Exhibit 4.4(b)


 


EXECUTION COPY


 




 





KERZNER
INTERNATIONAL LIMITED,


 


as Issuer,


 


THE
GUARANTORS NAMED HEREIN


 


and


 


THE BANK
OF NEW YORK TRUST COMPANY, N.A.,


 


as Trustee


 


 










 


 


INDENTURE


 


 


Dated as of September 22,
2004


 


 










 


 


63⁄4 % Senior Subordinated Notes
due 2015




 





 





















 


CROSS-REFERENCE
TABLE


 


	
  TIA

  	
   

  	
  Indenture

  	
   

  
	
  Section

  	
   

  	
  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
   

  	
  7.10

  	
   

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  	
   

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  	
   

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  	
   

  
	
   

  	
  (a)(5)

  	
   

  	
  7.10

  	
   

  
	
   

  	
  (b)

  	
   

  	
  7.8;

  	
   

  
	
   

  	
   

  	
   

  	
  7.10;

  	
   

  
	
   

  	
   

  	
   

  	
  13.2

  	
   

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  	
   

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  	
   

  
	
   

  	
  (b)

  	
   

  	
  7.11

  	
   

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  	
   

  
	
  312

  	
  (a)

  	
   

  	
  2.5

  	
   

  
	
   

  	
  (b)

  	
   

  	
  13.3

  	
   

  
	
   

  	
  (c)

  	
   

  	
  13.3

  	
   

  
	
  313

  	
  (a)

  	
   

  	
  7.6

  	
   

  
	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  	
   

  
	
   

  	
  (b)(2)

  	
   

  	
  7.6

  	
   

  
	
   

  	
  (c)

  	
   

  	
  7.6;

  	
   

  
	
   

  	
   

  	
   

  	
  13.2

  	
   

  
	
   

  	
  (d)

  	
   

  	
  7.6

  	
   

  
	
  314

  	
  (a)

  	
   

  	
  4.7;

  	
   

  
	
   

  	
   

  	
   

  	
  4.6

  	
   

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  	
   

  
	
   

  	
  (c)(1)

  	
   

  	
  2.2;

  	
   

  
	
   

  	
   

  	
   

  	
  7.2;

  	
   

  
	
   

  	
   

  	
   

  	
  13.4

  	
   

  
	
   

  	
  (c)(2)

  	
   

  	
  7.2;

  	
   

  
	
   

  	
   

  	
   

  	
  13.4

  	
   

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  	
   

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  	
   

  
	
   

  	
  (e)

  	
   

  	
  13.5

  	
   

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  	
   

  
	
  315

  	
  (a)

  	
   

  	
  7.1(b)

  	
   

  
	
   

  	
  (b)

  	
   

  	
  7.5;

  	
   

  
	
   

  	
   

  	
   

  	
  7.6;

  	
   

  
	
   

  	
   

  	
   

  	
  13.2

  	
   

  
	
   

  	
  (c)

  	
   

  	
  7.1(a)

  	
   

  
	
   

  	
  (d)

  	
   

  	
  7.2;

  	
   

  
	
   

  	
   

  	
   

  	
  6.11;

  	
   

  
	
   

  	
   

  	
   

  	
  7.1(c)

  	
   

  



 


i





















 


	
  TIA

  	
   

  	
  Indenture

  	
   

  
	
  Section

  	
   

  	
  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
   

  	
  6.14

  	
   

  
	
  316

  	
  (a)(last sentence)

  	
   

  	
  2.9

  	
   

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.11

  	
   

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.12

  	
   

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  	
   

  
	
   

  	
  (b)

  	
   

  	
  6.12;

  	
   

  
	
   

  	
   

  	
   

  	
  6.8

  	
   

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.3

  	
   

  
	
   

  	
  (a)(2)

  	
   

  	
  6.4

  	
   

  
	
   

  	
  (b)

  	
   

  	
  2.4

  	
   

  
	
  318

  	
  (a)

  	
   

  	
  13.1

  	
   

  



 










N.A. means Not Applicable


 


Note:  This Cross-Reference Table
shall not, for any purpose, be deemed to be a part of the Indenture.


 


ii





















 


TABLE OF
CONTENTS


 


	
  ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  
	
  Section 1.2

  	
  Incorporation by Reference of TIA

  	
   

  
	
  Section 1.3

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  THE SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Form and Dating

  	
   

  
	
  Section 2.2

  	
  Execution and Authentication

  	
   

  
	
  Section 2.3

  	
  Registrar and Paying Agent

  	
   

  
	
  Section 2.4

  	
  Paying Agent to Hold Assets in Trust

  	
   

  
	
  Section 2.5

  	
  Securityholder Lists

  	
   

  
	
  Section 2.6

  	
  Transfer and Exchange

  	
   

  
	
  Section 2.7

  	
  Replacement Securities

  	
   

  
	
  Section 2.8

  	
  Outstanding Securities

  	
   

  
	
  Section 2.9

  	
  Treasury Securities

  	
   

  
	
  Section 2.10

  	
  Temporary Securities

  	
   

  
	
  Section 2.11

  	
  Cancellation

  	
   

  
	
  Section 2.12

  	
  Defaulted Interest

  	
   

  
	
  Section 2.13

  	
  CUSIP Numbers

  	
   

  
	
  Section 2.14

  	
  Issuance of Additional Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Right of Redemption

  	
   

  
	
  Section
  3.2

  	
  Redemption
  Pursuant to Gaming Laws

  	
   

  
	
  Section
  3.3

  	
  Notices
  to Trustee.

  	
   

  
	
  Section
  3.4

  	
  Selection
  of Securities to Be Redeemed

  	
   

  
	
  Section
  3.5

  	
  Notice
  of Redemption

  	
   

  
	
  Section
  3.6

  	
  Effect
  of Notice of Redemption

  	
   

  
	
  Section
  3.7

  	
  Deposit
  of Redemption Price

  	
   

  
	
  Section
  3.8

  	
  Securities
  Redeemed in Part

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  4.1

  	
  Payment
  of Securities

  	
   

  
	
  Section
  4.2

  	
  Maintenance
  of Office or Agency

  	
   

  
	
  Section
  4.3

  	
  Limitation
  on Restricted Payments

  	
   

  
	
  Section
  4.4

  	
  Corporate
  Existence

  	
   

  
	
  Section
  4.5

  	
  Payment
  of Taxes and Other Claims

  	
   

  
	
  Section
  4.6

  	
  Compliance
  Certificate; Notice of Default

  	
   

  
	
  Section
  4.7

  	
  Reports

  	
   

  
	
  Section
  4.8

  	
  Waiver
  of Stay, Extension or Usury Laws

  	
   

  
	
  Section
  4.9

  	
  Limitation
  on Transactions with Affiliates

  	
   

  



 


iii





















 


	
  Section
  4.10

  	
  Limitation
  on Incurrence of Additional Indebtedness and Disqualified Capital Stock

  	
   

  
	
  Section
  4.11

  	
  Limitation
  on Dividends and Other Payment Restrictions Affecting Subsidiaries

  	
   

  
	
  Section
  4.12

  	
  Limitation
  on Liens Securing Indebtedness

  	
   

  
	
  Section
  4.13

  	
  Limitation
  on Sale of Assets and Subsidiary Stock

  	
   

  
	
  Section
  4.14

  	
  Limitation
  on Layering Indebtedness

  	
   

  
	
  Section
  4.15

  	
  Intentionally
  Omitted

  	
   

  
	
  Section
  4.16

  	
  Limitation
  on Status as Investment Company

  	
   

  
	
  Section
  4.17

  	
  Future
  Subsidiary Guarantors

  	
   

  
	
  Section
  4.18

  	
  Payment
  for Consent

  	
   

  
	
  Section
  4.19

  	
  Suspended
  Covenants

  	
   

  
	
  Section
  4.20

  	
  Payment
  of Additional Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V SUCCESSOR CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  5.1

  	
  Limitation
  on Merger, Sale or Consolidation of Kerzner International

  	
   

  
	
  Section
  5.2

  	
  Successor
  Corporation Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  6.1

  	
  Events
  of Default

  	
   

  
	
  Section
  6.2

  	
  Acceleration
  of Maturity Date; Rescission and Annulment

  	
   

  
	
  Section
  6.3

  	
  Collection
  of Indebtedness and Suits for Enforcement by Trustee

  	
   

  
	
  Section
  6.4

  	
  Trustee
  May File Proofs of Claim

  	
   

  
	
  Section
  6.5

  	
  Trustee
  May Enforce Claims Without Possession of Securities

  	
   

  
	
  Section
  6.6

  	
  Priorities

  	
   

  
	
  Section
  6.7

  	
  Limitation
  on Suits

  	
   

  
	
  Section
  6.8

  	
  Unconditional
  Right of Holders to Receive Principal, Premium and Interest

  	
   

  
	
  Section
  6.9

  	
  Rights
  and Remedies Cumulative

  	
   

  
	
  Section
  6.10

  	
  Delay
  or Omission Not Waiver

  	
   

  
	
  Section
  6.11

  	
  Control
  by Holders

  	
   

  
	
  Section
  6.12

  	
  Waiver
  of Past Default

  	
   

  
	
  Section
  6.13

  	
  Undertaking
  for Costs

  	
   

  
	
  Section
  6.14

  	
  Restoration
  of Rights and Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  7.1

  	
  Duties
  of Trustee

  	
   

  
	
  Section
  7.2

  	
  Rights
  of Trustee

  	
   

  
	
  Section
  7.3

  	
  Individual
  Rights of Trustee

  	
   

  
	
  Section
  7.4

  	
  Trustee’s
  Disclaimer

  	
   

  
	
  Section
  7.5

  	
  Notice
  of Default

  	
   

  
	
  Section
  7.6

  	
  Reports
  by Trustee to Holders

  	
   

  
	
  Section
  7.7

  	
  Compensation
  and Indemnity

  	
   

  
	
  Section
  7.8

  	
  Replacement
  of Trustee

  	
   

  
	
  Section
  7.9

  	
  Successor
  Trustee by Merger, Etc.

  	
   

  
	
  Section
  7.10

  	
  Eligibility;
  Disqualification

  	
   

  
	
  Section
  7.11

  	
  Preferential
  Collection of Claims against Issuer

  	
   

  



 


iv





















 


	
  ARTICLE
  VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  8.1

  	
  Option
  to Effect Legal Defeasance or Covenant Defeasance

  	
   

  
	
  Section
  8.2

  	
  Legal
  Defeasance and Discharge

  	
   

  
	
  Section
  8.3

  	
  Covenant
  Defeasance

  	
   

  
	
  Section
  8.4

  	
  Conditions
  to Legal or Covenant Defeasance

  	
   

  
	
  Section
  8.5

  	
  Deposited
  Cash and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous
  Provisions

  	
   

  
	
  Section
  8.6

  	
  Repayment
  to the Issuer

  	
   

  
	
  Section
  8.7

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Supplemental Indentures Without Consent of
  Holders

  	
   

  
	
  Section 9.2

  	
  Amendments, Supplemental Indentures and
  Waivers with Consent of Holders

  	
   

  
	
  Section 9.3

  	
  Compliance with TIA

  	
   

  
	
  Section 9.4

  	
  Revocation and Effect of Consents

  	
   

  
	
  Section 9.5

  	
  Notation on or Exchange of Securities

  	
   

  
	
  Section 9.6

  	
  Trustee to Sign Amendments, Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X RIGHT TO REQUIRE REPURCHASE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Repurchase of Securities at Option of the
  Holder upon Change of Control

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI GUARANTEES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Guarantees

  	
   

  
	
  Section 11.2

  	
  Execution and Delivery of Guarantee

  	
   

  
	
  Section 11.3

  	
  Certain Bankruptcy Events

  	
   

  
	
  Section 11.4

  	
  Limitation on Merger, Consolidation, Etc.
  of Guarantors

  	
   

  
	
  Section 11.5

  	
  Future Guarantors

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII SUBORDINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.1

  	
  Securities Subordinated to Senior Debt

  	
   

  
	
  Section 12.2

  	
  No Payment on Securities in Certain
  Circumstances

  	
   

  
	
  Section 12.3

  	
  Securities Subordinated to Prior Payment of
  All Senior Debt on Dissolution, Liquidation or Reorganization

  	
   

  
	
  Section 12.4

  	
  Securityholders to Be Subrogated to Rights
  of Holders of Senior Debt

  	
   

  
	
  Section 12.5

  	
  Obligations of the Issuer Unconditional

  	
   

  
	
  Section 12.6

  	
  Trustee Entitled to Assume Payments Not
  Prohibited in Absence of Notice

  	
   

  
	
  Section 12.7

  	
  Application by Trustee of Assets Deposited
  with It

  	
   

  
	
  Section 12.8

  	
  Subordination Rights Not Impaired by Acts
  or Omissions of the Issuer, Guarantors or Holders of Senior Debt, Etc.;
  Modifications

  	
   

  
	
  Section 12.9

  	
  Securityholders Authorize Trustee to
  Effectuate Subordination of Securities

  	
   

  
	
  Section 12.10

  	
  Right of Trustee to Hold Senior Debt

  	
   

  
	
  Section 12.11

  	
  Article XII Not to Prevent Events of
  Default

  	
   

  
	
  Section 12.12

  	
  No Fiduciary Duty of Trustee to Holders of
  Senior Debt

  	
   

  



 


v





















 


	
  ARTICLE
  XIII MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.1

  	
  TIA Controls

  	
   

  
	
  Section 13.2

  	
  Notices

  	
   

  
	
  Section 13.3

  	
  Communications by Holders with Other
  Holders

  	
   

  
	
  Section 13.4

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
   

  
	
  Section 13.5

  	
  Statements Required in Certificate or
  Opinion

  	
   

  
	
  Section 13.6

  	
  Rules by Trustee, Paying Agent, Registrar

  	
   

  
	
  Section 13.7

  	
  Legal Holidays

  	
   

  
	
  Section 13.8

  	
  Governing Law

  	
   

  
	
  Section 13.9

  	
  No Adverse Interpretation of Other
  Agreements

  	
   

  
	
  Section 13.10

  	
  No Recourse Against Others

  	
   

  
	
  Section 13.11

  	
  Successors

  	
   

  
	
  Section 13.12

  	
  Duplicate Originals

  	
   

  
	
  Section 13.13

  	
  Severability

  	
   

  
	
  Section 13.14

  	
  Table of Contents, Headings, Etc.

  	
   

  



 


EXHIBITS


 


	
  Exhibit
  A — Form of Note

  	
   

  
	
  Exhibit
  B — Form of Guarantee

  	
   

  
	
  Schedule
  A — List of Guarantors as of the date of the Indenture

  	
   

  



 


vi





















 


THIS INDENTURE,
dated as of September 22, 2005, is by and among Kerzner International
Limited, an international business company organized under the laws of the
Commonwealth of The Bahamas (“Kerzner International” or the “Issuer”),
the Guarantors referred to below and The Bank of New York Trust Company, N.A.,
as Trustee.


 


Each party hereto agrees as follows for the
benefit of each other party and for the equal and ratable benefit of the
Holders of the Issuer’s 63⁄4 % Senior Subordinated Notes due 2015:


 


ARTICLE I


 


DEFINITIONS
AND INCORPORATION BY REFERENCE


 


Section 1.1             Definitions.


 


“Acceleration Notice” shall have the
meaning specified in Section 6.2.


 


“Acquired Indebtedness” means
Indebtedness or Disqualified Capital Stock of any person existing at the time
such person becomes a Subsidiary of the Issuer or is merged or consolidated
into or with the Issuer or any of its Subsidiaries.


 


“Acquisition” means the purchase or
other acquisition of any person or all or substantially all the assets of any
person by any other person, or the acquisition of assets that constitute all or
substantially all of an operating unit of business, whether by purchase,
merger, consolidation, or other transfer, and whether or not for consideration.


 


“Additional Amounts” shall have the
meaning specified in Section 4.20.


 


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


 


“Affiliate” means any person directly
or indirectly controlling or controlled by or under direct or indirect common
control with Kerzner International.  For
purposes of this definition, the term “control” means the power to direct the
management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by
contract, or otherwise, provided,
that, with respect to ownership interest in Kerzner International and its
Subsidiaries a Beneficial Owner of 10% or more of the total voting power
normally entitled to vote in the election of directors, managers or trustees,
as applicable, shall for such purposes be deemed to constitute control.


 


“Affiliate Transaction” shall have the
meaning specified in Section 4.9.


 


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


 


“Allowed Non-Recourse Indebtedness”
means Indebtedness (a) as to which neither the Issuer nor any of its
Subsidiaries (1) provide credit support of any kind (including any


 


1





















 


undertaking, agreement or instrument that would constitute
Indebtedness), (2) is directly or indirectly liable (as a guarantor or
otherwise), or (3) constitutes the lender, and (b) 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 Indebtedness of the Issuer or
any of its Subsidiaries to declare a default on such Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity.


 


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


 


“Asset Sale” shall have the meaning
specified in Section 4.13.


 


“Asset Sale Offer” shall have the
meaning specified in Section 4.13.


 


“Asset Sale Offer Amount” shall have
the meaning specified in Section 4.13.


 


“Asset Sale Offer Price” shall have
the meaning specified in Section 4.13.


 


“Average Life” means, as of the date
of determination, with respect to any security or instrument, the quotient
obtained by dividing (i) the sum of the products of (a) the number of
years from the date of determination to the date or dates of each successive
scheduled principal (or redemption) payment of such security or instrument and (b) the
amount of each such respective principal (or redemption) payment by (ii) the
sum of all such principal (or redemption) payments.


 


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


 


“Beneficial Owner” or “beneficial
owner” has the meaning attributed to it in Rules 13d-3 and 13d-5 under
the Exchange Act (as in effect on the Issue Date), whether or not applicable.


 


“Board of Directors” means, with
respect to any person, the Board of Directors (or, if no such Board of
Directors exists, a similar governing body) of such person or any committee of
the Board of Directors (or such similar governing body) of such person
authorized, with respect to any particular matter, to exercise the power of the
Board of Directors (or such similar governing body) of such person.


 


“Board Resolution” means, with respect
to any person, a duly adopted resolution of the Board of Directors of such
person.


 


“Business Day” means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York, New York or the New York Stock Exchange are
authorized or obligated by law or executive order to close.


 


2





















 


“Capital Stock” means, with respect to
any corporation, any and all shares, interests, rights to purchase (other than
convertible or exchangeable Indebtedness that is not otherwise itself capital
stock), warrants, options, participations or other equivalents of or interests
(however designated) in stock issued by that corporation.


 


“Capitalized Lease Obligation” means,
as applied to any person, any lease of any property (whether real, personal or
mixed) of which the discounted present value of the rental obligations of such
person, as lessee, in conformity with GAAP, is required to be capitalized on
the balance sheet of such person.


 


“Cash” or “cash” means such
coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public or private debts.


 


“Cash Equivalent” means (a) (i) securities
issued or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the full faith and credit of the United States
of America is pledged in support thereof), (ii) time deposits and
certificates of deposit of any domestic commercial bank of recognized standing
having capital and surplus in excess of $500 million or (iii) commercial
paper issued by others rated at least A-1 or the equivalent thereof by Standard &
Poor’s Corporation or at least P-1 or the equivalent thereof by Moody’s
Investors Service, Inc., and in the case of each of (i), (ii) and (iii) above
maturing within one year after the date of acquisition or (b) shares of
money market mutual funds or similar funds having assets in excess of $500
million.


 


“Change of Control” means (i) any
sale, transfer or other conveyance, whether direct or indirect, of all or
substantially all of the assets, on a consolidated basis, of Kerzner
International, in one transaction or a series of related transactions (in each
case other than to a person that is a Permitted Holder); (ii) any merger
or consolidation of Kerzner International with or into any person if,
immediately after giving effect to such transaction, any “person” or “group”
(as such terms are used for purposes of Sections 13(d) and 14(d) of
the Exchange Act, whether or not applicable) (other than one or more Permitted
Holders) is or becomes the “beneficial owner,” directly or indirectly, of more
than 50% of the total voting power in the aggregate normally entitled to vote
in the election of directors, managers, or trustees, as applicable, of the
surviving entity or entities; (iii) any “person” or “group” (as such terms
are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act, whether or not applicable) (other than one or more Permitted Holders) is
or becomes the “beneficial owner,” directly or indirectly, of more than 50% of
the total voting power in the aggregate of all classes of Capital Stock of
Kerzner International then outstanding normally entitled to vote in elections
of directors; (iv) during any period of 12 consecutive months after the
Issue Date, individuals who at the beginning of any such 12-month period
constituted the Board of Directors of Kerzner International (together with any
new directors whose election by such Board of Directors or whose nomination for
election by the shareholders of Kerzner International was approved by a vote of
a majority of the directors then still in office who were either directors 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
Board of Directors of Kerzner International then in office; or (v) the
adoption of a plan relating to the liquidation or dissolution of Kerzner
International.


 


3





















 


“Change of Control Offer” shall have
the meaning specified in Section 10.1.


 


“Change of Control Purchase Date”
shall have the meaning specified in Section 10.1.


 


“Change of Control Purchase Price”
shall have the meaning specified in Section 10.1.


 


“Change of Control Triggering Event”
shall be deemed to have occurred if either of the Rating Agencies shall
downgrade or withdraw their rating of the Securities as a result of, or, in any
case, within 90 days of, a Change of Control.


 


“Clearstream” means Clearstream
Banking Luxembourg, or its successors.


 


“Consolidated Coverage Ratio” of any
person on any date of determination (a “Transaction Date”) means the ratio,
on a pro forma basis, of (a) the
aggregate amount of Consolidated EBITDA of such person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of) for the
Reference Period to (b) the aggregate Consolidated Fixed Charges of such
person (exclusive of amounts attributable to operations and businesses
permanently discontinued or disposed of, but only to the extent that the
obligations giving rise to such Consolidated Fixed Charges would no longer be
obligations contributing to such person’s Consolidated Fixed Charges subsequent
to the Transaction Date) during the Reference Period; provided, that for purposes of such
calculation, (i) Acquisitions which occurred during the Reference Period
or subsequent to the Reference Period and on or prior to the Transaction Date
shall be assumed to have occurred on the first day of the Reference Period, (ii) transactions
giving rise to the need to calculate the Consolidated Coverage Ratio shall be
assumed to have occurred on the first day of the Reference Period, (iii) the
incurrence or repayment of any Indebtedness or issuance of any Disqualified
Capital Stock during the Reference Period or subsequent to the Reference Period
and on or prior to the Transaction Date (and the application of the proceeds
therefrom to the extent used to refinance or retire other Indebtedness) (other
than Indebtedness incurred under any revolving credit facility) shall be
assumed to have occurred on the first day of such Reference Period and (iv) the
Consolidated Fixed Charges of such person attributable to interest on any
Indebtedness or dividends on any Disqualified Capital Stock bearing a floating
interest (or dividend) rate shall be computed on a pro forma basis as if the rate in effect on the Transaction
Date had been the applicable rate for the entire period, unless such person or
any of its Subsidiaries is a party to an Interest Swap or Hedging Obligation
(which shall remain in effect for the 12-month period immediately following the
Transaction Date) that has the effect of fixing the interest rate on the date
of computation, in which case such rate (whether higher or lower) shall be
used.


 


“Consolidated EBITDA” means, with
respect to any person, for any period, the Consolidated Net Income of such
person for such period adjusted to add thereto (to the extent deducted from net
revenues in determining Consolidated Net Income), without duplication, the sum
of (i) Consolidated income tax expense, (ii) Consolidated
depreciation and amortization expense, provided
that consolidated depreciation and amortization of a Subsidiary that is a less
than wholly owned Subsidiary shall only be added to the extent of the equity
interest of such


 


4





















 


person in such Subsidiary, (iii) Consolidated Fixed Charges, less
any non-cash interest income, and (iv) consolidated preopening expenses.


 


“Consolidated Fixed Charges” of any
person means, for any period, the aggregate amount (without duplication and
determined in each case in accordance with GAAP) of (a) interest expensed
or capitalized, paid, accrued, or scheduled to be paid or accrued (including,
in accordance with the following sentence, interest attributable to Capitalized
Lease Obligations) of such person and its Consolidated Subsidiaries during such
period, including (i) original issue discount and non-cash interest
payments or accruals on any Indebtedness, (ii) the interest portion of all
deferred payment obligations and (iii) all commissions, discounts and
other fees and charges owed with respect to bankers’ acceptances and letters of
credit financings and currency and Interest Swap and Hedging Obligations, in
each case to the extent attributable to such period, and (b) the amount of
dividends accrued or payable (or guaranteed) by such person or any of its
Consolidated Subsidiaries in respect of preferred stock (other than by
Subsidiaries of such person to such person or such person’s wholly owned
Subsidiaries) other than dividends payable solely in shares of Qualified
Capital Stock.  For purposes of this
definition, (x) interest on a Capitalized Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined by Kerzner International to be
the rate of interest implicit in such Capitalized Lease Obligation in
accordance with GAAP and (y) interest expense attributable to any Indebtedness
represented by the guaranty (excluding any Investment Guarantee, but including
any interest expense or comparable debt service payments with respect to any
Investment Guarantee Indebtedness to the extent such Investment Guarantee
Indebtedness is being serviced by such person or any Subsidiary of such person)
by such person or a Subsidiary of such person of an obligation of another
person shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed.


 


“Consolidated Net Income” means, with
respect to any person for any period, the net income (or loss) of such person
and its Consolidated Subsidiaries (determined on a consolidated basis in
accordance with GAAP) for such period, adjusted to exclude (only to the extent
included in computing such net income (or loss) and without duplication): (a) all
gains or losses which are either extraordinary (as determined in accordance
with GAAP), unusual or non-recurring (including any gain or loss from the sale
or other disposition of assets or currency transactions outside the ordinary
course of business or from the issuance or sale of any capital stock), (b) the
net income, if positive, of any person, other than a Consolidated Subsidiary,
in which such person or any of its Consolidated Subsidiaries has an interest,
except to the extent of the amount of any dividends or distributions actually
paid in cash to such person or a wholly owned Consolidated Subsidiary of such
person during such period, but in any case not in excess of such person’s pro rata share of such person’s net income
for such period, (c) the net income or loss of any person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition, (d) the net income, if positive, of any of such person’s
Consolidated Subsidiaries to the extent that the declaration or payment of
dividends or similar distributions is not at the time permitted by operation of
the terms of its charter or bylaws or any other agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Consolidated Subsidiary, except for restrictions under the
Credit Agreement and (e) the cumulative effect of a change in accounting
principles.


 


“Consolidated Net Worth” of any person
at any date means the aggregate consolidated stockholders’ equity of such
person (plus amounts of equity attributable to preferred


 


5





















 


stock) and its Consolidated Subsidiaries, as would be shown on the
consolidated balance sheet of such person prepared in accordance with GAAP,
adjusted to exclude (to the extent included in calculating such equity), the
amount of any such stockholders’ equity attributable to Disqualified Capital
Stock or treasury stock of such person and its Consolidated Subsidiaries.


 


“Consolidated Subsidiary” means, for
any person, each Subsidiary of such person (whether now existing or hereafter
created or acquired) the financial statements of which are consolidated for
financial statement reporting purposes with the financial statements of such
person in accordance with GAAP.


 


“Credit Agreement” means the Fifth
Amended and Restated Credit Agreement, dated as of July 7, 2004, among
Kerzner International, Kerzner International North America, Inc., and
Kerzner International Bahamas Limited, as borrowers and guarantors, various
financial institutions as the lenders, JPMorgan Chase Bank, N.A., as the
administrative agent, Deutsche Bank Securities Inc. and Wells Fargo Bank, N.A.,
as the co-syndication agents, Bank of America, N.A. and Bear Stearns Corporate
Lending Inc., as the co-documentation agents, as amended by that certain First
Amendment to Credit Agreement, dated as of February 15, 2005, among
Kerzner International, Kerzner International Bahamas Limited and Kerzner
International North America and certain lenders party thereto, providing for a
revolving credit facility, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, as such
credit agreement and/or related documents may be amended, restated,
supplemented, renewed, replaced or otherwise modified from time to time whether
or not with the same agent, trustee, representative lenders or holders, and,
subject to the proviso to the next succeeding sentence, irrespective of any
changes in the terms and conditions thereof. 
Without limiting the generality of the foregoing, the term “Credit
Agreement” shall include agreements in respect of Interest Swap and Hedging
Obligations entered into for bona  fide hedging purposes and not
entered into for speculative purposes with lenders party to the Credit
Agreement or their affiliates and shall also include any amendment, amendment
and restatement, renewal, extension, restructuring, supplement or modification
to any Credit Agreement and all refundings, refinancings and replacements of
any Credit Agreement, including any credit agreement (i) extending or
shortening the maturity of any Indebtedness incurred thereunder or contemplated
thereby, (ii) adding or deleting borrowers or guarantors thereunder, so
long as borrowers and issuers include one or more of Kerzner International and
its Subsidiaries and their respective successors and assigns, (iii) increasing
the amount of Indebtedness incurred thereunder or available to be borrowed
thereunder, provided that on the
date such Indebtedness is incurred it would not be prohibited by Section 4.10
hereof or (iv) otherwise altering the terms and conditions thereof in a
manner not prohibited by the terms hereof.


 


“Custodian” means any receiver,
trustee, assignee, liquidator, sequestrator or similar official under any
Bankruptcy Law.


 


“Debt Incurrence Ratio” shall have the
meaning specified in Section 4.10.


 


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


 


6





















 


“Definitive Securities” means
Securities that are in the form of the Note attached hereto as Exhibit A
that do not include the information called for by footnotes 1 and 3 thereof.


 


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


 


“Disqualified Capital Stock” means (i) except
as set forth in (ii), with respect to any person, Equity Interests of such
person that, by their terms or by the terms of any security into which they are
convertible, exercisable or exchangeable, are, or upon the happening of an
event or the passage of time would be, required to be redeemed or repurchased
(including at the option of the holder thereof) by such person or any of its
Subsidiaries, in whole or in part, on or prior to the Stated Maturity of the
Securities and (ii) with respect to any Subsidiary of such person (other
than the Guarantors), any Equity Interests other than any common equity with no
preference, privileges, or redemption or repayment provisions.  Notwithstanding the foregoing, any Equity
Interests that would constitute Disqualified Capital Stock solely because the
holders thereof have the right to require the Issuer to repurchase such Equity
Interests upon the occurrence of a change of control or with the proceeds of an
asset sale shall not constitute Disqualified Capital Stock if the terms of such
Equity Interests provide that the Issuer may not repurchase or redeem any such
Equity Interests pursuant to such provisions prior to the Issuer’s purchase of
the Securities as are required to be purchased pursuant to the provisions of Section 4.13
and Section 10.1 hereof, as applicable.


 


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


 


“Euroclear” means Euroclear Bank
S.A./N.V., or its successor, as operator of the Euroclear system.


 


“Equity Interest” of any person means
any shares, interests, participations or other equivalents (however designated)
in such person’s equity, and shall in any event include any Capital Stock
issued by, or partnership or membership interests in, such person.


 


“Event of Default” shall have the
meaning specified in Section 6.1.


 


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


 


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


 


“Exchange Offer” means the offer by
the Issuer and the Guarantors to exchange the Series B Securities and
Guarantees thereof for the Original Securities and Guarantees thereof made
pursuant to the Registration Rights Agreement.


 


7





















 


“Exempted Affiliate Transaction” means
(i) any transaction solely between or among the Issuer, the Guarantors
and/or any of the Issuer’s wholly owned Subsidiaries, (ii) payment of
reasonable directors’ fees and indemnity provided on behalf of officers,
directors or employees of the Issuer or any of its Subsidiaries in connection
with the performance by such persons of their duties as officers, directors or employees
of the Issuer or such Subsidiaries, (iii) any indemnification or
employment agreements or arrangements and benefit plans or arrangements, and
any transactions contemplated by any of the foregoing relating to compensation
and employee benefits matters, in each case in respect of employees, officers
or directors entered into by the Issuer or any of its Subsidiaries in the
ordinary course of business in connection with the performance by such persons
of their duties as officers, directors or employees of the Issuer or such
Subsidiaries, which shall have, in each case, been approved by a majority of
the members of the Board of Directors of Kerzner International that are
disinterested in respect of such agreements or arrangements or in such
transactions, and (iv) any loans to employees, officers or directors made
by the Issuer or any of its Subsidiaries in the ordinary course of business,
which shall have, in each case, been approved by a majority of the members of
the Board of Directors of Kerzner International that are disinterested.


 


“FF&E Indebtedness” means any
Indebtedness of a person to any seller or other person incurred to finance the
acquisition (including in the case of a Capitalized Lease Obligation, the
lease) or improvement of any Gaming Facility or hotel or gaming or hotel
related fixtures, furniture or equipment which is directly related to a Related
Business of Kerzner International and which is incurred concurrently with such
acquisition and is secured only by the assets so financed.


 


“GAAP” means United States 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 Public Company Accounting
Oversight Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession in the United States as in
effect on the Issue Date.


 


“Gaming Authority” means any
regulatory body responsible for a gaming license held by Kerzner International
or a Subsidiary of Kerzner International or any agency (including, without
limitation, any agency established by a United States Federally recognized
Indian tribe to regulate gaming on such tribe’s reservation) which has, or may
at any time after the Issue Date have, jurisdiction over the gaming activities
of the Issuer or any of its Subsidiaries, or any successor to such authority.


 


“Gaming Facility” means any gaming or
parimutuel wagering establishment and other property or assets directly
ancillary thereto or used in connection therewith, including any building,
restaurant, hotel, theater, parking facilities, retail shops, land, golf
courses and other recreation and entertainment facilities, vessel, barge, ship,
and equipment.


 


“Global Security” means a Security
that contains the paragraph referred to in footnote 1 and the additional schedule referred
to in footnote 3 to the form of Security attached hereto as Exhibit A
hereto.


 


8





















 


“Guarantee” shall have the meaning
provided in Section 11.1.


 


“Guarantors” means the entities set
forth on Schedule A hereto and any future newly created, acquired
or designated Subsidiary of Kerzner International.


 


“Holder” or “Securityholder”
means the person in whose name a Security is registered on the Registrar’s
books.


 


“incur” shall have the meaning
specified in Section 4.10.


 


“Incurrence Date” shall have the
meaning specified in Section 4.10.


 


“Indebtedness” of any person means,
without duplication, (a) all liabilities and obligations, contingent or
otherwise, of such person to the extent such liabilities and obligations would
appear as a liability upon the consolidated balance sheet of such person in
accordance with GAAP, (i) in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such person or only to
a portion thereof), (ii) evidenced by bonds, notes, debentures or similar
instruments, or (iii) representing the balance deferred and unpaid of the
purchase price of any property or services, except those incurred in the
ordinary course of its business that would constitute ordinarily trade payables
to trade creditors, (b) all liabilities and obligations, contingent or
otherwise, of such person (i) evidenced by bankers’ acceptances or similar
instruments issued or accepted by banks, (ii) relating to any Capitalized
Lease Obligation, or (iii) evidenced by a letter of credit or a
reimbursement obligation of such person with respect to any letter of credit; (c) all
net obligations of such person under Interest Swap and Hedging Obligations; (d) all
liabilities and obligations of others of the kind described in the preceding
clause (a), (b) or (c) that such person has guaranteed or that is
otherwise its legal liability or which are secured by any assets or property of
such person, (e) any and all deferrals, renewals, extensions, refinancing
and refundings (whether direct or indirect) of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (a), (b) or (c), or this clause (e), whether or not between or
among the same parties, and (f) all Disqualified Capital Stock of such
person (measured at the greater of its voluntary or involuntary maximum fixed
repurchase price plus accrued and unpaid dividends). Notwithstanding the
foregoing, (1) an Investment Guarantee shall not constitute Indebtedness
and (2) Investment Guarantee Indebtedness shall constitute Indebtedness.
For purposes hereof, the “maximum fixed repurchase price” of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such
price is based upon, or measured by, the Fair Market Value of such Disqualified
Capital Stock, such Fair Market Value to be determined in good faith by the
board of directors (or the equivalent governing body thereof if no such board
of directors exists) of the issuer of such Disqualified Capital Stock. The
amount of any Indebtedness outstanding as of any date shall be (1) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount, but the accretion of original issue discount in accordance with
the original terms of Indebtedness issued with an original issue discount will
not be deemed to be an incurrence and (2) the principal amount thereof, in
the case of any other Indebtedness.


 


9





















 


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


 


“Initial Purchasers” means Deutsche
Banc Alex. Brown, J.P. Morgan Securities Inc., Bear, Stearns & Co.
Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Wachovia Capital Markets, LLC and Wells Fargo Securities,
LLC.


 


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


 


“Interest Swap and Hedging Obligation”
means any obligation of any person pursuant to any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate exchange agreement, currency exchange agreement or any other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency values, including, without limitation, any arrangement whereby,
directly or indirectly, such person is entitled to receive from time to time
periodic payments calculated by applying either a fixed or floating rate of
interest on a stated notional amount in exchange for periodic payments made by
such person calculated by applying a fixed or floating rate of interest on the
same notional amount.


 


“Investment” by any person in any
other person means (without duplication) (a) the acquisition (whether by
purchase, merger, consolidation or otherwise) by such person (whether for cash,
property, services, securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities,
including any options or warrants, of such other person or any agreement to
make any such acquisition; (b) the making by such person of any deposit
with, or advance, loan or other extension of credit to, such other person
(including the purchase of property from another person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such other person) or any commitment to make any such advance, loan or
extension (but excluding accounts receivable or deposits arising in the
ordinary course of business); (c) other than (i) guarantees of
Indebtedness of Kerzner International or any Subsidiary to the extent permitted
by Section 4.10 and Section 4.14, and (ii) Investment
Guarantees, the entering into by such person of any guarantee of, or other
credit support or contingent obligation with respect to, Indebtedness or other
liability of such other person; (d) the making of any capital contribution
by such person to such other person; (e) the designation by the Board of
Directors of Kerzner International of any person to be an Unrestricted
Subsidiary; and (f) the making by such person or any Subsidiary of such
person of any Investment Guarantee Payment. 
Kerzner International shall be deemed to make an Investment in an amount
equal to the fair market value of the net assets of any subsidiary (or, if
neither Kerzner International nor any of its Subsidiaries has theretofore made
an Investment in such subsidiary, in an amount equal to the Investments being
made), at the time that such subsidiary is designated an Unrestricted
Subsidiary, and any property transferred to an Unrestricted Subsidiary from Kerzner
International or a Subsidiary shall be deemed an Investment valued at its fair
market value at the time of such transfer.


 


“Investment Grade Rating” means a
rating equal to or higher than Baa3 (or the equivalent) by Moody’s (or any
successor to the rating agency business thereof) or BBB- (or the equivalent) by
S&P (or any successor to the rating agency business thereof).


 


10





















 


“Investment Grade Status” means any
time at which the ratings of the Securities by both Moody’s (or any successor
to the rating agency business thereof) and S&P (or any successor to the
rating agency business thereof) are Investment Grade Ratings.


 


“Investment Guarantee” means (1) any
guarantee (with full rights of subrogation), directly or indirectly, by the
Issuer or any Guarantor of Indebtedness of a Permitted Joint Venture, (2) any
guarantee (with full rights of subrogation), directly or indirectly, by the
Issuer or any Guarantor of Indebtedness of any person to whom the Issuer or any
of the Guarantors provide management services pursuant to a Management Services
Agreement, which Indebtedness matures by its terms prior to the time (if any)
that such Management Services Agreement is scheduled to expire,(3) any
guarantee (with full rights of subrogation), directly or indirectly, by the
Issuer or any Guarantor of Indebtedness of any person to whom the Issuer, any
of the Guarantors or TCA provides management services or development services
pursuant to a Native American Services Agreement, which Indebtedness matures by
its terms prior to the time (if any) that such Native American Services
Agreement is scheduled to expire, or (4) any direct or indirect completion
guarantee by the Issuer or any Guarantor, which terminates or expires by its
terms prior to the time (if any) that the applicable Native American Services
Agreement is scheduled to expire, in connection with any development services
or management services provided by the Issuer, any of the Guarantors or TCA, as
applicable, pursuant to such Native American Services Agreement; provided that in the case of each of (1),
(2), (3) and (4), at the time such guarantee is incurred or such
completion guarantee is entered into, the Issuer and the Guarantors are
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Debt Incurrence Ratio contained in Section 4.10.


 


“Investment Guarantee Indebtedness” of
the Issuer or any Guarantor means any Indebtedness of another person guaranteed
by the Issuer or any Guarantor pursuant to an Investment Guarantee, on and
after the time the Issuer or such Guarantor makes any interest or comparable
debt service payment with respect to such guaranteed Indebtedness.


 


“Investment Guarantee Payments” means,
without duplication, (1)any payments made pursuant to any Investment Guarantee,
or (2) the full amount of any Investment Guarantee if, at any time, the
person whose Indebtedness is guaranteed by such Investment Guarantee ceases to
constitute a Permitted Joint Venture as a result of a decline in the Issuer’s
or a Guarantor’s ownership interest to less than 35% as a result of a sale,
transfer or other disposition of Capital Stock of such person by the Issuer or
such Guarantor, or (3) the full amount of any Investment Guarantee if, at
any time, the Management Services Agreement or Native American Services
Agreement with respect to the person whose Indebtedness is guaranteed by such
Investment Guarantee is terminated without a concurrent replacement thereof
that has an expiration after the maturity of all Indebtedness of such person
guaranteed by the Issuer or any of the Guarantors.


 


“Issue Date” means September 22,
2005, the date of the first issuance of the Securities under the Indenture.


 


“Issuer” means the party named as such
in this Indenture until a successor replaces it pursuant to the Indenture and
thereafter means such successor.


 


11





















 


“Issuer Request or Issuer Order” means
a written request or order signed in the name of the Issuer by two Officers of
the Issuer.


 


“Junior Security” means any Qualified
Capital Stock and any Indebtedness of the Issuer or a Guarantor, as applicable,
that (i) is subordinated in right of payment to Senior Debt of the Issuer
or such Guarantor, as applicable, at least to the same extent as the Securities
or the Guarantees, as applicable, (ii) has no scheduled installment of
principal due, by redemption, sinking fund payment or otherwise, on or prior to
the Stated Maturity of the Securities, (iii) does not have covenants or
default provisions materially more beneficial to the holders of the Securities
than those in effect with respect to the Securities on the Issue Date and (iv) was
authorized by an order or decree of a court of competent jurisdiction that gave
effect to (and states in such order or decree that effect has been given to)
the subordination of such securities to all Senior Debt of the Issuer or
Guarantor, as applicable, not paid in full in cash or Cash Equivalents in
connection with such reorganization; provided
that all such Senior Debt is assumed by the reorganized corporation and the
rights of the holders of any such Senior Debt are not, without the consent of
such holders, altered by such reorganization, which consent shall be deemed to
have been given if the holders of such Senior Debt, individually or as a class,
shall have approved such reorganization.


 


“KIBL” means Kerzner International Bahamas
Limited, a company incorporated under the Companies Act in the Commonwealth of
the Bahamas.


 


“Legal Holiday” shall have the meaning
provided in Section 13.7.


 


“Lien” means any mortgage, charge,
pledge, lien (statutory or otherwise), privilege, security interest,
hypothecation or other encumbrance upon or with respect to any property of any
kind, real or personal, movable or immovable, now owned or hereafter acquired.


 


“Liquidated Damages” shall have the
meaning specified in the Registration Rights Agreement.


 


“Management Services Agreement” means
any written agreement (other than a Native American Services Agreement)
pursuant to which the Issuer or any of the Guarantors provide or will provide
management services in connection with a Gaming Facility and/or a hotel
facility and related amenities.


 


“Maturity Date,” when used with
respect to any Security, means the date on which the principal of such Security
becomes due and payable as therein or herein provided, whether at Stated
Maturity, a Change of Control Purchase Date, a purchase date with respect to an
Asset Sale Offer or by declaration of acceleration, call for redemption or
otherwise.


 


“Moody’s” means Moody’s Investor
Services, Inc.


 


“Native American Services Agreement”
means any written agreement pursuant to which the Issuer, any of the Guarantors
or TCA provides or will provide development services or management services in
connection with a Gaming Facility operated by a Native North American Tribe or
agency or instrumentality thereof, provided
that the Issuer, such Guarantor or TCA has obtained a customary opinion from
outside counsel that such agreement is enforceable.


 


12





















 


“Net Cash Proceeds” means the
aggregate amount of Cash or Cash Equivalents received by Kerzner International
in the case of a sale of Qualified Capital Stock and by Kerzner International
and its Subsidiaries in respect of an Asset Sale plus, in the case of an
issuance of Qualified Capital Stock upon any exercise, exchange or conversion
of securities (including options, warrants, rights and convertible or
exchangeable debt) of Kerzner International that were issued for cash on or
after the Issue Date, the amount of cash originally received by Kerzner
International upon the issuance of such securities (including options,
warrants, rights and convertible or exchangeable debt) less, in each case, the
sum of all payments, fees, commissions and reasonable and customary expenses
(including, without limitation, the fees and expenses of legal counsel and
investment banking fees and expenses) incurred in connection with such Asset
Sale or sale of Qualified Capital Stock, and, in the case of an Asset Sale
only, less the amount (estimated reasonably and in good faith by Kerzner
International) of income, franchise, sales and other applicable taxes required
to be paid by Kerzner International or any of its Subsidiaries in connection
with such Asset Sale.


 


“Non-Recourse Indebtedness” means
Indebtedness of a person to the extent that under the terms thereof or pursuant
to applicable law (i) no personal recourse shall be had against such
person for the payment of the principal of or interest or premium, if any, on
such Indebtedness, and (ii) enforcement of obligations on such
Indebtedness is limited only to recourse against interests in property
purchased with the proceeds of the incurrence of such Indebtedness and as to
which none of the Issuer or any of its Subsidiaries provides any credit support
or is liable.


 


“Non-Strategic Real Estate” means (i) any
real estate on Paradise Island in the Bahamas, other than the real estate upon
which the Atlantis Resort & Casino property is located, and (ii) any
real property that Kerzner International or any of its Subsidiaries owns as of
the Issue Date in Atlantic City, New Jersey.


 


“Offering Memorandum” means the
Offering Memorandum of the Issuer dated September 15, 2005 with respect to
the Securities.


 


“Officer” means, with respect to the
Issuer, the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Chief Financial Officer, the Treasurer, the Controller,
or the Secretary or Assistant Secretary.


 


“Officers’ Certificate” means, with
respect to the Issuer or any Guarantor, a certificate signed by two Officers of
the Issuer or such Guarantor and otherwise complying with the requirements of
Sections 13.4 and 13.5.


 


“Opinion of Counsel” means a written
opinion from legal counsel to the Issuer complying with the requirements of
Sections 13.4 and 13.5.  Unless otherwise
required by this Indenture, the counsel may be in-house counsel to the Issuer.


 


“Original Securities” means the 63⁄4 %
Senior Subordinated Securities due 2015, as amended and supplemented from time
to time in accordance with the terms hereof, that are issued pursuant to this
Indenture on the Issue Date.


 


“Paying Agent” shall have the meaning
specified in Section 2.3.


 


13





















 


“Permitted Holder” means Solomon
Kerzner, his immediate family or a trust or similar entity existing solely for
his benefit or for the benefit of his immediate family.


 


“Permitted Indebtedness” means
Indebtedness incurred as follows:


 


(a)           the
Issuer and the Guarantors may incur (i) Indebtedness pursuant to the
Credit Agreement up to an aggregate principal amount outstanding pursuant to
this clause (a) at any time of $900 million (excluding any amounts with
respect to Interest Swap and Hedging Obligations), minus the amount of any such
Indebtedness retired with Net Cash Proceeds from any Asset Sale or assumed by a
transferee in an Asset Sale and (ii) the Issuer and the Guarantors may
incur Indebtedness with respect to Interest Swap and Hedging Obligations
entered into for bona  fide hedging purposes and not entered into
for speculative purposes;


 


(b)           the
Issuer and the Guarantors may incur Indebtedness evidenced by the Securities
and the Guarantees and represented by this Indenture up to the amounts issued
on the Issue Date;


 


(c)           the
Issuer and the Guarantors may incur FF&E Indebtedness on or after the Issue
Date, provided, that (i) such
FF&E Indebtedness is Non-Recourse Indebtedness and (ii) such
Indebtedness shall not constitute more than 100% of the cost (determined in
accordance with GAAP) to the Issuer or any such Guarantor, as applicable, of
the property so purchased or leased or the cost of the relevant improvements;


 


(d)           the
Issuer and the Guarantors may incur Indebtedness solely in respect of bankers
acceptances and performance bonds (to the extent that such incurrence does not
result in the incurrence of any obligation to repay any obligation relating to
borrowed money of others), all in the ordinary course of business in accordance
with customary industry practices, in amounts and for the purposes customary in
their industry;


 


(e)           the
Issuer may incur Indebtedness to any wholly owned Subsidiary, and any wholly
owned Subsidiary may incur Indebtedness to any other wholly owned Subsidiary or
to the Issuer; provided, that, in
the case of Indebtedness of the Issuer (other than Indebtedness that is
required to be pledged to the lenders under the Credit Agreement), such
obligations shall be unsecured and subordinated in all respects to the Issuer’s
obligations pursuant to the Securities, and the date of any event that causes a
Subsidiary to no longer be a wholly owned Subsidiary shall be an Incurrence
Date;


 


(f)            the
Issuer and the Guarantors may incur Investment Guarantee Indebtedness; and


 


(g)           the
Issuer and any of its Subsidiaries, as applicable, may incur Refinancing
Indebtedness with respect to any Indebtedness or Disqualified Capital Stock, as
applicable, described in clauses (b),(f) and (g) of this definition
or incurred under the Debt Incurrence Ratio contained in Section 4.10 or
which is outstanding on the Issue Date so long as such Refinancing Indebtedness
is secured only by the assets that secured the Indebtedness so refinanced or
otherwise replaced.


 


14





















 


“Permitted Investment” means (a) any
Investment in any of the Securities; (b) any Investment in Cash
Equivalents; (c) any Investment in intercompany notes to the extent
permitted under clause (e) of the definition of “Permitted Indebtedness”; (d) any
Investment in any Guarantor; (e) any Investment in a person in a Related
Business who, after such Investment, becomes a Subsidiary of the Issuer and a
Guarantor of the Securities; (f) any Investment in any property or assets
to be used by the Issuer or a Guarantor in a Related Business; (g) any
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 4.13
hereof; and (h) any Investments solely in exchange for the issuance of
Qualified Capital Stock.


 


“Permitted Joint Venture” means a
person primarily engaged or preparing to engage in a Related Business as to
which the Issuer or a Guarantor owns at least 35% of the shares of Capital
Stock (including at least 35% of the total voting power thereof) of such
person.


 


“Permitted Lien” means (a) any
Lien securing the Securities; (b) any Lien securing Indebtedness of a
person existing at the time such person becomes a Subsidiary or is merged with
or into the Issuer or a Subsidiary of the Issuer or Liens securing Indebtedness
incurred in connection with an Acquisition, provided
that such Liens were in existence prior to the date of such acquisition, merger
or consolidation, were not incurred in anticipation thereof, and do not extend
to any other assets; (c) any Lien in favor of the Issuer or any Guarantor;
and (d) any Lien arising from FF&E Indebtedness permitted to be
incurred under clause (c) of the definition of “Permitted Indebtedness”,
provided such Lien relates solely to the property which is subject to such
FF&E Indebtedness.


 


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


 


“principal” of any Indebtedness
(including the Securities) means the principal of such Indebtedness plus any
applicable premium, if any, on such Indebtedness.


 


“Property” or “property” means
any right or interest in or to property or assets of any kind whatsoever,
whether real, personal or mixed and whether tangible, intangible, contingent,
indirect or direct.


 


“Qualified Capital Stock” means any
Capital Stock of Kerzner International that is not Disqualified Capital Stock.


 


“Qualified Equity Offering” means (1) an
underwritten registered public offering of Ordinary Shares of Kerzner
International for cash, other than pursuant to Form S-8 (or any successor
thereto) and other than Ordinary Shares of Kerzner International issued
pursuant to employee benefit plans or as compensation to employees, and (2) an
unregistered offering of Ordinary Shares of Kerzner International for cash
resulting in net proceeds to Kerzner International in excess of $50 million.


 


“Qualified Exchange” means any legal
defeasance, redemption, retirement, repurchase or other acquisition of Capital
Stock or Indebtedness of Kerzner International issued on or after the Issue
Date with the Net Cash Proceeds received by Kerzner International from the


 


15





















 


substantially concurrent sale of Qualified Capital Stock or any
exchange of Qualified Capital Stock for any Capital Stock or Indebtedness of
Kerzner International outstanding on or issued on or after the Issue Date.


 


“Rating Agencies” means S&P and
Moody’s or any successor to the respective rating agency businesses thereof.


 


“Record Date” means a Record Date
specified in the Securities whether or not such Record Date is a Business Day.


 


“Redemption Date,” when used with
respect to any Security to be redeemed, means the date fixed for such
redemption pursuant to Article III of this Indenture and Paragraph 5 in
the form of Security.


 


“Redemption Price,” when used with
respect to any Security to be redeemed, means the redemption price for such
redemption set forth in Paragraph 5 in the form of Security, which shall
include in each case accrued and unpaid interest with respect to such Security
to the applicable Redemption Date.


 


“Reference Period” with regard to any
person means the four full fiscal quarters (or such lesser period during which
such person has been in existence) ended immediately preceding any date upon
which any determination is to be made pursuant to the terms of the Securities or
the Indenture.


 


“Refinancing Indebtedness” means
Indebtedness or Disqualified Capital Stock (a) issued in exchange for, or
the proceeds from the issuance and sale of which are used substantially
concurrently to repay, redeem, defease, refund, refinance, discharge or
otherwise retire for value, in whole or in part, or (b) constituting an
amendment, modification or supplement to, or a deferral or renewal of ((a) and
(b) above are, collectively, a “Refinancing”), any Indebtedness or
Disqualified Capital Stock in a principal amount or, in the case of
Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses, including any premium
and defeasance costs, incurred in connection with the Refinancing) the lesser
of (i) the principal amount or, in the case of Disqualified Capital Stock,
liquidation preference, of the Indebtedness or Disqualified Capital Stock so
Refinanced and (ii) if such Indebtedness being Refinanced was issued with
an original issue discount, the accreted value thereof (as determined in
accordance with GAAP) at the time of such Refinancing; provided, that (A) such Refinancing
Indebtedness of any Subsidiary of Kerzner International shall only be used to
Refinance outstanding Indebtedness or Disqualified Capital Stock of such
Subsidiary, (B) such Refinancing Indebtedness shall (x) not have an
Average Life shorter than the Indebtedness or Disqualified Capital Stock to be
so refinanced at the time of such Refinancing and (y) in all respects, be no
less subordinated or junior, if applicable, to the rights of Holders of the
Securities than was the Indebtedness or Disqualified Capital Stock to be
refinanced and (C) such Refinancing Indebtedness shall have a final stated
maturity or redemption date, as applicable, no earlier than the final stated
maturity or redemption date, as applicable, of the Indebtedness or Disqualified
Capital Stock to be so refinanced.


 


“Registrar” shall have the meaning
specified in Section 2.3.


 


16





















 


“Registration Rights Agreement” means
the Registration Rights Agreement by and among the Issuer, the Guarantors and
the Initial Purchasers, dated as of the Issue Date.


 


“Reg S Temporary Global Security”
means one or more temporary Global Securities issued in an aggregate amount of
denominations equal in total to the outstanding principal amount of the
Securities sold in reliance on Rule 903 of Regulation S.


 


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


 


“Related Business” means the gaming or
hotel business and other businesses necessary for, or in the good faith
judgment of the Board of Directors of Kerzner International, incident to,
connected with, arising out of, or developed or operated to permit or
facilitate the conduct or pursuit of the gaming or hotel business (including
developing or operating sports or entertainment facilities, retail facilities,
restaurants, night clubs, transportation and communications services or other
related activities or enterprises and any additions or improvements thereto)
and potential opportunities in the gaming or hotel business.


 


“Representative” means the agent or
representative in respect of the lenders party to the Credit Agreement.


 


“Restricted Payment” means, with
respect to any person, (a) the declaration or payment of any dividend or
other distribution in respect of Equity Interests of such person or any parent
or Subsidiary of such person, (b) any payment on account of the purchase,
redemption or other acquisition or retirement for value of Equity Interests of
such person or any parent or Subsidiary of such person, (c) other than
with the proceeds from the substantially concurrent sale of, or in exchange
for, Refinancing Indebtedness, any purchase, redemption, or other acquisition
or retirement for value of, any payment in respect of any amendment of the
terms of or any defeasance of, any Subordinated Indebtedness, directly or indirectly,
by such person or a Subsidiary of such person prior to the scheduled maturity,
any scheduled repayment of principal, or scheduled sinking fund payment, as the
case may be, of such Indebtedness and (d) any Investment by such person,
other than a Permitted Investment; provided,
however, that the term “Restricted Payment” does not include (i) any
dividend, distribution or other payment on or with respect to Equity Interests
of the Issuer to the extent payable solely in shares of Qualified Capital Stock
of the Issuer; or (ii) any dividend, distribution or other payment to the
Issuer by any of its Subsidiaries or by any such Subsidiary to its parent.


 


“Required Regulatory Redemption” shall
have the meaning specified in Section 3.2.


 


“S&P” means Standard and Poor’s
Ratings Group, a division of the McGraw-Hill Companies, Inc.


 


“SEC” means the Securities and
Exchange Commission.


 


“Securities” means, the Original
Securities, the Series B Securities, and any Additional Securities issued
in accordance with the terms hereof, in each case as amended or modified from
time to time in accordance with the terms hereof and issued under this
Indenture.


 


17





















 


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


 


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


 


“Securityholder”  See “Holder.”


 


“Senior Debt” means Indebtedness
(including and together with all monetary obligations in respect of the Credit
Agreement, and interest, whether or not allowable, accruing on Indebtedness
incurred pursuant to the Credit Agreement after the filing of a petition
initiating any proceeding under any bankruptcy, insolvency or similar law or
which would have accrued but for such filing) of Kerzner International or any
of the Guarantors, as applicable, arising under the Credit Agreement or that,
by the terms of the instrument creating or evidencing such Indebtedness, is
expressly designated Senior Debt and made senior in right of payment to the
Securities or the applicable Guarantee; provided,
that in no event shall Senior Debt include (a) Indebtedness to any
Subsidiary of Kerzner International or any officer, director or employee of
Kerzner International or any Subsidiary of Kerzner International (other than
Indebtedness that is required to be pledged to the lenders under the Credit
Agreement), (b) Indebtedness incurred in violation of the terms of this
Indenture including, without limitation, Indebtedness claiming to be
subordinated to any other Indebtedness and senior to the Securities (c) Indebtedness
to trade creditors, (d) Disqualified Capital Stock, and (e) any
liability for taxes owed or owing by Kerzner International or such Guarantor.


 


“Series B Securities” means the Series B
63⁄4% Senior Subordinated Securities due 2015, in substantially the form set
forth on the Form of Note set forth as Exhibit A hereto, to be issued
pursuant to this Indenture either (i) in connection with the Exchange
Offer or (ii) as otherwise contemplated by the Registration Rights
Agreement.


 


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


 


“Stated Maturity,” when used with
respect to any Note, means October 1, 2015.


 


“Subordinated Indebtedness” means
Indebtedness of Kerzner International or a Guarantor that is subordinated in
right of payment to the Securities or such Guarantee, as applicable, in any
respect or, for purposes of the definition of Restricted Payments only, has a
stated maturity on (except for the Securities) or after the Stated Maturity.


 


“Subsidiary,” with respect to any
person, means (i) a corporation a majority of whose Equity Interests with
voting power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such person, by such person and one or more
Subsidiaries of such person or by one or more Subsidiaries of such person, (ii) any
other person (other than a corporation) in which such person, one or more
Subsidiaries of such person, or such person and one or more Subsidiaries of
such person, directly or indirectly, at the date of determination thereof has
at least majority ownership interest, or (iii) a partnership in which such
person or a Subsidiary of such person is, at the time, a general partner.  For the avoidance of doubt, a person that
otherwise is not a Subsidiary of another person based on the foregoing shall


 


18





















 


not be deemed to be a Subsidiary of such person merely because its
results of operations are required to be consolidated with the Issuer solely by
virtue of Interpretation No. 46R, “Consolidation of Variable Interest
Entities.”  Notwithstanding the
foregoing, an Unrestricted Subsidiary shall not be a Subsidiary of Kerzner
International or any Subsidiary of Kerzner International.   Unless the context requires otherwise,
Subsidiary means each direct and indirect Subsidiary of Kerzner International.


 


“TCA” means Trading Cove Associates, a
Connecticut general partnership and its majority owned subsidiaries, so long as
the Issuer and any of the Guarantors maintain at least their ownership interest
in the partnership (including priorities, preferences and privileges with
respect to distributions or any other payments or voting power) owned on the
Issue Date.


 


“TIA” means the Trust Indenture Act of
1939 (15 U.S. Code §§ 77aaa-77bbbb) as in effect on the date of the
execution of this Indenture, except as permitted in Section 9.3.


 


“Transfer Restricted Securities” means
Securities that bear or are required to bear the legend set forth in Section 2.6.


 


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


 


“Trust Officer” means any officer
within the corporate trust department (or any successor group) of the Trustee
including any vice president, assistant vice president, or any other officer or
assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at that time shall be such officers, and
also means, with respect to a particular corporate trust matter, any other
officer of the corporate trust department (or any successor group) of the
Trustee to whom such trust matter is referred because of his knowledge of and
familiarity with the particular subject.


 


“Unrestricted Subsidiary” means any subsidiary
of Kerzner International that does not own any Capital Stock of, or own or hold
any Lien on any property of, Kerzner International or any other Subsidiary of
Kerzner International and that shall be designated an Unrestricted Subsidiary
by the Board of Directors of Kerzner International; provided, that (i) neither immediately prior thereto
nor after giving pro forma effect
to such designation would there exist a Default or Event of Default, (ii) immediately
after giving pro forma effect
thereto, Kerzner International could incur at least $1.00 of Indebtedness
pursuant to the Debt Incurrence Ratio contained in Section 4.10, and (iii) at
the time of such designation, such Subsidiary has no Indebtedness other than
Allowed Non-Recourse Indebtedness.  The
Board of Directors of Kerzner International may designate any Unrestricted
Subsidiary to be a Subsidiary, provided,
that (i) no Default or Event of Default is existing or will occur as a
consequence thereof and (ii) immediately after giving effect to such
designation, on a pro forma
basis, Kerzner International could incur at least $1.00 of Indebtedness
pursuant to the Debt Incurrence Ratio contained in Section 4.10.  Notwithstanding the foregoing, the Board of
Directors of Kerzner International may not designate KIBL or any Subsidiary of
KIBL (or any successor to KIBL’s or its Subsidiaries’ business or assets that
is majority owned or controlled by Kerzner International) to be an Unrestricted
Subsidiary; provided, however,
that the Board of Directors of Kerzner


 


19





















 


International may designate one or more Subsidiaries of KIBL to be
Unrestricted Subsidiaries if such Subsidiaries, singly and in the aggregate,
are not material to the business of KIBL and its Subsidiaries, taken as a
whole, as determined in the good faith, reasonable judgment of the Board of
Directors of Kerzner International.  Each
such designation shall be evidenced by filing with the Trustee a certified copy
of the resolution giving effect to such designation and an Officers’
Certificate certifying that such designation complied with the foregoing
conditions.


 


“U.S. Government Obligations” means
direct non-callable obligations of, or noncallable obligations guaranteed by,
the United States of America for the payment of which obligation or guarantee
the full faith and credit of the United States of America is pledged.


 


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


 


“wholly owned Subsidiary” means a
Subsidiary all the Equity Interests of which are owned by Kerzner International
or one or more wholly owned Subsidiaries of Kerzner International, except for
directors’ qualifying shares.


 


Section 1.2             Incorporation by Reference of TIA.


 


Whenever this Indenture refers to a provision
of the TIA, such provision is incorporated by reference in and made a part of
this Indenture.  The following TIA terms
used in this Indenture have the following meanings:


 


“Commission” means the SEC.


 


“indenture securities” means the Securities.


 


“indenture securityholder” means a
Holder or a Securityholder.


 


“indenture to be qualified” means this
Indenture.


 


“indenture trustee” or “institutional trustee”
means the Trustee.


 


“obligor” on the indenture securities
means the Issuer and any other obligor on the Securities.


 


All other TIA terms used in this Indenture
that are defined by the TIA, defined by TIA reference to another statute or
defined by SEC rule and not otherwise defined herein have the meanings
assigned to them thereby.


 


Section 1.3             Rules of Construction.


 


Unless the context otherwise requires:


 


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


 


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


 


20





















 


(iii)          “or” is not exclusive;


 


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


 


(v)           provisions apply to successive events
and transactions;


 


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


 


(vii)         references to Sections or Articles
means reference to such Section or Article in this Indenture, unless
stated otherwise.


 


ARTICLE II


 


THE
SECURITIES


 


Section 2.1             Form and Dating.


 


The Securities and the Trustee’s certificate
of authentication, in respect thereof, shall be substantially in the form of Exhibit A
hereto which Exhibit is part of this Indenture.  The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage.  The Issuer shall approve the form of the
Securities and any notation, legend or endorsement on them.  Any such notations, legends or endorsements
not contained in the form of Security attached as Exhibit A hereto
shall be delivered in writing to the Trustee. 
Each Security shall be dated the date of its authentication.


 


The terms and provisions contained in the
form of Securities shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Issuer and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.


 


Section 2.2             Execution and Authentication.


 


Two Officers shall sign, or one Officer shall
sign and one Officer shall attest to, the Securities for the Issuer by manual
or facsimile signature.


 


If an Officer whose signature is on a
Security was an Officer at the time of such execution but no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless and the Issuer shall nevertheless be bound by the terms
of the Securities and this Indenture.


 


A Security shall not be valid until an
authorized signatory of the Trustee manually signs the certificate of
authentication on the Security, but such signature shall be conclusive evidence
that the Security has been authenticated pursuant to the terms of this
Indenture.


 


21





















 


The Trustee shall authenticate the Original
Securities for original issue in the aggregate principal amount of up to
$400,000,000 and shall authenticate Series B Securities for original issue
in the aggregate principal amount of up to $400,000,000, in each case upon a
written order of the Issuer in the form of an Officers’ Certificate; provided that such Series B
Securities shall be issuable only upon the valid surrender for cancellation of
Original Securities of a like aggregate principal amount in accordance with the
Registration Rights Agreement.


 


The Officers’ Certificate shall specify the
amount of Securities to be authenticated and the date on which the Securities
are to be authenticated.


 


Subject to Article IV hereof and
applicable law, the Issuer may issue Additional Securities under this Indenture
from time to time after the Issue Date. 
Upon the written order of the Issuer in the form of an Officers’
Certificate meeting the requirements of Section 2.14 hereof, the Trustee
shall authenticate Additional Securities in the aggregate principal amount set
forth in such Officers’ Certificate.


 


Upon the written order of the Issuer in the
form of an Officers’ Certificate, the Trustee shall authenticate Securities in
substitution of Securities originally issued to reflect any name change of the
Issuer.


 


The Trustee may appoint an authenticating
agent acceptable to the Issuer to authenticate Securities.  Unless otherwise provided in the appointment,
an authenticating agent may authenticate Securities whenever the Trustee may do
so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights
as an Agent to deal with the Issuer, any Affiliate of the Issuer or any of its
Subsidiaries.


 


Securities shall be issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof.


 


Section 2.3             Registrar and Paying Agent.


 


The Issuer shall maintain an office or agency
in the Borough of Manhattan, The City of New York, where Securities may be
presented for registration of transfer or for exchange (“Registrar”) and
an office or agency in the Borough of Manhattan, The City of New York, where
Securities may be presented for payment (“Paying Agent”) and an office
or agency where notices and demands to or upon the Issuer in respect of the
Securities may be served.  The Issuer may
act as Registrar or Paying Agent, except that, for the purposes of Articles
III, VIII, X and Section 4.13 neither the Issuer nor any Affiliate thereof
shall act as Paying Agent.  The Registrar
shall keep a register of the Securities and of their transfer and
exchange.  The Issuer may have one or
more co-Registrars and one or more additional Paying Agents.  The term “Paying Agent” includes any
additional Paying Agent.  The Issuer
hereby initially appoints the Trustee as Registrar and Paying Agent, and the
Trustee hereby initially agrees so to act.


 


The Issuer shall enter into an appropriate
written agency agreement with any Agent not a party to this Indenture, which
agreement shall implement the provisions of this Indenture that relate to such
Agent.  The Issuer shall promptly notify
the Trustee in writing of the


 


22





















 


name and address of any such Agent. 
If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such.


 


The Issuer initially appoints The Depository
Trust Company (“DTC”) to act as Depository with respect to the Global
Securities.


 


The Issuer initially appoints the Trustee to
act as Securities Custodian with respect to the Global Securities.


 


Section 2.4             Paying Agent to Hold Assets in Trust.


 


The Issuer shall require each Paying Agent
other than the Trustee to agree in writing that each Paying Agent shall hold in
trust for the benefit of Holders or the Trustee all assets held by the Paying
Agent for the payment of principal of, or interest (and Liquidated Damages, if
any) on, the Securities (whether such assets have been distributed to it by the
Issuer or any other obligor on the Securities), and shall promptly notify the
Trustee in writing of any Default by the Issuer (or any other obligor on the
Securities) in making any such payment. 
If the Issuer or any Subsidiary thereof acts as Paying Agent, it shall
segregate such assets and hold them as a separate trust fund for the benefit of
the Holders or the Trustee.  The Issuer
at any time may require a Paying Agent to distribute all assets held by it to
the Trustee and account for any assets disbursed and the Trustee may at any
time during the continuance of any payment Default, upon written request to a
Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed.  Upon distribution to the Trustee of all
assets that shall have been delivered by the Issuer to the Paying Agent, the
Paying Agent (if other than the Issuer) shall have no further liability for
such assets.


 


Section 2.5             Securityholder 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 Holders.  If the
Trustee is not the Registrar, the Issuer shall furnish to the Trustee on or
before the third Business Day preceding 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 reasonably may require of the names and addresses of
Holders.  The Trustee, the Registrar and
the Issuer shall provide a current securityholder list to any Gaming Authority
upon demand.


 


Section 2.6             Transfer and Exchange.


 


(a)           When
Definitive Securities are presented to the Registrar or a co-Registrar with a
request:


 


(x)            to register the transfer of such
Definitive Securities, or


 


(y)           to exchange such Definitive
Securities for an equal principal amount of Definitive Securities of other
authorized denominations,


 


the Registrar or co-Registrar shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction are
met; provided, that in no event
shall Definitive


 


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Securities be issued upon the transfer or exchange of beneficial
interests in the Reg S Temporary Global Security prior to (x) the expiration of
the Distribution Compliance Period and (y) the receipt by the Registrar or
co-Registrar of any certificates identified by the Issuer or its counsel to be
required pursuant to Rule 903 or Rule 904 under the Securities Act; provided, further,
that the Definitive Securities surrendered for transfer or exchange:


 


(i)            shall be duly endorsed or
accompanied by a written instrument of transfer in form reasonably satisfactory
to the Issuer and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing; and


 


(ii)           in the case of Transfer Restricted
Securities that are Definitive Securities, shall be accompanied by the
following additional information and documents, as applicable:


 


(A)              if such Transfer Restricted
Securities are being delivered to the Registrar by a Holder for registration in
the name of such Holder, without transfer, a certification from such Holder to
that effect (in substantially the form set forth on the reverse of the
Security); or


 


(B)               if such Transfer Restricted
Security is being transferred to a “qualified institutional buyer” (as defined
in Rule 144A under the Securities Act) in accordance with Rule 144A
under the Securities Act, a certification to that effect (in the form set forth
on the reverse of the Security); or


 


(C)               if such Transfer Restricted
Security is being transferred (i) pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act or
Regulation S, (ii) pursuant to an effective registration statement under
the Securities Act, (iii) to an “institutional accredited investor” within
the meaning of Rule 501(A)(1), (2), (3) or (7) under the
Securities Act that is acquiring the Security for its own account, or for the
account of such an institutional accredited investor, in each case in a minimum
principal amount of $100,000, not with a view to or for offer or sale in
connection with any distribution in violation of the Securities Act, or (iv) in
reliance on another exemption from the registration requirements of the
Securities Act, a certification to that effect (in the form set forth on the
reverse of the Security) and in the case of (iii) above a letter of
representation from the transferee in form and substance reasonably
satisfactory to the Issuer and the Registrar and in the case of (i), (iii) and
(iv) above, if the Issuer or the Registrar so request, an Opinion of
Counsel reasonably acceptable to the Issuer and to the Registrar to the effect
that such transfer is in compliance with the Securities Act.


 


24





















 


(b)           Restrictions
on Transfer of a Definitive Security for a Beneficial Interest in a Global
Security.  A Definitive Security may
not be exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below; provided, however,
that prior to the expiration of the Distribution Compliance Period, transfers
of beneficial interests in the Reg S Temporary Global Securities may not be
made to a U.S. Person or for the account or benefit of a U.S. Person (other
than the Initial Purchasers).  Upon
receipt by the Registrar of a Definitive Security, duly endorsed or accompanied
by appropriate instruments of transfer, in form satisfactory to the Registrar,
together with:


 


(i)            if such Definitive Security is a
Transfer Restricted Security, a certification, substantially in the form set
forth on the reverse of the Security, that such Definitive Security is being
transferred to a “qualified institutional buyer” (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under the
Securities Act; and


 


(ii)           whether or not such Definitive
Security is a Transfer Restricted Security, written instructions directing the
Registrar to make, or to direct the Securities Custodian to make, an
endorsement on the Global Security to reflect an increase in the aggregate
principal amount of the Securities represented by the Global Security,


 


then the Registrar shall cancel such Definitive Security and cause, or
direct the Securities Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Securities
Custodian, the aggregate principal amount of Securities represented by the
Global Security to be increased accordingly. 
If no Global Securities are then outstanding, the Issuer shall issue and
the Trustee shall authenticate a new Global Security in the appropriate
principal amount.


 


(c)           Transfer
and Exchange of Global Securities. 
The transfer and exchange of Global Securities or beneficial interests
therein shall be effected through the Depository, in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the
Applicable Procedures.


 


(d)           Transfer
of a Beneficial Interest in a Global Security for a Definitive Security.


 


(i)            Any person having a beneficial
interest in a Global Security may upon request exchange such beneficial
interest for a Definitive Security; provided,
that in no event shall the Reg S Temporary Global Security be exchanged by the
Issuer for Definitive Securities prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Registrar of any
certificate identified by the Issuer and its counsel to be required pursuant to
Rule 903 or Rule 904 under the Securities Act.  Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for the
Depository from the Depository or its nominee on behalf of any person having a
beneficial interest in a Global Security and upon receipt by the Trustee of a
written order or such other form of instructions as is customary for the


 


25





















 


Depository or the person designated by the
Depository as having such a beneficial interest in a Transfer Restricted
Security only, the following additional information and documents (all of which
may be submitted by facsimile):


 


(A)              if such beneficial interest is
being transferred to the person designated by the Depository as being the
beneficial owner, a certification from such person to that effect (in
substantially the form set forth on the reverse of the Security); or


 


(B)               if such beneficial interest is
being transferred to a “qualified institutional buyer” (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under the
Securities Act, a certification to that effect from the transferor (in the form
set forth on the reverse of the Security); or


 


(C)               if such beneficial interest is
being transferred (i) pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act or Regulation S, (ii) pursuant
to an effective registration statement under the Securities Act, (iii) to
an “institutional accredited investor” within the meaning of Rule 501(A)(1),
(2), (3) or (7) under the Securities Act that is acquiring the
security for its own account, or for the account of such an institutional
accredited investor, in each case in a minimum principal amount of $100,000,
not with a view to or for offer or sale in connection with distribution in
violation of the Securities Act, or (iv) in reliance on another exemption
from the registration requirements of the Securities Act, a certification to
that effect from the transferee or transferor (in the form set forth on the
reverse of the Security) and in the case of (iii) above a letter of
representation from the transferee in form and substance reasonably
satisfactory to the Issuer and the Registrar and in the case of (i), (iii) and
(iv) above, if the Issuer or the Registrar so requests, an Opinion of
Counsel reasonably acceptable to the Issuer and to the Registrar to the effect
that such transfer is in compliance with the Securities Act,


 


then the Registrar or the Securities Custodian, at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of the Global Security to be reduced and, following
such reduction, the Issuer will execute and the Trustee will authenticate and
deliver to the transferee a Definitive Security in the appropriate principal
amount.


 


(ii)           Definitive Securities issued in
exchange for a beneficial interest in a Global Security pursuant to this Section 2.6(d) shall
be registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect participants
or otherwise, shall


 


26





















 


instruct the Trustee.  The Registrar shall deliver such Definitive
Securities to the persons in whose names such Securities are so registered.


 


(e)           Restrictions
on Transfer and Exchange of Global Securities.  Notwithstanding any other provisions of this
Indenture (other than the provisions set forth in subsection (f) of
this Section 2.6), a Global Security may not be transferred as a whole
except by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository.


 


(f)            Authentication
of Definitive Securities in Absence of Depository.  If at any time:


 


(i)         the Depository for the Securities notifies
the Issuer that the Depository is unwilling or unable to continue as Depository
for the Global Securities and a successor Depository for the Global Securities
is not appointed by the Issuer within 90 days after delivery of such notice; or


 


(ii)        the Issuer, in its sole discretion,
notify the Trustee in writing that it elects to cause the issuance of
Definitive Securities under this Indenture,


 


then the Issuer will execute, and the Trustee, upon receipt of an
Officers’ Certificate requesting the authentication and delivery of Definitive
Securities, will authenticate and make available for delivery Definitive
Securities, in an aggregate principal amount equal to the principal amount of
the Global Securities, in exchange for such Global Securities.


 


(g)           Legends.  Each Security certificate evidencing the
Global Securities and the Definitive Securities (and all Securities 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 THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER.  BY ITS ACQUISITION OF
THE SECURITIES OR OF A BENEFICIAL INTEREST THEREIN, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON, IS NOT


 


27





















 


ACQUIRING THIS NOTE FOR THE ACCOUNT OR
BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN
INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A) (1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT).  THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(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, (d) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $100,000, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED IN THE CASE OF (d) UPON
DELIVERY OF A TRANSFEREE LETTER OF REPRESENTATION AND IN THE CASE OF (b), (c) AND
(d) UPON AN OPINION OF COUNSEL IF THE ISSUER OR REGISTRAR SO REQUEST), (2) TO
THE ISSUER OR A SUBSIDIARY THEREOF, OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT 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.  THESE SECURITIES MAY BE TRANSFERRED ONLY
IN COMPLIANCE WITH APPLICABLE GAMING LAWS.”


 


(h)           Reg
S Temporary Global Security Legend.


 


To the extent required by the Applicable
Procedures, each Reg S Temporary Global Security shall bear a legend in
substantially the following form:


 


28





















 


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


 


(i)            Cancellation
and/or Adjustment of Global Security. 
At such time as all beneficial interests in a Global Security have
either been exchanged for Definitive Securities, redeemed, repurchased or
cancelled, such Global Security shall be returned to or retained and cancelled
by the Trustee.  At any time prior to
such cancellation, if any beneficial interest in a Global Security is exchanged
for Definitive Securities, redeemed, repurchased or cancelled, the principal
amount of Securities represented by such Global Security shall be reduced and
an endorsement shall be made on such Global Security, by the Trustee or the Securities
Custodian, at the direction of the Trustee, to reflect such reduction.


 


(j)            Obligations
with respect to Transfers and Exchanges of Definitive Securities.


 


(i)         To permit registrations of transfers
and exchanges, the Issuer shall execute and the Trustee shall authenticate
Definitive Securities and Global Securities at the Registrar’s or co-Registrar’s
request.


 


(ii)        No service charge shall be made for any
registration of transfer or exchange, but the Issuer may require payment of a
sum sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer taxes,
assessments, or similar governmental charge payable upon exchanges or transfers
pursuant to Section 2.2, 2.10, 3.8, 4.13, 9.5 or 10.1).


 


(iii)       Except for a redemption of Securities
pursuant to Section 3.2 or upon an order of any Gaming Authority, the
Registrar or co-Registrar shall not be required to register the transfer of or
exchange of (a) any Definitive Security selected for redemption in whole
or in part pursuant to Article III, except the unredeemed portion of any
Definitive Security being redeemed in part, or (b) any Security for a
period beginning 15 days before the mailing of a notice of an offer to
repurchase pursuant to Article X or Section 4.13 hereof or a notice
of redemption of Securities pursuant to Article III hereof and ending at
the close of business on the day of such mailing or (c) to register the
transfer of or exchange of any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in part.


 


29





















 


(iv)       The Trustee shall have no obligation or
duty to monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security other than to require delivery of
such certificates and other documentation or evidence as expressly required by,
and to do so if and when expressly required by the terms of, this Indenture,
and to examine the same to determine substantial compliance as to form with the
express requirements hereof.


 


Section 2.7             Replacement Securities.


 


If a mutilated Security is surrendered to the
Trustee or if the Holder of a Security claims and submits an affidavit or other
evidence, satisfactory to the Trustee, to the Trustee to the effect that the
Security has been lost, destroyed or wrongfully taken, the Issuer shall issue and
the Trustee shall authenticate a replacement Security if the Trustee’s
requirements are met.  If required by the
Trustee or the Issuer, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of the Issuer and the Trustee, to protect
the Issuer, the Trustee or any Agent from any loss which any of them may suffer
if a Security is replaced.  The Issuer
may charge such Holder for their reasonable, out-of-pocket expenses in
replacing a Security.


 


Every replacement Security is an additional
obligation of the Issuer.


 


Section 2.8             Outstanding Securities.


 


Securities outstanding at any time are all
the Securities that have been authenticated by the Trustee except those
cancelled by it, those delivered to it for cancellation, those reductions in
the interest in a Global Security effected by the Trustee hereunder and those
described in this Section 2.8 as not outstanding.  A Security does not cease to be outstanding
because the Issuer or an Affiliate of the Issuer holds the Security, except as
provided in Section 2.9.


 


If a Security is replaced pursuant to Section 2.7
(other than a mutilated Security surrendered for replacement), such Security,
together with the Guarantee of that particular Security endorsed thereon,
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Security is held by a bona  fide purchaser.  A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7.


 


If on a Redemption Date or the Maturity Date
the Paying Agent (other than the Issuer or an Affiliate of the Issuer) holds
cash sufficient to pay all of the principal and interest (and Liquidated
Damages, if any) due on the Securities payable on that date and payment of the
Securities called for redemption is not otherwise prohibited, then on and after
that date such Securities cease to be outstanding and interest on them ceases
to accrue.


 


Section 2.9             Treasury Securities.


 


In determining whether the Holders of the
required principal amount of Securities have concurred in any direction,
amendment, supplement, waiver or consent, Securities owned


 


30





















 


by the Issuer, any Guarantor and Affiliates of the Issuer or of any Guarantor
shall be disregarded, except that, for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, amendment,
supplement, waiver or consent, only Securities that a Trust Officer of the
Trustee actually knows are so owned shall be disregarded.


 


Section 2.10           Temporary Securities.


 


Until definitive Securities are ready for
delivery, the Issuer may prepare, the Guarantors shall endorse and the Trustee
shall authenticate temporary Securities. 
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Issuer reasonably and in good faith
considers appropriate for temporary Securities. 
Without unreasonable delay, the Issuer shall prepare, the Guarantors
shall endorse and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities.  Until
so exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as permanent Securities authenticated and
delivered hereunder.


 


Notwithstanding the other provisions of this Article II,
a beneficial interest in the Reg S Temporary Global Security may not be (A) exchanged
for a Definitive Security prior to (x) the expiration of the Distribution
Compliance Period (unless such exchange is effected by the Issuer, does not
require an investment decision on the part of the holder thereof and does not
violate the provisions of Regulation S) and (y) the receipt by the Registrar of
any certificates identified by the Issuer or its counsel to be required
pursuant to Rule 903(c)(3)(B) under the Securities Act or (B) transferred
to a Person who takes delivery thereof in the form of a Definitive Security
prior to the events set forth in clause (A) above or unless the transfer
is pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 903 or Rule 904.


 


Section 2.11           Cancellation.


 


The Issuer at any time may deliver Securities
to the Trustee for cancellation.  The
Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for transfer, exchange or payment.  The Trustee, or at the direction of the
Trustee, the Registrar or the Paying Agent (other than the Issuer or an
Affiliate of the Company), and no one else, shall cancel and, at the written
direction of the Issuer, shall dispose of all Securities surrendered for
transfer, exchange, payment or cancellation in accordance with its customary
procedures.  Subject to Section 2.7,
the Issuer may not issue new Securities to replace Securities it has paid or
delivered to the Trustee for cancellation. 
No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section 2.11, except as expressly
permitted in the form of Securities and as permitted by this Indenture.


 


Section 2.12           Defaulted Interest.


 


If the Issuer default in a payment of
interest (and Liquidated Damages, if any) on the Securities, the Issuer shall
pay the defaulted interest (and Liquidated Damages, if any), plus (to the
extent lawful) interest on the defaulted interest (and Liquidated Damages, if
any), to the persons who are Holders on a Record Date (or at the Issuer’s
option a subsequent special record date) which date shall be the fifteenth day
next preceding the date fixed by the Issuer for the


 


31





















 


payment of defaulted interest, whether or not such day is a Business
Day, unless the Trustee fixes another record date.  At least 15 days before the subsequent
special record date, the Issuer shall mail to each Holder with a copy to the
Trustee a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest (and Liquidated Damages, if any), and
interest payable on such defaulted interest (and Liquidated Damages), if any,
to be paid.


 


Section 2.13           CUSIP Numbers.


 


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


 


Section 2.14           Issuance of Additional Securities.


 


The Issuer may, subject to Section 4.10
hereof, and applicable law, issue Additional Securities under this Indenture
which shall have identical terms as the Original Securities issued on the Issue
Date other than with respect to the date of issuance and issue price.  The Original Securities, the Series B
Securities, any Additional Securities and any Securities issued in exchange
therefor or in replacement thereof shall be treated as a single class for all
purposes under this Indenture.


 


With respect to any Additional Securities,
the Issuer shall set forth in a Board Resolution and an Officers’ Certificate,
a copy of each of which shall be delivered to the Trustee, the following
information:


 


(1)           the
aggregate principal amount of such Additional Securities to be authenticated
and delivered pursuant to this Indenture;


 


(2)           the
issue price, the issue date and the CUSIP number (if then generally in use) of
such Additional Securities, if any; provided,
however, that no Additional Securities may be issued at a price that
would cause such Additional Securities to have “original issue discount” within
the meaning of Section 1273 of the Code; and


 


(3)           whether
such Additional Securities shall be Transfer Restricted Securities.


 


Such Officers’ Certificate shall certify that
the issuance of such Additional Securities complies with Section 4.10
hereof.


 


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ARTICLE III


 


REDEMPTION


 


Section 3.1             Right of Redemption.


 


Redemption of Securities shall be made only
in accordance with this Article III. 
At its election, the Issuer may redeem the Securities in whole or in
part, at any time or from time to time on or after October 1, 2010, at the
Redemption Prices specified under the caption “Redemption,” in the Form of
Note attached as Exhibit A hereto, plus accrued but unpaid interest
(and Liquidated Damages, if any) to the Redemption Date.  Except as provided in this paragraph, the
next following paragraph, Section 3.2 and paragraph 5 of the Securities,
the Securities may not otherwise be redeemed at the option of the Company.


 


On or prior to October 1, 2008, upon one
or more Qualified Equity Offerings, up to 35% of the aggregate principal amount
of the Securities may be redeemed at the option of the Issuer with cash from
the Net Cash Proceeds of such Qualified Equity Offering, at 106.75% of the
principal amount thereof (subject to the right of Holders of record on a Record
Date to receive interest due on an Interest Payment Date that is on or prior to
such Redemption Date), together with accrued and unpaid interest (and
Liquidated Damages, if any) to the date of redemption, provided, that such redemption shall occur
within 60 days of such Qualified Equity Offering.


 


The Securities may be redeemed at the option
of the Issuer, in whole but not in part, upon not less than 30 nor more than 60
days’ notice given as provided herein, at any time at a redemption price equal
to the principal amount thereof, plus accrued and unpaid interest, if any,
thereon, plus Liquidated Damages, if any, to the date fixed for redemption if,
as a result of any change in or amendment to the laws, treaties, rulings or
regulations of The Bahamas, or of any political subdivision or taxing authority
thereof or therein, or any change in the official position of the applicable
taxing authority regarding the application or interpretation of such laws,
treaties, rulings or regulations (including a holding, judgment or order of a
court of competent jurisdiction) or any execution thereof or amendment thereto,
which is enacted into law or otherwise becomes effective after the date of the
Offering Memorandum, the Issuer is or would be required on the next succeeding
Interest Payment Date to pay Additional Amounts on the Securities as a result
of the imposition of a Bahamian tax and the payment of such Additional Amounts
cannot be avoided by the use of any reasonable measures available to the Issuer
which do not cause the Issuer to incur any material costs.  The Issuer shall also pay to holders on the
redemption date any Additional Amounts then due and which will become due as a
result of the redemption or would otherwise be payable.


 


Prior to the publication of any notice of
redemption in accordance with the foregoing, the Issuer shall deliver to the
Trustee an Officers’ Certificate stating that (i) the payment of
Additional Amounts cannot be avoided by the use of any reasonable measures
available to the Issuer which do not cause the Issuer to incur any material
costs and (ii) the Issuer is entitled to effect such redemption based on
the written, substantially unqualified Opinion of Counsel, which counsel shall
be reasonably acceptable to the Trustee, that the Issuer has or will become
obligated to pay Additional Amounts as a result of such change or
amendment.  The notice, once delivered by
the Issuer to the Trustee, will be irrevocable.


 


33


















 


Section 3.2             Redemption Pursuant to Gaming Laws.


 


If a Holder or a beneficial owner of a Note
is required by any Gaming Authority to be found suitable to hold the
Securities, the Holder shall apply for a finding of suitability within 30 days
after a Gaming Authority request or sooner if so required by such Gaming
Authority.  The applicant for a finding
of suitability must pay all costs of the investigation for such finding of
suitability.  If a Holder or beneficial
owner is required to be found suitable to hold the Securities and is not found
suitable by a Gaming Authority, the Holder shall, to the extent required by
applicable law, dispose of his Securities within 30 days or within that time
prescribed by a Gaming Authority, whichever is earlier.  If the Holder fails to dispose of his
Securities within such time period, the Issuer may, at its option, redeem such
Holder’s Securities (a “Required Regulatory Redemption”) at, depending
on applicable law, (i) the principal amount thereof, together with accrued
and unpaid interest (and Liquidated Damages, if any) to the date of the finding
of unsuitability by a Gaming Authority, (ii) the amount that such Holder
paid for the Securities, (iii) the fair market value of the Securities, (iv) the
lowest of clauses (i), (ii) and (iii), or (v) such other amount as
may be determined by the appropriate Gaming Authority.


 


Section 3.3             Notices to Trustee.


 


If the Issuer elects to redeem Securities
pursuant to this Article III, it shall notify the Trustee in writing of
the date on which the Securities are to be redeemed (“Redemption Date”) and the
principal amount of Securities to be redeemed and whether it wants the Trustee
to give notice of redemption to the Holders in the name of and at the expense
of the Issuer.


 


If the Issuer elects to reduce the principal
amount of Securities to be redeemed pursuant to Paragraph 5 of the Securities
by crediting against any such redemption Securities it has not previously
delivered to the Trustee for cancellation, it shall so notify the Trustee of
the amount of the reduction and deliver such Securities with such notice.


 


The Issuer shall give each notice to the
Trustee provided for in this Section 3.3 at least 45 days (unless a
shorter period is acceptable to the Trustee) before the Redemption Date (unless
a different notice period shall be required by a Gaming Authority with respect
to a Required Regulatory Redemption).


 


Section 3.4             Selection of Securities to Be Redeemed.


 


If less than all of the Securities are to be
redeemed pursuant to Paragraph 5 thereof (except in the case of a Required
Regulatory Redemption), the Trustee shall select from among such Securities to
be redeemed on a pro rata basis,
or by lot or by such other method as the Trustee shall determine to be fair and
appropriate and in such manner as complies with any applicable legal and stock
exchange requirements.


 


The Trustee shall make the selection from the
Securities outstanding and not previously called for redemption and shall
promptly notify the Issuer in writing of the Securities selected for redemption
and, in the case of any Security selected for partial redemption, the principal
amount thereof to be redeemed. 
Securities in denominations of $1,000 may be redeemed only in whole.  The Trustee may select for redemption portions
(equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000.  Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called
for redemption.


 


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Section 3.5             Notice of Redemption.


 


At least 30 days but not more than 60 days
before a Redemption Date, the Issuer shall mail a notice of redemption by first
class mail, postage prepaid, to each Holder whose Securities are to be redeemed
(unless a different notice period shall be required by any Gaming
Authority).  At the Issuer’s request, the
Trustee shall give the notice of redemption in the Issuer’s name and at the
Issuer’s expense, provided that
the Issuer gives the Trustee at least five (5) days prior written notice
of such requested action.  Each notice
for redemption shall identify the Securities to be redeemed and shall state:


 


(1)             the Redemption Date;


 


(2)             the Redemption Price, including the
amount of accrued but unpaid interest (and Liquidated Damages, if any) to be
paid upon such redemption;


 


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


 


(4)             that Securities called for
redemption must be surrendered to the Paying Agent at the address specified in
such notice to collect the Redemption Price;


 


(5)             that, unless (a) the Issuer
defaults in its obligation to deposit cash with the Paying Agent in accordance
with Section 3.7 hereof, interest on Securities called for redemption
ceases to accrue on and after the Redemption Date and the only remaining right
of the Holders of such Securities is to receive payment of the Redemption
Price, including accrued but unpaid interest (and Liquidated Damages, if any),
upon surrender to the Paying Agent of the Securities called for redemption and
to be redeemed;


 


(6)             if any Security is being redeemed
in part, the portion of the principal amount, equal to $1,000 or any integral
multiple thereof, of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion
thereof will be issued;


 


(7)             if less than all the Securities are
to be redeemed, the identification of the particular Securities (or portion
thereof) to be redeemed, as well as the aggregate principal amount of such
Securities to be redeemed;


 


(8)             the CUSIP number of the Securities
to be redeemed; and


 


(9)             that the notice is being sent
pursuant to this Section 3.5 and pursuant to the redemption provisions of
Paragraph 5 of the Securities.


 


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Section 3.6             Effect of Notice of Redemption.


 


Once notice of redemption is mailed in
accordance with Section 3.5, Securities called for redemption become due
and payable on the Redemption Date and at the Redemption Price, including
accrued but unpaid interest (and Liquidated Damages, if any).  Upon surrender to the Trustee or Paying
Agent, such Securities called for redemption shall be paid at the Redemption
Price, including interest (and Liquidated Damages, if any), if any, accrued to
and unpaid on the Redemption Date; provided
that if the Redemption Date is after a regular Record Date and on or prior to
the Interest Payment Date, the accrued interest (and Liquidated Damages, if
any) shall be payable to the Holder of the redeemed Securities registered on
the relevant Record Date; and provided,
further, that if a Redemption Date is a Legal Holiday, payment shall
be made on the next succeeding Business Day and no interest shall accrue for
the period from such Redemption Date to such succeeding Business Day.


 


Section 3.7             Deposit of Redemption Price.


 


Prior to 10:00 a.m. on the Redemption
Date, the Issuer shall deposit with the Paying Agent (other than the Issuer or
an Affiliate of the Issuer) cash sufficient to pay the Redemption Price of,
including accrued but unpaid interest on (and Liquidated Damages, if any), all
Securities to be redeemed on such Redemption Date (other than Securities or
portions thereof called for redemption on that date that have been delivered by
the Issuer to the Trustee for cancellation). 
The Paying Agent shall promptly return to the Issuer any cash so
deposited which is not required for that purpose upon the written request of
the Issuer.


 


If the Issuer comply with the preceding
paragraph and the other provisions of this Article III and payment of the
Securities called for redemption is not otherwise prohibited, interest on the
Securities to be redeemed will cease to accrue on the applicable Redemption
Date, whether or not such Securities are presented for payment.  Notwithstanding anything herein to the
contrary, if any Security surrendered for redemption in the manner provided in
the Securities shall not be so paid upon surrender for redemption because of
the failure of the Issuer to comply with the preceding paragraph and the other
provisions of this Article III, interest shall continue to accrue and be
paid from the Redemption Date until such payment is made on the unpaid
principal, and, to the extent lawful, on any interest not paid on such unpaid
principal, in each case at the rate and in the manner provided in Section 4.1
hereof and the Securities.


 


Section 3.8             Securities Redeemed in Part.


 


Upon surrender of a Security that is to be
redeemed in part, the Issuer shall execute and the Trustee shall authenticate
and deliver to the Holder, without service charge, a new Security or Securities
equal in principal amount to the unredeemed portion of the Security
surrendered.


 


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ARTICLE IV


 


COVENANTS


 


Section 4.1             Payment of
Securities.


 


The Issuer shall pay the principal of and
interest (and Liquidated Damages, if any) on the Securities on the dates and in
the manner provided in the Securities and this Indenture.  An installment of principal of or interest
(and Liquidated Damages, if any) on the Securities shall be considered paid on
the date it is due if the Trustee or Paying Agent (other than the Issuer or an
Affiliate of the Issuer) holds for the benefit of the Holders, on or before
10:00 a.m. New York City time on that date, cash deposited and designated
for and sufficient to pay the installment.


 


The Issuer shall pay interest on overdue
principal and on overdue installments of interest (and Liquidated Damages, if
any) at the rate specified in the Securities compounded semi-annually, to the
extent lawful.


 


Section 4.2             Maintenance of Office or Agency.


 


The Issuer and the Guarantors shall maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Issuer and the Guarantors in respect of the Securities
and this Indenture may be served.  The
Issuer and the Guarantors shall give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency.  If at any time the Issuer and the Guarantors
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 13.2.


 


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


 


Section 4.3             Limitation on Restricted Payments.


 


The Issuer and the Guarantors shall not, and
shall not permit any of their Subsidiaries to, individually or collectively,
directly or indirectly, make any Restricted Payment if, after giving effect to
such Restricted Payment on a pro forma
basis, (i) a Default or an Event of Default shall have occurred and be
continuing or (ii) Kerzner International is not permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio
contained in Section 4.10.


 


The immediately preceding paragraph, however,
will not prohibit (1) a Qualified Exchange, (2) the payment of any
dividend on Capital Stock within 60 days after the date of its declaration if
such dividend could have been made on the date of such declaration in
compliance with the foregoing provisions, (3) the redemption or repurchase
of any Capital Stock or Indebtedness of the Issuer or its Subsidiaries (other
than Capital Stock or Indebtedness held by


 


37





















 


Permitted Holders), if the holder or beneficial owner of such Capital
Stock or Indebtedness is required to be found suitable by any Gaming Authority
to own or vote any such security and is found unsuitable by any such Gaming
Authority to so own or vote such security, (4) any Investment Guarantee
Payments, and (5) repurchases of Equity Interests of the Issuer or any
such Guarantor, as applicable, deemed to occur upon exercise of stock options
if such Equity Interests represent a portion of the exercise price of such
options.


 


For purposes of this Section 4.3, the
amount of any Restricted Payment made or returned, if other than in cash, shall
be the Fair Market Value thereof, as determined in the good faith reasonable
judgment of the Board of Directors of Kerzner International, unless stated
otherwise, at the time made or returned, as applicable.


 


Section 4.4             Corporate Existence.


 


Subject to Article V, the Issuer and the
Guarantors shall do or cause to be done all things necessary to preserve and
keep in full force and effect their corporate or other existence and the
corporate or other existence of each of their Subsidiaries in accordance with
the respective organizational documents of each of them and the rights (charter
and statutory) and corporate or other franchises of the Issuer and the
Guarantors and each of their Subsidiaries; provided,
however, that neither the Issuer nor any of the Guarantors shall be
required to preserve, with respect to itself, any right or franchise, and with
respect to any of their Subsidiaries, any such existence, right or franchise,
if (a) the Board of Directors of Kerzner International shall determine
reasonably and in good faith that the preservation thereof is no longer
desirable in the conduct of the business of the Issuer and (b) the loss
thereof is not disadvantageous in any material respect to the Holders.


 


Section 4.5             Payment of Taxes and Other Claims.


 


The Issuer and the Guarantors shall, and
shall cause each of their Subsidiaries to, pay or discharge or cause to be paid
or discharged, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Issuer,
any Guarantor or any of their Subsidiaries or properties and assets of the
Issuer, any Guarantor or any of their Subsidiaries and (ii) all lawful
claims, whether for labor, materials, supplies, services or anything else,
which have become due and payable and which by law have or may become a Lien
upon the property and assets of the Issuer, any Guarantor or any of their
Subsidiaries; provided, however,
that neither the Issuer nor any Guarantor shall be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which disputed amounts adequate reserves have
been established in accordance with GAAP.


 


Section 4.6             Compliance Certificate; Notice of
Default.


 


(a)           The
Issuer shall deliver to the Trustee within 120 days after the end of their
fiscal year an Officers’ Certificate, one of the signers of which shall be the
principal executive, financial or accounting officer of the Issuer, complying
(whether or not required) with Section 314(a)(4) of the TIA and
stating that a review of its activities and the activities of its


 


38





















 


Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Issuer has kept, observed, performed and fulfilled its obligations (without
regard to notice requirements or grace periods) under this Indenture and further
stating, as to each such Officer signing such certificate, whether or not the
signer knows of any failure by the Issuer, any Guarantor or any Subsidiary of
the Issuer or any Guarantor to comply with any conditions or covenants in this
Indenture and, if such signer does know of such a failure to comply, the
certificate shall describe such failure with particularity.  The Officers’ Certificate shall also notify
the Trustee should the relevant fiscal year end on any date other than the
current fiscal year end date.


 


(b)           The
Issuer shall, so long as any of the Securities are outstanding, deliver to the
Trustee, immediately upon becoming aware of any Default or Event of Default
under this Indenture, an Officers’ Certificate specifying such Default or Event
of Default and what action the Issuer is taking or propose to take with respect
thereto.  The Trustee shall not be deemed
to have knowledge of a Default or an Event of Default unless one of its Trust
Officers receives notice of the Default giving rise thereto from the Issuer or
any of the Holders.


 


Section 4.7             Reports.


 


Whether or not Kerzner International is
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, Kerzner International shall deliver to the Trustee and to each
Holder within 15 days after it is or would have been (if it were subject to
such reporting obligations) required to furnish such with the SEC, annual and
quarterly financial statements substantially equivalent to financial statements
that would have been included in reports filed with the SEC, if Kerzner
International were subject to the requirements of Section 13 or 15(d) of
the Exchange Act, including, with respect to annual information only, a report
thereon by Kerzner International’s certified independent public accountants as
such would be required in such reports to the SEC, and, together with a
management’s discussion and analysis of financial condition and results of
operations which would be so required and, to the extent permitted by the
Exchange Act or the SEC, file with the SEC the annual, quarterly and other
reports which it is or would have (if it were subject to such reporting
obligations) been required to file with the SEC.  Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee’s
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Issuer’s compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).


 


Section 4.8             Waiver of Stay, Extension or Usury Laws.


 


The Issuer and each Guarantor covenants (to
the extent that it may lawfully do so) that it will not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law wherever enacted
which would prohibit or forgive the Issuer or any Guarantor from paying all or
any portion of the principal of or interest (and Liquidated Damages, if any) on
the Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that they may lawfully do so) the Issuer and
each Guarantor hereby expressly waives all benefit or advantage


 


39





















 


of any such law insofar as such law applies to the Securities, and
covenants that it shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.


 


Section 4.9             Limitation on Transactions with
Affiliates.


 


Neither the Issuer nor any of its
Subsidiaries will, on or after the Issue Date, enter into or suffer to exist
any contract, agreement, arrangement or transaction with any Affiliate (an “Affiliate
Transaction”), or any series of related Affiliate Transactions (other than
Exempted Affiliate Transactions) (i) unless it is determined that the
terms of such Affiliate Transaction are fair and reasonable to Kerzner
International or such Subsidiary, as applicable, and no less favorable to
Kerzner International or such Subsidiary, as applicable, than could have been
obtained in an arm’s length transaction with a non-Affiliate and (ii) if
involving consideration to either party in excess of $20 million, unless such
Affiliate Transaction(s) has been approved by a majority of the members of the
Board of Directors of Kerzner International that are disinterested in such
transaction and (iii) if involving consideration to either party in excess
of $50 million, unless in addition to the foregoing, Kerzner International,
prior to the consummation thereof, obtains a written favorable opinion as to
the fairness of such transaction to Kerzner International from a financial
point of view from an independent investment banking firm of national
reputation.


 


Section 4.10           Limitation on
Incurrence of Additional Indebtedness and Disqualified Capital Stock.


 


Except as set forth below in this Section 4.10,
the Issuer and the Guarantors will not, and will not permit any of their
Subsidiaries to, individually or collectively, directly or indirectly, issue,
assume, guaranty, incur, become directly or indirectly liable with respect to
(including as a result of an Acquisition), or otherwise become responsible for,
contingently or otherwise (individually and collectively, to “incur” or,
as appropriate, an “incurrence”), any Indebtedness or any Disqualified
Capital Stock (including Acquired Indebtedness), except Permitted
Indebtedness.  Notwithstanding the
foregoing, if (i) no Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect on a pro forma basis to, such incurrence of
Indebtedness or Disqualified Capital Stock and (ii) on the date of such
incurrence (the “Incurrence Date”), the Consolidated Coverage Ratio of
Kerzner International for the Reference Period immediately preceding the
Incurrence Date, after giving effect on a pro
forma basis to such incurrence of such Indebtedness or Disqualified
Capital Stock and, to the extent set forth in the definition of Consolidated
Coverage Ratio, the use of proceeds thereof, would be at least 2.0 to l (the “Debt
Incurrence Ratio”), then the Issuer and the Guarantors may incur such
Indebtedness or Disqualified Capital Stock.


 


Acquired Indebtedness shall be deemed to have
been incurred at the time the person who incurred such Indebtedness becomes a
Subsidiary of the Issuer (including upon designation of any Unrestricted
Subsidiary or other person as a Subsidiary) or is merged with or into or
consolidated with the Issuer or a Subsidiary of the Issuer, as applicable.  Upon each incurrence of Indebtedness, the
Issuer may designate pursuant to which provision of this Section 4.10
(including pursuant to which clause of the definition of “Permitted
Indebtedness”) such Indebtedness is being incurred and the Issuer may subdivide
an amount of Indebtedness and


 


40





















 


designate more than one provision pursuant to which such amount of
Indebtedness is being incurred and such Indebtedness shall not be deemed to
have been incurred or outstanding under any other provision of this Section 4.10.


 


Section 4.11           Limitation on
Dividends and Other Payment Restrictions Affecting Subsidiaries.


 


The Issuer and the Guarantors will not, and
will not permit any of their Subsidiaries to, individually or collectively,
directly or indirectly, create, assume or suffer to exist any consensual
restriction on the ability of any Subsidiary of Kerzner International or such
Guarantors to pay dividends or make other distributions to or on behalf of, or
to pay any obligation to or on behalf of, or otherwise to transfer assets or
property to or on behalf of, or make or pay loans or advances to or on behalf
of, Kerzner International, the Guarantors or any Subsidiary of any of them, or
to guaranty the Securities, except (a) restrictions imposed by the
Securities or herein or by other Indebtedness (which may also be guaranteed by
the Guarantors) ranking pari passu
with the Securities or the Guarantees, as applicable, provided that such restrictions are no
more restrictive taken as a whole than those imposed by the Indenture and the
Securities, (b)  restrictions imposed by applicable law, (c) any
restriction imposed by Indebtedness incurred under the Credit Agreement or
other Senior Debt incurred pursuant to Section 4.10 hereof; provided that such restriction or
requirement is no more restrictive than that imposed by the Credit Agreement as
of the Issue Date, (d) any restriction imposed by Indebtedness incurred by
any Guarantor pursuant to Section 4.10 or Section 4.14; provided, that a majority of the members
of the Board of Directors of Kerzner International and such Guarantor shall
have determined in good faith that (i) such restriction or requirement is
no more restrictive than that imposed by the Credit Agreement as of the Issue
Date or (ii) such restriction or requirement will not, individually or
together with such other restrictions or requirements imposed on any other
Guarantor, be reasonably expected to result (except upon a default or event of
default under such Indebtedness) in the Issuer not having sufficient funds to
make scheduled payments of cash interest on the Securities when due, (e) restrictions
under any Acquired Indebtedness not incurred in violation of this Indenture or
any agreement relating to any property, asset, or business acquired by Kerzner
International or any of its Subsidiaries, which restrictions in each case
existed at the time of acquisition, were not put in place in connection with or
in anticipation of such acquisition and are not applicable to any person, other
than the person acquired, or to any property, asset or business, other than the
property, assets and business so acquired, (f) restrictions with respect
solely to a Subsidiary of Kerzner International imposed pursuant to a binding
agreement that has been entered into for the sale or disposition of all or
substantially all of the Equity Interests or assets of such Subsidiary, provided such restrictions apply solely to
the Equity Interests or assets of such Subsidiary that are being sold, (g) restrictions
on transfer contained in FF&E Indebtedness incurred pursuant to paragraph (c) of
the definition of “Permitted Indebtedness,” provided such restrictions relate
only to the transfer of the property acquired with the proceeds of such
FF&E Indebtedness, and (h) in connection with and pursuant to
Permitted Refinancings, replacements of restrictions imposed pursuant to
clauses (a), (c), (d) or (e) of this paragraph that are not more
restrictive than those being replaced and do not apply to any other person or
assets than those that would have been covered by the restrictions in the
Indebtedness so refinanced. Notwithstanding the foregoing, neither (a) customary
provisions restricting subletting or assignment of any lease, license or
contract entered into in the ordinary course of business, consistent with
industry practice, nor (b) Liens permitted


 


41





















 


under the terms of this Indenture shall in and of themselves be
considered a restriction on the ability of the applicable Subsidiary to
transfer such agreement or assets, as the case may be.


 


Section 4.12           Limitation on
Liens Securing Indebtedness.


 


The Issuer and the Guarantors will not, and
will not permit any of their Subsidiaries to, individually or collectively,
create, incur, assume or suffer to exist any Lien of any kind, other than
Permitted Liens, upon any of their respective assets now owned or acquired on
or after the date of this Indenture or upon any income or profits therefrom
securing any Indebtedness of the Issuer, the Guarantors or any of their
Subsidiaries other than Senior Debt, unless the Issuer and Guarantors each
provide, and cause their Subsidiaries to provide, concurrently therewith, that
the Securities are equally and ratably so secured, provided that,
if such Indebtedness is Subordinated Indebtedness, the Lien securing such
Subordinated Indebtedness shall be subordinate and junior to the Lien securing
the Securities with the same relative priority as such Subordinated
Indebtedness shall have with respect to the Securities.


 


Section 4.13           Limitation on
Sale of Assets and Subsidiary Stock.


 


The Issuer and the Guarantors will not, and
will not permit any of their Subsidiaries to, individually or collectively, in
one or a series of related transactions, convey, sell, transfer, assign or
otherwise dispose of, directly or indirectly, any of its property, business or
assets, including by merger or consolidation, and including any sale or other
transfer or issuance of any Equity Interests of any Subsidiary of Kerzner
International, whether by Kerzner International or a Subsidiary of Kerzner
International or through the issuance, sale or transfer of Equity Interests by
a Subsidiary of Kerzner International, and including any sale and leaseback transaction
(an “Asset Sale”), unless (i)(a) within 360 days after the date of
such Asset Sale, the Net Cash Proceeds therefrom (the “Asset Sale Offer
Amount”) are applied to the optional redemption of the Securities in
accordance with the terms of this Indenture or to the repurchase of the
Securities and other Indebtedness of the Issuer on a parity with the Securities
with similar provisions requiring the Issuer to make an offer to purchase such
Indebtedness with the proceeds from such Asset Sale pursuant to a cash offer (pro rata in proportion to the respective
principal amounts (or accreted values in the case of Indebtedness issued with
an original issue discount) of the Securities and such other Indebtedness then
outstanding) pursuant to an irrevocable, unconditional cash offer (the “Asset
Sale Offer”) to repurchase Securities at a purchase price of 100% of the
principal amount (or accreted value in the case of Indebtedness issued with an
original issue discount) with respect to each such series of Indebtedness (the “Asset
Sale Offer Price”) together with accrued and unpaid interest and Liquidated
Damages, if any, to the date of payment, made within 540 days of such Asset
Sale or (b) within 540 days following such Asset Sale, the Asset Sale
Offer Amount is (1) invested in assets and property (other than notes,
bonds, obligation and securities) which in the good faith judgment of the Board
of Directors of Kerzner International will immediately constitute or be a part
of a Related Business of Kerzner International or such Subsidiary (if it
continues to be a Subsidiary) immediately following such investment or (2) used
to permanently reduce Senior Debt (provided
that in the case of a revolving loan agreement or similar arrangement that
makes credit available, such commitment is so permanently reduced by such
amount), (ii) no more than the greater of (A) $20 million or (B) 15%
of the total consideration for such Asset Sale or series of related Asset Sales
consists of consideration other than cash or Cash Equivalents, provided however, that more than 15% of
the


 


42





















 


total consideration may consist of consideration other than cash or
Cash Equivalents if (A) the portion of such consideration that does not
consist of cash or Cash Equivalents consists of assets of a type ordinarily
used in the operation of a Related Business (including Capital Stock of a
person that becomes a wholly owned Subsidiary and that holds such assets) to be
used by the Issuer or a Subsidiary in the conduct of a Related Business, and (B) the
terms of such Asset Sale have been approved by a majority of the members of the
Board of Directors of Kerzner International having no personal stake in such
transaction, (iii) no Default or Event of Default shall have occurred and
be continuing at the time of, or would occur after giving effect, on a pro forma basis, to, such Asset Sale, and (iv) if
the value of the assets disposed of is at least $20 million, the Board of
Directors of Kerzner International determines in good faith that Kerzner
International or such Subsidiary, as applicable, receives fair market value for
such Asset Sale (as evidenced by a resolution of the Board of Directors).  Pending the final application of any Net Cash
Proceeds, the Issuer may temporarily reduce revolving credit borrowings or
otherwise invest the Net Cash Proceeds in any manner that is not prohibited by
this Indenture.


 


Notwithstanding the foregoing provisions of
the prior paragraph:


 


(i)            Kerzner
International and its Subsidiaries may, in the ordinary course of business,
convey, sell, transfer, assign or otherwise dispose of inventory acquired and
held for resale in the ordinary course of business;


 


(ii)           Kerzner
International and its Subsidiaries may convey, sell, transfer, assign or
otherwise dispose of assets pursuant to and in accordance with Article V;


 


(iii)          Kerzner
International and its Subsidiaries may sell or dispose of damaged, worn out or
other obsolete property in the ordinary course of business so long as such
property is no longer necessary for the proper conduct of the business of
Kerzner International or such Subsidiary, as applicable;


 


(iv)          Kerzner
International and any of its Subsidiaries may convey, sell, transfer, assign or
otherwise dispose of assets to Kerzner International or any Guarantor; and


 


(v)           Kerzner
International may sell Non-Strategic Real Estate.


 


An Asset Sale Offer may be deferred until the
accumulated Net Cash Proceeds from Asset Sales not applied to the uses set
forth in (i) above (the “Excess Proceeds”) exceeds $50 million and
that each Asset Sale Offer shall remain open for 20 Business Days following its
commencement (the “Asset Sale Offer Period”).  Upon expiration of the Asset Sale Offer
Period, the Issuer shall apply the Asset Sale Offer Amount plus an amount equal
to accrued and unpaid interest and Liquidated Damages, if any, to the purchase
of all Indebtedness properly tendered (on a pro
rata basis if the Asset Sale Offer Amount is insufficient to
purchase all Indebtedness so tendered) at the applicable Asset Sale Offer Price
(together with accrued and unpaid interest and Liquidated Damages, if
any).  To the extent that the aggregate
amount of Indebtedness tendered pursuant to an Asset Sale Offer is less than
the Asset Sale Offer Amount, the Issuer may use any remaining Net Cash Proceeds
for general corporate purposes as otherwise permitted by this Indenture and
following the consummation of each Asset Sale Offer the Excess Proceeds amount
shall be reset to zero.  For purposes of (ii) above,
total consideration received means the total


 


43





















 


consideration received for such Asset Sales minus the amount of (a) Senior
Debt assumed by a transferee which assumption permanently reduces the amount of
Indebtedness outstanding on the Issue Date or permitted pursuant to clause (a) or
(c) of the definition of Permitted Indebtedness (including that in the
case of a revolving loan agreement or similar arrangement that makes credit
available, such commitment is so reduced by such amount), (b) FF&E
Indebtedness secured solely by the assets sold and assumed by a transferee and (c) property
that within 30 days of such Asset Sale is converted into Cash or Cash
Equivalents.


 


All Net Cash Proceeds from an Event of Loss
shall be invested, used for prepayment of Senior Debt, or used to repurchase
Securities, all within the period and as otherwise provided above in clauses
(i)(a) or (i)(b) of the first paragraph of this Section 4.13.


 


Notice of an Asset Sale Offer shall be sent,
on or prior to the commencement of the Asset Sale Offer, by first-class mail,
by the Issuer to each Holder at its registered address, with a copy to the
Trustee.  The Asset Sale Offer shall
remain open for at least 20 Business Days following its commencement.  The notice to the Holders shall contain all
information, instructions and materials required by applicable law or otherwise
material to such Holders’ decision to tender Securities pursuant to the Asset
Sale Offer.  The notice, which (to the
extent consistent with this Indenture) shall govern the terms of an Asset Sale
Offer, shall state:


 


(1)             that the Asset Sale Offer is being
made pursuant to such notice and this Section 4.13;


 


(2)             the Asset Sale Offer Amount, the
Asset Sale Offer Price (including the amount of accrued but unpaid interest
(and Liquidated Damages, if any)), and the date of purchase;


 


(3)             that any Security or portion
thereof not tendered or accepted for payment will continue to accrue interest
if interest is then accruing;


 


(4)             that, unless the Issuer defaults in
depositing cash with the Paying Agent (which may not for purposes of this Section 4.13,
notwithstanding anything in this Indenture to the contrary, be the Issuer or
any Affiliate of the Issuer) in accordance with the last paragraph of this Section 4.13,
any Security, or portion thereof, accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Asset Sale Purchase Date;


 


(5)             that Holders electing to have a
Security, or portion thereof, purchased pursuant to an Asset Sale Offer will be
required to surrender their Security, with the form entitled “Option of Holder
to Elect Purchase” on the reverse of the Security completed, to the Paying
Agent (which may not for purposes of this Section 4.13, notwithstanding
any other provision of this Indenture, be the Issuer or any Affiliate of the
Issuer) at the address specified in the notice;


 


(6)             that Holders will be entitled to
withdraw their elections, in whole or in part, if the Paying Agent receives, prior
to the expiration


 


44





















 


of the Asset Sale Offer, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Securities the Holder is withdrawing and a statement containing a
facsimile signature and stating that such Holder is withdrawing his election to
have such principal amount of Securities purchased;


 


(7)             that if Indebtedness, including
Securities, in a principal amount in excess of the principal amount of Indebtedness,
including Securities, to be acquired pursuant to the Asset Sale Offer are
tendered and not withdrawn, the Issuer shall purchase Indebtedness, including
Securities on a pro rata basis
(with such adjustments as may be deemed appropriate by the Issuer so that only
Securities, in denominations of $1,000 or integral multiples of $1,000 shall be
acquired);


 


(8)             that Holders whose Securities were
purchased only in part will be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered; and


 


(9)             the circumstances and relevant
facts regarding such Asset Sales; and


 


(10)           the CUSIP Number, if any, of the
Securities.


 


The Issuer agrees that any Asset Sale Offer
shall be made in compliance with all applicable laws, rules, and regulations,
including, if applicable, Regulation 14E of the Exchange Act and the rules and
regulations thereunder and all other applicable United States Federal and state
securities laws, and any provisions of this Indenture which conflict with such
laws shall be deemed to be superseded by the provisions of such laws.


 


On or before the date of purchase, the Issuer
shall (i) accept for payment Indebtedness, including Securities, or
portions thereof properly tendered pursuant to the Asset Sale Offer (on a pro rata basis if required pursuant to
paragraph (7) above), (ii) deposit with the Paying Agent cash
sufficient to pay the Asset Sale Offer Price for all Securities or portions
thereof so accepted and (iii) deliver to the Trustee Securities so accepted
together with an Officers’ Certificate setting forth the Securities or portions
thereof being purchased by the Issuer. 
The Paying Agent shall promptly mail or deliver to Holders of Securities
so accepted payment in an amount equal to the Asset Sale Offer Price for such
Securities, and the Trustee shall promptly authenticate and mail or deliver to
such Holders a new Security equal in principal amount to any unpurchased
portion of the Security surrendered.  Any
Securities not so accepted shall be promptly mailed or delivered by the Issuer
to the Holder thereof.


 


Section 4.14           Limitation on
Layering Indebtedness.


 


The Issuer and the Guarantors will not,
individually or collectively, directly or indirectly, incur, or suffer to exist
any Indebtedness that is, or by its terms may become, subordinate in right of
payment to any other Indebtedness of the Issuer or any Guarantor unless such
Indebtedness, by its terms, is subordinated in right of payment to, or ranks pari passu with, the Securities or the
Guarantees, as applicable.


 


45





















 


Section 4.15           Intentionally
Omitted.


 


Section 4.16           Limitation on
Status as Investment Company.


 


Neither of Kerzner International nor any of
its Subsidiaries shall become required to be registered as an “investment
company” (as that term is defined in the Investment Company Act of 1940, as
amended), or otherwise become subject to regulation under the Investment
Company Act.


 


Section 4.17           Future
Subsidiary Guarantors.


 


The Issuer covenants and agrees that it shall
cause each person that becomes a Subsidiary of the Issuer to execute a
Guarantee in the form of Exhibit B hereto and shall cause such
Subsidiary to enter into a supplemental indenture for the purpose of jointly
and severally guaranteeing, irrevocably and unconditionally, on a senior
subordinated basis, the Issuer’s obligations to pay principal, premium and
interest (and Liquidated Damages, if any) on the Securities.


 


Section 4.18           Payment for
Consent.


 


Neither the Issuer nor any of its
Subsidiaries or Unrestricted Subsidiaries shall, directly or indirectly, pay or
cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder of any Securities for, or as an inducement to, any
consent, waiver or amendment of any of the terms or provisions of the Indenture
or the Securities unless such consideration is offered to be paid or agreed to
be paid to all Holders of the Securities which so consent, waive or agree to
amend in the time frame set forth in the solicitation documents relating to
such consent, waiver or agreement, which solicitation documents must be mailed
to all Holders of the Securities prior to the expiration of the solicitation.


 


Section 4.19           Suspended
Covenants.


 


During any period of time that (i) the
Securities have Investment Grade Status and (ii) no Default or Event of
Default has occurred and is continuing, the Issuer and its Subsidiaries will
not be subject to Sections 4.3, 4.10, 4.13 or clause (iii) of Section 5.1
(collectively, the “Suspended Covenants”).  In the event that the Issuer and its
Subsidiaries are not subject to the Suspended Covenants with respect to the
Securities for any period of time as a result of the preceding sentence and,
subsequently, either of the Rating Agencies withdraws its rating or assigns the
Securities a rating below the required Investment Grade Ratings, then the
Issuer and its Subsidiaries will thereafter again be subject to the Suspended
Covenants.


 


Section 4.20           Payment of
Additional Amounts.


 


The Issuer will, subject to the limitations
and exceptions set forth below, pay to each Holder such amounts (the “Additional
Amounts”) as may be necessary in order that every net payment or deemed
payment of (i) principal, premium, Liquidated Damages and interest, if
any, with respect to a Note, or (ii) net proceeds on the sale or exchange
of a Note, each after deduction or withholding for or on account of any taxes,
duties, assessments or governmental charges of whatever nature imposed or
levied by or on behalf of the government of The Bahamas


 


46





















 


or any authority thereof or therein having power to tax, will result in
the receipt by the Holders of the amounts that would have been received by them
had no such deduction or withholding been required; provided, however, that no such Additional Amounts shall be
payable in respect of any Note for:


 


(1)           any
tax, duty, assessment, or other governmental charge which would not have been
imposed but for the fact that such Holder:


 


(a)           is
a resident, domiciliary or national of, or engaged in business or maintains a
permanent establishment or was physically present in, The Bahamas or any
political subdivision thereof or therein or otherwise has some connection with
The Bahamas other than the mere ownership of, or receipt of payment under, such
Note;


 


(b)           presented
such Note for payment in The Bahamas or any political subdivision thereof or
therein, unless such Note could not have been presented for payment elsewhere;
or


 


(c)           presented
such Note for payment more than 30 days after the date on which the payment in
respect of such Note became due and payable or provided for, whichever is
later, except to the extent that the Holder would have been entitled to such
Additional Amounts if it had presented such Note for payment on any day within
such period of 30 days;


 


(2)           any
estate, inheritance, gift, sales, transfer, or similar tax, assessment or other
governmental charge or any taxes, duties, assessments or other governmental
charges that are payable otherwise than by deduction or withholding from
payments on the Securities;


 


(3)           any
tax, duty, assessment, or other governmental charge imposed on a Holder that is
not the beneficial owner of a Note to the extent that the beneficial owner
would not have been entitled to the payment of Additional Amounts had the
beneficial owner directly held the Note; or


 


(4)           any
combination of items (1), (2) and (3).


 


Whenever there is mentioned herein in any
context, the payment of the principal of or any premium or interest on, or in
respect of, any Note or the net proceeds received on the sale or exchange of
any Note, such mention shall be deemed to include mention of the payment of
Additional Amounts provided for in this Indenture to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to this Indenture.


 


Without limiting a Holder’s right to receive
payment of Additional Amounts, in the event that Additional Amounts actually
paid with respect to the Securities are based on rates of deduction or
withholding of Bahamian taxes in excess of the appropriate rate applicable to
the Holder of such Securities and, as a result thereof, such Holder of
Securities is entitled to make a claim for a refund or credit of such excess,
then such Holder of Securities shall, by accepting the Securities and receiving
a payment of Additional Amounts, be deemed to have assigned and transferred all
right, title and interest to any such claim for a refund or credit of such
excess to the Issuer.  By making such
assignment, the Holder of Securities makes no representation or


 


47





















 


warranty that the Issuer will be entitled to receive such claim for a
refund or credit and incurs no other obligation with respect thereto.


 


ARTICLE V


 


SUCCESSOR
CORPORATION


 


Section 5.1             Limitation
on Merger, Sale or Consolidation of Kerzner International.


 


Kerzner International will not, directly or
indirectly, consolidate with or merge with or into another person or sell,
lease, convey or transfer all or substantially all of its assets (computed on a
consolidated basis), whether in a single transaction or a series of related
transactions, to another person or group of affiliated persons or adopt a plan
of liquidation, unless (i) either (a) Kerzner International is the
resulting surviving or transferee entity (the “Successor Company”) or (b) the
Successor Company or, in the case of a plan of liquidation, the entity which
receives the greatest value from such plan of liquidation is a corporation
organized under the laws of the Commonwealth of The Bahamas, any member country
of the European Union, Canada or the United States, any state thereof or the
District of Columbia and expressly assumes by supplemental indenture all of the
obligations of Kerzner International in connection with the Securities and the
Indenture; (ii) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a pro
forma basis to such transaction; and (iii) immediately after
giving effect to such transaction on a pro
forma basis, the Successor Company or, in the case of a plan of
liquidation, the entity which receives the greatest value from such plan of
liquidation would immediately thereafter be permitted to incur at least $1.00
of additional Indebtedness pursuant to the Debt Incurrence Ratio contained in Section 4.10.


 


On or prior to the consummation of the
proposed transaction, Kerzner International shall have delivered to the Trustee
(x) an Officers’ Certificate, stating that such consolidation, merger, sale,
assignment, conveyance, transfer, lease or disposition and such supplemental
indenture executed in connection therewith comply with this Indenture and (y)
an Opinion of Counsel stating that the conditions in clause (i)(b) of the
first paragraph of this Section 5.1 have been satisfied, if
applicable.  The Trustee shall be
entitled to conclusively rely upon such Officers’ Certificate and Opinion of
Counsel.


 


For purposes of the foregoing, the transfer
(by lease, assignment, sale or otherwise) of all or substantially all of the
properties and assets of one or more Subsidiaries of Kerzner International
shall be deemed to be the transfer of all or substantially all of the
properties and assets of Kerzner International, if the interest of Kerzner
International in the properties and assets of such Subsidiary or Subsidiaries
constitutes all or substantially all of the properties and assets of Kerzner
International.


 


Section 5.2             Successor
Corporation Substituted.


 


Upon any consolidation or merger or any
transfer of all or substantially all of the assets of Kerzner International, or
consummation of a plan of liquidation in accordance with the foregoing, the
successor corporation formed by such consolidation or into which Kerzner


 


48





















 


International is merged or to which such transfer is made or, in the
case of a plan of liquidation, the entity which receives the greatest value
from such plan of liquidation shall succeed to, and (except in the case of a
lease or any transfer of substantially all (but less than all) of the assets of
Kerzner International) be substituted for, and may exercise every right and
power of, Kerzner International, under this Indenture with the same effect as
if such successor corporation had been named herein as Kerzner International
and (except in the case of a lease or any transfer of substantially all (but
less than all) of the assets of Kerzner International) Kerzner International
shall be released from the obligations under the Securities and this Indenture
except with respect to any obligations that arise from, or are related to, such
transaction.


 


ARTICLE VI


 


EVENTS OF
DEFAULT AND REMEDIES


 


Section 6.1             Events of
Default.


 


“Event of Default,” wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be caused voluntarily or involuntarily or
effected, without limitation, by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):


 


(1)             the failure by the Issuer to pay
any installment of interest or Liquidated Damages, if any, on the Securities as
and when the same becomes due and payable and the continuance of any such
failure for 30 days;


 


(2)             the failure by the Issuer to pay
all or any part of the principal, or premium, if any, on the Securities when
and as the same becomes due and payable at maturity, redemption, by
acceleration or otherwise, whether or not prohibited by Article XII
hereof, including, without limitation, payment of the Change of Control
Purchase Price or the Asset Sale Offer Price, or otherwise;


 


(3)             the failure by the Issuer or any of
its Subsidiaries otherwise to comply with Sections 4.13, 5.1 and 5.2 and Article X;


 


(4)             (A) failure by the Issuer or
any of its Subsidiaries to observe or perform any other covenant or agreement
contained in Article IV (except as provided in clauses (1), (2) and (3) above)
and the continuance of such failure for a period of 30 days after written
notice is given to the Issuer by the Trustee or to the Issuer and the Trustee
by the Holders of at least 25% in aggregate principal amount of the Securities
outstanding, or (B) failure by the Issuer or any of its Subsidiaries to
observe or perform any other covenant or agreement contained in the Securities
or herein (except as provided for in clauses (1), (2), (3) and (4)(A) above)
and the continuance of such failure for 60 days after written notice is given
to the Issuer by the Trustee or the Issuer and the


 


49





















 


Trustee by the Holders of at least 25% in
aggregate principal amount of Securities outstanding;


 


(5)             a decree, judgment, or order by a
court of competent jurisdiction shall have been entered adjudicating the Issuer
or any of its Significant Subsidiaries as bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization of the Issuer or any of its
Significant Subsidiaries under any bankruptcy or similar law, and such decree
or order shall have continued undischarged and unstayed for a period of 60
consecutive days; or a decree or order of a court of competent jurisdiction,
judgment appointing a receiver, liquidator, trustee, or assignee in bankruptcy
or insolvency for the Issuer, any of its Significant Subsidiaries, or any
substantial part of the property of any such person, or for the winding up or
liquidation of the affairs of any such person, shall have been entered, and
such decree, judgment, or order shall have remained in force undischarged and
unstayed for a period of 60 days;


 


(6)             the Issuer or any of its
Significant Subsidiaries shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking
reorganization under any bankruptcy or similar law or similar statute, or shall
consent to the filing of any such petition, or shall consent to the appointment
of a Custodian, receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency of it or any substantial part of its assets or property, or shall
make a general assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts as they become due;


 


(7)             a default in Indebtedness of the
Issuer or any of its Subsidiaries with an aggregate principal amount in excess
of $20 million (a) resulting from the failure to pay any principal at
final stated maturity or (b) as a result of which the maturity of such
Indebtedness has been accelerated prior to its stated maturity; and


 


(8)             final unsatisfied judgments not
covered by insurance aggregating in excess of $20 million, at any one time
rendered against the Issuer or any of its Subsidiaries and either (a) the
commencement by any creditor of any enforcement proceeding upon any such
judgment that is not promptly stayed or (b) such judgment is not stayed,
bonded or discharged within 60 days.


 


Section 6.2             Acceleration
of Maturity Date; Rescission and Annulment.


 


If an Event of Default occurs and is
continuing (other than an Event of Default specified in clauses (5) and
(6), above, relating to the Issuer or any of its Significant Subsidiaries,)
then in every such case, unless the principal of all of the Securities shall
have already become due and payable, either the Trustee or the Holders of 25%
in aggregate principal amount of the Securities then outstanding, by notice in
writing to the Issuer (and to the Trustee if given by Holders) (an “Acceleration
Notice”), may declare all principal and premium, if any,


 


50





















 


determined as set forth below, and accrued and unpaid interest and
Liquidated Damages, if any, thereon to be due and payable immediately; provided, however, that if any Senior Debt
is outstanding pursuant to the Credit Agreement, such acceleration shall not be
effective until the earlier of (x) the fifth Business Day after the giving to
Kerzner International and the Representative of such written notice, unless
such Event of Default is cured or waived prior to such date and (y) the date of
acceleration of any Senior Debt under the Credit Agreement.  If an Event of Default specified in clauses (5) and
(6) above relating to the Issuer or any of its Significant Subsidiaries
occurs, all principal and accrued interest on the Securities will be
immediately due and payable on all outstanding Securities without any
declaration or other act on the part of Trustee or the Holders.


 


At any time after such a declaration of
acceleration being made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter provided in this Article VI,
the Holders of a majority in aggregate principal amount of then outstanding
Securities, by written notice to the Issuer and the Trustee, may rescind, on
behalf of all Holders, any such declaration of acceleration if:


 


(1)      the
Issuer has paid or deposited with the Trustee a sum sufficient to pay


 


(A)              all overdue interest (and
Liquidated Damages, if any) on all Securities,


 


(B)               the principal of (and premium, if
any, applicable to) any Securities which would become due otherwise than by
such declaration of acceleration, and interest thereon at the rate borne by the
Securities,


 


(C)               to the extent that payment of
such interest is lawful, interest upon overdue interest (and Liquidated
Damages, if any) at the rate borne by the Securities,


 


(D)              all sums paid or advanced by the
Trustee hereunder and the compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and


 


(2)      all
Events of Default, other than the non-payment of amounts which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 6.12.


 


Notwithstanding the previous sentence of this Section 6.2, no
waiver shall be effective for any Event of Default or event which with notice
or lapse of time or both would be an Event of Default with respect to any
covenant or provision which cannot be modified or amended without the consent
of the Holder of each outstanding Security, unless all such affected Holders
agree, in writing, to waive such Event of Default or other event.  No such waiver shall cure or waive any
subsequent default or impair any right consequent thereon.


 


51





















 


Section 6.3             Collection
of Indebtedness and Suits for Enforcement by Trustee.


 


The Issuer covenants that if an Event of
Default in payment of principal, premium, or interest (and Liquidated Damages,
if any) specified in Section 6.1(1) or (2) occurs and is
continuing, the Issuer shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal, premium (if any) and interest (and
Liquidated Damages, if any), and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal (and premium,
if any) and on any overdue interest (and Liquidated Damages, if any), at the
rate borne by the Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
compensation to, and expenses, disbursements and advances of the Trustee, its
agents and counsel.


 


If the Issuer fails to pay such amounts
forthwith upon such demand, the Trustee, in its own name and as trustee of an
express trust in favor of the Holders, may institute a judicial proceeding for
the collection of the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same against the Issuer or any
other obligor upon the Securities and collect the moneys adjudged or decreed to
be payable in the manner provided by law out of the property of the Issuer or
any other obligor upon the Securities, wherever situated.


 


If an Event of Default occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders by such appropriate judicial
proceedings as the Trustee shall deem most effective to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.


 


Section 6.4             Trustee May File
Proofs of Claim.


 


In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Issuer or any other
obligor upon the Securities or the property of the Issuer or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Issuer for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise to take
any and all actions under the TIA, including:


 


(i)            to file and prove a claim for the
whole amount of principal (and premium, if any) and interest (and Liquidated
Damages, if any) owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agent and counsel) and
of the Holders allowed in such judicial proceeding, and


 


(ii)           to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same;


 


52





















 


and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 7.7.


 


Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment, or
composition affecting the Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.


 


Section 6.5             Trustee May Enforce
Claims Without Possession of Securities.


 


All rights of action and claims under this
Indenture or the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust in
favor of the Holders, and any recovery of judgment shall, after provision for
the payment of compensation to, and expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders of
the Securities in respect of which such judgment has been recovered.


 


Section 6.6             Priorities.


 


Subject to Article XII, any money
collected by the Trustee pursuant to this Article VI shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money on account of principal, premium (if any) or
interest (and Liquidated Damages, if any), upon presentation of the Securities
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:


 


FIRST: 
To the Trustee in payment of all amounts due pursuant to Section 7.7;


 


SECOND: 
To the Holders in payment of the amounts then due and unpaid for
principal of, premium (if any) and interest (and Liquidated Damages, if any)
on, the Securities in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal,
premium (if any) and interest (and Liquidated Damages, if any), respectively;
and


 


THIRD: 
To the Issuer or as a court of competent jurisdiction shall direct in
writing, the remainder, if any.


 


Section 6.7             Limitation
on Suits.


 


No Holder of any Security shall have any
right to order or direct the Trustee 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 hereunder, unless:


 


53





















 


(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 principal amount of then outstanding Securities shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;


 


(C)               such Holder or Holders have
offered to the Trustee reasonable security or indemnity reasonably satisfactory
to it against the costs, expenses and liabilities to be incurred or reasonably
probable to be incurred in compliance with such request;


 


(D)              the Trustee for 60 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 60-day period by
the Holders of a majority in principal amount of the outstanding Securities;


 


it being understood and intended that no one or more Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.


 


Section 6.8             Unconditional
Right of Holders to Receive Principal, Premium and Interest.


 


Notwithstanding any other provision of this
Indenture, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment of the principal of, and premium (if any)
and interest (and Liquidated Damages, if any) on, such Security on the Maturity
Dates or Interest Payment Dates, as applicable, of such payments as expressed
in such Security (in the case of redemption, the Redemption Price on the
Redemption Date; in the case of a Change of Control, the Change of Control
Purchase Price, on the Change of Control Purchase Date; and in the case of an
Asset Sale, the Asset Sale Offer Price on the relevant purchase date); and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.


 


Section 6.9             Rights and
Remedies Cumulative.


 


Except as otherwise provided with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities
in Section 2.7, no right or remedy herein conferred upon or reserved to
the Trustee or to the Holders is intended to be exclusive of any other right or


 


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remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.


 


Section 6.10           Delay or
Omission Not Waiver.


 


No delay or omission by the Trustee or by any
Holder of any Security to exercise any right or remedy arising upon any Event
of Default shall impair the exercise of any such right or remedy or constitute
a waiver of any such Event of Default. 
Every right and remedy given by this Article VI or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.


 


Section 6.11           Control by
Holders.


 


The Holder or Holders of a majority in
aggregate principal amount of then outstanding Securities 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 upon
the Trustee, provided, that:


 


(1)             such direction shall not be in
conflict with any rule of law or with this Indenture,


 


(2)             the Trustee shall not determine
that the action so directed would be unjustly prejudicial to the Holders not
taking part in such direction, and


 


(3)             the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction.


 


Section 6.12           Waiver of
Past Default.


 


Subject to Section 6.8, the Holder or
Holders of not less than a majority in aggregate principal amount of the
outstanding Securities may, by written notice to the Trustee on behalf of all
Holders, prior to the declaration of the maturity of the Securities, waive any
past default hereunder and its consequences, except a default:


 


(A)              in the payment of the principal
of, premium, if any, or interest (and Liquidated Damages, if any) on, any
Security as specified in clauses (1) and (2) of Section 6.1, or


 


(B)               in respect of a covenant or
provision hereof which, under Article IX, cannot be modified or amended
without the consent of the Holder of each outstanding Security affected.


 


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Upon any such waiver, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other default or impair the exercise of any right
arising therefrom.


 


Section 6.13           Undertaking
for Costs.


 


All parties to this Indenture agree, and each
Holder of any Security by such Holder’s acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, 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, suffered or omitted to be taken by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees and expenses, against
any party litigant in such suit, having due regard to the merits and good faith
of the claims or defenses made by such party litigant; but the provisions of
this Section 6.13 shall not apply to any suit instituted by the Issuer, to
any suit instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than 10% in aggregate principal
amount of the outstanding Securities, or to any suit instituted by any Holder
for enforcement of the payment of principal of, or premium (if any) or interest
(and Liquidated Damages, if any) on, any Security on or after the Maturity Date
of such Security.


 


Section 6.14           Restoration
of Rights and Remedies.


 


If the Trustee or any Holder has instituted
any proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every case,
subject to any determination in such proceeding, the Issuer, the Guarantors,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.


 


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 7.1             Duties of
Trustee.


 


(a)           If
a Default or 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 own
affairs.


 


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


 


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(1)             the Trustee need perform only those
duties as are specifically set forth in this Indenture and no others, and no
covenants or obligations shall be implied in or read into this Indenture which
are adverse to the Trustee; and


 


(2)             in the absence of bad faith on its
part, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture.  However, in the case of any
such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of any mathematical calculations or other facts stated therein).


 


(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 subsection (b) of this Section 7.1;


 


(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 grossly negligent in ascertaining the pertinent facts; and


 


(iii)       the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.12.


 


(d)           The
Trustee shall comply with any order or directive of a Gaming Authority
requiring that the Trustee submit, at the expense of the Issuer, an application
for any license, finding of suitability or other approval pursuant to any
gaming law and will cooperate fully and completely in any proceeding related to
such application; provided, however,
that in the event the Trustee in its reasonable judgment determines that
complying with such order or directive would subject it or its officers or
directors to unreasonable or onerous requirements, the Trustee may, at its
option, resign as Trustee in lieu of complying with such order or directive;
and provided, further, that no
resignation shall become effective until a successor Trustee is appointed and
delivers a written acceptance in accordance with Section 7.8 hereof.


 


(e)           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 to take or omit to take any action under this Indenture
or at the request, order or direction of the Holders or in the exercise of any
of its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.


 


(f)            Every
provision of this Indenture that in any way relates to the Trustee is subject
to subsections (a), (b), (c), (d) and (e) of this Section 7.1.


 


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


 


Section 7.2             Rights of
Trustee.


 


Subject to Section 7.1:


 


(a)           The
Trustee may conclusively rely on 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, it may consult with counsel of its
selection and may require an Officers’ Certificate or an Opinion of Counsel,
which shall conform to Sections 13.4 and 13.5. 
The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such certificate or opinion.


 


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


 


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


 


(e)           The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, notice,
request, direction, consent, order, bond, debenture, 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.


 


(f)            The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the
Holders, pursuant to the provisions of this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby.


 


(g)           Except
with respect to Section 4.1, the Trustee shall have no duty to inquire as
to the performance of the Issuer’s covenants in Article IV hereof.  In addition, the Trustee shall not be deemed
to have knowledge of any Default or Event of Default except (i) any Event
of Default occurring pursuant to Sections 6.1(1), 6.1(2) and 4.1, or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification or of which a Trust Officer shall have obtained actual knowledge.


 


(h)           Any
request or direction of the Issuer mentioned herein will be sufficiently
evidenced by an Issuer Request or Issuer Order and any resolution of the Board
of Directions will be sufficiently evidenced by a Board Resolution;


 


(i)            The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall


 


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be enforceable by, the Trustee in each of its capacities hereunder, and
to each agent, custodian and other person employed to act hereunder; and


 


(j)            The
Trustee may request that the Issuer deliver an Officers’ Certificate setting
forth the names of individuals and/or titles of officers authorized at such
time to take specified actions pursuant to this Indenture, which Officers’
Certificate may be signed by any person authorized to sign an Officers’
Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded.


 


Section 7.3             Individual
Rights of Trustee.


 


The Trustee in its individual or any other
capacity may become the owner or pledgee of Securities and may otherwise deal
with the Issuer, any Guarantor, any of their respective Subsidiaries, or their
respective Affiliates with the same rights it would have if it were not
Trustee.  Any Agent may do the same with
like rights.  However, the Trustee must
comply with Sections 7.10 and 7.11.


 


Section 7.4             Trustee’s
Disclaimer.


 


The Trustee makes no representation as to the
validity or adequacy of this Indenture or the Securities and it shall not be
accountable for the Issuer’s use of the proceeds from the Securities, and it
shall not be responsible for any statement in the Securities (other than the
Trustee’s certificate of authentication) or for the use or application of any
funds received by a Paying Agent other than the Trustee.


 


Section 7.5             Notice of
Default.


 


If a Default or an Event of Default occurs
and is continuing and if it is actually known to the Trustee, the Trustee shall
mail to each Securityholder notice of the uncured Default or Event of Default
within 90 days after such Default or Event of Default occurs.  Except in the case of a Default or an Event
of Default in payment of principal (or premium, if any) of, or interest (and
Liquidated Damages, if any) on, any Security (including the payment of the
Change of Control Purchase Price on the Change of Control Purchase Date, the
Redemption Price on the Redemption Date, and the Asset Sale Offer Price on the
relevant purchase date), the Trustee may withhold the notice if and so long as
a Trust Officer in good faith determines that withholding the notice is in the
interest of the Securityholders.


 


Section 7.6             Reports by
Trustee to Holders.


 


If required by law, within 60 days after each
January 31 beginning with the January 31 following the date of this
Indenture, the Trustee shall mail to each Securityholder a brief report dated
as of such January 31 that complies with TIA § 313(a).  If required by law, the Trustee also shall
comply with TIA §§ 313(b) and 313(c).


 


The Issuer shall promptly notify the Trustee
in writing if the Securities become listed on any stock exchange or automatic
quotation system.


 


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A copy of each report at the time of its
mailing to Securityholders shall be mailed to the Issuer and filed with the SEC
and each stock exchange, if any, on which the Securities are listed.


 


Section 7.7             Compensation
and Indemnity.


 


The Issuer shall pay to the Trustee from time
to time such compensation as shall be agreed in writing between the Issuer and
the Trustee for its services.  The
Trustee’s compensation shall not be limited by any law on compensation of a
trustee of an express trust.  The Issuer
shall reimburse the Trustee upon request for all reasonable disbursements,
expenses and advances incurred or made by it. 
Such expenses shall include the reasonable compensation, disbursements,
fees and expenses of the Trustee’s agents, accountants, experts and counsel.


 


The Issuer shall indemnify the Trustee (in
its capacity as Trustee, Registrar and Paying Agent) and each of its officers,
directors, attorneys-in-fact and agents for, and hold it harmless against, any
and all claims, losses, damages, liabilities, demands, fees, expenses
(including but not limited to reasonable compensation, disbursements and
expenses of the Trustee’s agents and counsel), losses or liabilities incurred
by them without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this trust and their rights
or duties hereunder including the reasonable costs and expenses of defending
themselves against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.  The Trustee shall notify the Issuer promptly
of any claim asserted against the Trustee of which it has received written
notice for which it may seek indemnity. 
The Issuer shall defend the claim and the Trustee shall provide
reasonable cooperation at the Issuer’s expense in the defense.  The Trustee may have separate counsel and the
Issuer shall pay the reasonable fees and expenses of such counsel; provided, that the Issuer will not be
required to pay such fees and expenses if they assume the Trustee’s defense and
there is, in the reasonable discretion of the Trustee, no conflict of interest
between the Issuer and the Trustee in connection with such defense.  The Issuer need not pay for any settlement
made without their written consent.  The
Issuer need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its own negligence, bad
faith or willful misconduct.


 


To secure the Issuer’s payment obligations in
this Section 7.7, the Trustee shall have a lien prior to the Securities on
all assets held or collected by the Trustee, in its capacity as Trustee, except
assets held in trust to pay principal and premium, if any, of or interest (and
Liquidated Damages, if any) on particular Securities.


 


When the Trustee incurs expenses or renders
services after an Event of Default specified in Section 6.1(5) or (6) occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.


 


The Issuer’s obligations under this Section 7.7
and any lien arising hereunder shall survive the resignation or removal of the
Trustee, the discharge of the Issuer’s obligations pursuant to Article VIII
of this Indenture and any rejection or termination of this Indenture under any
Bankruptcy Law.


 


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Section 7.8             Replacement
of Trustee.


 


The Trustee may resign by so notifying the
Issuer in writing.  The Holder or Holders
of a majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the Issuer and the Trustee in writing and may appoint a
successor trustee with the Issuer’s consent. 
The Issuer may remove the Trustee if:


 


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


 


(2)             the Trustee is adjudged bankrupt or
insolvent;


 


(3)             a receiver, Custodian, or other
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 Issuer shall
promptly appoint a successor Trustee. 
Within one year after the successor Trustee takes office, the Holder or
Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuer.


 


A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the Issuer.  Immediately after that and provided that all
sums owing to the Trustee provided for in Section 7.7 have been paid, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.7, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture.  A successor Trustee shall
mail notice of its succession to each Holder.


 


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


 


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


 


Notwithstanding replacement of the Trustee
pursuant to this Section 7.8, the Issuer’s obligations under Section 7.7
shall continue for the benefit of the retiring Trustee.


 


Section 7.9             Successor
Trustee by Merger, Etc.


 


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


 


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transferee corporation without any further act shall, if such
resulting, surviving or transferee corporation is otherwise eligible hereunder,
be the successor Trustee.


 


Section 7.10           Eligibility;
Disqualification.


 


The Trustee shall at all times satisfy the
requirements of TIA § 310(a)(1) and TIA § 310(a)(5).  The Trustee shall have a combined capital and
surplus of at least $25,000,000 as set forth in its most recent published
annual report of condition.  The Trustee
shall comply with TIA § 310(b).


 


Section 7.11           Preferential
Collection of Claims against Issuer.


 


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


 


ARTICLE VIII


 


LEGAL
DEFEASANCE AND COVENANT DEFEASANCE


 


Section 8.1             Option to
Effect Legal Defeasance or Covenant Defeasance.


 


The Issuer may, at its option at any time,
elect to have Section 8.2 or Section 8.3 applied to all outstanding Securities
upon compliance with the conditions set forth below in this Article VIII.


 


Section 8.2             Legal
Defeasance and Discharge.


 


Upon the Issuer’s exercise under Section 8.1
of the option applicable to this Section 8.2, the Issuer and the
Guarantors shall be deemed to have been discharged from their respective
obligations with respect to all outstanding Securities on the date the
conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, such Legal Defeasance means
that the Issuer shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities, which shall thereafter
be deemed to be “outstanding” only for the purposes of Section 8.5 and the
other Sections of this Indenture referred to in (a) and (b) below,
and to have satisfied all of its other obligations under such Securities and
this Indenture (and the Trustee, on demand of and at the expense of the Issuer,
shall execute proper instruments provided to it acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder:  (a) the rights of
Holders of outstanding Securities to receive solely from the trust fund
described in Section 8.4, and as more fully set forth in such section,
payments in respect of the principal of, premium, if any, and interest (and
Liquidated Damages, if any) on such Securities when such payments are due, (b) the
Issuer’s obligations with respect to such Securities under Sections 2.4, 2.6,
2.7, 2.10 and 4.2, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Issuer’s obligations in connection therewith
and (d) this Article VIII. 
Subject to compliance with this Article VIII, the Issuer may
exercise its option under this Section 8.2 notwithstanding the prior
exercise of its option under Section 8.3 with respect to the Securities.


 


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Section 8.3             Covenant
Defeasance.


 


Upon the Issuer’s exercise under Section 8.1
of the option applicable to this Section 8.3, the Issuer shall be released
from its obligations under the covenants contained in Sections 4.3, 4.6, 4.7,
4.9, 4.10, 4.11, 4.12, 4.13, 4.14 and 4.16, Article V and Article X
with respect to the outstanding Securities on and after the date the conditions
set forth below are satisfied (hereinafter, “Covenant Defeasance”), and
the Securities 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.  For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities, the Issuer need not
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, but, except as specified above, the remainder of this Indenture
and such Securities shall be unaffected thereby.  In addition, upon the Issuer’s exercise under
Section 8.1 of the option applicable to this Section 8.3, Sections
6.1(3) through 6.1(8) shall not constitute Events of Default.


 


Section 8.4             Conditions
to Legal or Covenant Defeasance.


 


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


 


(a)           The
Issuer shall irrevocably have deposited or caused to be deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10
who shall agree to comply with the provisions of this Article VIII
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (a) cash in an amount,
or (b) U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, cash in an
amount, or (c) a combination thereof, in such amounts, as in each case
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge the principal of, premium, if
any, and interest (and Liquidated Damages, if any) on the outstanding
Securities on the stated maturity or on the applicable redemption date, as the
case may be, of such principal or installment of principal, premium, if any, or
interest (and Liquidated Damages, if any); provided
that the Trustee shall have been irrevocably instructed to apply such cash and
the proceeds of such U.S. Government Obligations to said payments with respect
to the Securities.


 


(b)           In
the case of an election under Section 8.2, the Issuer shall have delivered
to the Trustee an Opinion of Counsel in the United States reasonably
satisfactory to the Trustee confirming that (i) the Issuer has received
from, or there has been published by, the Internal Revenue Service a ruling or (ii) since
the date hereof, there has been a change in the applicable United States
Federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding Securities will
not


 


63





















 


recognize income, gain or loss for United States Federal income tax
purposes as a result of such Legal Defeasance and will be subject to United
States 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 has not
occurred;


 


(c)           In
the case of an election under Section 8.3, the Issuer shall have delivered
to the Trustee an Opinion of Counsel in the United States to the effect that
the Holders of the outstanding Securities will not recognize income, gain or
loss for United States Federal income tax purposes as a result of such Covenant
Defeasance and will be subject to United States Federal income tax in the same
amount, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;


 


(d)           No
Default or Event of Default with respect to the Securities shall have occurred
and be continuing on the date of such deposit or, in so far as Section 6.1(5) or
6.1(6) is concerned, at any time in the period ending on the 91st day
after the date of such deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such period);


 


(e)           Such
Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Issuer or any of its Subsidiaries
is a party or by which the Issuer or any of its Subsidiaries is bound;


 


(f)            In
the case of an election under either Section 8.2 or 8.3, the Issuer shall
have delivered to the Trustee an Officers’ Certificate stating that the deposit
made by the Issuer pursuant to its election under Section 8.2 or 8.3 was
not made by the Issuer with the intent of hindering, delaying or defrauding
creditors of the Issuer or others;


 


(g)           The
Issuer shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel in the United States, each stating that the conditions
precedent provided for, in the case of the Officers’ Certificate, in
subsections (a) through (f) of this Section 8.4 and, in the case
of the Opinion of Counsel, subsections (a) (with respect to the validity
and perfection of the security interest), (b), (c) and (e) of this Section 8.4
have been complied with as contemplated by this Section 8.4.


 


Section 8.5             Deposited
Cash and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous
Provisions.


 


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


 


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The Issuer shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against the
U.S. Government Obligations deposited pursuant to Section 8.4 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 outstanding
Securities.


 


Section 8.6             Repayment
to the Issuer.


 


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


 


Any money deposited with the Trustee or any
Paying Agent, or then held by the Issuer, in trust for the payment of the
principal of, premium, if any, or interest (and Liquidated Damages, if any) on
any Security and remaining unclaimed for two years after such principal, and
premium, if any, or interest (and Liquidated Damages, if any) has become due
and payable shall be paid to the Issuer on its request; and the Holder of such
Security shall thereafter look only to the Issuer for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money
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 Issuer 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 Issuer.


 


Section 8.7             Reinstatement.


 


If the Trustee or Paying Agent is unable to
apply any cash or U.S. Government Obligations in accordance with Section 8.2
or 8.3, 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 Issuer’s obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.2 or 8.3 until such time as the Trustee or Paying
Agent is permitted to apply such money in accordance with Section 8.2 and
8.3, as the case may be; provided, however,
that, if the Issuer make any payment of principal of, premium, if any, or
interest (and Liquidated Damages, if any) on any Security following the
reinstatement of its obligations, the Issuer shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the cash held by
the Trustee or Paying Agent.


 


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ARTICLE IX



AMENDMENTS, SUPPLEMENTS AND WAIVERS


 


Section 9.1             Supplemental Indentures Without Consent of Holders.


 


Without the consent of any Holder, the Issuer
or any Guarantor, when authorized by a Board Resolution, and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:


 


(1)             to cure any ambiguity, defect, or
inconsistency, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with the
provisions of this Indenture, provided such action pursuant to this clause
(1) shall not adversely affect the interests of any Holder in any respect;


 


(2)             to add to the covenants of the
Issuer for the benefit of the Holders, or to surrender any right or power
herein conferred upon the Issuer or to make any other change that does not
adversely affect the rights of any Holder; provided,
that such change does not adversely affect the rights of any Holder;


 


(3)             to provide for additional
Guarantors of the Securities;


 


(4)             to evidence the succession of
another person to the Issuer, and the assumption by any such successor of the
obligations of the Issuer, herein and in the Securities in accordance with
Article V;


 


(5)             to comply with the TIA;


 


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


 


(7)             to provide for the issuance of
Additional Securities in accordance with the limitations set forth in this
Indenture as of the date hereof.


 


Section 9.2             Amendments, Supplemental Indentures and Waivers with
Consent of Holders.


 


Subject to Section 6.8 and the last
sentence of this paragraph, with the consent of the Holders of not less than a
majority in aggregate principal amount of then outstanding Securities, by
written act of said Holders delivered to the Issuer and the Trustee, the Issuer
and any Guarantor, when authorized by Board Resolutions, and the Trustee may
amend or supplement this Indenture or the Securities or enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or the Securities or of modifying in any manner the rights of the
Holders under this Indenture or the Securities. 
Subject to Section 6.8 and the last sentence of this paragraph, the
Holder or Holders of a majority, in principal amount of then outstanding
Securities may waive compliance by the Issuer or any Guarantor with any
provision of this


 


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Indenture or the Securities. 
Notwithstanding the foregoing provisions of this Section 9.2,
without the consent of each Holder affected thereby, no such amendment,
supplemental indenture or waiver shall:


 


(1)             reduce the percentage of principal
amount of Securities whose Holders must consent to an amendment, supplement or
waiver of any provision of this Indenture or the Securities;


 


(2)             reduce the rate or extend the time
for payment of interest (and Liquidated Damages, if any) on any Security;


 


(3)             reduce the principal amount of any
Security, or reduce the Change of Control Purchase Price or the Asset Sale
Offer Price;


 


(4)             change the Stated Maturity of any
Security;


 


(5)             alter the redemption provisions of
Article III in a manner adverse to any Holder;


 


(6)             make any changes in the provisions
concerning waivers of Defaults or Events of Default by Holders of the
Securities (except to increase any percentage of Securities required to consent
to a waiver or to provide that certain other provisions of the Indenture cannot
be modified or waived without the consent of the Holder of each outstanding
Security affected thereby) or the rights of Holders to recover the principal or
premium of, interest (and Liquidated Damages, if any) on, or redemption payment
with respect to, any Security;


 


(7)             make any changes in
Section 6.8, 6.12 or this third sentence of this Section 9.2; or


 


(8)             make the principal of, or the
interest (and Liquidated Damages, if any) on, any Security payable with
anything or at anywhere other than as provided for in this Indenture and the
Securities as in effect on the date hereof; or


 


(9)             make the Securities or Guarantees
further subordinated in right of payment to any extent or under any
circumstances to any other indebtedness.


 


It shall not be necessary for the consent of
the Holders under this Section to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.


 


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


 


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After an amendment, supplement or waiver
under this Section 9.2 or 9.4 becomes effective, it shall bind each Holder.


 


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


 


Section 9.3             Compliance with TIA.


 


Every amendment, waiver or supplement of this
Indenture or the Securities shall comply with the TIA as then in effect.


 


Section 9.4             Revocation and Effect of Consents.


 


Until an amendment, waiver or supplement
becomes effective, a consent to it by a Holder is a continuing consent by the
Holder and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder’s Security, even if notation
of the consent is not made on any Security. 
However, any such Holder or subsequent Holder may revoke the consent as
to his Security or portion of his Security by written notice to the Issuer or
the person designated by the Issuer as the person to whom consents should be
sent if such revocation is received by the Issuer or such person before the
date on which the Trustee receives an Officers’ Certificate certifying that the
Holders of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.


 


The Issuer may, but shall not be obligated
to, fix a record date for the purpose of determining the Holders entitled to
consent to any amendment, supplement or waiver, which record date shall be the
date so fixed by the Issuer notwithstanding the provisions of the TIA.  If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders at such record date, and only those persons (or their
duly designated proxies), shall be entitled to revoke any consent previously
given, whether or not such persons continue to be Holders after such record
date.  No such consent shall be valid or
effective for more than 90 days after such record date.


 


After an amendment, supplement or waiver
becomes effective, it shall bind every Securityholder, unless it makes a change
described in any of clauses (1) through (9) of Section 9.2, in
which case, the amendment, supplement or waiver shall bind only each Holder of
a Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder’s
Security; provided, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal and premium of and interest (and Liquidated Damages, if any) on a
Security, on or after the respective dates set for such amounts to become due
and payable expressed in such Security, or to bring suit for the enforcement of
any such payment on or after such respective dates.


 


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Section 9.5             Notation on or Exchange of Securities.


 


If an amendment, supplement or waiver changes
the terms of a Security, the Trustee may require the Holder of the Security to
deliver it to the Trustee or require the Holder to put an appropriate notation
on the Security.  The Trustee may place
an appropriate notation on the Security about the changed terms and return it
to the Holder.  Alternatively, if the
Issuer or the Trustee so determines, the Issuer in exchange for the Security
shall issue, the Guarantors shall endorse and the Trustee shall authenticate a
new Security that reflects the changed terms. 
Any failure to make the appropriate notation or to issue a new Security
shall not affect the validity of such amendment, supplement or waiver.


 


Section 9.6             Trustee to Sign Amendments, Etc.


 


The Trustee shall execute any amendment,
supplement or waiver authorized pursuant to this Article IX, provided, that the Trustee may, but shall
not be obligated to, execute any such amendment, supplement or waiver which
affects the Trustee’s own rights, duties or immunities under this
Indenture.  The Trustee shall be provided
with, and shall be fully protected in relying upon, an Officers’ Certificate
and Opinion of Counsel stating that the execution of any amendment, supplement
or waiver authorized pursuant to this Article IX is authorized or
permitted by this Indenture.


 


ARTICLE X



RIGHT TO REQUIRE REPURCHASE


 


Section 10.1           Repurchase of Securities at Option of the Holder upon
Change of Control.


 


(a)           In
the event that a Change of Control Triggering Event occurs, each Holder of
Securities shall have the right, at such Holder’s option, subject to the terms
and conditions of this Indenture, to require the Issuer to repurchase all or
any part of such Holder’s Securities (provided,
that the principal amount of such Securities must be $1,000 or an integral
multiple thereof) on the date that is no later than 45 Business Days after the
occurrence of such Change of Control Triggering Event (the “Change of
Control Purchase Date”), at a cash price equal to 101% of the principal
amount thereof (the “Change of Control Purchase Price”), together with
accrued and unpaid interest (and Liquidated Damages), if any, to the Change of
Control Purchase Date.


 


(b)           In
the event that, pursuant to this Section 10.1, the Issuer shall be
required to commence an offer to purchase Securities (a “Change of Control
Offer”), the Issuer shall follow the procedures set forth in this
Section 10.1 as follows:


 


(1)             the Change of Control Offer shall
commence within 20 Business Days following the Change of Control Triggering
Event;


 


(2)             the Change of Control Offer shall
remain open for at least 20 Business Days;


 


(3)             within 5 Business Days following
the expiration of a Change of Control Offer, the Issuer shall purchase all of
the


 


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tendered Securities at the Change of Control
Purchase Price, plus accrued interest (and Liquidated Damages, if any);


 


(4)             if the Change of Control Purchase
Date is on or after an interest payment record date and on or before the
related interest payment date, any accrued interest (and Liquidated Damages, if
any) will be paid to the person in whose name a Security is registered at the
close of business on such record date, and no additional interest will be
payable to Securityholders who tender Securities pursuant to the Change of
Control Offer;


 


(5)             the Issuer shall use its best
efforts to provide the Trustee with notice of the Change of Control Offer at
least 5 Business Days before the commencement of any Change of Control Offer;
and


 


(6)             on or before the commencement of
any Change of Control Offer, the Issuer or the Trustee (upon the request and at
the expense of the Issuer) shall send, by first-class mail, a notice to each of
the Securityholders, which (to the extent consistent with this Indenture) shall
govern the terms of the Change of Control Offer and shall state:


 


(i)  that
the Change of Control Offer is being made pursuant to this Section 10.1
and that all Securities, or portions thereof, tendered will be accepted for
payment;


 


(ii)  the
Change of Control Purchase Price (including the amount of accrued but unpaid
interest (and Liquidated Damages, if any)) and the Change of Control Purchase
Date;


 


(iii) 
that any Security, or portion thereof, not tendered or accepted for payment
will continue to accrue interest;


 


(iv) 
that, unless the Issuer defaults in depositing cash with the Paying Agent in
accordance with the last paragraph of this subsection (b), or such payment
is prevented for any reason, any Security, or portion thereof, accepted for
payment pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date;


 


(v)  that
Holders electing to have a Security, or portion thereof, purchased pursuant to
a Change of Control Offer will be required to surrender the Security, with the
form entitled “Option of Holder to Elect Purchase” on the reverse of the
Security completed, to the Paying Agent (which may not for purposes of this
Section 10.1, notwithstanding anything in this Indenture to the contrary,
be the Issuer or any Affiliate of the Issuer) at the address specified in the
notice prior to the expiration of the Change of Control Offer;


 


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(vi) 
that Holders will be entitled to withdraw their election, in whole or in part,
if the Paying Agent receives, prior to the expiration of the Change of Control
Offer, a facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Securities the Holder is withdrawing and a
statement containing a facsimile signature and stating that such Holder is
withdrawing his election to have such principal amount of Securities purchased;


 


(vii)  a
brief description of the events resulting in such Change of Control Triggering
Event; and


 


(viii) 
the CUSIP Number, if any, of the Securities.


 


Any such Change of Control Offer shall comply
with any and all applicable provisions of United States Federal and state laws,
including those regulating tender offers, if applicable, and any provisions of
this Indenture which conflict with such laws shall be deemed to be superseded
by the provisions of such laws.


 


On or before the Change of Control Purchase
Date, the Issuer shall (i) accept for payment Securities or portions
thereof properly tendered pursuant to the Change of Control Offer prior to the
expiration of the Change of Control Offer, (ii) deposit with the Paying
Agent cash sufficient to pay the Change of Control Purchase Price (including
accrued and unpaid interest (and Liquidated Damages, if any)) of all Securities
so tendered and (iii) deliver to the Trustee Securities so accepted
together with an Officers’ Certificate listing the Securities or portions
thereof being purchased by the Issuer. 
The Paying Agent shall promptly pay to the Holders of Securities so
accepted payment in an amount equal to the Change of Control Purchase Price
(together with accrued and unpaid interest (and Liquidated Damages, if any)),
and the Trustee shall promptly authenticate and mail or deliver to such Holders
a new Security equal in principal amount to any unpurchased portion of the
Security surrendered.


 


ARTICLE XI



GUARANTEES


 


Section 11.1           Guarantees.


 


(a)           In
consideration of good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, each of the Guarantors hereby irrevocably and
unconditionally guarantees, jointly and severally, on a senior subordinated
basis (the “Guarantee”) to each Holder of a Security authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the
Securities or the obligations of the Issuer under this Indenture or the
Securities, that:  (w) the principal and
premium (if any) of and interest (and Liquidated Damages, if any) on the Securities
will be paid in full when due, whether at the maturity or interest payment
date, by acceleration, call for redemption, upon an Change of Control Offer, an
Asset Sale Offer or otherwise; (x) all other obligations of the Issuer to the
Holders or the Trustee under this Indenture or the Securities will be promptly
paid in full or performed, all in accordance with the


 


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terms of this Indenture and the Securities; and (y) in case of any
extension of time of payment or renewal of any Securities or any of such other
obligations, they will be paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at maturity, by acceleration,
call for redemption, upon an Offer to Purchase or otherwise.  Failing payment when due of any amount so
guaranteed for whatever reason, each Guarantor shall be obligated to pay the
same before failure so to pay becomes an Event of Default.


 


(b)           Each
Guarantor hereby agrees that its obligations with regard to this Guarantee
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, the recovery of any judgment against the Issuer, any
action to enforce the same or any other circumstances that might otherwise
constitute a legal or equitable discharge or defense of a guarantor.  Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of insolvency
or bankruptcy of the Issuer, any right to require a proceeding first against
the Issuer or right to require the prior disposition of the assets of the
Issuer to meet its obligations, protest, notice and all demands whatsoever and
covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities and this Indenture.


 


(c)           If
any Holder or the Trustee is required by any court or otherwise to return to
the Issuer or any Guarantor, or any Custodian, Trustee, or similar official
acting in relation to the Issuer or such Guarantor, any amount paid by the
Issuer or such Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.  Each Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.  Each Guarantor
further agrees that, as between such Guarantor, on the one hand, and the
Holders and the Trustee, on the other hand, (i) the maturity of the
obligations guaranteed hereby may be accelerated as provided in
Section 6.2 for the purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration as to the Issuer
of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in
Section 6.2, those obligations (whether or not due and payable) will forthwith
become due and payable by each of the Guarantors for the purpose of this
Guarantee.


 


(d)           Each
Guarantor and by its acceptance of a Security issued hereunder each Holder
hereby confirms that it is the intention of all such parties that the guarantee
by such Guarantor set forth in Section 11.1(a) not constitute a
fraudulent transfer or conveyance for purpose of any Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar United States Federal or state law. 
To effectuate the foregoing intention, the Holders and such Guarantor
hereby irrevocably agree that the obligations of such Guarantor under its
guarantee set forth in Section 11.1(a) shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections from
or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to the
following paragraph of this Section 11.1(d), result in the obligations of
such Guarantor under such guarantee not constituting such a fraudulent transfer
or conveyance.


 


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Each Guarantor that makes any payment or
distribution under Section 11.1(a) shall be entitled to a
contribution from each other Guarantor equal to its Pro Rata amount of such
payment or distribution so long as the exercise of such right does not impair
the rights of the Holders under the Guarantees. 
For purposes of the foregoing, the “Pro Rata amount” of any Guarantor
means the percentage of the net assets of all Guarantors held by such
Guarantor, determined in accordance with GAAP.


 


Section 11.2           Execution and Delivery of Guarantee.


 


To evidence its Guarantee set forth in
Section 11.1, each Guarantor agrees that a notation of such Guarantee
substantially in the form annexed hereto as Exhibit B shall be
endorsed on each Security authenticated and delivered by the Trustee and that
this Indenture shall be executed on behalf of such Guarantor by one Officer by
manual or facsimile signature.  Two
Officers shall sign, or one Officer shall sign and one Officer shall attest to,
the Securities for each of the Issuer by manual or facsimile signature.


 


Each Guarantor agrees that its Guarantee set
forth in Section 11.1 shall remain in full force and effect and apply to
all the Securities notwithstanding any failure to endorse on each Security a
notation of such Guarantee.


 


If an Officer whose signature is on a
Security no longer holds that office at the time the Trustee authenticates the
Security on which a Guarantee is endorsed, the Guarantee shall be valid
nevertheless.


 


The delivery of any Security by the Trustee,
after the authentication thereof hereunder, shall constitute due delivery of
the Guarantee set forth in this Indenture on behalf of each Guarantor.


 


Section 11.3           Certain Bankruptcy Events.


 


Each Guarantor hereby covenants and agrees
that in the event of the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Issuer, such Guarantor shall not file (or join in any
filing of), or otherwise seek to participate in the filing of, any motion or
request seeking to stay or to prohibit (even temporarily) execution on the
Guarantee and hereby waives and agrees not to take the benefit of any such stay
of execution, whether under Section 362 or 105 of the United States
Bankruptcy Code or otherwise.


 


Section 11.4           Limitation on Merger, Consolidation, Etc. of Guarantors.


 


No Guarantor shall consolidate or merge with
or into (whether or not such Guarantor is the surviving person) another person
(other than the Issuer or another Guarantor) unless (i) subject to the
provisions of the following paragraph, the person formed by or surviving any
such consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor pursuant to a supplemental indenture in form
reasonably satisfactory to the Trustee, pursuant to which such person shall
unconditionally guarantee, on a senior subordinated basis, all of such
Guarantor’s obligations under such Guarantor’s guarantee and this Indenture on
the terms set forth in this Indenture; and (ii) immediately before and
immediately after giving


 


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effect to such transaction on a pro
forma basis, no Default or Event of Default shall have occurred or
be continuing.


 


Notwithstanding the foregoing, upon the sale
or disposition (whether by merger, stock purchase, or otherwise) of a Guarantor
in its entirety to an entity which is not a Subsidiary or the designation of a
Subsidiary as an Unrestricted Subsidiary, which transaction is otherwise in
compliance with the Indenture (including, without limitation, the provisions of
Section 4.13), such Guarantor will be deemed released from its obligations
under its Guarantee of the Securities; provided,
however, that any such termination shall occur only to the extent
that all obligations of such Guarantor under all of its guarantees of, and
under all of its pledges of assets or other security interests which secure,
any Indebtedness of the Issuer or any of its Subsidiaries shall also terminate
upon such release, sale or transfer.


 


Section 11.5           Future Guarantors.


 


Upon the acquisition by the Issuer or any
Guarantor of the Capital Stock of any person, if, as a result of such
acquisition, such Person becomes a Subsidiary, and upon designation of any
Unrestricted Subsidiary as a Subsidiary, such Subsidiary shall fully and
unconditionally guarantee on a senior subordinated basis the obligations of the
Issuer with respect to payment and performance of the Securities and the other
obligations of the Issuer under this Indenture to the same extent that such
obligations are guaranteed by the other Guarantors pursuant to Section 11.1;
and, within 60 days of the date of such occurrence, such Subsidiary shall
execute and deliver to the Trustee a supplemental indenture making such
Subsidiary a party to this Indenture; provided,
however, that for the purposes of this Section 11.5, the term
“Subsidiary” shall not include Unrestricted Subsidiaries.


 


The Issuer shall cause all Subsidiaries
existing on the Issue Date and not a party to this Indenture to fully and
unconditionally guarantee on a senior subordinated basis the obligations of the
Issuer with respect to payment and performance of the Securities and the other
obligations of the Issuer under this Indenture to the same extent that such
obligations are guaranteed by the other Guarantors pursuant to
Section 11.1; and, within 60 days of the date of this Indenture, each such
Subsidiary shall execute and deliver to the Trustee a supplemental indenture
making such Subsidiary a party to this Indenture.


 


ARTICLE XII



SUBORDINATION


 


Section 12.1           Securities Subordinated to Senior Debt.


 


The Issuer, the Guarantors and each Holder,
by its acceptance of Securities, agree that (a) the payment of the
principal of and interest on the Securities and (b) any other payment in
respect of the Securities, including on account of the acquisition or redemption
of the Securities by the Issuer or the Guarantors (including, without
limitation, pursuant to Section 4.13 or 10.1) is subordinated, to the
extent and in the manner provided in this Article XII, to the prior
payment in full in Cash or Cash Equivalents of all Senior Debt of the Issuer
and the Guarantor, and that these subordination provisions are for the benefit
of the holders of Senior Debt.


 


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This Article XII shall constitute a
continuing offer to all Persons who, in reliance upon such provisions, become
holders of, or continue to hold, Senior Debt, and such provisions are made for
the benefit of the holders of Senior Debt, and such holders are made obligees
hereunder and any one or more of them may enforce such provisions.


 


Section 12.2           No Payment on Securities in Certain Circumstances.


 


(a)           No
payment of any kind or character from any source may be made by or on behalf of
the Issuer or a Guarantor, as applicable, on account of the principal of, premium,
if any, or interest or Liquidated Damages or Additional Amounts on the
Securities (including any repurchases of Securities and rescission payments),
or on account of the redemption provisions of the Securities, for cash or
property (other than from the trust described in Article VIII),
(i) upon the maturity of any Senior Debt of the Issuer or such Guarantor
by lapse of time, acceleration (unless waived) or otherwise, unless and until
all principal of, premium, if any, the interest on and any fee or other amount
due in respect of such Senior Debt are first paid in full in cash or Cash
Equivalents or otherwise to the extent holders accept satisfaction of amounts
due by settlement in other than cash or Cash Equivalents, or (ii) in the
event of default in the payment of any principal of, premium, if any, or
interest on or any fee or other amount due in respect of Senior Debt of the
Issuer or such Guarantor when it becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration or otherwise (a “Payment
Default”), unless and until such Payment Default has been cured or waived
or otherwise has ceased to exist.


 


(b)           Upon
(i) the happening of an event of default (other than a Payment Default)
that permits the holders of Senior Debt to declare such Senior Debt to be due
and payable and (ii) prompt written notice of such event of default given
to the Trustee by the Representative under the Credit Agreement or the holders
of an aggregate of at least $25 million principal amount outstanding of any
other Senior Debt or their representative (a “Payment Blockage Notice”),
then, unless and until such event of default has been cured or waived or
otherwise has ceased to exist (including by reason of the repayment in full of
such Senior Debt in cash or Cash Equivalents), no payment (by set-off or
otherwise) may be made by or on behalf of the Issuer or any Guarantor which is
an obligor under such Senior Debt on account of the principal of, premium, if
any or interest or Liquidated Damages or Additional Amounts on the Securities,
including any repurchases of Securities and rescission payments, other than
payments made from the trust described in Article VIII; provided, however, that so long as the
Credit Agreement is in effect, a Payment Blockage Notice may only be given by
the Representative under the Credit Agreement unless otherwise agreed in
writing by the requisite lenders under the Credit Agreement.  Notwithstanding the immediately preceding
sentence, unless the Senior Debt in respect of which such event of default
exists has been declared due and payable in its entirety within 179 days after
the Payment Blockage Notice is delivered as set forth above (the “Payment
Blockage Period”) (and such declaration has not been rescinded or waived),
at the end of the Payment Blockage Period, the Issuer and the Guarantors shall
be required to pay all sums not paid to the Holders of the Securities during
the Payment Blockage Period due to the foregoing prohibitions and to resume all
other payments as and when due on the Securities.  Any number of Payment Blockage Notices may be
given; provided, however, that
(i) not more than one Payment Blockage Notice shall be given within a
period of any 360 consecutive days, and (ii) no default that existed upon
the date of such Payment Blockage Notice or the commencement of such


 


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Payment Blockage Period (whether or not such event of default is on the
same issue of Senior Debt) shall be made the basis for the commencement of any
other Payment Blockage Period, unless such event of default shall have been
cured or waived for a period of not less than 90 days.


 


(c)           In
furtherance of the provisions of Section 12.1, in the event that,
notwithstanding the foregoing provisions of this Section 12.2 or the
provisions of Section 12.3, any payment or distribution of assets (other
than from the trust described in Article VIII and, in the case of
Section 12.3, payment by way of the issuance of Junior Securities) shall
be received by the Trustee or the Holders at a time when such payment or
distribution is prohibited by such provisions, such payment or distribution
shall be held in trust for the benefit of the holders of such Senior Debt, and
shall be paid or delivered by the Trustee or such Holders, as the case may be,
to the holders of such Senior Debt remaining unpaid or unprovided for or to
their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing any of such Senior
Debt may have been issued, ratably according to the aggregate principal amounts
remaining unpaid on account of such Senior Debt held or represented by each,
for application to the payment of all such Senior Debt remaining unpaid, to the
extent necessary to pay all such Senior Debt in full in cash or Cash
Equivalents or otherwise to the extent holders accept satisfaction of amounts
due by settlement in other than cash or Cash Equivalents after giving effect to
any concurrent payment or distribution to the holders of such Senior Debt.


 


Section 12.3           Securities Subordinated to Prior Payment of All Senior
Debt on Dissolution, Liquidation or Reorganization.


 


Upon any distribution of assets of the Issuer
or any Guarantor upon any dissolution, winding up, total or partial liquidation
or reorganization of the Issuer or a Guarantor, whether voluntary or
involuntary, in bankruptcy, insolvency, receivership or a similar proceeding or
upon assignment for the benefit of creditors or any marshalling of assets or liabilities:


 


(a)           the
holders of all Senior Debt of the Issuer or such Guarantor, as applicable, will
first be entitled to receive payment on account of all principal of, premium,
if any, interest on and fees and other amounts payable in respect of such Senior
Debt in full in cash or Cash Equivalents or otherwise to the extent holders
accept satisfaction of amounts due by settlement in other than cash or Cash
Equivalents before the Holders are entitled to receive any payment on account
of principal of, premium, if any, and interest and Liquidated Damages or
Additional Amounts on the Securities, including any repurchase of Securities
and rescission payments, other than payments by way of the issuance of Junior
Securities or from the trust described in Article VIII; and


 


(b)           any
payment or distribution of assets of the Issuer or such Guarantor of any kind
or character from any source, whether in cash, property or securities (other
than payments by way of the issuance of Junior Securities or from the trust
described in Article VIII) to which the Holders or the Trustee on behalf
of the Holders would be entitled (by set-off or otherwise), except for the
provisions of Article VIII, will be paid by the liquidating trustee or
agent or other person making such a payment or distribution directly to the
holders of such Senior Debt or their representative to the extent necessary to
make payment in full in cash or


 


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Cash Equivalents on all such Senior Debt remaining unpaid, after giving
effect to any concurrent payment or distribution to the holders of such Senior
Debt.


 


Section 12.4           Securityholders to Be Subrogated to Rights of Holders
of Senior Debt.


 


Subject to the payment in full in cash or
Cash Equivalents of all Senior Debt of the Issuer and the Guarantors as
provided herein, the Holders of Securities shall be subrogated to the rights of
the holders of such Senior Debt to receive payments or distributions of assets
of the Issuer and the Guarantors applicable to the Senior Debt until all
amounts owing on the Securities shall be paid in full, and for the purpose of
such subrogation no such payments or distributions to the holders of such
Senior Debt by or on behalf of the Issuer or the Guarantors, or by or on behalf
of the Holders by virtue of this Article XII, which otherwise would have
been made to the Holders shall, as between the Issuer and Guarantors and the
Holders, be deemed to be payment by the Issuer or Guarantors or on account of
such Senior Debt, it being understood that the provisions of this
Article XII are and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of such Senior
Debt, on the other hand.


 


If any payment or distribution to which the
Holders would otherwise have been entitled but for the provisions of this
Article XII shall have been applied, pursuant to the provisions of this
Article XII, to the payment of amounts payable under Senior Debt of the
Issuer or the Guarantors, then the Holders shall be entitled to receive from
the holders of such Senior Debt any payments or distributions received by such
holders of Senior Debt in excess of the amount sufficient to pay all amounts
payable under or in respect of such Senior Debt in full in Cash or Cash
Equivalents.


 


Section 12.5           Obligations of the Issuer Unconditional.


 


Nothing contained in this Article XII or
elsewhere in this Indenture or in the Securities is intended to or shall
impair, as between the Issuer and Guarantors and the Holders, the obligation of
each such Person, which is absolute and unconditional, to pay to the Holders
the principal of, premium, if any, and interest and Liquidated Damages on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Issuer and the Guarantors other than the holders
of the Senior Debt, nor shall anything herein or therein prevent the Trustee or
any Holder from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article XII and under the proviso to Section 6.2, of the
holders of Senior Debt in respect of cash, property or securities of the Issuer
or the Guarantors received upon the exercise of any such remedy or
otherwise.  Notwithstanding anything to
the contrary in this Article XII or elsewhere in this Indenture or in the
Securities, upon any distribution of assets of the Issuer referred to in this
Article XII, the Trustee, subject to the provisions of Sections 6.1 and
6.2, and the Holders shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating Trustee or agent or other Person making any distribution to the
Trustee or to the Holders for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Debt and other
Indebtedness of the Issuer and the Guarantors, the amount thereof or payable


 


77





















 


thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article XII so long as such court
has been apprised of the provisions of, or the order, decree or certificate
makes reference to, the provisions of this Article XII.  Nothing in this Section 12.5 shall apply
to the claims of, or payments to, the Trustee under or pursuant to
Section 6.7.


 


Section 12.6           Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.


 


The Trustee shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment to or by the Trustee unless and until a Trust Officer of the
Trustee or any Paying Agent shall have received, no later than two Business
Days prior to such payment, written notice thereof from the Issuer or from one
or more holders of Senior Debt or from any representative therefor and, prior
to the receipt of any such written notice, the Trustee, subject to the
provisions of Sections 7.1 and 7.2, shall be entitled in all respects
conclusively to assume that no such fact exists.  The Issuer shall give prompt written notice
to the Trustee of any fact actually known to the Issuer which would prohibit
the making of any payment to or by the Trustee in respect of the Securities.


 


Section 12.7           Application by Trustee of Assets Deposited with It.


 


Amounts deposited in trust with the Trustee
pursuant to and in accordance with Article VIII shall be for the sole
benefit of Securityholders and, to the extent allocated for the payment of
Securities, shall not be subject to the subordination provisions of this
Article XII.  Otherwise, any deposit
of assets with the Trustee or any Paying Agent (whether or not in trust) for
the payment of principal of or interest on any Securities shall be subject to
the provisions of Sections 12.1, 12.2, 12.3 and 12.4; provided, that, if prior to two Business
Days preceding the date on which by the terms of this Indenture any such assets
may become distributable for any purpose (including without limitation, the
payment of either principal of or interest on any Security) the Trustee or such
Paying Agent shall not have received with respect to such assets the written
notice provided for in Section 12.6, then the Trustee or such Paying Agent
shall have full power and authority to receive such assets and to apply the same
to the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such date.


 


Section 12.8           Subordination Rights Not Impaired by Acts or Omissions
of the Issuer, Guarantors or Holders of Senior Debt, Etc.; Modifications.


 


No right of any present or future holders of
any Senior Debt to enforce subordination provisions contained in this
Article XII shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Issuer, the Guarantors or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance
by the Issuer or the Guarantors with the terms of this Indenture, regardless of
any knowledge thereof which any such holder may have or be otherwise charged
with.  The holders of Senior Debt may
extend, renew, modify or amend the terms of the Senior Debt or any security
therefor and release, sell or exchange such security and otherwise deal freely
with the Issuer and the Guarantors, all without affecting the liabilities and
obligations of the parties to this Indenture or the Holders.  The 


 


78





















 


subordination provisions are solely for the benefit of the holders from
time to time of Senior Debt and may not be rescinded, cancelled, amended or
modified in any way other than any amendment or modification that would not
adversely affect the rights of any holder of Senior Debt or any amendment or
modification that is consented to by each holder of Senior Debt that would be
affected thereby.  The subordination
provisions of this Article XII shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the Senior
Debt is, pursuant to applicable law, avoided, recovered or rescinded or must
otherwise be restored or returned by any holder of Senior Debt, whether as a
“voidable preference,” “fraudulent conveyance,” “fraudulent transfer,” or
otherwise, all as though such payment or performance had not been made.


 


Section 12.9           Securityholders Authorize Trustee to Effectuate
Subordination of Securities.


 


Each Holder of the Securities by his
acceptance thereof authorizes and expressly directs the Trustee on his behalf
to take such action as may be necessary or appropriate to effectuate the
subordination provisions contained in this Article XII and to protect the
rights of the Holders pursuant to this Indenture, and appoints the Trustee his
attorney-in-fact for such purpose, including, in the event of any dissolution,
winding up, liquidation or reorganization of the Issuer or any Guarantor
(whether in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of the Issuer and the Guarantors) the immediate filing of a claim
for the unpaid balance of his Securities in the form required in said
proceedings and cause said claim to be approved.  If the Trustee does not file a proper claim
or proof of debt in the form required in such proceeding prior to 30 days
before the expiration of the time to file such claim or claims, then the
holders of the Senior Debt or their representative are or is hereby authorized
to have the right to file and are or is hereby authorized to file an appropriate
claim for and on behalf of the Holders of said Securities.  Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Debt or their representative to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee or
the holders of Senior Debt or their representative to vote in respect of the
claim of any Securityholder in any such proceeding.


 


Section 12.10         Right of Trustee to Hold Senior Debt.


 


The Trustee shall be entitled to all of the
rights set forth in this Article XII in respect of any Senior Debt at any
time held by it to the same extent as any other holder of Senior Debt, and
nothing in this Indenture shall be construed to deprive the Trustee of any of
its rights as such holder.


 


Section 12.11         Article XII Not to Prevent Events of Default.


 


The failure to make a payment on account of
principal of, premium, if any, or interest on the Securities by reason of any
provision of this Article XII shall not be construed as preventing the
occurrence of a Default or an Event of Default under Section 7.1 or in any
way


 


79





















 


limit the rights of the Trustee or any Holder to pursue any other
rights or remedies with respect to the Securities.


 


Section 12.12         No Fiduciary Duty of Trustee to Holders of Senior Debt.


 


Notwithstanding anything to the contrary
herein, the Trustee shall not be deemed to owe any fiduciary duty to any
present or future holders of Senior Debt, and shall not be liable to any such
holders (other than for its willful misconduct or negligence) if it shall in
good faith mistakenly pay over or distribute to the Holders of Securities or
the Issuer or Guarantors or any other Person, cash, property or securities to
which any holders of Senior Debt shall be entitled by virtue of this
Article XII or otherwise.  The
Trustee undertakes to perform or to observe only such of the covenants and
obligations as are specifically set forth in this Article XII, and no
implied covenants or obligations with respect to such holders of Senior Debt
shall be implied in this Indenture against the Trustee.  Nothing in this Section 12.12 shall
affect the obligation of any other such Person to hold such payment for the
benefit of, and to pay such payment over to, the holders of Senior Debt or
their representative.  In the event of
any conflict between the fiduciary duty of the Trustee to the Holders of
Securities and its duty to the holders of Senior Debt, the Trustee is expressly
authorized to resolve such conflict in favor of the Holders.


 


ARTICLE XIII



MISCELLANEOUS


 


Section 13.1           TIA Controls.


 


If any provision of this Indenture limits,
qualifies, or conflicts with the duties imposed by operation of the TIA, the
imposed duties, upon qualification of this Indenture under the TIA, shall
control.


 


Section 13.2           Notices.


 


Any notices or other communications to the
Issuer, the Guarantors or the Trustee required or permitted hereunder shall be
in writing, and shall be sufficiently given if made by hand delivery, by
telecopier or registered or certified mail, first-class postage prepaid, return
receipt requested, addressed as follows:


 


if to the Issuer or any Guarantor:


 


Kerzner International Limited

Coral Towers

Paradise Island, Bahamas

Attention:  General Counsel

Telephone: (242)-363-6019

Facsimile: (212) 659-5196


 


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if to the Trustee (addressed to a Trust
Officer at the following address):


 


The Bank of New York Trust Company, N.A.

101 Barclay St., Floor 21 W

New York, New York

Attention:  Corporate Trust
Administration

Telephone:  (212) 815-5783

Facsimile:   (212) 815-5915


 


The Issuer, the Guarantors or the Trustee by
notice to each other party may designate additional or different addresses as
shall be furnished in writing by such party. 
Any notice or communication to the Issuer, the Guarantors or the Trustee
shall be deemed to have been given or made as of the date so delivered, if
personally delivered; when receipt is acknowledged, if telecopied; and 5
Business Days after mailing if sent by registered or certified mail,
first-class postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).


 


Any notice or communication mailed to a
Securityholder shall be mailed to such Securityholder by first class mail or
other equivalent means at his address as it appears on the registration books
of the Registrar and shall be sufficiently given to him if so mailed within the
time prescribed.


 


Failure to mail a notice or communication to
a Securityholder or any defect in it shall not affect its sufficiency with
respect to other Securityholders.  If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.


 


Section 13.3           Communications by Holders with Other Holders.


 


Securityholders may communicate pursuant to
TIA § 312(b) with other Securityholders with respect to their rights
under this Indenture or the Securities. 
The Issuer, the Guarantors, the Trustee, the Registrar and any other
person shall have the protection of TIA § 312(c).


 


Section 13.4           Certificate and Opinion as to Conditions Precedent.


 


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


 


(1)             an Officers’ Certificate (in form
and substance reasonably satisfactory to the Trustee) stating that, in the
opinion of the signers, 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 (in form and
substance reasonably satisfactory to the Trustee) stating that, in the opinion
of such counsel, all such conditions precedent have been complied with.


 


81





















 


Section 13.5           Statements Required in Certificate or Opinion.


 


Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture 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, he 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 each 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 or certificates of public officials.


 


Section 13.6           Rules by Trustee, Paying Agent, Registrar.


 


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


 


Section 13.7           Legal Holidays.


 


A “Legal Holiday” used with respect to
a particular place of payment is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are not required to be open.  If a payment date is a Legal Holiday in New
York, New York, payment may be made at such place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.


 


Section 13.8           Governing Law.


 


THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.  THE ISSUER AND EACH GUARANTOR HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING
IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE
SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS.  THE ISSUER AND EACH GUARANTOR IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE
LAW, TRIAL


 


82





















 


BY JURY AND ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUER OR
ANY GUARANTOR IN ANY OTHER JURISDICTION.


 


Section 13.9           No Adverse Interpretation of Other Agreements.


 


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


 


Section 13.10         No Recourse Against Others.


 


No direct or indirect stockholder, director,
officer or employee, as such, past, present or future of the Issuer, the
Guarantors or any successor entity shall have any personal liability in respect
of the obligations of the Issuer or the Guarantors under the Securities or this
Indenture by reason of his status as such stockholder, director, officer or
employee, except to the extent such person is the Issuer or a Guarantor.  Each Securityholder by accepting a Security
waives and releases all such liability. 
Such waiver and release are part of the consideration for the issuance
of the Securities.


 


Section 13.11         Successors.


 


All agreements of the Issuer and the
Guarantors in this Indenture and the Securities shall bind their
successors.  All agreements of the
Trustee in this Indenture shall bind its successor.


 


Section 13.12         Duplicate Originals.


 


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


 


Section 13.13         Severability.


 


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


 


83





















 


Section 13.14         Table of Contents, Headings, Etc.


 


The Table of Contents, Cross-Reference Table
and headings of the Articles and the 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]


 


84





















 


SIGNATURE


 


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


 


 


	
   

  	
  KERZNER INTERNATIONAL LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Richard M. Levine

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Richard M. Levine

  
	
   

  	
   

  	
   Title:

  	
  Executive Vice President and General

  
	
   

  	
   

  	
   

  	
  Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John Allison

  	
   

  
	
   

  	
   

  	
   Name:

  	
  John Allison

  
	
   

  	
   

  	
   Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST COMPANY, N.A.,

  As Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Craig A. Kaye

  	
   

  
	
   

  	
   

  	
   Name:

  	
  Craig A. Kaye

  
	
   

  	
   

  	
   Title:

  	
  Assistant Vice-President

  
					



 





















 


	
   

  	
  KERZNER INTERNATIONAL BAHAMAS LIMITED,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
         /s/
  J. Barrie Farrington

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  J. Barrie
  Farrington

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Vice
  President

  
						



 





















 


	
   

  	
  ISLAND
  HOTEL COMPANY LIMITED

  
	
   

  	
  PARADISE
  ACQUISITION LIMITED

  
	
   

  	
  PARADISE
  BEACH INN LIMITED

  
	
   

  	
  PARADISE
  ENTERPRISES LIMITED

  
	
   

  	
  PARADISE
  ISLAND LIMITED

  
	
   

  	
  KERZNER
  INTERNATIONAL MANAGEMENT LIMITED

  
	
   

  	
  PARADISE
  ISLAND FUTURES LIMITED

  
	
   

  	
  PARADISE
  SECURITY SERVICES LIMITED

  
	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT (TIMESHARE) LIMITED

  
	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT LIMITED

  
	
   

  	
  KERZNER
  INVESTMENTS PALMILLA, INC.

  
	
   

  	
  KERZNER
  NORTHAMPTON LIMITED

  
	
   

  	
  HURRICANE
  HOLE MARINA INVESTMENTS LIMITED

  
	
   

  	
  HURRICANE
  HOLE PROPERTIES LIMITED,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Giselle
  M. Pyfrom

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Giselle M.
  Pyfrom

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Assistant
  Secretary

  
						



 


	
   

  	
  KERZNER
  INTERNATIONAL TIMESHARE LIMITED

  
	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT (TIMESHARE) LIMITED

  
	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT LIMITED

  
	
   

  	
  KERZNER
  INVESTMENTS PALMILLA, INC.

  
	
   

  	
  KERZNER
  INTERNATIONAL EMPLOYMENT SERVICES LIMITED

  
	
   

  	
  KERZNER
  UK LEISURE OPERATIONS HOLDINGS LIMITED

  
	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT (MOROCCO) LIMITED

  
	
   

  	
  PARADISE
  MARINA CONDOMINIUM INVESTMENTS LIMITED,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  	
  /s/ Giselle
  M. Pyfrom

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Giselle M.
  Pyfrom

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Secretary

  
						



 





















 


	
   

  	
  KERZNER
  INVESTMENTS PALMILLA, INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Giselle
  M. Pyfrom

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Giselle M.
  Pyfrom

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President and Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT FZ-LLC

  
	
   

  	
  KERZNER INTERNATIONAL MANAGEMENT FZ-LLC,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Giselle
  M. Pyfrom

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Giselle
  Pyfrom

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Power of
  Attorney

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ONE&ONLY
  MANAGEMENT LIMITED

  
	
   

  	
  ONE&ONLY
  RESORTS LIMITED

  
	
   

  	
  KERZNER
  INTERNATIONAL MARINE PROJECTS LIMITED

  
	
   

  	
  KERZNER
  UK LEISURE PROPERTY HOLDINGS LIMITED

  
	
   

  	
  KERZNER
  INVESTMENTS MOROCCO LIMITED

  
	
   

  	
  KERZNER
  INTERNATIONAL MOROCCO HOLDINGS LIMITED

  
	
   

  	
  KERZNER
  INTERNATIONAL MANAGEMENT (MOROCCO) LIMITED,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Giselle
  M. Pyfrom

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Giselle
  Pyfrom

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Director

  
						



 





















 


	
   

  	
  KERZNER
  INVESTMENTS CONNECTICUT, INC.

  
	
   

  	
  ISS,
  INC.

  
	
   

  	
  PIV,
  INC.

  
	
   

  	
  KERZNER
  INVESTMENTS CALIFORNIA, INC.

  
	
   

  	
  KERZNER
  INTERNATIONAL NEW YORK, INC.

  
	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT SERVICES, INC.

  
	
   

  	
  KERZNER
  INTERNATIONAL MARKETING, INC.

  
	
   

  	
  KERZNER
  INTERNATIONAL NEVADA, INC.

  
	
   

  	
  KERZNER
  NEW YORK, INC.

  
	
   

  	
  KERZNER
  INTERNATIONAL RESORTS, INC.

  
	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT SERVICES, INC.

  
	
   

  	
  KERZNER
  INTERNATIONAL MANAGEMENT SERVICES, INC.

  
	
   

  	
  KERZNER
  INTERNATIONAL CALIFORNIA, INC.

  
	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT SERVICES HOLDING, L.L.C.

  
	
   

  	
  KERZNER
  INTERNATIONAL MANAGEMENT SERVICES HOLDING, L.L.C.

  
	
   

  	
  KERZNER
  INVESTMENTS BLB, INC.

  
	
   

  	
  KERZNER
  INVESTMENTS PENNSYLVANIA, INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Richard
  Levine

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Richard
  Levine

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Vice
  President

  
						



 





















 


	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT SERVICES HOLDING, L.L.C.

  
	
   

  	
  KERZNER
  INTERNATIONAL MANAGEMENT SERVICES HOLDING, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Richard
  Levine

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Richard
  Levine

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Vice
  President

  
						



 





















 


	
   

  	
  ABERDEEN
  MANAGEMENT LIMITED,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/
  Authorized Signatory for Cosign Limited

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Authorized
  Signatory for

  Cosign Limited

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Corporate
  Secretary

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/
  Authorized Signatory for Cosign Limited

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Authorized
  Signatory for

  Cosign Limited

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Corporate
  Secretary

  
						



 





















 


	
   

  	
  BIRBO
  NV,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ TMF

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  TMF

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Director

  
						



 





















 


	
   

  	
  PURPOSEFUL
  BV,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ TIM BV

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  TIM BV

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Director

  
						



 





















 


	
   

  	
  KERZNER
  HOTELS INTERNATIONAL (BERMUDA) LIMITED,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Wayne
  Morgan

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Wayne Morgan

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Secretary

  
						



 





















 


	
   

  	
  KERZNER
  HOTELS INTERNATIONAL MANAGEMENT NV,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Curacao
  Corporation

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Curacao
  Corporation

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Director

  
						



 





















 


	
   

  	
  KERZNER
  INTERNATIONAL FINANCE (BVI) LIMITED,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ STC
  International

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  STC
  International

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Secretary

  
						



 





















 


	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT SERVICES MEXICO, S. DE R.L. DE C.V.

  
	
   

  	
  KERZNER INTERNATIONAL MANAGEMENT SERVICES
  MEXICO, S. DE R.L. DE C.V.

  
	
   

  	
  KERZNER SERVICIOS MEXICO, S. DE R.L. DE C.V.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ William
  C. Murtha

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  William C.
  Murtha

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Vice
  President

  
						



 





















 


	
   

  	
  KERZNER
  INTERNATIONAL MARKETING (UK) LIMITED

  
	
   

  	
  KERZNER
  INTERNATIONAL DEVELOPMENT SERVICES (UK) LIMITED,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Alex
  Penkul

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Alex Penkul

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Secretary

  
						



 





















 


	
   

  	
  KERZNER
  NORTHAMPTON LIMITED

  
	
   

  	
  KERZNER
  GREENWICH HOTEL LIMITED

  
	
   

  	
  KERZNER
  GREENWICH CASINO LIMITED

  
	
   

  	
  KERZNER
  GLASGOW LIMITED

  
	
   

  	
  KERZNER
  UK GAMING LIMITED

  
	
   

  	
  KERZNER
  MANCHESTER LIMITED,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Margaret
  Mary Hotchkiss

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Margaret
  Mary Hotchkiss

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Secretary

  
						



 





















 


	
   

  	
  ONE&ONLY
  RESORTS (FRANCE) EURL,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Roger
  Wharton

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Roger
  Wharton

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Chairman

  
						



 


 


	
   

  	
  ONE&ONLY
  RESORTS (DEUTSCHLAND) GMBH,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Roger
  Wharton

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Roger
  Wharton

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Director

  
						



 


 


	
   

  	
  SOLEA
  VACANCES SA,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Roger
  Wharton

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  Roger
  Wharton

  
	
   

  	
   

  	
   

  	
   Title:

  	
  President

  
						



 





















 


	
   

  	
  KERZNER INTERNATIONAL NORTH AMERICA, INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ John R.
  Allison

  	
   

  
	
   

  	
   

  	
   

  	
   Name:

  	
  John R.
  Allison

  
	
   

  	
   

  	
   

  	
   Title:

  	
  Executive
  Vice President and Chief Financial Officer

  
						



 


	
   

  	
  KERZNER
  INTERNATIONAL PALM ISLAND LIMITED

  
	
   

  	
  KERZNER
  INTERNATIONAL UAE LIMITED

  
	
   

  	
  ONE&ONLY
  RESORTS (SOUTHERN AFRICA) (PTY) LIMITED

  
	
   

  	
  WORLD
  LEISURE HOLIDAYS (PTY.) LIMITED,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ John R.
  Allison

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John R.
  Allison

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Director

  
						



 


A-1





















 


EXHIBIT A


 


[FORM OF
NOTE]


 


KERZNER
INTERNATIONAL LIMITED


 


63⁄4% SENIOR
SUBORDINATED NOTES


DUE 2015


 


Unless and until it is exchanged in whole or
in part for Securities in definitive form, this Security may not be transferred
except as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository
or a nominee of such successor Depository. 
Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) (“DTC”), to
the Issuer or their agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or 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.  BY ITS ACQUISITION OF THE SECURITIES OR OF A
BENEFICIAL INTEREST THEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS
A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), (B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR THE
ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR
(C) IT IS AN


 










(1)           This paragraph
should only be added if the Security is issued in global form.


 


A-1





















 


INSTITUTIONAL “ACCREDITED INVESTOR” (AS
DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT).  THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1)(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, (d) TO AN INSTITUTIONAL ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $100,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT, OR (e) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
IN THE CASE OF (d) UPON DELIVERY OF A TRANSFEREE LETTER OF REPRESENTATION
AND IN THE CASE OF (b), (c) AND (e) UPON AN OPINION OF COUNSEL IF THE
ISSUER OR REGISTRAR SO REQUEST), (2) TO THE ISSUER OR A SUBSIDIARY THEREOF,
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT 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.  THESE SECURITIES
MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH APPLICABLE GAMING LAWS.


 


[THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY
GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR


 


A-2





















 


DEFINITIVE SECURITIES, ARE AS SPECIFIED IN
THE INDENTURE (AS DEFINED HEREIN). 
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
TEMPORARY GLOBAL SECURITY SHALL BE ENTITLED TO RECEIVE CASH PAYMENTS OF
INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS THIS SECURITY.  NOTHING IN THIS LEGEND SHALL BE DEEMED TO
PREVENT INTEREST FROM ACCRUING ON THIS NOTE.](2)


 


If a Holder or a beneficial owner of a Note is required by any Gaming
Authority to be found suitable, the Holder shall apply for a finding of
suitability within 30 days after a Gaming Authority request or sooner if so
required by such Gaming Authority.  The
applicant for a finding of suitability must pay all costs of the investigation
for such finding of suitability.  If a
Holder or beneficial owner is required to be found suitable and is not found
suitable by a Gaming Authority, the Holder shall, to the extent required by
applicable law, dispose of his Securities within 30 days or within that time
prescribed by a Gaming Authority, whichever is earlier.  If the Holder fails to dispose of his
Securities within such time period, the Issuer may, at its option, redeem such
Holder’s Securities at, depending on applicable law, (i) the principal
amount thereof, together with accrued and unpaid interest (and Liquidated
Damages, if any) to the date of the finding of unsuitability by a Gaming
Authority, (ii) the amount that such Holder paid for the Securities,
(iii) the fair market value of the Securities, (iv) the lowest of
clauses (i), (ii) and (iii), or (v) such other amount as may be
determined by the appropriate Gaming Authority.


 










(2)           To
be included only on Reg S Temporary Global Securities.


 


A-3





















 


CUSIP
NO.                      


 


	
  No.

  	
   

  	
  $

  



 


Kerzner International Limited, an
international business company organized under the laws of the Commonwealth of
The Bahamas (“Kerzner International” or the “Issuer”, which terms, in each
case, includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promise, jointly and severally, to pay
to            , or
registered assigns, the principal sum of
            
Dollars, on October 1, 2015.


 


Interest Payment Dates: April 1 and
October 1.


 


Record Dates: March 15 and
September 15.


 


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


 


A-4





















 


IN WITNESS WHEREOF, the Issuer has caused
this Instrument to be duly executed.


 


	
   

  	
  KERZNER INTERNATIONAL LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  	
   

  
					



 


A-5





















 


[FORM OF
TRUSTEE’S CERTIFICATE OF AUTHENTICATION]


 


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


 


Dated:
                  ,
200  


 


	
   

  	
  THE BANK OF NEW YORK TRUST COMPANY, N.A.,

  
	
   

  	
  As Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  



 


A-6





















 


(Reverse of Note)


 


KERZNER
INTERNATIONAL LIMITED


 


63⁄4% SENIOR
SUBORDINATED NOTES

DUE 2015


 


1.             Interest.


 


Kerzner International Limited, an
international business company organized under the laws of the Commonwealth of
The Bahamas (“Kerzner International” or the “Issuer”, which terms, in each
case, includes any successor corporation under the Indenture hereinafter
referred to), promises to pay interest on the principal amount of this Security
at a rate of 63⁄4% per annum.  To the
extent it is lawful, the Issuer promises to pay interest on any interest
payment due but unpaid on such principal amount at a rate of 63⁄4% per annum
compounded semi-annually.


 


The Issuer will pay interest semi-annually on
April 1 and October 1 of each year (each, an “Interest Payment
Date”), commencing April 1, 2006. 
Interest on the Securities will accrue from the most recent date to which
interest has been paid on the Securities pursuant to the Indenture or, if no
interest has been paid, from September 22, 2005.  Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months.


 


2.             Method of Payment.


 


The Issuer shall pay interest (and Liquidated
Damages, if any) on the Securities (except defaulted interest) to the persons
who are the registered Holders at the close of business on the Record Date
immediately preceding the Interest Payment Date.  Holders must surrender Securities to a Paying
Agent to collect principal payments. 
Except as provided below, the Issuer shall pay principal and interest
(and Liquidated Damages, if any) in such coin or currency of the United States of
America as at the time of payment shall be legal tender for payment of public
and private debts (“Cash”).  The
Securities will be payable as to principal, premium and interest (and
Liquidated Damages, if any) at the office or agency of the Issuer maintained
for such purpose within the City and State of New York or, at the option of the
Issuer, payment of principal, premium and interest (and Liquidated Damages, if
any) may be made by check mailed to the Holders at their addresses set forth in
the register of Holders, and provided
that payment by wire transfer of immediately available funds will be required
with respect to principal of and interest (and Liquidated Damages, if any) and
premium on all Global Securities and all other Securities the Holders of which
shall have provided written wire transfer instructions to the Issuer and the
Paying Agent.


 


3.             Paying Agent and Registrar.


 


Initially, The Bank of New York Trust
Company, N.A. (the “Trustee”) will act as Paying Agent and
Registrar.  The Issuer may change any
Paying Agent, Registrar or Co-registrar without notice to the Holders.  The Issuer or any of its Subsidiaries may,
subject to certain exceptions, act as Paying Agent, Registrar or Co-registrar.


 


A-7





















 


4.             Indenture.


 


The Issuer issued the Securities under an
Indenture, dated as of September 22, 2005 (the “Indenture”), by and
among the Issuer, the Guarantors named therein and the Trustee.  Capitalized terms herein are used as defined
in the Indenture unless otherwise defined herein.  The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act, as in effect on the date of the Indenture.  The Securities are subject to all such terms,
and Holders of Securities are referred to the Indenture and said Act for a
statement of them.  The Securities are
senior subordinated obligations of the Issuer.


 


5.             Redemption.


 


Except as provided in this Paragraph 5 or as
provided in Sections 3.1 or 3.2 of the Indenture, the Issuer shall not have the
right to redeem any Securities.  The
Securities are redeemable in whole or from time to time in part at any time on
or after October 1, 2010 at the option of the Issuer, at the Redemption
Price (expressed as a percentage of principal amount) set forth below, if
redeemed during the 12-month period commencing October 1 of each of the
years indicated below, in each case (subject to the right of Holders of record
on the Record Date to receive interest due on an Interest Payment Date that is
on or prior to such Redemption Date), plus any accrued but unpaid interest (and
Liquidated Damages, if any) to the Redemption Date.


 


	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
  2010

  	
   

  	
  103.375

  	
  %

  
	
  2011

  	
   

  	
  102.250

  	
  %

  
	
  2012

  	
   

  	
  101.125

  	
  %

  
	
  2013 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


On or prior to October 1, 2008, upon one
or more Qualified Equity Offerings, up to 35% aggregate principal amount of the
Securities issued pursuant to the Indenture may be redeemed at the option of
the Issuer with cash from the Net Cash Proceeds of such Qualified Equity Offering,
at 106.75% of the principal amount thereof (subject to the right of Holders of
record on a Record Date to receive interest due on an Interest Payment Date
that is on or prior to such Redemption Date), plus accrued but unpaid interest
(and Liquidated Damages, if any) to the date of redemption; provided, that such redemption shall occur
within 60 days of such Qualified Equity Offering.


 


The Securities may be redeemed at the option
of the Issuer, in whole but not in part, upon not less than 30 nor more than 60
days’ notice given as provided herein, at any time at a redemption price equal
to the principal amount thereof, plus accrued and unpaid interest, if any,
thereon, plus Liquidated Damages, if any, to the date fixed for redemption if,
as a result of any change in or amendment to the laws, treaties, rulings or
regulations of The Bahamas, or of any political subdivision or taxing authority
thereof or therein, or any change in the official position of the applicable
taxing authority regarding the application or interpretation of such laws,
treaties, rulings or regulations (including a holding judgment or order of a
court of competent jurisdiction) or any execution thereof or amendment thereto,
which is enacted into law or otherwise becomes effective after the Issue Date,
the Issuer is or would be required on the next


 


A-8





















 


succeeding Interest Payment Date to pay Additional Amounts on the
Securities as a result of the imposition of a Bahamian tax and the payment of
such Additional Amounts cannot be avoided by the use of any reasonable measures
available to the Issuer which do not cause the Issuer to incur any material
costs.  The Issuer shall also pay to
holders on the redemption date any Additional Amounts then due and which will
become due as a result of the redemption would otherwise be payable.


 


If a Holder or a beneficial owner of a Note
is required by any Gaming Authority to be found suitable, the Holder shall
apply for a finding of suitability within 30 days after a Gaming Authority
request or sooner if so required by such Gaming Authority.  The applicant for a finding of suitability
must pay all costs of the investigation for such finding of suitability.  If a Holder or beneficial owner is required
to be found suitable and is not found suitable by a Gaming Authority, the
Holder shall, to the extent required by applicable law, dispose of his
Securities within 30 days or within that time prescribed by a Gaming Authority,
whichever is earlier.  If the Holder fails
to dispose of his Securities within such time period, the Issuer may, at its
option, redeem such Holder’s Securities at, depending on applicable law,
(i) the principal amount thereof, together with accrued and unpaid
interest (and Liquidated Damages, if any) to the date of the finding of
unsuitability by a Gaming Authority, (ii) the amount that such Holder paid
for the Securities, (iii) the fair market value of the Securities,
(iv) the lowest of clauses (i), (ii) and (iii), or (v) such
other amount as may be determined by the appropriate Gaming Authority.


 


Any redemption of the Securities shall comply
with Article III of the Indenture.


 


6.             Notice of Redemption.


 


Except as required by a Gaming Authority with
respect to a redemption provided for in Section 3.2 of the Indenture,
notice of redemption will be mailed by first class mail at least 30 days but
not more than 60 days before the Redemption Date (unless a shorter notice shall
be required by any Governmental Authority) to each Holder of Securities to be
redeemed at his registered address. 
Securities in denominations larger than $1,000 may be redeemed in part.


 


Except as set forth in the Indenture, from
and after any Redemption Date, if monies for the redemption of the Securities
called for redemption shall have been deposited with the Paying Agent on such
Redemption Date, the Securities called for redemption will cease to bear
interest and the only right of the Holders of such Securities will be to
receive payment of the Redemption Price, plus any accrued but unpaid interest
(and Liquidated Damages, if any) to the Redemption Date.


 


7.             Denominations; Transfer;
Exchange.


 


The Securities are in registered form,
without coupons, in denominations of $1,000 and integral multiples of
$1,000.  A Holder may register the
transfer of, or exchange Securities in accordance with, the Indenture.  The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture.  The Registrar need not register the transfer
of or exchange any Securities selected for redemption.


 


A-9





















 


8.             Persons Deemed Owners.


 


The registered Holder of a Security may be
treated as the owner of it for all purposes.


 


9.             Unclaimed Money.


 


If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent(s)
will pay the money back to the Issuer at its written request.  After that, all liability of the Trustee and
such Paying Agent(s) with respect to such money shall cease.


 


10.           Discharge Prior to Redemption or
Maturity.


 


If the Issuer at any time deposits into an
irrevocable trust with the Trustee Cash or U.S. Government Obligations sufficient
to pay the principal of and interest (and Liquidated Damages, if any) on the
Securities to redemption or maturity and comply with the other provisions of
the Indenture relating thereto, the Issuer will be discharged from certain
provisions of the Indenture and the Securities (including the financial
covenants, but excluding its obligation to pay the principal of and interest
(and Liquidated Damages, if any) on the Securities).  Upon satisfaction of certain additional
conditions set forth in the Indenture, the Issuer may elect to have its
obligations with respect to outstanding Securities discharged.


 


11.           Amendment; Supplement; Waiver.


 


Subject to certain exceptions, the Indenture
or the Securities may be amended or supplemented with the written consent of
the Holders of a majority in aggregate principal amount of the Securities then
outstanding, and any existing Default or Event of Default or compliance with
any provision may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding.  Without notice to or consent of any Holder,
the parties thereto may amend or supplement the Indenture or the Securities to,
among other things, cure any ambiguity, defect or inconsistency, comply with
the TIA or make any other change that does not adversely affect the rights of
any Holder of a Security.


 


12.           Restrictive Covenants.


 


The Indenture imposes certain limitations on
the ability of the Issuer and its Subsidiaries to, among other things, incur
additional Indebtedness and Disqualified Capital Stock, make payments in
respect of its Capital Stock, enter into transactions with Affiliates, incur
Liens, merge or consolidate with any other person and sell, lease, transfer or
otherwise dispose of substantially all of its properties or assets.  The limitations are subject to a number of
important qualifications and exceptions. 
The Issuer must annually report to the Trustee on compliance with such
limitations.


 


13.           Change of Control.


 


In the event there shall occur any Change of
Control Triggering Event, each Holder of Securities shall have the right, at
such Holder’s option but subject to the limitations


 


A-10





















 


and conditions set forth in the Indenture, to require the Issuer to
purchase on the Change of Control Purchase Date in the manner specified in the
Indenture, all or any part (in integral multiples of $1,000) of such Holder’s
Securities at a cash price equal to 101% of the principal amount thereof,
together with accrued but unpaid interest (and Liquidated Damages, if any) to
and including the Change of Control Purchase Date.


 


14.           Certain Asset Sales.


 


The Indenture imposes certain limitations on
the ability of the Issuer to sell assets. 
In the event the proceeds from a permitted Asset Sale exceed certain
amounts, as specified in the Indenture, the Issuer generally will be required
either to reinvest the proceeds of such Asset Sale in their business, use such
proceeds to retire debt, or to make an asset sale offer to purchase a certain
amount of Indebtedness, including each Holder’s Securities at 100% of the
principal amount thereof, plus accrued interest, if any, to the purchase date,
as more fully set forth in the Indenture.


 


15.           Gaming Laws.


 


The rights of the Holder of this Security and
any owner of any beneficial interest in this Security are subject to various
gaming laws and the jurisdiction and requirements of the Gaming Authorities and
the further limitations and requirements set forth in the Indenture.


 


16.           Ranking.


 


Payment of principal, premium, if any, and
interest on the Securities is subordinated, in the manner and to the extent set
forth in the Indenture, to the prior payment in full of all Senior Debt.


 


17.           Successors.


 


When a successor assumes all the obligations
of its predecessor under the Securities and the Indenture, the predecessor will
be released from those obligations.


 


18.           Defaults and Remedies.


 


If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Securities then outstanding may declare all the Securities to be due
and payable immediately in the manner and with the effect provided in the
Indenture.  Holders of Securities may not
enforce the Indenture or the Securities except as provided in the
Indenture.  The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the
Securities.  Subject to certain
limitations, Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power.


 


A-11





















 


19.           Trustee Dealings with Company.


 


The Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Issuer or its Affiliates, and may otherwise deal with
the Issuer or its Affiliates as if it were not the Trustee.


 


20.           No Recourse Against Others.


 


No direct or indirect stockholder, director,
officer or employee, as such, past, present or future of the Issuer, the
Guarantors or any successor entity shall have any personal liability in respect
of the obligations of the Issuer or the Guarantors under the Securities or the
Indenture by reason of his status as such stockholder, director, officer or
employee, except to the extent such person is the Issuer or a Guarantor.  Each Holder of a Security by accepting a
Security waives and releases all such liability.  The waiver and release are part of the
consideration for the issuance of the Securities.


 


21.           Authentication.


 


This Security shall not be valid until the
Trustee or authenticating agent signs the certificate of authentication on the
other side of this Security.


 


22.           Abbreviations and Defined Terms.


 


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


 


23.           CUSIP Numbers.


 


Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Issuer will
cause CUSIP numbers to be printed on the Securities as a convenience to the
Holders of the Securities.  No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.


 


24.           Governing Law.


 


The Indenture and the Securities shall be
governed by and construed in accordance with the internal laws of the State of
New York.


 


A-12





















 


[FORM OF
ASSIGNMENT]


 


I or we assign this Security to


 


	
   

  
	
   

  
	
   

  
	
  (Print or type name, address and zip code
  of assignee)

  



 


Please insert Social Security or other
identifying number of assignee                                   


 


and irrevocably appoint                           
agent to transfer this Security on the books of the Issuer.  The agent may substitute another to act for
him.


 


	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the
  other side of this Security)

  
	
   

  
	
  Signature guarantee:

  	
   

  	
   

  
							



 


Signatures must be guaranteed by an “eligible institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”) or
such other “signature guarantee program” as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.


 


A-13





















 


OPTION OF
HOLDER TO ELECT PURCHASE


 


If you want to elect to have this Security
purchased by the Issuer pursuant to Section 4.13 or Article X of the
Indenture, check the appropriate box:


 


o            Section 4.13


o            Article X


 


If you want to elect to have only part of
this Security purchased by the Issuer pursuant to the Indenture, state the
principal amount you want to have purchased:


$                      


 


	
  Date:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
  (Sign
  exactly as your name appears on the other side of this Security)

  



 


	
  Signature guarantee:

  	
   

  	
   

  



 


Signatures must be guaranteed by an “eligible institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”) or
such other “signature guarantee program” as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.


 


A-14





















 


SCHEDULE OF
EXCHANGES OF DEFINITIVE SECURITIES(3)


 


The following exchanges of a part of this Global Security for
Definitive Securities have been made:


 


	
  Date
  of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal Amount

  of this Global

  Security

  	
   

  	
  Amount of

  increase in

  Principal Amount

  of this Global

  Security

  	
   

  	
  Principal Amount

  of this Global

  Security following

  such decrease (or

  increase)

  	
   

  	
  Signature of

  authorized

  signatory of

  Trustee or

  Securities

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 










(3)           This
schedule should only be added if the Security is issued in global form.


 


A-15





















 


CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER
OF SECURITIES(4)


 


Re:          63⁄4% SENIOR SUBORDINATED NOTES DUE 2015
OF KERZNER INTERNATIONAL LIMITED


 


This Certificate relates to
$              
principal amount of Securities held in (5)o book-entry or o definitive 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 Security held by
the Depository a Security or Securities in definitive, registered form of
authorized denominations and an aggregate principal amount equal to its
beneficial interest in such Global Security (or the portion thereof indicated
above); or


 


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


 


In connection with such request and in
respect of each such Security, the Transferor does hereby certify that
Transferor is familiar with the Indenture relating to the above-captioned
Securities and as provided in Section 2.6 of such Indenture, the transfer
of this Security does not require registration under the Securities Act (as
defined below) because:(5)


 


o Such Security is being acquired for the
Transferor’s own account, without transfer (in satisfaction of
Section 2.6(a)(ii)(A) or Section 2.6(d)(i)(A) of the
Indenture).


 


o Such Security 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 (in satisfaction of Section 2.6(a)(ii)(B) or Section 2.6(d)(i)(B) of
the Indenture).


 


o Such Security is being transferred in
accordance with (i) Rule 144 or Regulation S under the Securities
Act, (ii) pursuant to an effective registration statement under the
Securities Act, (iii) to an “institutional accredited investor” within the
meaning of Rule 501(A)(1), (2), (3) or (7) under the Securities
Act that is acquiring the Security for its own account, or for the account of
such an institutional accredited investor, in each case in a minimum principal
amount of $100,000, not with a view to or for offer or sale in connection with
any distribution in violation of the Securities Act or (iv) in reliance on
another exemption from registration under the Securities Act (in satisfaction
of Section 2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the
Indenture).  To effect such transfer, the
Registrar or the Issuer may require delivery of an Opinion of Counsel and in
case of a transfer pursuant to clause (iii) above, will require a
transferee letter of representation.


 










(4)           The
following should be included only for Original Securities.


 


(5)           Check
applicable box.


 


A-16





















 


	
   

  	
   

  
	
   

  	
  [INSERT NAME OF TRANSFEROR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
					



 


A-17





















 


EXHIBIT B


 


FORM OF
GUARANTEE


 


For value received, [each of the below-named
subsidiaries of Kerzner International Limited (“Kerzner International” or the
“Issuer”, which terms, in each case, includes any successor corporation under
the Indenture hereinafter referred to)] hereby irrevocably, unconditionally
guarantees on a senior subordinated basis to the Holder of the Security upon
which this Guarantee is endorsed and to the Trustee (i) the due and
punctual payment, as set forth in the Indenture, dated September 22, 2005,
by and among Kerzner International, as issuer, the Guarantors party thereto and
The Bank of New York Trust Company, N.A., as trustee (as may be amended,
modified or supplemented from time to time, the “Indenture”), pursuant to which
such Security and this Guarantee were issued, of the principal of, premium (if
any) and interest (and Liquidated Damages, if any) on such Security when and as
the same shall become due and payable for any reason according to the terms of
such Security and Article XI of the Indenture, (ii) the payment or
performance of all other obligations of the Issuer to the Holders or the
Trustee under the Indenture or the Securities and (iii) in case of any
extension of time of payment or renewal of any Securities or any of such other
obligations, the payment in full when due or performance in accordance with the
terms of the extension or renewal.  The
Guarantee of the Security upon which this Guarantee is endorsed will not become
effective until the Trustee signs the certificate of authentication on such
Security.


 


	
   

  	
  By and on behalf of the following
  Guarantors:

  
	
   

  	
   

  
	
   

  	
  [

  	
  ]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				



 


B-1





















 


SCHEDULE A


 


LIST OF
GUARANTORS


 


	
  1.

  	
  Kerzner International North America, Inc.

  
	
  2.

  	
  Kerzner International Bahamas Limited

  
	
  3.

  	
  Island Hotel Company Limited

  
	
  4.

  	
  Paradise Acquisition Limited

  
	
  5.

  	
  Paradise Beach Inn Limited

  
	
  6.

  	
  Paradise Enterprises Limited

  
	
  7.

  	
  Paradise Island Limited

  
	
  8.

  	
  Kerzner Investments Connecticut, Inc.

  
	
  9.

  	
  Kerzner International Management Limited

  
	
  10.

  	
  Aberdeen Management Limited

  
	
  11.

  	
  Birbo NV

  
	
  12.

  	
  ISS, Inc.

  
	
  13.

  	
  Paradise Island Futures Limited

  
	
  14.

  	
  Paradise Security Services Limited

  
	
  15.

  	
  PIV, Inc.

  
	
  16.

  	
  Purposeful BV

  
	
  17.

  	
  Kerzner Investments California, Inc.

  
	
  18.

  	
  Kerzner International New York, Inc.

  
	
  19.

  	
  Kerzner Hotels International (Bermuda)
  Limited

  
	
  20.

  	
  Kerzner Hotels International Management NV

  
	
  21.

  	
  Kerzner International Timeshare Limited

  
	
  22.

  	
  Kerzner International Development
  (Timeshare) Limited

  
	
  23.

  	
  Kerzner International Development
  Services, Inc.

  
	
  24.

  	
  Kerzner International Development Limited

  
	
  25.

  	
  Kerzner International Finance (BVI) Limited

  
	
  26.

  	
  Kerzner International Marketing (UK)
  Limited

  
	
  27.

  	
  Kerzner International Marketing, Inc.

  
	
  28.

  	
  Kerzner International Nevada, Inc.

  
	
  29.

  	
  Kerzner New York, Inc.

  
	
  30.

  	
  Kerzner International Resorts, Inc.

  
	
  31.

  	
  Solea Vacances SA

  
	
  32.

  	
  Kerzner International Development Services
  Mexico, S. de R.L. de C.V.

  
	
  33.

  	
  Kerzner International Development
  Services, Inc.

  
	
  34.

  	
  Kerzner International Management
  Services, Inc.

  
	
  35.

  	
  Kerzner Investments Palmilla, Inc.

  
	
  36.

  	
  Kerzner International California, Inc.

  
	
  37.

  	
  Kerzner International Development Services
  Holding, L.L.C.

  
	
  38.

  	
  Kerzner International Management Services
  Holding, L.L.C.

  
	
  39.

  	
  Kerzner International Management Services
  Mexico, S. de R.L. de C.V.

  
	
  40.

  	
  Kerzner Northampton Limited

  
	
  41.

  	
  Kerzner Servicios Mexico, S. de R.L. de
  C.V.

  
	
  42.

  	
  Kerzner International Development Services
  (UK) Limited

  



 


SA-1





















 


	
  43.

  	
  Kerzner International Palm Island Limited

  
	
  44.

  	
  Kerzner International UAE Limited

  
	
  45.

  	
  Kerzner International Employment Services
  Limited

  
	
  46.

  	
  Kerzner International Development FZ-LLC

  
	
  47.

  	
  Kerzner International Management FZ-LLC

  
	
  48.

  	
  One&Only Management Limited

  
	
  49.

  	
  One&Only Resorts Limited

  
	
  50.

  	
  Kerzner International Marine Projects
  Limited

  
	
  51.

  	
  Kerzner Investments BLB, Inc.

  
	
  52.

  	
  Kerzner Investments Pennsylvania, Inc.

  
	
  53.

  	
  Kerzner UK Leisure Property Holdings
  Limited

  
	
  54.

  	
  Kerzner UK Leisure Operations Holdings
  Limited

  
	
  55.

  	
  Kerzner Greenwich Hotel Limited

  
	
  56.

  	
  Kerzner Greenwich Casino Limited

  
	
  57.

  	
  Kerzner Glasgow Limited

  
	
  58.

  	
  Kerzner UK Gaming Limited

  
	
  59.

  	
  Kerzner Manchester Limited

  
	
  60.

  	
  Kerzner Investments Morocco Limited

  
	
  61.

  	
  Kerzner International Morocco Holdings
  Limited

  
	
  62.

  	
  Kerzner International Management (Morocco)
  Limited

  
	
  63.

  	
  Kerzner International Development (Morocco)
  Limited

  
	
  64.

  	
  One&Only Resorts (Deutschland) Gmbh

  
	
  65.

  	
  One&Only Resorts (France) EURL

  
	
  66.

  	
  One&Only Resorts (Southern Africa)
  (Pty) Limited

  
	
  67.

  	
  World Leisure Holidays (Pty.) Limited

  
	
  68.

  	
  Paradise Marina Condominium Investments
  Limited

  
	
  69.

  	
  Hurricane Hole Marina Investments Limited

  
	
  70.

  	
  Hurricane Hole Properties Limited

  



 


SA-2