Document:

EXHIBIT
10.9.9

 

INTERCREDITOR AGREEMENT

 

THIS INTERCREDITOR AGREEMENT (“Agreement”), dated as of March 5,
2002, is entered into by and among BANK OF AMERICA, N.A., as Administrative
Agent for the Lenders under the Credit Agreement referred to below, THE BANK OF
NEW YORK as Trustee for the Noteholders referred to below (the “Trustee”),
CIRCUS AND ELDORADO JOINT VENTURE, a Nevada general partnership (“Borrower”),
and SILVER LEGACY CAPITAL CORP., a Nevada corporation (“Capital”, and
together with Borrower, “Debtors”). 
All capitalized terms not otherwise defined herein shall have the
meaning set forth in the Credit Agreement (defined below).

 

RECITALS

 

1.             Pursuant to the Second Amended and Restated Credit
Agreement dated as of March 5, 2002 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”) among Borrower, as
borrower, the lenders from time to time parties thereto (each a “Lender”
and collectively, the “Lenders”) and Bank of America, N.A., as
Administrative Agent for the Lenders (in such capacity, the “Administrative
Agent”), the Lenders have agreed to provide to Borrower (i) a term loan in
the principal amount of $20,000,000 and (ii) a revolving credit facility in an
aggregate principal amount of $20,000,000.

 

2.             Pursuant to the Credit Agreement, Borrower has executed
an Second Amended and Restated Construction Deed of Trust of dated as of March
1, 2002 and effective as of the date hereof 
(as at any time amended, supplemented or otherwise modified or replaced,
the “Lender Deed of Trust”), a Second Amended and Restated Security
Agreement of even date herewith (as at any time amended, supplemented or
otherwise modified or replaced, the “Borrower Security Agreement”).

 

3.             In connection with the Credit Agreement, Capital has entered
into, among other documents, a Guaranty dated as of March 5, 2002 in favor of
the Administrative Agent, for the benefit of the Lenders (as at any time
amended, supplemented or otherwise modified or replaced, the “Capital
Guaranty”) and a Security Agreement dated as of March 5, 2002 in favor of
the Administrative Agent, for the benefit of the Lenders (as at any time
amended, supplemented or otherwise modified or replaced, the “Capital
Security Agreement”).  In addition
thereto, Galleon, Inc., a Nevada corporation, and Eldorado Limited Liability
Company, a Nevada limited liability company (the “General Partners”), which are
all of the general partners in

 

 

the Borrower, have agreed to pledge their
respective membership interests in the Borrower to the Administrative Agent
pursuant to a Pledge Agreement to be delivered forthwith upon receipt of
necessary approvals under applicable Gaming Laws (as at any time amended,
supplemented or otherwise modified or replaced, the “Partner Pledge
Agreement”).

 

4.             Concurrently herewith, the Debtors shall issue their
$160,000,000 10 1/8% Mortgage Notes due 2012 (the “Notes”) pursuant to
an Indenture dated as of March 1, 2002 among the Debtors and the Trustee (as
amended, supplemented or otherwise modified from time to time, the “Indenture”).

 

5.             It is a condition precedent to the Lenders’ execution
and delivery of the Credit Agreement and the making of the loans and the
issuance of other credit accommodations  thereunder
that the Trustee execute and deliver this Agreement on behalf of the
Noteholders for the purpose of subordinating the Liens granted by the Debtors
to the Trustee for the benefit of the Noteholders to the Liens granted by the
Debtors to the Lenders in the manner and to the extent set forth herein.

 

6.             Pursuant to Section 11.13 of the Indenture each
Noteholder has, as a condition to accepting the Notes, agreed that the liens
securing the Notes shall be subject to the terms of this Agreement and
authorized the Trustee to execute and deliver this Agreement and take all
action as is necessary or appropriate to acknowledge and effectuate the
provisions of this Agreement.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.             Definitions and Construction.

 

(1)           Definitions. 
For purposes of this Agreement, the following terms shall have the
following definitions:

 

“Assets” means any interest of the Debtors, and either of them,
and of any other Obligors, in any kind of property or asset, whether real,
personal or mixed real and personal, or whether tangible or intangible, and
includes without limitation the membership interests in Borrower.

 

“Bankruptcy Code” means the Bankruptcy Reform Act, Title 11 of
the United States Code, as amended from time to time, or any successor statute.

 

“Code” means the Uniform Commercial Code as codified in the
State of Nevada.  All terms used in this
Agreement which are defined in the Code shall be construed and defined in

 

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accordance
with the meaning and definition ascribed to such terms under the Code, unless
another meaning is specifically provided herein.

 

“Collateral” means Assets with respect to which the
Administrative Agent on behalf of the Lenders has a Lien at any time and with
respect to which the Trustee on behalf of the Noteholders has a Lien at any
time.

 

“Debtors” shall include both the named Debtors and any other
Person at any time assuming or otherwise becoming primarily liable for all or
any part of the obligations of the applicable Debtor under the Lender Documents,
including, but not limited to, the trustees and the debtors-in-possession in
any bankruptcy or similar proceedings involving the named Debtors.

 

“Distribution of Assets” means any distribution of the Assets or
in respect thereof, or of the proceeds thereof, of any kind or character,
whether in cash, property, or securities, and whether in respect of repayment
of indebtedness or otherwise, and whether upon foreclosure, sale, liquidation
or other disposition of the Assets by the parties or either of them as secured
creditors, including, but not limited to, adequate protection payments under
the Bankruptcy Code.

 

“Lender Default” means any “Event of Default” as defined in the
Credit Agreement.

 

“Lender Documents” means the “Loan Documents” as defined in the
Credit Agreement or the instruments, documents and agreements executed in favor
of the lenders under any successor loan documents.

 

“Lender Obligations” means (i) the  “Obligations” as defined in the Credit Agreement, including
any such obligations incurred after the filing of a petition with respect to
any applicable Obligor under any Bankruptcy Code (including any interest
accruing under any  Lender Document
after the filing of any such petition whether or not allowed or allowable as a
claim in the bankruptcy proceeding); (ii) the obligations of the Debtors to any
lenders directly or indirectly refinancing such Obligations, (iii) all
obligations owed pursuant to any interest rate hedging arrangement with respect
to such Obligations and any direct or indirect refinancings thereof; and (iv)
all renewals, extensions, refinancings, refundings, amendments, restatements,
supplements, and modifications of all of the foregoing obligations, provided
that in any event the aggregate principal amount of the loans and letters of
credit

 

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constituting
Lender Obligations shall not be increased to an amount which is in excess of
$40,000,000 less the principal amount of Term Loans from time to time repaid by
the Debtor pursuant to Section 2.4A or 2.4B(iii) of the Credit Agreement (or
any similar provision, in the case of an amendment, modification, replacement,
substitution or refinancing thereof).

 

“Lien” means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, security interest, charge or
other encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any agreement to give or refrain from giving a lien,
mortgage, pledge, hypothecation, assignment, deposit arrangement, security
interest, charge or other encumbrance of any kind.

 

“Noteholder Default” means any “Event of Default” as defined in
Section 6.01 of the Indenture.

 

“Noteholder Documents” means the Indenture, the Notes, and any
certificates, agreements, instruments or other documents executed in connection
therewith to which any Obligor and/or the Trustee or any Noteholder are a party.

 

“Noteholder Obligations” means all indebtedness, claims, debts,
liabilities, or obligations of any Obligor owing to the Trustee or the
Noteholders under the Noteholder Documents, in each case, of whatever nature,
character or description, and whether presently existing or arising hereafter,
including, but not limited to, all contract and tort claims that the Trustee or
the Noteholders may have with respect thereto under the Noteholder Documents,
together with interest and fees accruing thereon and costs and expenses
(including attorneys’ fees and expenses) of collection thereof, and all
renewals, extensions, refinancings, refundings, amendments, restatements,
supplements, and modifications thereof.

 

“Noteholders” means the holders from time to time of the Notes
and any instruments, documents or agreements directly or indirectly refinancing
the same.  Subject to the terms hereof
and of the Indenture, any right, remedy, privilege or power of the Noteholders
shall be exercised by the Trustee.

 

“Obligors” means, collectively, Debtors, General Partners, and
any other Person now or hereafter directly or contingently liable for all or
any part of the Lender Obligations.

 

“Person” means any natural person, sole proprietorship,
partnership, joint venture, limited liability company, trust, unincorporated
organization, association, corporation, public authority, or any other
organization, irrespective of whether it is a legal entity.

 

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(2)           Construction.  Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, to the
singular include the plural, and to the part include the whole, the term
“including” is not limiting, and the term “or” has the inclusive meaning
represented by the phrase “and/or.”  The
words “hereof,” “herein,” “hereby,” “hereunder” and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement.  Section,
subsection and clause references are to this Agreement unless otherwise
specified.

 

2.             Lien Subordination.

 

(1)           General. 
The Trustee, the Noteholders and Debtors each covenant and agree that
all of the Liens on the Assets securing all or any part of the Noteholder
Obligations are and shall be subordinate, junior and inferior and postponed in
priority, operation and effect to the priority, operation and effect of the
Liens on the Assets securing all or any part of the Lender Obligations,
including without limitation the Liens created by the Lender Deed of Trust, the
Borrower Security Agreement, the Partner Pledge Agreement, and the Capital
Security Agreement.  The subordination
provided for herein shall be effective notwithstanding the perfection, order of
perfection or failure to perfect or failure to maintain the perfection of any
such Lien or the filing or recording, order of filing or recording or failure
to file or record any instrument or other document in any filing or recording
office in any jurisdiction.  The
subordination provided for herein shall constitute a continuing and accepted
offer to all holders, present and future, of the Lender Obligations, and shall
be effective both in respect of the principal, interest, fees, indemnity claims
and other obligations of the Obligors thereto, including without limitation any
interest on the Lender Obligations arising following the filing of any petition
against any Obligor under the Bankruptcy Code.

 

(2)           Subordination on Dissolution, Liquidation or
Reorganization of Debtors.

 

(1)           Upon any
Distribution of Assets, whether in the event of any dissolution or winding up
or total or partial liquidation or reorganization of the Obligors (whether
voluntary or involuntary), any adjustment or protection or relief or
composition of any of the Obligors or their debts, in any bankruptcy,
insolvency, receivership, arrangement, reorganization, relief or other
proceeding of any Obligor or upon an arrangement for the benefit of creditors
of any Obligor

 

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or
any other marshaling of the assets and liabilities of any Obligor, or
otherwise, then:

 

(1)           all amounts payable under or on account of the Lender  Obligations shall first be indefeasibly paid
in full and in cash from such Distribution of Assets, before the holders of
Noteholder Obligations shall be entitled to receive any Distribution of Assets;
and

 

(2)           before any payment may be made on account of the
Noteholder Obligations, any such Distribution of Assets to which the
Noteholders would be entitled, but for the provisions of this Section 2(b)(i),
shall be made directly to the Administrative Agent for the benefit of the
Lenders to the extent necessary to indefeasibly pay all Lender Obligations in
full, in cash, after giving effect to any concurrent payment or distribution to
the Administrative Agent for the benefit of the Lenders.  In the case of a non-cash Distribution of
Assets with respect to the Noteholder Obligations which is delivered to the
Administrative Agent for the benefit of the Lenders under this
Section 2(b)(i), the Lender Obligations shall be deemed satisfied in the
amount equal to the cash realized by the Lenders upon disposition of such
Distribution of Assets; until such disposition, the non-cash Distribution of
Assets shall be held as security for the Lender Obligations.  Neither the Administrative Agent nor any
Lender shall have any duty hereunder to sell or otherwise reduce to cash any
non-cash Distribution of Assets turned over by the Trustee or any Noteholder in
accordance with this Section 2(b)(i), and neither the Administrative Agent
nor any Lender shall have any liability to the Trustee or any Noteholder with
respect to any such sale or other disposition, under the Code or otherwise,
except for liability arising from the Administrative Agent’s or any Lender’s
willful misconduct or gross negligence, and such sale or other disposition
shall not affect the Administrative Agent’s and the Lenders’ rights and
remedies hereunder.

 

(2)           The Administrative Agent (on behalf of the Lenders) is
hereby irrevocably authorized and empowered (in its own name or in the name of
the Trustee, the Noteholders or

 

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otherwise), but shall have no obligation, to
demand, sue for, collect and receive every Distribution of Assets and give
acquittance therefor and take such other action on behalf of the Noteholders as
it may deem necessary for the exercise or enforcement of any of the Lenders’
rights or interests hereunder.  The
Trustee and the Noteholders shall duly and promptly take such action as the
Administrative Agent may request (A) to collect the Noteholder Obligations for
the account of the Lenders and to file appropriate claims or proofs of claim in
respect of the Noteholder Obligations, (B) to execute and deliver to the
Administrative Agent such powers of attorney, assignments, or other instruments
as it may reasonably request in order to enable it to enforce any and all
claims with respect to, and any Liens securing payment of, the Noteholder
Obligations, and (C) to collect and receive any and all Distributions of Assets
which may be payable or deliverable upon or with respect to the Noteholder
Obligations.

 

(3)           Bankruptcy Reorganizations.  Without limitation upon Section 2(b) hereof,
to the extent that any proceeding under the Bankruptcy Code results in the
reorganization of the affairs of the Obligors, the Trustee and the Noteholders
shall not vote for or approve any plan of reorganization which does not result
in the full and immediate payment in cash of the Lender Obligations which the
Lenders have not voted for or approved and which does any of the following:

 

(x)            extends the term of the Lender Obligations or delays or
reduces any payment to which the Lenders would have been entitled but for the
existence of such proceeding;

 

(y)           requires the Lenders to release any collateral or
guarantees for the Lender Obligations or requires the Lenders to share any
collateral or guarantees with any other Person (other than the Noteholders to
the same extent permitted herein) or requires the liens of the Lenders to be
subject or subordinate to the liens of any Person, including without limitation
the provider of any “debtor-in-possession” financing or similar arrangements;
or

 

(z)            otherwise requires the Lenders to accept “adequate
protection” for their claims in lieu of full and immediate cash payment or
first priority Liens on the Assets (subject only to liens and encumbrances then
permitted by the terms of the Lender Obligations).

 

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(4)           Subordination of Title Insurance Claims.  In the event that the Lenders and the
Noteholders suffer any loss for which they are insured by title insurance in
relation to the property purportedly encumbered by the Lender Deed of Trust or
are otherwise entitled to assert a claim against such insurers, and for which
the same insurers are liable to both the Lenders and the Noteholders (or as to
which both the Lenders and the Noteholders may assert such a claim), then the
claims of the Noteholders against such title insurers in respect to such losses
shall be in every respect subordinated and junior to the claims of the Lenders
against such title insurers.

 

(5)           Legends. 
Each instrument, document and agreement evidencing any Lien held by the
Trustee or the Noteholder on account of the Noteholder Obligations shall bear a
prominent legend as follows:

 

“THE LIENS GRANTED PURSUANT TO THIS INSTRUMENT ARE SUBJECT AND
SUBORDINATE TO THE LIENS GRANTED TO BANK OF AMERICA, N.A., AS ADMINISTRATIVE
AGENT PURSUANT TO AN INTERCREDITOR AGREEMENT DATED AS OF MARCH 5, 2002 WITH
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT.”

 

3.             Remedies Standstill.

 

(1)           The Trustee shall give written notice to the
Administrative Agent of each Noteholder Default of which it gives notice to
either of the Obligors or which it otherwise asserts against any of the
Obligors (each a “Noteholder Default Notice”).  For so long as any Lender Obligations remain outstanding and
unpaid, neither the Trustee nor the Noteholders shall, for a period of 90 days
after the date upon which any Noteholder Default Notice is given (each such 90
day period (as extended pursuant to clause (c) of this Section, a “Standstill
Period”), without the Administrative Agent’s prior written consent, given
in the Administrative Agent’s sole and absolute discretion:  (i) exercise any right of set-off with
respect to the Noteholder Obligations with respect to any Assets in its
possession or control; (ii) exercise any right of possession of any Collateral
securing the Noteholder Obligations or attach, seize, or realize upon any
Collateral securing the Noteholder Obligations or otherwise enforce any Lien
against the Assets or authorize or direct any trustee under any deed of trust
to do so; or (iii) exercise any right under the Code, including, but not limited
to, the right of strict foreclosure, but excluding the right of redemption in
respect of any Asset.

 

(2)           No additional Standstill Period shall commence

 

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on the basis of any Noteholder Default which
occurs or is asserted during any Standstill Period, provided that
(unless the Administrative Agent otherwise consents in writing in its  sole discretion), if the Trustee has not
accelerated the balance of the Noteholder Obligations within the sixty day period
following the end of any Standstill Period, then the Trustee shall be obliged
to give a new Noteholder Default Notice to the Administrative Agent and to
observe a new Standstill Period with respect to any Noteholder Defaults
thereafter asserted.

 

(3)           In the event that, during or after any Standstill Period,
either (i) a proceeding under the Bankruptcy Code or any similar debtor relief
or reorganization law is commenced with respect to any Obligor, or (ii) the
maturity of the Lender Obligations is accelerated and the Administrative Agent
or the Lenders commence any foreclosure or enforcement proceedings with respect
to the liens securing the Lender Obligations, then the Standstill Period shall
be extended until such time as (y) the Lender Obligations are indefeasibly paid
in full and in cash, or (z) the Lenders rescind such acceleration.  During the Standstill Period, as so
extended, the Trustee and the Noteholders shall not without the Administrative
Agent’s prior written consent, given in the Administrative Agent’s sole and
absolute discretion:  (i) exercise any
right of set-off with respect to the Noteholder Obligations with respect to any
Assets in its possession or control; (ii) exercise any right of possession of
any Collateral securing the Noteholder Obligations or attach, seize, or realize
upon any Collateral securing the Noteholder Obligations or otherwise enforce
any Lien against the Assets or authorize or direct any trustee under any deed
of trust to do so; or (iii) exercise any right under the Code, including,
but not limited to, the right of strict foreclosure, but excluding the right of
redemption in respect of any Asset.

 

(4)           If the Trustee or the Noteholders take any action in
violation of this Section 3, (i) the Administrative Agent may intervene in
any proceeding seeking to enforce the Liens of the Noteholders or otherwise
seek judicial restraint of such action, and (ii) the applicable Obligors may
interpose as a defense or a dilatory plea the making of this Agreement and the
Lenders may intervene and interpose such defense or plea in the names of the
applicable Obligors.  If the Trustee or
the Noteholders, other  than in accordance with this
Section 3, attempt to enforce any Lien with respect to the Noteholder
Obligations, the Lenders or the applicable Obligors may, by virtue of this
Agreement, restrain the enforcement 

 

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thereof in the name of the Lenders or such Obligors.

 

(5)           Each Obligor covenants and agrees to toll, upon the
Noteholders’ request, the statute of limitations with respect to any action
which the Noteholders might bring but for the provisions of this
Section 3.

 

4.             Proceeds of Collateral.  The Administrative Agent and the Lenders shall be entitled to the
full and indefeasible payment and performance of the Lender Obligations from
the Assets and the proceeds thereof prior to any payment or performance of the
Noteholder Obligations from the Assets and the proceeds thereof.  In furtherance thereof, the Debtors agree
that (a) following the giving of written notice by the Administrative Agent to
the Borrower of the occurrence of any Lender Default which is a default in the
payment of money (including any Lender Default which has resulted in an
acceleration of the Lender Obligations) or (b) the filing of any proceeding
under the Bankruptcy Code with respect to either of the Debtors, the Debtors
shall not make (and the Trustee and the Noteholders agree that, they shall not
take and receive) any payments with respect to the Noteholder Obligations from
the Assets or the proceeds thereof, with any payment made in violation of this
Section 4 being held by the Trustee in the manner described in Section 6.

 

5.             Disposition of Collateral.  Upon any foreclosure upon, or realization or
collection in respect of, any Collateral, whether such action is taken by or on
behalf of the Lenders or the Noteholders or otherwise, all Lender Obligations
shall first be indefeasibly satisfied in full in cash from the proceeds
thereof, before the Noteholders shall be entitled to receive or retain any
proceeds or Assets from such foreclosure, realization or collection.

 

6.             Payments and/or Property Held in Trust.  If (a) any payment or other
distribution (whether in cash or other property) is made to the Trustee or the
Noteholders in violation of this Agreement or (b) any cash or other
property is received by the Trustee or the Noteholders upon any disposition or
other action with respect to any of the Collateral, including, but not limited
to, converting accounts receivable, instruments and chattel paper to cash, in
violation of this Agreement, before the Lender Obligations are paid in full, in
cash, and the Credit Agreement is terminated or expires, then the Trustee and
the Noteholders shall receive the same in trust for the Lenders’ benefit and
shall forthwith remit it to the Administrative Agent for the benefit of the

 

10

 

Lenders in the form in which it was received,
together with such endorsements or documents as may be necessary to effectively
negotiate or transfer the same, to the extent necessary to pay in full, in
cash, the Lender Obligations, after giving effect to any other payment or
distribution with respect to the Lender Obligations.

 

7.             Trustee’s and Noteholders’ Representations,
Warranties and Covenants.  The
Trustee represents and warrants that it has not entered into any subordination
agreement with respect to any Lien securing the Noteholder Obligations prior to
the execution and delivery of this Agreement. 
The Trustee covenants not to enter into any subordination agreement with
respect to any Lien securing the Noteholder Obligations without the Lenders’
prior written consent, given in their sole and absolute discretion through the
Administrative Agent.  Any and all such
subsequent subordinations shall be, and shall be expressed to be, subject and
subordinate to the terms of this Agreement.

 

8.             Rights of The Lenders Not to Be Impaired, Etc.

 

(1)           No right of the Administrative Agent or any Lender to
enforce the subordination and other terms and conditions provided herein shall
at any time or in any way be prejudiced or impaired by any act or failure to
act by the Administrative Agent or any Lender, or by any non-compliance by any
Obligor with the terms and provisions and covenants herein, regardless of any
knowledge thereof the Administrative Agent or any Lender may have or with which
the Administrative Agent or any Lender may otherwise be charged.  The Administrative Agent and the Lenders
shall not be prejudiced in their right to enforce the subordination of any
Liens securing the Noteholder Obligations by any act or failure to act by any
Obligor or any other Person in custody of any of the Assets.

 

(2)           Without limiting the generality of the foregoing, the Trustee
and the Noteholders, for the benefit of the Lenders, waive any right the
Trustee or the Noteholders may have to require the Lenders to (i) proceed
against any Person, including the Obligors; (ii) proceed against or
exhaust any security held from any Obligor or any other Person; or (iii) pursue
any other remedy in the Lenders’ power.

 

(3)           The Trustee and the Noteholders further waive, for the
benefit of the Lenders, any defense or cause of action based upon or arising by
reason of (i) any disability or other defense of any Obligor or any other
Person; (ii) the cessation

 

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 or
limitation from any cause whatsoever, other than
payment in full, of the Lender Obligations; (iii) any lack of authority of
any officer, director, partner, agent or any other Person acting or purporting
to act on behalf of any Obligor; (iv) any act or omission by the
Administrative Agent or the Lenders which directly or indirectly results in or
aids the discharge of any Obligor or any Lender Obligations by operation of law
or otherwise; (v) any failure by the Administrative Agent, the Lenders or
their agents to use reasonable care in the custody and preservation of
Collateral in the possession of the Administrative Agent, the Lenders or their
agents which directly or indirectly impairs or diminishes the value of the
Liens securing the Noteholder Obligations; or (vi) any failure by the
Administrative Agent, the Lenders or their agents to fulfill any duty owed to
the Noteholders as bailee or agent with respect to any of the Collateral.

 

(4)           The Trustee and the Noteholders agree that the Lenders
shall have the right to apply the proceeds of any disposition of Collateral in
the manner the Lenders determine, in their sole and absolute discretion,
provided that such application complies with applicable law and this
Agreement.  Notwithstanding the
foregoing sentence, any proceeds of any such disposition of Collateral
remaining in the possession of the Administrative Agent or the Lenders after
the Lender Obligations have been paid in full shall be paid by the
Administrative Agent to the Trustee for application to the Noteholder
Obligations.

 

(5)           The Trustee and the Noteholders agree that (i) the Lenders
shall have no obligation to marshal any Collateral in favor of the Noteholders
or any other Person; and (ii) neither the Administrative Agent nor the Lenders
shall be liable to the Trustee or the Noteholders for any action or failure to
act in exercising their rights and remedies under this Agreement, the Lender
Documents or against any of the Collateral.

 

(6)           In the event of any sale or other disposition of all or
any part of the Assets by the Administrative Agent or the Lenders, the Trustee
shall deliver to the Administrative Agent any such instruments or documents as
the Administrative Agent may request to evidence the termination of the
Trustee’s and the Noteholder’s liens therein, concurrently with the execution
or consummation of such sale or other disposition.

 

(7)           The Trustee and the Noteholders agree that the Liens
against the Collateral securing the Noteholder 

 

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Obligations shall terminate upon exercise of
the Lenders’ strict foreclosure rights under the Code, whether or not the Liens
would terminate pursuant to the Code. 
The Lenders are hereby irrevocably authorized and empowered (in their
own name or in the name of the Noteholders or otherwise) to take all actions
reasonable and necessary to effect such termination.

 

(8)           The Trustee and the Noteholders (i) consent to any
extension or renewal of the Liens securing the Lender Obligations,
(ii) waive any right to cure any Lender Default, whether by payment of any
portion of the Lender Obligations or otherwise (but without prejudice to any
rights of redemption or similar rights available to the Trustee and the
Noteholders pursuant to applicable law), (iii) waive any right to set
aside or otherwise legally challenge any foreclosure sale or other exercise of
rights and remedies by the Lenders, (iv) waive any right to redeem any
Collateral foreclosed upon or otherwise disposed of by the Lenders, (v) agree
not to contest the commercial reasonableness of any sale of the Collateral by
the Lenders, (vi) agree to cooperate with the Lenders in connection with any
foreclosure sale or other exercise of rights and remedies by the Lenders, and
(vii) agree that the Liens securing the Noteholder Obligations shall be
extinguished with respect to any Collateral foreclosed upon or otherwise
disposed of by the Lenders in accordance with this Agreement and applicable
law.

 

(9)           The Trustee and the Noteholders agree that neither the
Administrative Agent nor the Lenders shall be bailees, or agents of the Trustee
or the Noteholders, with respect to Collateral in the Administrative Agent’s or
any Lender’s possession for the purpose of perfecting the Trustee’s (on behalf
of the Noteholders) Liens against such Collateral or otherwise, except upon the
Lenders’ express written consent.  The
Trustee and the Noteholders further agree that if the Administrative Agent or
any Lender acts as a bailee or agent of the Trustee and the Noteholders with
respect to any of the Collateral, the Administrative Agent or such Lender shall
have no liability to the Trustee or the Noteholders with respect to the
Administrative Agent’s or such Lender’s performance in such capacity, except
for their gross negligence or willful misconduct.

 

(10)         The Trustee and the Noteholders agree that neither the
Administrative Agent nor any Lender shall be a fiduciary or an agent of the
Trustee or the Noteholders, or otherwise owe any duty to the Trustee or the
Noteholders, by virtue of any provision of this Agreement or the Administrative

 

13

 

Agent’s or the Lenders’ exercise, or failure
to exercise, any right hereunder.

 

1.             Conduct
of Bankruptcy Proceeding.

 

(11)         In any bankruptcy, insolvency, receivership or other similar
proceeding of any Obligor, the Trustee and the Noteholders agree that if the
Trustee or any Noteholder has not filed a proof of claim with respect to the
Noteholder Obligations on or prior to the date that is thirty days before the
expiration of the time to file any such proof of claim, the Trustee or such
Noteholder will be deemed to have irrevocably appointed the Administrative
Agent its agent and attorney-in-fact (i) to make, file and present for and on
behalf of the Trustee or such Noteholder such proofs of claims against any
Obligor on account of the Noteholder Obligations and (ii) to vote such claims
in such proceedings (in the name of the Lenders or the Trustee or such
Noteholder as the Administrative Agent may deem necessary or advisable) if the
Trustee or such Noteholder fails to vote such claim on or prior to the date
that is ten days before the expiration of the time to vote any such claim;
provided that the Administrative Agent shall have no obligation to make, file,
present and/or vote any such proof of claim. 
In the event the Administrative Agent votes any claim of the Trustee or
any Noteholder in accordance with its authority granted hereby, the Trustee or
such Noteholder, as applicable, shall not be entitled to change or withdraw
such vote.

 

(12)         The Trustee and the Noteholders agree that the Lenders may
consent to the use of cash collateral or provide financing to any applicable
Obligor on such terms and conditions and in such amounts as the Lenders, in
their sole and absolute discretion, may decide and that, in connection with
such cash collateral usage or such financing, such Obligor (or a trustee
appointed for the estate of such Obligor) may grant to the Administrative Agent
on behalf of the Lenders Liens upon all Assets, which Liens (i) shall secure
payment of all Lender Obligations (whether such Lender Obligations arose prior to
the filing of the petition for relief under the Bankruptcy Code or arise
thereafter), but subject to the limitations as to the principal amounts thereof
set forth herein; and (ii) shall be superior in priority to the Liens held by
Trustee for the benefit of the Noteholders on the Assets.  All allocations of payments between the
Lenders and the Noteholders shall, subject to any court order, continue to be
made after the filing of a petition under the Bankruptcy Code on the same basis
that the payments were to be allocated

 

14

 

prior to the date of such filing.  The Trustee and the Noteholders agrees that
neither the Trustee nor the Noteholders, respectively, will object to or oppose
a sale or other disposition of any Assets securing the Lender Obligations (or
any portion thereof) free and clear of Liens or other claims of the Trustee and
the Noteholders under Section 363 of the Bankruptcy Code or any other
provision of the Bankruptcy Code if the Lenders have consented to such sale or
disposition of such Assets.  The Trustee
and the Noteholders agree that it will not seek to have the automatic stay
lifted with respect to the Noteholder Obligations and the Liens securing the
Noteholder Obligations, in each case without the Lenders’ prior written
consent, given in their sole and absolute discretion.  The Trustee and the Noteholders agree not to initiate or
prosecute any claim, action or other proceeding (i) challenging the
enforceability of the Lenders’ claim, or (ii) challenging the enforceability of
any Liens in Assets securing the Lender Obligations or the priority thereof.

 

2.             Call
Right in Favor of the Noteholders. 
The Administrative Agent agrees on behalf of the Lenders that, unless a
proceeding under the Bankruptcy Code has been filed in respect of any of the
Obligors, it shall provide written notice of any acceleration of the maturity
of the Lender Obligations to the Trustee (the “Call Notice’) and that
the Noteholders shall have, during the thirty day period following such notice,
the right to purchase the Lender Obligations from the Lenders for a purchase
price equal to the outstanding principal balance thereof (including any
outstanding letters of credit and other similar financial accommodations), plus
all accrued and unpaid interest, fees and other amounts due to the
Administrative Agent and the Lenders under the Lender Documents, provided
that the Trustee and the Noteholders shall make arrangements reasonably
acceptable to the Administrative Agent for backup indemnification for any
contingent liabilities of the Debtors and their affiliates under the Lender
Documents.  The Trustee and the
Noteholders further agree that neither the Administrative Agent nor the Lenders
will have any disclosure duty to the Trustee or Noteholders, respectively, other
than to inform the Trustee of the amount of the Lender Obligations, and
the Trustee agrees that neither the Administrative Agent nor the Lenders make
any representation or warranty with respect to the Lender Obligations (except
for their legal authority to sell and make settlements thereof), the Collateral
or any other matter and the Trustee and the Noteholders waive any claim which
the Trustee or the Noteholders, respectively, may have against the
Administrative Agent or the Lenders with respect to the Lender Obligations and
the Collateral as a result of

 

15

 

exercising their rights under this Section.  In conjunction with the exercise of the Noteholders’ rights under
this Section, the Noteholders exercising such rights  agree to execute and deliver all documentation requested by the
Lenders which is necessary to effectuate the foregoing agreements and waivers.  The sole obligation of the Trustee hereunder
shall be to deliver the Call Notice to the Noteholders following receipt
thereof from the Administrative Agent.

 

9.             Subrogation. 
Upon the payment in full, in cash, of the Lender Obligations and the
termination or expiration of the Lender Documents, the Noteholders shall be
subrogated to the rights of the Lenders to receive any Distribution of Assets
made on account of the Lender Obligations to the extent that distributions
otherwise payable to the Noteholders have been applied to payment of Lender
Obligations, until the Noteholder Obligations shall be paid in full; and for
the purposes of such subrogation, no Distribution of Assets to the Lenders of
any cash, property, or securities to which the holders of Noteholder
Obligations would be entitled except for the provisions hereof, and no payment
paid over pursuant to the provisions of Section 6 to the Lenders by the
Noteholders shall, as among the Obligors, their respective creditors, and the
Noteholders, be deemed to be a payment by the Obligors to or on account of such
Lender Obligations.  Neither the
Administrative Agent nor the Lenders shall have any liability to the Trustee or
the Noteholders, and the subordination and other provisions of this Agreement
shall not be affected by, any act or omission by the Administrative Agent or
the Lenders, prior to payment in full of the Lender Obligations and the
termination or expiration of the Lender Documents, which affect in any way the
Noteholders’ subrogation rights hereunder.

 

10.           Obligations of Obligors Unconditional.  Nothing contained in this Agreement is
intended to or shall, as among the Obligors or their respective creditors,
impair the obligations of the Obligors, which obligations are absolute and
unconditional, to pay the Lender Obligations and the Noteholder Obligations as
and when the same shall become due and payable in accordance with their
terms.  Nothing contained in this
Agreement is intended to or shall, as among the Obligors or their respective
creditors, affect the relative rights of the Noteholders and other creditors of
the Obligors (other  than between the Noteholders and the
Lenders).

 

11.           Further Assurances.  The Trustee and the Noteholders agree to take such actions and
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered,

 

16

 

such documents as are reasonably requested by
any Obligor or the Administrative Agent to effectuate and carry out the
purposes of this Agreement and the subordination provisions hereunder, so long
as any such acts are consistent with and do not impose terms of subordination
more onerous than the terms hereof.

 

12.           Modification and Expansion of Lender Obligations.  Notwithstanding any term of the Noteholder
Documents to the contrary, the Lenders may (i) grant extensions of time of
payment or performance of any Lender Obligations, (ii) make compromises and
settlements with the Obligors and other Persons regarding any Lender
Obligations, and (iii) increase, expand and/or modify any Lender
Obligations without the consent of the Noteholders, and without affecting this
Agreement and its rights hereunder, provided, in each case, that in any
event the aggregate principal amount of the loans and letters of credit
constituting Lender Obligations shall not exceed $40,000,000 less the principal
amount of Term Loans from time to time repaid by the Debtor pursuant to Section
2.4A or 2.4B(iii) of the Credit Agreement (or any similar provision, in the
case of an amendment, modification, replacement, substitution or refinancing
thereof).  No action that the
Administrative Agent or the Lenders may take, or refrain from taking, with
respect to the Lender Obligations or any Collateral therefor or any agreements
in connection therewith, shall affect this Agreement or the Administrative
Agent’s or the Lenders’ rights hereunder.

 

13.           Discontinuation of Credit.  If, at any time hereafter, the Lenders
shall, in the Lenders’ sole and absolute judgment, determine to discontinue the
extension of credit to Borrower, the Lenders may do so if permitted by the
terms and provisions of the Credit Agreement. 
Such discontinuation notwithstanding, this Agreement shall continue in
full force and effect until the Lender Obligations shall have been paid in full
in cash and the Lender Documents terminate or expire.

 

14.           Statutes of Limitation.  The obligations of any Obligor, the Trustee and the Noteholders
hereunder shall continue irrespective of, and each Obligor and the Trustee and
the Noteholders hereby waive, so far as the law permits, any existing or future
statutes of limitation applicable thereto or applicable to the enforcement of
indebtedness and liability of any Obligor, and any Collateral therefor.

 

15.           Impairment of Lender Obligations or Lien.  No court or other action which has the effect
of voiding, impairing, equitably subordinating or otherwise adversely affecting
the

 

17

 

Lender Obligations or the Liens securing the
Lender Obligations, whether upon the insolvency, bankruptcy or reorganization
of Debtors or otherwise, shall affect the Administrative Agent’s or the
Lenders’ rights hereunder or any of the Trustees or the Noteholders’ waivers,
covenants or obligations hereunder.

 

16.           Breach of Duty or Obligation to the Trustee or the
Noteholders.  No breach by the
Administrative Agent or the Lenders of any duty or obligation owed to the
Trustee or the Noteholders, whether under this Agreement or otherwise, nor any
determination that the Administrative Agent or the Lenders have any liability to
the Trustee or the Noteholders, whether under this Agreement or otherwise,
shall affect the Administrative Agent’s or the Lenders’ rights hereunder or any
of the Trustee’s or the Noteholders’ waivers, covenants or obligations
hereunder.

 

17.           Waiver of Jury Trial.  THE TRUSTEE AND THE 
NOTEHOLDERS, DEBTORS, AND THE ADMINISTRATIVE AGENT, ON BEHALF OF ITSELF
AND THE LENDERS, EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT.  IF NECESSARY, EACH PARTY
WILL UPON DEMAND EXECUTE AND DELIVER TO ANY OTHER PARTY ALL SUCH INSTRUMENTS
AND DOCUMENTS AS MAY BE REQUIRED (OR REQUESTED BY SUCH OTHER PARTY) IN ORDER TO
FILE PAPERS WITH ANY COURT OF COMPETENT JURISDICTION SO AS TO EFFECTIVELY
WAIVE, OR ACKNOWLEDGE ITS WAIVER OF, ALL SUCH RIGHTS.

 

18.           Agreement by Obligors.  Each Obligor agrees that it will not, and it will not permit any
affiliate or subsidiary to, take any action in contravention of the provisions
of this Agreement.

 

19.           Miscellaneous Provisions.

 

(1)           Binding Effect; Authorization.  This Agreement shall be binding on Debtors,
the Administrative Agent, the Lenders, the Trustee and the Noteholders, and
deemed effective, when executed by Debtors, the Administrative Agent and the
Trustee.  The Trustee is authorized
under the Indenture to execute and deliver this Agreement for and on behalf of
the Noteholders.  The Administrative
Agent is authorized to execute and deliver this Agreement for and on behalf of
the Lenders.

 

(2)           Parties Intended to be Benefitted.  All of the understandings, covenants and
agreements contained herein are

 

18

 

solely for the benefit of the Administrative
Agent, the Lenders, the Trustee and the Noteholders and there are no other
Persons (including Debtors) which are intended to be benefitted in any way by
this Agreement.

 

(3)           No Limitation Intended.  Nothing contained in this Agreement is intended to affect or
limit, in any way, the rights that each of the parties hereto has insofar as
the rights of such party and third parties are involved.  The Administrative Agent, on behalf of
itself and the Lenders, and the Trustee, on behalf of itself and the
Noteholders, hereto specifically reserve all of their respective rights against
the Obligors and other Persons.

 

(4)           Notices. 
All notices, demands and other communications which a party may desire,
or may be required, to give to another shall be in writing, shall be delivered
personally against receipt, or sent by recognized overnight courier service, or
mailed by registered or certified mail, return receipt requested, postage
prepaid, or sent by telecopy, and shall be addressed to the party to be
notified as follows:

 

	
  Lenders:

  	
   

  	
  Bank
  of America, N.A.,

  
	
   

  	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  	
  555
  South Flower Street

  
	
   

  	
   

  	
  Los
  Angeles, California 90071

  
	
   

  	
   

  	
  Attn:
  Janice Hammond, V.P.

  
	
   

  	
   

  	
  Telephone:
  (213) 228-9861

  
	
   

  	
   

  	
  Telecopier:
  (213) 228 2299

  
	
   

  	
   

  	
   

  
	
  Noteholders:

  	
   

  	
  The
  Bank of New York, as Trustee

  
	
   

  	
   

  	
  c/o
  United States Trust Company of New York

  
	
   

  	
   

  	
  114
  West 47th Street, 25th Floor

  
	
   

  	
   

  	
  New
  York, New York 10036

  
	
   

  	
   

  	
  Attn:
  Corporate Trust Agency

  
	
   

  	
   

  	
  Telephone: 
  ( ___ ) __________________

  	
   

  
	
   

  	
   

  	
  Telecopier:  ( ___ ) __________________

  	
   

  
	
   

  	
   

  	
   

  
	
  Borrower or Capital:

  	
   

  	
  Circus
  and Eldorado Joint Venture or 

  
	
   

  	
   

  	
  Silver
  Legacy Capital Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o
  Gary Carano, General Manager

  
	
   

  	
   

  	
  Silver
  Legacy Hotel and Casino

  
	
   

  	
   

  	
  407
  North Sierra Street

  
	
   

  	
   

  	
  Post
  Office Box 3920

  
	
   

  	
   

  	
  Reno,
  NV 89502

  
	
   

  	
   

  	
  Telephone:
  800/687-7733 ext. 7350

  
	
   

  	
   

  	
  Telecopier:
  775/325-7330

  

 

19

 

Any
such notice, demand, or communication shall be deemed given when received if
personally delivered or sent by overnight courier, or when deposited in the
United States mails, postage prepaid, if sent by registered or certified mail,
or when answerback received, if sent by telecopier.  The address for a party may be changed by notice given in
accordance with this subsection.  All
notices or other items required hereby to be delivered to any Lender shall be
delivered to the Administrative Agent. 
All notices or other items required hereby to be delivered to any
Noteholder shall be delivered to the Trustee.

 

(5)           Choice of Law. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada.

 

(6)           Effectiveness and Condition Precedent.  The subordinations, agreements and
priorities set forth hereinabove shall remain in full force and effect
regardless of whether any party hereto in the future seeks to rescind, amend,
terminate or reform, by litigation or otherwise, its respective agreements with
Debtors.

 

(7)           Successors and Assigns.  This Agreement shall be binding upon, and shall inure to the
benefit of, the participants, transferees, successors, and permitted assigns of
the parties hereto; provided, however, that neither the Trustee
nor the Noteholders shall transfer or assign any of their rights or obligations
hereunder, or transfer or assign all or any part of their interest in the Liens
securing the Noteholder Obligations to any person or entity, except in
connection with the transfer of the Notes, without the prior written consent of
the Lenders, any assignment being made in violation hereof being void  ab
initio.  The Trustee, on behalf
of itself and the Noteholders, further agrees that if Debtors are in the
process of refinancing a portion of the Lender Obligations with new lenders
(the “New Creditors”) providing credit conforming to the definition of “Lender
Obligations”, and if the Lenders make a request of the Trustee, the Trustee
shall, on behalf of itself and the 
Noteholders, promptly confirm in writing that the rights of the
Administrative Agent and the Lenders under this Agreement shall inure to the
specific  benefit of such New Creditors
(subject to a written assumption by the New Creditors of the obligations of the
Administrative Agent and the Lenders hereunder).

 

20

 

(8)           Headings. 
Section headings used in this Agreement have been set forth herein for
convenience of reference only.  Unless
the contrary is compelled by the context, everything contained in each section
hereof applies equally to this entire Agreement.

 

(9)           Severability. 
Wherever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

 

(10)         Waivers.  No
failure on the part of the Administrative Agent or the Lenders to exercise, no
delay in exercising and no course of dealing with respect to, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.

 

(11)         Attorneys’ Fees. 
If it becomes necessary for the Lenders or the Noteholders to commence
any proceedings or actions to enforce the provisions of this Agreement, the
prevailing party shall be entitled to recover from the non-prevailing party all
of the prevailing party’s reasonable costs and expenses in prosecuting such proceedings
and actions, including reasonable attorneys’ fees, the usual and customary and
lawfully recoverable proceeding costs, and all the expenses in connection
therewith.

 

(12)         Entire Agreement; Modifications.  This Agreement contains all of the terms and
conditions agreed upon by the parties relating to its subject matter and
supersedes all prior and contemporaneous agreements, negotiations,
correspondence, understandings and communications of the parties, whether oral
or written, respecting that subject matter. 
No modification, rescission, waiver, release, or amendment of any
provision of this Agreement shall be made, except by a written agreement signed
by the Administrative Agent (on behalf of the Lenders), the Trustee, in its
capacity as trustee under the Indenture, and the Borrower.

 

(13)         Counterparts. 
This Agreement may be signed in any number of counterparts, each of
which will constitute an original, and all of which, taken together, shall
constitute

 

21

 

but one and the same agreement with the same effect as if the
signatures thereon were upon the same instrument.

 

(14)         Trustee Protected. 
Nothing contained in this Agreement shall be construed to impose any
liability on the Trustee for any action or omission independently taken or made
by any Noteholder, regardless of whether such action or omission violates or
contravenes any provision hereof.  The
Trustee shall be entitled to all of the rights provided in the Indenture,
including Section 7.02 thereof, in carrying out is duties hereunder.

 

[THIS SPACE INTENTIONALLY
LEFT BLANK -

SIGNATURE PAGES  TO FOLLOW]

 

22

 

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

 

	
  “Administrative
  Agent”

  
	
   

  
	
  BANK
  OF AMERICA, N.A.,

  
	
  as
  Administrative Agent for the Lenders

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Janice Hammond

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  “Trustee”

  
	
   

  
	
  THE
  BANK OF NEW YORK,

  
	
  as
  Trustee

  
	
   

  	
   

  
	
  By:

  	
  /s/
  John Guiliano

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
  “Borrower”

  
	
   

  
	
  CIRCUS
  AND ELDORADO JOINT VENTURE,

  
	
  a
  Nevada general partnership

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Gary Carano

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  “Capital”

  
	
   

  
	
  SILVER
  LEGACY CAPITAL CORP.,

  
	
  a
  Nevada corporation

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Gary Carano

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  President and CEO

  

 

[Intercreditor
Agreement - Signature Page]

 

S-1EXHIBIT
10.10.1

 

CIRCUS AND
ELDORADO JOINT VENTURE

SILVER LEGACY
CAPITAL CORP.

 

$180,000,000

 

10 1/8% MORTGAGE NOTES
DUE 2012

 

 

Indenture

 

Dated as of March 5, 2002

 

 

The Bank of New York

 

Trustee

 

 

 

CROSS-REFERENCE TABLE*

 

	
  Trust
  Indenture

  Act Section

  	
   

  	
   

  	
  Indenture Section

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  7.10

  
	
  (b)

  	
   

  	
  7.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.05

  
	
  (b)

  	
   

  	
  11.03

  
	
  (c)

  	
   

  	
  11.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)(1)

  	
   

  	
  10.03

  
	
  (b)(2)

  	
   

  	
  7.06

  
	
  (c)

  	
   

  	
  7.06; 11.02

  
	
  (d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.03; 11.02

  
	
  (b)

  	
   

  	
  10.02

  
	
  (c)(1)

  	
   

  	
  11.04

  
	
  (c)(2)

  	
   

  	
  11.04

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  11.05

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.01

  
	
  (b)

  	
   

  	
  7.05; 11.02

  
	
  (c)

  	
   

  	
  7.01

  
	
  (d)

  	
   

  	
  7.01

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a) (last sentence)

  	
   

  	
  2.09

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.07

  
	
  (c)

  	
   

  	
  6.04

  
	
  317(a)(1)

  	
   

  	
  6.08

  

 

N.A. means not
applicable.

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

 

	
  (a)(2)

  	
   

  	
  6.09

  
	
  (b)

  	
   

  	
  2.04

  
	
  318(a)

  	
   

  	
  11.01

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  11.0

  

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE ONE DEFINITIONS AND INCORPORATION
  BY REFERENCE

  
	
   

  
	
  Section 1.01

  	
  Definitions

  	
   

  
	
  Section 1.02

  	
  Other Definitions

  	
   

  
	
  Section 1.03

  	
  Incorporation by Reference of Trust
  Indenture Act

  	
   

  
	
  Section 1.04

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO THE NOTES

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Form and Dating

  	
   

  
	
  Section 2.02

  	
  Execution and Authentication

  	
   

  
	
  Section 2.03

  	
  Registrar and Paying Agent

  	
   

  
	
  Section 2.04

  	
  Paying Agent to Hold Money in Trust

  	
   

  
	
  Section 2.05

  	
  Holder Lists

  	
   

  
	
  Section 2.06

  	
  Transfer and Exchange

  	
   

  
	
  Section 2.07

  	
  Replacement Notes

  	
   

  
	
  Section 2.08

  	
  Outstanding Notes

  	
   

  
	
  Section 2.09

  	
  Treasury Notes

  	
   

  
	
  Section 2.10

  	
  Temporary Notes

  	
   

  
	
  Section 2.11

  	
  Cancellation

  	
   

  
	
  Section 2.12

  	
  Defaulted Interest

  	
   

  
	
  Section 2.13

  	
  CUSIP Numbers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE REDEMPTION AND PREPAYMENT;
  SATISFACTION AND DISCHARGE

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Notices to Trustee

  	
   

  
	
  Section 3.02

  	
  Selection of Notes to Be Redeemed

  	
   

  
	
  Section 3.03

  	
  Notice of Redemption

  	
   

  
	
  Section 3.04

  	
  Effect of Notice of Redemption

  	
   

  
	
  Section 3.05

  	
  Deposit of Redemption Price

  	
   

  
	
  Section 3.06

  	
  Notes Redeemed in Part

  	
   

  
	
  Section 3.07

  	
  Optional Redemption

  	
   

  
	
  Section 3.08

  	
  Gaming Redemption

  	
   

  
	
  Section 3.09

  	
  Mandatory Redemption

  	
   

  
	
  Section 3.10

  	
  Repurchase Offers

  	
   

  
	
  Section 3.11

  	
  Satisfaction and Discharge of Indenture

  	
   

  
	
  Section 3.12

  	
  Application of Trust Money

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR COVENANTS

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Payment of Notes

  	
   

  
	
  Section 4.02

  	
  Maintenance of Office or Agency

  	
   

  

 

 

	
  Section 4.03

  	
  Reports

  	
   

  
	
  Section 4.04

  	
  Compliance Certificate

  	
   

  
	
  Section 4.05

  	
  Taxes

  	
   

  
	
  Section 4.06

  	
  Stay, Extension and Usury Laws

  	
   

  
	
  Section 4.07

  	
  Restricted Payments

  	
   

  
	
  Section 4.08

  	
  Dividend and Other Payment Restrictions
  Affecting Restricted Subsidiaries

  	
   

  
	
  Section 4.09

  	
  Incurrence of Indebtedness and Issuance of
  Disqualified Stock

  	
   

  
	
  Section 4.10

  	
  Repurchase at the Option of Holders — Asset
  Sales

  	
   

  
	
  Section 4.11

  	
  Transactions with Affiliates

  	
   

  
	
  Section 4.12

  	
  Liens

  	
   

  
	
  Section 4.13

  	
  Business Activities

  	
   

  
	
  Section 4.14

  	
  Corporate Existence

  	
   

  
	
  Section 4.15

  	
  Repurchase at the Option of Holders—Change
  of Control

  	
   

  
	
  Section 4.16

  	
  Limitation on Issuances and Sales of Equity
  Interests in Restricted Subsidiaries

  	
   

  
	
  Section 4.17

  	
  Designation of Restricted and Unrestricted
  Subsidiaries

  	
   

  
	
  Section 4.18

  	
  Payments for Consent

  	
   

  
	
  Section 4.19

  	
  Restrictions on Activities of Capital

  	
   

  
	
  Section 4.20

  	
  Advances to Restricted Subsidiaries

  	
   

  
	
  Section 4.21

  	
  Insurance

  	
   

  
	
  Section 4.22

  	
  Amendments to Certain Agreements

  	
   

  
	
  Section 4.23

  	
  Further Assurances

  	
   

  
	
  Section 4.24

  	
  Pledge Agreement.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE SUCCESSORS

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Merger, Consolidation, or Sale of Assets

  	
   

  
	
  Section 5.02

  	
  Successor Corporation Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX DEFAULTS AND REMEDIES

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Events of Default

  	
   

  
	
  Section 6.02

  	
  Acceleration; Intentional Defaults

  	
   

  
	
  Section 6.03

  	
  Other Remedies

  	
   

  
	
  Section 6.04

  	
  Waiver of Past Defaults

  	
   

  
	
  Section 6.05

  	
  Control by Majority

  	
   

  
	
  Section 6.06

  	
  Limitation on Suits

  	
   

  
	
  Section 6.07

  	
  Rights of Holders of Notes to Receive
  Payment

  	
   

  
	
  Section 6.08

  	
  Collection Suit by Trustee

  	
   

  
	
  Section 6.09

  	
  Trustee May File Proofs of Claim

  	
   

  
	
  Section 6.10

  	
  Priorities

  	
   

  
	
  Section 6.11

  	
  Undertaking for Costs

  	
   

  
	
  Section 6.12

  	
  Management of the Hotel/Casino Property

  	
   

  
	
  Section 6.13

  	
  Restoration of Rights and Remedies

  	
   

  

 

 

	
  ARTICLE SEVEN TRUSTEE

  
	
   

  
	
  Section 7.01

  	
  Duties of Trustee

  	
   

  
	
  Section 7.02

  	
  Certain Rights of Trustee

  	
   

  
	
  Section 7.03

  	
  Individual Rights of Trustee

  	
   

  
	
  Section 7.04

  	
  Trustee’s Disclaimer

  	
   

  
	
  Section 7.05

  	
  Notice of Defaults

  	
   

  
	
  Section 7.06

  	
  Reports by Trustee to Holders of the Notes

  	
   

  
	
  Section 7.07

  	
  Compensation and Indemnity

  	
   

  
	
  Section 7.08

  	
  Replacement of Trustee

  	
   

  
	
  Section 7.09

  	
  Successor Trustee by Merger, Etc

  	
   

  
	
  Section 7.10

  	
  Eligibility; Disqualification

  	
   

  
	
  Section 7.11

  	
  Preferential Collection of Claims Against
  Issuers

  	
   

  
	
  Section 7.12

  	
  Authorization of Trustee to Take Other
  Actions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT DEFEASANCE AND COVENANT
  DEFEASANCE

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Option to Effect Legal Defeasance or
  Covenant Defeasance

  	
   

  
	
  Section 8.02

  	
  Legal Defeasance and Discharge

  	
   

  
	
  Section 8.03

  	
  Covenant Defeasance

  	
   

  
	
  Section 8.04

  	
  Conditions to Legal or Covenant Defeasance

  	
   

  
	
  Section 8.05

  	
  Deposited Money and Government Securities
  to Be Held in Trust; Other Miscellaneous Provisions

  	
   

  
	
  Section 8.06

  	
  Repayment to the Issuers

  	
   

  
	
  Section 8.07

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE AMENDMENT, SUPPLEMENT AND
  WAIVER

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Without Consent of Holders of Notes

  	
   

  
	
  Section 9.02

  	
  With Consent of Holders of Notes

  	
   

  
	
  Section 9.03

  	
  Compliance with Trust Indenture Act

  	
   

  
	
  Section 9.04

  	
  Revocation and Effect of Consents

  	
   

  
	
  Section 9.05

  	
  Notation on or Exchange of Notes

  	
   

  
	
  Section 9.06

  	
  Trustee to Sign Amendments, Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN GUARANTEES

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Subsidiary Guarantees

  	
   

  
	
  Section 10.02

  	
  Additional Guarantees

  	
   

  
	
  Section 10.03

  	
  Execution and Delivery of Subsidiary
  Guarantee

  	
   

  
	
  Section 10.04

  	
  Severability

  	
   

  
	
  Section 10.05

  	
  Limitation of Subsidiary Guarantors’
  Liability

  	
   

  
	
  Section 10.06

  	
  Subsidiary Guarantors May Consolidate,
  Etc., on Certain Terms

  	
   

  
	
  Section 10.07

  	
  Releases Following Sale of Assets

  	
   

  
	
  Section 10.08

  	
  Release of a Guarantor

  	
   

  
	
  Section 10.09

  	
  Benefits Acknowledged

  	
   

  

 

 

	
  ARTICLE ELEVEN COLLATERAL AND SECURITY

  
	
   

  	
   

  	
   

  
	
  Section 11.01

  	
  Security

  	
   

  
	
  Section 11.02

  	
  Recording and Opinions

  	
   

  
	
  Section 11.03

  	
  Release of Collateral

  	
   

  
	
  Section 11.04

  	
  Protection of the Trust Estate

  	
   

  
	
  Section 11.05

  	
  Certificates of the Issuers

  	
   

  
	
  Section 11.06

  	
  Certificates of the Trustee

  	
   

  
	
  Section 11.07

  	
  Authorization of Actions to Be Taken by the
  Trustee Under the Collateral Documents

  	
   

  
	
  Section 11.08

  	
  Trustee’s Duties

  	
   

  
	
  Section 11.09

  	
  Authorization of Receipt of Funds by the
  Trustee Under the Collateral Documents

  	
   

  
	
  Section 11.10

  	
  Termination of Security Interest

  	
   

  
	
  Section 11.11

  	
  Cooperation of Trustee

  	
   

  
	
  Section 11.12

  	
  Collateral Agent

  	
   

  
	
  Section 11.13

  	
  Intercreditor Agreement.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWELVE SATISFACTION AND DISCHARGE

  
	
   

  	
   

  	
   

  
	
  Section 12.01

  	
  Satisfaction and Discharge

  	
   

  
	
  Section 12.02

  	
  Deposited Money and Government Securities
  to be Held in Trust; Other Miscellaneous Provisions

  	
   

  
	
  Section 12.03

  	
  Repayment to Issuers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THIRTEEN JOINT AND SEVERAL
  LIABILITY

  
	
   

  	
   

  	
   

  
	
  Section 13.01

  	
  Joint and Several Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOURTEEN MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  Section 14.01

  	
  Trust Indenture Act Controls

  	
   

  
	
  Section 14.02

  	
  Notices

  	
   

  
	
  Section 14.03

  	
  Communication by Holders of Notes with
  Other Holders of Notes

  	
   

  
	
  Section 14.04

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
   

  
	
  Section 14.05

  	
  Statements Required in Certificate or
  Opinion

  	
   

  
	
  Section 14.06

  	
  Rules by Trustee and Agents

  	
   

  
	
  Section 14.07

  	
  No Personal Liability of Partners,
  Management Committee Members, Officers, Employees and Stockholders

  	
   

  
	
  Section 14.08

  	
  Governing Law

  	
   

  
	
  Section 14.09

  	
  No Adverse Interpretation of Other
  Agreements

  	
   

  
	
  Section 14.10

  	
  Successors

  	
   

  
	
  Section 14.11

  	
  Severability

  	
   

  
	
  Section 14.12

  	
  Counterpart Originals

  	
   

  
	
  Section 14.13

  	
  Acts of Holders

  	
   

  
	
  Section 14.14

  	
  Benefit of Indenture

  	
   

  
	
  Section 14.15

  	
  Table of Contents, Headings, Etc.

  	
   

  

 

 

	
  EXHIBITS

  
	
  Exhibit A1

  	
  FORM OF NOTE

  	
   

  
	
  Exhibit A2

  	
  FORM OF REGULATION S TEMPORARY GLOBAL NOTE

  	
   

  
	
  Exhibit B

  	
  FORM OF CERTIFICATE OF
  TRANSFER

  	
   

  
	
  Exhibit C

  	
  FORM OF CERTIFICATE OF
  EXCHANGE

  	
   

  
	
  Exhibit D

  	
  FORM
  OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

  	
   

  

 

 

INDENTURE dated as
of March 5, 2002 among Circus and Eldorado Joint Venture, a Nevada general
partnership (the “Partnership”),
Silver Legacy Capital Corp., a Nevada corporation (“Capital” and, together with the Partnership, the “Issuers”), the Subsidiary Guarantors (as
defined below) from time to time party hereto, and The Bank of New York, a New
York banking corporation (the “Trustee”).

 

The Issuers and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 10 1/8% Mortgage Notes due 2012 (the “Notes”):

 

ARTICLE ONE

DEFINITIONS
AND INCORPORATION

BY
REFERENCE

 

Section 1.01           Definitions.

 

“144A Global Note” means a global note substantially in
the form of Exhibit A1 hereto bearing the Global Note Legend and
the Private Placement Legend and deposited with or on behalf of, and registered
in the name of, the Depositary or its nominee that will be issued in a
denomination equal to the outstanding principal amount of the Notes sold in
reliance on Rule 144A.

 

“Acquired Debt” means,
with respect to any specified Person:

 

(1)           Indebtedness of any other Person existing at the time such
other Person is merged with or into, becomes a Restricted Subsidiary of, or
substantially all of its business and assets are acquired by, such specified
Person, whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, becoming a Restricted
Subsidiary of, or substantially all of its business and assets being acquired
by, such specified Person; and

 

(2)           Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.

 

“Affiliate”
of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person.  For the purposes
of this definition, “control,” when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10%
or more of the Voting Securities of a Person shall be deemed to be
control.  For purposes of this
definition, the terms “controlling,”
“controlled by” and “under
common control with” have correlative meanings.

 

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

 

 

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

 

“Applicable Tax Rate” means, with respect to any taxable
year, the highest effective combined federal, state and local tax rates
applicable to any equity holder of the Partnership, or, if such equity holder
is a partnership or other pass-through entity for United States federal income
tax purposes, the equity holders of such equity holders, during such taxable
year with respect to income allocated to such equity holder by the Partnership,
taking into account (i) the deductibility of state and local taxes  for federal income tax purposes and the
limitation of Internal Revenue Code section 68 on such deductions, computes as
if the equity holder’s only income were that allocated to the equity holder by
the Partnership and (ii) the highest statutory rates applicable to different
categories of income allocated to such equity holder by the Partnership (e.g.
tax-exempt income or long-term capital gains).

 

“Asset Sale” means:

 

(1)           the sale, lease,
conveyance, transfer or other disposition (whether in a single transaction or a
series of related transactions) of any assets or rights (including but not
limited to sale and leaseback transactions); provided that the sale,
lease conveyance, transfer or other disposition of all or substantially all of
the assets of the Issuers and their Restricted Subsidiaries taken as a whole,
or the sale of the Hotel/Casino Property, will be governed by Sections 4.15
and/or 5.01 hereof and not by Section 4.10 hereof; and

 

(2)           the issuance of
Equity Interests by any Restricted Subsidiary or the sale of Equity Interests
in any of the Partnership’s Restricted Subsidiaries by the Partnership or any
Restricted Subsidiary.

 

Notwithstanding the
foregoing, the following items will not be deemed to be Asset Sales:

 

(a)           any
single transaction or series of related transactions that involves assets
having a fair market value of less than $1.0 million;

 

(b)           a
transfer of assets between or among the Partnership and its Restricted
Subsidiaries;

 

(c)           an
issuance of Equity Interests (i) by Capital to the Partnership or (ii) by a
Restricted Subsidiary to the Partnership or to another Restricted Subsidiary;

 

(d)           the
sale of inventory or obsolete furniture, fixtures, equipment or other assets in
the ordinary course of business;

 

(e)           dispositions
of gaming equipment in the ordinary course of business pursuant to an
established program for the maintenance and upgrading of this equipment;

 

(f)            dispositions
pursuant to the foreclosure of any Lien on assets securing any FF&E
Financing or Capital Lease Obligation permitted pursuant to Section 4.09
hereof; provided that the
FF&E Financing or Capital Lease Obligation is secured by a Lien that
relates only to assets purchased with that FF&E Financing or Capital Lease
Obligation, 

 

2

 

and provided further that each foreclosure or
other remedy is conducted in a commercially reasonable manner or in accordance
with applicable law;

 

(g)           the
sale or other disposition of cash or Cash Equivalents; and

 

(h)           a
Restricted Payment or Permitted Investment that is permitted by the covenant
described above under Section 4.07 hereof.

 

“Assignment of Rents and Revenues” means that certain
Assignment of Rents and Revenues, dated as of February 26, between the
Partnership and the Trustee.

 

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

 

“Beneficial Owner”
has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that in calculating the beneficial ownership of any
particular “person” (as that term is used in Section 13(d)(3) of the
Exchange Act), such “person” shall be deemed to have beneficial ownership of
all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition.  The terms “Beneficially
Owns” and “Beneficially Owned”
shall have a corresponding meaning.

 

“Broker-Dealer”
has the meaning set forth in the Registration Rights Agreement.

 

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

 

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

 

“Capital Stock” means:

 

(1)           in
the case of a corporation, any and all shares of stock issued by the corporation;

 

(2)           in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;

 

(3)           in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and

 

(4)           any other interest
or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.

 

3

 

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

 

“Cash Equivalents”
means:

 

(1)           United
States dollars;

 

(2)           securities issued or directly and fully guaranteed or
insured by the United States government or any agency or instrumentality
thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition;

 

(3)           certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers’
acceptances with maturities not exceeding one year and overnight bank deposits,
in each case, with any commercial bank chartered or organized in the United
States and having capital and surplus in excess of $500.0 million and a Thomson
Bank Watch Rating of “B” or better;

 

(4)           repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the qualifications
specified in clause (3) above;

 

(5)           commercial paper having the highest rating obtainable from
Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Services and
in each case maturing within six months after the date of acquisition; and

 

(6)           a money market fund at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through (5)
of this definition, if such fund has assets of not less than $500.0 million.

 

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

 

(1)           the
Permitted Holders shall at any time cease to own, directly or indirectly, in
the aggregate, at least 50% of the Voting Stock of the Partnership or any
entity resulting from any merger or consolidation of the Partnership with any
Person;

 

(2)           after
an Initial Public Offering, the Partnership’s becoming aware of (by way of a
report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy
vote, written notice or otherwise) the acquisition by any Person or related
group (within the meaning of Section 13(d) or Section 14(d)(2) of the Exchange
Act, or any successor provision to either of the foregoing, including any
“group” acting for the purpose of acquiring, holding or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than
Permitted Holders, in a single transaction or in a related series of
transactions, by way of merger, consolidation or other business combination or
purchase of beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act, or any successor provision) of 35% or more of the Voting Stock of
the Partnership, or such other Person surviving the transaction and, at such
time, the 

 

4

 

Permitted Holders shall
fail to beneficially own, directly or indirectly, securities representing
greater than the combined voting power of the Partnership’s or such other
Person’s Voting Stock as is beneficially owned by such Person or group;

 

(3)           the direct or indirect sale, transfer, conveyance or other
disposition of the Hotel/Casino Property;

 

(4)           the first day on which the Partnerships fails to own 100%
of the issued and outstanding Equity Interest of Capital, other than by reason
of a merger of Capital with and into a corporate successor to the Partnership;

 

(5)           the first day on which a majority of the members of the
Partnership’s Management Committee are not Continuing Members; and

 

(6)           the adoption of a plan relating to the liquidation or
dissolution of either of the Issuers.

 

“Clearstream” means Clearstream Banking, société anonyme,
Luxembourg.

 

“Closing  Date” means March 5, 2002.

 

“Collateral” means all “collateral” referred to in the
Collateral Documents and all other property or assets that become subject to a
Lien in favor of the Trustee or the holders of the Notes.

 

“Collateral Account Agreement” means that certain Collateral
Account Agreement, dated as of March 5, 2002, between the Issuers and the
Trustee.

 

“Collateral Agent” means any person appointed by the Trustee
as a Collateral Agent hereunder.

 

“Collateral Documents” means, collectively, the Deed of
Trust, the Security Agreement, the Assignment of Rents and Revenues, the
Collateral Account Agreement, the Environmental Indemnity, the Pledge Agreement
and all agreements, instruments, documents, pledges or filings executed in
connection with granting, or that otherwise evidence, the Lien of the Trustee
in the Collateral.

 

“Commission” means the Securities and Exchange Commission.

 

“Consolidated
Cash Flow” means, with respect to any specified Person
for any period, the Consolidated Net Income of that Person for that period plus (without duplication):

 

(1)           an
amount equal to any extraordinary loss plus the amount of any net loss realized
by that Person or any of its Restricted Subsidiaries in connection with an
Asset Sale, to the extent those losses were deducted in computing Consolidated
Net Income; plus

 

5

 

(2)           provision for taxes based on income or profits of that
Person and its Restricted Subsidiaries for the relevant period, to the extent
that the provision for taxes was deducted in computing Consolidated Net Income
or, so long as that Person is treated as a partnership or other pass through
entity for United States federal income tax purposes, the Tax Amount of that
Person and its Restricted Subsidiaries for the relevant period; plus

 

(3)           consolidated interest expense of that Person and its
Restricted Subsidiaries for the relevant period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization of
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers’ acceptance
financings, and net of the effect of all payments made or received pursuant to
Hedging Obligations), to the extent that this expense was deducted in computing
Consolidated Net Income; plus

 

(4)           depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents an
accrual of or reserve for cash expenses in any future period or amortization of
a prepaid cash expense that was paid in a prior period) of that Person and its
Restricted Subsidiaries for the relevant period to the extent that
depreciation, amortization and other non-cash expenses were deducted in
computing Consolidated Net Income; minus

 

(5)           non-cash items increasing Consolidated Net Income for the
relevant period, other than the accrual of revenue in the ordinary course of
business.

 

Notwithstanding the foregoing, the provision for taxes
based on the income or profits of, and the depreciation and amortization and
other non-cash expenses of, a Restricted Subsidiary of the Issuers will be
added to Consolidated Net Income to compute Consolidated Cash Flow of the
Issuers only to the extent that a corresponding amount would be permitted at
the date of determination to be dividended to the Issuers by that Restricted
Subsidiary without prior governmental approval (that has not been obtained),
and without direct or indirect restriction pursuant to the terms of its charter
and all agreements, instruments, judgments, decrees, orders, statutes, rules
and governmental regulations applicable to that Restricted Subsidiary or its
stockholders.

 

“Consolidated
Net Income” means, with respect to any specified Person for
any period, the aggregate of the Net Income of that Person and its Restricted
Subsidiaries for that period, on a consolidated basis, determined in accordance
with GAAP; provided
that:

 

(1)           the
Net Income (but not loss) of any Person that is not a Restricted Subsidiary or
that is accounted for by the equity method of accounting will be included only
to the extent of the amount of dividends or distributions paid in cash to the
specified Person or a Restricted Subsidiary thereof;

 

6

 

(2)           the Net Income of any Restricted Subsidiary will be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Restricted Subsidiary or its
stockholders;

 

(3)           the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of its acquisition will
be excluded; and

 

(4)           the cumulative effect of a change in accounting principles
will be excluded.

 

“Continuing Member”  means, as of
any date of determination, any member of the Management Committee who:

 

(1)           was
a member of the Partnership’s Management Committee on the date of this
Indenture; or

 

(2)           was nominated for election or elected to the Partnership’s
Management Committee with the approval of a Permitted Holder.

 

“Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in
Section 14.02 hereof or such other address as to which the Trustee may
give notice to the Partnership.

 

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

 

“Deed of Trust” means that certain Deed of Trust, Fixture
Filing and Security Agreement with Assignment of Rents, dated as of February
26, between the Partnership and Trustee.

 

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

 

“Definitive Note”
means a certificated Note registered in the name of the Holder thereof and
issued in accordance with Section 2.06 hereof, substantially in the form
of Exhibit A1 hereto except that such Note shall not bear the
Global Note Legend and shall not have the “Schedule of Exchanges of Interests
in the Global Note” attached thereto.

 

“Depositary”
means, with respect to the Notes issuable or issued in whole or in part in
global form, the Person specified in Section 2.03 hereof as the Depositary
with respect to the Notes, and any and all successors thereto appointed as
depositary hereunder and having become such pursuant to the applicable
provision of this Indenture.

 

7

 

“Disqualified Stock”
means any Capital Stock that, by its terms (or by the terms of any security
into which it is convertible, or for which it is exchangeable, in each case at
the option of the holder thereof), or upon the happening of any event, matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder thereof, in whole or in
part, on or prior to the date that is 91 days after the date on which the
Notes mature.  Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders thereof have the right to require the Issuers to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
shall not constitute Disqualified Stock if the terms of such Capital Stock
provide that the Issuers may not repurchase or redeem any of such Capital Stock
unless such repurchase or redemption complies with Section 4.07 hereof.

 

“Environmental Indemnity” means that certain Environmental
Indemnity, dated as of March 5, between the Issuers and Trustee.

 

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

 

“Euroclear”
means Morgan Guaranty Trust Company of New York, Brussels office, as operator
of the Euroclear system.

 

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

 

“Exchange Notes”
means the Notes issued in the Exchange Offer pursuant to Section 2.06(f)
hereof.

 

“Exchange Offer”
has the meaning set forth in the Registration Rights Agreement.

 

“Exchange Offer Registration Statement” has the meaning set forth in the Registration Rights
Agreement.

 

“Existing Indebtedness” means Indebtedness of the Issuers and
their Restricted Subsidiaries (excluding Indebtedness under the New Revolving
Facility but including Indebtedness under the New Term Loan Facility)
outstanding or incurred immediately prior to or concurrently with the execution
of this Indenture, until those amounts are repaid.

 

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

 

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

 

8

 

“Fixed Charge Coverage Ratio”  means
with respect to any specified Person for any period, the ratio of the
Consolidated Cash Flow of that Person for that period to the Fixed Charges of
that Person for that period.  In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, repays, repurchases or redeems any Indebtedness (other
than ordinary revolving credit borrowings) or issues, repurchases or redeems
Preferred Stock subsequent to the commencement of the period for which the
Fixed Charge Coverage Ratio is being calculated and on or prior to the date on
which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio
will be calculated giving pro forma effect to that incurrence, assumption,
Guarantee, repayment, repurchase or redemption of Indebtedness, or that
issuance, repurchase or redemption of Preferred Stock, and the use of the
proceeds therefrom, as if the same had occurred at the beginning of the
applicable four-quarter reference period.

 

In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:

 

(1)           acquisitions
that have been made by the specified Person or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to that reference period and on or prior to the Calculation Date
will be given pro forma effect as if they had occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for that reference
period will be calculated on a pro forma basis in accordance with Regulation
S-X under the Securities Act;

 

(2)           the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded; and

 

(3)           the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, will be excluded, but only to the extent that
the obligations giving rise to those Fixed Charges will not be obligations of
the specified Person or any of its Restricted Subsidiaries following the
Calculation Date.

 

“Fixed Charges”  means,
with respect to any specified Person for any period, the sum, without
duplication, of:

 

(1)           the
consolidated interest expense of that Person and its Restricted Subsidiaries
for that period, whether paid or accrued, including, without limitation,
amortization of original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers’ acceptance financings, and the net effect of all payments made or
received pursuant to Hedging Obligations; plus

 

(2)           the consolidated interest of that Person and its
Restricted Subsidiaries that was capitalized during that period; plus

 

9

 

(3)           any interest expense on Indebtedness of another Person
that is Guaranteed by that Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of that Person or one of its Restricted
Subsidiaries, whether or not the Guarantee or Lien is called upon; plus

 

(4)           the product of (a) all dividends and distributions,
whether paid or accrued and whether or not in cash, on any series of Preferred
Stock of such Person or any of its Restricted Subsidiaries other than dividends
on Equity Interests payable solely in Equity Interests of the Partnership
(other than Disqualified Stock) or to the Partnership or a Restricted
Subsidiary of the Partnership, and (b) a fraction, the numerator of which
is one and the denominator of which is one minus the Applicable Tax Rate for
such Person with respect to the taxable year in which the distribution is made
(calculated based on a reasonable estimate of the character of the income to be
allocated to such person with respect to such distribution).

 

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

 

“Gaming
Authority” means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States federal or foreign government, any state, province or any
city or the political subdivision or otherwise, and whether now or hereafter in
existence, or any officer or official thereof, including the Nevada State
Gaming Commission, the Nevada State Gaming Control Board and any other
applicable gaming regulatory authority with authority to regulate any gaming
operation (or proposed gaming operation) owned, managed or operated by the
Partnership or, any of its Subsidiaries.

 

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

 

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

 

10

 

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

 

“Global Note Legend” means the legend set forth in
Section 2.06(g)(ii), which is required to be placed on all Global Notes
issued under this Indenture.

 

“Global Notes” means, individually and
collectively, each of the Restricted Global Notes and the Unrestricted Global
Notes, substantially in the form of Exhibit A1 or A2 hereto,
as appropriate, issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.

 

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

 

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

 

“Hedging Obligations”
means, with respect to any specified Person, the obligations of such Person
under interest rate swap agreements, interest rate cap agreements, interest
rate collar agreements and other agreements or arrangements designed to manage
interest rate risk.

 

“Holder”
means a Person in whose name a Note is registered.

 

“Hotel/Casino
Property” means that certain parcel of real property,
together with the improvements thereon operated as the Silver Legacy Resort
Casino, located at 407 North Virginia Street in the city of Reno, Nevada.

 

“Indebtedness”
means, with respect to any specified Person and without duplication, any
liability of such Person, whether or not contingent

 

11

 

(1)           for
borrowed money;

 

(2)           evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof);

 

(3)           in respect of banker’s acceptances;

 

(4)           representing Capital Lease Obligations;

 

(5)           representing the balance deferred and unpaid of the
purchase price of any property, except any such balance that constitutes an
accrued expense or trade payable;

 

(6)           all Indebtedness of others secured by a Lien on any asset
of the specified Person (whether or not such Indebtedness is assumed by the
specified Person); provided, however, that the amount of such
Indebtedness shall be limited to the lesser of the fair market value of the
assets or property to which such Lien attaches and the amount of the
Indebtedness so incurred;

 

(7)           representing any Hedging Obligations; and

 

(8)           to the extent not otherwise included, the Guarantee by the
specified Person of any Indebtedness of any other Person,

 

if and to the extent any
of the preceding items (other than letters of credit, Hedging Obligations and
the amount of that Person’s obligation to the redemption, repayment or other
repurchase of Disqualified Stock) would appear as a liability upon a balance sheet
of the specified Person prepared in accordance with GAAP.  In addition, the term “Indebtedness” includes all Indebtedness of
others secured by a Lien on any asset of the specified Person (whether or not
such Indebtedness is assumed by the specified Person).

 

The amount of any
Indebtedness outstanding as of any date will be:

 

(a)   the accreted value thereof, in the case of any Indebtedness issued
with original issue discount; and

 

(b)   the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness.

 

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

 

“Indirect Participant” means a Person who holds a
beneficial interest in a Global Note through a Participant.

 

“Initial Public Offering”
means the first underwritten public offering of Capital Stock of the
Partnership (other than a public offering registered on Form S-8 under the
Securities Act) that results in net proceeds of at least $20.0 million to the
Partnership or its successor entity.

 

12

 

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

 

“Intercreditor Agreement”
means that certain Intercreditor Agreement dated as of the date of this
Indenture by and among Bank of America, N.A., as administrative agent, The Bank
of New York, as trustee, and the Issuers.

 

“Investments” means, with respect to any Person, all direct or indirect
investments by that Person in other Persons (including Affiliates) in the forms
of loans (including Subsidiary Guarantees or other obligations), advances or
capital contributions (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP.  If the Partnership or any of its Restricted
Subsidiaries sells or otherwise disposes of any Equity Interests of any
Restricted Subsidiary such that, after giving effect to the sale or disposition,
that Person is no longer a Restricted Subsidiary, then the Partnership or that
Restricted Subsidiary will be deemed to have made an Investment on the date of
the sale or disposition equal to the fair market value of the Equity Interests
of that Subsidiary not sold or disposed of pursuant to the sale or disposition
in an amount determined as provided in the final paragraph of Section 4.07
hereof.  If the Issuers or any of their
Restricted Subsidiaries designate a Restricted Subsidiary to be an Unrestricted
Subsidiary pursuant to the provisions of this Indenture, then the Issuers or
that Restricted Subsidiary will be deemed to have made an Investment on the
date of that designation equal to the greater of the book value and fair market
value of the Equity Interests of that Subsidiary in an amount determined as
provided in the final paragraph of Section 4.07 hereof.

 

The acquisition by the Partnership or any Restricted Subsidiary of a
Person that holds an Investment in any third Person will be deemed to be an
Investment by the Partnership or the Restricted Subsidiary in that third Person in an amount equal to the fair
market value of the Investment held by the acquired Person in that third Person
in an amount determined as provided in the final paragraph of Section
4.07 hereof.

 

“Issue  Date”
means the date of original issuance of the Notes.

 

“Legal Holiday” means a Saturday, a Sunday or a day
on which banking institutions in The City of New York or at a place of payment
are authorized by law, regulation or executive order to remain closed.  If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue on such payment for
the intervening period.

 

“Letter of Transmittal” means the letter of transmittal to
be prepared by the Issuers and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.

 

“Lien” means, with respect to any asset,
any mortgage, lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset, whether or not filed, 

 

13

 

recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

 

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

 

“Management Committee”
means:

 

(1)           with respect to a corporation, the Board of Directors of
the corporation;

 

(2)           with respect to the Partnership, the executive committee
of the Partnership;

 

(3)           with respect to a limited partnership or partnership other
than the Partnership, the Board of Directors of the general partner of the
Partnership; and

 

(4)           with respect to any other Person, the board or committee
of that Person serving a similar function.

 

“Net Income” means, with respect to
any specified Person for any period, (i) the net income (loss) of that
Person for that period, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends and distributions, excluding,
however, (1) any gain (but not loss), together with any related provision
for taxes on that gain (but not loss), realized in connection with:  (a) any Asset Sale; or (b) the
disposition of any securities by that Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of that Person or any of
its Restricted Subsidiaries, including, with respect to the Partnership,
premiums paid in connection with the purchase of the Notes; and (2) any
extraordinary gain (but not loss), together with any related provision for
taxes on that extraordinary gain (but not loss), less (ii) in the case of any Person that is treated as
a partnership or other pass through entity for United States federal or state
income tax purposes, the Tax Amount of that Person for such period.

 

“Net Proceeds” means the aggregate cash proceeds received by the Partnership
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to the Asset Sale, including, without limitation, legal, accounting,
appraisal and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result thereof, any taxes or Tax  Distributions paid or payable by the
Partnership as a result thereof, in each case, after taking into account any
available tax credits or deductions and any tax sharing agreements, amounts
required to be applied to the repayment of Indebtedness, other than
Indebtedness under the New Credit Facility, secured by a Lien on the asset or
assets that were the subject of the Asset Sale and any reserve for adjustment
in respect of the sale price if the asset or assets established in accordance
with GAAP.

 

“New Credit Facility”
means the New Term Loan Facility and the New Revolving Facility.

 

14

 

“New Revolving Facility”
means (a) the revolving portion of that certain Credit Agreement dated March 5,
2002 between the Partnership and the lenders thereunder (and any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith) and (b) any amendment, modification, supplement,
restatement, refunding, refinancing, restructuring, replacement, renewal,
repayment or extension thereof (whether with the original agent and lenders or
other agents and lenders or otherwise and whether provided under the Credit
Agreement or other credit agreements or otherwise) or additional revolving
lines of credit with respect to the principal lender which the managing agent
is a commercial banking institution with over $500 million in assets.

 

“New Term Loan Facility”
means the term loan portion of that certain Credit Agreement dated March 5,
2002 between the Partnership and the lenders thereunder (and any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith) in the initial principal amount of $20.0 million.

 

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

 

“Non-U.S. Person” means a Person who is not a U.S.
Person.

 

“Notes” has the meaning assigned to it in
the preamble to this Indenture.

 

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

 

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

 

“Officer” means, with respect to any Person,
the Chairman of the Board, the Chief Executive Officer, the General Manager,
the President, the Chief Operating Officer, the Chief Financial Officer, the
Chief Accounting and Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary, any Assistant Secretary or any Vice-President of
such Person, as applicable.

 

“Officers’ Certificate”
means a certificate signed on behalf of the Partnership by at least two
Officers of the Partnership, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Partnership, that meets the requirements of
Section 14.05 hereof.

 

15

 

“Opinion of Counsel” means
an opinion from legal counsel who is reasonably acceptable to the Trustee, that
meets the requirements of Section 14.05 hereof.  The counsel may be an employee of or counsel to the Partnership,
any Subsidiary of the Partnership or the Trustee.

 

“Parent Partners” means
Galleon, Inc., a Nevada corporation, and Eldorado Limited Liability Company, a
Nevada limited liability company, the sole general partners of the Partnership.

 

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

 

“Permitted
Holders” means the (1) Carano Interests, (2) Mandalay
Resort Group and any Person into which Mandalay Resort Group merges or
consolidates or that acquires all or substantially all of the assets and
properties of Mandalay Resort Group and (3) any Wholly Owned Subsidiary of any of the
foregoing.

 

“Permitted Investments”
means:

 

(1)           any Investment in the Partnership or in any of its
Restricted Subsidiaries including, without limitation, any Investment in the
Gaming Business of the Partnership or in the Gaming Business of any such
Restricted Subsidiary;

 

(2)           the making of Investments in the Partnership by any
Subsidiary (provided that
any Indebtedness evidencing that Investment is subordinated and junior to the
Notes);

 

(3)           any Investment in Cash Equivalents;

 

(4)           any Investment by the Partnership or any of its Restricted
Subsidiaries in a Person, if as a result of that Investment:

 

(i)            the Person becomes a Restricted Subsidiary of the
Partnership engaged in the Gaming Business; or

 

(ii)           the Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Partnership or a Restricted Subsidiary engaged in the
Gaming Business;

 

(5)           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 4.10 hereof;

 

(6)           advances and loans to employees of the Partnership or a
Restricted Subsidiary in the ordinary course of business not in excess of
$500,000 at any one time outstanding;

 

16

 

(7)           Investments acquired by the Partnership or any of its
Restricted Subsidiaries (a) in exchange for any other Investment or
accounts receivable held by the Partnership or such Restricted Subsidiary in
connection with or as a result of a bankruptcy workout, reorganization or
recapitalization of the issuer of such Investment or accounts receivable or
(b) as a result of a foreclosure by the Partnership or such Restricted
Subsidiary or other transfer of title with respect to any secured Investment in
default; or

 

(8)           Hedging Obligations otherwise permitted under this
Indenture.

 

“Permitted Liens” means:

 

(1)           Liens on the assets of the Issuers and any Subsidiary
Guarantor created (a) by this Indenture and the Collateral Documents
securing the Notes issued on the date of this Indenture and, to the extent that
additional Notes are issued to refinance amounts outstanding under the New Term
Loan Facility, such additional Notes, the Exchange Notes and the Subsidiary
Guarantees or (b) by the New Credit Facility;

 

(2)           Liens in favor of the Issuers or any of their Restricted
Subsidiaries;

 

(3)           Liens on property of a Person existing at the time that
Person is acquired by, merged with or into or consolidated with the Issuers or
any of their Restricted Subsidiaries; provided that those Liens were in
existence prior to the contemplation of the acquisition, merger or
consolidation and do not extend to any assets other than those of the Person
acquired by, merged into or consolidated with the Issuers or such Restricted
Subsidiary;

 

(4)           Liens on property existing at the time of acquisition
thereof by the Issuers or any of their Restricted Subsidiaries; provided that
those Liens were in existence prior to the contemplation of the acquisition and
do not extend to any assets other than the acquired property;

 

(5)           Liens or deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;

 

(6)           Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (5) of the second paragraph of Section
4.09 hereof covering only the assets acquired with or improved with the
proceeds of that Indebtedness;

 

(7)           Liens to secure Indebtedness that is Permitted Refinancing
Indebtedness incurred with respect to the New Term Loan Facility;

 

(8)           Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that can be paid without penalty or that
are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, provided

 

17

 

that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor;

 

(9)           Liens incurred in the ordinary course of business of the
Partnership or of any of its Restricted Subsidiaries with respect to
obligations that do not at any time exceed 5% of the net book value of the
total net assets of the Partnership as of the time of determination and that
(A) are not incurred in connection with the borrowing of money or the obtaining
of advances of credit (other than trade credit in the ordinary course of
business) and (B) do not in the aggregate materially detract from the value of
the property or materially impair the use thereof by the Partnership and its
Restricted Subsidiary in accordance with GAAP;

 

(10)         leases or subleases not prohibited by the terms of the
Indenture and that are granted to others in the ordinary course of business and
do not in any material respect interfere with the business of the Partnership
or any Restricted Subsidiary and deposits made in connection therewith;

 

(11)         carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other similar Liens arising in the ordinary course of business
and not overdue for a period of more than 90 days or which are being contested
in good faith by appropriate proceedings if adequate reserves with respect
thereto maintained on the books of the Partnership and its Restricted
Subsidiary in accordance with GAAP;

 

(12)         Liens incurred or pledges or deposits made in the ordinary
course of business in connection with workers’ compensation, unemployment
insurance and other social security legislation;

 

(13)         easements, rights-of-way, restrictions and other similar
encumbrances or charges which, in the aggregate, are not substantial in amount
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary course of the
business of the Partnership and its Restricted Subsidiaries, taken as a whole,
and any exceptions to title set forth in any title policies;

 

(14)         Liens existing on the date of the Indenture;

 

(15)         Liens incurred in the ordinary course of business securing
Hedging Obligations otherwise permitted under the terms of this Indenture; and

 

(16)         Liens securing Permitted Refinancing Indebtedness, provided, that, in each case, such Liens
do not extend to any additional property or asset that did not secure the
Indebtedness being extended, refinanced, renewed, replaced, deferred or
refunded or that did not secure the Indebtedness affected by such amendment or
renewal and do not have a higher priority than the Liens securing the
Indebtedness being extended, refinanced, renewed, replaced, deferred or
refunded.

 

“Permitted Refinancing Indebtedness” means any Indebtedness of the
Partnership or of any of its Restricted Subsidiaries issued in exchange for, or
the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness of the 

 

18

 

Issuers or of any of their Restricted Subsidiaries permitted to be
incurred by the first paragraph of Section 4.09 hereof or clause (3)
of the second paragraph of Section 4.09; provided that:

 

(1)           the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the sum of (a) the
outstanding principal amount (or accreted value, if applicable) of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus all accrued interest thereon and the amount of all premiums and
reasonable expenses incurred in connection therewith) less (b) all due and
unpaid scheduled principal payments with respect thereto plus (c) the
reasonable fees and expenses incurred in connection with obtaining such
Permitted Refinancing Indebtedness;

 

(2)           the Permitted Refinancing Indebtedness has a final
maturity date earlier than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;

 

(3)           if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, the Permitted Refinancing Indebtedness has a final maturity date earlier
than the final maturity date of, and is subordinated in right of payment to,
the Notes on terms at least as favorable to the holders of the Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and

 

(4)           the Indebtedness is incurred either by the Issuers or by
the Restricted Subsidiary that is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.

 

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

 

“Pledge Agreement” means
that certain Pledge Agreement between the Parent Partners and the Trustee.

 

“Preferred Stock” means
any Equity Interest with preferential right of payment of dividends or
distributions or upon liquidation, dissolution or winding up.

 

“Private Placement Legend”
means the legend set forth in Section 2.06(g)(i) to be placed on all Notes
issued under this Indenture except where otherwise permitted by the provisions
of this Indenture.

 

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

 

“Registration Rights Agreement”
means the Registration Rights Agreement, dated as of the date of this
Indenture, by and among the Issuers and the other parties named on the
signature pages thereof, as such agreement may be amended, modified or
supplemented from time to time.

 

19

 

“Regulation S” means
Regulation S promulgated under the Securities Act.

 

“Regulation S Global Note”
means a Regulation S Temporary Global Note or a Regulation S
Permanent Global Note, as appropriate.

 

“Regulation S Permanent Global
Note” means a permanent global Note in the form of Exhibit A1
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Regulation S Temporary Global Note upon expiration of the Restricted
Period.

 

“Regulation S Temporary Global
Note” means a temporary global Note in the form of Exhibit A2
hereto bearing the Global Note Legend, the Private Placement Legend and the
Temporary Regulation S Legend and deposited with or on behalf of and registered
in the name of the Depositary or its nominee, issued in a denomination equal to
the outstanding principal amount of the Notes initially sold in reliance on
Rule 903 of Regulation S.

 

“Responsible Officer,”
when used with respect to the Trustee, means any officer within the Corporate
Trust Administration of the Trustee (or any successor group of the Trustee) or
any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.

 

“Restricted Definitive Note”
means a Definitive Note bearing the Private Placement Legend.

 

“Restricted Global Note”
means a Global Note bearing the Private Placement Legend.

 

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

 

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

 

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

 

“Rule 144” means
Rule 144 promulgated under the Securities Act.

 

“Rule 144A” means
Rule 144A promulgated under the Securities Act.

 

“Rule 903” means
Rule 903 promulgated under the Securities Act.

 

“Rule 904” means
Rule 904 promulgated the Securities Act.

 

“Securities Act” means the
Securities Act of 1933, as amended.

 

20

 

“Security Agreement” means
that certain Security Agreement, dated as of March 5, between the Issuers and
the Trustee.

 

“Shelf Registration Statement”
means the Shelf Registration Statement as defined in the Registration Rights
Agreement.

 

“Significant Subsidiary”  means a “significant subsidiary” of the
Partnership as defined in Article 1 Rule 1–02 of
Regulation S-X promulgated under the Securities Act.

 

“Stated Maturity” means,
with respect to any installment of interest or principal on any series of
Indebtedness, the date on which such payment of interest or principal was
scheduled to be paid in the original documentation governing such Indebtedness,
and will not include any contingent obligations to repay, redeem or repurchase
such interest or principal prior to the date originally scheduled for the
payment thereof.

 

“Subsidiary” means, with
respect to any specified Person:

 

(1)           any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more other
Subsidiaries of that Person (or a combination thereof); and

 

(2)           any partnership (a) the sole general partner or the
managing general partner of which is that Person or a Subsidiary of that Person
or (b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or a combination thereof).

 

“Subsidiary Guarantee”
means a guarantee of the Issuers’ payment obligations under the Notes and this
Indenture by a Subsidiary Guarantor in accordance with the provisions of this
Indenture.

 

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

 

“Tax Amount”
means, with respect to any taxable year, without duplication, the amount
of taxable income of any Person for such period multiplied by the Applicable
Tax Rate.

 

“Tax
Distribution” means a distribution in respect of taxes to the
partners of the Partnership pursuant to clause (4) of the second paragraph
of Section 4.07 hereof.

 

“Total
Assets” means, with respect to any Person, the aggregate of
all assets of such Person and its subsidiaries as would be shown on the balance
sheet of such Person prepared in accordance with GAAP.

 

21

 

“Temporary Regulation S Legend”
means the legend set forth in Section 2.06(h) hereof, which is required to
be placed on the Regulation S Temporary Global Note.

 

“TIA” means the Trust
Indenture Act of 1939, as amended.

 

“Transaction Date” means,
with respect to the incurrence of any Indebtedness by the Partnership or any of
its Restricted Subsidiaries, the date such Indebtedness is to be incurred and,
with respect to any Restricted Payment, the date such Restricted Payment is to
be made.

 

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

 

“Unrestricted Global Note”
means a permanent global Note substantially in the form of Exhibit A1
attached hereto that bears the Global Note Legend and that has the “Schedule of
Exchanges of Interests in the Global Note” attached thereto, and that is
deposited with or on behalf of and registered in the name of the Depositary,
representing a series of Notes that do not bear the Private Placement Legend.

 

“Unrestricted
Subsidiary” means any Subsidiary of the Partnership other
than Capital that is designated by the Management Committee as an Unrestricted
Subsidiary pursuant to a resolution, but only to the extent that such
Subsidiary:

 

(1)           has no Indebtedness other than Non-Recourse Indebtedness;

 

(2)           is not party to any agreement, contract, arrangement or
understanding with the Partnership or any Restricted Subsidiary of the Partnership
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Partnership or such Restricted Subsidiary than
those that might be obtained at the time from Persons who are not Affiliates of
the Partnership;

 

(3)           is a Person with respect to which neither the Partnership
nor any of its Restricted Subsidiaries has any direct or indirect obligation
(a) to subscribe for additional Equity Interests or (b) to maintain
or preserve such Person’s financial condition or to cause such Person to
achieve any specified levels of operating results; and

 

(4)           has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Partnership or any of its
Restricted Subsidiaries.

 

Any designation of a Subsidiary of the Partnership as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.17 hereof.  If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary shall be deemed to be
incurred by a Restricted Subsidiary of the Partnership as of such date and, if
such Indebtedness is not permitted to be incurred as of such date under
Section 4.09 hereof, the Partnership shall be in default of

 

22

 

such covenant. 
The Management Committee of the Partnership may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be
deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the
Partnership of any outstanding Indebtedness of such Unrestricted Subsidiary and
such designation shall only be permitted if (1) such Indebtedness is
permitted under Section 4.09 hereof, calculated on a pro forma basis as if
such designation had occurred at the beginning of the four–quarter
reference period and (2) no Default or Event of Default would be in
existence following such designation.

 

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

 

“Voting Stock” means any
class of Capital Stock of any Person then outstanding normally entitled
(without regard to the occurrence of any contingency) to vote in elections of
the members of such Person’s Management Committee.

 

“Weighted
Average Life to Maturity” means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:

 

(1)           the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between that date and the making of the payment;
by

 

(2)           the then outstanding principal amount of that Indebtedness.

 

“Wholly Owned Subsidiary”
of any specified Person means a Restricted Subsidiary of such Person all of the
outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares) shall at the time be owned by such Person and by
one or more Wholly Owned Subsidiaries of such Person or by one or more Wholly
Owned Subsidiaries of such Person.

 

Section 1.02           Other
Definitions.

 

	
  Term

  	
   

  	
  Defined

  in

  Section

  
	
  “Affiliate Transaction”

  	
  4.11

  
	
  “Asset Sale Offer”

  	
  4.10

  
	
  “Authentication Order”

  	
  2.02

  
	
  “Beneficiary”

  	
  13.01

  
	
  “Benefitted Party”

  	
  10.01

  
	
  “Change of Control Offer”

  	
  4.15

  
	
  “Change of Control Payment”

  	
  4.15

  
	
  “Change of Control Payment Date”

  	
  4.15

  
	
  “Covenant Defeasance”

  	
  8.03

  
	
  “DTC”

  	
  2.01

  

 

23

 

	
  Term

  	
   

  	
  Defined

  in

  Section

  
	
  “Event of Default”

  	
  6.01

  
	
  “Excess Proceeds”

  	
  4.10

  
	
  “incur”

  	
  4.09

  
	
  “Legal Defeasance”

  	
  8.02

  
	
  “Note Obligations”

  	
  13.01

  
	
  “Offer Amount”

  	
  3.10

  
	
  “Offer Period”

  	
  3.10

  
	
  “Paying Agent”

  	
  2.03

  
	
  “Payment Default”

  	
  6.01

  
	
  “Permitted Debt”

  	
  4.09

  
	
  “Purchase Date”

  	
  3.10

  
	
  “Registrar”

  	
  2.03

  
	
  “Repurchase Offer”

  	
  3.10

  
	
  “Restricted Payments”

  	
  4.07

  
	
  “Trustee”

  	
  8.05

  

 

Section 1.03           Incorporation
by Reference of Trust Indenture Act.

 

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

 

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

 

“indenture securities”
means the Notes;

 

“indenture security Holder”
means a Holder of a Note;

 

“indenture to be qualified”
means this Indenture;

 

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

 

“obligor” on the Notes
means the Issuers and any successor obligor upon the Notes.

 

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

 

Section 1.04           Rules
of Construction.

 

Unless the context otherwise requires:

 

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

 

24

 

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

 

(c)           “or”
is not exclusive;

 

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

 

(e)           provisions
apply to successive events and transactions; and

 

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

 

ARTICLE TWO

THE NOTES

 

Section 2.01           Form
and Dating.

 

(a)           General.  The Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A1 hereto,
which is part of this Indenture.  The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage which do not amend or conflict with the terms of the
Notes.  Each Note shall be dated the
date of its authentication.  The
aggregate principal amount of the Notes issued pursuant to this Indenture shall
be no greater than $180,000,000.  The
Notes shall be issued only in registered form without coupons and only shall be
in denominations of $1,000 and integral multiples thereof.

 

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

 

(b)           Global
Notes.  Notes issued in
global form shall be substantially in the form of Exhibit A1 or A2
attached hereto (including the Global Note Legend thereon and the “Schedule of
Exchanges of Interests in the Global Note” attached thereto).  Notes issued in definitive form shall be
substantially in the form of Exhibit A1 attached hereto (but without the
Global Note Legend thereon and without the “Schedule of Exchanges of Interests
in the Global Note” attached thereto). 
Each Global Note shall represent such of the outstanding Notes as shall
be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.

 

25

 

(c)           Temporary
Global Notes.  Notes offered
and sold in reliance on Regulation S shall be issued initially in the form
of the Regulation S Temporary Global Note, which shall be deposited on
behalf of the purchasers of the Notes represented thereby with the Trustee, as
custodian for The Depositary Trust Company (“DTC”)
in New York,  New York, and registered
in the name of the Depositary or the nominee of the Depositary for the accounts
of designated agents holding on behalf of Euroclear or Clearstream, duly
executed by the Issuers and authenticated by the Trustee as hereinafter
provided.  The Restricted Period shall
be terminated upon the receipt by the Trustee of (i) a written certificate
from Euroclear and Clearstream certifying that they have received certification
of non–United States beneficial ownership of 100% of the aggregate
principal amount of the Regulation S Temporary Global Note (except to the
extent of any beneficial owners thereof who acquired an interest therein during
the Restricted Period pursuant to another exemption from registration under the
Securities Act and who will take delivery of a beneficial ownership interest in
a 144A Global Note bearing a Private Placement Legend, all as contemplated by
Section 2.06(a)(ii) hereof), and (ii) an Officers’ Certificate from
the Issuers.  Following the termination
of the Restricted Period, beneficial interests in the Regulation S Temporary
Global Note shall be exchanged for beneficial interests in Regulation S
Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously
with the authentication of Regulation S Permanent Global Notes, the
Trustee shall cancel the Regulation S Temporary Global Note.  The aggregate principal amount of the
Regulation S Temporary Global Note and the Regulation S Permanent Global
Notes may from time to time be increased or decreased by adjustments made on
the records of the Trustee and the Depositary or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.

 

(d)           Euroclear
and Clearstream Procedures Applicable.  The provisions of the “Operating Procedures of the Euroclear
System” and “Terms and Conditions Governing Use of Euroclear” and the “General
Terms and Conditions of Cedel Bank” and “Customer Handbook” of Clearstream
shall be applicable to transfers of beneficial interests in the
Regulation S Temporary Global Note and the Regulation S Permanent
Global Notes that are held by Participants through Euroclear or Clearstream.

 

Section 2.02           Execution
and Authentication.

 

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

 

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

 

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

 

The Trustee shall, upon a written order of the Issuers signed by one
Officer of each Issuer (an “Authentication
Order”), authenticate
Notes for original issue up to the aggregate principal amount stated in
paragraph 4 of the Notes.  The
aggregate principal amount

 

26

 

of Notes outstanding at any time may not exceed such
amount except as provided in Section 2.07 hereof.

 

The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Notes.  An
authenticating agent may authenticate Notes whenever the Trustee may do
so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights
as an Agent to deal with Holders or an Affiliate of either Issuer.

 

Section 2.03           Registrar
and Paying Agent.

 

The Issuers shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for
payment (“Paying Agent”). 
The Registrar shall keep a register of the Notes and of their transfer
and exchange.  The Issuers may appoint
one or more co-registrars and one or more additional paying agents.  The term “Registrar”
includes any co-registrar and the term “Paying
Agent” includes any additional paying agent.  The Issuers may change any Paying Agent or
Registrar without notice to any Holder. 
The Issuers shall notify the Trustee in writing of the name and address
of any Agent not a party to this Indenture. 
If the Issuers fails to appoint or maintain another entity as Registrar
or Paying Agent, the Trustee shall act as such.  The Issuers or any of their Subsidiaries may act as Paying Agent
or Registrar.

 

The Issuers initially appoint DTC to act as Depositary with respect to
the Global Notes.

 

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

 

Section 2.04           Paying
Agent to Hold Money in Trust.

 

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

 

Section 2.05           Holder
Lists.

 

The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA § 312(a).  If the Trustee is not the Registrar, the Issuers
shall furnish to the

 

27

 

Trustee at least seven (7) Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of the Holders of Notes and the Issuers
shall otherwise comply with TIA § 312(a).

 

Section 2.06           Transfer
and Exchange.

 

(a)           Transfer and Exchange of Global Notes.  A Global Note may not be transferred as a
whole except by the Depositary to a nominee of the Depositary, by a nominee of
the Depositary to the Depositary or to another nominee of the Depositary, or by
the Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.  All Global Notes
will be exchanged by the Issuers for Definitive Notes if (i) the Issuers
deliver to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Issuers within 120 days after the date of
such notice from the Depositary, (ii) the Issuers in their sole discretion
determine that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and deliver a written notice to such effect to the
Trustee; provided that in no
event shall the Regulation S Temporary Global Note be exchanged by the
Issuers for Definitive Notes prior to (x) the expiration of the Restricted
Period and (y) the receipt by the Registrar of any certificates required
pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act; or
(iii) there shall have occurred and be continuing a Default or Event of
Default with respect to the Notes.  Upon
the occurrence of either of the preceding events in (i), (ii) or (iii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee.  Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof.  Every Note authenticated
and delivered in exchange for, or in lieu of, a Global Note or any portion
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10
hereof, shall be authenticated and delivered in the form of, and shall be, a
Global Note.  A Global Note may not be
exchanged for another Note other than as provided in this Section 2.06(a),
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.06(b), (c) or (f) hereof.

 

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

 

(i)            Transfer of Beneficial Interests in the Same Global
Note.  Beneficial interests
in any Restricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Restricted Global Note
in accordance with the transfer restrictions set forth in the Private Placement
Legend; provided,
however,
that prior to the expiration of the Restricted Period, transfers of beneficial
interests in the Regulation S Temporary Global Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial 

 

28

 

Purchaser).  Beneficial interests in any Unrestricted
Global Note may be transferred to Persons who take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note.  No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described in
this Section 2.06(b)(i).

 

(ii)           All
Other Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers and
exchanges of beneficial interests that are not subject to
Section 2.06(b)(i) above, the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) a written order from a Participant
or an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase or
(B) (1) a written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable Procedures directing
the Depositary to cause to be issued a Definitive Note in an amount equal to
the beneficial interest to be transferred or exchanged and
(2) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above; provided that in no event shall Definitive
Notes be issued upon the transfer or exchange of beneficial interests in the
Regulation S Temporary Global Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903 under the Securities Act.  Upon consummation of an Exchange Offer by
the Issuers in accordance with Section 2.06(f) hereof, the requirements of
this Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes.  Upon
satisfaction of all of the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and the Notes or
otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Notes pursuant to Section 2.06(i)
hereof.

 

(iii)          Transfer
of Beneficial Interests to Another Restricted Global Note.  A beneficial interest in any Restricted
Global Note may be transferred to a Person who takes delivery thereof in the
form of a beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:

 

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

 

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

 

29

 

(iv)          Transfer
and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial
Interests in the Unrestricted Global Note.  A beneficial interest in any Restricted Global Note may be exchanged
by any holder thereof for a beneficial interest in an Unrestricted Global Note
or transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or transfer
complies with the requirements of Section 2.06(b)(ii) above and:

 

(A)          such exchange or
transfer is effected pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is not
(1) a Broker-Dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Partnership;

 

(B)           such transfer is
effected pursuant to the Shelf Registration Statement in accordance with the
Registration Rights Agreement;

 

(C)           such transfer is
effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or

 

(D)          the Registrar
receives the following:

 

(1)                                  if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial interest in an Unrestricted
Global Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or

 

(2)                                  if
the holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;

 

and, in each such
case set forth in this subparagraph (D), if the Registrar so requests or
if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.

 

If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Issuers shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the 

 

30

 

aggregate principal amount of beneficial interests
transferred pursuant to subparagraph (B) or (D) above.

 

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

 

(c)           Transfer or Exchange of Beneficial Interests for Definitive Notes.

 

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

 

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

 

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

 

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

 

(D)          if such beneficial
interest is being transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;

 

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

 

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

 

(G)           if such beneficial
interest is being transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c) thereof,

 

31

 

the Trustee shall
cause the aggregate principal amount of the applicable Global Note to be
reduced accordingly pursuant to Section 2.06(i) hereof, and the Issuers
shall execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate principal
amount.  Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the Depositary
and the Participant or Indirect Participant. 
The Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered.  Any
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained
therein.

 

(ii)           Beneficial
Interests in Regulation S Temporary Global Note to Definitive Notes.  Notwithstanding Sections 2.06(c)(i)(A) and
(C) hereof, a beneficial interest in the Regulation S Temporary Global Note may
not be exchanged for a Definitive Note or transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to (x) the expiration
of the Restricted Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities
Act, except in the case of a transfer pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 903 or Rule
904.

 

(iii)          Beneficial
Interests in Restricted Global Notes to Unrestricted Definitive Notes.  A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only if:

 

(A)          such exchange or
transfer is effected pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of such beneficial interest, in
the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of
the Partnership;

 

(B)           such transfer is
effected pursuant to the Shelf Registration Statement in accordance with the
Registration Rights Agreement;

 

(C)           such transfer is
effected by a Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement; or

 

(D)          the Registrar
receives the following:

 

(1)                                  if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest 

 

32

 

for a Definitive
Note that does not bear the Private Placement Legend, a certificate from such
holder in the form of Exhibit C hereto, including the certifications in
item (1)(b) thereof; or

 

(2)                                  if
the holder of such beneficial interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall take delivery thereof
in the form of a Definitive Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;

 

and, in each such
case set forth in this subparagraph (D), if the Registrar so requests or
if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.

 

(iv)          Beneficial
Interests in Unrestricted Global Notes to Unrestricted Definitive Notes.  If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for a
Definitive Note or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Note, then, upon satisfaction of
the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause
the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(i) hereof, and the Issuers shall
execute and the Trustee shall authenticate and deliver to the Person designated
in the instructions a Definitive Note in the appropriate principal amount.  Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iv) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant.  The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are so
registered.  Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv)
shall not bear the Private Placement Legend.

 

(d)           Transfer and Exchange of Definitive Notes for Beneficial Interests.

 

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

 

(A)          if the Holder of such
Restricted Definitive Note proposes to exchange such Note for a beneficial interest
in a Restricted Global Note, a 

 

33

 

certificate from
such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;

 

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

 

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

 

(D)          if such Restricted
Definitive Note is being transferred pursuant to an exemption from the
registration requirements of the Securities Act in accordance with
Rule 144 under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in
item (3)(a) thereof;

 

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

 

(F)           if such Restricted
Definitive Note is being transferred to either one of the Issuers or any of
their Subsidiaries,
a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or

 

(G)           if such Restricted
Definitive Note is being transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c) thereof,

 

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

 

(ii)           Restricted Definitive Notes to Beneficial Interests
in Unrestricted Global Notes. 
A Holder of a Restricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer such Restricted
Definitive Note to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note only if:

 

(A)          such exchange or
transfer is effected pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the case of an exchange, or
the transferee, in the case of a transfer, certifies in the applicable Letter
of Transmittal that it is not (1) a broker-dealer, (2) a Person 

 

34

 

participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Partnership;

 

(B)           such transfer is
effected pursuant to the Shelf Registration Statement in accordance with the
Registration Rights Agreement;

 

(C)           such transfer is
effected by a Broker–Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement; or

 

(D)          the Registrar
receives the following:

 

(1)                                  if
the Holder of such Definitive Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or

 

(2)                                  if
the Holder of such Definitive Notes proposes to transfer such Notes to a Person
who shall take delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;

 

and, in each such
case set forth in this subparagraph (D), if the Registrar so requests or
if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.

 

Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.

 

(iii)          Unrestricted Definitive Notes to Beneficial Interests
in Unrestricted Global Notes. 
A Holder of an Unrestricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer such Definitive
Notes to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note at any time.  Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and increase
or cause to be increased the aggregate principal amount of one of the
Unrestricted Global Notes.

 

If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Issuers
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall 

 

35

 

authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.

 

(e)           Transfer and Exchange of Definitive Notes for
Definitive Notes.  Upon
request by a Holder of Definitive Notes and such Holder’s compliance with the
provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. 
Prior to such registration of transfer or exchange, the requesting
Holder shall present or surrender to the Registrar the Definitive Notes duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by its attorney,
duly authorized in writing. In addition, the requesting Holder shall provide
any additional certifications, documents and information, as applicable,
required pursuant to the following provisions of this Section 2.06(e).

 

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

 

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

 

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

 

(C)           if the transfer will
be made pursuant to any other exemption from the registration requirements of
the Securities Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.

 

(ii)           Restricted
Definitive Notes to Unrestricted Definitive Notes.  Any Restricted Definitive Note may be
exchanged by the Holder thereof for an Unrestricted Definitive Note or
transferred to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:

 

(A)          such exchange or
transfer is effected pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the case of an exchange, or
the transferee, in the case of a transfer, certifies in the applicable Letter
of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person
who is an affiliate (as defined in Rule 144) of the Partnership;

 

(B)           any such transfer is
effected pursuant to the Shelf Registration Statement in accordance with the
Registration Rights Agreement;

 

36

 

(C)           any such transfer is
effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or

 

(D)          the Registrar
receives the following:

 

(1)                                  if
the Holder of such Restricted Definitive Notes proposes to exchange such Notes
for an Unrestricted Definitive Note, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in
item (1)(d) thereof; or

 

(2)                                  if
the Holder of such Restricted Definitive Notes proposes to transfer such Notes
to a Person who shall take delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;

 

and, in each such
case set forth in this subparagraph (D), if the Registrar so requests, an
Opinion of Counsel in form reasonably acceptable to the Partnership to the
effect that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance with
the Securities Act.

 

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

 

(f)            Exchange
Offer.  Upon the occurrence
of the Exchange Offer in accordance with the Registration Rights Agreement, the
Issuers shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02, the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (x) they are not Broker-Dealers, (y) they are not
participating in a distribution of the Exchange Notes and (z) they are not
affiliates (as defined in Rule 144) of the Partnership, and accepted for
exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted Definitive
Notes accepted for exchange in the Exchange Offer.  Concurrently with the issuance of such Notes, the Trustee shall
cause the aggregate principal amount of the applicable Restricted Global Notes
to be reduced accordingly, and the Issuers shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.  Any Notes that remain outstanding after the
consummation of the Exchange Offer, and Exchange Notes issued in connection
with the Exchange Offer and any additional Notes issued pursuant to the terms
of this Indenture, shall be treated as a single class of securities under this
Indenture.

 

37

 

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

 

(i)            Private
Placement Legend.

 

(A)          Except in the case of a transfer referred to in
clause (B) below, each Global Note and each Definitive Note (and all Notes
issued in exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:

 

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

 

(B)           Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(iii), (c)(iv),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and all
Notes issued in exchange therefor or substitution thereof) shall not bear the
Private Placement Legend.

 

38

 

(ii)           Global Note Legend.  Each Global Note shall bear a legend in
substantially the following form:

 

THIS GLOBAL NOTE
IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR
ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS
NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE
TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO
SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE ISSUERS.

 

(h)           Regulation S Temporary Global Note Legend.  The Regulation S Temporary Global Note
shall bear a legend in substantially the following form:

 

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

 

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

 

(j)            General Provisions Relating to Transfers and Exchanges.

 

39

 

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

 

(ii)           No service charge shall be made to a
holder of a beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Issuers may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to
Sections 2.10, 3.06, 3.08, 3.09, 4.10, 4.15 and 9.05 hereof).

 

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

 

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

 

(v)           The Issuers shall not be required
(A) to issue, to register the transfer of or to exchange any Notes during
a period beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending at
the close of business on the day of selection, (B) to register the
transfer of or to exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part or
(C) to register the transfer of or to exchange a Note between a record
date and the next succeeding interest payment date.

 

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

 

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

 

(viii)        All certifications, certificates and
Opinions of Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.

 

(ix)           Each Holder of a Note agrees to
indemnify the Issuers and the Trustee against any liability that may result
from the transfer, exchange or assignment of such Holder’s Note in violation of
any provision of this Indenture and/or applicable United States Federal or
state securities law.

 

40

 

(x)            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 Note (including any transfers between or
among Depositary participants or beneficial owners of interest in any Global
Note) other than to require delivery of such certificates and other
documentation or evidence as are 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 2.07           Replacement
Notes.

 

If any mutilated Note is surrendered to the Trustee or the Issuers and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Issuers shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee’s
requirements are met.  If required by
the Trustee or the Issuers, an indemnity bond must be supplied by the Holder
that is sufficient in the judgment of the Trustee and the Issuers to protect
the Issuers, the Trustee, any Agent and any authenticating agent from any loss
that any of them may suffer if a Note is replaced.  The Issuers may charge for their expenses in replacing a Note.

 

Every replacement Note is an additional obligation of the Issuers and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.

 

Section 2.08           Outstanding
Notes.

 

The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.08 as not outstanding. 
Except as set forth in Section 2.09 hereof, a Note does not cease
to be outstanding because the Issuers or an Affiliate of either of the Issuers
holds the Note.

 

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.

 

If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases
to accrue.

 

If the Paying Agent (other than the Issuers or a Subsidiary or an
Affiliate of any of the foregoing) holds, on a redemption date or maturity
date, money sufficient to pay Notes payable on that date, then on and after
that date such Notes shall be deemed to be no longer outstanding and shall
cease to accrue interest.

 

41

 

Section 2.09           Treasury
Notes.

 

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

 

Section 2.10           Temporary
Notes.

 

Until certificates representing Notes are ready for delivery, the
Issuers may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. 
Temporary Notes shall be substantially in the form of certificated Notes
but may have variations that the Issuers consider appropriate for temporary
Notes and as shall be reasonably acceptable to the Trustee.  Without unreasonable delay, the Issuers
shall prepare and the Trustee shall authenticate definitive Notes in exchange
for temporary Notes.

 

Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.

 

Section 2.11           Cancellation.

 

The Issuers at any time may deliver Notes to the Trustee for
cancellation.  The Registrar and Paying
Agent shall forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange or payment. 
The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall dispose of canceled Notes in accordance with its procedures for the
disposition of canceled securities in effect as of the date of such disposition
(subject to the record retention requirement of the Exchange Act).  Certification of the disposition of all
canceled Notes shall be delivered to the Issuers.  The Issuers may not issue new Notes to replace Notes that they have
paid or that have been delivered to the Trustee for cancellation.

 

Section 2.12           Defaulted
Interest.

 

If the Issuers default in a payment of interest on the Notes, they
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. 
The Issuers shall notify the Trustee in writing of the amount of
defaulted interest proposed to be paid on each Note and the date of the
proposed payment.  The Issuers shall fix
or cause to be fixed each such special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest.  At least 15 days before the
special record date, the Issuers (or, upon the written request of the Issuers,
the Trustee in the name and at the expense of the Issuers) shall mail or cause
to be mailed to Holders a notice that states the special record date, the
related payment date and the amount of such interest to be paid.

 

42

 

Section 2.13           CUSIP
Numbers.

 

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

 

ARTICLE THREE

REDEMPTION AND PREPAYMENT;

SATISFACTION AND DISCHARGE

 

Section 3.01           Notices
to Trustee.

 

If the Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, they shall furnish to the
Trustee, at least 45 days but not more than 60 days before a redemption date,
an Officers’ Certificate setting forth (i) the clause of this Indenture
pursuant to which the redemption shall occur, (ii) the redemption date,
(iii) the principal amount of Notes to be redeemed and (iv) the
redemption price.

 

Section 3.02           Selection
of Notes to Be Redeemed.

 

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

 

The Trustee shall promptly notify the Issuers in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed.  No Notes in amounts of $1,000 or less shall
be redeemed in part unless all of the Notes held by a Holder are to be
redeemed.  Notes and portions of Notes
selected shall be in amounts of $1,000 or whole multiples of $1,000; except
that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, shall be
redeemed.  Except as provided in the
preceding sentence, provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.

 

Section 3.03           Notice
of Redemption.

 

Subject to the provisions of Section 3.10 hereof, at least 30 days
but not more than 60 days before a redemption date, the Issuers shall mail or
cause to be mailed, by first class 

 

43

 

mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.

 

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

 

(a)   the redemption date;

 

(b)   the redemption price;

 

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

 

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

 

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

 

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

 

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

 

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

 

At the Issuers’ request, the Trustee shall give the notice of
redemption in the Issuers’ names and at their expense; provided,
however, that the Issuers shall have delivered to the Trustee, at
least 45 days prior to the redemption date, an Officers’ Certificate requesting
that the Trustee give such notice and setting forth the information to be
stated in such notice as provided in the preceding paragraph.

 

Section 3.04           Effect
of Notice of Redemption.

 

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

 

Section 3.05           Deposit
of Redemption Price.

 

One (1) Business Day prior to the redemption date, the Issuers shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest and Liquidated Damages, if any, on all
Notes to be redeemed on that date.  The
Trustee or the Paying Agent shall promptly return to the Issuers any money deposited
with the Trustee or the Paying Agent by the Issuers in excess of the amounts
necessary to pay the redemption price of, and accrued interest on, all Notes to
be redeemed.

 

44

 

If the Issuers comply with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes
or the portions of Notes called for redemption.  If a Note is redeemed on or after an interest record date but on
or prior to the related interest payment date, then any accrued and unpaid
interest shall be paid to the Person in whose name such Note was registered at
the close of business on such record date. 
If any Note called for redemption shall not be so paid upon surrender
for redemption because of the failure of the Issuers to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided
in the Notes and in Section 4.01 hereof.

 

Section 3.06           Notes
Redeemed in Part.

 

Upon surrender of a Note that is redeemed in part, the Issuers shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Issuers a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.  No Notes in
denominations of $1,000 or less shall be redeemed in part.

 

Section 3.07           Optional
Redemption.

 

(a)           Except
as set forth in clause (b) of this Section 3.07, the Issuers shall
not have the option to redeem the Notes pursuant to this Section 3.07
prior to March 1, 2007.  Thereafter, the
Issuers may redeem all or a part of the Notes upon not less than 30 nor more
than 60 days’ notice, at the redemption prices (expressed as percentages
of principal amount) set forth below plus accrued interest and Liquidated
Damages, if any, thereon, to the applicable redemption date, if redeemed during
the twelve–month period beginning on March 1 of the years indicated below
(subject to the right of Holders on the relevant record date to receive
interest due on the related interest payment date):

 

	
  Year

  	
   

  	
   

  	
  Percentage

  	
   

  
	
  2007

  	
   

  	
  105.0625

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  103.3750

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  101.6875

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2010 and

  thereafter

  	
   

  	
  100.0000

  	
  %

  

 

(b)           Notwithstanding
the provisions of clause (a) of this Section 3.07, at any time prior
to March 1, 2005, the Issuers may, on any one or more occasions, redeem up to
35% of the aggregate principal amount of Notes at a redemption price of 110.125%
of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date, with the net cash proceeds
of one or more sales of Capital Stock of the 

 

45

 

Partnership resulting, for each such sale, in net cash
proceeds to the Partnership in excess of $25.0 million; provided that:

 

(1)           at least 65% of the
aggregate principal amount of Notes originally issued under this Indenture
remains outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Partnership and Subsidiaries of the Partnership);
and

 

(2)           the redemption must
occur within 45 days following the date of the closing of such offering.

 

(c)           Any redemption
pursuant to this Section 3.07 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.

 

Section 3.08           Gaming
Redemption.

 

(a)           Notwithstanding
any other provisions of this Article 3, if any Gaming Authority in which
the Partnership, either of its partners or any of their respective Affiliates
as of the date of this Indenture conducts or, in the future conducts, directly
or indirectly through a subsidiary or joint venture, gaming notifies a Holder
or beneficial owner of the Notes that the Holder or beneficial owner must be
licensed, qualified or found suitable under any applicable gaming law and the
Holder or beneficial owner does not apply for that license, qualification or
finding of suitability within 30 days after being requested to do so by such
Gaming Authority (or such lesser period that may be required by such Gaming
Authority) or if such Holder or beneficial owner will not be so licensed,
qualified or found suitable under applicable gaming law, the Issuers have the
right, at their option, (i) to require such Holder or beneficial owner to
dispose of such Holder’s or beneficial owner’s Notes within 30 days (or such
earlier date as may be required by the applicable Gaming Authority), of
(A) the termination of the 30-day period or any shorter period as may be
required by a Gaming Authority, in each case as described above, for the Holder
or beneficial owner to apply for a license, qualification or finding of
suitability or (B) the receipt of notice from the Gaming Authority that
the Holder or beneficial owner will not be licensed, qualified or found
suitable or (ii) to call for redemption of the Notes of such Holder or
beneficial owner at a redemption price equal to (A) the lesser of
(1) 100% of the principal amount thereof, (2) the price at which such
Holder or beneficial owner acquired the Notes and (3) the fair market
value of the Notes, together with, in each case, accrued and unpaid interest
and Liquidated Damages, if any, thereon to the earlier of the date of
redemption or such earlier date as may be required by the Gaming Authority or
the date of the finding that such Holder will not be licensed or qualified or
found suitable by such Gaming Authority, which may be less than 30 days
following the notice of redemption, if so ordered by such Gaming Authority or
(B) such other redemption price as shall be ordered by the Gaming Authority.

 

(b)           Immediately
upon a determination that a Holder or beneficial owner will not be licensed,
qualified or found suitable, the Holder or beneficial owner will have no
further rights (1) to exercise any right conferred by the Notes, directly
or indirectly, through any trustee, nominee or any other Person or entity, or
(2) to receive any interest or other distribution or payment with respect
to the Notes or any remuneration in any form from the Issuers for services
rendered or otherwise, except the redemption price of the Notes.

 

46

 

(c)           The
Holder or beneficial owner of Notes applying for a license, qualification or a
finding of suitability must pay all costs of the licenses or investigation for
this qualification or finding of suitability. 
The Issuers are not required to pay or reimburse any Holder or
beneficial owner of Notes who is required to apply for any license,
qualification or finding of suitability.

 

Section 3.09           Mandatory
Redemption.

 

The Issuers shall not be required to make mandatory redemption payments
or sinking fund payments with respect to the Notes.

 

Section 3.10           Repurchase
Offers.

 

In the event that, pursuant to Section 4.10 or 4.15 hereof, the
Issuers shall be required to commence an offer to the Holders to purchase all
or a portion of their respective Notes (a “Repurchase
Offer”), they shall
follow the procedures specified below.

 

The Repurchase Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the “Offer
Period”).  No later than five (5) Business Days after
the termination of the Offer Period (the “Purchase
Date”), the Issuers
shall purchase at the purchase price (as determined in accordance with Section
4.10 or Section 4.15, as the case may be) the maximum principal amount of Notes
that are required to be purchased pursuant to Section 4.10 or 4.15 hereof,
as the case may be, (the “Offer Amount”) or, if less than the Offer Amount
has been tendered, all Notes tendered in response to the Repurchase Offer.  The offer price in any Repurchase Offer will
be equal to 100% of the principal amount plus accrued and unpaid interest and
Liquidated Damages, if any, to the date of purchase, and will be payable in
cash.  Payment for any Notes so
purchased shall be made in cash and in the same manner as interest payments are
made.

 

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

 

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

 

(a)   that the Repurchase Offer is being made pursuant to this
Section 3.10 and Section 4.10 or Section 4.15 hereof, as the case may
be, and the length of time the Repurchase Offer shall remain open;

 

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

 

47

 

(c)   that any Note not tendered or accepted for payment shall continue
to accrete or accrue interest and Liquidated Damages, if any;

 

(d)   that, unless the Issuers default in making such payment, any Note
(or portion thereof) accepted for payment pursuant to the Repurchase Offer
shall cease to accrete or accrue interest and Liquidated Damages, if any, after
the Purchase Date;

 

(e)   that Holders electing to have a Note purchased pursuant to an
Repurchase Offer may elect to have Notes purchased in integral multiples of
$1,000 only;

 

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

 

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

 

(h)   that, if the aggregate amount of Notes surrendered by Holders
exceeds the Offer Amount, the Trustee shall select the Notes to be purchased
pursuant to the terms of Section 3.02 hereof (with such adjustments as may be
deemed appropriate by the Trustee so that only Notes in denominations of
$1,000, or integral multiples thereof, shall be purchased); and

 

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

 

On or before the Purchase Date, the Issuers shall, to the extent
lawful, accept for payment the Offer Amount of Notes (or portions thereof)
tendered pursuant to the Repurchase Offer, or if less than the Offer Amount has
been tendered, all Notes tendered, and shall deliver to the Trustee an
Officers’ Certificate stating that such Notes (or portions thereof) were
accepted for payment by the Issuers in accordance with the terms of this
Section 3.10.  The Issuers, the
Depositary or the Paying Agent, as the case may be, shall promptly (but in any
case not later than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of Notes tendered by
such Holder or holder, as the case may be, and accepted by the Issuers for
purchase, and if less than all the Notes tendered by a Holder are purchased,
the Issuers, shall promptly issue a new Note in a principal amount equal to any
unpurchased portion of the Notes surrendered and the Trustee, upon written
request from the Issuers, shall authenticate and mail or deliver such new Note
to such Holder.  Any Note not so
accepted shall be promptly mailed or delivered by the Issuers to the respective
Holder thereof.  The Issuers shall
publicly announce the results of the Repurchase Offer on the Purchase Date.

 

48

 

The Issuers shall comply with the requirements of Rule 14e-1 under
the Exchange Act, and any other securities laws and regulations thereunder to
the extent such laws or regulations are applicable in connection with the
repurchase of the Notes pursuant to an Asset Sale Offer and to the extent such
laws and regulations conflict with other provisions of this Indenture, the
Issuers shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached their obligations under this Indenture by
virtue thereof.

 

Other than as specifically provided in this Section 3.10, any
purchase pursuant to this Section 3.10 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.

 

Section 3.11           Satisfaction
and Discharge of Indenture.

 

This Indenture shall be discharged and shall cease to be of further
effect as to all Notes issued hereunder, and the Trustee, at the expense of the
Issuers, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

 

(1)           either

 

(i)            all
Notes that have been authenticated (except lost, stolen or destroyed Notes that
have been replaced or paid and Notes for whose payment money has theretofore
been deposited in trust and thereafter repaid to the Issuers) have been
delivered to the Trustee for cancellation; or

 

(ii)           all
Notes that have not been delivered to the Trustee for cancellation have become
due and payable by reason of the making of a notice of redemption or otherwise
or will become due and payable within one year and the Issuers or any
Subsidiary Guarantor has irrevocably deposited or caused to be deposited with
the Trustee as trust funds in trust solely for the benefit of the Holders, cash
in U.S. dollars, non-callable Government Securities, or a combination thereof,
in such amounts as will be sufficient without consideration of any reinvestment
of interest, to pay and discharge the entire indebtedness on the Notes not
delivered to the Trustee for cancellation for principal, premium and Liquidated
Damages, if any, and accrued interest to the date of maturity or redemption;

 

(2)           no Default or Event
of Default shall have occurred and be continuing on the date of such deposit or
shall occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other instrument to
which either Issuer or any Subsidiary Guarantor is a party or by which either
Issuer or any Subsidiary Guarantor is bound;

 

(3)           the Issuers and
each Subsidiary Guarantor have paid or caused to be paid all sums payable by it
under this Indenture; and

 

(4)           the Issuers have
delivered irrevocable instructions to the Trustee under this Indenture to apply
the deposited money toward the payment of the Notes at maturity or the
redemption date, as the case may be.

 

49

 

In addition, the Issuers must deliver an Officers’ Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.

 

Section 3.12           Application
of Trust Money.

 

All money deposited with the Trustee pursuant to
Section 3.11 shall be held in trust and applied by it, in accordance with
the provisions of the Notes and this Indenture, to the payment, either directly
or through any Paying Agent (including either Issuer acting as its own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.

 

ARTICLE FOUR

COVENANTS

 

Section 4.01           Payment
of Notes.

 

The Issuers shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes.  Principal, premium, if any, and
interest shall be considered paid on the date due if the Trustee or Paying
Agent, if other than the Issuers or one of their Subsidiaries, holds as of
10:00 a.m. Eastern Time on the due date money deposited by the Issuers in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due.  The Issuers shall pay all Liquidated Damages, if any, in the same
manner on the dates and in the amounts set forth in the Registration Rights
Agreement.

 

The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest, and
Liquidated Damages (without regard to any applicable grace period) at the same
rate as borne by the Notes to the extent lawful.

 

Section 4.02           Maintenance
of Office or Agency.

 

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

 

The Issuers may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may

 

50

 

from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Issuers of their
obligation to maintain an office or agency in the Borough of Manhattan, The
City of New York for such purposes.  The
Issuers shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

 

The Issuers hereby designate the Corporate Trust Office of the Trustee
as one such office or agency of the Issuers in accordance with
Section 2.03 of this Indenture.

 

Section 4.03           Reports.

 

(a)           Whether
or not required by the Commission, so long as any Notes are outstanding,
(unless defeased in a Legal Defeasance) the Issuers shall furnish to the
Holders of Notes, within the time periods specified in the Commission’s rules
and regulations:

 

(1)           commencing with the quarterly
financial information that would be required on Form 10-Q for the fiscal
quarter ended March 31, 2003all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Issuers were required to file those Forms, including a
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and, with respect to the annual information only, a report on the annual
financial statements by the Issuers certified independent accountants; and

 

(2)           all current reports that would be
required to be filed with the Commission on Form 8-K if the Issuers were
required to file such reports.

 

(b)           In addition, whether or nor required
by the Commission, the Issuers shall file a copy of all of the information and
reports referred to in clauses (1) and (2) above with the Commission for public
availability within the time periods specified in the Commission’s rules and
regulations (unless the Commission will not accept such filing) and make such
information available to securities analysts and prospective investors upon
request if not obtainable from the Commission. 
In addition, the Issuers and the Subsidiary Guarantors have agreed that,
for so long as any Notes remain outstanding, they shall furnish to the Holders
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144(d)(4) under the
Securities Act if not obtainable from the Commission.

 

(c)           If
the Issuers have designated any of their Subsidiaries as Unrestricted
Subsidiaries, then, to the extent that any such Unrestricted Subsidiary or
group of Unrestricted Subsidiaries would (but for its or their being designated
as an Unrestricted Subsidiary or Subsidiaries) constitute a Significant
Subsidiary or Subsidiaries, the quarterly and annual financial information
required by the preceding paragraph shall include a reasonably detailed
presentation, either on the face of the financial statements or in the
footnotes thereto, and in “Management’s 
Discussion and Analysis of Financial Condition and Results of
Operations,” of the financial condition and results of operations of the
Issuers and their Restricted Subsidiaries separate from the financial condition
and results of operations of the Unrestricted Subsidiaries of the Issuers.

 

51

 

Section 4.04           Compliance
Certificate.

 

(a)           The
Issuers and each Subsidiary Guarantor (to the extent that such Subsidiary
Guarantors is so required under the TIA) shall deliver to the Trustee, within
90 days after the end of 2002 and each subsequent fiscal year, an Officers’
Certificate stating that a review of the activities of such Issuer or
Subsidiary Guarantor and their Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Issuers and the Subsidiary Guarantor, as the case may
be, have kept, observed, performed and fulfilled their obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Issuers and the
Subsidiary Guarantors, as the case may be, have kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and are not in
default in the performance or observance of any of the terms, provisions and
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action either of the Issuers is taking or proposes
to take with respect thereto) and that to the best of his or her knowledge no
event has occurred and remains in existence by reason of which payments on
account of the principal of or interest, if any, on the Notes is prohibited or
if such event has occurred, a description of the event and what action the
applicable entity is taking or proposes to take with respect thereto.

 

(b)           So
long as not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, the year-end financial statements
delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Issuers’ and the Subsidiary Guarantors’ independent
public accountants (each of which shall be a firm of established national
reputation) that in making the examination necessary for certification of such
financial statements, nothing has come to their attention that would lead them
to believe that either of the Issuers or the Subsidiary Guarantors, as the case
may be, has violated any provisions of Article Four or Article Five hereof or,
if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain knowledge
of any such violation.

 

(c)           The
Issuers shall, so long as any of the Notes are outstanding, deliver to the
Trustee, forthwith upon any Officer becoming aware of any Default or Event of
Default, an Officers  Certificate
specifying such Default or Event of Default and what action the Issuers are
taking or proposes to take with respect thereto.

 

Section 4.05           Taxes.

 

The Issuers shall pay, and shall cause each
of their Subsidiaries to pay, prior to delinquency, all material taxes,
assessments, and governmental levies owed by the Issuers or their Subsidiaries
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.

 

52

 

Section 4.06           Stay, Extension and Usury Laws.

 

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

 

Section 4.07           Restricted
Payments.

 

The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:

 

(1)           declare or pay any
dividend or make any other payment or distribution on account of the
Partnership’s or any Restricted Subsidiary’s Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Partnership or any Restricted Subsidiary) or to the direct or
indirect holders of the Partnership’s or any Restricted Subsidiaries’ Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Partnership
or dividends or distributions payable to the Partnership or a Restricted
Subsidiary);

 

(2)           purchase, redeem or
otherwise acquire or retire for value (including, without limitation, in
connection with any merger or consolidation involving the Partnership or any
Restricted Subsidiary) any Equity Interests of the Partnership or any direct or
indirect parent or Affiliate of the Partnership;

 

(3)           make any payment on
or with respect to, or purchase, redeem, defease or otherwise acquire or retire
for value, any Indebtedness that is subordinated to the Notes or a Subsidiary
Guarantee, except a payment of interest or principal at the Stated Maturity
thereof; or

 

(4)           make any Restricted
Investment

 

(all payments and other
actions set forth in clauses (1) through (4) being collectively referred to as
“Restricted Payments”), unless, at
the time of and after giving effect to the Restricted Payment:

 

(a)           no Default or Event of Default has occurred and is
continuing or would occur as a result thereof;

 

(b)           the Partnership would, at the time of the Restricted
Payment and after giving pro forma effect thereto as if the Restricted Payment
had been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of 

 

53

 

additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof; and

 

(c)           the Restricted Payment, together with the aggregate amount
of all other Restricted Payments made by the Partnership and its Restricted
Subsidiaries after the date of this Indenture (excluding Restricted Payments
permitted by clauses (2), (3), (4), (5) and (6) of the next succeeding
paragraph), is less than the sum, without duplication, of:

 

(i)            50% of the
cumulative Consolidated Net Income of the Partnership for the period (taken as
one accounting period) beginning April 1, 2002, to the end of its most
recently ended fiscal quarter for which internal financial statements are
available at the time of the Restricted Payment (or, if such Consolidated Net
Income for this period is a deficit, less
100% of this deficit); plus

 

(ii)           100% of the
aggregate net cash proceeds received by the Partnership subsequent to the
issuance of the Notes as a contribution to the Partnership’s common equity
capital or from the issue or sale of Equity Interests of the Partnership (other
than Disqualified Stock or warrants, options and other rights to acquire
Disqualified Stock) or from the issue or sale of convertible or exchangeable
debt securities of the Partnership that have been converted into or exchanged
for Equity Interests of the Partnership (other than Equity Interests (or
Disqualified Stock or debt securities) sold to a Subsidiary); plus

 

(iii)          to the extent that
any Restricted Investment that was made after the date of the Indenture is sold
for cash or otherwise liquidated or repaid for cash, the lesser of (A) the
cash return of capital with respect to that Restricted Investment (less the
cost of disposition, if any) and (B) the initial amount of that Restricted
Investment; plus

 

(iv)          50% of any dividends
or distributions received by the Partnership or a Restricted Subsidiary after
the date of the Indenture from an Unrestricted Subsidiary of the Partnership,
to the extent that such dividends or distributions were not otherwise included
in the Consolidated Net Income of the Partnership for such period; plus

 

(v)           $5.0 million.

 

The preceding provisions will not prohibit:

 

(1)           if no Default or
Event of Default shall have occurred and be continuing or would be caused
thereby, the payment of any dividend or distribution within 60 days after the
date of declaration thereof, if at the date of declaration, the payment would
have complied with this Indenture;

 

(2)           the redemption,
repurchase, retirement, defeasance or other acquisition of subordinated
Indebtedness of the Partnership or any of its Restricted Subsidiaries that is a
Subsidiary Guarantor or of any Equity Interests of the Partnership in exchange
for, or out 

 

54

 

of the net cash proceeds of, a
substantially concurrent capital contribution or sale (other than to a
Subsidiary of the Partnership) of, other Equity Interests of the Partnership
(other than Disqualified Stock or warrants, options and other rights to acquire
Disqualified Stock); provided that the amount of the net cash
proceeds that are utilized for any redemption, repurchase, retirement,
defeasance or other acquisition will be excluded from clause (c)(ii)
above;

 

(3)           the defeasance,
redemption, repurchase or other acquisition of subordinated Indebtedness of the
Partnership or any Restricted Subsidiary that is a Subsidiary Guarantor with
the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;

 

(4)           so long as the
Partnership is treated as a partnership or other pass-through entity for United
States federal income tax purposes, distributions to equity owners of the
Partnership in an amount with respect to any taxable year beginning with the
2001 taxable year not to exceed the Tax Amount for such taxable year and, in
the case of 2001, only to the extent that such amounts have not been
distributed prior to the date of the Indenture (it being understood that the
Partnership may distribute the tax amount for any taxable year in four
quarterly installments at times reasonably designed to enable its equity owners
to pay estimated taxes on taxable income allocated to them by the Partnership
with respect to such taxable year, the amount of each installment to be based
on estimates of the excess of (x) the Tax Amount that would have been payable
from the beginning of such taxable year through the end of the month preceding
the date of such distribution being a taxable year over (y) distributions
attributable to all prior periods during such taxable year with any
over-distributions for a taxable year reducing the Tax Amount distributable
with respect to the next succeeding taxable year);

 

(5)           distributions to
equity owners of the Partnership made substantially concurrently with the
initial issuance of the Notes in an amount not to exceed $30.0 million in
the aggregate;

 

(6)           any redemption
required by a Gaming Authority pursuant to the provisions of this Indenture
described in Section 3.08 hereof or any redemption pursuant to the
provisions of Section 4.10 and Section 4.15 hereof; and

 

(7)           the redemption,
repurchase, retirement or other acquisition of any Equity Interest of the
Partnership to the extent required by a Gaming Authority.

 

The amount of all Restricted Payments, other than cash, will be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Partnership or the
Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment.  The fair market value of any
assets or securities that are required to be valued by this covenant will be
determined is good faith by a majority of the Partnership’s Management
Committee whose resolution with respect thereto will be delivered to the
Trustee.  The determination of the
Partnership’s Management Committee must be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if the fair market value exceeds $5.0 million.  Not later than the date of making any 

 

55

 

Restricted Payment (other than those permitted by
paragraphs (1) through (7) above), the Partnership will deliver to the Trustee
an Officers’ Certificate stating that the Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed, together with a copy of any fairness opinion or appraisal
required hereby.

 

Section 4.08           Dividend
and Other Payment Restrictions Affecting Restricted Subsidiaries.

 

The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to:

(1)           (A) pay
dividends or make any other distributions on its Capital Stock to the
Partnership or any of its Restricted Subsidiaries, or with respect to any other
interest or participation in, or measured by, its profits, or (B) pay any
Indebtedness owed to the Partnership or any of its Restricted Subsidiaries;

 

(2)           make loans or
advances to the Partnership or any of its Restricted Subsidiaries; or

 

(3)           sell, lease or
transfer any of its properties or assets to the Partnership or any of its
Restricted Subsidiaries.

 

However, the restrictions above shall not apply to encumbrances or
restrictions existing under or by reason of:

 

(1)           the Indenture, the
Notes, the Subsidiary Guarantees or the Collateral Documents;

 

(2)           the New Credit
Facility and the collateral documents related thereto;

 

(3)           applicable law or
any applicable rule or order;

 

(4)           any instrument
governing Indebtedness or Capital Stock of a Person acquired by the Partnership
or any of its Restricted Subsidiaries as in effect at the time of the
acquisition (except to the extent that Indebtedness was incurred in connection
with or in contemplation of the acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person so acquired, and such acquired Person’s subsidiaries; provided that,
in the case of Indebtedness, the Indebtedness was permitted by the terms of
this Indenture to be incurred;

 

(5)           customary
non-assignment provisions in leases and other contracts entered into in the
ordinary course of business;

 

(6)           purchase money
obligations for property acquired in the ordinary course of business that
impose restrictions on the sale, lease or transfer of property so acquired;

 

56

 

(7)           any restriction or
encumbrance contained in contracts for the sale of assets permitted by this
Indenture, provided that such
restrictions or encumbrances relate only to the assets being sold pursuant to
these contracts; and

 

(8)           Permitted
Refinancing Indebtedness, provided that the restrictions on the
ability of Restricted Subsidiaries to engage in activities described in the
first paragraph of this covenant contained in the agreements governing
Permitted Refinancing Indebtedness are no more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced.

 

Section 4.09           Incurrence
of Indebtedness and Issuance of Disqualified Stock.

 

The Partnership shall not, and shall
not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including
Acquired Debt), and the Partnership shall not issue any Disqualified Stock and
the Partnership will not permit any of its Restricted Subsidiaries to issue any
shares of Preferred Stock; provided, however, that  if no Default or Event of Default shall have
occurred and be continuing at the time or as a consequence of the incurrence of
this Indebtedness, the Partnership may incur Indebtedness (including
Acquired Debt) or the Partnership may issue shares of Disqualified Stock, if
(x) the Fixed Charge Coverage Ratio for the Partnership’s most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which that additional Indebtedness
is incurred, would have been at least 2.0 to 1, determined on a pro-forma basis
(including a pro-forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the Disqualified Stock had been
issued, as the case may be, at the beginning of the four-quarter period and
(y) no Default or Event of Default shall have occurred and be continuing
at the time of or would occur after giving pro forma effect to such incurrence
or issuance and the application of proceeds therefrom.

 

The first paragraph of this Section 4.09 shall not prohibit the
incurrence of any of the following (collectively, “Permitted Debt”):

 

(1)           (a) Indebtedness
represented by the Notes to be issued on the date of this Indenture and the
Exchange Notes to be issued pursuant to the Registration Rights Agreement, and
(b) the respective obligations of the Partnership and its Restricted
Subsidiaries arising under the Collateral Documents to the extent such obligations
would represent Indebtedness;

 

(2)           Indebtedness
incurred pursuant to the New Revolving Facility in an amount outstanding at any
time not to exceed $20 million less any permanent reductions made pursuant
to Section 4.10 hereof;

 

(3)           Existing Indebtedness;

 

(4)           Permitted
Refinancing Indebtedness;

 

57

 

(5)           so long as at the
time of incurrence no Event of Default has occurred and is continuing,
Indebtedness in one or more FF&E Financings and Capitalized Lease
Obligations to acquire or refinance furniture, fixtures or equipment incident
to and useful in the Gaming Business, in an aggregate principal amount not to
exceed $5.0 million outstanding at any time;

 

(6)           intercompany
Indebtedness between or among the Partnership and any of its Restricted
Subsidiaries as provided in Section 4.20 hereof; provided, however,  that:

 

(i)            if
the Partnership or any Subsidiary Guarantor is the obligor on that
Indebtedness, the obligation to pay principal, interest or other amounts under
such Indebtedness must be expressly subordinated to the prior payment in full
in cash of all Obligations with respect to the Notes, in the case of the
Partnership, or the Subsidiary Guarantee, in the case of a Subsidiary
Guarantor; and

 

(ii)           (A) any
subsequent issuance or transfer of Equity Interests that results in any
Indebtedness being held by a Person other than the Partnership or a Restricted
Subsidiary and (B) any sale or other transfer of any Indebtedness to a
Person other than the Partnership or a Restricted Subsidiary, shall be deemed,
in each case, to constitute an incurrence of Indebtedness by the Partnership or
the Restricted Subsidiary, as the case may be, that was not permitted by this
clause (6);

 

(7)           Hedging Obligations
of the Partnership or any of its Restricted Subsidiaries that are incurred for
the purpose of fixing, managing or hedging interest rate risk with respect to
any Indebtedness that is permitted by the terms of this Indenture to be
outstanding; provided, however, that, in each case, the Hedging
Obligations are not incurred for speculative purposes;

 

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

 

(9)           the Indebtedness
represented by a Subsidiary Guarantee.

 

The Partnership shall not incur any Indebtedness (including Permitted
Debt) that is contractually subordinated in right of payment to any other
Indebtedness of the Partnership unless such Indebtedness is also contractually
subordinated in right of payment to the Notes on substantially identical terms;
provided, however, that no Indebtedness of the
Partnership shall be deemed to be contractually subordinated in right of
payment to any other Indebtedness of the Partnership solely by virtue of being
unsecured.

 

58

 

For purposes of determining compliance with this Section 4.09, in
the event that an item of proposed Indebtedness meets the criteria of more than
one of the categories of Permitted Debt described in clauses (1) through (9)
above, or is entitled to be incurred under the first paragraph of this
Section 4.09, the Partnership shall be permitted to classify the item of
Indebtedness on the date of its incurrence, or later reclassify all or a
portion of the item of Indebtedness, in any manner that complies with this
Section 4.09.

 

Section 4.10           Repurchase
at the Option of Holders — Asset Sales.

 

The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:

 

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

 

(2)           the Partnership or
the Restricted Subsidiary, as the case may be, receives (i) consideration
at the time of the Asset Sale at least equal to the fair market value, as
determined in good faith by a majority of the members of the Partnership’s
Management Committee, of the assets or Equity Interests issued, sold or
otherwise disposed of or (ii) in the case of a lease of assets that
constitute an Asset Sale, a lease providing for rents or other consideration
which are no less favorable to the Partnership or the Restricted Subsidiary, as
the case may be, than the prevailing market conditions as determined in good
faith by a majority of the members of the Partnership’s Management Committee;

 

(3)           if applicable, the
fair market value is evidenced by a resolution of the Partnership’s Management
Committee set forth in an Officers’ Certificate delivered to the Trustee; and

 

(4)           at least 75% of the
consideration therefor received by the Partnership or the Restricted Subsidiary
is in the form of cash or Cash Equivalents; provided that:

 

(i)            any
liabilities (as shown on the Partnership’s or the Restricted Subsidiary’s most
recent balance sheet) of the Partnership or the Restricted Subsidiary (other
than contingent liabilities and liabilities that are by their terms
subordinated to the Notes or any Subsidiary Guarantee) that are assumed by the
transferee of any of those assets under a customary novation agreement that
unconditionally releases the Partnership or the Restricted Subsidiary, as the
case may be, from further liability will be deemed to be cash for purposes of
this provision; and

 

(ii)           any
securities, notes or other obligations received by the Partnership or the
Restricted Subsidiary from the transferee that are promptly, but in any event
within 30 days of receipt, converted by the Partnership or the Restricted
Subsidiary into cash will be deemed to be cash (to the extent of the cash
received in that conversion) for purposes of this provision.

 

Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Partnership or the Restricted Subsidiary may apply such Net Proceeds
to (i) make a capital 

 

59

 

expenditure, (ii) improve real property,
(iii) acquire long-term assets that are used or useful, in each case, in a
line of business permitted by Section 4.13 hereof, or (iv) repay
Indebtedness permitted by this Indenture to be incurred under (and permanently
reduce, by the amount of principal repaid, the commitments, if any, under) the
New Credit Facility in the following order of priority, first, Indebtedness
incurred under the New Term Loan Facility, and second, Indebtedness incurred
under the New Revolving Facility; provided,
however, that the Partnership or
the Restricted Subsidiary, as the case may be, grants to the Trustee, on behalf
of the holders of Notes, a perfected security interest, subject to Permitted
Liens, on any such property or assets acquired or constructed with the Net
Proceeds of any such Asset Sale on the terms set forth in this Indenture and
the Collateral Documents.  Pending the
final applications of any such Net Proceeds, the Partnership or the applicable
Restricted Subsidiary may invest such Net Proceeds in Cash Equivalents which
shall be held in an account in which the Trustee shall have a perfected
security interest, subject to Permitted Liens, for the benefit of the Holders
of Notes.

 

Any Net Proceeds from Asset Sales that
are not applied or invested as provided in the preceding paragraph shall
constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds
exceeds $5.0 million, the Issuers shall be required to make an offer to all
Holders of Notes (an “Asset Sale Offer”)
to purchase the maximum principal amount of Notes that may be purchased out of
the Excess Proceeds.  The offer price in
any Asset Sale Offer will be equal to 100% of principal amount plus accrued and
unpaid interest and Liquidated Damages, if any, to the date of purchase, and
will be payable in cash.  The Issuers will commence an Asset Sale Offer
with respect to Excess Proceeds within 10 business days after the date that the
aggregate amount of Excess Proceeds not so applied within such 365 days exceeds
$5.0 million by mailing the notice required pursuant to the terms of this
Indenture.  If any Excess
Proceeds remain after an Asset Sale Offer, they shall cease to be “Excess
Proceeds” and the Partnership or the Restricted Subsidiary may use the Excess
Proceeds for any purpose not prohibited by this Indenture or the Collateral
Documents.  If the aggregate principal
amount of Notes surrendered by the Holders thereof exceeds the amount of Excess
Proceeds, the Trustee will select the Notes to be purchased in the manner
described in Section 3.02 hereof. 
Upon completion of each Asset Sale Offer, the amount of Excess Proceeds
will be reset at zero.

 

The Issuers shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer.  To the extent that the provisions of any securities laws or
regulations conflict with the Asset Sales provisions of this Indenture, the
Issuers shall comply with the applicable securities laws and regulations and shall
not be deemed to have breached the Issuers’ obligations under the Asset Sale
provisions of this Indenture by virtue of that conflict.

 

Liens under the Collateral Documents on assets subject to an Asset Sale
and permitted pursuant to the terms hereof shall be released concurrently with
the consummation of such Asset Sale.

 

Section 4.11           Transactions
with Affiliates.

 

The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or 

 

60

 

assets to, or purchase any property or assets from, or
enter into or make or amend any transaction, contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each, an “Affiliate Transaction”),
unless:

 

(1)           to the extent such
transaction could be entered into with an unrelated Person, the Affiliate
Transaction is on terms that are no less favorable to the Issuers or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Issuers or the Restricted Subsidiary with an
unrelated Person;

 

(2)           with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $1.0 million, prior to the time that the
aggregate consideration paid for such Affiliate Transaction or series of
Affiliate Transactions exceeds $1.0 million, the Partnership delivers to
the Trustee a resolution of its Management Committee set forth in an Officers’
Certificate certifying that the Affiliate Transaction complies with this
Section 4.11 and that the Affiliate Transaction has been approved by a
majority of the members of its Management Committee, and, to the extent that
there are members of the Management Committee that do not have a direct or
indirect financial interest in such Affiliate Transaction and who were not
appointed to the Management Committee by a Person that has a direct or indirect
financial interest in such Affiliate Transaction, by a majority of such
disinterested members of the Management Committee; and

 

(3)           with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration of $10.0 million or more, prior to the time that the
aggregate consideration paid for such Affiliate Transaction or series of
Affiliate Transactions exceeds $10.0 million, the Partnership delivers to
the Trustee an opinion as to the fairness to the Partnership or the relevant
Restricted Subsidiary of that Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm of national
standing who does not, and whose directors, officers, employees and Affiliates
do not, have a direct or indirect material financial interest in the
Partnership or any Affiliate of the Partnership; provided, that the ownership of less than 5% of the
outstanding Equity Interests of an Affiliate of the Partnership shall not
constitute a material financial interest in the Partnership and the Partnership
shall be entitled to rely on representations made by such accounting, appraisal
or investment banking firm as to ownership of such Equity Interests.

 

The following items will not be deemed to be Affiliate Transactions and
will not be subject to the provisions of the prior paragraph:

 

(1)           to the extent not
otherwise prohibited under this Indenture, transactions in the ordinary course
of business consistent with past practices of the Partnership on terms that the
Management Committee believes in its good faith judgment are commercially
reasonable to the Issuers or the relevant Restricted Subsidiary;

 

(2)           to the extent not
otherwise prohibited under this Indenture, transactions between or among the
Partnership and/or its Restricted Subsidiaries; provided, that, in 

 

61

 

each case, no Affiliate of the Partnership (other than another
Restricted Subsidiary or a director owning qualifying shares) owns Capital
Stock of any such Restricted Subsidiary;

 

(3)           reasonable
compensation paid to and indemnities provided on behalf of, officers,
directors, employees or Management Committee members of the Partnership or any
Restricted Subsidiary; and

 

(4)           Restricted Payments,
Permitted Investments and other payments and distributions that are permitted
by the provisions of this Indenture described above under Section 4.07
hereof.

 

Section 4.12           Liens.

 

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

 

Section 4.13           Business
Activities.

 

The Partnership shall not, and shall not permit any of its Restricted
Subsidiaries to, engage, directly or indirectly, in any business other than a
Gaming Business and any other business activities that are incidental to, related
or complementary thereto.  Neither the
Partnership nor any of its Subsidiaries is permitted hereby to conduct a Gaming
Business in any gaming jurisdiction in which the Partnership or that Subsidiary
is not licensed on the date hereof if the Holders of the Notes would be
required to be licensed as a result thereof; provided
that the provisions described in this sentence will not prohibit the
Partnership or any of its Restricted Subsidiaries from conducting a Gaming
Business in any jurisdiction that does not require the licensing or
qualification of all of the Holders of the Notes as a condition to the conduct
of business, but reserves the discretionary right to require or otherwise
refuse the licensing or qualification of any Holder of Notes.

 

Section 4.14           Corporate
Existence.

 

Subject to Article Five hereof, each of the
Issuers and the Subsidiary Guarantors shall do or cause to be done all things
necessary to preserve and keep in full force and effect (i) its corporate
or organizational existence, as the case may be, and the corporate, partnership
or other existence of each of its Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of each of the Issuers and any such Subsidiary and (ii) the rights
(charter and statutory), licenses and franchises of each of the Issuers and
their Subsidiaries; provided, however, that the
Issuers shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its Subsidiaries, if
the Management Committee shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Issuer and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Notes.

 

62

 

Section 4.15           Repurchase
at the Option of Holders—Change of Control.

 

Upon the occurrence of a Change of Control, each Holder of Notes shall
have the right to require the Issuers to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of that Holder’s Notes pursuant to an
offer described below (a “Change of Control
Offer”).  In the Change of
Control Offer, the Issuers shall offer a payment in cash equal to 101% of the
aggregate principal amount of Notes repurchased plus accrued and unpaid
interest and Liquidated Damages, if any, thereon, to the date of purchase (the
“Change of Control Payment”).  Within 30 days following any Change of
Control, the Issuers shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and
stating:  (i) that the Change of
Control Offer is being made pursuant to this Section 4.15 and that all
Notes tendered will be accepted for payment; (ii) the purchase price and
the purchase date, which shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed (the “Change of Control Payment Date”); (iii) that any Note not tendered will continue to accrue
interest; (iv) that, unless the Issuers default in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of Control
Payment Date; (v) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be required to surrender the Notes,
with the form entitled “Option of Holder to Elect Purchase” on the reverse of
the Notes completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the Change
of Control Payment Date; (vi) that Holders will be entitled to withdraw
their election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control Payment
Date, a facsimile transmission or letter setting forth the name of the Holder,
the principal amount of Notes delivered for purchase, and a statement that such
Holder is withdrawing his election to have the Notes purchased; and
(vii) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof.  The Issuers shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.  To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions
of this Indenture, the Issuers shall comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under
the Change of Control provisions of this Indenture by virtue of that conflict.

 

On the Change of Control Payment Date, the Issuers shall, to the extent
lawful:

 

(1)           accept for payment
all Notes or portions thereof properly tendered under the Change of Control
Offer;

 

(2)           deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Notes or portions of Notes so tendered; and

 

(3)           deliver or cause to
be delivered to the Trustee the Notes so accepted together with an Officers’
Certificate stating the aggregate principal amount of Notes or portions of
Notes being purchased by the Issuers.

 

63

 

The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for those Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note will be in a
principal amount of $1,000 or an integral multiple thereof.

 

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

 

The provisions described above that require the Issuers to make a
Change of Control Offer following a Change of Control will apply regardless of
whether any other provisions of this Indenture are applicable.  Except as described above with respect to a
Change of Control, this Indenture does not contain provisions that permit the
Holders of the Notes to require the Issuers to repurchase or redeem the Notes
in the event of a takeover, recapitalization or similar transaction.

 

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

 

Section 4.16           Limitation
on Issuances and Sales of Equity Interests in Restricted Subsidiaries.

 

All of the Partnership’s Restricted Subsidiaries shall be wholly owned
by the Partnership, by one or more of its Restricted Subsidiaries or by the
Partnership and one or more of its Restricted Subsidiaries.

 

The Partnership shall not, and will not permit any of its Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Restricted Subsidiary of the Partnership to any Person
(other than the Partnership or a Restricted Subsidiary of the Partnership),
unless:

 

(1)           such transfer,
conveyance, sale, lease or other disposition is of all the Equity Interests in
such Restricted Subsidiary; or

 

(2)           the cash Net
Proceeds from such transfer, conveyance, sale, lease or other disposition are
applied in accordance with Section 4.10 hereof.

 

In addition, the Partnership shall not permit any of its Restricted
Subsidiaries to issue any of its Equity Interests to any Person other than to
the Partnership or any one or more of its Restricted Subsidiaries.

 

Section 4.17           Designation
of Restricted and Unrestricted Subsidiaries.

 

The Partnership’s Management Committee may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default.  If a Restricted Subsidiary
is designated as an Unrestricted Subsidiary, the aggregate fair market value 

 

64

 

of all outstanding Investments owned by the
Partnership and its Restricted Subsidiaries in the Restricted Subsidiary so
designated shall be deemed to be an Investment made as of the time of such
designation and that designation will only be permitted if such Investment
would be permitted at that time pursuant to Section 4.07 hereof and will
reduce the amount available for Restricted Payments pursuant to
Section 4.07.  That designation
will only be permitted if such Restricted Payment would be permitted at that
time and if such Restricted Subsidiary otherwise meets the definition of
Unrestricted Subsidiary.  The
Partnership’s Management Committee may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.

 

Section 4.18           Payments
for Consent.

 

The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture, the Notes or the Collateral Documents unless that
consideration is offered to be paid and is paid to all Holders of the Notes
that consent, waive or agree to amend in the time frame described in the
solicitation documents relating to that consent, waiver or agreement, as
applicable.

 

Section 4.19           Restrictions
on Activities of Capital.

 

Capital shall not hold any material assets, become liable for any
obligations or engage in any significant business activities; provided that Capital may be a co-obligor
or guarantor with respect to Indebtedness if the Partnership is a primary
obligor of that Indebtedness and the net proceeds of that Indebtedness are
received by the Partnership.

 

Section 4.20           Advances
to Restricted Subsidiaries.

 

All advances, other than equity contributions, to Restricted
Subsidiaries made by the Partnership after the date of the Indenture shall be
evidenced by intercompany notes in favor of the Partnership.  These intercompany notes shall be pledged
pursuant to the Collateral Documents to the Trustee as Collateral to secure the
Notes.  Each intercompany note shall be
payable upon demand and will bear interest at a rate equal to the then current
fair market interest rate.

 

Section 4.21           Insurance.

 

Until the Notes have been paid in full, the Partnership shall, and
shall cause its Restricted Subsidiaries to, maintain insurance with carriers
against such risks and in such amounts as is customarily carried by similar
businesses with such deductibles, retentions, self insured amounts and
coinsurance provisions as are customarily carried by similar businesses of
similar size, including, without limitation, property and casualty and shall
provide insurance certificates evidencing such insurance to the Trustee prior
to the issuance of the Notes and will hereafter provide such certificates prior
to the anniversary or renewal date of each such policy, which certificate will
expressly state the expiration date for each policy listed.  Customary insurance coverage will be deemed to
include, without limitation, the following:

 

65

 

(1)           workers’
compensation insurance to the extent required to comply with all applicable
state, territorial or United States laws and regulations, or the laws and
regulations of any other applicable jurisdiction;

 

(2)           comprehensive
general liability insurance with minimum limits of $1.0 million per
occurrence;

 

(3)           umbrella or excess
liability insurance providing excess liability coverages over and above the
foregoing underlying insurance policies up to a minimum limit of
$50.0 million;

 

(4)           business
interruption insurance; and

 

(5)           property insurance
protecting the property against losses or damages as is customarily covered by
an “all-risk” policy or a property policy covering “special” causes of loss and
losses resulting from earthquakes or floods for a business of similar type and
size; provided, however, that
such insurance shall provide coverage of not less than the least of
(a) 130% of the sum of (x) the outstanding principal amount of the
Notes plus accrued and unpaid interest thereon, and (y) the aggregate
commitments under the New Credit Facility, (b) 100% of actual replacement
value (as determined at each policy renewal based on the F.W. Dodge Building
Index or some other recognized means) of any improvements customarily insured
consistent with industry standards and (c) in the case of earthquake
insurance, such coverage as is available on commercially reasonable terms and,
in any event, is consistent with coverage obtained by businesses of a similar
type and size and, in each case, with a deductible no greater than 3% of the
insured value of the Hotel/Casino Property or such greater amount as is
available on commercially reasonable terms.

 

All insurance required by this covenant (except worker’s compensation)
shall name the Issuers and the Trustee as additional insureds loss payees, as
the case may be, with losses in excess of $1.0 million payable jointly to the
Issuers and the Trustee (unless a Default or Event of Default has occurred and
is then continuing, in which case all losses are payable solely to the
Trustee), with no recourse against the Trustee for the payment of premiums,
deductibles, commissions or club calls, and provide for at least 30 days notice
of cancellation.  All such insurance
policies shall be issued by carriers having an A.M. Best & Company, Inc.
rating of A or higher and a financial size category of not less than X, or if
such carrier is not rated by A.M. Best & Company, Inc., having the
financial stability and size deemed appropriate by an opinion from a reputable
insurance broker.  The Issuers shall
deliver to the Trustee on the Closing Date and each anniversary thereafter a
certificate of an insurance agent describing the insurance policies obtained by
the Issuers and their Restricted Subsidiaries, together with an Officer’s
Certificate stating that such policies comply with this Section 4.22 and
the related applicable provisions of the Collateral Documents.

 

Section 4.22           Amendments
to Certain Agreements.

 

Neither of the Issuers nor any of their Restricted Subsidiaries may
amend, waive or modify, or take or refrain from taking any action that has the
effect of amending, waiving or 

 

66

 

modifying any provision of any of the Collateral
Documents; provided, however,
that (1) any such agreement may be amended or modified so long as the
terms of such agreement as so amended or modified are no less favorable to the
holders of the Notes than the terms of such agreement as of the date of the
Indenture and (2) any of the Collateral Documents may be amended, waived
or modified as set forth under Article 9 hereof.

 

Section 4.23           Further
Assurances.

 

The Issuers shall, and shall cause each of their Restricted
Subsidiaries to, do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register, as applicable, any and all such further
acts, deeds, conveyances, security agreements, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and
other instruments as may be required from time to time in order to:

 

(1)           carry out more
effectively the purposes of the Collateral Documents;

 

(2)           subject to the
Liens created by any of the Collateral Documents any of the properties, rights
or interests required to be encumbered thereby;

 

(3)           perfect and
maintain the validity, effectiveness and priority of any of the Collateral
Documents and the Liens intended to be created thereby; and

 

(4)           better assure,
convey, grant, assign, transfer, preserve, protect and confirm to the Trustee
any of the rights granted now or hereafter intended by the parties thereto to
be granted to the Trustee under any other instrument executed in connection
therewith or granted to the Issuers under the Collateral Documents or under any
other instrument executed in connection therewith.

 

Section 4.24           Pledge
Agreement.

 

The Issuers shall
use their commercially reasonable efforts to obtain all necessary approvals of
the requisite Gaming Authorities to the execution and delivery of the Pledge
Agreement by the Parent Partners.  Upon
receipt of necessary approvals of the requisite Gaming Authorities, the Issuers
shall cause the Pledge Agreement to be promptly executed and delivered by the
Parent Partners.  The Issuers shall
cause to be done all such acts and things as may be necessary or proper, or as
may be required by the provisions of the Pledge Agreement to assure and confirm
to the Trustee the validity, perfection, priority and enforceability of the
security interest in the Collateral contemplated thereby, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Notes and the Subsidiary Guarantees secured thereby,
according to the intent and purposes herein and therein expressed.  The Issuers shall take, or shall cause the Parent
Partners to take, upon request of the Trustee, any and all actions reasonably
required to cause the Pledge Agreement to create and maintain, as security for
the obligations of the Issuers and the Subsidiary Guarantors hereunder, a
valid, perfected and enforceable perfected Lien on the Collateral, subject to
Permitted Liens.

 

67

 

ARTICLE
FIVE

SUCCESSORS

 

Section 5.01           Merger, Consolidation, or Sale of
Assets.

 

(a)          The
Partnership may not, directly or indirectly, consolidate or merge with or into
another Person or directly or indirectly sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another Person; unless:

 

(1)           either:  (a) the Partnership is the surviving entity;
or (b) the Person formed by or surviving any consolidation or merger or to
which the sale, assignment, transfer, conveyance or other disposition shall
have been made (in each case, if other than the Partnership or the Subsidiary Guarantor)
is a limited liability company, limited partnership, partnership or corporation
organized or existing under the laws of the United States, any state thereof or
the District of Columbia;

 

(2)           the Person formed
by or surviving any consolidation or merger or the Person to which the sale,
assignment, transfer, conveyance or other disposition shall have been made (in
each case, if other than the Partnership, assumes all the obligations of the
Partnership as applicable, under the Notes, this Indenture, the Registration
Rights Agreement and the Collateral Documents pursuant to agreements reasonably
satisfactory to the Trustee, in its reasonable discretion;

 

(3)           immediately before
and immediately after giving effect to the transaction (including giving effect
to any Indebtedness incurred or anticipated to be incurred in connection with
or in respect of the transaction) no Default or Event of Default would exist or
be continuing;

 

(4)           the Partnership or
the Person formed by or surviving any such consolidation or merger, or in the
case of a sale, assignment, transfer, lease, conveyance or other disposition of
all or substantially all of the assets of the Partnership, the Person to whom
such sale, transfer, assignment, lease, conveyance or other disposition shall
have been made (if other than the Partnership) will, the Partnership shall, on
the date of such transaction after giving pro forma effect thereto and any
related financing transactions, in each case, as if the same had occurred at
the beginning of the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the first paragraph of Section 4.09 hereof;

 

(5)           the transaction
would not require any Holder of Notes to obtain a Gaming License or be
qualified under the laws of any applicable gaming jurisdiction which would not
be required in the absence of such transactions, provided that a transaction
involving a jurisdiction that does not require the licensing or qualification
of any Holder of the Notes as a condition to such transaction, but reserves the
discretionary right to require the licensing or qualification of any Holder of
Notes, shall not be prohibited under the terms of this clause (5);

 

68

 

(6)           the transaction
would not result in the material impairment or loss of any qualification or any
license necessary for any Gaming Business operated, or anticipated to be
operated by the Partnership or any of its Restricted Subsidiaries following the
consummation of the proposed transaction;

 

(7)           the Partnership has
delivered to the Trustee an Opinion of Counsel satisfactory to the Trustee in
its reasonable direction confirming that the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such transaction and will be subject to federal income tax in the
same manner and at the same time as would have been the case if such
transaction had not occurred; and

 

(8)           the Partnership or the resulting Person
will have delivered to the Trustee (a) an Officers’ Certificate and an Opinion
of Counsel (which counsel may not be in-house counsel of either of the Issuers
or any of their Affiliates), each stating that the consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with the transaction, the supplemental indenture, comply with this
provision of this Indenture and the Collateral Documents and that all
conditions precedent in this Indenture relating to the transaction have been
satisfied and (b) a certificate from the Partnership’s independent certified
public accountants stating that the Partnership has made the calculations
required by clause (4) above in accordance with the terms of this Indenture and
the Collateral Documents.

 

In addition, except as otherwise permitted pursuant to Article Ten
hereof, the Partnership may not, and may not permit any Restricted Subsidiary
to, directly or indirectly, lease all or substantially all of the respective
properties or assets of the Partnership or a Subsidiary Guarantor, as
applicable, in one or more related transactions, to any other Person.  This Section 5.01 shall not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or
among the Partnership and any of its Restricted Subsidiaries.

 

Section 5.02           Successor
Corporation Substituted.

 

Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
assets of the Issuers or any Subsidiary Guarantor in accordance with Section
5.01 hereof, the successor corporation formed by such consolidation or into or
with which one of the Issuers or any Subsidiary Guarantor is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, assignment, transfer, lease, conveyance or
other disposition, the provisions of this Indenture referring to the
“Partnership”, “Capital” or the applicable “Subsidiary Guarantor”, as the case
may be, shall refer instead to the successor corporation and not to the
Partnership, Capital or such Subsidiary Guarantor, as the case may be), and may
exercise every right and power of an Issuer or Subsidiary Guarantor under this
Indenture with the same effect as if such successor Person had been named as an
Issuer or Subsidiary Guarantor, as applicable, herein; provided, however,
that the surviving entity or acquiring corporation shall (i) assume all of the
obligations of the acquired Person incurred under this Indenture, the Notes,
and, if applicable, the Collateral Documents, (ii) acquire and own and operate,
directly or 

 

69

 

through Subsidiaries, all or substantially all of the
properties and assets then constituting the assets of the Partnership or the
applicable Subsidiary Guarantor, as the case may be, (iii) have been issued, or
have a consolidated Subsidiary which has been issued, Gaming Licenses to
operate the acquired casino operations and entities substantially in the manner
and scope operated prior to such transaction, which Gaming Licenses are in full
force and effect, and (iv) be in compliance fully with Section 5.01 hereof and
(v) the Issuers or the applicable Subsidiary Guarantor shall have delivered to
the Trustee an Officers’ Certificate and Opinion of Counsel, subject to
customary assumptions and exclusions, stating that the proposed transaction
complies with this Indenture.

 

ARTICLE
SIX

DEFAULTS AND REMEDIES

 

Section 6.01           Events
of Default.

 

Each of the following is an “Event of
Default”:

 

(a)           default
for 30 days or more in the payment when due of interest on, or Liquidated
Damages with respect to, the Notes;

 

(b)           default
in payment when due, upon maturity, redemption or otherwise, of the principal
of, or premium, if any, on the Notes;

 

(c)           failure
by the Issuers or any of their Restricted Subsidiaries to comply with the
provisions described under Sections 4.10, 4.15 or 5.01;

 

(d)           failure
by the Issuers or any of their Restricted Subsidiaries for 30 days after notice
to comply with any of the other agreements, representations or warranties in
this Indenture, the Notes or the Collateral Documents (other than a default set
forth in clause (a), (b) or (c) above);

 

(e)           default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Partnership or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Partnership or any of its Restricted Subsidiaries),
whether the Indebtedness or guarantee now exists, or is created after the date
of the Indenture, if that default:

 

(i)            is
caused by a failure to pay principal of, or interest or premium, if any, on
such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a “Payment
Default”); or

 

(ii)           results
in the acceleration of that Indebtedness prior to its express maturity,

 

70

 

and, in each case, the principal amount of that
Indebtedness, together with the principal amount of any other Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $5.0 million or more;

 

(f)            failure by the Issuers or any of
their Restricted Subsidiaries to pay final non-appealable judgments (other than
any judgments or portions thereof as to which a reputable insurance company has
accepted full liability in writing) aggregating in excess of $5.0 million,
which judgments are not paid, discharged or stayed for a period of 60 days;

 

(g)           any Subsidiary Guarantee of any
Subsidiary Guarantor shall be held in a judicial proceeding to be unenforceable
or invalid or shall cease for any reason, other than pursuant to the terms of
this Indenture, to be in full force and effect, or any Subsidiary Guarantor, or
any Person acting on behalf of any Subsidiary Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee;

 

(h)           breach by either of the Issuers or any
of the Subsidiary Guarantors in any material respect of any representation or
warranty or agreement in any of the Collateral Documents or in any certificates
delivered in connection therewith, the repudiation by any of them of any of its
obligations under any of the Collateral Documents, the unenforceability of the
Collateral Documents against any of them for any reason which continues for 30
days after written notice from the Trustee or Holders of at least 25% in
outstanding principal amount of Notes or the loss of the perfection or priority
of the Liens granted by any of them pursuant to the Collateral Documents for
any reason;

 

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

 

(j)            the Partnership fails to own 100% of
the issued and outstanding Equity Interests of Capital;

 

(k)           the cessation of gaming operations of
Silver Legacy Resort Casino for a period of more than 180 consecutive days;

 

(l)            either Issuer or any Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law (i)
commences a voluntary case, (ii) consents to the entry of an order for relief
against it in an involuntary case, (iii) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (iv) makes a
general assignment for the benefit of its creditors, or (v) admits in writing
its inability generally to  pay its
debts as the same become due; or

 

(m)          a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that (i) is for relief
against either Issuer or any Significant Subsidiary in an involuntary case,
(ii) appoints a Custodian of either Issuer or any Significant Subsidiary or for
all or substantially all of the property of either Issuer or any Significant 

 

71

 

Subsidiary, or (iii) orders the liquidation of either Issuer or any
SignificantSubsidiary, and the order or decree remains unstayed and in effect
for 60 days.

 

Section 6.02           Acceleration;
Intentional Defaults.

 

(a)           In the case of an
Event of Default described in Sections 6.01(l) or (m) above, all outstanding
Notes will become due and payable immediately and automatically without further
action or notice.  Subject to the terms of the Intercreditor
Agreement, if any other Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding
Notes may declare all the Notes to be due and payable immediately.  Upon any such declaration, the Notes shall
become due and payable immediately.  The
Holders of a majority in aggregate principal amount of the then outstanding
Notes by written notice to the Trustee may, on behalf of all of the Holders,
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Defaults or Events of
Default (except nonpayment of principal or interest or Liquidated Damages, if
any, on the Notes that has become due solely because of the acceleration) have
been cured or waived.

 

(b)           If
any Event of Default occurs by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Issuers with the intention of avoiding
payment of the premium that the Issuers would have had to pay if the Issuers
then had elected to redeem the Notes pursuant to Section 3.07 hereof, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, upon the acceleration of the Notes.  If an Event of Default occurs prior to March
1, 2007, by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding the prohibition on redemption of the Notes prior to
such date, then, the premium specified below shall also become immediately due
and payable, to the extent permitted by law, upon the acceleration of the
Notes.

 

	
  Occurrence of Event of 

  Default during the 12 months prior to:

  	
   

  	
  Applicable Premium:

  	
   

  
	
  March 1, 2003

  	
   

  	
  13.5000

  	
  %

  
	
  March 1, 2004

  	
   

  	
  11.8125

  	
  %

  
	
  March 1, 2005

  	
   

  	
  10.1250

  	
  %

  
	
  March 1, 2006

  	
   

  	
  8.4375

  	
  %

  
	
  March 1, 2007

  	
   

  	
  6.7500

  	
  %

  

 

Section 6.03           Other
Remedies.

 

If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, interest, and Liquidated Damages, if any, with
respect to, the Notes or to enforce the performance of any provision of the
Notes or this Indenture.

 

The Trustee may maintain a proceeding even
if it does not possess any of the Notes or does not produce any of them in the
proceeding.  A delay or omission by the
Trustee or 

 

72

 

any Holder of a Note in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default.  All remedies are
cumulative to the extent permitted by law.

 

Section 6.04           Waiver
of Past Defaults.

 

Holders of not less than a majority in
principal amount of the then outstanding Notes by notice to the Trustee may on
behalf of the Holders of all of the Notes waive an existing Default or Event of
Default and its consequences hereunder, except a continuing Default or Event of
Default in the payment of interest or Liquidated Damages, if any, on, or the
principal of, the Notes (including in connection with an offer to purchase) (provided, however, that the Holders of a majority in principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration).  Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.

 

Section 6.05           Control
by Majority.

 

Holders of a majority in principal amount of
the then outstanding Notes may direct the time, method and place of conducting
any proceeding for exercising any remedy available to the Trustee or exercising
any trust or power conferred on it. 
However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.  The
Trustee may withhold from Holders of the Notes notice of any continuing Default
or Event of Default (except a Default or Event of Default relating to the
payment of principal or interest or Liquidated Damages) if it determines that
withholding notice is in their interest.

 

Section 6.06           Limitation on Suits.

 

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

 

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

 

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

 

(3)           such Holder of a
Note or Holders of Notes offer and, if requested, provide to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or expense;

 

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

 

73

 

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

 

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

 

Section 6.07           Rights
of Holders of Notes to Receive Payment.

 

Notwithstanding any other provision of this
Indenture, the right of any Holder of a Note to receive payment of principal,
premium, if any, interest on, and Liquidated Damages, if any, with respect to,
the Note, on or after the respective due dates expressed in the Note (including
in connection with an offer to purchase), or to bring suit for the enforcement
of any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.

 

Section 6.08           Collection
Suit by Trustee.

 

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

 

Section 6.09           Trustee
May File Proofs of Claim.

 

The Trustee is authorized to file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders of the Notes allowed in any judicial
proceedings relative to the Issuers or any Subsidiary Guarantor (or any other
obligor upon the Notes), its creditors or its property and shall be entitled
and empowered to collect, receive and distribute any money or other property
payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee, and in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07 hereof.  To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise.  Nothing
herein contained shall 

 

74

 

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 Notes or the rights of any Holder, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

 

Section 6.10           Priorities.

 

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

 

First:       to
the Trustee, its agents and attorneys for amounts due under Section 7.07
hereof, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection, including costs incurred under the Collateral Agreements;

 

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

 

Third:     to
the Issuers, as otherwise required by applicable law or to such party as a
court of competent jurisdiction shall direct.

 

The Trustee may fix a record date and
payment date for any payment to Holders of Notes pursuant to this Section 6.10.

 

Section 6.11           Undertaking
for Costs.

 

In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys’ fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant.  This
Section does not apply to a suit by the Trustee, a suit by a Holder of a Note
pursuant to Section 6.07 hereof, or a suit by Holders of more than ten percent
in the aggregate of the then outstanding Notes.

 

Section 6.12           Management
of the Hotel/Casino Property.

 

Notwithstanding any provision of this Article 6 to the contrary,
following an Event of Default which permits the taking of possession of the
Hotel/Casino Property, the appointment of a receiver of either the Collateral
or any part thereof pursuant to any of the Collateral Documents, or after such
taking of possession of such appointment, the Trustee or any such receiver may,
but shall not be obligated to, in addition to the rights and powers of the
Trustee and such receiver set forth in this Indenture and the Collateral
Documents, to retain one or more experienced operators or developers or
construction contractors or agents of casinos to manage the operations of the
Hotel/Casino Property on behalf of the Holders of the Notes, 

 

75

 

provided, however, that any such operator shall have
all necessary legal qualifications, including all applicable Gaming Licenses to
manage the Hotel/Casino Property.

 

Section 6.13           Restoration
of Rights and Remedies.

 

If the Trustee or any Holder has instituted a proceeding to enforce any
right or remedy under this Indenture or any Collateral Document 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 such
case the Issuers, the Trustee and the Holders shall, subject to any
determination in such proceeding, 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 has been
instituted.

 

ARTICLE SEVEN

TRUSTEE

 

Section 7.01           Duties
of Trustee.

 

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

 

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

 

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

 

(ii)           in the absence of bad faith on its
part, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture and the Collateral Documents. 
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this Indenture and
the Collateral Documents (but the Trustee need not confirm or investigate the
accuracy of any facts, including mathematical calculations, stated therein).

 

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

 

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

 

76

 

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

 

(iii)          the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.05 hereof.

 

(d)           Whether
or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of
this Section.

 

(e)           No
provision of this Indenture or the Collateral Documents shall require the
Trustee to expend or risk its own funds or incur any liability.  The Trustee shall be under no obligation to
exercise any of its rights and powers under this Indenture or any Collateral Document
at the request of any Holders, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability
or expense.

 

(f)            Money
held in trust by the Trustee need not be segregated from other funds except to
the extent required by law.

 

Section 7.02           Certain
Rights of Trustee.

 

(a)           The
Trustee may conclusively rely upon any document believed by it to be genuine
and to have been signed or presented by the proper Person.  The Trustee need not investigate any fact or
matter stated in the document.

 

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

 

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

 

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

 

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

 

(f)            The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture or any Collateral Document at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee security or indemnity 

 

77

 

reasonably satisfactory to it against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.

 

(g)           The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation.

 

(h)           The
Trustee shall not be deemed to have notice of any Default or Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of such event is sent to the Trustee in accordance with
Section 14.02 hereof, and such notice references the Notes; and

 

(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 be enforceable by, the Trustee in each of its capacities hereunder,
and to each agent, custodian and other Person employed to act hereunder.

 

Section 7.03           Individual
Rights of Trustee.

 

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

 

Section 7.04           Trustee’s
Disclaimer.

 

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

 

Section 7.05           Notice
of Defaults.

 

If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs.  Except in the case of a Default or Event of
Default in payment of 

 

78

 

principal of, premium and Liquidated Damages, if any,
or interest on any Note, the Trustee may withhold the notice if and so long as
a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.

 

Section 7.06           Reports
by Trustee to Holders of the Notes.

 

Within 60 days after each September 1 beginning with the September 1
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA § 313(a) (but if no
event described in TIA § 313(a) has occurred within the twelve months preceding
the reporting date, no report need be transmitted).  The Trustee also shall comply with TIA § 313(b)(2).  The Trustee shall also transmit by mail all reports
as required by TIA § 313(c).

 

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

 

At the expense of the Issuers, the Trustee or, if the Trustee is not
the Registrar, the Registrar, shall report the names of record holders of the
Notes to any Gaming Authority when requested to do so by the Issuers.

 

At the express direction of the Issuers and at the Issuers’ expense,
the Trustee will provide any Gaming Authority with:

 

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

 

(ii)           a list of all of the Holders promptly
after the original issuance of the Notes and periodically thereafter if the
Issuers so direct;

 

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

 

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

 

(v)           notice of any transfer or assignment
of rights under this Indenture or the Guarantees known to the Trustee within
five (5) Business Days thereof;

 

(vi)          a copy of any amendment to the Notes
or this Indenture within five (5) Business Days of the effectiveness
thereof; and

 

(vii)         such other information as may be
required by any Gaming Authority.

 

79

 

To the extent requested by the Issuers and at the Issuers’ expense, the
Trustee shall cooperate with any Gaming Authority in order to provide such
Gaming Authority with the information and documentation requested and as
otherwise required by applicable law.

 

Section 7.07           Compensation
and Indemnity.

 

The Issuers and the Subsidiary Guarantors jointly and severally agree
to pay to the Trustee from time to time such compensation for its acceptance of
this Indenture and services hereunder and under the Collateral Agreements in
accordance with a written schedule provided by the Trustee to the Issuers.  The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust.  The Issuers and the Subsidiary Guarantors
jointly and severally agree to reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. 
Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee’s agents and counsel.

 

The Issuers and the Subsidiary Guarantors shall jointly and severally
indemnify the Trustee against any and all losses, liabilities or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Issuers (including this
Section 7.07) and defending itself against any claim (whether asserted by
either of the Issuers or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. 
The Trustee shall notify the Issuers promptly of any claim for which it
may seek indemnity.  Failure by the
Trustee to so notify the Issuers shall not relieve the Issuers or any
Subsidiary Guarantor of their obligations hereunder.  The Issuers shall defend the claim and the Trustee shall
cooperate in the defense.  The Trustee
may have separate counsel and the Issuers shall pay the reasonable fees and
expenses of such counsel.  The Issuers
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.

 

The obligations of the Issuers and the Subsidiary Guarantors under this
Section 7.07 shall survive the satisfaction and discharge of this Indenture.

 

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

 

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

 

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

 

80

 

Section 7.08           Replacement
of Trustee.

 

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

 

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

 

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

 

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

 

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

 

(d)           the
Trustee becomes incapable of acting.

 

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

 

If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or
the Holders of at least ten percent (10%) in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the appointment
of a successor Trustee.

 

If the Trustee, after written request by any Holder who has been a
Holder for at least six (6) months, fails to comply with Section 7.10,
such Holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.

 

A successor Trustee shall take all steps necessary or advisable to be
approved by applicable Gaming Authorities, if required, and deliver a written
acceptance of its appointment to the retiring Trustee and to the Issuers.  Thereupon, the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of
its succession to Holders.  The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, provided all
sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. 
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuers’ and the Subsidiary Guarantors’ obligations under Section
7.07 hereof shall continue for the benefit of the retiring Trustee.

 

81

 

Section 7.09           Successor
Trustee by Merger, Etc.

 

If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another Person, the
successor Person without any further act shall be the successor Trustee; provided, however,
such Person shall be otherwise eligible and qualified under this Article and in
accordance with any applicable rules or regulations of Gaming Authorities.

 

Section 7.10           Eligibility;
Disqualification.

 

There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or
state authorities and that has a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition.

 

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

 

Section 7.11           Preferential
Collection of Claims Against Issuers.

 

The Trustee is subject to TIA § 311(a), excluding any creditor
relationship listed in TIA § 311(b).  A
Trustee who has resigned or been removed shall be subject to TIA § 311(a) to
the extent indicated therein.  The
Trustee hereby waives any right to set-off any claim that it may have against
the Issuers in any capacity (other than as Trustee, Paying Agent or Collateral
Agent hereunder or under the Collateral Documents) against any of the assets of
the Issuers held by the Trustee; provided, however, that if the Trustee
is or becomes a lender of any other Indebtedness permitted hereunder to be pari passu
with the Notes, then such waiver shall not apply to the extent of such
Indebtedness.

 

Section 7.12           Authorization
of Trustee to Take Other Actions.

 

(a)           The
Trustee is hereby authorized to enter into and take any actions or deliver such
consents required by or requested under each of the Collateral Documents and
such other documents as directed by the Holders of a majority of outstanding
aggregate principal amount of the Notes. 
If at any time any action by or the consent of the Trustee is required
under any of the Collateral Documents or any other document entered into by the
Trustee at the direction of a majority of the Holders of outstanding aggregate
principal amount of the Notes, such action or consent shall be taken or given
by the Trustee upon the consent to such action by the Holders of a majority of
outstanding aggregate principal amount of the Notes.

 

(b)           Upon
the request of the Partnership, the Trustee shall enter into an intercreditor
agreement with respect to any FF&E Financing; provided, however, that
the Issuers deliver an Officers’ Certificate certifying that (i) such financing
will not violate this Indenture or any of the Collateral Documents and (ii) the
terms of such intercreditor agreement will not violate this Indenture or any of
the Collateral Documents.

 

82

 

(c)           The
Trustee and its directors, officers, employees and Affiliates shall cooperate
with all Gaming Authorities and provide such information and documentation as
may from time to time be requested thereby.

 

ARTICLE EIGHT

DEFEASANCE
AND COVENANT DEFEASANCE

 

Section 8.01           Option
to Effect Legal Defeasance or Covenant Defeasance.

 

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

 

Section 8.02           Legal
Defeasance and Discharge.

 

Upon the Issuers’ exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuers and the Subsidiary Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from their obligations with respect
to all outstanding Notes and Subsidiary Guarantees on the date the conditions
set forth below are satisfied (hereinafter, “Legal
Defeasance”).  For this purpose, Legal Defeasance means
that the Issuers shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the
other Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and
the Trustee, on demand of and at the expense of the Issuers, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder:  (a) the rights of Holders of outstanding
Notes to receive payments in respect of the principal of, or interest or
premium and Liquidated Damages, if any, on such Notes when such payments are
due, (b) the Issuers’ obligations with respect to such Notes under Article Two
and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Issuers’ and Subsidiary Guarantors’
obligations in connection therewith and (d) this Article Eight.  Subject to compliance with this Article
Eight, the Issuers may exercise their option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.

 

Section 8.03           Covenant
Defeasance.

 

Upon the Issuers’ exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuers shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from their
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.14, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21, 4.22, and
4.23 hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for
the purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed “outstanding” for all other purposes hereunder (it being
understood 

 

83

 

that such Notes shall not be deemed outstanding for
accounting purposes).  For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes, the
Issuers may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision
herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby.  In addition,
upon the Issuers’ exercise under Section 8.01 hereof of the option applicable
to this Section 8.03, subject to the satisfaction of the conditions set forth
in Section 8.04 hereof, Sections 6.10(c) though (f) shall not constitute Events
of Default.

 

Section 8.04           Conditions
to Legal or Covenant Defeasance.

 

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

 

(1)           the Issuers must irrevocably deposit
with the Trustee, in trust for the benefit of the Holders of the Notes, cash in
United States dollars, noncallable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal of, or
interest and premium and Liquidated Damages, if any, on the outstanding Notes
on the stated maturity or on the applicable redemption date, as the case may
be, and the Issuers must specify whether the Notes are being defeased to
maturity or to a particular redemption date;

 

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

 

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

 

(4)           no Default or Event
of Default shall have occurred and be continuing either (a) on the date of such
deposit (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit) or (b) insofar as Section 

 

84

 

6.01(j)  hereof
is concerned, at any time in the period ending on the 91st day after the date
of deposit;

 

(5)           such Legal
Defeasance or Covenant Defeasance shall not result in a breach or violation of,
or constitute a default under, any material agreement or instrument (except
with respect to the borrowing of funds described in clause 4 above, or any
other material agreement or instrument) to which the Issuers or any of their
Subsidiaries is a party or by which the Issuers or any of their Restricted Subsidiaries
are bound;

 

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

 

(7)           the Issuers shall
deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each
stating that all conditions precedent relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and

 

(8)           the Issuers shall
have delivered to the Trustee an Opinion of Counsel to the effect that:

 

(i)            the
trust funds will not be subject to any rights of holders of Indebtedness of the
Partnership other than the Notes, and.

 

(ii)           assuming
no intervening bankruptcy by either of the Issuers or any Subsidiary Guarantor
between the date of deposit and the 91st day following the deposit and assuming
that no Holder is an “insider” of either of the Issuers under applicable
bankruptcy law, after the 91st day following the deposit, the trust funds will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally.

 

Section 8.05           Deposited
Money and Government Securities to Be Held in Trust; Other Miscellaneous
Provisions.

 

Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Issuers acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds
except to the extent required by law.

 

The Issuers and the Subsidiary Guarantors shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against the
cash or non-callable Government Securities deposited pursuant to Section 8.04
hereof or the principal and interest 

 

85

 

received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders of the
outstanding Notes.

 

Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Partnership from time to time upon the
request of the Partnership any money or non-callable Government Securities held
by it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(2) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.

 

Section 8.06           Repayment
to the Issuers.

 

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

 

Section 8.07           Reinstatement.

 

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

 

86

 

ARTICLE NINE

AMENDMENT, SUPPLEMENT
AND WAIVER

 

Section 9.01           Without
Consent of Holders of Notes.

 

Notwithstanding Section 9.02 of this Indenture, the Issuers, the
Subsidiary Guarantors and the Trustee may amend or supplement this Indenture,
the Notes, the Subsidiary Guarantees or the Collateral Documents without the
consent of any Holder of a Note:

 

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

 

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

 

(c)   to provide for the assumption of the Issuers’ or Subsidiary
Guarantors’ obligations to the Holders of the Notes in the case of a merger or
consolidation or sale of all or substantially all of an Issuer’s or Subsidiary
Guarantor’s assets;

 

(d)   to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of a Note;

 

(e)   to enter into additional or supplemental Subsidiary Guarantees
pursuant to Section 10.02 hereof, or to enter into additional or supplemental
Collateral Documents pursuant to Section 11.11 hereof; and

 

(f)    to comply with requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the TIA, to comply with
the procedures of the Trustee, DTC, any other Depositary or any other
applicable entity with respect to the provisions of this Indenture and the
Notes relating to the transfer of the Notes or providing for the consummation
of the Exchange Offer or the issuance of the Exchange Notes; or

 

(g)  to the extent necessary to comply with the
terms of the applicable regulations, rules, decrees, orders or decisions
applicable to Gaming Businesses or issued by Gaming Authorities Laws or other
applicable laws;

 

provided,
however, that in the case of a
change pursuant to clause (a) or (e) above, the Issuers shall deliver to the
Trustee an Opinion of Counsel stating that the change does not adversely affect
the right of any Holder of the Notes.

 

Upon the request of the Issuers accompanied by a resolution of the
Partnership’s Management Committee authorizing the execution of any such
amended or supplemental Indenture, and upon receipt by the Trustee of the
documents described in Section 7.02 hereof, the Trustee shall join with the
Issuers and the Subsidiary Guarantors in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the 

 

87

 

Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.

 

Section 9.02           With
Consent of Holders of Notes.

 

Except as provided below in this Section 9.02, the Issuers and the
Trustee may amend or supplement this Indenture, the Notes, the Subsidiary
Guarantees or the Collateral Documents with the consent of the Holders of at
least a majority in principal amount of the Notes then outstanding voting as a
single class (including, without limitation, consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Notes), and,
subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default or compliance with any provision of this Indenture, the Notes, the
Subsidiary Guarantees or the Collateral Documents may be waived with the
consent of the Holders of a majority in principal amount of the then
outstanding Notes (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes).

 

The Issuers may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto.  If a record date
is fixed, the Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to consent to such supplemental indenture,
whether or not such Holders remain Holders after such record date; provided that unless such consent shall
have become effective by virtue of the requisite percentage having been
obtained prior to the date which is 90 days after such record date, any such
consent previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.

 

Upon the request of the Issuers accompanied by a resolution of their
Management Committee or Board of Directors, as applicable, authorizing the
execution of any such amended or supplemental Indenture, and upon the filing
with the Trustee of evidence satisfactory to the Trustee of the consent of the
Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Issuers and
the Subsidiary Guarantors in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture directly affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture.

 

It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment 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 Issuers shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver.  Any failure of the Issuers to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental Indenture or waiver.  Subject to Sections 6.04 and 6.07 hereof,
the Holders of a majority in aggregate principal amount of the then outstanding
Notes voting as a single class may waive compliance in a particular instance by
the Issuers or the Subsidiary Guarantors with any provision of this Indenture,
the Subsidiary Guarantees, the Collateral Documents or the 

 

88

 

Notes. 
However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):

 

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

 

(2)           reduce the
principal of or change the fixed maturity of any Note or alter the provisions
with respect to the redemption of the Notes;

 

(3)           reduce the rate of
or change the time for payment of interest on any Note;

 

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

 

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

 

(6)           make any change in
the provisions of the Indenture relating to waivers of past Defaults or Events
of Default or the rights of Holders of Notes to receive payments of principal
of, or interest or premium or Liquidated Damages, if any, on the Notes;

 

(7)           release any
Subsidiary Guarantor from any of its obligations under its Subsidiary Guarantee
or the Indenture, except in accordance with the terms of this Indenture;

 

(8)           waive a redemption
payment with respect to any Note or modify the obligations of the Issuers to
make offers to purchase Notes (i) upon a Change of Control after the occurrence
of a Change of Control or (ii) from the proceeds of one or more Asset Sales
after the aggregate amount of Excess Proceeds from such Asset Sales exceeds
$5.0 million;

 

(9)           release all or
substantially all of the Collateral from the Lien of the Indenture or the
Collateral Documents (except in accordance with the provisions thereof); or

 

(10)         make any change in
the preceding amendment and waiver provisions.

 

Any amendment to, or waiver of, the provisions of any of the Collateral
Documents relating Section 4.12 hereof or the security provisions of this
Indenture will require the consent of the Holders of at least 66 2/3% in
principal amount of the Notes then outstanding.

 

Section 9.03           Compliance
with Trust Indenture Act.

 

Every amendment or supplement to this Indenture, the Subsidiary
Guarantees, the Collateral Documents or the Notes shall be set forth in a
amended or supplemental Indenture that complies with the TIA as then in effect.

 

89

 

Section 9.04           Revocation
and Effect of Consents.

 

Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder’s Note, even if notation of the consent is not
made on any Note.  However, any such
Holder of a Note or subsequent Holder of a Note may revoke the consent as to
its Note if the Trustee receives written notice of revocation before the date
the waiver, supplement or amendment becomes effective.  An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.

 

Section 9.05           Notation
on or Exchange of Notes.

 

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

 

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

 

Section 9.06           Trustee to Sign Amendments, Etc.

 

The Trustee shall sign any amended or supplemental Indenture,
Subsidiary Guarantee, Collateral Document or Note authorized pursuant to this
Article Nine if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee.  The Issuers or any Subsidiary Guarantor may
not sign an amendment or supplemental Indenture, Subsidiary Guarantee,
Collateral Document or Note until its Management Committee or Board of
Directors, as the case may be, approves it. 
In executing any amended or supplemental Indenture, Subsidiary
Guarantee, Collateral Document or Note, the Trustee shall be entitled to receive
and (subject to Section 7.01 hereof) shall be fully protected in relying upon,
in addition to the documents required by Section 14.04 hereof, an Officers’
Certificate and an Opinion of Counsel stating that the execution of such
amended or supplemental indenture is authorized or permitted by this Indenture.

 

ARTICLE TEN

GUARANTEES

 

Section 10.01         Subsidiary
Guarantees.

 

Each Subsidiary Guarantor hereby jointly and severally, fully,
unconditionally and irrevocably, irrespective of the validity and enforceability
of this Indenture, the Notes, the Collateral Documents, or the obligations of
the Issuers hereunder or thereunder, guarantees the Notes and obligations of
the Issuers hereunder and thereunder, and guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee on behalf of such
Holder, that:  (a) the principal of (and
premium and Liquidated Damages, if any) and interest on the Notes shall be
promptly paid in full when due, whether at Stated Maturity, by acceleration,
call 

 

90

 

for redemption or otherwise (including, without
limitation, the amount that would become due but for the operation of the
automatic stay under Section 362(a) of the Federal Bankruptcy Code), together
with interest on the overdue principal, if any, and interest on any overdue
interest, to the extent lawful, and all other obligations of the Issuers to the
Holders or the Trustee hereunder or thereunder shall be paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or of any such
other obligations, the same shall be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. 
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Subsidiary Guarantors shall be jointly
and severally obligated to pay the same immediately.  Each of the Subsidiary Guarantees of the Subsidiary Guarantors
shall be a guarantee of payment and not of collection.

 

Each Subsidiary Guarantor hereby agrees that its obligations hereunder
shall be joint, several, unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Notes
with respect to any provisions hereof or thereof, the recovery of any judgment
against either of the Issuers, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Subsidiary Guarantor.

 

Each Subsidiary Guarantor further, to the extent permitted by law,
waives and relinquishes all claims, rights and remedies accorded by applicable
law to guarantors and agrees not to assert or take advantage of any such
claims, rights or remedies, including but not limited to:  (a) any right to require any of the
Trustee, the Holders or the Issuers (each a “Benefitted
Party”), as a condition of payment or performance by such Subsidiary
Guarantor, to (i) proceed against the Issuers, any other guarantor
(including any other Subsidiary Guarantor) of the Obligations of the Subsidiary
Guarantors under their Subsidiary Guarantees or any other Person,
(ii) proceed against or exhaust any security held from the Issuers, any
such other guarantor or any other Person, (iii) proceed against or have
resort to any balance of any deposit account or credit on the books of any
Benefitted Party in favor of the Issuers or any other Person, or
(iv) pursue any other remedy in the power of any Benefitted Party
whatsoever; (b) any defense arising by reason of the incapacity, lack of authority
or any disability or other defense of the Issuers including any defense based
on or arising out of the lack of validity or the unenforceability of the
Obligations under the Subsidiary Guarantees of the Subsidiary Guarantors or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of the Issuers from any cause other than payment in full of the
Obligations under the Subsidiary Guarantees of the Subsidiary Guarantors;
(c) any defense based upon any statute or rule of law which provides that
the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; (d) any defense based
upon any Benefitted Party’s errors or omissions in the administration of the
Obligations of the Subsidiary Guarantors under their Subsidiary Guarantees,
except behavior which amounts to bad faith; (e)  (i) any
principles or provisions of law, statutory or otherwise, which are or might be
in conflict with the terms of the Subsidiary Guarantees of the Subsidiary
Guarantors and any legal or equitable discharge of such Subsidiary Guarantor’s
obligations hereunder, (ii) the benefit of any statute of limitations
affecting such Subsidiary Guarantor’s liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims, and 

 

91

 

(iv) promptness, diligence and any requirement
that any Benefitted Party protect, secure, perfect or insure any security
interest or lien or any property subject thereto; (f) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance of the Subsidiary Guarantees of
the Subsidiary Guarantors, notices of default under the Notes or any agreement
or instrument related thereto, notices of any renewal, extension or
modification of the Obligations of the Subsidiary Guarantors under their
Subsidiary Guarantees or any agreement related thereto, and notices of any
extension of credit to the Issuers and any right to consent to any
thereof;  (g) to the extent
permitted under Section 40.495 of the Nevada Revised Statutes, the benefits of
the “One Action” rule under Section 40.430 of the Nevada Revised Statutes and
(h) any defenses or benefits that may be derived from or afforded by law
which limit the liability of or exonerate guarantors or sureties, or which may
conflict with the terms of the Subsidiary Guarantees.  Each Subsidiary Guarantor hereby covenants that its Subsidiary Guarantee
will not be discharged except by complete performance of the obligations
contained in its Subsidiary Guarantee and this Indenture.

 

If any Holder or the Trustee is required by any court or otherwise to
return to either the Issuers or any Subsidiary Guarantor, or any custodian,
trustee, or similar official acting in relation to either the Issuers or such
Subsidiary Guarantor, any amount paid by the Issuers or such Subsidiary
Guarantor to the Trustee or such Holder, the applicable Subsidiary Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect.  Each Subsidiary 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 Subsidiary Guarantor agrees that it shall 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.  If any Holder or the Trustee is
required by any court or otherwise to return to the Issuers or any Subsidiary
Guarantor, or any custodian, trustee, liquidator or other similar official acting
in relation to either of the Issuers or any Subsidiary Guarantor, any amount
paid by any of them to the Trustee or such Holder, the Subsidiary Guarantee of
each of the Subsidiary Guarantors, to the extent theretofore discharged, shall
be reinstated in full force and effect. 
Each Subsidiary Guarantor further agrees that, as between each
Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six hereof for the purposes of the
Subsidiary Guarantee of such Subsidiary Guarantor, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any acceleration of such
obligations as provided in Article Six hereof, such obligations (whether or not
due and payable) shall forthwith become due and payable by each Subsidiary
Guarantor for the purpose of the Subsidiary Guarantee of such Subsidiary
Guarantor.

 

Section 10.02         Additional
Guarantees.

 

If the Partnership or any of its Restricted Subsidiaries acquires or
creates another Subsidiary that is organized and existing under the laws of any
state in the United States or the District of Columbia after the date of this
Indenture, then the newly acquired or created Subsidiary shall (a) execute and
deliver to the Trustee a supplemental indenture setting forth its 

 

92

 

Subsidiary Guarantee, together with such Collateral
Documents in form reasonably satisfactory to the Trustee, as are necessary to
create and convey to the Trustee, for the benefit of the Holders of the Notes,
a perfected second-priority lien on all Collateral (subject to Permitted Liens)
held by such Subsidiary, and (b) deliver to the Trustee an Opinion of Counsel
relating to the enforceability and authorization of that Subsidiary Guarantee
and the perfection of the Liens in favor of the Trustee or the Collateral owned
by such Subsidiary Guarantee accordance with the terms of this Indenture,
pursuant to which that Restricted Subsidiary will become a Subsidiary
Guarantor, on a senior secured basis, of the Issuers’ payment obligations under
the Notes and the Indenture; provided
that this Section 10.02 shall not apply to Capital or to any Subsidiary during
a period when that Subsidiary (i) has been properly designated as an
Unrestricted Subsidiary in accordance with Section 4.17 hereof for so long as
it continues to constitute an Unrestricted Subsidiary or (ii) has Total
Assets of less than $1.0 million.

 

Section 10.03         Execution
and Delivery of Subsidiary Guarantee.

 

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

 

Section 10.04         Severability.

 

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

 

Section 10.05         Limitation
of Subsidiary Guarantors’ Liability.

 

Each Subsidiary Guarantor and, by its acceptance hereof, each Holder
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer or
conveyance for purposes of the Federal Bankruptcy Code, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law or the provisions of its local law relating to fraudulent transfer or
conveyance.  To effectuate the foregoing
intention, the Trustee, the Holders and the Subsidiary Guarantors hereby
irrevocably agree that the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee shall be limited to the maximum amount that will not,
after giving effect to all other contingent and fixed liabilities of such
Subsidiary Guarantor and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under its Subsidiary Guarantee, result in the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee constituting a fraudulent
transfer or conveyance.

 

Section 10.06         Subsidiary
Guarantors May Consolidate, Etc., on Certain Terms.

 

Except as otherwise provided in Section 10.07 hereof, a Subsidiary
Guarantor may not consolidate with or merge with or into (whether or not such
Subsidiary Guarantor is the surviving Person) another Person unless:

 

93

 

(i)            either: (a) the Subsidiary Guarantor
is the surviving entity; or (b) the Person formed by or surviving any
consolidation or merger (in each case, if other than the Partnership or the
Subsidiary Guarantor) is a limited liability company, limited partnership,
partnership or corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia;

 

(ii)           the Person formed by or surviving any
such consolidation or merger (if other than such Subsidiary Guarantor), assumes
all the obligations of such Subsidiary Guarantor under such Subsidiary
Guarantor’s Subsidiary Guarantee, this Indenture and the Collateral Documents
pursuant to agreements reasonably satisfactory to the Trustee;

 

(iii)          immediately before and immediately
after giving effect to such transaction (including giving effect to any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of the transaction), no Default or Event of Default would exist or be
continuing;

 

(iv)          such transactions would not require
any Holder of Notes to obtain a Gaming License or be qualified under the laws
of any applicable gaming jurisdiction which would not be required in the
absence of such transaction, provided
that a transaction involving a jurisdiction that does not require the licensing
or qualification of any Holder of Notes as a condition to such transaction, but
reserves the discretionary right to require the licensing or qualification of
any Holder of Notes, shall not be prohibited pursuant to the terms of this
clause (iv);

 

(v)           such transaction would not result in
the material impairment or loss of any qualification or any license necessary
for any Gaming Business operated, or anticipated to be operated, by the
Partnership or any of its Restricted Subsidiaries following the consummation of
the proposed transaction; and

 

(vi)          the Subsidiary Guarantor or the
resulting Person shall have delivered to the Trustee an Officers’ Certificate
and Opinion of Counsel (which counsel may not be in-house counsel of such
Subsidiary Guarantor or any of its Affiliates), each stating that the
consolidation or merger and, if a supplemental indenture is required in
connection with such transaction, the supplemental indenture, comply with the
provisions of this Indenture and the Collateral Documents and that all
conditions precedent in the Indenture relating to the transaction have been
satisfied.

 

All the Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this
Indenture as though all of such Subsidiary Guarantees had been issued at the
date of the execution hereof.

 

Except as set forth in Articles Four and Five hereof, and
notwithstanding clauses (i) and (ii) above, (A) a Subsidiary Guarantor may
consolidate with or merge with or into, or sell or otherwise dispose of all or
substantially all of its assets to, the Issuers, provided that the surviving corporation (if other than the
Issuers) shall expressly assume by supplemental indenture complying with the
requirements of this Indenture, the due and punctual payment of 

 

94

 

the principal of, premium and Liquidated Damages, if
any, and interest on all of the Notes, and the due and punctual performance and
observance of all the covenants and conditions of this Indenture to be
performed by the Issuers and (B) a Subsidiary Guarantor may consolidate
with or merge with or into, or sell or otherwise dispose of all or
substantially all of its assets to, any other Subsidiary Guarantor.

 

Section 10.07         Releases
Following Sale of Assets.

 

Any Subsidiary Guarantor shall be released and relieved of any
obligations under its Subsidiary Guarantee, (1) in connection with any sale or
other disposition of all or substantially all of the assets of that Subsidiary
Guarantor (including by way of merger or consolidation) to a Person that is not
(either before or after giving effect to such transaction) an Affiliate of
either of the Issuers, if the Subsidiary Guarantor applies the Net Proceeds of
that sale or other disposition in accordance with the provisions of Section
4.10 hereof; or (2) in connection with any sale of all of the Capital
Stock of a Subsidiary Guarantor to a Person that is not (either before or after
giving effect to such transaction) an Affiliate of either of the Issuers, if
the Issuers apply the Net Proceeds of that sale in accordance with the
provisions of Section 4.10 hereof.  Upon
delivery by the Issuers to the Trustee of an Officers’ Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was made
by the applicable Issuer in accordance with the provisions of this Indenture,
including without limitation Section 4.10 hereof, the Trustee shall execute any
documents reasonably required in order to evidence the release of any Subsidiary
Guarantor from its obligations under its Subsidiary Guarantee.

 

Any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of
and interest on the Notes and for the other obligations of any Subsidiary
Guarantor under this Indenture and the Collateral Documents as provided in this
Article Ten.

 

Section 10.08         Release
of a Guarantor.

 

Any Subsidiary Guarantor that is designated by the Management Committee
of the Partnership as an Unrestricted Subsidiary in accordance with the terms
of this Indenture shall, at such time, be deemed automatically and
unconditionally released and discharged of its obligations under its Subsidiary
Guarantee without any further action on the part of the Trustee or any Holder
of the Notes.  The Trustee shall deliver
an appropriate instrument evidencing such release upon receipt of the Issuers’
request for such release accompanied by an Officers’ Certificate certifying as
to the compliance with this Section 10.08. 
Any Subsidiary Guarantor not so released shall remain liable for the
full amount of principal of and interest on the Notes as provided in its
Subsidiary Guarantee and for the other obligations of such Subsidiary Guarantor
under this Indenture and the Collateral Documents.

 

Section 10.09         Benefits
Acknowledged.

 

Each Subsidiary Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this
Indenture and that its Subsidiary Guarantee and waivers pursuant to its
Subsidiary Guarantee are knowingly made in contemplation of such benefits.

 

95

 

ARTICLE ELEVEN

COLLATERAL AND SECURITY

 

Section 11.01         Security.

 

The due and punctual payment of the principal of, premium and
Liquidated Damages, if any, and interest on the Notes when and as the same
shall be due and payable, whether on an interest payment date, at maturity, by
acceleration, repurchase, redemption or otherwise, and interest on the overdue
principal of, premium and Liquidated Damages, if any, and interest on the Notes
and performance of all other respective obligations of the Issuers and the
Subsidiary Guarantors, as the case may be, to the Holders of Notes or the
Trustee under this Indenture, the Notes and the Subsidiary Guarantees,
according to the terms hereunder or thereunder, shall be secured by the
Collateral applicable thereto, as provided in the respective Collateral
Documents to which the Issuers, the Subsidiary Guarantors and any other
Affiliates of the Issuers named therein are respective parties and which have
been entered into for the benefit of the Holders of Notes.  Each Holder of Notes, by its acceptance
thereof, consents and agrees to the terms of the Collateral Documents
(including, without limitation, the provision providing for foreclosure and
release of Collateral as well as any additional intercreditor arrangements
entered into by the Trustee pursuant to Section 7.12 hereof) as the same may be
in effect or may be amended from time to time in accordance with their terms
and the terms of the Indenture, and authorizes and directs the Trustee to enter
into the Collateral Documents and to perform its obligations and exercise its
rights thereunder in accordance therewith. 
The Issuers, the Subsidiary Guarantors and the other Affiliates of the
Issuers party to certain Collateral Agreements shall deliver to the Trustee
copies of all documents executed pursuant to this Indenture and the Collateral
Documents and shall do or cause to be done all such acts and things as may be
necessary or proper, or as may be required by the provisions of the Collateral
Documents to assure and confirm to the Trustee the validity, perfection,
priority and enforceability of the security interest in the Collateral
contemplated hereby, by the Collateral Documents, or any part thereof, as from
time to time constituted, so as to render the same available for the security
and benefit of this Indenture and of the Notes and the Subsidiary Guarantees secured
thereby, according to the intent and purposes herein and therein
expressed.  The Issuers and the
Subsidiary Guarantors shall take, or shall cause their respective Restricted
Subsidiaries to take, upon request of the Trustee, any and all actions reasonably
required to cause the Collateral Documents to create and maintain, as security
for the obligations of the Issuers and the Subsidiary Guarantors hereunder, a
valid, perfected and enforceable Lien on the Collateral, subject to Permitted
Liens.

 

Section 11.02         Recording
and Opinions.

 

The Issuers and the Subsidiary Guarantors will cause the applicable
Collateral Documents and any financing statements, and all amendments or
supplements to each of the foregoing and any other similar security documents
as necessary, to be registered, recorded and filed and/or re-recorded, re-filed
and renewed in such manner and in such place or places, if any, as may be
required by law or reasonably requested by the Trustee at the direction of the
Holders in order fully to preserve and protect the Lien securing the
obligations under the Notes and the Subsidiary Guarantees of such Subsidiary
Guarantors pursuant to the Collateral Documents, except as otherwise provided
herein and therein.

 

96

 

The Issuers, the Subsidiary Guarantors and any other obligor shall
furnish to the Trustee:

 

(a)   promptly after the execution and delivery of this Indenture, and
promptly after the execution and delivery of any other instrument of further
assurance or amendment, an Opinion of Counsel in the United States either
(i) stating that, subject to customary assumptions and exclusions, in the
opinion of such counsel, this Indenture, the applicable Collateral Documents
and all other instruments of further assurance or amendment have been properly
recorded, registered and filed to the extent necessary to make effective the
Liens intended to be created by the Collateral Documents and reciting the
details of such action or referring to prior Opinions of Counsel in which such
details are given or (ii) stating that, subject to customary assumptions
and exclusions, in the opinion of such counsel, no such action is necessary to
make any other Lien created under any of the Collateral Documents effective as
intended by such Collateral Documents;

 

(b)   within 30 days after January 1, in each year beginning with the
year 2003, an Opinion of Counsel, dated as of such date, either
(i) stating that, subject to customary assumptions and exclusions, in the
opinion of such counsel, such action has been taken with respect to the
recording, registering, filing, re-recording, re-registering and re-filing of
this Indenture and all supplemental indentures, financing statements,
continuation statements or other instruments of further assurance as is
necessary to maintain the Lien of this Indenture and the Collateral Documents
until the next Opinion of Counsel is required to be rendered pursuant to this
paragraph and reciting the details of such action or referring to prior Opinions
of Counsel in which such details are given or (ii) stating that, subject
to customary assumptions and exclusions, in the opinion of such counsel, no
such action is necessary to maintain such Lien, until the next Opinion of
Counsel is required to be rendered pursuant to this paragraph; and

 

(c)   the Issuers shall furnish to the Trustee the certificates or
opinions, as the case may be, required by TIA Section 314(d).  Such certificates or opinions will be
subject to the terms of TIA Section 314(e).

 

Section 11.03         Release
of Collateral.

 

(a)           Subject
to subsections (b), (c) and (d) of this Section 11.03, Collateral may be
released from the Lien created by this Indenture and the Collateral Documents
at any time or from time to time upon the request of the Issuers pursuant to an
Officers’ Certificate certifying that all terms for release and conditions
precedent hereunder and under any applicable Collateral Document have been met
and specifying (x) the identity of the Collateral to be released and (y) the
provision of this Indenture which authorizes such release.  The Trustee shall release (at the sole cost
and expense of the Issuers) (i) all Collateral that is contributed, sold,
leased, conveyed, transferred or otherwise disposed of (including, without
limitation, any Collateral that is contributed, sold, leased, conveyed,
transferred or otherwise disposed of to an Unrestricted Subsidiary, but
excluding any such contribution, sale, lease, conveyance, transfer or other
distribution to the either of the Issuers or a Restricted Subsidiary); provided such contribution, sale, lease,
conveyance, transfer or other distribution is or will be made in accordance
with the provisions of this Indenture, including, without limitation, the
requirement that the net proceeds 

 

97

 

from such contribution, sale, lease, conveyance,
transfer or other distribution are or will be applied in accordance with this
Indenture and that no Default or Event of Default has occurred and is
continuing or would occur immediately following such release;
(ii) Collateral that is condemned, seized or taken by the power of eminent
domain or otherwise; provided
that no Default or Event of Default has occurred and is continuing or would
occur immediately following such release; (iii) Collateral which may be
released with the consent of Holders pursuant to Article Nine hereof;
(iv) all Collateral (except as provided in Article Eight hereof and, in
particular, the funds in the trust fund described in Section 8.04 hereof) upon
discharge of defeasance of this Indenture in accordance with Article Eight
hereof; (v) all Collateral upon the payment in full of all obligations of
the Issuers with respect to the Notes; (vi) Collateral of a Subsidiary
Guarantor whose Subsidiary Guarantee is released pursuant to Section 10.07
hereof; and (vii) Collateral that is expressly required to be released by
any Collateral Document.  Upon receipt
of such Officers’ Certificate the Trustee shall execute, deliver or acknowledge
any necessary or proper instruments of termination, satisfaction or release to
evidence the release of any Collateral permitted to be released pursuant to
this Indenture or the Collateral Documents. 
The Trustee is hereby authorized and shall, from time to time upon
request of the Issuers, and at the Issuers’ expense, execute and deliver UCC-3
partial release or termination statements and such other documents evidencing
release of Collateral available for release pursuant to clauses (i) through
(vii) above.

 

(b)           Except
pursuant to Section 11.03(a) above, no Collateral shall be released from the
Lien and security interest created by the Collateral Documents pursuant to the
provisions of the Collateral Documents unless there shall have been delivered
to the Trustee the Officers’ Certificate required by this Section 11.03.

 

(c)           The
Trustee may release Collateral from the Lien and security interest created by
this Indenture and the Collateral Documents upon the sale or disposition of
Collateral pursuant to the Trustee’s powers, rights and duties with respect to
remedies provided under any of the Collateral Documents.

 

(d)           The
release of any Collateral from the terms of this Indenture and the Collateral
Documents shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released pursuant to the terms hereof. 
To the extent applicable, the Issuers shall cause TIA § 313(b), relating
to reports, and TIA § 314(d), relating to the release of property or securities
from the Lien and security interest of the Collateral Documents and relating to
the substitution therefor of any property or securities to be subjected to the
Lien and security interest of the Collateral Documents, to be complied with.  Any certificate or opinion required by TIA §
314(d) may be made by an Officer of each of the Issuers except in cases where
TIA § 314(d) requires that such certificate or opinion be made by an
independent Person, which Person shall be an independent engineer, appraiser or
other expert selected or approved by the Trustee in the exercise of reasonable
care.

 

Section 11.04         Protection
of the Trust Estate.

 

Subject to the terms of the Collateral Documents, upon prior written
notice to the Issuers and the Subsidiary Guarantors, the Trustee shall have the
power (i) to institute and 

 

98

 

maintain such suits and proceedings as it may deem
expedient, to prevent any impairment of the Collateral under any of the Collateral
Documents and in the profits, rents, revenues and other income arising
therefrom, including the power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or
order would impair any Collateral or be prejudicial to the interests of the
Holders of Notes or the Trustee, to the extent permitted thereunder; and
(ii) to enforce the obligations of the Issuers, the Subsidiary Guarantors
or any Restricted Subsidiary under this Indenture or the Collateral
Documents.  Upon receipt of notice that
a Restricted Subsidiary or a Subsidiary Guarantor is not in compliance with any
of the requirements of any Collateral Document, the Trustee may, but shall have
no obligation to purchase, at the Issuers’ expense, such insurance coverage
necessary to comply with the appropriate section of such Collateral Document.

 

Section 11.05         Certificates
of the Issuers.

 

The Issuers shall furnish to the Trustee, prior to each proposed
release of Collateral pursuant to the Collateral Documents, (i) all
documents required by TIA § 314(d) and (ii) an Opinion of Counsel in the
United States, which may be rendered by internal counsel to the Issuers, to the
effect that, subject to customary assumptions and exclusions, such accompanying
documents constitute all documents required by TIA § 314(d).  The Trustee may, to the extent permitted by
Sections 7.01 and 7.02 hereof, accept as conclusive evidence of compliance with
the foregoing provisions the appropriate statements contained in such documents
and such Opinion of Counsel.

 

Section 11.06         Certificates
of the Trustee.

 

In the event that the Issuers wish to release Collateral in accordance
with the Collateral Documents and has delivered the certificates and documents
required by the Collateral Documents and Sections 11.03 and 11.04 hereof, the
Trustee shall determine whether it has received all documentation required by
TIA § 314(d) in connection with such release and, based on such determination
and the Opinion of Counsel delivered pursuant to Section 11.05(ii), shall
deliver a certificate to the Issuers setting forth such determination.

 

Section 11.07         Authorization
of Actions to Be Taken by the Trustee Under the Collateral Documents.

 

Subject to the provisions of Sections 7.01, 7.02 and 7.12 hereof, the
Trustee may (but shall not be obligated to, and shall have no liability for failure
to), in its sole discretion and without the consent of the Holders of Notes, on
behalf of the Holders of Notes, take all actions it deems necessary or
appropriate in order to (a) enforce any of the terms of the Collateral
Documents and (b) collect and receive any and all amounts payable in respect of
the Obligations of the Issuers hereunder, including, but not limited to, the
appointment and approval of collateral agents and the appointment and approval
of an insurance trustee.  The Trustee
shall have power to institute and maintain such suits and proceedings as it may
deem expedient to prevent any impairment of the Collateral by any acts that may
be unlawful or in violation of the Collateral Documents or this Indenture, and
such suits and proceedings as the Trustee may deem expedient 

 

99

 

to preserve or protect its interests and the interests
of the Holders of Notes in the Collateral (including power to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with
any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance
with, such enactment, rule or order would impair the security interest
hereunder or be prejudicial to the interests of the Holders of Notes or of the
Trustee).

 

Section 11.08         Trustee’s
Duties.

 

The powers and duties conferred upon the Trustee by this Article Eleven
are solely to protect the Collateral and shall not impose any duty upon the
Trustee to exercise any such powers and duties, except as expressly provided in
this Indenture.  The Trustee shall be
under no duty whatsoever to the Issuers, any Subsidiary Guarantor, or any other
Affiliate of the Issuers party to a Collateral Document to make or give any
presentment, demand for performance, notice or nonperformance, protest, notice
of protest, notice of dishonor, or other notice or demand in connection with
any Collateral, or to take any steps necessary to preserve this Indenture.  The Trustee shall not be liable to the
Issuers, any Subsidiary Guarantor, or any other Affiliate of the Issuers party
to a Collateral Document for failure to collect or realize upon any or all of the
Collateral, or for any delay in doing so, nor shall the Trustee be under any
duty to the Issuers, any Subsidiary Guarantor, or any other Affiliate of the
Issuers party to a Collateral Document to take any action whatsoever with
regard thereto.  The Trustee shall have
no duty to the Issuers, any Subsidiary Guarantor, any other Affiliate of the
Issuers party to a Collateral Document or any Holder to comply with any
recording, filing or other legal requirements necessary to establish or
maintain the validity, perfection, priority or enforceability of the Liens in,
or the Trustee’s or any Holder’s rights in or to, any of the Collateral or to
perform on behalf of the Issuers under any Collateral Documents.

 

Section 11.09         Authorization
of Receipt of Funds by the Trustee Under the Collateral Documents.

 

Upon an Event of Default and so long as such Event of Default
continues, the Trustee may exercise in respect of the Collateral, in addition
to the other rights and remedies provided for herein, in the Collateral
Documents or otherwise available to it, all of the rights and remedies of a
secured party under the Uniform Commercial Code or other applicable law, and
the Trustee may also upon obtaining possession of the Collateral as set forth
herein, without notice to the Issuers or any Subsidiary Guarantor, except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker’s board or at any of the
Trustee’s offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Trustee may deem commercially reasonable.  The Issuers and the Subsidiary Guarantors
acknowledge and agree that any such private sale may result in prices and other
terms less favorable to the seller than if such a sale were a public sale.  The Issuers and the Subsidiary Guarantors
agree that, to the extent notice of sale shall be required by law, at least ten
(10) days’ notice to the Issuers or the Subsidiary Guarantors, as applicable,
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification.  The Trustee shall not be obligated to make
any sale regardless of notice of sale having been given.  The Trustee may adjourn any public or
private sale from time to time 

 

100

 

by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.

 

Any cash that is Collateral held by the Trustee and all cash proceeds
received by the Trustee in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied (unless
otherwise provided for in the Collateral Documents and after payment of any and
all amounts payable to the Trustee pursuant to this Indenture and the
Collateral Documents), as the Trustee shall determine or as the Holders of the
Notes shall direct pursuant to Section 6.05 hereof, (a) against the
obligations for the ratable benefit of the Holders of the Notes, (b) to
maintain, repair or otherwise protect the Collateral or (c) to take such
other action to protect the other rights of the Holders of the Notes or to take
any other appropriate action or remedy for the benefit of the Holders of the
Notes.  Any surplus of such cash or cash
proceeds held by the Trustee and remaining after payment in full of all the
obligations shall be paid over to the applicable Issuer or Subsidiary Guarantor
or to whomsoever may be lawfully entitled to receive such surplus or as a court
of competent jurisdiction may direct.

 

Section 11.10         Termination
of Security Interest.

 

Upon the payment in full of all Obligations of the Issuers under this
Indenture and the Notes, the Trustee shall (at the request of the Issuers
accompanied by (a) an Officers’ Certificate of the Issuers to the Trustee
stating that such Obligations have been paid in full, and (b) instructions
from the Issuers to the Trustee to release the Liens pursuant to this Indenture
and the Collateral Documents) release the Liens securing the Collateral.

 

Section 11.11         Cooperation
of Trustee.

 

In the event the Issuers or any Subsidiary Guarantor pledges or grants
a security interest in additional Collateral, the Trustee shall cooperate with
the Issuers or such Subsidiary Guarantor in reasonably and promptly agreeing to
the form of, and executing as required, any instruments or documents necessary
to make effective the security interest in the Collateral to be so substituted
or pledged.  To the extent practicable,
the terms of any security agreement or other instrument or document
necessitated by any such substitution or pledge shall be comparable to the
provisions of the existing Collateral Documents.  Subject to, and in accordance with, the requirements of this
Article Eleven and the terms of the Collateral Documents, in the event that the
Issuer or any Subsidiary Guarantor engages in any transaction pursuant to
Section 11.03 hereof, the Trustee shall cooperate with the Issuer or such
Subsidiary Guarantor in order to facilitate such transaction in accordance with
any reasonable time schedule proposed by the Issuers, including by delivering
and releasing the Collateral in a prompt and reasonable manner.

 

Section 11.12         Collateral
Agent.

 

The Trustee may, from time to time, appoint one or more Collateral
Agents hereunder.  Each of such
Collateral Agents may be delegated any one or more of the duties or rights of
the Trustee hereunder or under the Collateral Documents or which are specified
in any Collateral Documents, including without limitation the right to hold any
Collateral in the name of, registered to, or in the physical possession of,
such Collateral Agent, for the ratable benefit of 

 

101

 

the Holders of the Notes.  Each such Collateral Agent shall have such rights and duties as
may be specified in an agreement between the Trustee and such Collateral Agent.

 

Section 11.13         Intercreditor
Agreement.

 

The Issuers agree, and each Holder by accepting a Note agrees, that the
liens on the Collateral securing the payment of the principal of, premium and
Liquidated Damages, if any, and interest on the Notes shall be junior to the
liens securing the obligations of the Partnership under the New Credit Facility
and shall, in all respects, be subject to the terms and conditions of the
Intercreditor Agreement.  Each Holder by
accepting a Note authorizes and directs the Trustee to execute and deliver the
Intercreditor Agreement and take all action as is necessary or appropriate to
acknowledge and effectuate the provisions of the Intercreditor Agreement and
appoints the Trustee as attorney-in-fact for any and all such purposes.  Each Holder by accepting a Note acknowledges
and agrees that the provisions of the Intercreditor Agreement are, and are
intended to be, an inducement and a consideration to each of the lenders under
the New Credit Facility in advancing funds to the Partnership pursuant to the
terms of the New Credit Facility, and each such lender under the New Credit
Facility shall be deemed to have conclusively relied upon the terms of the
Intercreditor Agreement and the agreements of the Holders of Notes contained in
this Section 11.13.  The Issuers, the
Trustee and each Holder of Notes further agree that in the event of a conflict
or inconsistency between the terms of this Indenture and the terms of the
Intercreditor Agreement, the Intercreditor Agreement shall control.

 

ARTICLE TWELVE

SATISFACTION AND DISCHARGE

 

Section 12.01         Satisfaction
and Discharge.

 

This Indenture will be discharged and will cease to be of further
effect as to all Notes issued thereunder, when:

 

(a)   Either:

 

(i)            all Notes that have been
authenticated (except lost, stolen or destroyed Notes that have been replaced
or paid and Notes for whose payment money has theretofore been deposited in
trust and thereafter repaid to the Issuers) have been delivered to the Trustee
for cancellation; or

 

(ii)           all Notes that have not been
delivered to the Trustee for cancellation have become due and payable by reason
of the making of a notice of redemption or otherwise or will become due and
payable within one year and the Issuers or any Subsidiary Guarantor have
irrevocably deposited or caused to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such amounts
as will be sufficient without consideration of any reinvestment of interest, to
pay and discharge the entire indebtedness on the Notes not delivered to the
Trustee for cancellation for principal, interest, the

 

102

 

maximum amount
payable as premium and Liquidated Damages, if any, to the date of maturity or
redemption;

 

(b)   no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which either of the Issuers
or any Subsidiary Guarantor is a party or by which either of the Issuers or any
Subsidiary Guarantor is bound;

 

(c)   the Issuers and each Subsidiary Guarantor has paid or caused to be
paid all sums payable by it under this Indenture; and

 

(d)   the Issuers have delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.

 

The Issuers shall deliver an Officers’ Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction
and discharge have been satisfied.

 

Notwithstanding the above, the Trustee shall pay to the Issuers from
time to time upon the request of the Partnership any cash or Government
Securities held by it as provided in this section which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification delivered to the Trustee, are in excess of the amount thereof
that would then be required to be deposited to effect a satisfaction and
discharge under this Article Twelve.

 

Section 12.02         Deposited
Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions.

 

Subject to Section 12.03 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 12.02, the
“Trustee”) pursuant to Section
12.01 hereof in respect of the outstanding Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Issuers acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due thereon in respect
of principal, premium and Liquidated Damages, if any, and interest, but such
money shall be segregated from other funds except to the extent required by law.

 

Section 12.03         Repayment
to Issuers.

 

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

 

103

 

shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuers cause to be published once, in the
New York Times or 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 Partnership.

 

ARTICLE THIRTEEN

JOINT AND SEVERAL LIABILITY

 

Section 13.01         Joint
and Several Liability.

 

(a)           Notwithstanding
any contrary provision contained in this Indenture, the Notes and the
Collateral Documents to which both of the Issuers are a party, the representations,
warranties, covenants, agreements and obligations of the Issuers, and either of
them, shall be deemed joint and several. 
Any waiver including, without limitation, any suretyship waiver, made by
either Issuer in this Indenture, the Notes or any Collateral Document to which
both of the Issuers are a party shall be deemed to be made also by the other
Issuer and references in any such waiver to either Issuer shall be deemed to
include the other Issuer and each of them.

 

(b)           Notwithstanding
any contrary provision contained in this Indenture, the Notes or any Collateral
Document to which both of the Issuers are a party, each such document to which
both Issuers are party shall be deemed to include, without limitation, the
following waivers:

 

Each of the Issuers hereby waives and relinquishes all rights and
remedies accorded by applicable law to sureties or guarantors and agrees not to
assert or take advantage of any such rights or remedies, including, without
limitation, (a) any right to require the Trustee or any of the Holders
(each a “Beneficiary”) to proceed
against either of the Issuers or any other Person or to proceed against or
exhaust any security held by a Beneficiary at any time or to pursue any other
remedy in the power of a Beneficiary before proceeding against such Issuer or
other Person, (b) the defense of the statute of limitations in any action
hereunder or in any action for the collection or performance of the Obligations
under this Indenture, the Notes and any of the Collateral Documents
(collectively, the “Note Obligations”),
(c) any defense that may arise by reason of the incapacity, lack of
authority, death or disability of any Person or the failure of a Beneficiary to
file or enforce a claim against the estate (in administration, bankruptcy or
any other proceeding) of any Person, (d) appraisal, valuation, stay,
extension, marshaling of assets, redemption, exemption, demand, presentment,
protest and notice of any kind, including, without limitation, notice of the
existence, creation or incurring of any new or additional indebtedness or
obligation or of any action or non-action on the part of a Beneficiary, any
Issuer, any endorser, guarantor or creditor of either Issuer or on the part of
any other Person under this or any other instrument or document in connection
with any Obligation or evidence of Indebtedness held by a Beneficiary as
collateral or in connection with the Note Obligations, (e) any defense
based upon an election of remedies by a Beneficiary, including, without limitation,
an election to proceed by non-judicial rather than judicial foreclosure, which
destroys or otherwise impairs the subrogation rights of either Issuer, the
right of either Issuer to proceed against the other Issuer or any other Person
for reimbursement, or both, (f) any defense based upon any statute or rule
of law which

 

104

 

 provides that
the obligation of a surety must be neither larger in amount nor in other
respects more burdensome that that of the principal, (g) any duty on the
party of a Beneficiary to disclose to either Issuer any facts a Beneficiary may
now or hereafter know about either of the Issuers or any other Person,
regardless of whether a Beneficiary has reason to believe that any such facts
materially increase the risk beyond that which such Issuer intends to assume,
or has reason to believe that such facts are unknown to such Issuer, or has a
reasonable opportunity to communicate such facts to either Issuer, because each
Issuer acknowledges that each Issuer is fully responsible for being and keeping
informed of the financial condition of each of the Issuers or any other Person
and of all circumstances bearing on the risk of non-payment of any Note
Obligations, (h) any defense arising because of the election of a
Beneficiary, in any proceeding instituted under the Federal Bankruptcy Code, of
the application of Section 1111(b)(2) of the Federal Bankruptcy Code,
(i) any defense based upon any borrowing or grant of a security interest under
Section 364 of the Federal Bankruptcy Code, (j) any claim or other rights
which it may now or hereafter acquire against the other Issuer or any other
Person that arises from the existence or performance of each Issuer of its
Obligations under this Indenture, the Notes or any Collateral Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, any right to participate in any
claim or remedy by a Beneficiary against the other Issuer or any collateral
which a Beneficiary now has or hereafter acquires, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law, by
any payment made hereunder or otherwise, including, without limitation, the
right to take or receive from either of the Issuers or any other Person,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights,
(k) any rights which it may acquire by way of contribution under this
Indenture, the Notes or any Collateral Document, by any payment made hereunder
or otherwise, including, without limitation, the right to take or receive from
any other Person, directly or indirectly, in cash or other property or by set-off
or in any manner, payment or security on account of such contribution rights,
and (1) any defense based on one-action laws and any other anti-deficiency
protections granted to guarantors by applicable law.  No failure or delay on the Trustee’s part in exercising any
power, right or privilege under this Indenture shall impair or waive one such
power, right or privilege.  Each of the
Issuers acknowledges and agrees that any nonrecourse or exculpation provided
for in this Indenture, the Notes or any Collateral Document, or any other
provision of this Indenture, the Notes or any Collateral Document, limiting the
benefitted parties’ recourse to specific collateral, or limiting the benefitted
parties’ right to enforce a deficiency judgment against the Issuers, shall have
absolutely no application to the Issuers’ liability under this Indenture, the
Notes or any Collateral Documents.

 

(c)           In
the event of any inconsistency between the provisions of this Article Thirteen
and the corresponding provisions of this Indenture, the Notes or any Collateral
Document to which both of the Issuers are a party, the provisions of this
Indenture shall govern.

 

ARTICLE FOURTEEN

MISCELLANEOUS

 

Section 14.01         Trust
Indenture Act Controls.

 

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

 

105

 

Section 14.02         Notices.

 

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

 

If to either of the Issuers and/or any Subsidiary Guarantor:

 

Circus and
Eldorado Joint Venture

407 North Virginia Street

Reno, Nevada  89501

Attention:  Bruce Sexton

 

With a copy to:

 

Wolf, Block,
Schorr and Solis-Cohen LLP

1650 Arch Street, 22nd Floor

Philadelphia,
Pennsylvania,  19103-2097

Attention:  Howell J. Reeves, Esq.

 

If to the Trustee:

 

The Bank of New
York

c/o United States Trust Company

114 West 47th Street, 25th Floor

New York, New York 10036

Attention:  Corporate Trust Agency

 

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

 

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

 

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

 

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

 

106

 

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

 

Section 14.03         Communication
by Holders of Notes with Other Holders of Notes.

 

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

 

Section 14.04         Certificate
and Opinion as to Conditions Precedent.

 

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

 

(a)   an Officers’ Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 14.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and

 

(b)   an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 14.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.

 

Section 14.05         Statements
Required in Certificate or Opinion.

 

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

 

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

 

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

 

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

 

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

 

Section 14.06         Rules
by Trustee and Agents.

 

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

 

107

 

Section 14.07         No
Personal Liability of Partners, Management Committee Members, Officers,
Employees and Stockholders.

 

No director, officer, employee, partner, member, Management Committee
member, incorporator or stockholder of either of the Issuers or any Affiliate,
shall have any liability for any obligations of either of the Issuers or any
Subsidiary Guarantor, under the Notes, this Indenture, the Subsidiary
Guarantee, the Collateral Documents or for any claim based on, in respect of,
or by reason of, such obligations or their creation.  Each Holder of Notes by accepting a Note waives and releases
these individuals from all such liability. 
The waiver and release are part of the consideration for issuance of the
Notes.

 

Section 14.08         Governing
Law.

 

THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

Section 14.09         No
Adverse Interpretation of Other Agreements.

 

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

 

Section 14.10         Successors.

 

All agreements of the Issuers in this Indenture, each of the Collateral
Documents to which they are a party and the Notes shall bind their
successors.  All agreements of the
Trustee in this Indenture shall bind its successors.  All agreements of each Subsidiary Guarantor in this Indenture,
each of the Collateral Documents to which it is a party and its Subsidiary
Guarantee shall bind its successors, except as otherwise provided in Section
10.07.

 

Section 14.11         Severability.

 

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

 

Section 14.12         Counterpart
Originals.

 

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

 

Section 14.13         Acts
of Holders.

 

(a)           Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by the Holders may be
embodied in 

 

108

 

and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Issuers and
the Subsidiary Guarantors.  Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of the Holders signing
such instrument or instruments.  Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and conclusive in favor
of the Trustee, the Issuers and the Subsidiary Guarantors, if made in the
manner provided in this Section 14.13.

 

(b)           The
fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to such witness, notary or officer the
execution thereof.  Where such execution
is by a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of authority.  The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.

 

(c)           Notwithstanding
anything to the contrary contained in this Section 14.13, the principal amount
and serial numbers of Notes held by any Holder, and the date of holding the
same, shall be proved by the register of the Notes maintained by the Registrar
as provided in Section 2.03 hereof.

 

(d)           If
the Issuers shall solicit from the Holders of the Notes any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Issuers
may, at their option, by or pursuant to a resolution of their Management
Committee or Board of Directors, as applicable, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Issuers
shall have no obligation to do so. 
Notwithstanding TIA § 316(c), such record date shall be the record
date specified in or pursuant to such resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith or the date of the most recent list of
Holders forwarded to the Trustee prior to such solicitation pursuant to Section
2.05 hereof and not later than the date such solicitation is completed.  If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record
at the close of business on such record date shall be deemed to be Holders for
the purposes of determining whether Holders of the requisite proportion of the
then outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the then outstanding Notes shall be computed as of such record
date; provided that
no such authorization, agreement or consent by the Holders on such record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than eleven months after the record
date.

 

(e)           Any
request, demand, authorization, direction, notice, consent, waiver or other Act
of the Holder of any Note shall bind every future Holder of the same Note and
the 

 

109

 

Holder of every
Note issued upon the registration or transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done, omitted or suffered to be done by
the Trustee or the Issuers in reliance thereon, whether or not notation of such
action is made upon such Note.

 

(f)            Without
limiting the foregoing, a Holder entitled hereunder to take any action
hereunder with regard to any particular Note may do so itself with regard to
all or any part of the principal amount of such Note or by one or more duly
appointed agents each of which may do so pursuant to such appointment with regard
to all or any part of such principal amount.

 

Section 14.14         Benefit
of Indenture.

 

Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent, any
Registrar and their successors hereunder, and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.

 

Section 14.15         Table of Contents, Headings, Etc.

 

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

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

110

 

SIGNATURES

 

	
  Dated as of March 5,
  2002

  	
  CIRCUS AND ELDORADO
  JOINT VENTURE

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  By:

  	
  /s/ Gary Carano

  	
   

  	
   

  
	
  Title:

  	
  Name:

  	
   

  
	
   

  	
  Title: Chief Executive
  Officer

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated as of March 5,
  2002

  	
  SILVER LEGACY CAPITAL
  CORP.

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary Carano

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
  Name:

  	
  Title: President and
  CEO

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated as of March 5,
  2002

  	
  THE BANK OF NEW YORK

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
  By:

  	
  /s/ John Guiliano

  	
   

  	
   

  	 

	
   

  	
   

  	
  Name:

  	
   

  
	
  Authorized Signatory

  	
  Title: Authorized Signatory

  	
   

  
													

 

111

 

EXHIBIT
A1

 

[Face of
Note]

 

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED
IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT
OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER
ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE,
(II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.

 

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

 

A1-1

 

	
   

  	
   

  	
  CUSIP

  	
                           

  
	
   

  	
   

  	
   

  
	
  No. 1

  	
   

  	
  $

  	
                       

  
					

 

CIRCUS
AND ELDORADO JOINT VENTURE

 

and

 

SILVER
LEGACY CAPITAL CORP.

 

10
1/8% Mortgage Notes due 2012

 

CIRCUS AND ELDORADO JOINT VENTURE, a Nevada general partnership (the “Partnership”), and SILVER LEGACY CAPITAL
CORP., a Nevada corporation (“Capital”
and, together with the Partnership, the “Issuers,”
which term includes any successor under the Indenture hereinafter referred to),
for value received, promises to pay to Cede & Co., or its registered
assigns, the principal sum of                         Million Dollars ($          ) on                     , 2012.

 

Interest Payment Dates:
March 1 and September 1, commencing September 1, 2002.

 

Record Dates: February 15
and August 15.

 

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

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

A1-2

 

IN WITNESS WHEREOF, the Issuers have caused this Note to be signed
manually or by facsimile by their duly authorized officers.

 

	
   

  	
  CIRCUS AND ELDORADO
  JOINT VENTURE

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  SILVER LEGACY CAPITAL
  CORP.

  	 

	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  [corporate seal]

  
						

 

This is one of the 10
1/8% Mortgage Notes due 2012 described in the within-mentioned Indenture.

 

Dated:  March 5, 2002

 

THE BANK OF NEW YORK

  as Trustee

 

	
  By:

  	
   

  
	
  Authorized Signatory

  

 

A1-3

 

[Reverse Side of Note]

 

CIRCUS
AND ELDORADO JOINT VENTURE

 

and

 

SILVER
LEGACY CAPITAL CORP.

 

10 1/8% Mortgage Notes
due 2012

 

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

 

1.             Interest.  The Issuers promise to pay interest on the
principal amount of this Note at 10 1/8% per annum from September 1, 2002,
until maturity and shall pay the Liquidated Damages, if any, payable pursuant
to Section 4 of the Registration Rights Agreement referred to below.  The Issuers shall pay interest and
Liquidated Damages, if any, semi-annually in arrears on March 1 and September 1
of each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an “Interest Payment Date”).  Interest on the Notes shall accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance; provided
that if there is no existing Default in the payment of interest, and if this
Note is authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided
further that the first Interest Payment Date shall be September 1,
2002.  Interest shall be computed on the
basis of a 360-day year of twelve 30-day months.

 

2.             Method of Payment.  The Issuers shall pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the February 15 or
August 15 next preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest.  The Notes shall be payable as
to principal, premium and Liquidated Damages, if any, and interest at the
office or agency of the Issuers maintained for such purpose in The City of New
York maintained for such purposes, or, at the option of the Issuers, payment of
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 shall be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Issuers or the Paying Agent. 
Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.

 

3.             Paying Agent and Registrar.  Initially, The Bank of New York, the Trustee
under the Indenture, shall act as Paying Agent and Registrar.  The Issuers may change any Paying Agent or
Registrar without notice to any Holder. 
So long as no Event of Default has occurred under the Indenture, the
Issuers or any of their Restricted Subsidiaries may act in any such capacity.

 

A1-4

 

4.             Indenture and Collateral
Documents.  The Issuers issued the
Notes under an Indenture dated as of March 5, 2002 (“Indenture”) among the Issuers, the Subsidiary Guarantors
from time to time party thereto and the Trustee.  The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code §§ 77aaa77bbbb).  The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms.  To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. 
The Notes are secured obligations of the Issuers and the Subsidiary
Guarantors limited to $180,000,000 in aggregate principal amount.  The Notes are secured by the Collateral as
set forth in the Collateral Documents.

 

5.             Optional Redemption.

 

(a)           Except
as set forth in subparagraph (b) of this Paragraph 5, the Issuers shall not
have the option to redeem the Notes prior to March 1, 2007.  Thereafter, the Issuers shall have the
option to redeem the Notes, in whole or in part, upon not less than 30 nor more
than 60 days’ prior notice, at the redemption prices (expressed as percentages
of principal amount) set forth below plus accrued and Liquidated Damages, if
any, thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on March 1 of the years indicated below (subject to the right
of Holder on the relevant record date to receive interest due on the related
Interest Payment Date):

 

	
  Year

  	
   

  	
   

  	
  Percentage

  	
   

  
	
  2007

  	
   

  	
   

  	
  105.0625

  	
  %

  
	
  2008

  	
   

  	
   

  	
  103.3750

  	
  %

  
	
  2009

  	
   

  	
   

  	
  101.6875

  	
  %

  
	
  2010
  and thereafter

  	
   

  	
   

  	
  100.0000

  	
  %

  

 

(b)           Notwithstanding
the provisions of subparagraph (a) of this Paragraph 5, at any time prior to
March 1, 2005, the Issuers may redeem up to 35% of the aggregate principal
amount of the Notes at a redemption price of 110.125% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date, with the net cash proceeds of one or more sales of Capital
Stock of the Partnership, resulting, for each offering, in net cash proceeds to
the Partnership in excess of $25.0 million; provided
that:

 

(1)           at least 65% of the
aggregate principal amount of the Notes issued under the Indenture remains
outstanding immediately after the occurrence of such redemption (excluding
Notes held by the Partnership and its Subsidiaries); and

 

(2)           the redemption must
occur within 45 days following the date of the closing of such offering.

 

6.             Mandatory
Redemption.

 

(a)           Except
as set forth in subparagraph 6(b) and Paragraph 7 below, the Issuers
shall not be required to make mandatory redemption payments with respect to the
Notes.

 

A1-5

 

(b)           If
any Gaming Authority in any jurisdiction in which the Partnership, either of
its partners or any of their respective Affiliates as of the date of the
Indenture currently conducts or, in the future may conduct, directly or
indirectly through a subsidiary or joint venture, gaming notifies a Holder or
beneficial owner of the Notes that the Holder or beneficial owner must be
licensed, qualified or found suitable under any applicable gaming law and the
Holder or beneficial owner does not apply for a license, qualification or
finding of suitability within 30 days after being requested to do so by such Gaming
Authority (or such lesser period that may be required by such Gaming Authority)
or if such Holder or beneficial owner will not be so licensed, qualified or
found suitable under applicable gaming law, the Issuers have the right, at
their option, (i) to require such Holder or beneficial owner to dispose of such
Holder or beneficial owner’s Notes within 30 days (or such earlier date as may
be required by the applicable Gaming Authority), of (A) the termination of the
30-day period or any shorter period as may be required by a Gaming Authority,
in each case as described above, for the Holder or beneficial owner to apply
for a license, qualification or finding of suitability or (B) the receipt of
notice from the Gaming Authority that the Holder or beneficial owner will not
be licensed, qualified or found suitable or (ii) to call for redemption of the
Notes of such Holder or beneficial owner at a redemption price equal to (A) the
lesser of (1) 100% of the principal amount thereof or (2) the price at which such
Holder or beneficial owner acquired the Notes and (3) the fair market value of
the Notes, together with, in each case, accrued and unpaid interest and
Liquidated Damages, if any, to the earlier of the date of redemption or such
earlier date as may be required by the Gaming Authority or that such Holder
will not be licensed or qualified or found suitable by such Gaming Authority,
which may be less than 30 days following the notice of redemption, if so
ordered by such Gaming Authority or (B) such other redemption price as shall be
ordered by the Gaming Authority. 
Immediately upon a determination that a Holder or beneficial owner will
not be licensed, qualified or found suitable, the Holder or beneficial owner
will have no further rights (1) to exercise any right conferred by the Notes,
directly or indirectly, through any trustee, nominee or any other Person or
entity, or (2) to receive any interest or other distribution or payment with
respect to the Notes or any remuneration in any form from the Issuers for
services rendered or otherwise, except the redemption price of the Notes.  The Holder or beneficial owner of Notes
applying for a license, qualification or a finding of suitability must pay all
costs of the licenses or investigation for this qualification or finding of
suitability.  The Issuers are not
required to pay or reimburse any Holder or beneficial owner of Notes who is
required to apply for any license, qualification or finding of suitability.

 

7.             Repurchase at Option of Holder.

 

(a)           If
there is a Change of Control, each Holder of Notes shall have the right to
require the Issuers to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of each Holder’s Notes pursuant to an offer
described below (a “Change of Control Offer”).  In the Change of Control Offer, the Issuers
shall offer a payment in cash equal to 101% of the aggregate principal amount
of Notes repurchased plus accrued and unpaid interest and Liquidated Damages,
if any, to the date of purchase (the “Change of Control Payment”).  Within 30 days following any Change of
Control, the Issuers shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be
no earlier than 30 days and no later than 60 days from the date such notice is
mailed, pursuant to the procedures required by the Indenture and described in
such notice.

 

A1-6

 

(b)           When
the aggregate amount of Excess Proceeds from one or more Asset Sales exceeds
$5.0 million, the Issuers shall commence an offer pursuant to Section 3.10
of the Indenture to all Holders of Notes (“Asset Sale
Offer”) to purchase the maximum principal amount of Notes that may
be purchased out of the Excess Proceeds. 
The offer price in any Asset Sale Offer shall be equal to 100% of
principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of purchase, and shall be payable in cash.  If any Excess Proceeds remain after an Asset
Sale Offer, they shall cease to be “Excess Proceeds” and the Partnership or the
Restricted Subsidiary may use the Excess Proceeds for any purpose not otherwise
prohibited by the Indenture or the Collateral Documents.  If the aggregate principal amount of the
Notes tendered pursuant to such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes to be purchased in the manner described
in Section 3.02 of the Indenture.

 

8.             Notice
of Redemption.  Notice of
redemption shall be mailed by first class mail, postage prepaid, at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address.  No Notes of $1,000 or less shall be redeemed in part unless all
of the Notes held by a Holder are to be redeemed.  Notes in denominations larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000, unless all of the Notes held by a Holder
are to be redeemed.  On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.

 

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

 

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

 

11.           Amendment,
Supplement and Waiver. 
Subject to certain exceptions, the Indenture, the Notes, the Subsidiary
Guarantees or the Collateral Documents may be amended or supplemented by the
Issuers with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04
and 6.07 of the Indenture, any existing Default or Event of Default or
compliance with any provision of the Indenture, the Notes, the Subsidiary
Guarantees or the Collateral Documents may be waived with the consent of the
Holders of a majority in principal of the then outstanding Notes voting as a
single class (including, without limitation, consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Notes).  Without the consent of any Holder, the
Indenture, a Note, the Notes, the Subsidiary Guarantees or the Collateral
Documents may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place 

 

A1-7

 

of certificated Notes, to provide for the assumption
of the Issuers’ or Subsidiary Guarantors’ obligations to Holders of the Notes
in case of a merger or consolidation or sale of all or substantially all of an
Issuer’s or Subsidiary Guarantor’s assets, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, to enter into additional or supplemental Collateral Documents or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.

 

12.           Defaults
and Remedies.  Events of
Default include:  (a) default for 30
days in the payment when due of Interest on, or Liquidated Damages with respect
to, the Notes; (b) default in payment when due of principal of, or premium, if
any, on the Notes; (c) failure by the Issuers or any of their Restricted
Subsidiaries to perform or comply with the provisions described under Sections
4.10, 4.15 or 5.01 of the Indenture; (d) failure by the Issuers or any of their
Restricted Subsidiaries for 30 days after notice thereof to comply with any of
the other agreements representations or warranties in the Indenture, the Notes
or the Collateral Documents (other than as set forth in clauses (a)-(c) above);
(e) default under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Partnership or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Partnership or any of its Restricted
Subsidiaries), whether the Indebtedness or guarantee now exists, or is created
after the date of the Indenture, if that default: (i) is caused by a failure to
pay principal of, or interest or premium, if any, on such Indebtedness prior to
the expiration of the grace period provided in such Indebtedness on the date of
such default (a “Payment Default”)
or (ii) results in the acceleration of such Indebtedness prior to its express
maturity, and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more; (f) failure by the Issuers
or any of their Restricted Subsidiaries to pay final non-appealable judgments
(other than any judgments or portions thereof as to which a repectable insurance
company has accepted full liability in writing) aggregating in excess of
$5.0 million, which judgments are not paid, discharged or stayed for a
period of 60 days; (g) any Subsidiary Guarantee of any Subsidiary Guarantor
shall be held in a judicial proceeding to be unenforceable or invalid or shall
cease for any reason, other than pursuant to the terms of the Indenture, to be
in full force and effect or any Subsidiary Guarantor, or any Person acting on
behalf of any Subsidiary Guarantor, shall deny or disaffirm its obligations
under its Subsidiary Guarantee; (h) breach by either of the Issuers or any of
the Subsidiary Guarantors in any material respect of any representation or
warranty or agreement in any of the Collateral Documents or in any certificates
delivered in connection therewith, the repudiation by any of them of any of its
obligations under any of the Collateral Documents, the unenforceability of the
Collateral Documents against any of them for any reason which continues for 30
days after written notice from the Trustee or Holders of at least 25% in
outstanding principal amount of Notes or the loss of the perfection or priority
of the Liens granted by any of them pursuant to the Collateral Documents for
any reason; (i) any Gaming License is revoked, terminated or suspended or
otherwise ceases to be effective resulting in the cessation or suspension of
operation for a period of more than 30 days of any material portion or aspect
of the Gaming Business of any Gaming Facility; (j)  the Partnership fails to own 100% of the issued and outstanding
Equity Interests of Capital; (k) the cessation of gaming operations of Silver
Legacy Resort Casino for a period of more than 180 consecutive days; (l) either
Issuer or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy 

 

A1-8

 

Law (i) commences a voluntary case, (ii) consents to
the entry of an order for relief against it in an involuntary case, (iii)
consents to the appointment of a Custodian of it or for all or substantially
all of its property, (iv) makes a general assignment for the benefit of its
creditors, or (v) admits in writing its inability generally to pay its debts as
the same become due; or (m) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that (i) is for relief against either Issuer
or any Significant Subsidiary in an involuntary case, (ii) appoints a Custodian
of either Issuer or any Significant Subsidiary or for all or substantially all
of the property of either Issuer or any Significant Subsidiary, or (iii) orders
the liquidation of either Issuer or any Significant Subsidiary, and the order
or decree remains unstayed and in effect for 60 days.

 

In the case of an Event of Default described in (l) or (m) above, all
outstanding Notes will become due and payable without further action or
notice.  Subject to the terms of the
Intercreditor Agreement, if any other Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable
immediately.  Upon such declaration, the
Notes shall become due and payable immediately.  Holders may not enforce the Indenture or the Notes except as
provided in the Indenture.  The Holders
of a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may on behalf of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Defaults or Events of Default (except
nonpayment of principal or interest or Liquidated Damages, if any, on the Notes
that has become due solely because of the acceleration) have been cured as
waived.

 

If any Event of Default occurs by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Issuers with the
intention of avoiding payment of the premium that the Issuers would have had to
pay if the Issuers then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes.  If
an Event of Default occurs prior to March 1, 2007, by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding the prohibition on redemption of the Notes prior to
such date, then the premium specified below shall also become immediately due
and payable to the extent permitted by law upon the acceleration of the Notes.

 

	
  Occurrence of Event of

  Default during the 12 months prior to:

  	
   

  	
  Applicable Premium:

  	
   

  
	
  March 1, 2003

  	
   

  	
  13.5000

  	
  %

  
	
  March 1, 2004

  	
   

  	
  11.8125

  	
  %

  
	
  March 1, 2005

  	
   

  	
  10.1250

  	
  %

  
	
  March 1, 2006

  	
   

  	
  8.4375

  	
  %

  
	
  March 1, 2007

  	
   

  	
  6.7500

  	
  %

  

 

13.           Subsidiary
Guarantees.  The Issuers’
obligations under the Notes are fully and unconditionally guaranteed, jointly
and severally, by the Subsidiary Guarantors, as provided in Article Ten of the
Indenture.

 

A1-9

 

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

 

15.           No
Recourse Against Others.  A
partner, member, Management Committee member, director, officer, employee,
incorporator or stockholder, of either of the Issuers or any Affiliate shall
not have any liability for any obligations of the Issuers or any Subsidiary
Guarantors under the Notes, the Indenture, the Subsidiary Guarantees, the
Collateral Documents or for any claim based on, in respect of, or by reason of,
such obligations or their creation. 
Each Holder by accepting a Note waives and releases these individuals
from all such liability.  The waiver and
release are part of the consideration for the issuance of the Notes.

 

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

 

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

 

18.           Additional
Rights of Holders of Restricted Global Notes and Restricted Definitive Notes.  In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of March 5, 2002, between the Issuers
and the parties named on the signature pages thereof (the “Registration Rights Agreement”).

 

19.           CUSIP
Numbers.  Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Issuers have caused CUSIP numbers to be printed on the Notes
and the Trustee may use CUSIP numbers in notices of redemption as a convenience
to Holders.  No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

 

The Issuers shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement.  Requests may be made to:

 

Circus and Eldorado Joint
Venture

407 North Virginia Street

Reno, Nevada  89501

Attention:  Bruce Sexton

 

A1-10

 

Assignment
Form

 

To assign this Note, fill in the form below:

 

	
  (I) or (we) assign and
  transfer this Note to:

  	
   

  
	
  (Insert assignee’s legal name)

  
	
   

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

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  
	
   

  
	
  and irrevocably appoint
  

  	
   

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

  
			

 

	
  Date: 

  	
   

  	
   

  
	
  Your Signature:

  	
   

  
	
  (Sign exactly as your name
  appears on the face of this Note)

  
	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  
						

 

*  Participant in a recognized Signature
Guarantee Medallion Program (or other signature guarantor acceptable to the
Trustee).

 

A1-11

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Issuers
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:

 

	
  0
  Section 4.10

  	
   

  	
  0
  Section 4.15

  

 

If you want to elect to have only part of the Note purchased by the
Issuers pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:

 

	
  $

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
	
  Your Signature:

  	
   

  
	
  (Sign exactly as your name
  appears on the face of this Note)

  
	
   

  
	
   

  	
  Tax Identification No.:

  	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  
										

 

* 
Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

 

A1-12

 

SCHEDULE
OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

 

The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note,
have been made:

 

	
  Date of Exchange

  	
   

  	
  Amount of
  Decrease in  

  Principal
  amount  of this 

  Global Note

  	
   

  	
  Amount of
  Increase in  

  Principal
  amount  of this 

  Global Note

  	
   

  	
  Principal
  amount  of this 

  Global Note  Following
  such  

  decrease
  (or increase)

  	
   

  	
  Signature
  of  Authorized 

  Officer  of Trustee or  Note 

  Custodian

  	
   

  

 

 

 

 

 

 

A1-14

 

EXHIBIT
A2

 

[Face of Note]

 

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED
IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT
OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER
ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE,
(II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.

 

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

 

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 PROVIDED BY RULE 144A THEREUNDER.  THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (i)(A) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR IN
ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT OR PURSUANT TO ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), (B) TO THE ISSUERS, OR
(C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND (ii) IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND 

 

A2-1

 

THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE.

 

A2-2

 

	
   

  	
   

  	
  CINS

  	
   

  
	
   

  	
   

  	
   

  
	
  No.

  	
   

  	
   

  	
   

  	
  $

  	
   

  
							

 

 

CIRCUS
AND ELDORADO JOINT VENTURE

 

and

 

SILVER
LEGACY CAPITAL CORP.

 

10 1/8% Mortgage Notes
due 2012

 

CIRCUS AND ELDORADO JOINT VENTURE, a Nevada general partnership (the “Partnership”), and SILVER LEGACY CAPITAL
CORP., a Nevada corporation (“Capital”
and, together with the Partnership, the “Issuers,”
which term includes any successor under the Indenture hereinafter referred to),
for value received, promises to pay to Cede & Co., or its registered
assigns, the principal sum of                        Million Dollars ($            ) on                   , 2012.

 

Interest Payment Dates:
March 1 and September 1, commencing September 1 , 2002.

Record Dates: February 15
and August 15.

 

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

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

A2-3

 

IN WITNESS WHEREOF, the issuers have caused this note to be signed
manually or by facsimile by their duly authorized officers.

 

	
   

  	
  CIRCUS AND ELDORADO
  JOINT VENTURE

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  SILVER LEGACY CAPITAL CORP. 

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

This is one of the 10
1/8% Mortgage Notes due 2012 described in the within-mentioned Indenture.

 

Dated:  March 5, 2002

 

THE BANK OF NEW YORK

  as Trustee

 

	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  

 

A2-4

 

[Reverse Side of Regulation S Temporary Global Note]

 

CIRCUS
AND ELDORADO JOINT VENTURE

 

and

 

SILVER
LEGACY CAPITAL CORP.

 

10 1/8% Mortgage Notes
due 2012

 

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

 

1.             Interest.  The Issuers promise to pay interest on the
principal amount of this Note at 10 1/8% per annum from September 1, 2002,
until maturity and shall pay the Liquidated Damages, if any, payable pursuant
to Section 4 of the Registration Rights Agreement referred to below.  The Issuers shall pay interest and
Liquidated Damages, if any, semi-annually in arrears on March 1 and September 1
of each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an “Interest Payment Date”).  Interest on the Notes shall accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance; provided
that if there is no existing Default in the payment of interest, and if this Note
is authenticated between a record date referred to on the face hereof and the
next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided
further that the first Interest Payment Date shall be September 1,
2002.  Interest shall be computed on the
basis of a 360-day year of twelve 30-day months.

 

2.             Method of Payment.  The Issuers shall pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the February 15 or
August 15 next preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest.  The Notes shall be payable as
to principal, premium and Liquidated Damages, if any, and interest at the
office or agency of the Issuers maintained for such purpose in The City of New
York maintained for such purposes, or, at the option of the Issuers, payment of
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 shall be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Issuers or the Paying Agent. 
Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.

 

3.             Paying Agent and Registrar.  Initially, The Bank of New York, the Trustee
under the Indenture, shall act as Paying Agent and Registrar.  The Issuers may change any Paying Agent or
Registrar without notice to any Holder. 
So long as no Event of Default has 

 

A2-5

 

occurred under the Indenture, the Issuers or any of
their Restricted Subsidiaries may act in any such capacity.

 

4.             Indenture and Collateral
Documents.  The Issuers issued the
Notes under an Indenture dated as of March 5, 2002 (“Indenture”) among the Issuers, the Subsidiary Guarantors
from time to time party thereto and the Trustee.  The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code §§ 77aaa77bbbb).  The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms.  To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. 
The Notes are secured obligations of the Issuers and the Subsidiary
Guarantors limited to $180,000,000 in aggregate principal amount.  The Notes are secured by the Collateral as
set forth in the Collateral Documents.

 

5.             Optional Redemption.

 

(a)           Except
as set forth in subparagraph (b) of this Paragraph 5, the Issuers shall not
have the option to redeem the Notes prior to March 1, 2007.  Thereafter, the Issuers shall have the
option to redeem the Notes, in whole or in part, upon not less than 30 nor more
than 60 days’ prior notice, at the redemption prices (expressed as percentages
of principal amount) set forth below plus accrued and Liquidated Damages, if
any, thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on March 1 of the years indicated below (subject
to the right of Holder on the relevant record date to receive interest due on
the related Interest Payment Date):

 

	
  Year

  	
   

  	
   

  	
  Percentage

  	
   

  
	
  2007

  	
   

  	
  105.0625

  	
  %

  
	
  2008

  	
   

  	
  103.3750

  	
  %

  
	
  2009

  	
   

  	
  101.6875

  	
  %

  
	
  2010
  and thereafter

  	
   

  	
  100.0000

  	
  %

  

 

(b)           Notwithstanding
the provisions of subparagraph (a) of this Paragraph 5, at any time prior to
March 1, 2005, the Issuers may redeem up to 35% of the aggregate principal
amount of the Notes at a redemption price of 110.125% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date, with the net cash proceeds of one or more sales of Capital
Stock of the Partnership, resulting, for each offering, in net cash proceeds to
the Partnership in excess of $25.0 million; provided
that:

 

(1)           at least 65% of the
aggregate principal amount of the Notes issued under the Indenture remains
outstanding immediately after the occurrence of such redemption (excluding
Notes held by the Partnership and its Subsidiaries); and

 

(2)           the redemption must
occur within 45 days following the date of the closing of such offering.

 

6.             Mandatory
Redemption.

 

A2-6

 

(a)           Except
as set forth in subparagraph 6(b) and Paragraph 7 below, the Issuers
shall not be required to make mandatory redemption payments with respect to the
Notes.

 

(b)           If
any Gaming Authority in any jurisdiction in which the Partnership, either of
its partners or any of their respective Affiliates as of the date of the
Indenture currently conducts or, in the future may conduct, directly or
indirectly through a subsidiary or joint venture, gaming notifies a Holder or
beneficial owner of the Notes that the Holder or beneficial owner must be
licensed, qualified or found suitable under any applicable gaming law and the
Holder or beneficial owner does not apply for a license, qualification or
finding of suitability within 30 days after being requested to do so by such
Gaming Authority (or such lesser period that may be required by such Gaming
Authority) or if such Holder or beneficial owner will not be so licensed,
qualified or found suitable under applicable gaming law, the Issuers have the
right, at their option, (i) to require such Holder or beneficial owner to
dispose of such Holder or beneficial owner’s Notes within 30 days (or such
earlier date as may be required by the applicable Gaming Authority), of (A) the
termination of the 30-day period or any shorter period as may be required by a
Gaming Authority, in each case as described above, for the Holder or beneficial
owner to apply for a license, qualification or finding of suitability or (B)
the receipt of notice from the Gaming Authority that the Holder or beneficial
owner will not be licensed, qualified or found suitable or (ii) to call for
redemption of the Notes of such Holder or beneficial owner at a redemption
price equal to (A) the lesser of (1) 100% of the principal amount thereof or
(2) the price at which such Holder or beneficial owner acquired the Notes and
(3) the fair market value of the Notes, together with, in each case, accrued
and unpaid interest and Liquidated Damages, if any, to the earlier of the date
of redemption or such earlier date as may be required by the Gaming Authority
or that such Holder will not be licensed or qualified or found suitable by such
Gaming Authority, which may be less than 30 days following the notice of
redemption, if so ordered by such Gaming Authority or (B) such other redemption
price as shall be ordered by the Gaming Authority.  Immediately upon a determination that a Holder or beneficial
owner will not be licensed, qualified or found suitable, the Holder or
beneficial owner will have no further rights (1) to exercise any right
conferred by the Notes, directly or indirectly, through any trustee, nominee or
any other Person or entity, or (2) to receive any interest or other
distribution or payment with respect to the Notes or any remuneration in any
form from the Issuers for services rendered or otherwise, except the redemption
price of the Notes.  The Holder or
beneficial owner of Notes applying for a license, qualification or a finding of
suitability must pay all costs of the licenses or investigation for this
qualification or finding of suitability. 
The Issuers are not required to pay or reimburse any Holder or
beneficial owner of Notes who is required to apply for any license,
qualification or finding of suitability.

 

7.             Repurchase at Option of Holder.

 

(a)           If
there is a Change of Control, each Holder of Notes shall have the right to
require the Issuers to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of each Holder’s Notes pursuant to an offer
described below (a “Change of Control Offer”).  In the Change of Control Offer, the Issuers
shall offer a payment in cash equal to 101% of the aggregate principal amount
of Notes repurchased plus accrued and unpaid interest and Liquidated Damages,
if any, to the date of purchase (the “Change of Control Payment”).  Within 30 days following any Change of
Control, the Issuers shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to 

 

A2-7

 

repurchase Notes on the date specified in such notice,
which date shall be no earlier than 30 days and no later than 60 days from the
date such notice is mailed, pursuant to the procedures required by the
Indenture and described in such notice.

 

(b)           When
the aggregate amount of Excess Proceeds from one or more Asset Sales exceeds
$5.0 million, the Issuers shall commence an offer pursuant to Section 3.10
of the Indenture to all Holders of Notes (“Asset Sale
Offer”) to purchase the maximum principal amount of Notes that may
be purchased out of the Excess Proceeds. 
The offer price in any Asset Sale Offer shall be equal to 100% of
principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of purchase, and shall be payable in cash.  If any Excess Proceeds remain after an Asset
Sale Offer, they shall cease to be “Excess Proceeds” and the Partnership or the
Restricted Subsidiary may use the Excess Proceeds for any purpose not otherwise
prohibited by the Indenture or the Collateral Documents.  If the aggregate principal amount of the
Notes tendered pursuant to such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes to be purchased in the manner
described in Section 3.02 of the Indenture.

 

8.             Notice
of Redemption.  Notice of
redemption shall be mailed by first class mail, postage prepaid, at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address.  No Notes of $1,000 or less shall be redeemed in part unless all
of the Notes held by a Holder are to be redeemed.  Notes in denominations larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000, unless all of the Notes held by a Holder
are to be redeemed.  On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.

 

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

 

This Regulation S Temporary Global Note is exchangeable in whole
or in part for one or more Global Notes only (i) on or after the termination of
the 40-day restricted period (as defined in Regulation S) and (ii) upon
presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Indenture.  Upon exchange of this Regulation S Temporary Global Note for
one or more Global Notes, the Trustee shall cancel this Regulation S
Temporary Global Note.

 

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

 

11.           Amendment,
Supplement and Waiver. 
Subject to certain exceptions, the Indenture, the Notes, the Subsidiary
Guarantees or the Collateral Documents may be amended or 

 

A2-8

 

supplemented by the Issuers with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes voting as a single class (including, without limitation, consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes), and, subject to Sections 6.04 and 6.07 of the Indenture, any
existing Default or Event of Default or compliance with any provision of the
Indenture, the Notes, the Subsidiary Guarantees or the Collateral Documents may
be waived with the consent of the Holders of a majority in principal of the
then outstanding Notes voting as a single class (including, without limitation,
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes).  Without the
consent of any Holder, the Indenture, a Note, the Notes, the Subsidiary
Guarantees or the Collateral Documents may be amended or supplemented to cure
any ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the Issuers’ or Subsidiary Guarantors’ obligations to Holders of the Notes in
case of a merger or consolidation or sale of all or substantially all of an
Issuer’s or Subsidiary Guarantor’s assets, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, to enter into additional or supplemental Collateral Documents or to comply
with the requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.

 

12.           Defaults
and Remedies.  Events of
Default include:  (a) default for 30
days in the payment when due of Interest on, or Liquidated Damages with respect
to, the Notes; (b) default in payment when due of principal of, or premium, if
any, on the Notes; (c) failure by the Issuers or any of their Restricted
Subsidiaries to perform or comply with the provisions described under Sections
4.10, 4.15 or 5.01 of the Indenture; (d) failure by the Issuers or any of their
Restricted Subsidiaries for 30 days after notice thereof to comply with any of
the other agreements representations or warranties in the Indenture, the Notes
or the Collateral Documents (other than as set forth in clauses (a)-(c) above);
(e) default under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Partnership or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Partnership or any of its Restricted
Subsidiaries), whether the Indebtedness or guarantee now exists, or is created
after the date of the Indenture, if that default: (i) is caused by a failure to
pay principal of, or interest or premium, if any, on such Indebtedness prior to
the expiration of the grace period provided in such Indebtedness on the date of
such default (a “Payment Default”)
or (ii) results in the acceleration of such Indebtedness prior to its express
maturity, and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more; (f) failure by the Issuers
or any of their Restricted Subsidiaries to pay final non-appealable judgments
(other than any judgments or portions thereof as to which a repectable insurance
company has accepted full liability in writing) aggregating in excess of
$5.0 million, which judgments are not paid, discharged or stayed for a
period of 60 days; (g) any Subsidiary Guarantee of any Subsidiary Guarantor
shall be held in a judicial proceeding to be unenforceable or invalid or shall
cease for any reason, other than pursuant to the terms of the Indenture, to be
in full force and effect or any Subsidiary Guarantor, or any Person acting on
behalf of any Subsidiary Guarantor, shall deny or disaffirm its obligations
under its Subsidiary Guarantee; (h) breach by either of the Issuers or any of
the Subsidiary Guarantors in any material respect of any representation or
warranty or agreement in any of the Collateral Documents or in any certificates

 

A2-9

 

delivered in connection therewith, the repudiation by
any of them of any of its obligations under any of the Collateral Documents,
the unenforceability of the Collateral Documents against any of them for any
reason which continues for 30 days after written notice from the Trustee or
Holders of at least 25% in outstanding principal amount of Notes or the loss of
the perfection or priority of the Liens granted by any of them pursuant to the
Collateral Documents for any reason; (i) any Gaming License is revoked,
terminated or suspended or otherwise ceases to be effective resulting in the
cessation or suspension of operation for a period of more than 30 days of any
material portion or aspect of the Gaming Business of any Gaming Facility;
(j)  the Partnership fails to own 100%
of the issued and outstanding Equity Interests of Capital; (k) the cessation of
gaming operations of Silver Legacy Resort Casino for a period of more than 180
consecutive days; (l) either Issuer or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law (i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an involuntary
case, (iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property, (iv) makes a general assignment for the
benefit of its creditors, or (v) admits in writing its inability generally to
pay its debts as the same become due; or (m) a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that (i) is for relief
against either Issuer or any Significant Subsidiary in an involuntary case,
(ii) appoints a Custodian of either Issuer or any Significant Subsidiary or for
all or substantially all of the property of either Issuer or any Significant
Subsidiary, or (iii) orders the liquidation of either Issuer or any Significant
Subsidiary, and the order or decree remains unstayed and in effect for 60 days.

 

In the case of an Event of Default described in (l) or (m) above, all
outstanding Notes will become due and payable without further action or
notice.  Subject to the terms of the
Intercreditor Agreement, if any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately.  Upon such declaration, the
Notes shall become due and payable immediately.  Holders may not enforce the Indenture or the Notes except as
provided in the Indenture.  The Holders
of a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may on behalf of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Defaults or Events of Default (except
nonpayment of principal or interest or Liquidated Damages, if any, on the Notes
that has become due solely because of the acceleration) have been cured as
waived.

 

If any Event of Default occurs by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Issuers with the
intention of avoiding payment of the premium that the Issuers would have had to
pay if the Issuers then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes.  If
an Event of Default occurs prior to March 1, 2007, by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding the prohibition on redemption of the Notes prior to
such date, then the premium specified below shall also become immediately due
and payable to the extent permitted by law upon the acceleration of the Notes.

 

A2-10

 

	
  Occurrence of Event of

  Default during the 12 months prior to:

  	
   

  	
  Applicable Premium:

  	
   

  
	
  March 1, 2003

  	
   

  	
  13.5000

  	
  %

  
	
  March 1, 2004

  	
   

  	
  11.8125

  	
  %

  
	
  March 1, 2005

  	
   

  	
  10.1250

  	
  %

  
	
  March 1, 2006

  	
   

  	
  8.4375

  	
  % 

  
	
  March 1, 2007

  	
   

  	
  6.7500

  	
  %

  

 

13.           Subsidiary
Guarantees.  The Issuers’
obligations under the Notes are fully and unconditionally guaranteed, jointly
and severally, by the Subsidiary Guarantors, as provided in Article Ten of the
Indenture.

 

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

 

15.           No
Recourse Against Others.  A
partner, member, Management Committee member, director, officer, employee,
incorporator or stockholder, of either of the Issuers or any Affiliate shall
not have any liability for any obligations of the Issuers or any Subsidiary
Guarantors under the Notes, the Indenture, the Subsidiary Guarantees, the
Collateral Documents or for any claim based on, in respect of, or by reason of,
such obligations or their creation. 
Each Holder by accepting a Note waives and releases these individuals
from all such liability.  The waiver and
release are part of the consideration for the issuance of the Notes.

 

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

 

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

 

18.           Additional
Rights of Holders of Restricted Global Notes and Restricted Definitive Notes.  In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of March 5, 2002, between the Issuers
and the parties named on the signature pages thereof (the “Registration Rights Agreement”).

 

19.           CUSIP
Numbers.  Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Issuers have caused CUSIP numbers to be printed on the Notes
and the Trustee may use CUSIP numbers in notices of redemption as a convenience
to Holders.  No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

 

A2-11

 

The Issuers shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement.  Requests may be made to:

 

Circus and Eldorado Joint
Venture

407 North Virginia Street

Reno, Nevada  89501

Attention:  Bruce Sexton

 

A2-12

 

ASSIGNMENT
FORM

 

To assign this Note, fill in the form below:

 

	
  (I) or (we) assign and
  transfer this Note to:

  	
   

  
	
  (Insert assignee’s legal name)

  
	
   

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

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  
	
   

  
	
  and irrevocably appoint 

  	
   

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

  
			

 

	
  Date: 

  	
   

  	
   

  
	
  Your Signature:

  	
   

  
	
  (Sign exactly as your name
  appears on the face of this Note)

  
	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  
						

 

*  Participant in a recognized Signature
Guarantee Medallion Program (or other signature guarantor acceptable to the
Trustee).

 

A2-13

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Issuers pursuant
to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:

 

	
  0
  Section 4.10

  	
   

  	
  0
  Section 4.15

  

 

If you want to elect to have only part of the Note purchased by the
Issuers pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:

 

	
  $

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
	
  Your Signature:

  	
   

  
	
  (Sign exactly as your name
  appears on the face of this Note)

  
	
   

  
	
   

  	
  Tax Identification No.:

  	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  
										

 

* 
Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

 

A2-14

 

SCHEDULE
OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE

 

The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:

 

	
  Date of Exchange

  	
   

  	
  Amount of
  Decrease in 

  Principal amount 

  of this Global Note

  	
   

  	
  Amount of
  Increase in 

  Principal amount

  of this Global Note

  	
   

  	
  Principal
  amount

  of this Global Note

  Following such

  decrease (or increase)

  	
   

  	
  Signature
  of

  Authorized Officer

  of Trustee or

  Note Custodian

  	
   

  

 

 

 

 

 

 

 

A2-15

 

EXHIBIT
B

 

FORM OF CERTIFICATE OF TRANSFER

 

Circus and Eldorado Joint
Venture

Silver Legacy Capital
Corp.

407 North Virginia Street

Reno, Nevada  89501

Attention:  Bruce Sexton

 

The Bank of New York

c/o United States Trust Company

114 West 47th Street, 25th Floor

New York, New York 10036

Attention:  Corporate Trust Agency

 

Re: 10 1/8% Mortgage Notes due 2012

 

Reference is hereby made to the Indenture, dated as of March 5, 2002
(the “Indenture”), among Circus
and Eldorado Joint Venture (the “Partnership”)
and Silver Legacy Capital Corp. (“Capital”),
as issuers (together, the “Issuers”)and
The Bank of New York, as trustee. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

 

                                           (the “Transferor”) owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $                       
in such Note[s] or interests (the “Transfer”),
to                                       
      (the “Transferee”), as further specified in
Annex A hereto.  In connection with the
Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.             :               Check if Transferee will take
delivery of a beneficial interest in the 144A Global Note or a Definitive Note
Pursuant to Rule 144A.  The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby
further certifies that the beneficial interest or Definitive Note is being
transferred to a Person that the Transferor reasonably believed and believes is
purchasing the beneficial interest or Definitive Note for its own account, or
for one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a “qualified
institutional buyer” within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A and such Transfer is in compliance with any
applicable blue sky securities laws of any state of the United States.  Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Note
and/or the Definitive Note and in the Indenture and the Securities Act.

 

B-1

 

2.             :               Check if Transferee will take
delivery of a beneficial interest in the Regulation S Temporary Global
Note, the Regulation S Permanent Global Note or a Definitive Note pursuant
to Regulation S.  The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and, accordingly, the Transferor hereby further certifies
that (i) the Transfer is not being made to a person in the United States and
(x) at the time the buy order was originated, the Transferee was outside the
United States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the
United States, (ii) no directed selling efforts have been made in contravention
of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the
Securities Act, (iii) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). 
Upon consummation of the proposed transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will
be subject to the restrictions on Transfer enumerated in the Private Placement
Legend printed on the Regulation S Permanent Global Note, the Regulation S
Temporary Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.

 

3.             :               Check and complete if
Transferee will take delivery of a beneficial interest in the IAI Global Note
or a Definitive Note pursuant to any provision of the Securities Act other than
Rule 144A or Regulation S.  The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):

 

(a)           :               such Transfer is being effected
pursuant to and in accordance with Rule 144 under the Securities Act;

 

or

 

(b)           :               such
Transfer is being effected to the Issuers or a subsidiary thereof;

 

or

 

(c)           :               such
Transfer is being effected pursuant to an effective registration statement
under the Securities Act and in compliance with the prospectus delivery
requirements of the Securities Act;

 

or

 

(d)           :               such
Transfer is being effected to an Institutional Accredited Investor and pursuant
to an exemption from the registration requirements of the 

 

B-2

 

Securities Act
other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further
certifies that it has not engaged in any general solicitation within the
meaning of Regulation D under the Securities Act and the Transfer complies with
the transfer restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), to the effect that such
Transfer is in compliance with the Securities Act.  Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the IAI Global Note and/or the Definitive Notes and
in the Indenture and the Securities Act.

 

4.             :               Check if Transferee will take
delivery of a beneficial interest in an Unrestricted Global Note or of an
Unrestricted Definitive Note.

 

(a)           :               Check if Transfer is Pursuant to
Rule 144.  (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act.  Upon consummation of
the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.

 

(b)           :               Check if Transfer is Pursuant to
Regulation S.  (i) The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act.  Upon consummation
of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

(c)           :               Check if Transfer is Pursuant to
Other Exemption.  (i) The Transfer is
being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903
or Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. 
Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will
not be subject to 

 

B-3

 

the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes or Restricted
Definitive Notes and in the Indenture.

 

This certificate and the statements contained herein are made for your
benefit and the benefit of the Partnership.

 

	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name of Transferor]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Dated:

  	
   

  	
   

  	
   

  
							

 

B-4

 

ANNEX
A TO CERTIFICATE OF TRANSFER

 

1.             The Transferor owns and proposes to transfer the
following:

 

[CHECK
ONE OF (A) OR (B)]

 

(a)           :               a beneficial interest in the:

 

(i)            :               144A Global Note (CUSIP                   ); or

 

(ii)           :               Regulation S Global Note
(CUSIP                      ); or

 

(iii)          :               IAI Global Note (CUSIP                      ); or

 

(b)           :               a Restricted Definitive Note.

 

2.             After the Transfer the Transferee will hold:

 

[CHECK
ONE]

 

(a)           :               a beneficial interest in the:

 

(i)            :               144A Global Note (CUSIP                     ); or

 

(ii)           :               Regulation S Global Note
(CUSIP                  ); or

 

(iii)          :               IAI Global Note (CUSIP                    ); or

 

(iv)          :               Unrestricted Global Note
(CUSIP                      ); or

 

(b)           :               a
Restricted Definitive Note; or

 

(c)           :               an
Unrestricted Definitive Note,

 

in accordance with the terms of the Indenture.

 

B-5

 

EXHIBIT
C

FORM OF CERTIFICATE OF
EXCHANGE

 

Circus and Eldorado Joint
Venture

Silver Legacy Capital
Corp.

407 North Virginia Street

Reno, Nevada  89501

Attention:  Bruce Sexton

 

The Bank of New York

c/o United States Trust Company

114 West 47th Street, 25th Floor

New York, New York 10036

Attention:  Corporate TRust Agency

 

Re: 10 1/8% Mortgage Notes due 2012

 

(CUSIP                        )

 

Reference is hereby made to the Indenture, dated as of March 5, 2002
(the “Indenture”), among Circus
and Eldorado Joint Venture (the “Partnership”)
and Silver Legacy Capital Corp. (“Capital”),
as issuers (together, the “Issuers”)and
The Bank of New York, as trustee. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

 

                                                       (the “Owner”) owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount
of $                             in such
Note[s] or interests (the “Exchange”).  In connection with the Exchange, the Owner
hereby certifies that:

 

1.             Exchange of
Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note
for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted
Global Note

 

(a)           :               Check if Exchange is from
beneficial interest in a Restricted Global Note to beneficial interest in an
Unrestricted Global Note.  In connection
with the Exchange of the Owner’s beneficial interest in a Restricted Global
Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to
the Global Notes and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the “Securities Act”),
(iii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest in an Unrestricted Global Note
is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.

 

C-1

 

(b)           :               Check if Exchange is from
beneficial interest in a Restricted Global Note to Unrestricted Definitive
Note.  In connection with the Exchange
of the Owner’s beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive
Note is being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.

 

(c)           :               Check if Exchange is from
Restricted Definitive Note to beneficial interest in an Unrestricted Global
Note.  In connection with the Owner’s
Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.

 

(d)           :               Check if Exchange is from
Restricted Definitive Note to Unrestricted Definitive Note.  In connection with the Owner’s Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired for the
Owner’s own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.

 

2.             Exchange of
Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes
for Restricted Definitive Notes or Beneficial Interests in Restricted Global
Notes

 

(a)           :               Check if Exchange is from
beneficial interest in a Restricted Global Note to Restricted Definitive
Note.  In connection with the Exchange
of the Owner’s beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner’s own account
without transfer.  Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
Restricted Definitive Note issued will continue to be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Note and in the Indenture and the Securities Act.

 

C-2

 

(b)           Check
if Exchange is from Restricted Definitive Note to beneficial interest in a
Restricted Global Note.  In connection
with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest
in the [CHECK ONE] : 144A Global Note, :
Regulation S Global Note, :  IAI Global Note with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner’s own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States.  Upon consummation of the proposed Exchange in accordance with the
terms of the Indenture, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the relevant Restricted Global Note and in the Indenture and the Securities
Act.

 

C-3

 

This certificate and the statements contained herein are made for your
benefit and the benefit of the Partnership.

 

	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name of Transferor]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Dated:

  	
   

  	
   

  	
   

  
							

 

C-4

 

EXHIBIT
D

FORM OF CERTIFICATE FROM

ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR

 

Circus and Eldorado Joint
Venture

Silver Legacy Capital
Corp.

407 North Virginia Street

Reno, Nevada  89501

Attention:  Bruce Sexton

 

The Bank of New York

c/o United States Trust Company

114 West 47th Street, 25th Floor

New York, New York 10036

Attention:  Corporate Trust Agency

 

Re:          10 1/8% Mortgage
Notes due 2012

 

Reference is hereby made to the Indenture, dated as of March 5, 2002
(the “Indenture”), among Circus
and Eldorado Joint Venture (the “Partnership”)
and Silver Legacy Capital Corp. (“Capital”),
as issuers (together, the “Issuers”)
and The Bank of New York, as
trustee.  Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

 

In connection with our proposed purchase of $                       aggregate principal amount of:

 

(a)           :               a beneficial interest in a Global
Note, or

 

(b)           :               a
Definitive Note,

 

we confirm that:

 

1.             We understand that
any subsequent transfer of the Notes or any interest therein is subject to
certain restrictions and conditions set forth in the Indenture and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes or any interest therein except in compliance with, such
restrictions and conditions and the United States Securities Act of 1933, as
amended (the “Securities Act”).

 

2.             We understand that
the offer and sale of the Notes have not been registered under the Securities
Act, and that the Notes and any interest therein may not be offered or sold
except as permitted in the following sentence. 
We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Issuers or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
“qualified institutional buyer” (as defined therein), (C) to an institutional
“accredited investor” (as defined below) that, prior to 

 

D-1

 

such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Issuers a signed letter
substantially in the form of this letter and an Opinion of Counsel in form
reasonably acceptable to the Issuers to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to
the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing the Definitive Note or beneficial interest
in a Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.

 

3.             We understand that,
on any proposed resale of the Notes or beneficial interest therein, we will be
required to furnish to you and the Issuers such certifications, legal opinions
and other information as you and the Issuers may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions.  We further understand that the Notes
purchased by us will bear a legend to the foregoing effect.

 

4.             We are an
institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act) and have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Notes, and we and any accounts for
which we are acting are each able to bear the economic risk of our or its
investment.

 

5.             We are acquiring
the Notes or beneficial interest therein purchased by us for our own account or
for one or more accounts (each of which is an institutional “accredited
investor”) as to each of which we exercise sole investment discretion.

 

You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.

 

	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name of Accredited Investor]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Dated:

  	
   

  	
   

  	
   

  
									

 

D-2

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