Document:

Exhibit 4.2

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE THEREOF.  THIS
NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL NOTE 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 NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

 

No.:         1

 

	
  CUSIP
  No.:

  	
  695156
  AN9

  	
   

  	
  Principal Amount: $150,000,000

  
	
  ISIN
  No.:

  	
  US695156AN93

  	
   

  	
   

  

 

PACKAGING CORPORATION OF
AMERICA

 

 

6.50% SENIOR NOTES DUE
2018

 

Packaging Corporation of America, a corporation duly
organized and existing under the General Corporation Law of the State of
Delaware (hereinafter called the “Company,” which term includes any successor
under the Indenture referred to below), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of ONE
HUNDRED AND FIFTY MILLION DOLLARS ($150,000,000) on March 15, 2018, and to
pay interest thereon from and including March 25, 2008, or from and
including the most recent date to which interest has been paid or duly provided
for, to, but not including, the applicable Interest Payment Date (as defined
below) or Maturity, as the case may be. 
The Company will pay interest semiannually in arrears on March 15
and September 15 of each year (each, an “Interest Payment Date”),
commencing September 15, 2008 and at Maturity, at the rate of 6.50% per
annum, until the principal hereof is paid or duly made available for
payment.  Interest on this Note shall be
calculated on the basis of a 360-day year consisting of twelve 30-day
months.  The interest so payable and
punctually paid or duly provided for on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Securities) is registered at the close of business on
the on the date (whether or not a Business Day) that is fifteen calendar days
prior to such Interest Payment Date.  Any
such interest which is payable, but is not punctually paid or duly provided
for, on any Interest Payment Date shall forthwith cease to be payable to the
Person who was the Holder hereof on the relevant Regular Record Date by virtue
of having been such Holder, and may be paid to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to the Holder of this
Note not less than 10 days prior to such Special Record Date, or may be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in such
Indenture.

 

Payment of the principal of and premium, if any, and
the interest on this Note will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and

 

 

private debts; provided, however, that, at the option of the Company,
interest may be paid by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or by transfer to
an account maintained by the payee with a bank located in the United States.

 

This Note is one of a duly authorized issue of
Securities of the Company (herein called the “Notes”) issued and to be issued
in one or more series under an Indenture dated as of July 21, 2003 (the “Indenture”),
between the Company and U.S. Bank National Association, as trustee (herein
called the “Trustee,” which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Notes, and the terms upon which the Notes are, and are to be,
authenticated and delivered.  This Note
is one of the series designated on the face hereof, initially limited (subject
to exceptions provided in the Indenture) in aggregate principal amount to
$150,000,000, subject to the right of the Company, without the consent of the
Holders of the Notes, to “reopen” such series and to issue additional Notes of
such series on the terms and subject to the conditions provided in or pursuant
to the Indenture.

 

The interest rate payable on the Notes shall be
subject to adjustments (each an “Interest Rate Adjustment”) from time to time
if either Moody’s or S&P, or any Substitute Rating Agency, downgrades (or
subsequently upgrades) the debt rating assigned to the Notes, in the manner
described below.

 

If the rating of the Notes from Moody’s or any
Substitute Rating Agency is decreased to a rating set forth in the immediately
following table, the interest rate on the Notes shall increase from the
interest rate payable on the Notes on the date of their issuance by the
percentage set forth opposite that rating:

 

	
  Rating*

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Ba1

  	
   

  	
  0.25%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Ba2

  	
   

  	
  0.50%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Ba3

  	
   

  	
  0.75%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  B1 or below

  	
   

  	
  1.00%

  	
   

  

 

*  Including the equivalent ratings of any Substitute
Rating Agency.

 

If the rating of the Notes from S&P or any
Substitute Rating Agency is decreased to a rating set forth in the immediately
following table, the interest rate on the Notes shall increase from the
interest rate payable on the Notes on the date of their issuance by the
percentage set forth opposite that rating:

 

	
  Rating*

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BB+

  	
   

  	
  0.25%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BB

  	
   

  	
  0.50%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BB-

  	
   

  	
  0.75%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  B+ or below

  	
   

  	
  1.00%

  	
   

  

 

*  Including the equivalent ratings of any
Substitute Rating Agency.

 

If at any time the interest rate on the Notes has been
adjusted upward and either Moody’s or S&P (or either Substitute Rating
Agency), as the case may be, subsequently increases its rating of the Notes to
any of the threshold ratings set forth above, the interest rate on the Notes
shall be decreased such that the interest rate for the Notes equals the
interest rate payable on the Notes on the date of their issuance plus the
applicable percentages set forth opposite the ratings from the tables above in
effect immediately following the increase. If Moody’s or any Substitute Rating
Agency subsequently increases its rating of the Notes to Baa3 (or its
equivalent, in the case of a Substitute Rating Agency) or higher and S&P or
any Substitute Rating Agency increases its rating of the Notes to BBB- (or its
equivalent, in the case of a Substitute Rating Agency) or higher, the interest
rate on the Notes shall be decreased to

 

A-2

 

the interest rate payable
on the Notes on the date of their issuance. In addition, the interest rate on
the Notes shall permanently cease to be subject to any Interest Rate Adjustment
described above (notwithstanding any subsequent decrease in the ratings by
either or both rating agencies) if the Notes become rated Baa1 and A- or higher
by Moody’s (or its equivalent, in the case of a Substitute Rating Agency) and
S&P (or its equivalent, in the case of a Substitute Rating Agency),
respectively (or one of these ratings, if the Notes are only rated by one
rating agency).

 

Each adjustment required by any decrease or increase
in a rating set forth above, whether occasioned by the action of Moody’s,
S&P or any Substitute Rating Agency, shall be made independent of any and
all other adjustments. In no event shall (1) the interest rate payable on
the Notes be reduced to below the interest rate payable on the Notes on the
date of their issuance or (2) the total increase in the interest rate
payable on the Notes exceed 2.00% above the interest rate payable on the Notes
on the date of their issuance.

 

No adjustments in the interest rate payable on the
Notes shall be made solely as a result of a rating agency ceasing to provide a
rating. If at any time less than two rating agencies provide a rating of the
Notes, the Company will use its commercially reasonable efforts to obtain a
rating of the Notes from another rating agency, to the extent one exists, and
if another such rating agency rates the Notes (such rating agency, a “Substitute
Rating Agency”), for purposes of determining any increase or decrease in the
interest rate on the Notes pursuant to the table above (a) such Substitute
Rating Agency will be substituted for the last rating agency to provide a
rating of the Notes but which has since ceased to provide such rating, (b) the
relative ratings scale used by such Substitute Rating Agency to assign ratings
to senior unsecured debt will be determined in good faith by an independent
investment banking institution of national standing appointed by the Company and,
for purposes of determining the applicable ratings included in the applicable
table above with respect to such Substitute Rating Agency, such ratings will be
deemed to be the equivalent ratings used by Moody’s or S&P, as applicable,
in such table and (c) the interest rate payable on the Notes will increase
or decrease, as the case may be, such that the interest rate equals the
interest rate payable on the Notes on their date of issuance plus the
appropriate percentage, if any, set forth opposite the rating from such
Substitute Rating Agency in the applicable table above (taking into account the
provisions of clause (b) above) (plus any applicable percentage resulting
from a decreased rating by the other rating agency). For so long as only one
rating agency provides a rating of the Notes, any subsequent increase or
decrease in the interest rate of the Notes necessitated by a reduction or
increase in the rating by the agency providing the rating shall be twice the
percentage set forth in the applicable table above. For so long as no rating
agency provides a rating of the Notes, the interest rate on the Notes shall
increase to, or remain at, as the case may be, 2.00% above the interest rate
payable on the Notes on the date of their issuance.

 

Any Interest Rate Adjustment described above shall
take effect from the first day of the interest period during which a rating
change requires an adjustment in the interest rate. If Moody’s or S&P or
any Substitute Rating Agency changes its rating of the Notes more than once
during any particular interest period, the last change by such agency during
such period shall control for purposes of any Interest Rate Adjustment
described above relating to such agency’s action.

 

If the interest rate payable on the Notes is increased
pursuant to an Interest Rate Adjustment, the term “interest,” as used in this
Note, shall be deemed to include any such additional interest unless the
context otherwise requires.

 

The Notes may be redeemed by the Company, in whole or
from time to time in part, at the option of the Company on any date at a
Redemption Price equal to the greater of (i) 100% of the principal amount
of the Notes to be redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest on the Notes to be
redeemed (exclusive of interest accrued to the applicable Redemption Date)
discounted to such Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis
points, plus, in the case of both clause (i) and clause (ii) above,
accrued and unpaid interest on the principal amount of the Notes being redeemed
up to, but not including, such Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date will be payable to the Holders of the Notes (or one or more Predecessor
Notes) registered as such at the close of business on the relevant Regular
Record Dates according to their terms and the provisions of the Indenture.  Any such redemption shall be effected in
accordance with the terms and conditions set forth in the Indenture.

 

A-3

 

Notice of any redemption will be mailed at least 30
days but not more than 60 days before the applicable Redemption Date to each
Holder of the Notes to be redeemed at such Holder’s registered address.  If less than all the Notes are to be redeemed
at the Company’s option, the Trustee will select, in such manner as it deems
fair and appropriate, the Notes (or portions thereof) to be redeemed.  Unless the Company defaults in payment of the
Redemption Price, on and after the applicable Redemption Date interest will
cease to accrue on the Notes or portions thereof called for redemption on such Redemption
Date.

 

If
a Change of Control Triggering Event occurs, unless the Company has previously
exercised its right to redeem the Notes as described above, the Company will
make an offer to each Holder of Notes to repurchase all or any part (equal to $2,000
or integral multiples of $1,000 in excess thereof) of that Holder’s Notes at a
Repurchase Price in cash equal to 101% of the aggregate principal amount of
Notes repurchased plus any accrued and unpaid interest on the Notes repurchased
to the applicable Repurchase Date. Within 30 days following any Change of
Control Triggering Event or, at the option of the Company, prior to any Change
of Control, but after the public announcement of an impending Change of
Control, the Company will mail a notice to each Holder, with a copy to the
Trustee, describing the transaction or transactions that constitute or may
constitute the Change of Control Triggering Event and offering to repurchase
the Notes on the Change of Control Triggering Event Repayment Date specified in
the notice, which date will be no earlier than 30 days and no later than 60
days from the date such notice is mailed. The notice shall, if mailed prior to
the date of consummation of the Change of Control, state that the offer to
purchase is conditioned on the Change of Control being consummated on or prior
to the Repurchase Date specified in such notice.

 

The
Company will comply with the requirements of Rule 14e-1 under the
Securities Exchange Act of 1934 (the “Exchange Act”) and any other securities laws
and regulations thereunder, to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control Triggering Event. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control Triggering
Event provisions of the Notes, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Change of Control Triggering Event provisions of the
Notes by virtue of such conflict.

 

On the Change of Control
Triggering Event Repayment Date, the Company will, to the extent lawful: (a) accept
for payment all Notes or portions of Notes properly tendered pursuant to the
Company’s offer; (b) deposit with the Paying Agent an amount equal to the
aggregate Repurchase Price in respect of all Notes or portions of Notes
properly tendered; and (c) deliver or cause to be delivered to the Trustee
the Notes properly accepted, together with an Officers’ Certificate stating the
aggregate principal amount of Notes being purchased by the Company.

 

The Paying Agent will
promptly mail to each Holder of Notes properly tendered the Repurchase Price
for the Notes, and the Trustee will promptly authenticate and mail (or cause to
be transferred by book-entry) to each Holder a new Note equal in principal
amount to any unpurchased portion of any Notes surrendered; provided, that each
new Note will be in a principal amount of $2,000 or an integral multiple of $1,000
in excess thereof.

 

The
Company will not be required to make an offer to repurchase the Notes upon a
Change of Control Triggering Event if a third party makes such an offer in the
manner, at the times and otherwise in compliance with the requirements for an
offer made by the Company and such third party purchases all Notes properly
tendered and not withdrawn under its offer. An offer to repurchase the Notes
upon a Change of Control Triggering Event may be made in advance of a Change of
Control Triggering Event, if a definitive agreement is in place for a Change of
Control at the time of the making of a such an offer.

 

As used in this Note, the following terms have the
meaning set forth below:

 

“Below Investment Grade Rating Event” occurs if the
Notes cease to be rated Investment Grade by each of the Rating Agencies on any
date during the period (the “Trigger Period”) commencing 60 days prior to the
first public announcement by the Company of any Change of Control (or pending
Change of Control) and ending 60 days following consummation of such Change of
Control (which Trigger Period shall be extended following consummation of a
Change of Control for so long as any of the Rating Agencies has publicly
announced that it is considering a possible ratings change). If a Rating Agency
is not providing a rating for the Notes at the

 

A-4

 

commencement of any
Trigger Period, the Notes will be deemed to have ceased to be rated Investment
Grade by such Rating Agency during that Trigger Period. Notwithstanding the
foregoing, no Below Investment Grade Rating Event will be deemed to have
occurred in connection with any particular Change of Control unless and until
such Change of Control has actually been consummated.

 

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

 

(1)                                  the
direct or indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of
the Exchange Act) other than the Company or one of its Subsidiaries;

 

(2)                                  the
adoption of a plan relating to the liquidation or dissolution of the Company;

 

(3)                                  the
first day on which the majority of the members of the board of directors of the
Company are not Continuing Directors;

 

(4)                                  the
consummation of any transaction or series of related transactions (including
without limitation, any merger or consolidation) the result of which is that
any “person” (as that term is used in Section 13(d)(3) of the
Exchange Act) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of
the then outstanding shares of the Voting Stock of the Company, measured by
voting power rather than number of shares; or

 

(5)                                  the
Company consolidates with, or merges with or into, any “person” (as that term
is used in Section 13(d)(3) of the Exchange Act), or any person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Company or any of the outstanding Voting Stock of such other person is
converted into or exchanged for cash, securities or other property, other than
any such transaction where the shares of the Voting Stock of the Company
outstanding immediately prior to such transaction constitute, or are converted
into or exchanged for, a majority of the Voting Stock of the surviving person
immediately after giving effect to such transaction.

 

“Change of Control Triggering Event” means the
occurrence of both a Change of Control and a Below Investment Grade Rating
Event.

 

“Comparable Treasury Issue” means, with respect to any
Redemption Date for the Notes, the United States Treasury security selected by
the Independent Investment Banker as having a maturity comparable to the
remaining term of the Notes to be redeemed that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the remaining
term of the Notes.

 

“Comparable Treasury Price” means, with respect to any
Redemption Date for the Notes, (i) the average of five Reference Treasury
Dealer Quotations for such Redemption Date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, (ii) if the Trustee
obtains fewer than five but more than one such Reference Treasury Dealer
Quotations for such Redemption Date, the average of all such quotations or (iii) if
the Trustee obtains only one such Reference Treasury Dealer Quotation for such
Redemption Date, that Reference Treasury Dealer Quotation.

 

“Continuing Directors” means, as of any date of
determination, any member of the Company’s board of directors who (1) was
a member of such board of directors on the date of the issuance of the Notes;
or (2) was nominated for election or elected to such board of directors
with the approval of a majority of the Continuing Directors who were members of
such board of directors at the time of such nomination or election (either by a
specific vote or by approval of the Company’s proxy statement in which such member
was named as a nominee for election as a director).

 

A-5

 

“Final Maturity Date” means March 15, 2018.

 

“Independent Investment Banker” means, with respect to
any Redemption Date for the Notes, Deutsche Bank Securities Inc. and its
successors or J.P. Morgan Securities Inc. and its successors, whichever is
selected by the Trustee after consultation with the Company, or, if both such
firms or the respective successors, if any, to such firms, as the case may be,
are unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing in the United States of
America appointed by the Trustee after consultation with the Company.

 

“Investment Grade” means a rating of Baa3 or better by
Moody’s (or its equivalent under any successor rating categories of Moody’s)
and a rating of BBB- or better by S&P (or its equivalent under any
successor rating categories of S&P) or the equivalent investment grade
credit rating from any additional Rating Agency or Rating Agencies.

 

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

 

“Rating Agency” means (1) each of Moody’s and
S&P; and (2) if either Moody’s or S&P ceases to rate the Notes or
fails to make a rating of the Notes publicly available for reasons outside of
the Company’s control, a “nationally recognized statistical rating
organization,” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under
the Exchange Act, selected by the Company and that must be reasonably
acceptable to the Trustee as a replacement agency for Moody’s or S&P, as
the case may be.

 

“Reference Treasury Dealers” means, with respect to
any Redemption Date for the Notes, Deutsche Bank Securities Inc. and J.P.
Morgan Securities Inc. and their respective successors (provided, however, that
if either such firm or any such successor, as the case may be, ceases to be a
primary U.S. Government securities dealer in New York City (a “Primary Treasury
Dealer”), the Trustee, after consultation with the Company, shall substitute
therefor another Primary Treasury Dealer) and three other Primary Treasury
Dealers selected by the Trustee after consultation with the Company.

 

“Reference Treasury Dealer Quotations” means, with
respect to each Reference Treasury Dealer and any Redemption Date for the
Notes, the average, as determined by the Trustee, of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business
Day preceding such Redemption Date.

 

“Repurchase Date,” with respect to any Note or
portion thereof to be repurchased, means the date fixed for such repurchase by
or pursuant to the Indenture or such Note.

 

“Repurchase Price,” with respect to any Note or
portion thereof to be repurchased, means the price at which it is to be
repurchased as determined by or pursuant to the Indenture or such Note.

 

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

 

“Treasury Rate” means, with respect to any Redemption
Date for the Notes, (i) the yield, under the heading that represents the
average for the immediately preceding week, appearing in the most recently
published statistical release designated “H.15 (519)” or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption “Treasury
Constant Maturities,” for the maturity corresponding to the Comparable Treasury
Issue (if no maturity is within three months before or after the Final Maturity
Date for the Notes, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined and the
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month) or (ii) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price
for such

 

A-6

 

Redemption Date.  The Treasury Rate shall be calculated on the
third Business Day preceding the applicable Redemption Date. As used in the
immediately preceding sentence and in the definition of “Reference Treasury
Dealer Quotations” below, the term “Business Day” means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in The City of New York are authorized or obligated by law, regulation or
executive order to close.

 

“Voting Stock” means, with respect to any “person” (as
that term is used in Section 13(d)(3) of the Exchange Act) as of any
date, the capital stock of such person that is at the time entitled to vote
generally in the election of the board of directors (or persons performing
similar functions) of such person.

 

If an Event of Default with respect to the Notes shall
occur and be continuing, the principal of and accrued and unpaid interest on
the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.

 

The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of Securities of each
series issued under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities at the time Outstanding of each series
affected thereby.  The Indenture also
contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Securities of any series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Notes issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Note. The Indenture also permits the
Company and the Trustee, without notice to or consent of the Holders of the
Notes, to enter into one or more indentures supplemental thereto for the
purposes specified in the Indenture.

 

No reference herein to the Indenture and no provision
of this Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Note at the time, place and rate, and in
the coin or currency, herein and in the Indenture prescribed.

 

As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Security Register upon surrender of this Note for registration of transfer
at the Office or Agency of the Company maintained for the purpose in any place
where the principal of and interest on this Note are payable, duly endorsed, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or by his
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

 

The Notes are issuable only in registered form without
coupons in denominations of $2,000 and integral multiples of $1,000 in excess
thereof.  As provided in the Indenture
and subject to certain limitations set forth therein, the Notes are
exchangeable for a like aggregate principal amount of Notes of authorized
denominations as requested by the Holders surrendering the same.

 

No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith, other than in certain cases provided in the Indenture.

 

Prior to due presentment of this Note for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Note is registered as the owner
hereof for all purposes, whether or not this Note shall be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

 

A-7

 

The Indenture contains provisions whereby (i) the
Company may be discharged from its obligations with respect to the Notes
(subject to certain exceptions) or (ii) the Company may be released from
its obligations under specified covenants and agreements in the Indenture, in
each case if the Company irrevocably deposits with the Trustee money or
Government Obligations sufficient to pay and discharge the entire indebtedness
on all Notes, and satisfies certain other conditions, all as more fully
provided in the Indenture.  In addition,
the Indenture shall cease to be of further effect (subject to certain
exceptions) with respect to the Notes when (1) either (A) all Notes
previously authenticated and delivered have been delivered (subject to certain
exceptions) to the Trustee for cancellation, or (B) all Notes (i) have
become due and payable, (ii) will become due and payable at their Stated
Maturity within one year or (iii) are to be called for redemption within
one year and, in the case of (i), (ii) or (iii) of this sentence, the
Company has irrevocably deposited with the Trustee money in an amount
sufficient to pay and discharge the entire indebtedness on all such Notes not
theretofore delivered to the Trustee for cancellation, and (2) the Company
satisfies certain other conditions, all as more fully provided in the
Indenture.

 

This Note shall be governed by and construed in
accordance with the laws of the State of New York.

 

All terms used in this Note which are defined in the
Indenture and not defined herein shall have the meanings assigned to them in
the Indenture.

 

Unless the certificate of authentication hereon has
been executed by or on behalf of the Trustee under the Indenture by the manual
signature of one of its authorized signatories, this Note shall not be entitled
to any benefits under the Indenture or be valid or obligatory for any purpose.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A-8

 

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

	
   

  	
  Packaging
  Corporation of America

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  RICHARD B. WEST

  
	
   

  	
   

  	
  Name:

  	
  Richard
  B. West

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and CFO

  

 

 

 

 

 

 

Dated:
March 25, 2008

 

	
  TRUSTEE’S
  CERTIFICATE OF AUTHENTICATION 

  	
   

  
	
  This
  is one of the Notes of the series designated therein referred to in the
  within-mentioned Indenture.

  	
   

  
	
   

  	
   

  
	
  U.S.
  Bank National Association, 

  	
   

  
	
  as
  Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  RICHARD PROKOSCH

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  

 

 

 

A-9

 

ABBREVIATIONS

 

The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:

 

	
  TEN
  COM—as tenants in common

  	
  UNIF
  GIFT MIN ACT - -

  	
   

  	
  Custodian

  	
   

  
	
  TEN
  ENT—as tenants by the entireties

  	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  
	
  JT
  TEN—as joint tenants with right of survivorship

  	
   

  	
  Under
  Uniform Gifts to Minors

  
	
  and
  not as tenants in common

  	
   

  	
  Act

  	
   

  
	
   

  	
   

  	
  (State)

  
	
  Additional abbreviations may also be used though not in the above
  list.

  
						

 

	
   

  	
   

  	
   

  

 

 

FOR
VALUE RECEIVED, the undersigned registered holder hereby sell(s), assign(s) and
transfer(s) unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

	
   

   

  

 

 

 

 

	
   

  
	
  PLEASE PRINT OR TYPEWRITE
  NAME AND ADDRESS OF ASSIGNEE

  
	
   

  
	
   

  
	
  the within security and all rights thereunder,
  hereby irrevocably constituting and appointing

  
	
   

  	
   

  	
   

  
	
   

  	
  Attorney

  
	
  to
  transfer said security on the books of the Company with full power of
  substitution in the premises.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  
							

 

 

Notice:  The signature to this
assignment must correspond with the name as it appears upon the face of the
within security in every particular, without alteration or enlargement or any
change whatever.

 

 

A-10

 

OPTION TO ELECT REPAYMENT

(CHANGE OF CONTROL TRIGGERING EVENT)

 

The
undersigned hereby irrevocably requests and instructs the Company to repay the
within Note (or portion thereof specified below) pursuant to its terms at a
price equal to the Repurchase Price together with accrued and unpaid interest
to the Repurchase Date, to the undersigned at:

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or
  typewrite name and address of the undersigned)

  

 

 

 

If less than the entire principal amount of the within
Note is to be repaid, specify the portion thereof which the Holder elects to
have
repaid:                                    ;
and specify the denomination or denominations (which shall not be less than the
minimum authorized denomination) of the Notes to be issued to the Holder for
the portion of the within Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid):
                                    .

 

 

 

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  NOTICE:
  The signature on this Option to Elect Repayment must correspond with the name
  as written upon the face of the within instrument in every particular without
  alteration or enlargement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

 

A-11EXHIBIT
10.1

 

EMPLOYMENT AGREEMENT

 

                                                This Employment
Agreement (this “Agreement”) is entered into as of March         ,
2008, by and between OpBiz, L.L.C. (“Employer”), and Dean DiLullo (“Employee”).

 

1.                                       Employment.  Employer hereby employs Employee, and Employee
hereby accepts employment by the Employer, as Employer’s Executive Vice
President & Chief Operating Officer to perform such executive,
managerial or administrative duties, commensurate with Employee’s position, as
Employer may specify from time to time, during the Specified Term as defined in
Section 2.  The Chief Operating
Officer will serve as a key member of the executive team to lead the execution
and attainment of the Employer’s vision and goals as directed by the Executive
Committee of the Board of Managers pursuant to an agreed organizational chart
including, without limitation, the following:

 

a.                                       Ensuring that departmental business plans are established and
implemented to achieve approved goals within established timetables and
approved resources;

 

b.                                      Ensuring all operating goals are met to produce the maximum
potential guest experience, provide for forecasted financial returns, and meet
the organization’s established cost-control objectives with a focus on
increasing overall profitability for the Employer;

 

c.                                       Providing leadership in the development, execution, and
monitoring of business plans, fiscal budgets, division operations, and
marketing strategies to produce both short-term and long-term profitability for
Employer;

 

d.                                      Performing regular assessments of all aspects of the Employer’s
operations to ascertain both short-term and long-term additional improvements
to guest experience, financial returns, and cost-controls;

 

e.                                       Liaising with the Employer’s President & Chief
Executive Officer with respect to the foregoing; and

 

f.                                         Such other activities as are requested by the Executive
Committee of the Board of Managers from time to time.

 

2.                                       Effective Date;
Specified Term.  This
Agreement shall be effective as of Employee’s commencement date.  Subject to earlier termination as provided
herein, the term of the Employee’s employment hereunder shall commence on March 24,
2008 and terminate on the third (3rd) anniversary thereof (the “Specified
Term”).  If Employee remains employed by
Employer following the Specified Term, any such employment shall be on an
at-will basis, unless the parties agree in writing to extend the Specified
Term.

 

1

 

3.                                       Compensation.

 

a.                                       Base Salary.  During
the Specified Term, in consideration of the performance by Employee of Employee’s
obligations hereunder to Employer and its parents, subsidiaries, affiliates,
and joint ventures (collectively, the “Employer Group”), Employer shall pay
Employee an annual base salary (the “Base Salary”) of $350,000.00 subject to
annual review by the Employer.  The Base
Salary shall be payable in accordance with the payroll practices of Employer as
in effect from time to time.

 

b.                                      Bonus
Compensation.  Employee is eligible to participate
in Employer’s discretionary management bonus program as formulated from time to
time by Employer’s President & Chief Executive Officer in his or her
sole discretion (“Employer Bonus Program”), with the possibility of receiving
up to 50% of Employee’s Base Salary based on achievement of Employer EBITDA
goals as determined by the Employer’s Board of Managers from time to time.  For the first year of Employee’s employment,
Employee’s bonus will be determined on a sliding scale such that 25% of
Employee’s Base Salary (i.e., 50% of the potential bonus) would be paid out in
the event that EBITDA of $80mm is achieved and 50% of Employee’s Base Salary
(i.e., 100% of the potential bonus in the aggregate) would be paid out in the
event that $99.7mm or greater EBITDA is achieved.  In such year, no bonus shall be payable in
the event EBITDA is below $80mm.

 

c.                                       Employee
Benefit Programs.  During the
Specified Term, Employee shall be entitled to participate in Employer’s
employee benefit plans as are generally made available from time to time for
similarly situated executives with Employer, subject to the terms and
conditions of such plans, and subject to Employer’s right to amend, terminate
or take other similar actions with respect to such plans.  Notwithstanding the foregoing, Employer shall
reimburse Employee for all COBRA expenses incurred by Employee for the period
commencing on the first date of the Specified Term and ending on the first date
that Employee becomes eligible to participate in said Employer’s employee
benefit plans.

 

d.                                      Business
Expense Reimbursements. 
Employer will pay or reimburse Employee for all reasonable out-of-pocket
expenses, including travel expenses, Employee incurs during the Specified Term
in the course of performing Employee’s duties under this Agreement upon timely
submission of appropriate documentation to Employer, as prescribed from time to
time by Employer.

 

e.                                       Options.  It is
the Employer’s intention to review performance on or before the sixth (6th)
month following the Commencement Date and, based on that review but subject to
the prior approval of the Nevada Gaming Commission, the availability of an
exemption from registration under applicable securities laws,

 

 

2

 

                                                and any
necessary corporate approvals, grant Employee options to purchase equity
interest (non-voting) in MezzCo, LLC (or other equivalent vehicle) in an amount
as the Employer shall determine.  Options
carry a strike price based on fair market value at the time of grant and vest
in installments as may be set forth in the option grant.

 

4.                                       Extent of
Services.   Employee agrees that the duties and services
to be performed by Employee shall be performed exclusively for members of the
Employer Group.  Employee further agrees
to perform such duties in an efficient, trustworthy, lawful, and businesslike
manner.  Employee agrees not to render to
others any service of any kind whether or not for compensation, or to engage in
any other business activity whether or not for compensation, that is similar to
or conflicts with the performance of Employee’s duties under this Agreement,
without the prior written approval of Employer.

 

5.                                       Policies and
Procedures.  In addition
to the terms herein, Employee agrees to be bound by Employer’s policies and procedures
including drug testing and background checks, as they may be established or
amended by Employer in its sole discretion from time to time.  In the event the terms in this Agreement
conflict with Employer’s policies and procedures, the terms herein shall take
precedence.  Employer recognizes that it
has a responsibility to see that its employees understand the adverse effects
that problem gambling and underage gambling can have on individuals and the
gaming industry as a whole.  Employee
agrees to read, understand, and comply with Employer’s policy prohibiting
underage gaming and supporting programs to treat compulsive gambling.

 

6.                                       Licensing
Requirements.  Employee
acknowledges that Employer is engaged in a business that is or may be subject
to and exists because of privileged licenses issued by governmental authorities
in Nevada and other jurisdictions in which Employer or Employer Group is
engaged or has applied or, during the Specified Term, may apply to engage in
the gaming business.  If requested to do
so by Employer or Employer Group, Employee shall apply for and obtain any
license, qualification, clearance or the like that shall be requested or
required of Employee by any regulatory authority having jurisdiction over
Employer or Employer Group.

 

7.                                       Failure to
Satisfy Licensing Requirement.  If Employee fails to satisfy any licensing
requirement referred to in Section 6 above, or if any governmental
authority directs the Employer to terminate any relationship it may have with
Employee, or if Employer shall determine, in Employer’s reasonable judgment,
that Employee was, is or might be involved in, or is about to be involved in,
any activity, relationship(s) or circumstance that could or does
jeopardize the business of Employer or Employer’s Group, reputation or such
licenses, or if any such license is threatened to be, or is, denied, curtailed,
suspended or revoked, this Agreement may be terminated by Employer and the
parties’ obligations and responsibilities shall be determined by the provisions
of Section 11.

 

3

 

8.                                       Restrictive
Covenants.

 

a.                                       Competition.  Employee acknowledges that, in the course of
Employee’s responsibilities hereunder, Employee will form relationships and
become acquainted with certain confidential and proprietary information as
further described in Section 8(b). 
Employee further acknowledges that such relationships and information
are and will remain valuable to the Employer and Employer Group and that the
restrictions on future employment, if any, are reasonably necessary in order
for Employer and Employer Group to remain competitive in the gaming
industry.  In recognition of their
heightened need for protection from abuse of relationships formed or
information garnered before and during the Specified Term of the Employee’s
employment hereunder, Employee covenants and agrees for the six (6) month
period immediately following termination of employment for any reason (the “Restrictive
Period”), not to directly or indirectly be employed by, provide consultation or
other services to, engage or participate in, provide advice, information or
assistance to, fund or invest in, or otherwise be connected or associated in
any way or manner with, any firm, person, corporation or other entity which is
either directly, indirectly or through an affiliated company or entity, engaged
in gaming or proposes to engage in gaming in Clark County,  Nevada. 
The covenants under this Section 8(a) include but are not
limited to Employee’s covenant not to:

 

i.                                          Make known to any third party the names and addresses of any
of the customers of Employer or any member of Employer Group, or any other
information or data pertaining to those customers;

 

ii.                                       Call on, solicit, induce to leave and/or take away, or
attempt to call on, solicit, induce to leave and/or take away, any of the
customers of Employer or any member of the Employer Group, either for Employee’s
own account or for any third party;

 

iii.                                    Call on, solicit and/or take away, any potential or
prospective customer of Employer or any member of the Employer Group, on whom
the Employee called or with whom Employee became acquainted during employment
(either before or during the Specified Term), either for Employee’s own account
or for any third party; and

 

iv.                                   Approach or solicit any employee or independent contractor of
Employer or any member of the Employer Group with a view towards enticing such
person to leave the employ or service of Employer or any member of the Employer
Group, or hire or contract with any employee or independent contractor of
Employer or any member of the Employer Group, without the prior written consent
of the Employer, such consent to be within Employer’s sole and absolute
discretion.

 

4

 

b.                                      Confidentiality.  Employee covenants and agrees that Employee
shall not at any time during the Specified Term or thereafter, without Employer’s
prior written consent, such consent to be within Employer’s sole and absolute
discretion, disclose or make known to any person or entity outside of the
Employer Group any Trade Secret (as defined below), or proprietary or other
confidential information concerning Employer or any member of the Employer
Group, including without limitation, Employer’s customers and its casino,
hotel, and marketing data practices, procedures, management policies or any
other information regarding Employer or any member of the Employer Group, which
is not already and generally known to the public through no wrongful act of
Employee or any other party.  Employee
covenants and agrees that Employee shall not at any time during the Specified
Term, or thereafter, without the Employer’s prior written consent, utilize any
such Trade Secrets, proprietary or confidential information in any way, including
communications with or contact with any such customer other than in connection
with employment hereunder.  For purposes
of this Section 8, Trade Secrets is defined as data or information,
including a formula, pattern, compilation, program, device, method, know-how,
technique or process, that derives any economic value, present or potential,
from not being generally known to, and not being readily ascertainable by
proper means by, other persons who may or could obtain any economic value from
its disclosure or use.

 

c.                                       Former Employer Information.  Employee will not intentionally, during the
Specified Term, improperly use or disclose any proprietary information or Trade
Secrets of any former employer or other person or entity and will not
improperly bring onto the premises of the Employer any unpublished document or
proprietary information belonging to any such employer, person or entity.

 

d.                                      Third Party Information.  Employee acknowledges that Employer and other
members of the Employer Group have received and in the future will receive from
third parties their confidential or proprietary information subject to a duty
to maintain the confidentiality of such information and to use it only for
certain limited purposes.  Employee will
hold all such confidential or proprietary information in the strictest
confidence and will not disclose it to any person or entity or to use it except
as necessary in carrying out Employee’s duties hereunder consistent with
Employer’s (or such other member of the Employer Group’s) agreement with such
third party.

 

e.                                       Employer’s Property.  Employee hereby confirms that Trade Secrets,
proprietary or confidential information and all information concerning
customers who utilize the goods, services or facilities of any hotel and/or casino
owned, operated or managed by Employer constitute Employer’s exclusive
property.  Employee agrees that upon
termination of employment, Employee shall promptly return to the Employer all
notes, notebooks, memoranda, computer disks, and any other similar repositories
of information containing or relating in any way to the Trade

 

5

 

                                                Secrets or proprietary or confidential information of each
member of the Employer Group, including but not limited to, the documents
referred to in Section 8(b).  Such
repositories of information also include but are not limited to any so-called
personal files or other personal data compilations in any form, which in any
manner contain any Trade Secrets or proprietary or confidential information of
Employer or any member of the Employer Group.

 

f.                                         Notice to Employer.  Employee agrees to notify Employer
immediately of any employers for whom Employee works or provides services
(whether or not for remuneration to Employee or a third party) during the
Specified Term or within the Restrictive Period.  Employee further agrees to promptly notify
Employer, during Employee’s employment with Employer, of any contacts made by
any gaming licensee that concern or relate to an offer of future employment (or
consulting services) to Employee.

 

9.                                       Representations.   Employee hereby represents, warrants and
agrees with Employer that:

 

a.                                       The covenants and agreements contained in Sections 4 and 8
above are reasonable, appropriate and suitable in their geographic scope,
duration and content; the Employer’s agreement to employ the Employee and a
portion of the compensation and consideration to be paid to Employee hereunder
is separate and partial consideration for such covenants and agreements; the
Employee shall not, directly or indirectly, raise any issue of the
reasonableness, appropriateness and suitability of the geographic scope,
duration or content of such covenants and agreements in any proceeding to
enforce such covenants and agreements;  and
such covenants and agreements shall survive the termination of this Agreement,
in accordance with their terms;

 

b.                                      The enforcement of any remedy under this Agreement will not
prevent Employee from earning a livelihood, because Employee’s past work
history and abilities are such that Employee can reasonably expect to find work
in other geographic areas and lines of business;

 

c.                                       The covenants and agreements stated in Sections 4, 6, 7, and
8 above are essential for the Employer’s reasonable protection;

 

d.                                      Employer has reasonably relied on these covenants and
agreements by Employee;

 

e.                                       Employee has the full right to enter into this Agreement and
by entering into and performance of this Agreement will not violate or conflict
with any arrangements or agreements Employee may have or agreed to have with
any other person or entity; and

 

6

 

f.                                         Employee acknowledges and warrants to Employer the receipt
and sufficiency of separate consideration for the assignment by Employer of
Employer’s rights and Employee’s obligation under Section 8.

 

Notwithstanding Section 21,
Employee agrees that in the event of Employee’s breach or threatened breach of
any covenants and agreements set forth in Sections 4 and 8 above, Employer may
seek to enforce such covenants and agreements in court through any equitable
remedy, including specific performance or injunction, without waiving any claim
for damages.  In any such event, Employee
waives any claim that the Employer has an adequate remedy at law or for the
posting of a bond.

 

10.                                 Termination for
Death or Disability.  Employee’s
employment hereunder shall terminate upon Employee’s death or Disability (as
defined below).  In the event of Employee’s
death or Disability, Employee (or Employee’s estate or beneficiaries in the
case of death) shall have no right to receive any compensation or benefit
hereunder or otherwise from Employer or any member of the Employer Group on and
after the effective date of termination of employment other than (1) unpaid
Base Salary earned to the date of termination of employment (which shall be
paid on Employer’s next scheduled payroll date), (2) any earned but unpaid
bonus then payable to Employee (which shall be paid on Employer’s next
scheduled payroll date), (3) business expense reimbursement pursuant to Section 3(d),
and (4) benefits provided pursuant to Section 3(c), subject to the
terms and conditions applicable thereto. For purposes of this Section 10,
Disability is defined as Employee’s inability to perform the essential
functions of Employee’s duties hereunder for a period of time in excess of that
set forth in Employer’s policies and procedures, as in effect from time to
time, or in excess of a qualified leave pursuant to the Family and Medical
Leave Act or as otherwise required by the Americans with Disabilities Act, as
applicable.  Employee hereby consents to
any examination or to provide or authorize access to any medical records that
may be reasonably required by a licensed physician selected by Employer in connection
with any determination to be made pursuant to this Section 10.

 

11.                                 (a)  Termination
by Employer for Cause.  Employer may
terminate Employee’s employment hereunder for Cause (as defined below) at any
time.  If Employer terminates Employee’s
employment for Cause, Employee shall have no right to receive any compensation
or benefit hereunder or otherwise from Employer or any member of the Employer
Group on and after the effective date of termination of employment other than (1) unpaid
Base Salary earned to the date of termination of employment (which shall be
paid on Employer’s next scheduled payroll date), (2) business expense
reimbursement pursuant to Section 3(d), and (3) benefits provided
pursuant to Section 3(c), subject to the terms and conditions applicable
thereto.  For purposes of this Section 11(a),
Cause is defined as Employee’s (i) failure to abide by Employer’s policies
and procedures, (ii) misconduct, insubordination, or inattention to
Employer’s business, (iii) failure to perform the duties required of
Employee up to the standards established by Employer, or other material breach
of this Agreement (other than as a result of a Disability), or (iv) failure
or

 

7

 

                                                inability to
satisfy the requirements stated in Section 7 above.  Prior to a termination for Cause under this Section 11(a),
Employer must provide a written notice of deficiency to Employee and thereafter
provide Employee with a reasonable opportunity to cure the deficient conduct,
if such conduct is capable of being cured. 
If such conduct is incapable of being cured or if, after a reasonable
opportunity to cure, Employee fails to cure the deficient conduct, Employer may
immediately terminate Employee’s employment hereunder for Cause.

 

(b)  At Will Termination by Employer.  Employer may terminate Employee at will at
any time upon fifteen (15) days prior written notice, or, in the Employer’s
sole discretion, the equivalent of two weeks of Base Salary in lieu of notice.

 

If Employer terminates Employee at will under
this Section 11(b), Employee shall have no right to receive any
compensation or benefit hereunder or otherwise from Employer or any member of
the Employer Group on and after the effective date of termination of employment
other than (1) unpaid Base Salary earned to the date of termination of
employment (which shall be paid on Employer’s next scheduled payroll date), (2) business
expense reimbursement pursuant to Section 3(d), and (3) benefits
provided pursuant to Section 3(c), subject to the terms and conditions
applicable thereto, and (4) twelve (12) months of Base Salary; provided
that severance pay shall not exceed an amount equivalent to Base Salary from
the date of termination to the date this Agreement would otherwise expire but
for earlier termination.

 

12.                                 Termination by
Employee.  Employee
may terminate Employee’s employment hereunder upon thirty (30) days’ prior
written notice to Employer.  If Employee
shall terminate his employment other than for (a) death, (b) Disability,
(c) failure of Employer to pay Employee’s compensation when due, or (d) material
reductions in Employee’s duties and responsibilities without his or her
consent, Employee shall have no right to receive any compensation or benefit
hereunder or make any other claims against Employer or any member of the
Employer Group on and after the effective date of termination of employment
other than (1) unpaid Base Salary earned to the date of termination of
employment (which shall be paid on Employer’s next scheduled payroll date), (2) business
expense reimbursement pursuant to Section 3(d), and (3) benefits
provided pursuant to Section 3(c), subject to the terms and conditions
applicable thereto.

 

13.                                 Cooperation
Following Termination. 
Following termination of employment of Employee’s employment hereunder
for any reason, Employee agrees to reasonably cooperate with Employer upon the
reasonable request of Employer and to be reasonably available to Employer with
respect to matters arising out of Employee’s services to any member of the
Employer Group.  Employer shall
reimburse, or at Employee’s request, advance Employee for expenses reasonably
incurred in connection with such matters.

 

14.                                 Interpretation;
Each Party the Drafter.  Each
of the parties was represented by or had the opportunity to consult with
counsel who either participated in the formulation and documentation of, or was
afforded the opportunity to review and provide comments on,

 

8

 

                                                this Agreement.  Accordingly,
this Agreement and the provisions contained in it shall not be construed or
interpreted for or against any party to this agreement because that party
drafted or caused that party’s legal representative to draft any of its
provisions.

 

15.                                 Indemnification.  Employer shall indemnify Employee to the
fullest extent permitted by Nevada law and the articles of incorporation and
bylaws of the Employer.  Such
indemnification shall include, without limitation, the following:

 

a.                                       Indemnification Involving Third Party Claims.  Employer shall
indemnify Employee if Employee is a party to or is threatened to be made a
party to or otherwise involved in any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(each a “Claim”), other than a Claim by or in the name of Employer or any
entity in the Employer Group, by reason of the fact that Employee is or was
serving as an employee or agent of Employer or any entity in the Employer Group
(each an “Indemnifiable Event”), against all expenses, including attorneys’
fees, judgments, fines, and amounts paid in settlement (collectively, “Expenses”)
actually and reasonably incurred by Employee in connection with the
investigation, defense, settlement or appeal of such Claim, if Employee either
is not liable pursuant to NRS Section 78.138 or acted in good faith and in
a manner Employee reasonably believed to be in or not opposed to the best
interests of Employer and, in the case of a criminal Claim, in addition had no
reasonable cause to believe that his or her conduct was unlawful.

 

b.                                      Determination of Appropriateness of Indemnification.  Notwithstanding the
foregoing, the obligations of Employer under this Section 15 shall be
subject to the condition that, unless ordered by a court, a determination shall
have been made that indemnification is proper under the specific circumstances,
pursuant to and in accordance with NRS Section 78.751, as in effect from
time to time.

 

c.                                       Indemnification for Defense Only.  The indemnification
authorized by this Section 15 does not include any actions, suits or
proceedings initiated by Employee against Employer or any entity in the
Employer Group.

 

d.                                      Settlement of Claims.  Neither Employee nor Employer shall settle
any Claim without the prior written consent of the other (such consent not to
be unreasonably withheld or delayed).

 

16.                                 Severability.  If any provision hereof is unenforceable,
illegal or invalid for any reason whatsoever, such fact shall not affect the
remaining provisions hereof, except in the event a law or court decision,
whether on application for declaration, or preliminary injunction or upon final
judgment, declares one or more of the provisions of this Agreement that impose
restrictions on Employee unenforceable or invalid because of the geographic
scope or time duration of such restriction. 
In such event, Employer shall have the option to deem the invalidated
restrictions retroactively modified to provide for the maximum

 

9

 

                                                geographic
scope and time duration that would make such provisions enforceable and valid.

 

Exercise of this option
shall not affect Employer’s right to seek damages or such additional relief as
may be allowed by law in respect to any breach by Employee of the enforceable
provisions of this Agreement.

 

17.                                 Survival.  Notwithstanding anything in this Agreement to
the contrary, to the extent applicable, Sections 8 through and including Section 17
shall survive the termination of this Agreement.

 

18.                                 Notice.  For purposes of this Agreement, notices and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given (i) when
personally delivered, (ii) the business day following the day when
deposited with a reputable and established overnight express courier (charges
prepaid), or (iii) five (5) days following mailing by certified or
registered mail, postage prepaid and return receipt requested.  Unless
another address is specified, notices shall be sent to the addresses indicated
below:

 

To
Employer:

 

 

Mr. Michael
V. Mecca

OpBiz,
LLC

3667
Las Vegas Blvd. South

Las
Vegas, NV 89109

 

	
  To Employee:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

or to such other address as
either party shall have furnished to the other in writing in accordance
herewith.

 

19.                                 Tax Withholding.  Notwithstanding any other provision of this
Agreement, Employer may withhold from any amounts payable under this Agreement,
or any other benefits received pursuant hereto, such Federal, state, local and
other taxes as shall be required to be withheld under any applicable law or
regulation.

 

20.                                 Dispute
Resolution.

 

a.                                       Any dispute, claim or controversy arising from or related in
any way to this Agreement or the interpretation, application, breach,
termination or validity

 

10

 

                                                thereof, including any claim of inducement of this Agreement
by fraud, or arising from or related in any way to Employee’s employment with
Employer will be submitted first to mediation to be exclusively paid for by
Employer up to a maximum of $5,000 in mediation fees and costs, with each party
to bear its own attorney’s fees and costs. 
If the parties wish to engage in mediation, which mediator’s fee and
costs exceeds $5,000, the parties shall, after payment of the first $5,000 by
Employer, thereafter equally share the mediator’s fee and costs.  If the parties are not successful in
resolving disputes pursuant to mediation, the parties agree that any claim or
controversy arising from or in any way related to this Agreement to the
interpretation, application, breach, termination or validity thereof, including
any claim of inducement of this Agreement by fraud or arising from or related
in any way to Employee’s employment with Employer, will be submitted for final
resolution by private arbitration before a single arbitrator and in accordance
with the National Rules for the Resolution of Employment Disputes and
practices then in effect of, the American Arbitration Association, or any
successors thereto (“AAA”), except where those rules conflict with these
provisions, in which case these provisions control; provided, however, that
Employer shall have the right to seek in court equitable relief, including a
temporary restraining order, preliminary or permanent injunction or an
injunction in aid of arbitration, to enforce its rights set forth in Section 8.  The arbitration will be held in Las Vegas,
Nevada.

 

b.                                      Giving recognition to the understanding of the parties hereto
that they contemplate reasonable discovery, including document demands and
depositions, the arbitrator shall provide for discovery in accordance with the
Nevada Rules of Civil Procedure as reasonably applicable to this private
arbitration.

 

c.                                       To the extent possible, the arbitration hearings and award
will be maintained in confidence, except as may be required by law or for the
purpose of enforcement of an arbitral award.

 

d.                                      Each party shall bear its own attorney’s fees, costs and
expenses incurred in connection with arbitration proceedings pursuant to this
Agreement to arbitrate.  The fees, costs,
and expenses of the arbitrators and related expenses shall be paid by the
Employer up to a maximum of $5,000.  Any
fees, costs and expenses of the arbitrators shall thereafter be shared equally
between Employer, on one hand, and Employee on the other hand.

 

e.                                       Each party hereto waives, to the fullest extent permitted by
law, any claim to punitive or exemplary or liquidated or multiplied damages
from the other.

 

21.                                 No Waiver of
Breach or Remedies.  No failure
or delay on the part of Employer or Employee in exercising any right, power or
remedy hereunder shall operate as a waiver thereof nor shall any single or
partial exercise of any such right, power or 

 

11

 

                                                remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy hereunder.  The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

 

22.                                 Amendment or
Modification.  No amendment,
modification, termination or waiver of any provision of this Agreement shall be
effective unless the same shall be in writing and signed by an officer of
Employer (other than Employee), and Employee, nor consent to any departure by
the Employee from any of the terms of this Agreement shall be effective unless
the same is signed by an officer of Employer (other than Employee).  Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

 

23.                                 Governing Law;
Venue.  The laws of the State of
Nevada shall govern the validity, construction, and interpretation of this
Agreement, without regard to conflict of law principles.  Each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of Nevada located in Clark
County in any action, suit or proceeding arising out of or relating to this
Agreement or any matters contemplated hereby, and agrees that any such action,
suit or proceeding shall be brought only in such court.

 

24.                                 Headings.  The headings in this Agreement have been
included solely for convenience of reference and shall not be considered in the
interpretation or construction of this Agreement.

 

25.                                 Assignment.  This Agreement is personal to Employee and
may not be assigned by Employee.

 

26.                                 Prior
Agreements.  This
Agreement shall supersede and replace any and all other prior discussions and
negotiations as well as any and all agreements and arrangements that may have
been entered into by and between Employer or any predecessor thereof, on the
one hand, and Employee, on the other hand, relating to the subject matter
hereof.  Employee acknowledges that all
rights under such prior agreements and arrangements shall be extinguished.

 

12

 

                IN WITNESS WHEREOF, Employer and
Employee have entered into this Agreement in Las Vegas, Nevada, as of the date
first written above.

 

                “EMPLOYEE”

                DEAN DILULLO

 

 

	
   

  
	
  Signature

  

 

 

 

                “EMPLOYER”

                OPBIZ, L.L.C.

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  Its:

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  

 

13

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