


4

















 


Consolidated Net Income to compute Consolidated Cash Flow only to the
extent (and in same proportion) that the Net Income of such Restricted
Subsidiary was included in calculating the Consolidated Net Income of such
Person and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Issuers by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulation applicable to such Restricted Subsidiary or its equity
interest holders.


 


“Consolidated Net
Income” means, with respect to any Person for any period, the aggregate of
the Net Income of such Person and its Restricted Subsidiaries for such period,
on a consolidated basis, determined in accordance with GAAP; provided that (i)
the Net Income (but not loss) of any Person that is not a Restricted Subsidiary
or that is accounted for by the equity method of accounting (including without
limitation ELLC) shall be included only to the extent of the amount of
dividends or distribution paid in cash to the referent Person or a Consolidated
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of such Net Income is not at the
date of determination of Consolidated Net Income for such period permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgments, decrees, orders, statutes, rules or
governmental regulation applicable to such Restricted Subsidiary or its equity
interest holders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded, (iv) the cumulative effect of a change in accounting
principles and any losses resulting from the application of Statement of
Financial Accounting Standards No. 121 shall be excluded and (v) the Net Income
of any Unrestricted Subsidiary, other than ELLC, shall be excluded, whether or
not distributed to the Issuers or their Restricted Subsidiaries.


 


“Consolidated Net
Worth” means, with respect to any Person, the amount by which the total
assets of such Person and its Restricted Subsidiaries exceed the sum of (i) the
total liabilities of such Person and its Restricted Subsidiaries plus (ii) any
Disqualified Stock of such Person and its Restricted Subsidiaries (other than
any such Disqualified Stock issued to such Person or any of its Restricted
Subsidiaries), in each case determined in accordance with GAAP.


 


“Consolidated
Subsidiary” of any Person means a Restricted Subsidiary of such Person
which could be included with such Person in a consolidated group of such Person
for federal income tax reporting.


 


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


 


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


 


5

















 


“Daniels Property”
means that certain parcel of real property together with improvements thereon
located in the City of Reno, County of Washoe, State of Nevada, located on
Washoe Assessor Parcels 007-292-18, 007-292-20 and 007-292-25, and more
commonly known as Daniel’s Motor Lodge, 275 North Sierra Street, Reno, Nevada
89501.


 


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


 


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


 


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


 


“Disqualified Stock”
means any Capital Stock that, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the Maturity
Date.


 


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


 


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


 


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


 


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


 


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


 


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


 


“FF&E” means
furniture, fixtures and equipment, including gaming equipment, used in
connection with any Gaming Business.


 


6

















 


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


 


“Fixed Charges”
means, with respect to any Person for any period, the sum of (without
duplication) (i) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers’ acceptance financings, and net payments (if any) pursuant
to Hedging Obligations, but excluding all other amortization of debt issuance
costs) and (ii) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period and (iii) any
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries (whether or not such
Guarantee or Lien is called upon) and (iv) the product of (a) all cash dividend
payments or other distributions (and non-cash dividend payments in the case of
a Person that is a Restricted Subsidiary) on any series of Disqualified Stock
of such Person (other than payments to such Person and its Consolidated
Subsidiaries), times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
1ocal statutory tax rate of such Person (or, in the case of a Person that is a
partnership, the combined federal, state and local tax rate to which such
Person would be subject if it were a Nevada corporation filing separate tax
returns with respect to its Taxable Income), expressed as a decimal, in each
case, on a consolidated basis and in accordance with GAAP.


 


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


 


7

















 


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


 


“GAAP” means
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
have been approved by a significant segment of the accounting profession, which
are in effect on the date of the Indenture.


 


“Gaming Authority”
means any agency, authority, board, bureau, commission, department, office or
instrumentality of any nature whatsoever of the United States federal 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, including the Nevada State Gaming Commission, the
Nevada State Gaming Control Board and any other applicable gaming regulatory
authority with authority to regulate any gaming operation (or proposed gaming
operation) owned, managed or operated by the Company or any of its
Subsidiaries.


 


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


 


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


 


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


 


8

















 


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


 


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


 


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


 


“Guarantor” means
each Subsidiary that executes a Guarantee of the Issuers’ payment obligations
under the Notes and the Indenture in accordance with the provisions of the
Indenture, and their respective successors and assigns.


 


“HCM” means Hotel
Casino Management, Inc., a Nevada corporation.


 


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


 


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


 


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


 


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


 


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


 


9

















 


credit and Hedging Obligations) would appear as a liability upon a
balance sheet of such Person prepared in accordance with GAAP, as well as all
indebtedness of others secured by a Lien on any asset of such Person (whether
or not such indebtedness is assumed by such Person) and, to the extent not
otherwise included, the Guarantee by such Person of any indebtedness of any other
Person.


 


“Indenture” means
this Indenture as amended or supplemented from time to time.


 


“Initial Public
Offering” means the first underwritten public offering of common Capital
Stock of the Company or Parent registered under the Securities Act (other than
a public offering registered on Form S-8 under the Securities Act) that results
in net proceeds of at least $20.0 million to the Company or Parent, as the case
may be.


 


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


 


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


 


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


 


“Investments”
means, with respect to any Person, all investments by such Person in other
Persons in the forms of direct or indirect loans (including guarantees of
Indebtedness or other obligations), advances (other than advances to vendors
and customers in the ordinary course of business that are recorded as accounts
receivable in accordance with GAAP and excluding commission, travel, relocation
and similar advances to officers and employees made in the ordinary course of
business), capital contributions, purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP; provided that an acquisition of assets,
Equity Interests or other securities by the Issuers or any of their Restricted
Subsidiaries for consideration consisting of Equity Interests (other than
Disqualified Stock) of the Company shall not be deemed to be an Investment. If
the Issuers or any of their Restricted Subsidiaries sells or otherwise disposes
of any Equity Interests of any Restricted Subsidiary of the Issuers such that,
after giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary of either Issuer, the Issuers shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Restricted Subsidiary not
sold or disposed of.


 


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


 


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


 


10

















 


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


 


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


 


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


 


“Lien” means, with
respect to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset, whether or not filed,
recorded or otherwise perfected under applicable law (including any conditional
sale or other title retention agreement, any lease in the nature thereof, any
option or other agreement to sell or give a security interest in and any filing
of or agreement to give any financing statement under the Uniform Commercial
Code (or equivalent statutes) of any jurisdiction).


 


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


 


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


 


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


 


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


 


“Managers” means
REC and HCM, or any successors thereto.


 


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


 


11

















 


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


 


“Maturity Date”
means April 15, 2014.


 


“Member Notes”
shall mean a series of notes of the Company that: (i) are issued pro rata, to
the members of the Company in contemplation of the Initial Public Offering;
(ii) have terms specifying that principal amounts thereof may be paid only by
proceeds from the Initial Public Offering; (iii) shall automatically be
converted into membership interests, pro rata, (a) if not paid with proceeds of
the Initial Public Offering within 90 days of issuance or (b) upon the
occurrence of an event of default under the Notes; (iv) have a stated maturity
after the Notes; (v) are expressly subordinated in right of payment to the
prior payment in full of the Notes; (vi) have stated interest payment dates no
more often than semi-annually; (vii) have a stated interest rate of less than
10%; (viii) are unsecured; (ix) are not redeemable prior to stated maturity
except from the proceeds of the Initial Public Offering; and (x) do not contain
any terms or covenants which would cause the Member Notes to be in default
prior to the Notes.


 


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


 


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


 


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


 


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


 


12

















 


“Non-Recourse Debt”
means Indebtedness (i) as to which neither the Issuers nor any of their
Restricted Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness), (b)
is directly or indirectly liable (as a guarantor or otherwise), or (c)
constitutes the lender, (ii) no default with respect to which (including any
rights that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Indebtedness of the Issuers or any of their Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Issuers or any of their
Restricted Subsidiaries.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Parent” means a
corporation to be formed which shall own all or substantially all of the common
equity interests of the Company.


 


“Participants” means those
Persons designated as participants by the Depositary.


 


“Permitted Investments”
means (i) any Investment in the Issuers or in a Consolidated Subsidiary of the
Issuers, including without limitation any investment in the Gaming Business of
the Issuers or any such Consolidated Subsidiaries of the Issuers; (ii) any
Investment in Cash Equivalents; (iii) any Investment by the Issuers or any of
their Restricted Subsidiaries in a Person if, as a result of such Investment,
(a) such Person becomes a Consolidated Subsidiary of the Company engaged in the
Gaming Business or (b) such Person 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 Consolidated Subsidiary of the Company
engaged in the Gaming


 


13

















 


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


 


“Permitted Liens”
means (i) Liens securing the Senior Credit Agreement and Indebtedness of
Restricted Subsidiaries that is permitted to be incurred pursuant to
Section 4.09 hereof; (ii) liens securing Indebtedness that is pari passu in
right of payment with the Notes, provided that the Notes are equally and
ratably secured; (iii) Liens securing intercompany Indebtedness permitted by
this Indenture in favor of the Issuers or any of their Restricted Subsidiaries;
(iv) Liens on property of a Person existing at the time such Person is merged
into or consolidated with the Issuers or any of their Restricted Subsidiaries,
provided that such Liens were in existence prior to the contemplation of such
merger or consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with the Issuers or any such Restricted
Subsidiary; (v) Liens on property existing at the time of acquisition thereof
by the Issuers or any of their Restricted Subsidiaries, provided that such
Liens were in existence prior to the contemplation of such acquisition; (vi)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (vii) Liens to secure Indebtedness (including
Capital Lease Obligations) permitted by Section 4.09(b)(iv) hereof
covering only the assets acquired with such Indebtedness; (viii) Liens existing
on the date hereof; (ix) Liens for taxes, assessments or governmental charges
or claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as shall be required
in conformity with GAAP shall have been made therefor; (x) Liens of landlords
or of mortgagees of landlords arising by operation of law, provided that the
rental payments secured thereby are not yet due and payable; (xi) Liens
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, (xii) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the business of the Company or any of
its Restricted Subsidiaries; (xiii) judgment or attachment Liens not giving
rise to an Event of Default; (xiv) Liens arising out of the purchase,
consignment, shipment or storage of inventory or other goods in the ordinary
course of business; (xv) any interest or title of a lessor in property subject
to any Capital Lease Obligation or other lease permitted by this Indenture;
(xvi) Liens arising from filing Uniform Commercial Code financing statements
regarding leases permitted by this Indenture; (xvii) leases or subleases
permitted pursuant to Section 4.14 hereof and that


 


14

















 


are granted to others and that do not interfere in any material respect
with the business of the Company or any Restricted Subsidiary; (xviii) any
interest or title of a lessor in the property subject to any lease, whether
characterized as capitalized or operating other than any such interest or title
resulting from or arising out of a default by the Company or any Restricted
Subsidiary of its obligations under such lease; and (xix) Liens incurred in the
ordinary course of business of the Issuers or any of their Restricted
Subsidiaries that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Issuers or any such Restricted Subsidiary.


 


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


 


“Person” means an
individual, partnership, limited-liability company, corporation, trust, joint
venture, association, joint stock company or unincorporated organization and a
government or agency or a political subdivision thereof.


 


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


 


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


 


“Qualified
Institutional Buyer” has the meaning assigned to that term in Rule 144A
under the Securities Act.


 


“REC” means
Recreational Enterprises, Inc., a Nevada corporation.


 


15

















 


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


 


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


 


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


 


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


 


“S&P” means
Standard & Poor’s Rating Services, a division of McGraw-Hill, Inc., or its
successor.


 


“SEC” means the
Securities and Exchange Commission.


 


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


 


“Senior Credit
Agreement” means that certain Second Amended and Restated Loan Agreement
dated as of June 29, 2001 among the Company, certain lenders and Bank of
America, N. A., as administrative agent, together with the Guarantee
issued by Capital and all instruments, documents and agreements executed in
connection therewith, and any further substitution of lenders, amendments,
modifications, restatements, renewals, supplements, refundings, replacements or
refinancings thereof.


 


“Shelf Registration
Statement” means a registration statement filed with the Commission
pursuant to the Securities Act and Rule 145 promulgated thereunder in
connection with the public resale of Notes pursuant to the terms set forth in
the Registration Rights Agreement.


 


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


 


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


 


“Silver Legacy Joint
Venture” means the Circus and Eldorado Joint Venture, a Nevada general
partnership.


 


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


 


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


 


16

















 


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


 


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


 


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


 


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


 


“Treasury Yield”
means the yield to maturity at the time of computation of Treasury Securities
with a constant maturity (as compiled by and published in the most recent
Federal Reserve Statistical Release H.15 (519) which has become publicly
available at least two business days prior to the date fixed for redemption
(or, if such Statistical Release is no longer published, any publicly available
source of similar data)) most nearly equal to the then remaining period to and
including the first Redemption Determination Date, provided that if such period
is not equal to the constant maturity of a Treasury Security for which a weekly
average yield is given, the Treasury yield shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of Treasury Securities for which such yields are given, except
that if such period is less than one year, the weekly average yield on actually
traded Treasury Securities adjusted to a constant maturity of one year shall be
used.


 


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


 


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


 


“Unrestricted
Subsidiary” means any Subsidiary, other than Capital, that is designated by
the Management Committee as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary (i) has no Indebtedness
other than Non-Recourse Debt, (ii) is not party to any agreement, contract,
arrangement or understanding with the Issuers or any of their Restricted
Subsidiaries unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Issuers or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Issuers, (iii) is a Person with respect to which neither
the Issuers nor any of their Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to maintain
or preserve such Person’s financial condition or to cause such Person to
achieve any specified levels of operating results and (iv) is not a guarantor
of, and is not otherwise directly or indirectly providing credit support for,
any Indebtedness of the Issuers or any of their Restricted Subsidiaries. Any
such designation by the Management Committee shall be evidenced to the Trustee
by filing with the Trustee a certified copy of the board resolution giving
affect to such


 


17

















 


designation and an Officers’ Certificate certifying that such
designation complied with the foregoing conditions and was permitted by
Section 4.18 hereof.  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 the Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Issuers as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Issuers shall be
in default of such section).


 


“Weighted Average Life
to Maturity” means, when applied to any Indebtedness at any date, the
number of years obtained by dividing (i) the sum of the products 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 will elapse between such date and the making of
such payment, by (ii) the then-outstanding principal amount of such
Indebtedness.


 


Section 1.02           Other
Definitions.


 


	
  Term

  	
   

  	
  Defined in
  Section

  
	
  “Affiliate Transaction”

  	
   

  	
  4.12

  
	
  “Alternative Offer”

  	
   

  	
  4.08(d)

  
	
  “Asset Sale Offer”

  	
   

  	
  4.14(c)

  
	
  “Certificated Notes”

  	
   

  	
  2.01

  
	
  “Change of Control Offer”

  	
   

  	
  4.08(a)

  
	
  “Change of Control Offer Price”

  	
   

  	
  4.08(a)

  
	
  “Change of Control Payment Date”

  	
   

  	
  4.08(a)

  
	
  “Co-Registrar”

  	
   

  	
  2.03

  
	
  “Covenant Defeasance”

  	
   

  	
  8.03

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Excess Proceeds”

  	
   

  	
  4.14(b)

  
	
  “Global Note”

  	
   

  	
  2.01

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  
	
  “New York Office”

  	
   

  	
  2.03

  
	
  “Non-Global Purchasers”

  	
   

  	
  2.01

  
	
  “Offer Amount”

  	
   

  	
  3.09

  
	
  “Offer Period”

  	
   

  	
  3.09

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Payment Blockage Notice”

  	
   

  	
  10.03

  
	
  “Purchase Date”

  	
   

  	
  3.09

  
	
  “Purchase Offer”

  	
   

  	
  3.01 (b)

  
	
  “Redemption Determination Date”

  	
   

  	
  3.07(a)

  
	
  “Redemption Failure”

  	
   

  	
  4.25(a)

  
	
  “Redemption Failure Offer Price”

  	
   

  	
  4.25(a)

  
	
  “Redemption Failure Payment Date”

  	
   

  	
  4.25(a)

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Regulation S”

  	
   

  	
  2.06(a)(ii)(B)

  
	
  “Restricted Payment”

  	
   

  	
  4.05

  



 


18

















 


	
  “Trustee Office”

  	
   

  	
  2.03

  



 


Section 1.03           Incorporation
by Reference of Trust Indenture Act.


 


Whenever this Indenture
refers to a provision of the TIA, the 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;


 


“indenture securities”
means the Notes;


 


“indenture security
holder” means a Noteholder or Holder;


 


“indenture to be
qualified” means this Indenture;


 


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


 


“obligor” on the
Notes means the Issuers or any other obligor on 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 1.04           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 as in
effect at the date hereof;


 


(3)           “or” is not
exclusive;


 


(4)           provisions apply to successive events and
transactions;


 


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


 


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


 


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


 


19

















 


ARTICLE II


 


THE NOTES


 


Section 2.01           Form
and Dating.


 


The Notes shall be
substantially in the form set forth in Exhibit A, which exhibit is part of this
Indenture, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Issuers shall approve the forms of the Notes and any notation,
legend or endorsement on them. Each Note shall be dated the date of its
authentication. The aggregate principal amount of the Notes shall be no greater
than $64.7 million.


 


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


 


Holders of Notes who
elect to take physical delivery of their certificates (collectively, the “Non-Global
Purchasers”) will be issued certificates in the registered form of
certificated Notes, substantially in the form of Exhibit A (excluding footnotes
1 and 2 thereto and the text referred to therein) (the “Certificated Notes”).


 


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


 


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


 


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


 


20

















 


Section 2.02           Execution
and Authentication.


 


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


 


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


 


A Note shall not be valid
until authenticated by the manual signature of the Trustee. Such signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.


 


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


 


The Notes shall be
issuable only in registered form without coupons and only in minimum
denominations of $100,000 or larger denominations that are an integral multiple
of $25,000.


 


The Trustee may appoint
an authenticating agent acceptable to the Issuers to authenticate Notes. Unless
limited by the terms of its appointment, 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 right as an Agent to deal with the
Issuers or an Affiliate.


 


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


 


The Issuers shall
maintain or cause to be maintained in The City of New York, State of New York
(the “Trustee Office”), and, to the extent required by applicable law,
(including without limitation any regulation or rule of a national securities
exchange), in the Borough of Manhattan, The City of New York (the “New York
Office”), State of New York, and in such other locations as it shall determine:
(i) an office or agency where securities may be presented for registration of
transfer or for exchange (“Registrar”); and (ii) an office or agency where
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 (a “Co-Registrar”), and one or more
additional paying agents. The term Paying Agent includes any additional paying
agent. The Issuers may change any Paying Agent, Registrar or Co-Registrar
without prior notice to the Holders. The Issuers shall promptly notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture and shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or Co-Registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
Agent. Except as otherwise provided herein, the Issuers may act as Paying
Agent, Registrar or Co-Registrar. If the Issuers fail to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation in accordance with Section 7.07.
The Trustee shall cause to be maintained the Trustee Office and the New York
Office (to the extent required by applicable law) as long as it acts as
Registrar or Paying Agent.


 


21

















 


The Issuers initially
appoint The Depository Trust Company to act as Depositary with respect to the
Global Notes and initially the Trustee, to act as the Registrar and Paying
Agent and to act as Global Note Holder with respect to the Global Notes.


 


Section 2.04           Paying
Agent to Hold Money in Trust.


 


Not later than two
Business Days prior to each due date for the payment of the principal of,
premium, interest and Liquidated Damages, if any, on any of the Notes, the
Issuers shall deposit with a Paying Agent available funds sufficient to make
such payments so becoming due to Holders. The Issuers shall require each Paying
Agent (other than the Trustee, who hereby so agrees), to agree in writing that
the Paying Agent will hold in trust for the benefit of Noteholders or the Trustee
all money held by the Paying Agent for the payment of the principal of,
premium, interest or Liquidated Damages, if any, on the Notes, and will
promptly notify the Trustee in writing of any, delay or default by the Issuers
in making any such payment. While any such delay in payment or 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 Issuers or their Restricted Subsidiary) shall have no
further liability for such money. If the Issuers or their Restricted Subsidiary
act as Paying Agent, such Person shall segregate and hold in a separate trust fund
for the benefit of the Noteholders all money held by such Person as Paying
Agent. Upon any bankruptcy or reorganization proceedings relating to either
Issuer or their Restricted Subsidiaries, the Trustee shall serve as Paying
Agent.


 


Section 2.05           Noteholder
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 Noteholders and shall
otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar,
the Issuers shall furnish to the Trustee at least five (5) Business Days 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 all Noteholders, including the
aggregate principal amount of Notes held by each thereof, and the Issuers shall
otherwise comply with TIA Section 312(a).


 


Section 2.06           Transfer
and Exchange.


 


(a)           Transfer
and Exchange of Certificated Notes. 
When Certificated Notes are presented to the Registrar or Co-Registrar
with a request to register the transfer of the Certificated Notes or to
exchange such Certificated Notes for an equal principal amount of Certificated
Notes of other authorized denominations, the Registrar or Co-Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transactions are met; provided, however, that the Certificated Notes
presented or surrendered for registration of transfer or exchange:


 


(i)            shall
be duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar or Co-Registrar, duly executed by the Holder
thereof or by such Holder’s attorney, duly authorized in writing; and


 


22

















 


(ii)           in
the case of Legended Notes that are Certificated Notes, shall be accompanied by
the following additional information and documents, as applicable:


 


(A)          if
such Legended Note is being delivered to the Registrar or Co-Registrar by a
Noteholder for registration in the name of such Noteholder, without transfer, a
certification from such Noteholder to that effect (in substantially the form of
Exhibit B hereto); or


 


(B)           if
such Legended Note is being transferred to a Qualified Institutional Buyer in
accordance with Rule 144A under the Securities Act or pursuant to an exemption
from registration in accordance with Rule 144 under the Securities Act or a
transaction meeting the requirements of Regulation S under the Securities Act
(“Regulation S”) or pursuant to an effective registration statement under the
Securities Act, a certification to that effect (in substantially the form of
Exhibit B hereto); or


 


(C)           if
such Legended Note is being transferred in reliance on another exemption from
the registration requirements of the Securities Act or in a transaction exempt
from the registration requirements of the Securities Act, a certification to
that affect (in substantially the form of Exhibit B hereto) and an Opinion of
Counsel to the effect that such transfer does not require registration under
the Securities Act (in substantially the form of Exhibit C hereto).


 


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


 


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


 


(ii)           whether
or not such Certificated Note is a Legended Note, written instructions
directing the Trustee to make, or to direct the Global Note Holder to make, an
endorsement on the Global Notes to reflect an increase in the aggregate
principal amount of the Notes represented by the Global Notes;


 


23

















 


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


 


(c)           Transfer
and Exchange of Global Notes.  The
transfer and exchange of Global Notes or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture (including
the restrictions on transfer set forth herein) and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.


 


(d)           Transfer
and Exchange of a Beneficial Interest in a Global Note for a Certificated Note.  Any Person having a beneficial interest in a
Global Note may upon request exchange such beneficial interest for a
Certificated Note. Upon receipt by the Trustee of written instructions
including registration instructions from the Depositary or its nominee on
behalf of any Person having a beneficial interest in a Global Note, and, in the
case of a beneficial interest in a Legended Note only, the following additional
information and documents:


 


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


 


(ii)           if
such beneficial interest is being transferred to a Qualified Institutional
Buyer in accordance with Rule 144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rule 144 or in a transaction
meeting the requirements of Regulation S or pursuant to an effective
registration statement under the Securities Act, a certification to that effect
from the transferee or transferor (in substantially the form of Exhibit B
hereto); or


 


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


 


then the Trustee, or the Global Note Holder at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Global Note Holder, the
aggregate principal amount of the Global Note to be reduced and, following such
reduction, the Issuers will execute and the Trustee will authenticate and
deliver a Certificated Note to the transferee. Certificated Notes issued in
exchange for a beneficial interest in a Global Note pursuant to this
Section 2.06(d) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect


 


24

















 


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


 


(e)           Restrictions
on Transfer and Exchange of Global Notes. Notwithstanding any other
provisions of this Indenture (other than the provisions set forth in
Section 2.06(f)), a Global Note may not be transferred as a whole except
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.


 


(f)            Authentication
of Certificated Notes in Absence of Depositary or at the Issuer’s Election.
If at any time (i) the Depositary for a Global Note notifies the Issuers that
the Depositary is unwilling or unable to continue as Depositary for the Global
Note and a successor Depositary for the Global Note is not appointed by the Issuers
within 90 days after delivery of such notice, or (ii) the Issuers, at their
sole discretion, notify the Trustee in writing that they elect to cause the
issuance of Certificated Notes under this Indenture, then, the Issuers will
execute, and the Trustee, upon receipt of an Officers’ Certificate requesting
the authentication and delivery of Certificated Notes, shall authenticate and
deliver Certificated Notes, in an aggregate principal amount equal to the
principal amount of the Global Note, in exchange for such Global Note.


 


(g)           Cancellation
and/or Adjustment of Global Note. At such time as all beneficial interests
in a Global Note have either been exchanged for Certificated Notes, redeemed,
converted, repurchased or canceled, such Global Note shall be returned to or
retained by and canceled 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 Certificated Notes, redeemed, converted,
repurchased or canceled, the aggregate principal amount of Notes represented by
such Global Note shall be reduced and an endorsement shall be made on such
Global Note, by the Trustee or the Global Note Holder at the direction of the
Trustee, to reflect such reduction.


 


(h)           Legends.


 


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


 


“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND
THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT


 


25

















 


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


 


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


 


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


 


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


 


26

















 


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


 


(i)            Obligations
with respect to Transfers and Exchanges of Certificated Notes.


 


(i)            To permit registrations of transfers and
exchanges, the Issuers shall execute and the Trustee shall authenticate
Certificated Notes and Global Notes at the Registrar’s or Co-Registrar’s
request.


 


(ii)           No service charge shall be made to a
Noteholder 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 charges payable in connection therewith (other than any such
transfer taxes or similar governmental charges payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.08, 4.14, 4.25 and 9.05 hereof).


 


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


 


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


 


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


 


(vi)          Prior to due presentment for registration or
transfer of any Note, the Trustee, any Agent and the Issuers shall 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, premium,
interest and Liquidated Damages, if any, on such Note, and for all other
purposes whatsoever, whether or


 


27

















 


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


 


(vii)         The Trustee shall authenticate Certificated
Notes and the Global Notes in accordance with the provisions of
Section 2.02 hereof.


 


Section 2.07           Replacement
Notes.


 


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


 


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


 


Section 2.08           Outstanding
Notes.


 


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


 


If a Note is replaced
pursuant to Section 2.07 (other than a mutilated Note surrendered for
replacement), it shall cease to be outstanding unless the Trustee receives
proof satisfactory to it that the replaced Note is held by a bona fide
purchaser. A mutilated Note shall cease to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.07.


 


If Notes are considered
paid in full under Section 4.01, they cease to be outstanding and interest
on them ceases to accrue.


 


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


 


Section 2.09           When
Treasury Notes Disregarded.


 


In determining whether
the Holders of the required aggregate principal amount of Notes have concurred
in any direction, waiver or consent, Notes owned by the Issuers or an Affiliate
of the Issuers shall be considered as though they are 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 which the Trustee
knows are so owned shall be so disregarded.


 


28

















 


Section 2.10           Temporary
Notes.


 


Until Notes in
certificated form are ready for delivery, the Issuers may prepare and the
Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially
in the form of Notes in certificated form but may have variations that the
Issuers consider appropriate for temporary Notes and as shall be acceptable to
the Trustee.  Without unreasonable
delay, the Issuer shall prepare and the Trustee shall, as soon as practicable
upon its receipt of an authentication order, authenticate Notes in certificated
form in exchange for temporary Notes. Until such exchange, such temporary Notes
shall be entitled to the same rights, benefits and privileges as the Notes in
certificated form.


 


Section 2.11           Gaming
Redemption.


 


Notwithstanding any other
provision of this Indenture, if any Gaming Authority requires that a Holder or
beneficial owner of Notes must be licensed, qualified or found suitable under
any applicable gaming law and such Holder or beneficial owner fails to apply
for a license, qualification or a finding of suitability within 30 days after
being requested to do so by the Gaming Authority (or such 1esser period that
may be required by such Gaming Authority), or if such Holder or such beneficial
owner is not so licensed, qualified or found suitable, the Company shall have
the right, at its option, (i) to require such Holder or beneficial owner to
dispose of such Holders or beneficial owner’s Notes within 30 days of receipt
of such notice of such finding by the applicable Gaming Authority or such
earlier date as may be ordered by such Gaming Authority or (ii) to redeem the
Notes of such Holder or beneficial owner at a redemption price equal to the
lesser of (A) the principal amount thereof or (B) the price at which such
Holder or beneficial owner acquired such Notes (in the case of (A) or (B),
together with accrued and unpaid interest and Liquidated Damages, if any,
thereon to the earlier of the date of redemption or such earlier date as may be
required by such Gaming Authority or the date of the finding of unsuitability
by such Gaming Authority, which may be less than 30 days following the notice
of redemption, if so ordered by such Gaming Authority), or (C) such other
amount as may be required by applicable law or by order of any Gaming
Authority.  The Holder or beneficial
owner of Notes applying for a license, qualification or a finding of
suitability with any Gaming Authority must pay all costs of the licensure or
investigation for such qualification or finding of suitability. The Company
shall not be required to pay or reimburse any Holder or beneficial owner of
Notes who is required to apply for such license, qualification or a finding of
suitability for the costs of the licensure or investigation for such
qualification or finding of suitability.


 


Section 2.12           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 and no one else
shall cancel all Notes surrendered for registration of transfer, exchange,
payment, replacement, or cancellation, shall dispose of canceled Notes subject
to record retention requirements of the Exchange Act, and shall promptly
provide the Issuers with a certificate executed by an authorized signatory
certifying such destruction. The Issuers may not issue new Notes to replace
Notes that it has paid or that have been delivered to the Trustee for
cancellation.


 


29

















 


Section 2.13           Defaulted
Interest.


 


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


 


Section 2.14           CUSIP
Number.


 


The Issuers in issuing
the Notes may use one or more CUSIP numbers to identify the Notes, and if so,
such CUSIP number shall be included in notices of redemption or exchange as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness or accuracy of such CUSIP
number printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Issuers
shall promptly notify the Trustee of any change in the CUSIP number.


 


ARTICLE III


 


REDEMPTION AND PREPAYMENT


 


Section 3.01           Notices
to Trustee.


 


(a)           If
the Issuers elect to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, they shall furnish to the Trustee, at
least 30 days but not more than 60 days before a redemption date, an Officers’
Certificate setting forth (i) the Section of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.


 


(b)           If
the Issuers are required to make an offer to redeem Notes pursuant to the
provisions of Section 4.08, 4.14 or 4.25 hereof (a “Purchase Offer”), they
shall furnish to the Trustee at least 30 days but not more than 60 days before
a redemption date, an Officers’ Certificate setting forth (i) the
Section of this Indenture pursuant to which the repurchase shall occur,
(ii) the repurchase date, (iii) the maximum principal amount of Notes to be
repurchased, (iv) the repurchase price, and (v) further setting forth a
statement to the effect that (a) either Issuer or a Restricted Subsidiary has
effected an Asset Sale and the conditions set forth in Section 4.14 have
been satisfied, (b) a Change of Control has occurred and the conditions set 


 


30

















 


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


 


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


 


Section 3.02           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 to be
redeemed among the Holders (other than as provided in Section 2.11 hereof)
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 no Notes of $1,000 or
less shall 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 Issuers shall
promptly notify the Trustee in writing of the listing of the Notes on any
national securities exchange.


 


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 them selected shall be in
amounts of $1,000 or whole multiples of $1,000; except that if all Notes of a
Holder are to be redeemed, the entire outstanding amount of Notes held by such
Holder, even if not a 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.


 


In the event the Issuers
are required to make an offer to repurchase Notes pursuant to Sections 3.09 and
4.14 hereof and the amount of the Excess Proceeds from the Asset Sale are not
evenly divisible by $1,000, the Trustee shall promptly refund to the Issuers
any remaining Excess Proceeds.


 


Section 3.03           Notice
of Redemption.


 


Subject to the provisions
of Section 3.09 hereof, at least 30 days but not more than 60 days before
a redemption date (except in the case of a redemption effected pursuant to
Section 2.11 hereof, which may be less than 30 days), 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 (including CUSIP numbers) and shall state:


 


(a)           the
redemption date;


 


31

















 


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


 


(c)           if
any Note is being redeemed in part, that, 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)           if
any Note is being redeemed in part, the portion of the principal amount thereof
to be redeemed;


 


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


 


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


 


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


 


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


 


(i)            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 the
Issuers’ expense; provided, however, that the Issuers shall have delivered to
the Trustee, at least 45 days prior to the redemption date, 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 3.04           Effect
of Notice of Redemption.


 


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


 


Section 3.05           Deposit
of Redemption Price.


 


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


 


If the Issuers comply
with the provisions of the preceding paragraph, on and after the redemption
date, interest shall cease to accrue on the Notes or the portions of Notes
called for


 


32

















 


redemption. If a Note is redeemed on or after an Interest Record Date,
but on or prior to the related Interest Payment Date, then any accrued 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 premium, interest and
Liquidated Damages not paid on such unpaid principal, in such case at the rate
provided in the Notes and in Section 4.01 hereof.


 


Section 3.06           Notes
Redeemed in Part.


 


Upon surrender of a Note
that is redeemed in part, the Issuers shall issue and, upon receipt of the
Issuers’ written request, the Trustee shall as soon as practicable 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 3.07           Optional
Redemption.


 


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


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  104.50

  	
  %

  
	
  2010

  	
   

  	
  103.00

  	
  %

  
	
  2011

  	
   

  	
  101.50

  	
  %

  
	
  2012 and
  thereafter

  	
   

  	
  100.00

  	
  %

  



 


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


 


(c)           Any
redemption pursuant to this Section 3.07 shall be made, to the extent
applicable, pursuant to the provisions of Sections 3.01 through 3.06 hereof and
not inconsistent with this Section 3.07.


 


33

















 


Section 3.08           Mandatory
Redemption.


 


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


 


Section 3.09           Offer
to Purchase by Application of Excess Proceeds.


 


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


 


The Asset Sale Offer
shall remain open for a period of 20 Business Days following its commencement
and no longer, except to the extent that a longer period is required by
applicable law (the “Offer Period”). No later than three Business Days
after the termination of the Offer Period (the “Purchase Date”), the
Issuers shall purchase the principal amount of Notes required to be purchased
pursuant to Section 4.14 hereof (the “Offer Amount”) or, if less
than the Offer Amount has been tendered, all Notes tendered in response to the
Asset Sale Offer. Payment for any Notes so purchased shall be made in the same
manner as interest payments are made.


 


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


 


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


 


(a)           that
the Asset Sale Offer is being made pursuant to this Section 3.09 and
Section 4.14 hereof and the length of time the Asset Sale Offer shall
remain open;


 


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


 


(c)           that
any Note not tendered or accepted for payment shall continue to accrue
interest;


 


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


 


(e)           that
each Holder electing to have its Notes purchased pursuant to an Asset Sale
Offer may elect to have all or part (in integral multiples of $1,000) of such
Notes purchased;


 


(f)            that
Holders electing to have a Note purchased pursuant to any Asset Sale Offer
shall be required to surrender the Note, with the form titled “Option of Holder
to Elect Purchase” on the reverse of the Note completed, or transfer by
book-entry transfer, to the Issuers, a depositary, if appointed by the Issuers,
or a Paying Agent at the address specified in the notice at least three days
before the Purchase Date;


 


34

















 


(g)           that
Holders shall be entitled to withdraw their election if the Issuers, the
depositary or the Paying Agent, as the case may be, receive, not later than the
expiration of the Offer Period, a facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing its
election to have such Note purchased;


 


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


 


(i)            that
Holders whose Notes were purchased only in part shall be issued new Notes in
principal amount equal to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer).


 


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


 


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


 


Section 3.10           Compliance
with Tender Offer Rules.


 


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


 


35

















 


ARTICLE IV


 


COVENANTS OF THE ISSUERS


 


Section 4.01           Payment
of Notes.


 


The Issuers shall pay or
cause to be paid the principal of and premium, interest and Liquidated Damages,
if any, on the Notes on the dates and in the manner provided in the Notes or
the Registration Rights Agreement, as applicable. Principal of, and premium,
interest and Liquidated Damages, if any, on the Notes shall be considered paid
on the date due if the Paying Agent, if other than the Issuers or a Restricted
Subsidiary or Affiliate thereof, (i) holds as of 10:00 a.m. Eastern Time on the
date due money deposited by the Issuers in immediately available funds and
designated for and sufficient to pay all principal of, and premium, interest
and Liquidated Damages, if any, on the Notes then due, and (ii) is not
prohibited from paying such money to the Holders pursuant to the terms of this
Indenture or the Notes. The Paying Agent shall return to the Issuers, no later
than five days following the date of payment, any money (including accrued
interest) that exceeds such amount of principal of, and premium, interest and
Liquidated Damages, if any, paid on the Notes.


 


Section 4.02           SEC
Reports.


 


(a)           Whether
or not required by the rules and regulations of the Commission, so long as any
Notes are outstanding, the Issuers shall furnish to the Holders of Notes (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Issuers
were required to file such Forms, including a “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” that describes the
financial position and results of operations of the Company and its Restricted
Subsidiaries and, with respect to the annual information only, a report thereon
by the Issuers’ certified independent accountants and (ii) all information that
would be required to be contained in a filing with the Commission on Form 8-K
if the Issuers were required to file such reports. The information required to
be delivered pursuant to clause (i) of the preceding sentence shall be
delivered for each fiscal quarter and fiscal year in each case no later than
the date the Issuers would be required to file a Form 10-Q or Form 10-K, as the
case may be, if the Issuers were then required to make filings pursuant to
Section 15(d) of the Exchange Act, and the information required to be
delivered pursuant to clause (ii) of the preceding sentence shall be delivered
in each case no later than the date the Issuers would be required to file a
Form 10-Q or Form 10-K, as the case may be, covering the period during which
the reportable information would be required to be reported on Form 8-K if the
Issuers were then required to make filings pursuant to Section 15(d) of
the Exchange Act, provided, however, that this Section 4.02(a) shall not
be applicable to any period for which the Issuers are required to file reports
with the Commission pursuant to Section 4.02(b).


 


(b)           Whether
or not required by the rules and regulations of the Commission, if the Issuers
become obligated by the terms of the Registration Rights Agreement to register
the Notes under the Securities Act, the Issuers shall file with the Commission
for public availability such reports or other filings as are required of an
entity which is subject to the reporting requirements under Section 15(d)
of the Exchange Act, (unless the Commission will not accept such filings) and
make such information available to securities analysts and prospective
investors upon request, beginning on the date the Issuers become required to
begin making filings with the Commission pursuant to Section 15(d) of the
Exchange Act as a result of the registration of the Notes pursuant to
Section 5 of the Securities Act and continuing for so long thereafter as
any of the Notes continue to be outstanding.


 


36

















 


(c)           The
Issuers agree that, for so long as any Notes remain outstanding, they will
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.


 


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


 


Section 4.03           Compliance
Certificate.


 


(a)           The
Issuers shall deliver to the Trustee (and, so long as no registration statement
is required to be filed with the SEC pursuant to the Registration Rights
Agreement, deliver to the Holders) within 90 days after the end of each fiscal
year of the Company, 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 have fully performed their obligations
under this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Issuers have kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and are not in default in the performance or observance of any of the
terms and conditions hereof (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and whatever action the Issuers are taking or plan to take
to cure all such Defaults or Events of Default) and that no event has occurred
and remains in existence by reason of which payments on account of principal
and interest on the Notes is prohibited.


 


(b)           So
long as not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, at the time the Officers’
Certificate required by Section 4.03 (a) is delivered, the Issuers shall
cause to be delivered to the Trustee (and, so long as no registration statement
is required to be filed with the SEC pursuant to the Registration Rights
Agreement, cause to be delivered to the Holders) a letter or statement of the
Issuers’ independent accountants who shall be a firm of established national
reputation who shall have certified the financial statements of the Issuers for
its preceding fiscal year in connection with the annual report of the Issuers
to the Company’s Equity Interests for such year to the affect that, in making
the examination necessary for certification of such financial statements,
nothing came to their attention that caused them to believe that the Issuers
were not in compliance with any of the terms or conditions contained in
Sections 4.01, 4.05, 4.06, 4.07, 4.09, 4.10, 4.11, 4.12, 4.14, 4.19, 4.21 and
4.22 and Article 5 of this Indenture, which Default remains uncured at the
date of such letter or statement or, if they shall have obtained knowledge of
any such uncured Default, specifying in such letter or statement such Default
or Defaults and the nature thereof, it being understood that such accountants
shall not be liable directly or indirectly for failure to obtain knowledge of
any such Default or Defaults and that their examination was not directed
primarily toward obtaining knowledge of such noncompliance.


 


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


 


37

















 


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


 


Section 4.04           Maintenance
of Office or Agency.


 


(a)           The
Issuers shall maintain, or cause to be maintained, the office or agency
required by Section 2.03. The Issuers shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office and
agency not maintained by or with the Trustee. 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 address of the Trustee set forth in
Section 10.09.


 


(b)           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 designation; provided, however,
that no such designation or rescission shall in any manner relieve the Issuers
of their joint and several obligation to maintain or cause to be maintained an
office or agency in the City of New York for such purpose to the extent
required by any applicable law, regulation or rule. The Issuers will give
prompt written notice to the Trustee of such rescission or designation.


 


Section 4.05           Limitations
on Restricted Payments.


 


(a)           The
Issuers shall not, and shall not permit or cause any of their Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or
make any other distribution on account of the Company’s Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company), other than the Member Notes and dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Company or dividends or distributions payable to the Company or any
Consolidated Subsidiary of the Company; (ii) purchase, redeem or otherwise
acquire or retire for value any Equity Interests of the Company or any direct
or indirect parent of the Company, other than any such Equity Interests owned
by the Company or any Consolidated Subsidiary of the Company; (iii) make any
principal payment on, or purchase, redeem, defease or otherwise acquire or
retire for value any Indebtedness that is subordinated to the Notes (other than
the Outstanding Notes and the Member Notes), except at final maturity or
scheduled sinking fund payments set forth in the original documentation
governing such Indebtedness; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) of this
paragraph being collectively referred to as “Restricted Payments”), unless, at
the time of and after giving effect to such Restricted Payment:


 


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


 


(B)           the Issuers would, after giving pro forma
effect to such Restricted Payment as if such Restricted Payment had been made
at the beginning of the Company’s most recently completed four full fiscal
quarters for which internal financial statements are available preceding the
date of such Restricted Payment, have been permitted to incur at least


 


38

















 


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


 


(C)           such Restricted Payment, together with the
aggregate of all other Restricted Payments made by the Issuers and their
Restricted Subsidiaries after January 1, 2004 (excluding the Restricted
Payments permitted by the next succeeding paragraph), is less than the sum of
$5 million plus (w) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from January 1, 2004 to the end of
the Company’s most recently ended fiscal quarter 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, less 100% of such
deficit), plus (x) 100% of the aggregate net cash proceeds, or the fair market
value of assets (as determined in good faith by the Management Committee),
received by the Company from capital contributions (other than the conversion
of the Member Notes into equity interests of the Company in accordance with the
terms thereof) or the issue or sale after the date of the Indenture of Equity
Interests of the Company or of debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
convertible debt securities) sold to a Subsidiary of the Company and other than
Disqualified Stock or debt securities that have been converted into
Disqualified Stock), less any amounts paid to holders of the Member Notes, plus
(y) 50% of the net cash proceeds received by the Company from the sale or other
liquidation of the Company’s interest in ELLC or the sale by ELLC of all or
substantially all its assets, plus (z) 100% of the net cash proceeds received
by the Company from a distribution by, or from the sale or other liquidation
of, any Restricted Investment or Unrestricted Subsidiary other than cash
proceeds received from ELLC and other than cash proceeds received from
Investments and applied pursuant to clause (vi) of Section 4.05(b).


 


(b)           Section 4.05(a)
shall not be construed to prohibit (i) the payment of any dividend or other
distribution by the Issuers within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied with
the provisions of the Indenture; (ii) the making of any Restricted Investment
or the redemption, repurchase, retirement or other acquisition of any Equity
Interests of the Company (A) in exchange for, or out of the proceeds of, a
substantially concurrent capital contribution (other than the conversion of the
Member Notes into equity interests of the Company in accordance with the terms
thereof) or sale (other than to a Subsidiary of the Company) of other Equity
Interests of the Company or its Parent (other than any Disqualified Stock),
provided that the amount of any such net cash proceeds that are utilized for
any such redemption, repurchase, retirement or other acquisition shall be
excluded from clause (C) of Section 4.05(a), or (B) to the extent required
by the final order of a Gaming Authority; (iii) the defeasance, redemption or
repurchase of the Outstanding Notes; (iv) the defeasance, redemption or
repurchase of subordinated Indebtedness with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness or a substantially concurrent
capital contribution or sale (other than to a Subsidiary of the Company) of
Equity


 


39

















 


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


 


(c)           The
Management Committee may designate any Restricted Subsidiary, other than
Capital, to be an Unrestricted Subsidiary if such designation would not cause a
Default. For purposes of making such determination, all outstanding Investments
by the Issuers and their Restricted Subsidiaries (except to the extent repaid
in cash) in the Subsidiary so designated shall be deemed to be Restricted
Payments at the time of such designation and shall reduce the amount available
for Restricted Payments under the paragraph (a) of this Section 4.05. All
such outstanding Investments shall be deemed to constitute Investments in an
amount equal to the greatest of (i) the net book value of such Investments at
the time of such designation, (ii) the fair market value of such Investments at
the time of such designation and (iii) the original fair market value of such
Investments at the time they were made. Such designation shall only be
permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.


 


(d)           The
amount of all Restricted Payments (other than cash) shall be the fair market
value (which value shall be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if such
value exceeds $10.0 million, or evidenced by a resolution of the Management Committee
set forth in an Officers’ Certificate delivered to the Trustee) on the date of
the Restricted Payment of the asset(s) proposed to be transferred by the
Company or such Subsidiary, as the case may be, pursuant to the Restricted
Payment. Not later than ten business days following the end of each fiscal
quarter, the Company shall deliver to the Trustee an Officers’ Certificate
identifying each Restricted Payment made by the Company during such fiscal
quarter and stating that each such Restricted Payment is permitted and setting
forth the basis (including any appraisals) upon which the calculations required
by the provisions of Section 4.05 hereof were computed, which calculations
may be based upon the Company’s latest available financial statements.


 


Section 4.06           Continued
Existence; Restrictions on Activities of Capital.


 


(a)           Subject
to Article 5 hereof, the Issuers shall do or cause to be done all things
necessary to preserve and keep in full force and effect their existence as a
limited-liability company or a corporation, as applicable, and the corporate,
limited liability company, partnership or other existence of each Restricted
Subsidiary, in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Issuers or each


 


40

















 


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


 


(b)           Capital
may not hold any material assets, become liable for any material obligations or
engage in any significant business activities; provided, that Capital may be a
co-obligor or guarantor with respect to Indebtedness if the Company is a
primary obligor of such Indebtedness and the net proceeds of such Indebtedness
are retained by the Company or loaned to one or more of the Company’s
Restricted Subsidiaries other than Capital.


 


Section 4.07           Taxes.


 


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


 


Section 4.08           Change
of Control.


 


(a)           Upon
the occurrence of a Change of Control each Holder of Notes shall have the right
to require the Issuers to repurchase all or any part of such Holder’s Notes. In
the event of a Change of Control the Issuers shall promptly notify the Trustee
and the Holders in writing of such occurrence and shall make an offer (a “Change
of Control Offer”) to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of each Holder’s Notes at an offer price in cash
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the date of repurchase (the
“Change of Control Offer Price,” and such date of payment being the “Change
of Control Payment Date”) which date is required to be no earlier than 30
days nor later than 60 days from the date such notice is mailed (unless a
longer period is required by law). Within 30 days following any Change of
Control, the Issuers shall mail a notice to each Holder stating (1) that the
Change of Control Offer is being made pursuant to this Section 4.08 and
that all Notes tendered shall be accepted for payment; (2) the purchase price
and purchase date, which shall, unless required by applicable law, be no
earlier than 30 days nor later than 60 Business Days from the date such notice
is mailed; (3) that any Note not tendered shall continue to accrue interest;
(4) that, unless the Issuers default in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date; (5)
that Holders electing to have any 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; (6) that Holders shall be entitled to withdraw their 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 facsimile
transmission or letter setting forth


 


41

















 


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
the Notes purchased; (7) that each Holder may elect to tender all or a portion
of the Notes held by such Holder and each Holder whose Notes are being
purchased only in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple thereof;
and (8) the circumstances and relevant facts regarding such Change of
Control.  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 as a result of a
Change of Control.


 


(b)           On
the Change of Control Payment Date, the Issuers shall, to the extent lawful,
(i) accept for payment all of the Notes or portions thereof properly 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 of the Notes or
portions thereof so tendered and (iii) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers’ Certificate stating
the aggregate principal amount of the Notes or portions thereof being purchased
by the Issuers. The Paying Agent shall promptly mail to each Holder of the Notes
so tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly 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 will be in a
principal amount of $1,000 or an integral multiple thereof.


 


(c)           The
Issuers shall publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.


 


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


 


(e)           Other
than as specifically provided in this Section 4.08, any purchase pursuant
to this Section 4.08 shall be made pursuant to the provisions of
Section 3.01 through 3.06 hereof.


 


Section 4.09           Limitation
on Indebtedness.


 


(a)           The
Issuers shall not, and shall not permit or cause any of their Restricted
Subsidiaries to, directly or indirectly, incur any Indebtedness (including
Acquired Debt), provided, however, that, so long as no Default or Event of
Default has occurred and is continuing, the Issuers and any of their Restricted
Subsidiaries may incur Indebtedness (including Acquired Debt) if the Fixed
Charge 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 would have
been at least 2.0 to 1, in each case determined on a pro forma basis (including
a pro forma application of the net proceeds therefrom including, without
limitation, the application of any such net proceeds to


 


42

















 


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


 


(b)           The
limitations set forth in Section 4.09(a) hereof shall not apply to:


 


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


 


(ii)           the incurrence by the Issuers of Existing
Indebtedness;


 


(iii)          the incurrence by the Issuers of Indebtedness
represented by the Notes and the Indenture;


 


(iv)          the incurrence by the Issuers or any of their
Restricted Subsidiaries of Indebtedness in one or more FF&E Financings and
Capital Lease Obligations to acquire or refinance furniture, fixtures or
equipment incident to and useful in the Gaming Business, in an aggregate
principal amount, together with amounts permitted by
Section 4.09(b)(viii), not to exceed $15.0 million outstanding at any one
time;


 


(v)           the incurrence of intercompany Indebtedness
between or among the Issuers and any of their Consolidated Subsidiaries;
provided that such Indebtedness is expressly subordinated to the prior payment
in full of the Notes and any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person other
than an Issuer or a Consolidated Subsidiary of an Issuer, or any sale or other
transfer of any such Indebtedness to a Person that is not either an Issuer or a
Consolidated Subsidiary of an Issuer, shall be deemed to constitute an
incurrence of such Indebtedness by the Issuers or such Restricted Subsidiary,
as the case may be;


 


(vi)          the incurrence by the Issuers or any of their
Restricted Subsidiaries of Hedging Obligations that are incurred for the
purpose of fixing or hedging interest rate risk with respect to any floating
rate Indebtedness that is permitted by the terms of this Indenture to be
outstanding or for the purpose of fixing or hedging any currency exchange rate
risk;


 


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


 


(viii)        the incurrence of other Indebtedness by the
Company or its Restricted Subsidiaries in an amount, together with amounts
permitted by Section 4.09(b)(iv), not to exceed $15.0 million outstanding
at any time to fund


 


43

















 


expansions, renovations, land acquisitions and construction of real
property improvements with respect to the Eldorado;


 


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


 


(x)            to the extent that such incurrence does not
result in the incurrence by the Company or any Restricted Subsidiary of any
obligation for the payment of borrowed money of others, Indebtedness incurred
solely as a result of the execution by the Company or its Restricted
Subsidiaries of letters of credit relating to workers compensation or self
insurance, performance bonds or similar instruments; provided, however, that
the foregoing exception shall not be applicable to Indebtedness incurred in
connection with the performance by the Company or its Restricted Subsidiaries
of such bonds or instruments or payment of such letters of credit.


 


Section 4.10           Limitations
on Liens.


 


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


 


Section 4.11           Dividend
and Other Payment Restrictions Affecting Subsidiaries.


 


The Issuers shall not,
and shall not permit or cause any of their Restricted Subsidiaries 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
(i)(a) pay dividends or make any other distributions to the Issuers or any of
their Restricted Subsidiaries on its Capital Stock or with respect to any other
interest or participation in, or measured by, its profits, or (b) pay any
indebtedness owed to the Issuers or any of their Restricted Subsidiaries, (ii)
make loans or advances to the Issuers or any of their Restricted Subsidiaries
or (iii) transfer any of its properties or assets to the Issuers or any of
their Restricted Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (a) the Senior Credit Agreement as in effect on
the date of the Indenture, and any amendments, modifications, restatements,
renewals, supplements, refundings, replacements or refinancings thereof that
contain restrictions that are no more restrictive than those contained in the
Senior Credit Agreement as in effect on the date of the Indenture, (b)
agreements existing and as in effect on the date of the Indenture, (c) any
instrument governing Indebtedness permitted to be incurred pursuant to the
terms of the Indenture, (d) applicable law, (e) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Issuers or any of
their Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is 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; provided
that, in the case of Indebtedness, such Indebtedness was permitted to be
incurred by this Indenture, (f) customary non-assignment, provisions in leases
or other agreements entered into in the ordinary course of business, (g)
purchase money obligations


 


44

















 


for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property so
acquired, (h) any restriction or encumbrance contained in contracts for the
sale of assets permitted by the Indenture, provided that such restrictions
relate only to the assets being sold pursuant to such contracts and (i)
Permitted Refinancing Indebtedness, provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced.


 


Section 4.12           Limitations
on Transactions with Affiliates.


 


The Issuers shall not,
and shall not permit any of their Restricted Subsidiaries to, make any payment
to, or sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property (except Development Property) or assets
from, or enter into or make or amend (for the purpose of increasing the
obligations of either Issuer or their Restricted Subsidiaries thereunder or
decreasing the obligations of any Affiliate thereunder without a commensurate
decrease of the obligations of such Issuer or such Restricted Subsidiary
thereunder) any contract, agreement, understanding, loan, advance or guaranty
with, or for the benefit of, any Affiliate (each of the foregoing, an “Affiliate
Transaction”), unless (i) such Affiliate Transaction is 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 with an unrelated
Person and (ii) such Issuer delivers to the Trustee (a) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $1.0 million, a resolution of the
Management Committee set forth in an Officers’ Certificate certifying that such
Affiliate Transaction complies with clause (i) above and that such Affiliate
Transaction has been approved unanimously by the Management Committee and (b)
with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, an
opinion as to the fairness to the Company of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment
banking firm of national standing; provided that (1) any compensation paid to,
indemnity provided on behalf of, or employment agreement entered into with, any
officer or director of the Issuers or any of their Restricted Subsidiaries in
the ordinary course of business, (2) transactions between or among the Issuers
and their Restricted Subsidiaries and (3) Restricted Payments, Permitted
Investments and other payments and distributions that are permitted by the
provisions of Section 4.05, in each case, shall not be deemed Affiliate
Transactions.


 


Section 4.13           Stay,
Extension and Usury Laws.


 


The Issuers jointly and
severally covenant (to the extent that they may lawfully do so) that they shall
not, and shall cause their Restricted Subsidiaries not to, at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or waiver law or any usury law or other law that would
prohibit or forgive the Issuers from paying all or any portion of the principal
of, premium, interest or Liquidated Damages, if any, on the Notes as
contemplated herein, wherever in force, now or at any time hereafter in force,
or that may materially affect the covenants or the performance of this
Indenture or the Notes in a manner inconsistent with the provisions hereof or
thereof and (to the extent that it may lawfully do so) the Issuers hereby
expressly waive all benefit or advantage of any such law, and covenant that
they shall not, and shall cause their Restricted Subsidiaries not to, hinder,
delay or impede


 


45

















 


the execution of any power granted to the Trustee under this Indenture
or the Notes, but will suffer and permit the execution of every such power as
though no such law existed.


 


Section 4.14           Limitation
on Sales of Assets.


 


(a)           The
Issuers shall not, and shall not permit or cause any of their Restricted
Subsidiaries or ELLC to, engage in an Asset Sale unless:


 


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


 


(ii)           the Issuers, the Restricted Subsidiary or
ELLC, as the case may be, receives (A) consideration at the time of such Asset
Sale at least equal to the fair market value of the assets or Equity Interests
issued or sold or otherwise disposed of or (B) in the case of a lease of assets
which constitutes an Asset Sale, a lease providing for rent and other
consideration which are no less favorable to the Company, the Restricted
Subsidiary or ELLC, as the case may be, than the then prevailing market
conditions (in the case of either (A) or (B) of this clause, evidenced by a
resolution of the Management Committee set forth in an Officers’ Certificate
delivered to the Trustee); and


 


(iii)          at least 80% of the consideration therefor
received by the Issuers, such Restricted Subsidiary or ELLC, as the case may
be, is in the form of cash or Cash Equivalents; provided that (A) the amount of
any liabilities (as shown on the most recent balance sheet of the Issuers, such
Restricted Subsidiary or ELLC, as the case may be) of the Issuers, any
Restricted Subsidiary or ELLC (other than liabilities that are by their terms
subordinated to the Notes) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases the Issuers,
such Restricted Subsidiary or ELLC, as the case may be, from further liability,
shall be deemed to be Cash Equivalents for purposes of this covenant, (B) the
amount of any notes or other obligations received by the Issuers, such Restricted
Subsidiary or ELLC from such transferee that are promptly (but in any event,
within 30 days) converted by the Issuers, such Restricted Subsidiary or ELLC
into cash (to the extent of the cash received) shall be deemed to be cash for
purposes of this Section 4.14, (C) with respect to an Asset Sale of
Development Property or other real property except a hotel/casino (1) real
property received in exchange therefor and to be used or useful in any business
in which the Company is permitted to engage pursuant to the provisions of
Section 4.19 hereof shall be deemed to be Cash Equivalents for purposes of
this Section 4.14 and shall be deemed to have been applied in accordance
with the first sentence of Section 4.14(b) hereof and (2) notes or other
evidences of indebtedness received in exchange therefor shall be deemed Cash
Equivalents for purposes of this Section 4.14, provided that cash payments
received in respect thereof shall be applied by the Company in accordance with
Section 4.14(b) hereof, (D) with respect to an Asset Sale by ELLC,
consideration received by ELLC in the form of a note pursuant to
Section 12.2 of the Joint Venture Agreement shall be deemed to be Cash
Equivalents for purposes of this provision


 


46

















 


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


 


(b)           Within
270 days after the receipt of any Net Proceeds from an Asset Sale, the Issuers
may either (i) apply such Net Proceeds to permanently reduce the obligations
under the Senior Credit Agreement or long-term Indebtedness of a Restricted
Subsidiary of the Company (and, in either case, to correspondingly reduce
commitments with respect thereto); (ii) reinvest, or to commit itself by
contract to reinvest, the Net Proceeds in a Permitted Investment (other than
Cash Equivalents); or (iii) in the case of the sale of the Company’s interest
in Tamarack Crossing, LLC, redeem Notes to the extent permitted by
Section 3.07(b); provided, however, that, so long as ELLC is an
Unrestricted Subsidiary, in the case of an Asset Sale by ELLC, (A) the Net
Proceeds shall be distributed to the members of ELLC, in accordance with their
membership interests, and (B) of the Net Proceeds received by the Company
pursuant to clause (A), 50% shall be subject to this Section 4.14, and
provided, further, however, that in the case of an Asset Sale by the Company of
its interest in ELLC, only 50% of the Net Proceeds received by the Company
shall be subject to this Section 4.14, so long as ELLC is an Unrestricted
Subsidiary prior to any such Asset Sale. Any Net Proceeds from Asset Sales that
are not applied or invested as provided in the first sentence of this paragraph
shall be deemed to constitute “Excess Proceeds.”


 


(c)           Within
five Business Days of each date on which the aggregate amount of Excess
Proceeds exceeds $5 million, the Issuers shall make an offer to all holders of
Notes (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes
that may be purchased out of the Excess Proceeds, at an offer price in cash in
an amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the date of purchase, in
accordance with the procedures set forth in Section 3.09 hereof. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any remaining
Excess Proceeds for general corporate purposes (subject to the restrictions of
the provisions of this Article 4). If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis.  Upon completion of such offer to purchase,
the amount of Excess Proceeds shall be reset at zero. Pending the final
application of any such Net Proceeds, the Issuers may temporarily reduce the
indebtedness outstanding under the Senior Credit Agreement, without a permanent
reduction of availability thereunder, or otherwise invest such Net Proceeds in
Permitted Investments.


 


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(d)           Notwithstanding
any provision of this Section 4.14, the sale, lease, conveyance or other
disposition of substantially all of the assets of the Issuers and their
Restricted Subsidiaries (when taken as a whole) shall be governed by the
provisions of Section 4.08 and Article V and not by the provisions of
this Section 4.14.


 


Section 4.15           Subsidiary
Guarantees.


 


(a)           Each
Restricted Subsidiary shall, and, if the Issuers or any of their Restricted
Subsidiaries shall acquire or create another Subsidiary after the date of the
Indenture, then such Restricted Subsidiary or such newly acquired or created
Subsidiary shall execute a Guarantee in substantially the form of Exhibit E
attached hereto and deliver an opinion of counsel relating to the
enforceability and authorization of such Guarantee in accordance with the terms
of the Indenture, pursuant to which such Subsidiary shall become a Guarantor,
on a senior basis, of the Issuers’ payment obligations under the Notes and the
Indenture; provided, that this Section 4.15 shall not apply to any
Subsidiary during such period as such Subsidiary (i) is incorporated in any
jurisdiction outside the United States, (ii) has been properly designated as an
Unrestricted Subsidiary in accordance with the Indenture for so long as it
continues to constitute an Unrestricted Subsidiary, (iii) has Adjusted Net
Assets of less than $3.0 million or (iv) has less than $5.0 million of
outstanding Indebtedness owed to any Person other than the Issuers or any
Restricted Subsidiary.


 


(b)           In
the event of a sale or other disposition of all of the assets of any Guarantor,
by way of merger, consolidation or otherwise, or a sale or other disposition of
all of the capital stock of any Guarantor, then such Guarantor (in the event of
a sale or other disposition, by way of such a merger, consolidation or
otherwise, of all of the capital stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all of
the assets of such Guarantor) shall be released and relieved of any obligations
under its Subsidiary Guarantee; provided that the Net Proceeds of such sale or
other disposition are applied in accordance with the provisions of
Section 4.14 hereof. In addition, in the event the Management Committee
designates a Guarantor to be an Unrestricted Subsidiary, then such Guarantor
shall be released and relieved of any obligations under its Guarantee; provided
that such designation is conducted in accordance with the provisions of
Section 4.18 hereof.


 


Section 4.16           Payments
for Consent.


 


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


 


48

















 


Section 4.17           Designation
of an Unrestricted Subsidiary as Restricted.


 


Any Unrestricted
Subsidiary may be designated by the Management Committee as a Restricted
Subsidiary; provided that (i) at the time of such designation after giving pro
forma effect thereto as if such designation had occurred, and any Non-Recourse
Debt previously incurred by such Unrestricted Subsidiary had been incurred, at
the beginning of the Company’s most recently completed four fiscal quarters for
which internal financial statements are available preceding the date of such
designation, the Issuers would be permitted to incur $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test contained in the provisions
described in the first paragraph of Section 4.09(a) hereof; (ii) if such
newly designated Restricted Subsidiary has Adjusted Net Assets of $3.0 million
or more or $5.0 million or more of outstanding Indebtedness owed to any Person
other than the Issuers or any Restricted Subsidiary, such newly designated
Restricted Subsidiary executes and delivers a Guarantee substantially in the
form of Exhibit D attached hereto and an opinion of counsel relating to the
enforceability and authorization of such Guarantee as required by the
Indenture; and (iii) no Default has occurred and is continuing immediately
preceding such designation and after giving pro forma effect thereto.


 


Section 4.18           Designation
of a Subsidiary as Unrestricted.


 


Any newly-organized
Subsidiary of the Issuers may be designated by the Management Committee as an
Unrestricted Subsidiary at the time of its formation, provided that such
Subsidiary has total assets of $1,000 or less at the time of such designation.
Any Restricted Subsidiary may be designated by the Management Committee as an
Unrestricted Subsidiary (at which time such Restricted Subsidiary’s Guarantee
shall terminate); provided that (i) at the time of such designation after
giving pro forma effect thereto as if such designation had occurred at the
beginning of the Issuers’ most recently completed four fiscal quarters for
which internal financial statements are available preceding the date of such
designation, (A) the Issuers would be permitted to incur $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test contained in
Section 4.09(a) hereof and (B) the Fixed Charge Coverage Ratio is not less
than 80% of the Fixed Charge Coverage Ratio for such period without giving pro
forma effect to such designation; and (ii) no Default has occurred and is
continuing immediately preceding such designation and after giving pro forma
effect thereto, including the provisions of Section 4.05(c) hereof.


 


Section 4.19           Business
Activities.


 


The Company shall not,
and shall not permit any Restricted Subsidiary to, engage, directly or
indirectly, in any business other than (i) a Gaming Business and (ii) such
other businesses as the Company or any of its Restricted Subsidiaries is
engaged in on the date of this Indenture. Neither the Company nor any of its
Subsidiaries shall conduct a Gaming Business in any gaming jurisdiction in
which the Company or such Subsidiary is not licensed on the date of the Indenture,
if the holders of the Notes would be required to be licensed as a result
thereof; provided that the provisions described in this sentence shall not
prohibit the Company or any of its Subsidiaries from conducting a Gaming
Business in any jurisdiction that does not require the licensing or
qualification of all of the holders of the Notes, but reserves the
discretionary right to require the licensing or qualification of any Holder of
Notes.


 


49

















 


Until such time as ELLC
is designated as a Restricted Subsidiary or merged with the Company, in each
case in accordance with the terms hereof, the Issuers shall not permit ELLC to
(i) engage, directly or indirectly in any business or activity other than
holding an interest in the Silver Legacy Joint Venture, subject to the right of
ELLC to dispose of such interest in the Silver Legacy Joint Venture in
accordance with the provisions of Section 4.14 hereof, (ii) become the
owner of any capital stock or other ownership interest in any other entity,
(iii) incur any Indebtedness to any other entity other than Indebtedness
payable to the Issuers or any Restricted Subsidiaries and Indebtedness incurred
pursuant to the Joint Venture Agreement or (iv) issue membership interests representing
more than 10% of the outstanding equity interests of ELLC prior to such
issuance without first obtaining an opinion of fairness to ELLC of the
consideration to be received by ELLC in respect of such issuance of membership
interests from an investment banking firm of national standing.


 


Section 4.20           Further
Assurance to the Trustee.


 


The Issuers shall, upon
request of the Trustee, execute and deliver such further instruments and do
such further acts as may reasonably be necessary or proper to carry out more
effectively the provisions of this Indenture and the Notes.


 


Section 4.21           Maintenance
of Properties.


 


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


 


Section 4.22           Insurance.


 


From and at all times
after the Issue Date, the Issuers and their Subsidiaries shall have in effect
customary insurance (including self-insurance) for general liabilities and
other risks on terms and in amounts as are customarily carried by similar
businesses and reasonably sufficient to avoid a material adverse change in the
financial condition or results of operation of the Issuers and their
Subsidiaries taken as a whole. The Issuers shall provide to the Trustee a
summary of all insurance coverage prepared by the Issuers’ insurance broker,
which expressly states the expiration date for such coverage and which shall
appear as an exhibit to the Officers’ Certificate delivered to the Trustee pursuant
to Section 4.03(a).


 


Section 4.23           Investment
Company Act.


 


Neither the Issuers nor
any their Restricted Subsidiaries shall become an investment company subject to
registration under the Investment Company Act of 1940, as amended.


 


Section 4.24           Maintenance
of Rating.


 


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


 


50

















 


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


 


Section 4.25           Redemption
of Subordinated Notes.


 


(a)           In
the event the Issuers fail to redeem the Subordinated Notes on or prior to May
24, 2004 (a “Redemption Failure”) each Holder of Notes shall have the
right to require the Issuers to repurchase all or any part of such Holder’s
Notes.  In the event of a Redemption
Failure the Issuers shall promptly notify the Trustee and the Holders in
writing of such occurrence and shall make an offer (a “Redemption Failure
Offer”) to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of each Holder’s Notes at an offer price in cash equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of repurchase (the “Redemption
Failure Offer Price,” and such date of payment being the “Redemption
Failure Payment Date”) which date is required to be no earlier than 30 days
nor later than 60 days from the date such notice is mailed (unless a longer
period is required by law). Within 30 days following any Redemption Failure,
the Issuers shall mail a notice to each Holder stating (1) that a Redemption
Failure Offer is being made pursuant to this Section 4.25 and that all
Notes tendered shall be accepted for payment; (2) the purchase price and
purchase date, which shall, unless required by applicable law, be no earlier
than 30 days nor later than 60 Business Days from the date such notice is
mailed; (3) that any Note not tendered shall continue to accrue interest; (4)
that, unless the Issuers default in the payment of the Redemption Failure Offer
Price, all Notes accepted for payment pursuant to the Redemption Failure Offer
shall cease to accrue interest after the Redemption Failure Payment Date; (5)
that Holders electing to have any Notes purchased pursuant to the Redemption
Failure 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 Redemption
Failure Payment Date; (6) that Holders shall be entitled to withdraw their
election if the Paying Agent receives, not later than the close of business on
the second Business Day preceding the Redemption Failure Payment Date, a
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 the Notes purchased; (7) that each
Holder may elect to tender all or a portion of the Notes held by such Holder
and each Holder whose Notes are being purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof; and (8) the circumstances and relevant
facts regarding the Redemption Failure. 
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 as a result of a Redemption Failure.


 


(b)           On
the Redemption Failure Payment Date, the Issuers shall, to the extent lawful,
(i) accept for payment all of the Notes or portions thereof properly tendered
pursuant to the Redemption Failure Control Offer, (ii) deposit with the Paying
Agent an amount equal to the Redemption Failure Offer Price in respect of all
of the Notes or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted together with an


 


51

















 


Officers’ Certificate stating the aggregate principal amount of the
Notes or portions thereof being purchased by the Issuers. The Paying Agent
shall promptly mail to each Holder of the Notes so tendered the Redemption
Failure Offer Price for such Notes, and the Trustee shall promptly 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 will be in a principal amount of
$1,000 or an integral multiple thereof.


 


(c)           The
Issuers shall publicly announce the results of the Redemption Failure Offer on
or as soon as practicable after the Redemption Failure Payment Date.


 


(d)           Other
than as specifically provided in this Section 4.25, any purchase pursuant
to this Section 4.25 shall be made pursuant to the provisions of
Section 3.01 through 3.06 hereof.


 


ARTICLE V


 


SUCCESSORS


 


Section 5.01           Merger,
Consolidation, Etc.


 


Neither Issuer shall, in
a single transaction or series of transactions, consolidate or merge with or
into (whether or not such Issuer is the surviving Person), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another
limited-liability company, corporation, Person or entity, unless (a) such
Issuer is the surviving entity or the entity or 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
shall have been made is a limited-liability company, partnership or a
corporation organized or existing under the laws of the United States, any
state thereof or the District of Columbia; (b) the entity or Person formed by
or surviving any such consolidation or merger (if other than such Issuer) or
the entity or Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all the obligations
of such Issuer under the Notes and the Indenture pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee; (c) immediately
before and after such transaction, no Default or Event of Default exists; (d)
such Issuer or any entity or Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (i) will have Consolidated
Net Worth immediately after the transaction equal to or greater than the
Consolidated Net Worth of such Issuer immediately preceding the transaction and
(ii) will, 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, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.09(a) hereof; (e) any such transaction would not require any
Holder of Notes to obtain a Gaming License or be qualified under the laws of
any applicable gaming jurisdiction in the absence of such transactions,
provided that a transaction involving a jurisdiction that does not require the
licensing or qualification of all of the holders of the Notes, but reserves the
discretionary right to require the licensing or qualification of any holder of
Notes, shall not be prohibited pursuant to the terms of this clause (e); (f)
any such transaction would not result in the loss of any qualification or any


 


52

















 


material license of the Company or its Subsidiaries necessary for any
Gaming Business then operated by the Company or its Subsidiary; and (g) the
Issuers have delivered to the Trustee an opinion of counsel reasonably
satisfactory to the Trustee confirming that the holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax purposes
as a result of such transaction and will be subject to federal income tax in
the same manner and at the same times as would have been the case if such
transaction had not occurred.


 


Upon creation of Parent
or upon the other transfer of sufficient membership interests to cause a
dissolution for purposes of Section 708 of the Internal Revenue Code of
1986, as amended, and any successor provision thereto, the Company shall
deliver to the Trustee an opinion of counsel reasonably satisfactory to the
Trustee confirming that the Holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
transaction and will be subject to federal income tax in the same manner and at
the same times as would have been the case if such transaction had not
occurred.


 


Section 5.02           Successor
Corporation Substituted.


 


Upon any consolidation or
merger, or any sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Issuers in accordance with
Section 5.01, the successor corporation formed by such consolidation or
into which such Issuer is merged or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that, in the case of any consolidation or merger, or any
sale, assignment transfer, lease, conveyance or other disposition of all or
substantially all of the assets of either Issuer, from and after the date of
such event, the provisions of this Indenture referring to such Issuer shall
refer instead to the successor corporation and not to such Issuer), and may
exercise every right and power of, such Issuer under this Indenture with the
same affect as if such successor Person had been named as such Issuer herein;
provided, however, that the predecessor Issuer in the case of a sale, lease,
conveyance or other disposition shall not be released from the obligation to
pay the principal of, premium, interest, if any, on the Notes in accordance
with the terms of the Notes and this Indenture.


 


Section 5.03           Purchase
Offer on Change of Control.


 


This Article 5 shall
not affect the obligations of the Issuers under Sections 4.08, 4.14 and 4.25
hereof.


 


ARTICLE VI


 


DEFAULTS AND REMEDIES


 


Section 6.01           Events
of Default.


 


The following are “Events
of Default”:


 


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


 


53

















 


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


 


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


 


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


 


(v)           default under 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 of their
Restricted Subsidiaries (or the payment of which is guaranteed by the Issuers
or any of their Restricted Subsidiaries) whether such Indebtedness or guarantee
now exists, or is created after the date of the Indenture having an outstanding
principal amount of more than $5.0 million, individually or in the aggregate,
if such Indebtedness has been accelerated (or has matured) or any default in
the payment of principal of such Indebtedness which entitles the holder of such
Indebtedness to accelerate the maturity thereof regardless of acceleration of
maturity;


 


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


 


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


 


(viii)        any Gaming License relating to a Material
Gaming Facility is revoked, terminated or suspended or otherwise ceases to be
effective, resulting in the cessation or suspension of operation for a period
of more than 30 days of any material portion or aspect of the Gaming Business
of any Gaming Facility;


 


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


 


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


 


(A)          commences a voluntary case,


 


54

















 


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


 


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


 


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


 


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


 


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


 


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


 


(B)           appoints a custodian of either Issuer or any
Significant Subsidiary of either Issuer, or for all or substantially all of the
property of either Issuer or any Significant Subsidiary of either Issuer, or


 


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


 


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


 


Section 6.02           Acceleration.


 


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


 


55

















 


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


 


(b)           In
the case of any Event of Default occurring by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Issuers with the
intention of avoiding payment of the premium that the Issuers would have had to
pay if the Issuers then had elected to redeem the Notes pursuant to
Section 3.07 hereof, an equivalent premium shall also become and be immediately
due and payable to the extent permitted by law upon the acceleration of the
Notes. If an Event of Default occurs prior to April 15, 2009 by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding the prohibition on redemption of the
Notes prior to such date, then, upon acceleration of the Notes, an additional
premium shall also become and be immediately due and payable in an amount, for
each of the years beginning on April 15 of the years set forth below, as
set forth below:


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2004

  	
   

  	
  109.00

  	
  %

  
	
  2005

  	
   

  	
  108.10

  	
  %

  
	
  2006

  	
   

  	
  107.20

  	
  %

  
	
  2007

  	
   

  	
  106.30

  	
  %

  
	
  2008

  	
   

  	
  105.40

  	
  %

  



 


Section 6.03           Other
Remedies.


 


If an Event of Default
occurs and is continuing, the Trustee may pursue any available remedy by
proceeding at law or in equity to collect the payment of principal of or
premium, if any, or 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
Noteholder in exercising any right or remedy accruing upon an Event of Default
shall not impair the right or remedy or constitute a waiver of or acquiescence
in the Event of Default. All remedies are cumulative to the extent permitted by
law.


 


Section 6.04           Waiver
of Past Defaults.


 


At any time before or
after declaration of acceleration with respect to the Notes has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee or the Holders, where applicable, the Holders of a majority in
aggregate principal amount of the then-outstanding Notes, 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 overdue installments of interest on all the Notes,
(ii) the principal of any Notes that have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
prescribed therefor in the Notes, (iii) to the extent that payment of such
interest is lawful, interest on the defaulted interest at the rate or rates prescribed
therefor in the Notes, and (iv) all money paid or advanced by the Trustee under
this


 


56

















 


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


 


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


 


Section 6.05           Control
by Majority.


 


The Holders of a majority
in aggregate principal amount of the then-outstanding Notes shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
such Trustee, provided that (a) such direction is not in conflict with any rule
of law or with this Indenture and (b) the Trustee may take any other action it
deems proper that is not inconsistent with such direction. The Trustee may
refuse to follow any direction that conflicts with law or this Indenture, is
unduly prejudicial to the rights of other Noteholders, or would result in the
incurrence of liability by the Trustee. This Section 6.05 shall be in lieu
of TIA Section 316(a)1(A) and said TIA section is hereby expressly
excluded from this Indenture, as permitted by the TIA.


 


Section 6.06           Limitation
on Suits.


 


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


 


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


 


Section 6.07           Rights
of Holders to Receive Payment.


 


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


 


57

















 


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


 


Section 6.08           Collection
Suit by Trustee.


 


If an Event of Default
specified in Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuers for the whole amount of principal and interest remaining unpaid on the
Notes and interest on overdue principal and, to the extent lawful, interest and
such further amounts 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, counsel and other advisors.


 


Section 6.09           Trustee
May File Proofs of Claim.


 


The Trustee may 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 and the Noteholders allowed in any
judicial proceedings relative to the Issuers, their Subsidiaries, their creditors
or their property. Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such
proceeding.


 


Section 6.10           Priorities.


 


If the Trustee collects
any money pursuant to this Article 6, it shall pay out the money in the
following order:


 


First:  to the Trustee for amounts due under
Section 7.07;


 


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


 


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


 


The Trustee may fix a
record date and payment date for any payment or distribution of property or
securities to Noteholders in accordance with Section 2.12 and may set a
record date or payment date as necessary to effectuate its obligations under
this Indenture and the Notes.


 


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,


 


58

















 


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 6.07, or a suit by Holders of more than 10% in
aggregate principal amount of the then-outstanding Notes.


 


ARTICLE VII


 


TRUSTEE


 


The Trustee hereby
accepts the trust imposed upon it by this Indenture and covenants and agrees to
perform the same, as herein expressed.


 


Section 7.01           Duties
of Trustee.


 


(a)           If
an Event of Default 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 their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.


 


(b)           Except
during the continuance of an Event of Default:


 


(i)            the Trustee need perform only those duties
that are specifically set forth in this Indenture and no others, and no implied
covenants shall be read into this Indenture against the Trustee; and


 


(ii)           in the absence of willful misconduct, gross
negligence or 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, in the case of an Officer’s
Certificate or Opinion of Counsel required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform on their face to the requirements of this Indenture, but need not
verify the contents thereof.


 


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


 


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


 


(ii)           the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer, 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 Sections 6.02, 6.04 or 6.05.


 


59

















 


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


 


(d)           Every
provision of this Indenture that in any way relates to the Trustee is subject
to paragraphs (a), (b), (c), (e) and (f) of this Section 7.01 and
Section 7.02.


 


(e)           The
Trustee may refuse to perform any duty or exercise any right or power unless it
is provided with adequate funds or indemnity, adequate in the sole reasonable
discretion of the Trustee, against any loss, liability or expense.


 


(f)            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 7.02           Rights
of Trustee.


 


(a)           The
Trustee may rely upon, and shall be fully protected from acting or refraining
from acting 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 with respect to any matter
contemplated by 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.


 


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


 


(d)           The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers.


 


(e)           The
Trustee may consult with counsel, and the advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection from
liability irrespective of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.


 


(f)            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, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled to examine the books, records and
premises of the Issuers and their Subsidiaries, personally or by agent or
attorney.


 


(g)           Except
with respect to Section 4.01, the Trustee shall have no duty to inquire as
to the performance of the Issuers’ covenants in Article 3, 4 and 5
hereof.  In addition, the Trustee shall
not be deemed to have knowledge of any Default or Event of Default except (i)


 


60

















 


any Event of Default occurring pursuant to Sections 6.01(a)(i) (other
than a failure of the Issuers to repurchase the Notes duly tendered for purchase
following a Change of Control Offer, an Asset Sale Offer or a Redemption
Failure Offer), Section 6.01(a)(ii) and Section 4.01, or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.


 


(h)           No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers, unless
repayment of such funds shall reasonably be assured to it or the Trustee is
provided adequate indemnity in its sole reasonable discretion.


 


(i)            The
Trustee shall not be required to give any bond or survey in respect of the
performance of its powers and duties hereunder.


 


(j)            Delivery
of reports, information and documents to the Trustee under Section 4.03 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 hereunder (as to which the Trustee is
entitled to rely exclusively on Officers’ Certificates).


 


(k)           The
Trustee shall not be charged with knowledge of any Defaults or Events of
Default unless either (1) a Trust Officer of the Trustee shall have actual
knowledge of such Default or Event of Default or (2) written notice of such
Default or Event of Default shall have been given to the Trustee by any Holder
or by either of the Issuers or any other obligor on the Notes or any lender
under the Senior Credit Facility or any representative thereof.


 


Section 7.03           Individual
Rights of Trustee.


 


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


 


Section 7.04           Trustee’s
Disclaimer.


 


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


 


Section 7.05           Notice
of Defaults.


 


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


 


61

















 


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


 


Section 7.06           Reports
by Trustee to Holders.


 


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


 


After this Indenture has
been qualified under the TIA, a copy of each report at the time of its mailing
to Noteholders shall be filed with the SEC and each stock exchange on which the
Notes are listed.  The Issuers shall
promptly notify the Trustee in writing when the Notes are listed on any stock
exchange.


 


Section 7.07           Compensation
and Indemnity.


 


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


 


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


 


62

















 


The Issuers need not
reimburse any expense or indemnify against any loss or liability incurred by
the Trustee through negligence or bad faith or from the unreasonable refusal or
failure of the Trustee to perform any of its duties or obligations hereunder.


 


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


 


When the Trustee, or its
agents, counsel or advisors, incurs expenses or renders services after an Event
of Default specified in Section 6.01(x) or (xi) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.


 


Section 7.08           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.


 


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


 


(1)           the Trustee fails to comply with
Section 7.10;


 


(2)           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;


 


(3)           a Custodian or public officer takes charge
of the Trustee or its property; or


 


(4)           the Trustee becomes incapable of acting.


 


If the Trustee resigns or
is removed or if a vacancy exists in the office of 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 aggregate
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
aggregate principal amount of the then-outstanding Notes may petition any court
of competent jurisdiction for the appointment of a successor Trustee.


 


If the Trustee fails to
comply with Section 7.10, any Noteholder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.


 


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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 without any further act, deed or conveyance, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture.  The successor Trustee shall
mail a notice of its succession to Noteholders.  The retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee. Notwithstanding the replacement of the
Trustee pursuant to this Section 7.08, the Issuers’ obligations and the
Trustee’s rights under Section 7.07 hereof shall continue for the benefit
of the retiring Trustee with respect to expenses and liabilities incurred by it
prior to such replacement.


 


Section 7.09           Successor
Trustee by Merger, etc.


 


Subject to
Section 7.10, if the Trustee consolidates with, merges or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the resulting, surviving or transferee corporation without
any further act shall be the successor Trustee.


 


Section 7.10           Eligibility;
Disqualification.


 


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


 


Section 7.11           Preferential
Collection of Claims Against Issuers.


 


The Trustee shall comply
with TIA Section 311(a), excluding any creditor relationship set forth in
TIA Section 311(b).  A Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.


 


ARTICLE VIII


 


SATISFACTION AND DISCHARGE OF INDENTURE


 


Section 8.01           Option
To Effect Legal Defeasance Or Covenant Defeasance.


 


The Issuers may, at the
option of the Management Committee evidenced by a resolution set forth in an
Officers’ Certificate, at any time, elect to have either Section 8.02 or
8.03 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article 8.


 


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Section 8.02           Legal
Defeasance And Discharge.


 


Upon the Issuers’
exercise under Section 8.01 hereof of the option applicable to this
Section 8.02, the Issuers shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Notes 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
the entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be outstanding only for the purposes of
Section 8.05 hereof and the other Sections of this Indenture referred to
in (i) and (ii) below, and to have satisfied all their other obligations under
such Notes and this Indenture (and the Trustee, on demand of and at the expense
of the Issuers, shall execute proper instruments acknowledging the same),
except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of outstanding
Notes to receive payments in respect of the principal of, and premium, interest
and Liquidated Damages (if any) on, the Notes when such payments are due from
the trust referred to in Section 8.04 hereof, (ii) the Issuers,
obligations with respect to such Notes under Article 2 and
Section 4.04 hereof, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, and the Issuers’ obligations in connection
therewith and (iv) this Article 8. 
Subject to compliance with this Article 8, the Issuers may exercise
their option under this Section 8.02 notwithstanding the prior exercise of
their option under Section 8.03.


 


Section 8.03           Covenant
Defeasance.


 


Upon the Issuers’
exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, the Issuers shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be released from their
obligations under the covenants contained in Sections 4.05, 4.06, 4.08, 4.09,
4.10, 4.11, 4.12, 4.14, 4.15, 4.16 and 4.25 hereof with respect to the
outstanding Notes on and after the date the conditions set forth below are
satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter
be deemed not outstanding for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed “outstanding”
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes).  For this purpose, Covenant Defeasance means that, with respect to
the outstanding Notes, the Issuers 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 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby.  In addition, upon the Issuers’ exercise under Section 8.01
hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(iii) through 6.01(ix) hereof shall not constitute Events of Default.


 


Section 8.04           Conditions
To Legal Or Covenant Defeasance.


 


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


 


In order to exercise
either Legal Defeasance or Covenant Defeasance:


 


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(i)            the Issuers must irrevocably deposit with
the Trustee, in trust, for the benefit of the Holders of the Notes, cash in
United States dollars, non-callable Government Securities, or a combination
thereof, in such amounts as shall be sufficient, without reinvestment, in the
opinion of a nationally recognized firm of independent public accountants, to
pay the principal of, and premium, interest and Liquidated Damages (if any) 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 maturity or to a particular redemption date;


 


(ii)           in the case of an election under
Section 8.02 hereof, the Issuers shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably acceptable to the Trustee
confirming that (a) the Issuers have received from, or there has been published
by, the Internal Revenue Service a ruling or (b) since the date of this
Indenture, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;


 


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


 


(iv)          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) or insofar as Sections 6.01(x) or 6.01(xi) hereof are concerned, at
any time in the period ending on the 91st day after the date of deposit;


 


(v)           such Legal Defeasance or Covenant Defeasance
will 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 or any of their Subsidiaries is a party or by which the Issuers or any
of their Subsidiaries is bound;


 


(vi)          the Issuers shall have delivered to the
Trustee an Opinion of Counsel to the effect that after the 91st day following
the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally;


 


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


 


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


 


Section 8.05           Deposited
Money And Government Securities To Be Held In Trust; Other Miscellaneous
Provisions.


 


Subject to
Section 8.06 hereof, all money and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
Trustee) pursuant to Section 8.04 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 Issuers 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, interest and Liquidated
Damages, if any, but such money need not be segregated from other funds, except
to the extent required by law.


 


The Issuers shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the cash or non-callable Government Securities deposited
pursuant to Section 8.04 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 of the outstanding Notes.


 


Anything in this
Article 8 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 non-callable Government Securities held by it as provided in
Section 8.04 hereof which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under
Section 8.04(i) 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 8.06           Repayment
To The 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, or premium, interest or Liquidated Damages, if
any, on, any Note and remaining unclaimed for two years after such principal,
premium, interest or Liquidated Damages has become due and payable, shall be
paid to the Issuers on their request or (if then held by the Issuers) shall be
discharged from such trust; and the Holder of such Note shall thereafter 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


 


67

















 


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


 


Section 8.07           Reinstatement.


 


If the Trustee or Paying
Agent is unable to apply any United States dollars or non-callable Government
Securities in accordance with Section 8.02 or 8.03 hereof, as the case may
be, by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Issuers’ obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or
8.03 hereof, until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 8.02 or 8.03 hereof, as
the case may be; provided, however, that, if the Issuers make any payment of
principal of, or premium, interest or Liquidated Damages, if any, 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.


 


ARTICLE IX


 


AMENDMENTS


 


Section 9.01           Without
Consent of Holders.


 


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


 


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


 


(2)           to comply with Section 5.01;


 


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


 


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


 


(5)           to add to the covenants, conditions and
restrictions of the Issuers, for the benefit of the Noteholders, or to
surrender any right or power herein conferred upon the Issuers, or


 


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(6)           to modify, eliminate or add to the
provisions of this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA, or under any similar federal
statute hereafter enacted.


 


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


 


Section 9.02           With
Consent of Holders.


 


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


 


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


 


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


 


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


 


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


 


(iv)          waive a Default or Event of Default in the
payment of principal of, or premium, interest or Liquidated Damages (if any)
on, the Notes (except a rescission of acceleration of the Notes by 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);


 


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


 


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


 


(vii)         waive a redemption payment with respect to any
Note (other than a payment required by the provisions described in Sections
2.11, 3.09, 4.08, 4.14 and 4.25 hereof).


 


(c)           To
secure a consent of the Holders under this Section 9.02, it shall not be
necessary for the Holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof. The calculation of holders so consenting shall be made
pursuant to Section 2.09 hereof.


 


(d)           After
an amendment or waiver under this Section 9.02 becomes effective, the
Issuers shall mail to Noteholders and the Trustee a notice describing the
amendment or waiver, provided that failure to give the required notice shall
not affect the validity and effect of such amendment or waiver.


 


Section 9.03           Compliance
with Trust Indenture Act.


 


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


 


Section 9.04           Revocation
and Effect of Consents.


 


Until the earlier of the
time that an amendment or waiver becomes effective, or for a period of 90 days
from the date the consent was given, a consent to an amendment or waiver by a
Holder of a Note is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the consent is not made on any
Note.


 


The Trustee may, upon
written direction of the Issuers, or as otherwise required hereunder or by
judgment, decree, order, statute, rule or governmental regulation, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment or waiver or to revoke
any consent previously given, whether or not such Persons continue to be
Holders after such record date. No consent shall be valid or effective for more
than 90 days after such record date unless consents from Holders of the
aggregate principal amount of Notes required hereunder for such amendment or
waiver to be effective shall have also been given and not revoked within such
90-day period.


 


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


 


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Section 9.05           Notation
on or Exchange of Notes.


 


If an amendment, supplement
or waiver changes the terms of the Notes, the Trustee may require each Holder
thereof to deliver its Notes to the Trustee. The Trustee may place an
appropriate notation about an amendment 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 or waiver. Failure to
make the appropriate notation or issue a new Note shall not affect the validity
or effect of such amendment or waiver.


 


Section 9.06           Trustee
Protected.


 


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


 


ARTICLE X


 


GENERAL PROVISIONS


 


Section 10.01         Trust
Indenture Act Controls.


 


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


 


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


 


Section 10.02         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, certified or
registered, return receipt requested, nationally recognized overnight courier,
telex or telecopier to the other’s address stated in Section 10.09. The
Issuers or the Trustee by written notice to the other may designate an
additional or different address for subsequent notices or communications.


 


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


 


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


 


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


 


All other notices or
communications shall be in writing.


 


Section 10.03         Communication
by Holders with Other Holders.


 


Noteholders may
communicate pursuant to TIA Section 312(b) with other Noteholders 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
Section 312(c).


 


Section 10.04         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:


 


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


 


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


 


(3)           where applicable, a certificate or opinion
by an independent certified public accountant satisfactory to the Trustee that
complies with TIA Section 314(c).


 


Section 10.05         Statements
Required in Certificate or Opinion.


 


Each certificate or
opinion of a Person with respect to compliance with a condition or covenant
provided for in this Indenture shall include:


 


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


 


(2)           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;


 


(3)           a statement that, in the opinion of such
Person, such Person 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 complied with; and


 


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


 


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Section 10.06         Rules
by Trustee and Agents.


 


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


 


Section 10.07         No
Recourse Against Others.


 


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


 


Section 10.08         Counterparts.


 


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


 


Section 10.09         Other
Provisions.


 


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


 


The first certificate
pursuant to Section 4.03(a) shall be for the fiscal year ending on
December 31, 2004. The reporting date for Section 7.06 is May 15 of
each year. The first reporting date is May 15, 2005.


 


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


 


The Issuers’ address is:


 


345 North Virginia Street


Reno, Nevada 89501


Telecopier: (775) 348-7513


Attention: Chief Financial Officer


 


The Trustee’s address for notice is:


 


U.S. Bank National Association


225 Asylum Street, 23rd Floor


Goodwin Square


Hartford, Connecticut 06103


 


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Attention: Corporate Trust Department


Telecopier: (860) 241-6897


 


Section 10.10         Governing
Law.


 


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


 


Section 10.11         No
Adverse Interpretation of Other Agreements.


 


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


 


Section 10.12         Successors.


 


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


 


Section 10.13         Severability.


 


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


 


Section 10.14         Table
of Contents, Headings, Etc.


 


The Table of Contents,
Cross-Reference Table 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 hereof and shall in no way modify or restrict any of the
terms or provisions hereof.


 


[signature pages follow]


 


74

















 


The parties have caused this Indenture to be duly executed and
attested, all as of the date first above written, signifying their agreements
contained in this Indenture.


 


	
   

  	
  The Issuers:

  
	
   

  	
   

  	
   

  
	
   

  	
  ELDORADO RESORTS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald L. Carano

  
	
   

  	
   

  	
  Donald L. Carano

  
	
   

  	
   

  	
  Chief Executive Officer,

  
	
   

  	
   

  	
  President and Presiding Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary L. Carano

  
	
   

  	
   

  	
  Gary L. Carano

  
	
   

  	
   

  	
  Corporate Representative of

  
	
   

  	
   

  	
  Recreational Enterprises, Inc., Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  ELDORADO CAPITAL CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald L. Carano

  
	
   

  	
   

  	
  Donald L. Carano

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregg R. Carano

  
	
   

  	
   

  	
  Gregg R. Carano

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Trustee:

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Michael M. Hopkins

  
	
   

  	
   

  	
  Michael M. Hopkins

  
	
   

  	
   

  	
  Vice President

  



 


75

















 


EXHIBIT
A


 


FORM OF NOTE


 


CUSIP NO.:


 


SEE REVERSE FOR TRANSFER RESTRICTIONS


 


ELDORADO RESORTS LLC

ELDORADO CAPITAL CORP.


 


% SENIOR NOTE DUE
         , 2014


 


	
  $

  	
  New York, New York

  
	
   

  	
   

  
	
  Note No.

  	
         ,
  2004

  
	
   

  	
   

  



Interest Payment
Dates:                                 and                                 


 


Record
Dates:                                         and                                         


 


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


 


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


 


	
   

  	
  ELDORADO RESORTS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				



 


A-1

















 


	
   

  	
  ELDORADO CAPITAL CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
						



 


A-2

















 


BACK OF NOTE


 


9% Senior Note

Due      , 2014


 


Unless this certificate
is presented by an authorized representative of The Depository Trust Company,
a New York corporation (“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 in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or
to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.(1)


 


THE SECURITY (OR ITS
PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR
(d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO
REQUEST), (ii) TO THE ISSUERS, OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.


 


THE FOREGOING LEGEND MAY
BE REMOVED FROM THIS SECURITY ON SATISFACTION OF THE CONDITIONS SPECIFIED IN
THE INDENTURE.


 












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


 


A-3

















 


Unless otherwise
indicated herein, capitalized terms used herein shall have the meanings
assigned to them in the Indenture (referred to below) and if no meaning is
assigned therein, the meanings assigned to them in the Registration Rights
Agreement (as defined in the Indenture).


 


1.             Interest.
Eldorado Resorts LLC, a Nevada limited-liability company (the “Company”)
and Eldorado Capital Corp., a Nevada corporation (“Capital” and,
together with the Company, the “Issuers”) promise to pay interest on the
principal amount of this Note at the rate of 9% per annum from
    , 2004 until maturity (plus any Make-Whole Premium or
any Liquidated Damages required to be paid pursuant to the terms of the
Registration Rights Agreement). The Issuers shall pay interest semiannually 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). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the first date on
which any Notes are issued; provided, that if there is no existing Default in
the payment of interest, and if this Note is authenticated between a Record
Date referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; and
provided, further, that the first Interest Payment Date shall be
October 15, 2004.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.


 


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


 


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


 


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


 


A-4

















 


principal of, and premium, interest and Liquidated Damages, if any, on
all Global Notes and all other Notes the Holders of which shall have provided
appropriate wire transfer instructions to the Issuers or the Paying Agent.  Until otherwise designated by the Issuers,
the Issuers’ office or agency will be the office of the Trustee maintained for
such purpose.  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.


 


3.             Paying Agent and
Registrar.  U.S. Bank National
Association, 100 Wall Street, Suite 1600, New York, New York [zip code]
(the “Trustee”) will act as the initial Paying Agent and Registrar
without prior notice to the Holders. Except as otherwise provided in the
Indenture, the Issuers may act in any such capacity.


 


4.             Indenture.  The Issuers issued the Notes under an
Indenture dated as of      , 2004 (the “Indenture”)
between the Issuers 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 Sections 77aaa-77bbbb) as in effect on the date of the
Indenture.  The Notes are subject to,
and qualified by, all such terms, certain of which are summarized herein, and
Noteholders are referred to the Indenture and such Act for a statement of such
terms. The Indenture shall govern and be controlling in the event of a conflict
with this Note. The Notes are general, unsecured obligations of the Issuers
limited to $[         ] in
aggregate principal amount.


 


5.             Optional
Redemption.


 


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


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2009

  	
   

  	
  104.50

  	
  %

  
	
  2010

  	
   

  	
  103.00

  	
  %

  
	
  2011

  	
   

  	
  101.50

  	
  %

  
	
  2012 and
  thereafter

  	
   

  	
  100.00

  	
  %

  



 


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


 


A-5

















 


6.             Mandatory
Redemption.


 


Except as set forth in
Paragraph 7 below, the Issuers shall not be required to make mandatory
redemption or sinking fund payments with respect to the Notes.


 


7.             Repurchase at the
Option of Holders.


 


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


 


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


 


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


 


(d)           Holders of Notes that
are the subject of a Change of Control Offer, an Asset Sale Offer or a
Redemption Failure Offer, as applicable, will receive notice from the Issuers
prior to any related purchase date and may elect to have such Notes purchased
by completing the form titled “Option of Holder to Elect Purchase” on the
reverse of the Notes.


 


8.             Gaming Redemption.
Notwithstanding any other provision of the Indenture, if any Gaming Authority
requires that a Holder or beneficial owner of Notes must be licensed, qualified
or found suitable under any applicable gaming law and such Holder or beneficial
owner fails to apply for a license, qualification or a finding of suitability
within 30 days after being requested to do so by the Gaming Authority (or such
1esser period that may be required by such Gaming Authority), or if such Holder
or such beneficial owner is not so licensed, qualified or found suitable, the
Company shall have the right, at its option, (i) to require such Holder or
beneficial owner to dispose of such Holders or beneficial owner’s Notes within
30 days of receipt of such notice of such finding by the applicable Gaming
Authority or such earlier date as may be ordered by such Gaming Authority or
(ii) to redeem the Notes of such Holder or beneficial owner at a redemption price
equal to the lesser of (A) the principal amount thereof or (B) the price at
which


 


A-6

















 


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


 


9.             Notice of
Redemption. Except in the case of a redemption effected pursuant to Section 8
hereof, 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 of
Notes to be redeemed at its registered address. If any Note is to be redeemed
in part only, the notice of redemption that relates to such Note shall state
the portion of the principal amount thereof to be redeemed. Notes may be
redeemed in part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder are to be redeemed. On and after the redemption date, interest
ceases to accrue on Notes or portions thereof called for redemption.


 


10.           Denominations
Transfer, Exchange. The Notes are in registered form without coupons in
minimum denominations of $100,000 and larger denominations that are integral
multiples of $25,000. 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, the Issuers need not exchange or register the transfer of any
Notes for a period of 15 days before the date on which a notice of redemption
is mailed or during the period between a Record Date and the corresponding
Interest Payment Date.


 


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


 


12.           Amendment Supplement
and Waiver. The Issuers and the Trustee may, without the consent of the
Holders of any outstanding Notes, amend, waive or supplement the Indenture or
the Notes for certain specified purposes, including, among other things: (1) to
cure any ambiguity, defect or inconsistency, (2) to comply with
Section 5.01 of the Indenture, (3) to provide for uncertificated Notes in
addition to or in place of Certificated Notes, (4) to make any change that does
not adversely affect the legal rights hereunder of any Noteholder, (5) to add
to the covenants, conditions and restrictions of the Issuers, for the benefit
of the Noteholders, or to surrender any right or power herein conferred upon
the Issuers, or (6) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the TIA, or under any similar federal statute hereafter
enacted.


 


A-7

















 


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


 


(b)           Except as provided in
Section 9.02(b) of the Indenture and subject to Sections 6.02, 6.04 and
6.07 thereof, (i) the Issuers and the Trustee may amend, modify or supplement
the Indenture or the Notes with the written consent of the Holders of at least
a majority in aggregate principal amount of the then-outstanding Notes (including
without limitation consents obtained in connection with a purchase of, or
tender offer in exchange for, the Notes) and (ii) the Holders of a majority in
aggregate principal amount of the Notes then-outstanding may by written
instrument waive any existing default or compliance in a particular instance by
the Issuers with any provision of the Indenture or the Notes.


 


(c)           Notwithstanding
anything to the contrary contained in the Indenture or the Notes, without the
written consent of each Holder affected thereby, no amendment, modification or
supplement of the Indenture or the Notes, and no waiver of any default of
rights thereunder may (with respect to any of the Notes held by any non
consenting Holder): (i) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver, (ii) reduce the principal of, or
change the fixed maturity of, any Note or alter the provisions with respect to
the redemption of the Notes (other than provisions relating to Sections 2.11,
3.09, 4.08, 4.14 and 4.25 of the Indenture), (iii) reduce the rate of, or
change the time for payment of, interest on any Note, (iv) waive a Default or
Event of Default in the payment of principal of, or premium, interest or
Liquidated Damages (if any) on, the Notes (except such amendment, modification
or supplement may effect a rescission of acceleration of the Notes by 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), (v) make any Note
payable in money other than that states in the Notes, (vi) make any change in
Sections 6.04 or 6.07 of the Indenture or in the foregoing amendment and waiver
provisions or (vii) waive a redemption payment with respect to any Note (other
than a payment required by the provisions described in Sections 2.11, 3.09,
4.08, 4.14 and 4.25 of the Indenture).


 


13.           Defaults and
Remedies.  Events of Default
include:


 


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


 


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


 


A-8

















 


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


 


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


 


(v)           default under 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 of their Restricted Subsidiaries (or the payment of which is
guaranteed by the Issuers or any of their Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture having an outstanding principal amount of more than $5.0 million,
individually or in the aggregate, if such Indebtedness has been accelerated (or
has matured) or any default in the payment of principal of such Indebtedness
which entitles the holder of such Indebtedness to accelerate the maturity
thereof regardless of acceleration of maturity;


 


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


 


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


 


(viii)        any Gaming License
relating to a Material Gaming Facility is revoked, terminated or suspended or
otherwise ceases to be effective, resulting in the cessation or suspension of
operation for a period of more than 30 days of any material portion or aspect
of the Gaming Business of any Gaming Facility;


 


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


 


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


 


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


 


A-9

















 


considered
together, would constitute a Significant Subsidiary of either Issuer, in an
involuntary case, (B) appoints a custodian of either Issuer or any Significant
Subsidiary of either Issuer, or for all or substantially all of the property of
either Issuer or any Significant Subsidiary of either Issuer, or (C) orders the
liquidation of either Issuer, any Significant Subsidiary of either Issuer, or
any group of Subsidiaries that, considered together, would constitute a
Significant Subsidiary of either Issuer; and the order or decree remains
unstayed and in effect for 60 consecutive days.


 


14.           Trustee Dealings
with the Issuers. The Trustee under the Indenture, or any of its
Affiliates, in their individual or any other capacities, may make or continue
loans to or loans guaranteed by the Issuers or their Affiliates, or accept
deposits from, and perform services for, the Issuers or their Affiliates, and
may otherwise deal with the Issuers or their Affiliates, as if the Trustee were
not Trustee.


 


15.           No Recourse Against
Others. A director, officer, employee, member, manager or stockholder, as
such, of the Issuers or of any Guarantor, shall not have any liability for any
obligations of the Issuers or any Guarantor under the Notes or the Indenture or
for any claim based thereon, in respect of or by reason of such status as
director, officer, employee, member, manager or stockholder.  Each Noteholder, by accepting a Note, waives
and releases all such liability.


 


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


 


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


 


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


 


19.           CUSIP Numbers.  The Issuers have caused one or more CUSIP
numbers to be printed on the Notes and the Trustee may use CUSIP numbers in
notices of redemption or exchange as a convenience to the 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 or exchange and reliance may be placed only on the other
identification numbers placed thereon.


 


20.           GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THE INDENTURE AND THE NOTES WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS
THEREOF TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION
WOULD BE REQUIRED.


 


A-10

















 


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


 


A-11

















 


ASSIGNMENT FORM


 


To assign this Note, fill
in the form below:


 


I or we assign and
transfer this Note to:


 


                                                                               

                (Assignee)


 


                                                                               

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


 


                                                                               

                (Assignee’s name, address and zip code)


 


and irrevocably appoint:


 


                                                                                     


 


as agent to transfer this
Note on the books of the Issuers. The agent may substitute another to act for
him or her.


 


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (name as appears on the face of the Note)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature guaranteed by:

  	
   

  
						



 


A-12

















 


OPTION OF HOLDER
TO ELECT PURCHASE


 


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


 


o


 


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


 


	
  $                                                                                                     

  	
   

  
	
   

  	
  (in an integral multiple of $1,000)

  	
   

  
			



 


 


	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   (Sign exactly as your name appears

  
	
   

  	
   

  	
   

  	
   

  	
   on the other side of this Note)

  
								



 


Signature Guarantee:


 


A-13

















 


SCHEDULE OF
EXCHANGES OF CERTIFICATED SECURITIES(2)


 


The following exchanges
of a part of this Global Note for Certificated- Notes have been made:


 


	
  Date of

  Exchange

  	
   

  	
  Amount of

  Decrease in

  Principal

  Amount of this

  Global Note

  	
   

  	
  Amount of

  Increase in

  Principal

  Amount of this

  Global Note

  	
   

  	
  Principal

  Amount of this

  Global Note

  following such

  decreases

  (or increases)

  	
   

  	
  Signature
  of

  authorized

  officer of Trustee

  or Global Note

  Holder

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 












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


 


A-14

















 


EXHIBIT B


 


CERTIFICATE TO BE
DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF NOTES


 


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


 


This Certificate relates
to
$                                                    principal
amount of Notes held in
*                               book
entry or
*                                       certificated
form
by                      (the
“Transferor”).


 


The Transferor*:


 


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


 


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


 


In connection with such
request and in respect of each such Note, the Transferor does hereby certify as
follows:


 


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


 


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


 


o            Such Note is being transferred in accordance with Rule
144 under the Securities Act, or pursuant to an effective registration
statement under the Securities Act.


 


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


 


	
   

  	
  Insert Name of Transferor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
   

  	
   

  



 












* Check applicable box


 


B-1

















 


EXHIBIT C


 


FORM OF LEGAL

OPINION ON TRANSFER


 


                                        ,
199  


 


Eldorado Resorts LLC

Eldorado Capital Corp.

345 Virginia Street

Reno, Nevada 89501


 


	
  Re:

  	
   

  	
  % Senior Notes Due
                        ,

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2014 of Eldorado Resorts LLC and Eldorado
  Capital Corp.

  	
   

  	
   

  	
   

  



 


Ladies and Gentlemen:


 


This opinion is being
furnished to you in connection with the sale
by                                (the
“Transferor”)
to                                (the
“Purchaser”) of
$                     aggregate
principal amount of          %
Senior Notes due 2014 of Eldorado Resorts LLC and Eldorado Capital Corp. (the
“Notes”).


 


We have examined such
documents and records as we have deemed appropriate. In our examination of the
foregoing, we have assumed the authenticity of all documents, the genuineness
of all signatures and the due authorization, execution and delivery of the
aforementioned by each of the parties thereto. We have further assumed the
accuracy of the representations contained in the documents referred to above
made by the parties executing such documents. We have also assumed that the
sale of the Notes to the Transferor was exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended (the
“Securities Act”).


 


Based on the foregoing,
we are of the opinion that the sale to the Purchaser of the Notes does not
require registration of such Notes under the Securities Act.


 


Very truly yours,


 


C-1

















 


EXHIBIT D


 


Form of Subsidiary
Guarantee


 


THIS GUARANTEE (as the
same may be amended, modified or supplemented from time to time, this
“Guarantee”), dated as
of                     ,
is made
by                             (hereinafter
referred to as the “Guarantor”) in favor of U.S. Bank National Association, a
national banking association, as trustee under the Indenture hereinafter
described (the “Trustee”), for the ratable benefit of the holders from time to
time (the “Holders”) of the Senior Notes (as hereinafter defined).


 


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


 


Recitals


 


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


 


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


 


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


 


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


 


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


 


D-1

















 


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


 


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


 


3.             Guarantee Absolute and Unconditional. The Guarantor waives any and all notice
of the creation, renewal, extension or accrual of any of the Guaranteed
Obligations and notice of or proof of reliance by the Trustee or the Holders
upon this Guarantee, the Guaranteed Obligations, and any of them shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guarantee; and all
dealings between the Issuers and the Guarantor, on the one hand, and the
Trustee and the Holders, on the other hand, likewise shall be conclusively presumed
to have been had or consummated in reliance upon this Guarantee. The Guarantor
waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon the Issuers or the Guarantor with respect to
the Guaranteed Obligations. The Guarantor understands and agrees that this
Guarantee shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity, regularity or
enforceability of the Indenture or any of the Senior Notes, any of the
Guaranteed Obligations or guarantee or right of offset with respect thereto at
any time or from time to time held by the Trustee or the Holders, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Issuers against the Trustee or the Holders, or (c) any other circumstances
whatsoever (with or without notice to or knowledge of the Issuers or such
Guarantor) which constitute, or might be construed to constitute, an equitable
or legal discharge of the Issuers for the Guaranteed Obligations, or of the
Guarantor under this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against the Guarantor, the Trustee
and/or the Holders may, but shall be under no obligation to, pursue such rights
and remedies as it or they may have against the Issuers or any other Person or
against any guarantee for the Guaranteed Obligations or any right of offset
with respect thereto, and any failure by the Trustee or the Holders to pursue
such other rights or remedies or to collect any payments from the Issuers or
any such other Person or to realize upon any such guarantee or to exercise any
such right of offset, or any release of the Issuers or any such other Person or
any such guarantee or right of offset, shall not relieve the Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Trustee and/or
the Holders against the Guarantor. This Guarantee shall remain in full force
and effect and be binding in accordance with and to the extent of its terms


 


D-2

















 


upon the Guarantor and its successors and assigns thereof, and shall
inure to the benefit of the Trustee, and its successors, endorsees, transferees
and assigns, and the Holders from time to time of the Senior Subordinated Notes
until all the Guaranteed Obligations and the obligations of the Guarantor under
this Guarantee shall have been satisfied by payment in full, notwithstanding
that from time to time during the term of the Indenture the Issuers may be free
from any Guaranteed Obligations.


 


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


 


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


 


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


 


7.             Stay of Acceleration.  In the event
that acceleration of the time for payment of any of the Guaranteed Obligations
is stayed upon insolvency, bankruptcy or reorganization of the Issuers, all
such amounts otherwise subject to acceleration under the terms of the Indenture
and the Senior Notes shall nonetheless be payable by the Guarantor forthwith on
demand by the Trustee.


 


8.             Merger Consolidation or Sale of Assets.


 


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


 


D-3

















 


Default or Event of Default exists; (iii) the Guarantor, or any Person
formed by or surviving any such consolidation or merger, would have
Consolidated Net Worth (immediately after giving effect to such transaction)
equal to or greater than the Consolidated Net Worth of the Guarantor
immediately preceding the transaction; and (iv) the Company would be permitted
by virtue of the Company’s pro forma Fixed Charge Coverage Ratio, immediately
after giving effect to such transaction, to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.09 of the Indenture; provided, however, that the foregoing will
not apply to the consolidation or merger of the Guarantor with and into either
Issuer or another Guarantor.


 


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


 


9.             Miscellaneous.


 


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


 


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


 


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


 


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


 


D-4

















 


Guarantee. Each Holder by accepting a Note has waived and released all
such liability. The waiver and release are part of the consideration for
issuance of this Guarantee.


 


(e)           Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, SHALL GOVERN AND BE USED TO CONSTRUE
THIS GUARANTEE.


 


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


 


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


 


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


 


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


 


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


 


[Signature Pages Follow]


 


D-5

















 


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


 


	
   

  	
  [GUARANTOR]

  
	
   

  	
   

  
	
   

  	
  [Address]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


D-6