Document:

Exhibit 4.1

 

STATION CASINOS, INC.

 

 

 

7.75%
SENIOR NOTES DUE 2016

 

 

 

FIRST
SUPPLEMENTAL INDENTURE

 

DATED
AS OF AUGUST 15, 2006

 

TO
INDENTURE DATED AS OF AUGUST 1, 2006

 

 

LAW
DEBENTURE TRUST COMPANY 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.

  
	
   

  	
  (b)

  	
   

  	
  7.08; 7.10; 10.02

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.05

  
	
   

  	
  (b)

  	
   

  	
  10.03

  
	
   

  	
  (c)

  	
   

  	
  10.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (b)(2)

  	
   

  	
  7.06

  
	
   

  	
  (c)

  	
   

  	
  7.06; 10.02

  
	
   

  	
  (d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.02; 10.02

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
   

  	
  10.04

  
	
   

  	
  (c)(2)

  	
   

  	
  10.04

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  10.05

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.01(b)

  
	
   

  	
  (b)

  	
   

  	
  7.05; 10.02

  
	
   

  	
  (c)

  	
   

  	
  7.01(a)

  
	
   

  	
  (d)

  	
   

  	
  7.01(c)

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  316(a) (last sentence)

  	
   

  	
  2.09

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.04; 6.07

  
	
  317(a)(1)

  	
   

  	
  6.08

  
	
   

  	
  (a)(2)

  	
   

  	
  6.09

  

 

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

 

Attention should also be directed to Section 318(c) of
the Trust Indenture Act of 1939, as amended, which provides that the provisions
of Section 310 through 317 of such Act are a part of and govern every
qualified indenture, whether or not physically contained therein.

 

 

	
   

  	
  (b)

  	
   

  	
  2.04

  
	
  318(a)

  	
   

  	
  10.01

  

 

N.A. means not
applicable.

 

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Article 1 DEFINITIONS AND INCORPORATION BY
  REFERENCE

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
  1

  
	
  Section 1.02

  	
  Other Definitions

  	
  13

  
	
  Section 1.03

  	
  Incorporation by
  Reference of Trust Indenture Act

  	
  14

  
	
  Section 1.04

  	
  Rules of Construction

  	
  14

  
	
   

  	
   

  	
   

  
	
  Article 2 THE NOTES

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Form; Dating, Execution
  and Authentication

  	
  15

  
	
  Section 2.02

  	
  Registrar; Paying
  Agent; Depository; Note Custodian

  	
  16

  
	
  Section 2.03

  	
  Paying Agent to Hold
  Money in Trust

  	
  16

  
	
  Section 2.04

  	
  Noteholder Lists

  	
  17

  
	
  Section 2.05

  	
  Transfer and Exchange

  	
  17

  
	
  Section 2.06

  	
  Replacement Notes.

  	
  20

  
	
  Section 2.07

  	
  Outstanding Notes

  	
  21

  
	
  Section 2.08

  	
  Treasury Notes

  	
  21

  
	
  Section 2.09

  	
  Temporary Notes

  	
  21

  
	
  Section 2.10

  	
  Cancellation

  	
  21

  
	
  Section 2.11

  	
  Defaulted Interest

  	
  22

  
	
  Section 2.12

  	
  CUSIP Numbers

  	
  22

  
	
   

  	
   

  	
   

  
	
  Article 3 REDEMPTION

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Notices to Trustee

  	
  22

  
	
  Section 3.02

  	
  Selection of Notes to
  Be Redeemed

  	
  22

  
	
  Section 3.03

  	
  Notice of Redemption

  	
  23

  
	
  Section 3.04

  	
  Effect of Notice of
  Redemption

  	
  23

  
	
  Section 3.05

  	
  Deposit of Redemption
  Price

  	
  24

  
	
  Section 3.06

  	
  Notes Redeemed in Part

  	
  24

  
	
  Section 3.07

  	
  Mandatory Disposition
  Pursuant to Gaming Laws

  	
  24

  
	
   

  	
   

  	
   

  
	
  Article 4 COVENANTS

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Payment of Notes

  	
  24

  
	
  Section 4.02

  	
  SEC Reports, Financial
  Reports

  	
  25

  
	
  Section 4.03

  	
  Compliance Certificate

  	
  25

  
	
  Section 4.04

  	
  Stay, Extension and
  Usury Laws

  	
  26

  
	
  Section 4.05

  	
  Limitation on
  Indebtedness

  	
  26

  
	
  Section 4.06

  	
  Limitation on Capital
  Stock of Restricted Subsidiaries

  	
  27

  
	
  Section 4.07

  	
  Corporate Existence

  	
  28

  
	
  Section 4.08

  	
  Taxes

  	
  28

  
	
  Section 4.09

  	
  Investment Company Act

  	
  28

  
	
  Section 4.10

  	
  Limitation on
  Transactions with Affiliates

  	
  28

  

 

i

 

	
  Section 4.11

  	
  Change of Control and
  Rating Decline

  	
  29

  
	
  Section 4.12

  	
  Limitation on Dividends
  and Other Payment Restrictions Affecting Restricted Subsidiaries

  	
  30

  
	
  Section 4.13

  	
  Limitation on Liens

  	
  31

  
	
  Section 4.14

  	
  No Amendment to
  Subordination Provisions

  	
  33

  
	
   

  	
   

  	
   

  
	
  Article 5 SUCCESSORS

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  When Company May Merge,
  etc

  	
  33

  
	
  Section 5.02

  	
  Successor Corporation
  Substituted

  	
  34

  
	
   

  	
   

  	
   

  
	
  Article 6 DEFAULTS AND REMEDIES

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Events of Default

  	
  34

  
	
  Section 6.02

  	
  Acceleration

  	
  36

  
	
  Section 6.03

  	
  Other Remedies

  	
  36

  
	
  Section 6.04

  	
  Waiver of Past Defaults

  	
  37

  
	
  Section 6.05

  	
  Control by Majority

  	
  37

  
	
  Section 6.06

  	
  Limitation on Suits

  	
  37

  
	
  Section 6.07

  	
  Rights of Holders to
  Receive Payment

  	
  37

  
	
  Section 6.08

  	
  Collection Suit by
  Trustee

  	
  37

  
	
  Section 6.09

  	
  Trustee May File
  Proofs of Claim

  	
  38

  
	
  Section 6.10

  	
  Priorities

  	
  38

  
	
  Section 6.11

  	
  Undertaking for Costs

  	
  38

  
	
   

  	
   

  	
   

  
	
  Article 7 TRUSTEE

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Duties of Trustee

  	
  39

  
	
  Section 7.02

  	
  Rights of Trustee

  	
  40

  
	
  Section 7.03

  	
  Individual Rights of
  Trustee

  	
  41

  
	
  Section 7.04

  	
  Trustee’s Disclaimer

  	
  41

  
	
  Section 7.05

  	
  Notice of Defaults

  	
  41

  
	
  Section 7.06

  	
  Reports by Trustee to
  Holders

  	
  41

  
	
  Section 7.07

  	
  Compensation and
  Indemnity

  	
  41

  
	
  Section 7.08

  	
  Replacement of Trustee

  	
  42

  
	
  Section 7.09

  	
  Successor Trustee by
  Merger, etc

  	
  43

  
	
  Section 7.10

  	
  Eligibility;
  Disqualification

  	
  43

  
	
  Section 7.11

  	
  Preferential Collection
  of Claims Against Company

  	
  43

  
	
   

  	
   

  	
   

  
	
  Article 8 DISCHARGE OF INDENTURE

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Termination of Company’s
  Obligations

  	
  44

  
	
  Section 8.02

  	
  Application of Trust
  Money

  	
  44

  
	
  Section 8.03

  	
  Repayment to Company

  	
  45

  
	
  Section 8.04

  	
  Reinstatement

  	
  45

  

 

ii

 

	
  Article 9 AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Without Consent of
  Holders

  	
  45

  
	
  Section 9.02

  	
  With Consent of Holders

  	
  46

  
	
  Section 9.03

  	
  Compliance with Trust
  Indenture Act

  	
  47

  
	
  Section 9.04

  	
  Revocation and Effect
  of Consents

  	
  47

  
	
  Section 9.05

  	
  Notation on or Exchange
  of Notes

  	
  47

  
	
  Section 9.06

  	
  Trustee Protected

  	
  48

  
	
  Section 9.07

  	
  Reference in Notes to
  Supplemental Indentures

  	
  48

  
	
   

  	
   

  	
   

  
	
  Article 10 MISCELLANEOUS

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Trust Indenture Act
  Controls

  	
  48

  
	
  Section 10.02

  	
  Notices

  	
  48

  
	
  Section 10.03

  	
  Communication by Holders
  with Other Holders

  	
  49

  
	
  Section 10.04

  	
  Certificate and Opinion
  as to Conditions Precedent

  	
  49

  
	
  Section 10.05

  	
  Statements Required in
  Certificate or Opinion

  	
  49

  
	
  Section 10.06

  	
  Rules by Trustee
  and Agents

  	
  49

  
	
  Section 10.07

  	
  Legal Holidays

  	
  50

  
	
  Section 10.08

  	
  No Recourse Against
  Others

  	
  50

  
	
  Section 10.09

  	
  Counterparts

  	
  50

  
	
  Section 10.10

  	
  Variable Provisions

  	
  50

  
	
  Section 10.11

  	
  Governing Law

  	
  51

  
	
  Section 10.12

  	
  No Adverse
  Interpretation of Other Agreements

  	
  51

  
	
  Section 10.13

  	
  Successors

  	
  51

  
	
  Section 10.14

  	
  Severability

  	
  51

  
	
  Section 10.15

  	
  Qualification of
  Indenture

  	
  51

  
	
  Section 10.16

  	
  Table of Contents,
  Headings, etc

  	
  51

  
	
   

  	
   

  	
   

  
	
  Exhibit A                Form of Global Note

  	
   

  

 

iii

 

FIRST SUPPLEMENTAL INDENTURE dated as of August 15,
2006 between STATION CASINOS, INC., a Nevada corporation (the “Company”),
and LAW DEBENTURE TRUST COMPANY OF NEW YORK, a New York banking corporation, as
Trustee (the “Trustee”).

 

THIS FIRST SUPPLEMENTAL INDENTURE CONTAINS ALL OF THE
TERMS RELEVANT TO THE 7.75% SENIOR NOTES DUE 2016 OF STATION CASINOS, INC.
THE BASE INDENTURE (AS DEFINED HEREIN), AS IT MAY BE AMENDED AND
SUPPLEMENTED FROM TIME TO TIME, WHICH THIS FIRST SUPPLEMENTAL INDENTURE
SUPPLEMENTS, NEED NOT BE REFERRED TO WITH RESPECT TO THE TERMS OF THE 7.75%
SENIOR NOTES GOVERNED HEREBY.

 

WHEREAS, the Company and the Trustee entered into an
indenture in respect of the issuance of senior notes by the Company, dated as
of August 1, 2006 (the “Base Indenture”);

 

WHEREAS, Sections 2.01 and 9.01 of the Base Indenture
provide, among other things, that the Company and the Trustee may enter
into a supplemental indenture to amend or supplement the Base Indenture to
establish the designation, form and terms of senior notes;

 

WHEREAS, the Company desires to establish and issue a
new series of senior notes, the Company’s 7.75% Senior Notes due 2016 (the
“Notes”), pursuant to the Base Indenture, as modified by this supplemental
indenture (the “First Supplemental Indenture”); and

 

WHEREAS, the Company desires to enter into this First
Supplemental Indenture pursuant to Sections 2.01 and 9.01 of the Base Indenture
(i) to supplement the Base Indenture, (ii) to establish the form,
terms and provisions of the Notes and (iii) to make deletions,
modifications and additions to the Base Indenture with respect to (and only
with respect to) the Notes as contemplated by Sections 2.01 and 9.01 of the
Base Indenture.

 

NOW, THEREFORE, in consideration of the foregoing, the
parties hereto, for the benefit of each other and for the equal and ratable
benefit of all persons who hereafter become the Holders of the Notes hereby
enter into this First Supplemental Indenture which amends, modifies,
supplements and restates in its entirety (except solely for the provisions of
the Base Indenture which authorize the creation of this First Supplemental
Indenture) the Base Indenture with respect to (and only with respect to) the
Notes, as follows:

 

ARTICLE 1

DEFINITIONS AND INCORPORATION

BY REFERENCE

 

Section 1.01           Definitions.

 

“Affiliate” of
any specified person means any other person (i) which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such specified person, (ii) which directly
or indirectly through one or more intermediaries beneficially owns or holds 10%
or more of any class of the Voting Stock of such specified person (or a
10% or greater equity interest in such person which is not a corporation) or
(iii) of which 10% or more of any class of the Voting Stock (or, in
the case of a person which is 

 

1

 

not a corporation, 10% or
more of the equity interest) is beneficially owned or held directly or
indirectly through one or more intermediaries by such person. The term “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a person, whether through the
ownership of voting securities, by contract or otherwise.

 

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

 

“Amortization Expense”
means, for any period, amounts recognized during such period as amortization of
all goodwill and other assets classified as intangible assets in accordance
with GAAP.

 

“Applicable Procedures”
means, with respect to any transfer or exchange of beneficial interests in a
Global Note, the rules and procedures of the Depository that are
applicable to such transfer or exchange.

 

“Average Life”
means, as of the date of determination, with reference to any Indebtedness, the
quotient obtained by dividing (i) the sum of the products of the number of
years from the date of determination to the dates of each successive scheduled
principal payment of such Indebtedness multiplied by the amount of such
principal payment by (ii) the sum of all such principal payments.

 

“Bank Facility”
means the Third Amended and Restated Loan Agreement as of December 15,
2005, as amended on June 26, 2006, by and among Palace, Boulder, Texas,
Sunset, Santa Fe, Lake Mead Holdings, Lake Mead, Fiesta Holdings, Fiesta and
Charleston Station, LLC, the Lenders party thereto and The Royal Bank of
Scotland, PLC, Deutsche Bank Trust Company Americas, Wachovia Bank, National
Association and Bank of Scotland as Co-Documentation Agents, and Wells Fargo
Bank, N.A., as Syndication Agent, and Bank of America, N.A., as Administrative
Agent, as amended, modified or refinanced from time to time, provided that the
managing agent for the lenders under such refinancing is a banking institution
with over $500 million in assets and subject to supervision and examination by
federal or state banking authorities.

 

“Board of Directors”
or “Board” means the Board of Directors of
the Company.

 

“Boulder” means
Boulder Station, Inc.

 

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

 

“Capital Lease Obligations”
of a person means any obligation that is required to be classified and
accounted for as a capital lease on the face of a balance sheet of such person
prepared in accordance with GAAP; the amount of such obligation shall be the
capitalized amount thereof, determined in accordance with GAAP; the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty; and such obligation
shall be deemed secured by a Lien on any property or assets to which such lease
relates.

 

2

 

“Capital Stock”
means, with respect to any person, any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents (including
partnerships or partnership interests), or ownership interests (however
designated) of such person, including each class of common stock and
preferred stock of such person, but excluding convertible Indebtedness.

 

“Certificated Note”
means a certificated Note registered in the name of the Holder thereof and
issued in accordance with Section 2.05 hereof, in the form of Exhibit A
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.

 

“Change of Control”
means an event or series of events by which (i) the Company sells,
conveys, transfers or leases, directly or indirectly, all or substantially all
of the properties and assets of the Company and its Restricted Subsidiaries to
any person, corporation, entity or group, (ii) any “person” (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) (other than
the Existing Equity Holders) is or becomes the “beneficial owner” (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have “beneficial ownership” of all shares that any such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly of securities
representing 40% or more of the combined voting power of the Company’s Voting
Stock and at such time as the Existing Equity Holders together shall fail to
beneficially own, directly or indirectly, securities representing at least the
same percentage of the combined voting power of the Company’s Voting Stock as
is “beneficially owned” by such “person”, (iii) the Company consolidates
with or merges into another corporation, or any corporation consolidates with
or merges into the Company, in either event pursuant to a transaction in which
the outstanding Voting Stock of the Company is changed into or exchanged for
cash, securities or other property, other than any such transactions between
the Company and its wholly-owned Restricted Subsidiaries, with the effect that
any “person” (other than the Existing Equity Holders) becomes the “beneficial
owner”, directly or indirectly, of securities representing 40% or more of the
combined voting power of the Company’s Voting Stock and at such time as the
Existing Equity Holders together shall fail to beneficially own, directly or
indirectly, securities representing at least the same percentage of the combined
voting power of the Company’s Voting Stock as is “beneficially owned” by such “person”,
or (iv) during any period of 24 consecutive months, individuals who at the
beginning of such period constituted the Company’s Board of Directors (together
with any new or replacement directors whose election by the Company’s Board of
Directors, or whose nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the directors then in office.

 

“Change of Control
Triggering Event” is defined as the occurrence of both (i) a
Change of Control and (ii) a Rating Decline.

 

“Charleston Station”
means Charleston Station, LLC.

 

3

 

“Company” means
the person named as such above until a successor replaces it in accordance with
Article 5 and thereafter means the successor.

 

“Completion Guarantee and
Keep-Well Agreement” means (i) the guarantee by the Company or
a Restricted Subsidiary of the completion of the development, construction and
opening of a new gaming facility by an Affiliate of the Company, (ii) the
agreement by the Company or a Restricted Subsidiary to advance funds, property
or services on behalf of an Affiliate of the Company in order to maintain the
financial condition of such Affiliate in connection with the development,
construction and opening of a new gaming facility by such Affiliate and (iii) performance
bonds incurred in the ordinary course of business; provided
that, in the case of clauses (i) and (ii) above, such guarantee or
agreement is entered into in connection with obtaining financing for such
gaming facility or is required by a Gaming Authority.

 

“Consolidated Coverage
Ratio” means, for any period, for any person, the ratio of the
aggregate amount of Operating Cash Flow of such person for such period to the
aggregate amount of Consolidated Interest Expense of such person for such
period.

 

“Consolidated Interest
Expense” means, for any period, the total interest expense of a
person and its consolidated Restricted Subsidiaries, including (i) interest
expense attributable to Capital Lease Obligations, (ii) amortization of
debt discount, (iii) capitalized interest, (iv) cash and noncash
interest payments, (v) commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financing, (vi) net
costs under Interest Rate Protection Agreements (including amortization of
discount) and (vii) interest expense in respect of obligations of other
persons deemed to be Indebtedness of the Company or its Restricted Subsidiaries
under clause (v) or (vi) of the definition of Indebtedness.

 

“Consolidated Net Income”
means, for any period, the net income of a person and its consolidated
Restricted Subsidiaries determined on a consolidated basis in accordance with
GAAP; provided, however,
that there shall not be included in such Consolidated Net Income:  (i) any net income (loss) of any person
if such person is not a Restricted Subsidiary, except that (A) the Company’s
equity in the net income of any such person (including, without limitation, an
Unrestricted Subsidiary) for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by such
person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in clause
(iii) below); and (B) the Company’s equity in the net loss of any
such person for such period shall be included in determining such Consolidated
Net Income (subject, with respect to the net loss of an Unrestricted
Subsidiary, to clause (vi) below); (ii) any net income (loss) of any
person acquired by the Company or a Restricted Subsidiary in a pooling of
interests transaction for any period prior to the date of such acquisition; (iii) any
net income (loss) of any Restricted Subsidiary if such Restricted Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends or
the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that (A) the Company’s equity in the
net income of any such Restricted Subsidiary for such period shall be included
in such Consolidated Net Income up to the aggregate amount of cash which could
have been distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to another Restricted

 

4

 

Subsidiary, to the
limitation contained in this clause) unless at the time of computation no cash
would be permitted to be distributed and (B) the Company’s equity in the
net loss of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income; (iv) any gain or loss realized
upon the sale or other disposition of any property, plant or equipment of the
Company or its consolidated Restricted Subsidiaries which is not sold or
otherwise disposed of in the ordinary course of business and any gain or loss
realized upon the sale or other disposition of any Capital Stock of any person;
(v) the cumulative effect of a change in accounting principles; (vi) the
net loss of any Unrestricted Subsidiary; and (vii) extraordinary or
nonrecurring gains or losses.

 

“Consolidated Net Tangible
Assets” means the total amount of assets (including investments in
Joint Ventures) of the Company and its Subsidiaries (less applicable
depreciation, amortization and other valuation reserves) after deducting
therefrom (i) all current liabilities of the Company and its Subsidiaries
(excluding (A) the current portion of long-term indebtedness, (B) intercompany
liabilities and (C) any liabilities which are by their terms renewable or
extendible at the option of the obligor thereon to a time more than 12 months
from the time as of which the amount thereof is being computed) and (ii) all
goodwill, trade names, trademarks, patents, unamortized debt discount and any
other like intangibles, all as set forth on the most recent consolidated
balance sheet of the Company and computed in accordance with GAAP.

 

“Consolidated Net Worth”
of any person means the total of the amounts shown on the balance sheet of such
person and its consolidated Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of any date selected by the
Company not more than 90 days prior to the taking of any action for the purpose
of which the determination is being made (and adjusted for any material events
since such date), as (i) the par or stated value of all outstanding
Capital Stock plus (ii) paid-in capital or capital surplus relating to
such Capital Stock plus (iii) any retained earnings or earned surplus,
less (A) any accumulated deficit, (B) any amounts attributable to
Redeemable Stock and (C) any amounts attributable to Exchangeable Stock.

 

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

 

“Depository”
means, with respect to the Notes issuable or issued in whole or in part in
global form, the person specified in Section 2.02 hereof as the Depository
with respect to the Notes, until a successor shall have been appointed and
become such Depository pursuant to the applicable provision of this Indenture,
and, thereafter, “Depository” shall mean or include such successor.

 

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

 

“Exchangeable Stock”
means any Capital Stock of a corporation that is exchangeable or convertible
into another security (other than into Capital Stock of such corporation that
is neither Exchangeable Stock or Redeemable Stock).

 

“Existing Equity Holders”
means Frank J. Fertitta III, Blake L. Sartini, Delise F. Sartini, Lorenzo J.
Fertitta, Glenn C. Christenson, Scott M Nielson, William W. Warner and the

 

5

 

Former Equity Holder and
their executors, administrators or the legal representatives of their estates,
their heirs, distributees and beneficiaries, any trust as to which any of the
foregoing is a settlor or co-settlor and any corporation, partnership or other
entity which is an Affiliate of any of the foregoing. Existing Equity Holders
shall also mean any lineal descendants of such persons, but only to the extent
that the beneficial ownership of the Voting Stock held by such lineal
descendants was directly received (by gift, trust or sale) from any such
person.

 

“Existing Notes”
means the $450,000,000 6% Senior Notes of the Company due 2012 and the Existing
Senior Subordinated Notes.

 

“Existing Senior
Subordinated Notes” means the $450,000,000 61⁄2% Senior Subordinated Notes
of the Company due 2014, the $700,000,000 67⁄8% Senior Subordinated Notes
of the Company due 2016 and the $300,000,000 65⁄8% Senior Subordinated
Notes of the Company due 2018.

 

“FF&E Financing”
means Indebtedness which is non-recourse to the borrower, the proceeds of which
will be used to finance the acquisition or lease by the Company or its
Restricted Subsidiaries of furniture, fixtures or equipment (“FF&E”) used
in the operation of its business and secured by a Lien on such FF&E.

 

“Fiesta” means
Fiesta Station, Inc.

 

“Fiesta Holdings”
means Fiesta Station Holdings, LLC.

 

“Former Equity Holder”
means Frank J. Fertitta, Jr.

 

“Funded Indebtedness”
means all Indebtedness of the Company that (i) matures by its terms, or is
renewable at the option of the Company to a date, more than one year after the
date of original issuance of such Indebtedness and (ii) ranks at least
equal in right of payment with the Notes.

 

“GAAP” means
generally accepted accounting principles as in effect in the United States of
America on the date of this Indenture.

 

“Gaming Authority”
means the Nevada Gaming Commission, the Nevada Gaming Control Board or any
agency of any state, county, city or other political subdivision which has, or may at
any time after the date of the Indenture have, jurisdiction over all or any
portion of the gaming activities of the Company or any of its Subsidiaries or
any successor to such authority.

 

“Gaming Control Act”
means the Nevada Gaming Control Act, as from time to time amended, or any
successor provision of law, and the regulations promulgated thereunder.

 

“Gaming License”
of any person means every license, franchise or other authorization on the date
of the Indenture or thereafter required to own, lease, operate or otherwise
conduct the gaming operations of such person, including, without limitation,
all such licenses granted under the Gaming Control Act, as from time to time
amended, or any successor provision at law, the regulations of Gaming
Authorities and other applicable laws.

 

6

 

“Global Notes”
means, individually and collectively, each of the Global Notes in the form of
Exhibit A in accordance with Section 2.01, 2.05(b), 2.05(d) or
2.05(f) hereof.

 

“Global Note Legend”
means the legend set forth in Section 2.05(f), which is required to be
placed on all Global Notes issued under this Indenture.

 

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

 

“Holder” or “Noteholder” means a person in whose name a Note is
registered on the register maintained by the Registrar.

 

“Indebtedness”
of any person means, without duplication, (i) the principal of and premium
(if any) in respect of (A) indebtedness of such person for money borrowed
and (B) indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such person is responsible or
liable; (ii) all Capital Lease Obligations of such person; (iii) all
obligations of such person issued or assumed as the deferred purchase price of
property, assets or services, all conditional sale obligations and all
obligations under any title retention agreement (but excluding operating leases
and trade accounts payable arising in the ordinary course of business); (iv) all
obligations of such person for the reimbursement of any obligor on any letter
of credit, banker’s acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in (i) through (iii) above) entered into in the
ordinary course of business of such person to the extent such letters of credit
are not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following receipt by such
person of a demand for reimbursement following payment on the letter of credit);
(v) all obligations of the type referred to in clauses (i) through (iv) of
other persons and all dividends of other persons for the payment of which, in
either case, such person is responsible or liable as obligor, guarantor or
otherwise; and (vi) all obligations of the type referred to in clauses (i) through
(v) of other persons secured by any Lien on any property or asset of such
person (whether or not such obligation is assumed by such person), the amount
of such obligation being deemed to be the lesser of the value of such property
or asset or the amount of the obligation so secured.

 

“Indenture”
means the Base Indenture as supplemented by this First Supplemental Indenture,
in each case 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.

 

“Interest Payment Date”
means the dates on which the Company shall pay interest on the Notes to
Noteholders, as described in the Notes.

 

“Interest Rate Protection
Agreement” means any interest rate swap agreement, interest rate cap
agreement or other financial agreement or arrangement designed to protect the
Company or any Subsidiary against fluctuations in interest rates.

 

7

 

“Investment Grade”
designates a rating of BBB- or higher by S&P or Baa3 or higher by Moody’s
or the equivalent of such ratings by S&P or Moody’s. In the event that the
Company shall select any other Rating Agency, the equivalent of such ratings by
such Rating Agency shall be used.

 

“Joint Venture”
means any partnership, corporation or other entity, in which up to and
including 50% of the partnership interests, outstanding voting stock or other
equity interests is owned, directly or indirectly, by the Company and/or one or
more Subsidiaries.

 

“Lake Mead”
means Lake Mead Station, Inc.

 

“Lake Mead Holdings”
means Lake Mead Station Holdings, LLC.

 

“Legal Requirements”
means, with respect to any project, all laws, statutes and ordinances
(including building codes and zoning and environmental laws, regulations and
ordinances), and all rules, orders, rulings, regulations, directives and
requirements of all Governmental Authorities, which are now or which may hereafter
be in existence, and which are applicable to the Company or any Affiliate
thereof in connection with the construction or development of any project or
the operation of its business, or any part thereof, including, without
limitation, the Nevada Gaming Control Act, as modified by any variances, special
use permits, waivers, exceptions or other exemptions which may from time
to time be applicable to the Company or any Affiliate thereof.

 

“Lien” means,
with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset (including any
agreement to give any security interest). For all purposes under this
Indenture, a person shall be deemed to own subject to a Lien any asset that it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease Obligation or other title retention
agreement (other than operating leases) relating to such asset.

 

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

 

“Note Custodian”
means the person specified in Section 2.02, as custodian with respect to
the Global Notes, or any successor entity thereto.

 

“Officer” means
the Chairman of the Board, the President, any Vice President, the Treasurer,
the Secretary, the Chief Financial Officer, any Assistant Treasurer or any
Assistant Secretary of the Company.

 

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

 

“Operating Cash Flow”
means, for any period, for any person, the aggregate amount of Consolidated Net
Income of such person before Consolidated Interest Expense, income taxes,
depreciation expense, Amortization Expense and any noncash amortization of debt
issuance cost. Notwithstanding the foregoing, the Consolidated Interest
Expense, income taxes, depreciation expense, Amortization Expense and any
noncash amortization of debt issuance cost

 

8

 

of a subsidiary of a
person shall be added to Consolidated Net Income to compute Operating Cash Flow
in the same proportion that the net income of such subsidiary was included in
calculating the Consolidated Net Income of such person.

 

“Opinion of Counsel”
means a written opinion from legal counsel who is reasonably acceptable to the
Trustee. Unless otherwise required by the Trustee, the counsel may be an
employee of or counsel to the Company or the Trustee.

 

“Palace” means
Palace Station Hotel & Casino, Inc.

 

“Participant” means,
with respect to DTC, a person who has an account with the Depository.

 

“Permitted Refinancing
Indebtedness” means Indebtedness of the Company or a Restricted
Subsidiary (i) issued in exchange for, or the proceeds from the issuance
and sale or disbursement of which are used to substantially concurrently repay,
redeem, refund, refinance, discharge or otherwise retire for value, in whole or
in part (collectively, “repay”), or (ii) constituting an amendment,
modification or supplement to, or a deferral or renewal of (collectively, an “amendment”),
any Indebtedness of the Company or a Restricted Subsidiary (and any premiums,
penalties, fees and expenses actually incurred by the Company or such
Restricted Subsidiary in connection with the repayment or amendment thereof)
existing immediately after the original issuance of the Notes or incurred
pursuant to clauses (iii), (vi), (vii) and (viii) (subject to proviso
(C) below) of Section 4.05, in a principal amount (or, if such
Permitted Refinancing Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon the acceleration thereof,
with an original issue price) not in excess of (1) the principal amount of
the Indebtedness so refinanced (or, if such Permitted Refinancing Indebtedness
refinances Indebtedness under an agreement providing a commitment for
subsequent borrowings, with a maximum commitment not to exceed the maximum
commitment under such agreement) plus (2) unpaid accrued interest on such
Indebtedness plus (3) premiums, penalties, fees and expenses actually
incurred by the Company or such Restricted Subsidiary, as the case may be,
in connection with the repayment or amendment thereof; provided
that (A) Permitted Refinancing Indebtedness of the Company that repays or
constitutes an amendment to Subordinated Indebtedness shall not have an Average
Life less than the Indebtedness to be so refinanced at the time of such
incurrence, and shall contain subordination and default provisions no less
favorable in any material respect to the Noteholders than those contained in
such repaid or amended Indebtedness, (B) notwithstanding the foregoing,
any Permitted Refinancing Indebtedness incurred to repay all of the Notes then
outstanding shall not be limited in principal amount or otherwise if the
Company, contemporaneously with such issuance, irrevocably deposits with the
Trustee or Paying Agent an amount of the proceeds of such Permitted Refinancing
Indebtedness sufficient to redeem or repay each installment of the outstanding principal
amount of the Notes on, and all interest accrued to, the date fixed for such
repayment, together with irrevocable instructions to redeem and repay the Notes
on the stated redemption date and (C) to the extent that Permitted
Refinancing Indebtedness includes Indebtedness incurred in connection with the
refinancing of the Bank Facility (whether or not such Indebtedness is existing
on or after the date of the Indenture) and the managing agent for the lenders
under such refinancing Indebtedness is a person other than a banking
institution with over $500 million in assets and subject to supervision and
examination by federal or state

 

9

 

banking authorities, the
provisions of clause (viii) of Section 4.05 shall terminate and be of
no further force and effect with respect to such refinancing Indebtedness.

 

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

 

“principal” of
any Indebtedness means the principal amount thereof plus the premium, if any,
thereon.

 

“Project Cost”
means, with respect to any Resort Property, the aggregate costs required to
complete a construction project on such Resort Property or an addition or
improvement to such Resort Property in accordance with the plans therefor and
applicable Legal Requirements, as set forth in an Officer’s Certificate
submitted to the Trustee, setting forth in reasonable detail all amounts
theretofore expended and any anticipated costs and expenses estimated to be
incurred and reserves to be established in connection with the construction and
development of such future addition or improvement, including direct costs
related thereto such as construction management, architectural, engineering and
interior design fees, site work, utility installations and hook up fees,
construction permits, certificates and bonds, land acquisition costs and the
cost of furniture, fixtures, furnishings, machinery and equipment, but
excluding the following: principal or interest payments on any Indebtedness
(other than interest which is required to be capitalized in accordance with
generally accepted accounting principles, which shall be included in
determining Project Cost), or costs related to the operation of the Resort
Property including, but not limited to, non-construction supplies and
pre-operating payroll.

 

“Qualified Non-Recourse
Debt” means Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any
kind (including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; and (ii) no default with
respect to which (including any rights that the holders thereof may have
to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of
the Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and (iii) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
of the Company or any of its Restricted Subsidiaries, other than by a pledge by
the Company or a Restricted Subsidiary of the stock of an Unrestricted
Subsidiary; provided, however,
that the Company or any of its Restricted Subsidiaries may (x) execute a
Completion Guarantee and Keep-Well Agreement for an Unrestricted Subsidiary
whose sole purpose is to develop, construct and operate a new gaming facility
or (y) make a loan to an Unrestricted Subsidiary and such actions referred to
in the foregoing clauses (x) and (y) shall not constitute Indebtedness which is
not Qualified Non-Recourse Debt.

 

“Rating Agencies”
means (i) S&P and (ii) Moody’s or (iii) if S&P or Moody’s
or both shall not make a rating of the Notes publicly available, a nationally
recognized securities rating agency or agencies, as the case may be,
selected by the Company, which shall be substituted for S&P or Moody’s or
both, as the case may be.

 

10

 

“Rating Category”
means (i) with respect to S&P, any of the following categories:  BB, B, CCC, CC, C and D (or equivalent
successor categories); and (ii) with respect to Moody’s, any of the
following categories:  Ba, B, Caa, Ca, C
and D (or equivalent successor categories); and (iii) the equivalent of
any such category of S&P or Moody’s used by another Rating Agency. In
determining whether the rating of the Notes has decreased by one or more
gradation, gradations within Rating Categories (+ and - for S&P; l, 2 and 3
for Moody’s; or the equivalent gradations for another Rating Agency) shall be
taken into account (e.g., with respect to S&P, a decline in a rating from
BB+ to BB, as well as from BB- to B+, will constitute a decrease of one
gradation).

 

“Rating Date”
means the date which is 90 days prior to the earlier of (i) a Change of
Control or (ii) public notice of the occurrence of a Change of Control or
of the intention by the Company to effect a Change of Control.

 

“Rating Decline”
shall be deemed to occur if, within 90 days of public notice of the occurrence
of a Change of Control (which period shall be extended so long as the rating of
the Notes is under publicly announced consideration for possible downgrade by
either of the Rating Agencies):  (a) in
the event the Notes are rated by either Rating Agency on the Rating Date as
Investment Grade the rating of the Notes by both Rating Agencies shall be below
Investment Grade, or (b) in the event the Notes are rated below Investment
Grade by both Rating Agencies on the Rating Date, the rating of the Notes by
either Rating Agency shall be decreased by one or more gradations (including
gradations within Rating Categories as well as between Rating Categories).

 

“Redeemable Stock”
means any Capital Stock that by its terms or otherwise (other than in
consideration of Capital Stock that is not Redeemable Stock) is, or upon the
happening of an event would be, required to be redeemed or repurchased,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof, in whole or in part, at any time prior to the
first anniversary of the stated maturity of the Notes; provided, however, that
any Capital Stock that would constitute Redeemable Stock solely because the
holders thereof (or of any security into which it is convertible or for which
it is exchangeable) have the right to require the issuer to repurchase such
Capital Stock (or such security into which it is convertible or for which it is
exchangeable) upon the occurrence of any of the events constituting a Change of
Control shall not constitute Redeemable Stock if such Capital Stock (and all
such securities into which it is convertible or for which it is exchangeable)
provides that the issuer thereof will not repurchase or redeem any such Capital
Stock (or any such security into which it is convertible or for which it is
exchangeable) pursuant to Section 4.11.

 

“Related Person”
of any person means (i) (A) if such person is a corporation, any
person who is a director, officer or employee (x) of such person, (y) of any
subsidiary of such person or (z) of any Affiliate of such person or (B) if
such person is an individual, any immediate family member or lineal descendent
of such person or spouse of such immediate family member or of such lineal
descendant, or (ii) any Affiliate of any person included in clause (i) and
any person who is a director, officer or employee of such Affiliate.

 

“Required Rating”
means ratings on the Notes of at least BBB- by S&P and Baa3 by Moody’s.

 

11

 

“Resort Property”
means any property owned by any Restricted Subsidiary that has on it, or upon
completion of construction will have on it, a casino (including a riverboat
casino), casino-hotel, destination resort or theme park.

 

“Responsible Officer”
when used with respect to the Trustee, means any officer within the corporate
trust administration group of the Trustee (or any successor group of the
Trustee) with direct responsibility for the administration of this Indenture
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 Subsidiary”
of a person means any subsidiary of the referent person that is not an
Unrestricted Subsidiary.

 

“Santa Fe” means
Santa Fe Station, Inc.

 

“SEC” means the
Securities and Exchange Commission.

 

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

 

“S&P” means
Standard & Poor’s Corporation and its successors.

 

“Subordinated Indebtedness”
means any Indebtedness of the Company (whether outstanding on the date hereof
or hereafter incurred) which is subordinate or junior in right of payment to
the Notes.

 

“subsidiary” of
a person means any corporation, association, partnership, limited liability
company or other business entity of which 50% or more of the Voting Stock is at
the time of determination owned or controlled, directly or indirectly, by such
person or by one or more of the other subsidiaries of that person (or a
combination thereof); provided that
with respect to any such corporation, association, partnership, limited
liability company or other business entity of which no more than 50% of the
total Voting Stock is so owned or controlled, then such corporation,
association, partnership, limited liability company or other business entity
shall not be deemed to be a subsidiary of such person unless such person has
the power to direct the policies or management of such corporation,
association, partnership, limited liability company or other business entity.

 

“Subsidiary”
means any subsidiary of the Company.

 

“Sunset” means
Sunset Station, Inc.

 

“Texas” means
Texas Station, LLC.

 

“TIA” means the
Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as in effect on
the date on which this Indenture is first qualified under the TIA, except as
provided in Section 9.03.

 

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

 

12

 

“Trust Officer”
means the Chairman of the Board, the President or any other officer of the
Trustee assigned by the Trustee to administer its corporate trust matters.

 

“Unrestricted Subsidiary”
means any Subsidiary (other than Palace, Boulder, Texas, Sunset, Santa Fe,
Fiesta, Fiesta Holdings, Lake Mead, Lake Mead Holdings, Charleston Station or
any successor to any of them) that at the time of determination shall be
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary of the Company by a Board Resolution and any Subsidiary of an
Unrestricted Subsidiary, but only to the extent and so long as such Subsidiary
(and any Subsidiary of such Subsidiary): (a) has no Indebtedness other
than Qualified Non-Recourse Debt;  and (b) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries;
provided, however, that the Company or any of its Restricted Subsidiaries may execute
a Completion Guarantee and Keep-Well Agreement for an Unrestricted Subsidiary
whose sole purpose is to develop, construct and operate a new gaming facility,
and the execution and performance (if such performance is permitted under Section 4.05)
of such Completion Guarantee and Keep-Well Agreement shall not prevent a
Subsidiary from becoming or remaining an Unrestricted Subsidiary. Any such
designation by the Board of Directors 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 foregoing conditions. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Company as of
such date (and, if such Indebtedness is not permitted to be incurred as of such
date under Section 4.05, the Company shall be in Default of such section).
The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if no Default or Event
of Default would be in existence following such designation.

 

“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 the
elections of directors, managers, managing partners or trustees.

 

Section 1.02           Other
Definitions.

 

	
  Term

  	
   

  	
  Defined in Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Authentication Order

  	
   

  	
  2.01

  	
   

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  	
   

  
	
  “Custodian”

  	
   

  	
  6.01

  	
   

  
	
  “DTC”

  	
   

  	
  2.02

  	
   

  
	
  “Event of Default”

  	
   

  	
  6.01

  	
   

  
	
  “Legal Holiday”

  	
   

  	
  10.07

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.02

  	
   

  

 

13

 

	
  “Registrar”

  	
   

  	
  2.02

  	
   

  
	
  “Repurchase Date”

  	
   

  	
  4.11

  	
   

  
	
  “Repurchase Offer”

  	
   

  	
  4.11

  	
   

  
	
  “Repurchase Price”

  	
   

  	
  4.11

  	
   

  
	
  “U.S. Government Obligations”

  	
   

  	
  8.01

  	
   

  

 

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;

 

“obligor” on the
Notes means the Company and any other obligor upon the Notes.

 

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

 

Section 1.04           Rules of
Construction.

 

Unless the context otherwise requires:

 

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

 

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

 

(3)           “or” is not exclusive;

 

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

 

(5)           provisions
apply to successive events and transactions.

 

14

 

ARTICLE 2

THE NOTES

 

Section 2.01           Form;
Dating, Execution and Authentication.

 

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

 

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

 

The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and
the Company 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)           Notes. The Notes issued in
global form shall be substantially in the form of Exhibit A
attached hereto (including the Global Note Legend thereon and the “Schedule of
Exchanges of Interests in the Global Note” attached thereto). The Notes issued
in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the “Schedule of
Exchanges of Interests in the Global Note” attached thereto). Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to
time be reduced or increased, as appropriate, to 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 2.05 hereof.

 

(c)           Execution. Two Officers shall
sign the Notes for the Company by manual or facsimile signature. Such
signatures may be in counterparts, all of which taken together shall
constitute one and the same instrument.

 

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

 

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

 

(d)           Authentication. The Trustee
will, upon receipt of a written order of the Company signed by an Officer (an “Authentication
Order”), authenticate and deliver Notes for an original issue in an aggregate
principal amount specified in the written order of the Company pursuant to this
Section 2.01. Such Authentication Order shall specify the amount of the
Notes to be authenticated and the date on which the original issue of the Notes
is to be authenticated.

 

15

 

The aggregate principal amount
of Notes outstanding at any time may not exceed the aggregate principal
amount of Notes authorized for issuance by the Company, pursuant to one or more
Authentication Orders, except as provided in Section 2.06 hereof.

 

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

 

Section 2.02           Registrar;
Paying Agent; Depository; Note Custodian.

 

The Company 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 are to be presented for payment (“Paying
Agent”). The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company 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 Company may change
any Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity
as Registrar or Paying Agent, the Trustee shall act as such. The Company may act
as Paying Agent or Registrar.

 

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

 

The Company initially appoints Deutsche Bank Trust
Company Americas, with offices at 60 Wall Street, New York, New York 10005, to
act as the Registrar and Paying Agent and to act as Note Custodian with respect
to the Global Notes.

 

Section 2.03           Paying
Agent to Hold Money in Trust.

 

The Company 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 Noteholders or the Trustee all money held by the Paying Agent
for the payment of principal, interest, or premium, if any, on the Notes
(whether such money has been paid to it by the Company or any other obligor on
the Notes), and will notify the Trustee of any default by the Company (or any
other obligor on the Notes) 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 Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a subsidiary) shall have no further
liability for the money. If the Company or a subsidiary acts as Paying Agent,
it shall segregate and hold in a separate trust fund for the benefit of the
Noteholders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee or its agent
shall serve as Paying Agent for the Notes.

 

16

 

Section 2.04           Noteholder
Lists.

 

The Registrar shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names and
addresses of Noteholders. If the Trustee is not the Registrar, the Company and
any other obligor shall furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the Trustee may request
in writing, but in any event at least semi-annually, a list in such form and
as of such date as the Trustee may reasonably require of the names and
addresses of Noteholders.

 

Section 2.05           Transfer
and Exchange.

 

(a)           Transfer and Exchange of Global
Notes. A Global Note may not be transferred as a whole except by the
Depository to a nominee of the Depository, by a nominee of the Depository to
the Depository or to another nominee of the Depository, or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. All Global Notes will be exchanged by the Company for Certificated
Notes if (i) the Company delivers to the Trustee notice from the
Depository that it is unwilling or unable to continue to act as Depository or
that it is no longer a clearing agency registered under the Exchange Act and,
in either case, a successor Depository is not appointed by the Company within
90 days after the date of such notice from the Depository or (ii) the
Company in its sole discretion determines that the Global Notes (in whole but
not in part) should be exchanged for Certificated Notes and delivers a written
notice to such effect to the Trustee or (iii) upon the request of the
Trustee or the Holders of a majority principal amount of the Notes, after there
shall have occurred and be continuing a Default or Event of Default with
respect to the Notes. Upon the occurrence of any of the preceding events in
(i), (ii) or (iii) above, Certificated Notes shall be issued in such
names as the Depository and Participants shall instruct the Trustee. Global
Notes also may be exchanged or replaced, in whole or in part, as provided
in Sections 2.06 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 2.05 or Section 2.06 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 2.05(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.05(b) or (c) hereof.

 

(b)           Transfer and Exchange of
Beneficial Interests in the Global Notes. The transfer and exchange of
beneficial interests in the Global Notes shall be effected through the
Depository, in accordance with the provisions of this Indenture and the
Applicable Procedures. 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 Global Note may be transferred to persons who take delivery thereof in
the form of a beneficial interest in a Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.05(b)(i).

 

17

 

(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 2.05(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
Depository in accordance with the Applicable Procedures directing the
Depository 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 Depository in accordance
with the Applicable Procedures directing the Depository to cause to be issued a
Certificated Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depository to
the Registrar containing information regarding the person in whose name such
Certificated Note shall be registered to effect the transfer or exchange
referred to in (1) above. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes contained in this
Indenture and the Notes or otherwise applicable under the Securities Act, the
Trustee shall adjust the principal amount of the relevant Global Note(s)
pursuant to Section 2.05(g) hereof.

 

(c)                                  Transfer
or Exchange of Beneficial Interests in Global Notes for Certificated Notes.
If any holder of a beneficial interest in a Global Note proposes to exchange
such beneficial interest for a Certificated Note or to transfer such beneficial
interest to a person who takes delivery thereof in the form of a
Certificated Note, then, upon satisfaction of the conditions set forth in Section 2.05(b)(ii) hereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.05(g) hereof,
and the Company shall execute and the Trustee shall authenticate and deliver to
the person designated in the instructions a Certificated Note in the appropriate
principal amount. Any Certificated Note issued in exchange for a beneficial
interest pursuant to this Section 2.05(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 Depository and the Participant or Indirect Participant. The
Trustee shall deliver such Certificated Notes to the persons in whose names
such Notes are so registered.

 

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

 

(e)                                  Transfer
and Exchange of Certificated Notes for Certificated Notes. Upon request by
a Holder of Certificated Notes and such Holder’s compliance with the provisions
of this Section 2.05(e), the Registrar shall register the transfer or
exchange of Certificated Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Certificated 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,

 

18

 

duly authorized in writing. In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the provisions
of this Section 2.05(e). A Holder of Certificated Notes may transfer
such Notes to a person who takes delivery thereof in the form of an
Certificated Note. Upon receipt of a request to register such a transfer, the
Registrar shall register the Certificated Notes pursuant to the instructions
from the Holder thereof.

 

(f)                                    Global
Note Legend. Each Global Note issued under this Indenture shall bear a
legend on its face in substantially the following form:

 

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (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 2.05 OF THE
INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.05(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.”

 

(g)                                 Cancellation
and/or Adjustment of Global Notes. At such time as all beneficial interests
in a particular Global Note have been exchanged for Certificated Notes or a
particular Global Note has been redeemed, repurchased or cancelled in whole and
not in part, each such Global Note shall be returned to or retained and
cancelled by the Trustee in accordance with Section 2.10 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 Certificated 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 Depository 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
Depository at the direction of the Trustee to reflect such increase.

 

(h)                                 General
Provisions Relating to Transfers and Exchanges.

 

(i)                                     To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Global Notes and Certificated Notes upon the Company’s
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 Certificated Note for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any transfer
tax or similar governmental charge payable in connection therewith (other than

 

19

 

any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.09, 3.06, 4.11 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
Certificated Notes issued upon any registration of transfer or exchange of
Global Notes or Certificated Notes shall be the valid and legally binding
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Global Notes or Certificated Notes
surrendered upon such registration of transfer or exchange.

 

(v)                                 Neither the Registrar
nor the Company shall 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 mailing of notice of redemption and ending at the close
of business on the day of such mailing, (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 the
Company 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, premium, if any, of and interest on such Notes and for all other
purposes, and none of the Trustee, any Agent or the Company shall be affected
by notice to the contrary.

 

(vii)                           The Trustee shall
authenticate Global Notes and Certificated Notes in accordance with the
provisions of Section 2.01 hereof.

 

(viii)                        All certifications,
certificates and Opinions of Counsel required to be submitted to the Registrar
pursuant to this Section 2.05 to effect a registration of transfer or
exchange may be submitted by facsimile, provided original copies are
promptly sent to the Registrar.

 

Section 2.06                                Replacement
Notes.

 

If the Holder of a Note claims that the Note has been
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Note if the Trustee’s requirements are met. If
required by the Trustee or the Company, an indemnity bond must be provided
which is sufficient in the judgment of both to protect the Company, the
Trustee, any Agent or any authenticating agent from any loss which any of them may suffer
if a Note is replaced. The Company may charge for its expenses in
replacing a Note.

 

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

 

20

 

Section 2.07                                Outstanding
Notes.

 

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

 

If a Note is replaced pursuant to Section 2.06,
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 Notes are considered paid under Section 4.01,
they cease to be outstanding and interest on them ceases to accrue.

 

Subject to Section 2.08, a Note does not cease to
be outstanding because the Company or an Affiliate of the Company holds the
Note.

 

Section 2.08                                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 Company or any other obligor or an Affiliate of the Company
or any other obligor shall be considered as though they are not outstanding,
except that for the purposes of determining whether the Trustee shall be protected
in relying on any such direction, waiver or consent, only Notes which the
Trustee knows are so owned shall be so disregarded. Notwithstanding the
foregoing, Notes that are to be acquired by the Company or an Affiliate of the
Company pursuant to an exchange offer, tender offer or other agreement shall
not be deemed to be owned by the Company or an Affiliate of the Company until
legal title to such Notes passes to the Company or Affiliate, as the case may be.

 

Section 2.09                                Temporary
Notes.

 

Until definitive Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Notes. Temporary
Notes shall be substantially in the form of definitive Notes but may have
variations that the Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes without charge to
the Noteholders.

 

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

 

Section 2.10                                Cancellation.

 

The Company 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 shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
cancelled Notes as the Company directs. Subject to Section 2.06 hereof,
the Company may not issue new Notes to replace Notes that it has paid or
that have been delivered to the Trustee for

 

21

 

cancellation. All
cancelled Notes held by the Trustee shall be destroyed and certification of
their destruction delivered to the Company, unless by a written order, signed
by two Officers of the Company, the Company shall direct that cancelled Notes
be returned to it.

 

Section 2.11                                Defaulted
Interest.

 

If the Company fails to make a payment of interest on
the Notes, it shall pay such defaulted interest plus any interest payable on
the defaulted interest, if any, in any lawful manner. It may pay such
defaulted interest, plus any such interest payable on it, to the persons who
are Noteholders on a subsequent special record date. The Company shall fix any
such record date and payment date. At least 15 days before any such record
date, the Company shall mail to Noteholders a notice that states the record
date, payment date and amount of such interest to be paid.

 

Section 2.12                                CUSIP
Numbers.

 

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

 

ARTICLE 3

REDEMPTION

 

Section 3.01                                Notices
to Trustee.

 

If the Company elects to redeem the Notes pursuant to
the optional redemption provisions of paragraph 5 of the Notes, it shall notify
the Trustee in writing of the redemption date and the principal amount of the
Notes to be redeemed.

 

The Company shall give each notice provided for in
this Section at least 60 days before the redemption date (unless a shorter
notice period shall be satisfactory to the Trustee, but in no event less than
30 days); provided, however,
that the Trustee shall have no liability to any Holder if it deems such shorter
notice period satisfactory to it.

 

Section 3.02                                Selection
of Notes to Be Redeemed.

 

Except as provided below, if less than all of the
Notes are to be redeemed, the Trustee shall select the Notes or portions
thereof to be redeemed on a pro rata basis or by lot among the Holders of the
Notes in accordance with a method the Trustee considers fair and appropriate
(in such manner as complies with applicable legal and stock exchange
requirements, if any).

 

The amount of Notes shall be calculated as the
aggregate principal amount of Notes originally issued hereunder less the
aggregate principal amount of any Notes previously

 

22

 

redeemed. The Trustee
shall make the selection not more than 60 days and not less than 30 days before
the redemption date from outstanding Notes not previously called for
redemption.

 

The Trustee shall promptly notify the Company of the
Notes or portions of Notes to be called for redemption. The Trustee may select
for redemption portions of the principal of Notes that have denominations
larger than $1,000. Notes and portions of them it selects shall be in amounts
of $1,000 or integral multiples of $1,000. 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.

 

At least 30 days but not more than 60 days before a
redemption date, the Company shall mail by first class mail, postage
prepaid a notice of redemption to each Holder whose Notes are to be redeemed at
its address of record, with a copy to the Trustee and the Registrar.

 

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

 

(1)                                  the
redemption date;

 

(2)                                  the
redemption price;

 

(3)                                  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
will be issued;

 

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

 

(5)                                  that
Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price plus accrued interest;

 

(6)                                  that,
unless the Company defaults in making the redemption payment, interest on Notes
called for redemption ceases to accrue on and after the redemption date, and
that 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; and

 

(7)                                  the
paragraph of the Notes pursuant to which the Notes called for redemption are
being redeemed.

 

At the Company’s written request, the Trustee shall
give the notice of redemption in the Company’s name and at its expense.

 

Section 3.04                                Effect
of Notice of Redemption.

 

Once notice of redemption is mailed, Notes called for
redemption become due and payable on the redemption date at the price set forth
in the Note. Unless the Company defaults in making the redemption payment, on
and after the redemption date, interest ceases to

 

23

 

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 thereof for
redemption, the principal (and premium, if any) shall, until paid, bear
interest from the redemption date at the rate borne by the Note.

 

Section 3.05                                Deposit
of Redemption Price.

 

No later than 10:00 a.m. Eastern Time on the
redemption date, the Company shall deposit with the Trustee or with the Paying
Agent immediately available funds sufficient to pay the redemption price of,
accrued and unpaid interest and premium, if any, on all Notes to be redeemed on
that date. The Trustee or the Paying Agent shall promptly return to the Company
any money not required for that purpose.

 

Section 3.06                                Notes
Redeemed in Part.

 

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

 

Section 3.07                                Mandatory
Disposition Pursuant to Gaming Laws.

 

Notwithstanding any other provision of this Article 3,
if a record or beneficial owner of a Note is required by any Gaming Authority
to be found suitable, such owner shall apply for a finding of suitability
within 30 days after request of such Gaming Authority. The applicant for a
finding of suitability must pay all costs of the investigation for such finding
of suitability. If a record or beneficial owner is required to be found
suitable and is not found suitable by such Gaming Authority, (i) such
owner shall, upon request of the Company, dispose of such owner’s Notes within
30 days or within that time prescribed by such Gaming Authority, whichever is
earlier, or (ii) the Company may, at its option, redeem such owner’s Notes
at the lesser of (x) the principal amount thereof or (y) the price at which the
Notes were acquired by such owner, together with, in either case, accrued and
unpaid interest and premium, if any, thereon to the date of the finding of
unsuitability by such Gaming Authority.

 

ARTICLE 4

COVENANTS

 

Section 4.01                                Payment
of Notes.

 

The Company shall pay the principal of and interest on
the Notes on the dates and in the manner provided in the Notes. Principal,
premium, if any, and interest shall be considered paid on the date due if the
Paying Agent (other than the Company or any Subsidiary or Affiliate of the
Company) holds by 10:00 a.m. New York time on that date money in
immediately available funds designated for and sufficient to pay all principal,
premium, if any, and interest then due.

 

24

 

To the extent lawful, the Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on (i) overdue principal at the rate borne by the Notes compounded
semiannually; and (ii) overdue installments of interest and, premium, if
any, (without regard to any applicable grace period) at the same rate,
compounded semiannually.

 

Section 4.02                                SEC
Reports, Financial Reports.

 

The Company shall file with the Trustee and shall
provide Holders within 15 days after it files them with the SEC copies of the
quarterly and annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company files with the SEC
pursuant to Sections 13(a) and 13(c) or 15(d) of the Exchange
Act. The Company will continue to file with the SEC and the Trustee, and to
provide to Holders, on the same timely basis such reports, information and
other documents as the Company would be required to file with the SEC as if the
Company were subject to the requirements of such Sections 13(a) and 13(c) or
15(d) of the Exchange Act, notwithstanding that the Company may no
longer be subject to Section 13(a) and 13(c) or 15(d) of
the Exchange Act and that the Company would be entitled not to file such
reports, information and other documents with the SEC. In addition, if the
Company has any Unrestricted Subsidiaries at such time, it shall also file with
the Trustee, and provide to the Holders, on the same timely basis, all
quarterly and annual financial statements (which statements may be
unaudited) that would be required by Forms 10-Q and 10-K if the Company did not
have such Unrestricted Subsidiaries.

 

The Company also shall comply with the provisions of
TIA § 314(a). The Company shall timely comply with its reporting and
filing obligations under applicable federal securities law.

 

Section 4.03                                Compliance
Certificate.

 

(a)                                  The
Company shall deliver to the Trustee, within 120 days after the end of each
fiscal year of the Company (which currently is December 31), an Officers’
Certificate stating that a review of the activities of the Company and its subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in
the performance or observance of any of the terms, provisions and conditions
hereof (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he may have knowledge) and
that to the best of his 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 are prohibited, or if such event has occurred, a
description of the event.

 

(b)                                 So
long as not contrary to the then current recommendations of the American
Institute of Certified Public Accountants or to a written policy adopted by the
Company’s independent public accountants which has been previously applied (a
copy of which

 

25

 

shall be delivered to the Trustee),
the audited financial statements delivered pursuant to Section 4.02 shall
be accompanied by a written statement of the Company’s independent public
accountants (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 which would lead them to believe that the
Company has violated any provisions of Article 4 or 5 of this Indenture
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
Company will, so long as any of the Notes are outstanding, deliver to the
Trustee, forthwith upon becoming aware of (i) any Default or Event of
Default in the performance of any covenant, agreement or condition contained in
this Indenture or (ii) any event of default under any other mortgage, indenture
or instrument governing other Indebtedness of the Company aggregating in excess
of $5,000,000, an Officers’ Certificate specifying such Default, Event of
Default or default.

 

Section 4.04                                Stay,
Extension and Usury Laws.

 

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

 

Section 4.05                                Limitation
on Indebtedness.

 

Unless the Notes are rated the Required Rating (during
which such time this Section 4.05 will not be in effect), the Company will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
create, incur, issue, assume, guarantee, or otherwise in any manner become
liable, directly or indirectly, with respect to any Indebtedness, except,
without duplication, for (i) the incurrence by the Company’s Unrestricted
Subsidiaries of Qualified Non-Recourse Debt, provided,
however, that if any such Indebtedness
ceases to be Qualified Non-Recourse Debt of an Unrestricted Subsidiary, such
event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company; (ii) FF&E Financing incurred by
the Company or its Restricted Subsidiaries; (iii) the Notes; (iv) all
Existing Notes; (v) provided no Event of Default shall have occurred and
be continuing, other Indebtedness of the Company and its Restricted
Subsidiaries in an amount not to exceed $15,000,000 in aggregate principal
amount; (vi) additional Indebtedness of the Company and its Restricted
Subsidiaries, if at the time of the incurrence of such Indebtedness, the pro
forma Consolidated Coverage Ratio of the Company, calculated cumulatively for
the four most recent consecutive fiscal quarters of the Company and ending
prior to the date of incurrence (the “Reference Period”), is not less than 2.00
to 1.00, after giving effect to (A) the incurrence of such Indebtedness as
if such Indebtedness was incurred at the beginning of the Reference Period and
(if applicable) the application of the net proceeds thereof to refinance other
Indebtedness as if the

 

26

 

application of such
proceeds occurred at the beginning of the Reference Period and (B) the
acquisition or disposition of any company or business acquired or disposed of
by the Company or any Restricted Subsidiary since the first day of the
Reference Period, including any acquisition or disposition which will be
consummated contemporaneously with the incurrence of such Indebtedness, as if
such acquisition or disposition occurred at the beginning of the Reference
Period; (vii) Permitted Refinancing Indebtedness; (viii) Indebtedness
incurred under the Bank Facility not to exceed the greater of (A) $200
million or (B) 1.5 times Operating Cash Flow calculated cumulatively for
the four most recent consecutive fiscal quarters of the Company immediately
preceding the date on which such Indebtedness is incurred, provided
that the exception in this clause (viii) shall not be applicable to any
Indebtedness incurred in refinancing the Bank Facility if the managing agent
for the lenders of such refinancing Indebtedness is a person other than a
banking institution with over $500 million in assets and subject to supervision
and examination by federal or state banking authorities; (ix) Interest
Rate Protection Agreements of the Company or any Restricted Subsidiary covering
solely Indebtedness of the Company or any Restricted Subsidiary which is
otherwise permitted to be incurred pursuant to this paragraph; (x) Indebtedness
to the Company or a wholly-owned Restricted Subsidiary; or (xi) to the extent
that such incurrence does not result in the incurrence by the Company or any
Restricted Subsidiary of any obligation for the payment of borrowed money of
others, Indebtedness incurred solely as a result of the execution by the
Company or its Restricted Subsidiaries of a Completion Guarantee and Keep-Well
Agreement; provided, however, that the foregoing
exception shall not be applicable to Indebtedness incurred in connection with
the performance by the Company or its Restricted Subsidiaries of a Completion
Guarantee and Keep-Well Agreement.

 

For purposes of determining compliance with this
covenant, in the event that an item of Indebtedness meets the criteria of more
than one of the categories of Indebtedness described in clauses (i) through
(xi) of the first paragraph of this covenant, the Company will, in its sole
discretion, classify such item of Indebtedness in any manner that complies with
this covenant and such item of Indebtedness will be treated as having been
incurred pursuant to only one of such clauses. The Company may reclassify
such Indebtedness from time to time in its sole discretion.

 

The Company will not incur any Indebtedness that is
contractually subordinated in right of payment to any other Indebtedness of the
Company 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
Company will be deemed to be contractually subordinated in right of payment to
any other Indebtedness of the Company solely by virtue of being unsecured.

 

Section 4.06                                Limitation
on Capital Stock of Restricted Subsidiaries.

 

The Company will not permit any Restricted Subsidiary
to issue any Capital Stock to any person (other than to the Company or any
wholly-owned Restricted Subsidiary) that shall entitle the holder of such
Capital Stock to a preference in right of payment in the event of liquidation, dissolution
or winding-up of such Restricted Subsidiary or with respect to dividends of
such Restricted Subsidiary.

 

27

 

Section 4.07                                Corporate
Existence.

 

Subject to Article 5 hereof, the Company will do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other
existence of each Subsidiary, if any, in accordance with the respective
organizational documents of each Subsidiary and the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries; provided, however, that
the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any Subsidiary,
if the Board of Directors of the Company shall determine in good faith, which
determination shall be evidenced by a board resolution, that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and its Subsidiaries taken as a whole and that the loss thereof is not adverse
in any material respect to the Holders.

 

Section 4.08                                Taxes.

 

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

 

Section 4.09                                Investment
Company Act.

 

The Company shall not become an investment company
subject to registration under the Investment Company Act of 1940, as amended.

 

Section 4.10                                Limitation
on Transactions with Affiliates.

 

Unless the Notes are rated the Required Rating (during
which such time this Section 4.10 will not be in effect), the Company will
not, and will not permit any Restricted Subsidiary to, directly or indirectly,
conduct any business or enter into any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property
or the rendering of any service), pursuant to which the Company or any
Restricted Subsidiary shall receive or render value exceeding $1,000,000, with
any Affiliate or Related Person of the Company or of the Existing Equity Holders
(other than the Company or a wholly-owned Restricted Subsidiary of the
Company), unless (i) the terms of such business, transaction or series of
related transactions are (A) set forth in writing and (B) fair and
reasonable to the Company or such Restricted Subsidiary, and no less favorable
to the Company or such Restricted Subsidiary, as the case may be, as terms
that would be obtainable at the time for a comparable transaction or series of
related transactions with an unrelated third person and (ii) the
disinterested directors of the Board of Directors of the Company have, by
resolution, determined in good faith that such business or transaction or series of
related transactions meets the criteria set forth in (i)(B) above, which
determination shall be conclusive and (iii) with respect to any
transaction or series of related transactions otherwise permitted under
this paragraph pursuant to which the Company or any Restricted Subsidiary shall
receive or render value exceeding $15,000,000, such transaction or series of
related transactions shall not be permitted unless, prior to consummation
thereof, the Company shall have received an opinion, from an independent
nationally recognized firm experienced in the appraisal or similar review of
similar types of

 

28

 

transactions, that such
transaction or series of related transactions is on terms which are fair,
from a financial point of view, to the Company or such Restricted Subsidiary. Notwithstanding
the foregoing, the Company or any of its Restricted Subsidiaries shall be
entitled to provide management services to an Unrestricted Subsidiary whose
sole purpose is to develop, construct and operate a new gaming facility,
provided that the Company or such Restricted Subsidiary, as the case may be,
is reimbursed by the Unrestricted Subsidiary for all costs and expenses
(including without limitation payroll) it incurs in providing such services.

 

Section 4.11                                Change
of Control and Rating Decline.

 

Upon the occurrence of a Change of Control Triggering
Event, each Holder shall have the right to require that the Company repurchase
all or any part of such Holder’s Notes at a repurchase price in cash (the “Repurchase
Price”) equal to 101% of the principal amount thereof, plus accrued interest to
the date of repurchase.

 

Within 30 days following the date of a Change of
Control Triggering Event, the Company shall mail a notice to each Holder at its
last registered address, with a copy to the Trustee, of the Company’s offer to
repurchase (the “Repurchase Offer”) Notes pursuant to this Section 4.11. The
Repurchase Offer shall remain open from the time of mailing of such notice
until the repurchase date (which shall be no earlier than 30 days nor later
than 60 days from the date of such mailing) (the date on which the Repurchase
Offer closes being the “Repurchase Date”). The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Repurchase Offer. The notice, which shall govern the terms of
the Repurchase Offer, shall state:

 

(i)                                     that a Change of
Control Triggering Event has occurred and that such Holder has the right to
require the Company to repurchase all or any part of such Holder’s Notes
at a repurchase price in cash equal to 101% of the principal amount, plus
accrued and unpaid interest thereon, if any, to the date of repurchase thereof;

 

(ii)                                  the circumstances and
relevant facts regarding such Change of Control Triggering Event (including
information with respect to pro forma historical income, cash flow and
capitalization after giving effect to such Change of Control Triggering Event);

 

(iii)                               the Repurchase Date;

 

(iv)                              that any Note not
tendered will continue to accrue interest;

 

(v)                                 that, unless the
Company defaults in paying the Repurchase Price, any Note accepted for payment
pursuant to the Repurchase Offer shall cease to accrue interest from and after
the Repurchase Date;

 

(vi)                              that Holders electing to
have a Note purchased pursuant to the Repurchase Offer will be required to
surrender the Note, with the form entitled “Option of Holder to Elect
Repurchase” on the reverse of the Note duly completed, to the Company at the
address specified in the notice at least three Business Days prior to the
Repurchase Date;

 

29

 

(vii)                           that Holders will be
entitled to withdraw their election if the Paying Agent receives, not later
than three Business Days prior to the Repurchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Notes the Holder delivered for repurchase and a statement
that such Holder is withdrawing such Holder’s election to have such Notes
repurchased; and

 

(viii)                        that Holders whose Notes are
purchased only in part will be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered.

 

If any consent under the Bank Facility is necessary to
permit the Company to effect the Repurchase Offer, the Company will (i) repay
in full or offer to repay in full all Indebtedness under the Bank Facility or (ii) obtain
the requisite consent under the Bank Facility; provided,
however, that the failure to repay such
Indebtedness or obtain such consent will not in any event excuse any failure by
the Company to perform its obligations under this Section 4.11.

 

On the Repurchase Date, the Company shall, to the
extent lawful, (i) accept for payment Notes or portions thereof tendered
pursuant to the Repurchase Offer and (ii) deliver to the Trustee Notes so
tendered together with an Officers’ Certificate stating the Notes or portions
thereof accepted for payment by the Company. The Paying Agent shall promptly
mail or deliver to Holders of Notes so accepted payment in an amount equal to
the Repurchase Price. The Trustee shall promptly authenticate and mail or
deliver to each Holder who tendered a Note a new Note or Notes equal in
principal amount to any untendered portion of the Note surrendered. The Paying
Agent shall invest funds deposited with it pursuant to this Section 4.11
for the benefit of, and at the written direction of, the Company to the
Repurchase Date.

 

Section 4.12                                Limitation
on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries.

 

Unless the Notes are rated the Required Rating (during
which such time this Section 4.12 will not be in effect), the Company will
not, and will not permit any Restricted Subsidiary to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any Restricted Subsidiary to:  (i) pay dividends or make any other
distribution on its Capital Stock or any other interest or participation in, or
measured by, its profits, or pay any interest or principal due on Indebtedness
owed to the Company or any of its Restricted Subsidiaries; (ii) make loans
or advances to the Company or any of its Restricted Subsidiaries; or (iii) transfer
any of its properties or assets to the Company or any of its Restricted
Subsidiaries, other than (a) any such encumbrance or restriction imposed
by any Gaming Authority; (b) any encumbrance or restriction existing on
the date hereof, contained in the Bank Facility relating to Indebtedness that
does not exceed the greater of (1) $200 million or (2) 1.5 times
Operating Cash Flow calculated cumulatively for the four most recent
consecutive fiscal quarters of the Company immediately preceding the date on
which such Indebtedness is incurred; (c) any encumbrance or restriction
with respect to a Restricted Subsidiary pursuant to an agreement relating to
any Indebtedness (other than Indebtedness incurred in anticipation of, as
consideration in, or to provide all or any portion of the funds utilized to
consummate, the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Subsidiary of the Company) incurred
by such Restricted Subsidiary on or prior to the date on which such Restricted
Subsidiary became a

 

30

 

Restricted Subsidiary of
the Company and outstanding on such date; (d) any pledge by the Company or
a Restricted Subsidiary of the stock of an Unrestricted Subsidiary if such
pledge is made in connection with the incurrence of Qualified Non-Recourse Debt
by such Unrestricted Subsidiary; and (e) any encumbrance or restriction
pursuant to an agreement relating to Indebtedness issued to repay or amend
Indebtedness referred to in clause (b), (c) or (e) of this paragraph,
provided, however,
that any such encumbrance or restriction is no less favorable to the
Noteholders than encumbrances and restrictions contained in agreements relating
to the Indebtedness so repaid or amended, and provided
further, that in the event that
Indebtedness is issued to repay or amend the Bank Facility, the aggregate
principal amount of such Indebtedness shall not exceed the greater of (A) $200
million or (B) 1.5 times Operating Cash Flow calculated cumulatively for
the four most recent consecutive fiscal quarters of the Company immediately
preceding the date on which such Indebtedness is issued.

 

Section 4.13                                Limitation
on Liens.

 

The Company will not issue, assume or guarantee any
Indebtedness secured by a Lien upon any of its property without (x) equally and
ratably securing the Notes with (or prior to) the Indebtedness secured by the
Lien, for so long as the Indebtedness shall be so secured or (y) in the event
that such Indebtedness is Subordinated Indebtedness, securing the Notes prior
to such Subordinated Indebtedness as to such property, for so long as such
Subordinated Indebtedness shall be so secured. This limitation on Liens will
not apply to:

 

(i)                                     Liens existing on
the date of issuance of the Notes;

 

(ii)                                  Liens affecting
property of a corporation or other entity existing at the time of acquisition
through a merger, consolidation or otherwise by the Company;

 

(iii)                               Liens on property
existing at the time of acquisition or incurred to secure payment of all or a part of
the purchase price or to secure Indebtedness incurred prior to, at the time of,
or within 24 months after the acquisition, for the purpose of financing all or part of
the purchase price;

 

(iv)                              Liens on any property to
secure all or part of the cost of improvements or construction thereon or
Indebtedness incurred to provide funds for that purpose in a principal amount
not exceeding the cost of these improvements or construction;

 

(v)                                 Liens to secure
Indebtedness of the Company, the proceeds of which are used substantially
simultaneously with the incurrence of such Indebtedness to retire Funded
Indebtedness;

 

(vi)                              purchase money security
Liens on personal property;

 

(vii)                           Liens securing Indebtedness
of the Company, the proceeds of which are used within 24 months of the
incurrence of such Indebtedness for the Project Cost of the construction and
development or improvement of a Resort Property;

 

31

 

(viii)                        Liens on the stock, partnership
or other equity interest of the Company in any Joint Venture to secure
Indebtedness, provided, the amount of such Indebtedness is contributed and/or
advanced solely to such Joint Venture;

 

(ix)                                Liens securing
Indebtedness, liabilities or other obligations incurred under the Bank Facility
or any other debt or credit facilities with banks or other institutional
lenders providing for revolving credit facilities, term loans or letters of
credit;

 

(x)                                   Liens in favor of
any government or governmental body, including the United States or any state
thereof, or any department, agency, instrumentality, or political subdivision
of any such jurisdiction, including, without limitation, Liens to secure
Indebtedness of the pollution control or industrial revenue bond type;

 

(xi)                                Liens required by any
contract or statute in order to permit the Company to perform any contract
or subcontract made by it with or at the request of a governmental entity, the
United States of America, any state or any department, agency or
instrumentality or political subdivision of either;

 

(xii)                             mechanic’s, materialman’s,
carrier’s or other like Liens, arising in the ordinary course of business;

 

(xiii)                          Liens for taxes or
assessments and similar charges either (x) not delinquent or (y) contested in
good faith by appropriate proceedings and as to which the Company or a
Subsidiary of the Company shall have set aside on its books adequate reserves;

 

(xiv)                         zoning restrictions,
easements, licenses, covenants, reservations, restrictions on the use of real
property and minor irregularities of title incident thereto which do not in the
aggregate materially detract from the value of the property or assets of the
Company and its Restricted Subsidiaries taken as a whole or impair the use of
such property in the operation of the Company’s business; and

 

(xv)                            any extension, renewal,
replacement or refinancing of any Lien referred to in the foregoing clauses (i) through
(ix) inclusive or of any Indebtedness secured thereby; provided, that the principal amount of Indebtedness secured
thereby shall not exceed the principal amount of Indebtedness so secured at the
time of such extension, renewal, replacement or refinancing, and that such
extension, renewal, replacement or refinancing Lien shall be limited to all or
part, of substantially the same property which secured the Lien extended,
renewed, replaced or refinanced (plus improvements on such property).

 

Notwithstanding the foregoing, the Company may,
without securing the Notes, issue, assume or guarantee Indebtedness secured by
a Lien on the Company’s property which would otherwise be subject to the foregoing
restrictions in an aggregate principal amount which, together with all other
such Indebtedness of the Company which would otherwise be subject to the
foregoing restrictions (not including Indebtedness permitted to be secured
under clauses (i) through (ix) inclusive above) does not at any one
time exceed an amount equal to the Operating Cash Flow of the Company
calculated cumulatively for the four most recent consecutive fiscal

 

32

 

quarters of the Company immediately
preceding the date of such issuance, assumption or guarantee of such
Indebtedness.

 

Section 4.14                                No
Amendment to Subordination Provisions.

 

Without the consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding, the
Company will not amend, modify or alter any of the indentures governing any of
the Existing Senior Subordinated Notes in any way to:

 

(i)                                     advance
the final maturity date of any of the Existing Senior Subordinated Notes to a
date that is prior to 181 days after the final maturity date of the Notes; or

 

(ii)                                  amend
the provisions of Article 10 of any of the indentures governing the
Existing Senior Subordinated Notes (which relate to subordination) in any
manner that materially adversely affects the holders of the Notes.

 

ARTICLE 5

SUCCESSORS

 

Section 5.01                                When
Company May Merge, etc.

 

The Company shall not consolidate with or merge with
or into any other entity (other than with a wholly-owned Restricted Subsidiary,
provided the Company is the continuing corporation) or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets (determined on a consolidated basis for the Company and
its Restricted Subsidiaries taken as a whole) to any entity, unless:

 

(i)                                     either (a) the
Company shall be the continuing corporation or (b) the entity (if other
than the Company) formed by such consolidation or into which the Company is
merged or the entity that acquires, by sale, conveyance, assignment, transfer,
lease or disposition, all or substantially all of the properties and assets of
the Company shall be a corporation, partnership or trust organized and validly
existing under the laws of the United States or any state thereof or the
District of Columbia, and shall expressly assume by a supplemental indenture
the due and punctual payment of the principal of and premium, if any, and
interest on all the Notes and the performance and observance of every covenant
of the Indenture on the part of the Company to be performed or observed;

 

(ii)                                  immediately
thereafter, no Event of Default (and no event that, after notice or lapse of
time, or both, would become an Event of Default) shall have occurred and be
continuing;

 

(iii)                               immediately after giving
effect to any such transaction involving the incurrence by the Company or any
Restricted Subsidiary, directly or indirectly, of additional Indebtedness (and
treating any Indebtedness not previously an obligation of the Company or any of
its Restricted Subsidiaries incurred in connection with or as a result of such
transaction as having been incurred at the time of such transaction), the
Company (if it is the continuing corporation) or such other entity could incur
at least $1.00 of additional Indebtedness pursuant to Section 4.05(vi);
and

 

33

 

(iv)                              immediately thereafter,
the Company (if it is the continuing corporation) or such other entity shall
have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth
of the Company immediately prior to such transaction.

 

The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers’ Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed transaction
and such supplemental indenture comply with this Indenture.

 

Section 5.02                                Successor
Corporation Substituted.

 

Upon any consolidation or merger, or any sale, lease,
conveyance or other disposition of all or substantially all of the assets of
the Company in accordance with Section 5.01, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, lease, conveyance or other disposition is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor person
had been named as the Company herein. When a successor corporation assumes all
of the obligations of the Company hereunder and under the Notes and agrees to
be bound hereby and thereby, the predecessor shall be released from such
obligations.

 

ARTICLE 6

DEFAULTS AND REMEDIES

 

Section 6.01                                Events
of Default.

 

An “Event of Default” occurs if:

 

(a)                                  the
Company defaults in the payment of interest on any Note when the same becomes
due and payable and such Default continues for a period of 30 days after the
date due and payable;

 

(b)                                 the
Company defaults in the payment of the principal of any Note when the same
becomes due and payable at maturity, upon optional redemption of the Notes by
the Company, upon exercise by the Holder of the Repurchase Offer upon a Change
of Control Triggering Event, upon declaration or otherwise;

 

(c)                                  the
Company fails to observe, perform or comply with Section 5.01;

 

(d)                                 the
Company fails to observe, perform or comply with any of its other
agreements or covenants in, or provisions of, the Notes or this Indenture and
such failure to observe, perform or comply continues for a period of 60
days after receipt by the Company of notice of Default from the Trustee or the
Holders of at least 25% in principal amount of the Notes;

 

(e)                                  the
Company fails, after any applicable grace period, to make any payment of
principal of, premium in respect of, or interest on, any Indebtedness when due,
or any Indebtedness of the Company or any of its Restricted Subsidiaries is
accelerated because of a

 

34

 

default and the aggregate
principal amount of such Indebtedness with respect to which any such failure to
pay or acceleration has occurred exceeds the greater of (x) $10,000,000 and (y)
5% of Consolidated Net Tangible Assets;

 

(f)                                    any
encumbrance or restriction of the type described in Section 4.12 becomes
applicable to any Restricted Subsidiary;

 

(g)                                 the
Company or any Restricted Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:

 

(A)                              commences a voluntary
case,

 

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

 

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

 

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

 

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

 

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

 

(A)                              is for relief against the
Company or any Restricted Subsidiary in an involuntary case,

 

(B)                                appoints a Custodian of
the Company or any Restricted Subsidiary or for all or substantially all of the
property of the Company or any Restricted Subsidiary, or

 

(C)                                orders the liquidation
of the Company or any Restricted Subsidiary, and the order or decree remains
unstayed and in effect for 60 days; or

 

(i)                                     one
or more judgments, orders or decrees are rendered against the Company or any of
its Restricted Subsidiaries in an aggregate amount in excess of (x) $10,000,000
and (y) 5% of Consolidated Net Tangible Assets (in each case, to the extent not
covered by insurance) and, in each case, that are not discharged for a period
of 60 days during which a stay of enforcement of such judgments, orders or
decrees, by reason of a pending appeal or otherwise, is not in effect; 

 

(j)                                     any
Gaming License of the Company or any of its Restricted Subsidiaries 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 90 days of the
casino business of any casino-hotel owned, leased or operated directly or
indirectly by the Company or any of its Restricted Subsidiaries (other than any
voluntary relinquishment of a Gaming License if such

 

35

 

relinquishment is, in the reasonable, good
faith judgment of the Board of Directors of the Company, evidenced by a
resolution of such Board, both desirable in the conduct of the business of the
Company and its Restricted Subsidiaries, taken as a whole, and not
disadvantageous in any material respect to the Holders).

 

The term “Bankruptcy Law” means title 11, U.S. Code or
any similar federal or state law for the relief of debtors.  The term “Custodian” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

In the case of any Event of Default pursuant to the
provisions of this Section 6.01 occurring by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the
intention of avoiding payment of the premium which the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to
paragraph 5 of the Notes, an equivalent premium (or, in the event that the
Company would not be permitted to redeem the Notes pursuant to paragraph 5 of
the Notes, the premium payable on the first date thereafter on which such
redemption would be permissible) shall also become and be immediately due and
payable to the extent permitted by law, anything in this Indenture or in the
Notes contained to the contrary notwithstanding.

 

Section 6.02           Acceleration.

 

If an Event of Default (other than an Event of Default
specified in clause (g) or (h) of Section 6.01) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the then outstanding Notes by notice to the Company and the Trustee,
may declare the unpaid principal of and all accrued and unpaid interest and
premium, if any, on the Notes to be immediately due and payable.  Upon such declaration, the principal,
interest and premium, if any, shall be due and payable immediately.  If an Event of Default specified in clause
(g) or (h) of Section 6.01 occurs, such an amount shall ipso
facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.  The Holders of a majority in
principal amount of the then outstanding Notes, by notice to the Trustee, may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived, except non-payment of principal or interest that has
become due solely because of the acceleration.

 

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 or
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.

 

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

 

36

 

Section 6.04           Waiver
of Past Defaults.

 

The Holders of a majority in principal amount of the
then outstanding Notes, by notice to the Trustee, may waive an existing Default
or Event of Default and its consequences, except a continuing Default or Event
of Default in the payment of the principal of any Note.  

 

Section 6.05           Control
by Majority.

 

The Holders of a majority in principal amount of the
then outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it.  However, the
Trustee may refuse to follow any direction that conflicts with law or this Indenture,
that is unduly prejudicial to the rights of other Noteholders, or would involve
the Trustee in personal liability.

 

Section 6.06           Limitation
on Suits.

 

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

 

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

 

(b)           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;

 

(c)           such Holder or Holders offer to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;

 

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

 

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

 

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

 

Section 6.07           Rights
of Holders 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, and interest on the Note, on or after the respective due dates expressed
in the Note, 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 the 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 may recover judgment as permitted
under applicable law in its own name and as 

 

37

 

trustee of an express trust against the Company or any
other obligor on the Notes for the whole amount of principal, premium, if any,
and interest remaining unpaid on the Notes and interest on overdue principal
and interest and such further amount as shall be sufficient to cover the costs
and, to the extent lawful, 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 may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee and the Noteholders allowed in any judicial proceedings
relative to the Company or any other obligor or their respective creditors or
property.  Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Noteholder in any such proceeding.

 

Section 6.10           Priorities.

 

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

 

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

 

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

 

Third:                                                                to
the Company or any other obligors on the Notes, as their interests may appear,
or as a court of competent jurisdiction may direct.

 

The Trustee may fix a record date and payment date for
any payment to Noteholders.

 

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 Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant.  This Section 6.11 does not
apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or
a suit by Holders of more than 10% in principal amount of the then outstanding
Notes.

 

38

 

ARTICLE 7

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 their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

 

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

 

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

 

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

 

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

 

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

 

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

 

(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.

 

(d)           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)           The Trustee may refuse to perform any
duty or exercise any right or power unless it receives indemnity satisfactory
to it against any loss, liability or expense.

 

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

 

39

 

(g)           None of the provisions of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers.

 

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

 

Section 7.02           Rights
of Trustee.

 

(a)           The Trustee may rely on, and shall be
protected in acting or refraining from acting upon, any document (whether in
original, facsimile or electronic form) believed by it to be genuine and to
have been signed or presented by the proper person.  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 or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney.

 

(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 of its own selection and the
written advice or opinion of such counsel or 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 agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.

 

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

 

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

 

(f)            The Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this Indenture
at the request or direction of any of the Holders unless such Holders shall
have offered to the Trustee reasonable security or indemnity 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 charged with
knowledge of any Default or Event of Default unless either (i) a Responsible
Officer of the Trustee shall have actual knowledge of such Default or Event of
Default or (ii) written notice of such Default or Event of Default shall 

 

40

 

have been given to and received by a
Responsible Officer of the Trustee by the Company or any Holder.

 

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 otherwise deal with the
Company or an Affiliate of the Company with the same rights it would have if it
were not Trustee.  Any Agent may do the
same with like rights.  However, the
Trustee is subject to Sections 7.10 and 7.11.

 

Section 7.04           Trustee’s
Disclaimer.

 

The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes,
it shall not be accountable for the Company’s use of the proceeds from the
Notes or any money paid to the Company or upon the Company’s direction under
any provision of this Indenture or the Notes, 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 authentication of the
Notes.

 

Section 7.05           Notice
of Defaults.

 

If a Default or Event of Default occurs and is
continuing and if it is actually known to the Trustee, the Trustee shall mail
to Note holders 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 on any Note, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Noteholders.

 

Section 7.06           Reports
by Trustee to Holders.

 

Within 60 days after the reporting date stated in
Section 10.10, the Trustee, to the extent required, shall mail to Noteholders a
brief report dated as of such reporting date that complies with TIA § 313(a).  The Trustee also shall comply with TIA §
313(b).  The Trustee shall also transmit
by mail all reports as required by TIA § 313(c).

 

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

 

Section 7.07           Compensation
and Indemnity.

 

The Company shall pay to the Trustee from time to time
upon demand by the Trustee reasonable compensation established by the Trustee
for its services hereunder.  The
Trustee’s compensation shall not be limited by any law on compensation of a
trustee of an 

 

41

 

express trust. 
The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it. 
Such expenses shall include the reasonable compensation and
out-of-pocket expenses of the Trustee’s agents and counsel.

 

The Company shall indemnify the Trustee, its officers,
directors, employees and agents against any and all losses, liabilities,
claims, damages or expenses (including reasonable legal fees and 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 Company (including this Section
7.07) and defending itself against any claim (whether asserted by the Company
or any Holder or any other person) or liability in connection with the exercise
or performance of any of its powers or duties hereunder.  The Trustee shall notify the Company promptly
of any claim for which it may seek indemnity. 
The Company shall defend the claim and the Trustee shall cooperate in
the defense.  The Trustee may have
separate counsel, and the Company shall pay the reasonable fees and expenses of
such counsel.  The Company need not pay
for any settlement made without its consent, which consent shall not be
unreasonably withheld.

 

The Company need not reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through gross
negligence or willful misconduct.

 

To secure the Company’s 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 resignation or removal of the Trustees and
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(g) or (h) 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.

 

Section 7.08           Replacement
of Trustee.

 

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

 

The Trustee may resign by so notifying the
Company.  The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company. 
The Company may remove the Trustee by notice to the Trustee if:

 

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

 

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

 

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

 

(4)           the
Trustee becomes otherwise incapable of acting.

 

42

 

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company and any other
obligor 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 Company.

 

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

 

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

 

A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company.  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 Noteholders.  The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.07.  Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company’s obligations under Section 7.07
hereof shall continue for the benefit of the retiring trustee with respect to
expenses and liabilities incurred by it prior to such replacement.

 

Section 7.09           Successor
Trustee by Merger, etc.

 

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

 

Section 7.10           Eligibility;
Disqualification.

 

This Indenture shall always have a Trustee who
satisfies the requirements of TIA § 310(a)(1). 
The Trustee shall always have a combined capital and surplus as stated
in Section 10.10.  The Trustee is subject
to TIA § 310(b), including the optional provision permitted by the proviso in
the second sentence of TIA § 310(b).

 

Section 7.11           Preferential
Collection of Claims Against Company.

 

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.

 

43

 

ARTICLE 8

DISCHARGE OF INDENTURE

 

Section 8.01           Termination
of Company’s Obligations.

 

This Indenture shall cease to be of further effect
(except that the Company’s obligations under Sections 7.07 and 8.03, and
application of funds to the payment of Notes, shall survive) when all outstanding
Notes theretofore authenticated and issued have been delivered to the Trustee
for cancellation, and the Company has paid all sums payable hereunder.  In addition, the Company may terminate all of
its obligations under this Indenture (except the Company’s obligations under
Sections 7.07 and 8.03) if:

 

(1)           the Company irrevocably deposits in
trust with the Trustee money or non-callable U.S. Government Obligations
maturing as to principal and interest in such amounts and at such times as are
sufficient, as certified by an Officers’ Certificate, to pay principal,
premium, if any, and interest on the Notes to maturity or redemption, as the
case may be, and to pay all other sums payable by it hereunder; and

 

(2)           the Company delivers to the Trustee
an Opinion of Counsel satisfactory to the Trustee that the Holders of the Notes
should not recognize income, gain or loss for federal income tax purposes as a
result of the Company’s exercise of its option under this Section 8.01 and will
be subject to federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such option had not been
exercised.

 

However, the Company’s obligations in Sections 2.02,
2.03, 2.04, 2.05, 2.06, 4.01, 7.07, 8.03 and 8.04 shall survive until the Notes
are no longer outstanding.  Thereafter,
only the Company’s obligations in Sections 7.07 and 8.03 shall survive.

 

After a deposit made pursuant to this Section 8.01,
the Trustee upon request shall acknowledge in writing the discharge of the Company’s
obligations under this Indenture, except for those surviving obligations
specified above.

 

“U.S. Government Obligations” means direct obligations
of the United States of America, or obligations unconditionally guaranteed by
the United States of America, for the payment of which the full faith and
credit of the United States of America is pledged.  In order to have money available on a payment
date to pay principal of or interest on the Notes, the U.S. Government
Obligations shall be payable as to principal or interest on or before such
payment date in such amounts as will provide the necessary money.  U.S. Government Obligations shall not be
callable at the issuer’s option.

 

Section 8.02           Application
of Trust Money.

 

The Trustee shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to Section 8.01.  It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal, premium, if any,
and interest on the Notes.

 

44

 

Section 8.03           Repayment
to Company.

 

The Trustee and the Paying Agent shall promptly pay to
the Company upon request any excess money or securities held by them at any
time.

 

The Trustee and the Paying Agent shall pay to the
Company upon request any money held by them for the payment of principal,
premium, if any, or interest on any Note that remains unclaimed for two years
after the date upon which such payment shall have become due; provided, however, that
the Company shall have first caused notice of such payment to the Company to be
mailed to each Noteholder entitled thereto no less than 30 days prior to such
payment.  After payment to the Company,
Noteholders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another person.

 

Section 8.04           Reinstatement.

 

If (i) the Trustee or Paying Agent is unable to apply
any money in accordance with Section 8.02 by reason of any order or judgment of
any court or governmental authority (other than any order of the Nevada Gaming
Commission restricting the payment of such money to any particular Holder)
enjoining, restraining or otherwise prohibiting such application and (ii) the
Holders of at least a majority in principal amount of the then outstanding
Notes so request by written notice to the Trustee, the Company’s obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01 until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
8.02; provided, however, that if the Company makes any payment of principal,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the right of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.

 

ARTICLE 9

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

Section 9.01           Without
Consent of Holders.

 

The Company and the Trustee may amend or supplement
this First Supplemental Indenture or the Notes without the consent of any
Noteholder:

 

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

 

(4)           to comply with Section 5.01;

 

(5)           to comply with any requirements of
the SEC in connection with the qualification or requalification of this
Indenture under the TIA;

 

(6)           to provide for uncertificated Notes
in addition to certificated Notes; or

 

(7)           to make any change that does not
adversely affect the rights hereunder of any Noteholder.

 

45

 

Upon the request of the Company accompanied by a
resolution of its Board of Directors 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
Company in the execution of any amended or supplemental indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee
shall not be obligated to enter into such amended or supplemental Indenture
that affects its own rights, duties or immunities under this Indenture or
otherwise.

 

Section 9.02           With
Consent of Holders.

 

Subject to Section 6.07, the Company and the Trustee
may amend or supplement this Indenture or the Notes with the written consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes.  Subject to Sections 6.04 and
6.07, the Holders of a majority in principal amount of the Notes then
outstanding may also waive compliance in a particular instance by the Company
with any provision of this Indenture or the Notes.

 

Upon the request of the Company accompanied by a
resolution of its Board of Directors 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 Company 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.

 

However, without the consent of each Noteholder
affected, an amendment, supplement or waiver under this Section may not:

 

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

 

(2)           reduce the rate of or change the time
for payment of interest on any Note;

 

(3)           reduce the principal of or change the
fixed maturity of any Note or alter the redemption provisions with respect
thereto;

 

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

 

(5)           make any change in Section 6.04, 6.07
or 9.02 (this sentence only); or

 

(6)           waive a default in the payment of the
principal of, or interest on, any Note.

 

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

 

46

 

After an amendment, supplement or waiver under Section
9.01 and this Section 9.02 becomes effective, the Company shall mail to
Noteholders a notice briefly describing the amendment, supplement or
waiver.  

 

Section 9.03           Compliance
with Trust Indenture Act.

 

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

 

Section 9.04           Revocation
and Effect of Consents.

 

Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same Indebtedness as the consenting Holder’s Note, even if
notation of the consent is not made on any Note.  However, any such Holder or subsequent Holder
may revoke the consent as to his Note or portion of a Note if the Trustee
receives notice of revocation before the date on which the Trustee receives an
Officers’ Certificate certifying that the Holders of the requisite principal
amount of Notes have consented to the amendment, supplement or waiver (or
before such later date as may be required by law or stock exchange rule).

 

The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to consent to
any amendment, supplement or waiver.  If
a record date is fixed, then notwithstanding the provisions of the immediately
preceding paragraph, those persons who were Holders at such record date (or
their duly designated proxies), and only those persons, shall be entitled to
consent to such amendment, supplement or waiver or to revoke any consent
previously given, whether or not such persons continue to be Holders after such
record date.  No consent shall be valid
or effective for more than 90 days after such record date unless consents from
Holders of the principal amount of Notes required hereunder for such amendment,
supplement or waiver to be effective shall have also been given and not revoked
within such 90-day period.

 

After an amendment, supplement or waiver becomes
effective it shall bind every Noteholder, unless it is of the type described in
any of clauses (1) through (6) of Section 9.02. 
In such case, the amendment, supplement or waiver shall bind each Holder
of a Note who has consented to it and every subsequent Holder of a Note that
evidences the same Indebtedness as the consenting Holder’s Note.

 

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 Company in exchange for all Notes may
issue and the Trustee shall authenticate new Notes that reflect the amendment,
supplement or waiver.

 

47

 

Section 9.06           Trustee
Protected.

 

The Trustee shall sign all amended or supplemental
indentures, except that the Trustee need not sign any amended or supplemental
indenture that adversely affects its rights. 
As a condition to executing or accepting any supplemental indenture, the
Trustee may request and rely on an Opinion of Counsel and an Officers’
Certificate stating that such amended or supplemental indenture is permitted
hereunder and all conditions precedent have been complied with, in the form set
forth in Sections 11.04 and 11.05.

 

Section 9.07           Reference
in Notes to Supplemental Indentures.

 

The Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture.  If the Company shall so determine, new Notes
so modified as to conform, in the opinion of the Trustee and the Company, to
any such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for outstanding Notes.

 

ARTICLE 10

MISCELLANEOUS

 

Section 10.01         Trust
Indenture Act Controls.

 

If any provision of this Indenture limits, qualifies
or conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.

 

Section 10.02         Notices.

 

Any notice or communication by the Company or the
Trustee to the other is duly given if in writing and delivered in person or
mailed by overnight delivery service to the recipient’s address stated in
Section 10.10.  The Company or the
Trustee by notice to the other may designate additional or different addresses
for subsequent notices or communications.

 

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

 

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

 

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

 

If any notice is mailed to the Company in the manner
provided above, a copy of such notice shall be mailed, in the manner provided
above, to Milbank, Tweed, Hadley & 

 

48

 

McCloy LLP, 601 South Figueroa Street, Los Angeles,
California 90017, Attention:  Kenneth J.
Baronsky, Esq.

 

All other notices or communications shall be in
writing.

 

Section 10.03         Communication
by Holders with Other Holders.

 

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

 

Section 10.04         Certificate
and Opinion as to Conditions Precedent.

 

Upon any request or application by the Company or any
other obligor to the Trustee to take any action under this Indenture, the
Company or any other obligor, as the case may be, shall furnish to the Trustee:

 

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

 

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

 

Section 10.05         Statements
Required in Certificate or Opinion.

 

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

 

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

 

(ii)           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;

 

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

 

(iv)          a statement as to
whether or not, in the opinion of such person, such condition or covenant has
been complied with.

 

Section 10.06         Rules
by Trustee and Agents.

 

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

 

49

 

Section 10.07         Legal
Holidays.

 

A “Legal Holiday” is a Saturday, a Sunday or a day on
which banking institutions in the State of Nevada, New York or California are
not required to be open.  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 for the intervening period.

 

Section 10.08         No
Recourse Against Others.

 

A director, officer, employee or stockholder, as such,
of the Company shall not have any liability for any obligations of the Company
under the Notes or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. 
Each Noteholder by accepting a Note waives and releases all such
liability.  The waiver and release are
part of the consideration for the issue of the Notes.

 

Section 10.09         Counterparts.

 

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

 

Section 10.10         Variable
Provisions.

 

The Company initially appoints Deutsche Bank Trust
Company Americas, with offices at 60 Wall Street, New York, New York 10005 as
Paying Agent and Registrar and the Trustee as authenticating agent.

 

The first certificate pursuant to Section 4.03 shall
be for the fiscal year ending on the first December 31 to occur after the date
of this Indenture.

 

The reporting date for Section 7.06 is June 1 of each
year.  The first reporting date is June
1, 2007.

 

The Trustee shall always have a combined capital and
surplus (including subordinated capital notes) of at least $50,000,000 as set
forth in its most recent published annual report of condition.

 

The Company’s address is:

 

STATION CASINOS, INC.

2411 West Sahara Avenue

Las Vegas, Nevada  89102

 

The Trustee’s address is:

 

LAW DEBENTURE TRUST
COMPANY OF NEW YORK

767 3rd Avenue

New York, New York  10017

 

Attention:  Boris Treyger

 

50

 

Section 10.11         Governing
Law.

 

THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS INDENTURE AND THE NOTES, WITHOUT REGARD TO THE CONFLICTS OF LAWS
PROVISIONS THEREOF.

 

Section 10.12         No
Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or a Subsidiary.  Any such indenture, loan or debt agreement
may not be used to interpret this Indenture.

 

Section 10.13         Successors.

 

All agreements of the Company in this Indenture and
the Notes shall bind its successors.  All
agreements of the Trustee in this Indenture shall bind its successor.

 

Section 10.14         Severability.

 

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

 

Section 10.15         Qualification
of Indenture.

 

The Company shall ensure this Indenture remains
qualified under the TIA and shall pay all costs and expenses (including attorneys’
fees for the Company, the Trustee and the Holders of the Notes) incurred in
connection therewith.  In connection
therewith, the Trustee shall be entitled to receive from the Company any such
Officers’ Certificates, Opinions of Counsel or other documentation as it may
reasonably request.

 

Section 10.16         Table
of Contents, Headings, etc.

 

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

 

[SIGNATURE
PAGES FOLLOW]

 

51

 

SIGNATURES

 

 

	
  Dated:  as of August 15, 2006

  	
   

  	
  STATION CASINOS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Glenn C.
  Christenson

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Glenn C. Christenson

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President, Chief

  
	
   

  	
   

  	
   

  	
  Financial Officer,
  Chief Administrative

  
	
   

  	
   

  	
   

  	
  Officer and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:  as of August 15, 2006

  	
   

  	
  LAW DEBENTURE TRUST
  COMPANY OF 

  NEW YORK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Boris Treyger

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Boris Treyger

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
						

 

52Exhibit 4.2

 

THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (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 2.05 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.05(a) OF
THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.

 

1

 

7.75% Senior Notes due
2016

 

CUSIP:  857689
BA 0

 

No.                  

$                      

 

Station Casinos, Inc., a Nevada corporation (the “Company”),
promises to pay to
                
or registered assigns, the principal sum of                                                         
Dollars on August 15, 2016.

 

Interest Payment Dates:
February 15 and August 15, commencing February 15, 2007.

 

Record Dates: February 1
and August 1 (whether or not a Business Day)

 

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

 

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

 

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

 

	
   

  	
  STATION CASINOS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
  Attest:

  
	
   

  
	
   

  
	
  By:

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
						

 

2

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

Law Debenture Trust Company of New York, as Trustee,
certifies that this is one of the 7.75% Senior Notes due 2016 referred to in
the within-mentioned Indenture.

 

LAW
DEBENTURE TRUST COMPANY OF NEW YORK

as Trustee

 

	
  By:

  	
  Dated:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  

 

3

 

[REVERSE OF SECURITY]

 

STATION CASINOS, INC.

 

7.75% SENIOR NOTES DUE 2016

 

1.             Interest.
STATION CASINOS, INC., a Nevada corporation (the “Company”, which term includes
any successor corporation under the Indenture referred to herein), promises to
pay interest on the principal amount of this Note at the rate per annum shown
above. The Company will pay interest semi-annually on February 15 and August 15
of each year, commencing February 15, 2007. Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no interest
has been paid, from the date of issuance of the Notes. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.

 

2.             Method
of Payment. The Company will pay interest on the Notes (except defaulted
interest) to the persons who are registered Holders of the Notes at the close
of business on the record date for the next interest payment date even though
the Notes are cancelled after the record date and on or before the interest
payment date. Holders must surrender the Notes to a Paying Agent to collect
principal payments. The Company will pay principal, premium, if any, and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Company, however, may pay
principal, premium, if any, and interest by check payable in such money, which
shall be mailed to a Holder’s registered address; provided that payment by wire
transfer of immediately available funds will be required with respect to
principal of and interest and premium on, all Global Notes and all other
Certificated Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent.

 

3.             Paying
Agent and Registrar. Deutsche Bank Trust Company Americas will initially
act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-registrar without prior notice to any Noteholder. The Company
or any of its Subsidiaries may act in any such capacity.

 

4.             Indenture.
The Company issued the Notes under an Indenture dated as of August 1, 2006 (the
“Base Indenture”) by and between the Company and the Trustee, as amended and
supplemented by a First Supplemental Indenture, dated as of August 15, 2006
(the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”).
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 (15 U.S.
Code §§ 77aaa-77bbbb) as in effect on the date of the Indenture. The Notes are
subject to, and qualified by, all such terms, certain of which are summarized
herein, and Noteholders are referred to the Indenture and such Act for a
statement of such terms. The Notes are unsecured general obligations of the
Company. The Indenture imposes certain limitations on, among other things, the
incurrence of indebtedness by the Company or any of its Restricted Subsidiaries.
In addition, the Indenture imposes certain limitations on transactions by the
Company or any of its Restricted Subsidiaries with Affiliates and

 

4

 

Related Persons and on the ability of the Company or any of its
Restricted Subsidiaries to restrict distributions and dividends from
Subsidiaries. The limitations are subject to a number of important
qualifications and exceptions.

 

5.             Optional
Redemption. The Company may redeem the Notes in whole or in part, at
redemption prices (expressed in percentages of principal amount) set forth
below, plus accrued and unpaid interest thereon, if any, to the redemption
date, if redeemed during the 12-month period beginning August 15 of the years
indicated below. The Notes may not be so redeemed before August 15, 2011.

 

	
  Year

  	
   

  	
  Redemption Prices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2011

  	
   

  	
  102.906

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2012

  	
   

  	
  101.938

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2013

  	
   

  	
  100.969

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2014 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

Notwithstanding the foregoing, each Holder by
accepting a Note agrees that if a record or beneficial owner of a Note is
required by any Gaming Authority to be found suitable, such owner shall apply
for a finding of suitability within 30 days after request of such Gaming
Authority. The applicant for a finding of suitability must pay all costs of the
investigation for such finding of suitability. If a record or beneficial owner
is required to be found suitable and is not found suitable by such Gaming
Authority, (a) such owner shall, upon request of the Company, dispose of such
owner’s Notes within 30 days or within that time prescribed by such Gaming
Authority, whichever is earlier, or (b) the Company may, at its option, redeem
such owner’s Notes at the lesser of (i) the principal amount thereof or (ii)
the price at which the Notes were acquired by such owner, together with, in
either case, and accrued interest to the date of the finding of unsuitability
by such Gaming Authority, all as more fully provided in the Indenture.

 

6.             Notice
of Redemption. Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Notes to be
redeemed at his registered address. Notes in denominations larger than $1,000
may be redeemed in part but only in whole multiples of $1,000. In the event of
a redemption of less than all of the Notes, the Notes will be chosen for
redemption by the Trustee in accordance with the Indenture. On and after the
redemption date, interest ceases to accrue on Notes or portions of the Notes
called for redemption.

 

If this Note is redeemed subsequent to a record date
with respect to any interest payment date specified above and on or prior to
such interest payment date, then any accrued interest will be paid to the
person in whose name this Note is registered at the close of business on such
record date.

 

7.             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
shall be registered, and Notes may only be exchanged, as provided in

 

5

 

the Indenture. The Registrar may require a holder, among other things,
to furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. The Registrar need not
exchange or register the transfer of any Notes or portion of a Note selected
for redemption. Also, the Registrar need not exchange or register the transfer
of any Note for a period of 15 days before a selection of Note to be redeemed.

 

8.             Persons
Deemed Owners. The registered Holder of a Note may be treated as its owner
for all purposes, except as provided in paragraph 5 hereof.

 

9.             Amendments
and Waivers. Subject to certain exceptions, the Indenture or the Notes may
be amended with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes, and certain existing defaults may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes. Without the consent of any Noteholder, the Indenture or
the Notes may be amended, among other things, to cure any ambiguity, defect or
inconsistency, to provide for assumption of the Company’s obligations to Noteholders
in the case of mergers and consolidations of the Company or to make any change
that does not adversely affect the rights of any Noteholder.

 

10.           Defaults
and Remedies. An Event of Default is: 
default in payment of interest on the Notes for a period of 30 days;
default in payment of principal on the Notes; failure by the Company for 60
days after notice to it to comply with any of its other agreements in the
Indenture or the Notes or, in the case of the failure to comply with certain
specified covenants or agreements, without such notice or passage of time;
certain defaults under and acceleration prior to maturity of certain other
indebtedness of the Company; certain final judgments which remain undischarged;
certain events of bankruptcy or insolvency; or a revocation, suspension,
termination or involuntary loss of a Gaming License which results in the
cessation of operation of the Company’s casino business for more than 90
consecutive days. If an 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, except that
in the case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes become due and payable immediately without
further action or notice. Noteholders may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Noteholders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company must furnish an annual
compliance certificate to the Trustee.

 

11.           Trustee
Dealings with Company. Law Debenture Trust Company of New York, the Trustee
under the Indenture, in its individual or any other capacity, may make loans
to, accept deposits from and perform services for the Company or its

 

6

 

Affiliates, and may otherwise deal with the Company or its Affiliates,
as if it were not Trustee.

 

12.           Change
of Control. Upon the occurrence of a Change of Control Triggering Event (as
such term is defined in the Indenture), the Holders shall have the right to
require that the Company repurchase, and the Company shall commence an offer to
repurchase, all of the outstanding Notes at a Repurchase Price in cash equal to
101% of the principal amount of such Notes plus accrued interest to the
repurchase date, upon the terms set forth in the Indenture.

 

13.           No
Recourse Against Others. A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for any obligations of the
Company under the Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Noteholder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Notes.

 

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

 

15.           Abbreviations.
Customary abbreviations may be used in the name of a Noteholder 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).

 

Company will furnish to any Noteholder upon written
request and without charge a copy of the Indenture, which has in it the text of
this Note in larger type. Request may be made to:

 

STATION CASINOS, INC.

2411 West Sahara Avenue

Las Vegas, Nevada  89102

Attn:  Chief Financial Officer

 

7

 

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 Certificated Note, or exchanges
of a part of another Global Note or Certificated 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

  SIGNATORY OF TRUSTEE OR

  NOTE CUSTODIAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

8

 

ASSIGNMENT FORM

 

To assign this Note, fill
in the form below: (I) or (we) assign and transfer this Note to

 

	
   

  	
   

  	
   

  

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

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

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

 

and irrevocably appoint                                                                                                                   
to transfer this Note on the books of the Company. 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:

  	
   

  	
   

  
							

 

9

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to
have this Note repurchased by the Company pursuant to Section 4.11 of the
Indenture, check the box:  o

 

If you want to elect to
have only part of the Note purchased by the Company pursuant to Section 4.11 of
the Indenture, state the amount (which must be $1,000 or an integral multiple
of $1,000) you elect to have purchased:

 

$               

 

	
  Date: 

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Tax Identification No.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature Guarantee:

  	
   

  	
   

  
								

 

10

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