Exhibit 10.6

 

 

SHUFFLE MASTER, INC.,

as Issuer

 

 

1.25% Contingent Convertible Senior Notes Due 2024

 

 

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INDENTURE

 

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WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

 

 

Dated as of April 21, 2004

 

 

 

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CROSS-REFERENCE TABLE*

 

Trust Indenture Act Section

 

Indenture Section

 

310

(a)(1)

 

                       7.10

 

 

(a)(2)

 

                       N.A.

 

 

(a)(3)

 

                       N.A.

 

 

(a)(4)

 

                       N.A.

 

 

(a)(5)

 

                       N.A.

 

 

(b)

 

                       7.10

 

 

(c)

 

                       N.A.

 

311

(a)

 

                       7.11

 

 

(b)

 

                       7.11

 

 

(c)

 

                       N.A.

 

312

(a)

 

                       N.A.

 

 

(b)

 

                       11.03

 

 

(c)

 

                       11.03

 

313

(a)

 

                       7.06

 

 

(b)

 

                       7.06

 

 

(b)

 

                       7.06

 

314

(c)

 

                       N.A.

 

 

(d)

 

                       N.A.

 

 

(a)

 

                       4.02, 4.03

 

 

(b)

 

                       N.A.

 

 

(c)(1)

 

                       N.A.

 

 

(c)(2)

 

                       N.A.

 

 

(c)(3)

 

                       N.A.

 

 

(d)

 

                       N.A.

 

 

(e)

 

                       N.A.

 

 

(f)

 

                       N.A.

 

315

(a)

 

                       7.01(b)

 

 

(b)

 

                       7.05

 

 

(c)

 

                       N.A.

 

 

(d)

 

                       7.01(c)

 

 

(e)

 

                       6.11

 

316

(a)(1)(A)

 

                       6.05

 

 

(a)(1)(B)

 

                       6.04

 

 

(a)(2)

 

                       N.A.

 

 

(b)

 

                       N.A.

 

 

(c)

 

                       N.A.

 

317

(a)(1)

 

                       N.A.

 

 

(a)(2)

 

                       N.A.

 

 

(b)

 

                       N.A.

 

318

(a)

 

                       N.A.

 

 

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N.A. means not applicable.

 

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

 

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TABLE OF CONTENTS

 

ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE

 

 

 

Section 1.01.  Definitions.

 

Section 1.02.  Other Definitions.

 

Section 1.03.  Incorporation by Reference of Trust Indenture Act

 

Section 1.04.  Rules of Construction

 

Section 1.05.  Acts of Holders.

 

 

 

ARTICLE 2
THE SECURITIES

 

 

 

Section 2.01.  Form and Dating.

 

Section 2.02.  Execution and Authentication

 

Section 2.03.  Registrar, Paying Agent and Conversion Agent

 

Section 2.04.  Paying Agent to Hold Money in Trust

 

Section 2.05.  Holder Lists

 

Section 2.06.  Transfer and Exchange.

 

Section 2.07.  Replacement Securities

 

Section 2.08.  Outstanding Securities; Determinations of Holders’ Action

 

Section 2.09.  Temporary Securities

 

Section 2.10.  Cancellation

 

Section 2.11.  Persons Deemed Owners

 

Section 2.12.  Global Securities.

 

Section 2.13.  CUSIP Numbers

 

Section 2.14.  Designation

 

 

 

ARTICLE 3
REDEMPTION AND REPURCHASES

 

 

 

Section 3.01.  Right to Redeem; Notices to Trustee.

 

Section 3.02.  Selection of Securities to Be Redeemed

 

Section 3.03.  Notice of Redemption

 

Section 3.04.  Effect of Notice of Redemption

 

Section 3.05.  Deposit of Redemption Price

 

Section 3.06.  Securities Redeemed in Part

 

Section 3.07.  Sinking Fund

 

Section 3.08.  Repurchase of Securities at Option of the Holder on Specified
Dates.

 

Section 3.09.  Repurchase of Securities at Option of the Holder Upon Change in
Control.

 

 

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Section 3.10.  Effect of Repurchase Notice or Change in Control Repurchase
Notice

 

Section 3.11.  Deposit of Repurchase Price or Change in Control Repurchase Price

 

Section 3.12.  Securities Repurchased in Part

 

Section 3.13.  Covenant to Comply with Securities Laws upon Repurchase of
Securities

 

Section 3.14.  Repayment to the Company

 

Section 3.15.  Mandatory Disposition Pursuant to Gaming Laws.

 

 

 

Article 4
COVENANTS

 

 

 

Section 4.01.  Payment of Securities

 

Section 4.02.  SEC and Other Reports

 

Section 4.03.  Compliance Certificate; Notice of Default.

 

Section 4.04.  Further Instruments and Acts

 

Section 4.05.  Maintenance of Office or Agency

 

Section 4.06.  Delivery of Certain Information

 

Section 4.07.  Liquidated Damages

 

 

 

Article 5
SUCCESSOR CORPORATION

 

 

 

Section 5.01.  When the Company May Consolidate, Merge or Transfer Assets

 

 

 

Article 6
DEFAULTS AND REMEDIES

 

 

 

Section 6.01.  Events of Default

 

Section 6.02.  Acceleration.

 

Section 6.03.  Other Remedies

 

Section 6.04.  Waiver of Past Defaults

 

Section 6.05.  Control by Majority

 

Section 6.06.  Limitation on Suits

 

Section 6.07.  Rights of Holders to Receive Payment and to Convert

 

Section 6.08.  Collection Suit by Trustee

 

Section 6.09.  Trustee May File Proofs of Claim

 

Section 6.10.  Priorities

 

Section 6.11.  Suits

 

Section 6.12.  Waiver of Stay, Extension or Usury Laws

 

Section 6.13.  Disqualified Holders

 

 

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Article 7
TRUSTEE

 

 

 

Section 7.01.  Duties of Trustee.

 

Section 7.02.  Rights of Trustee

 

Section 7.03.  Individual Rights of Trustee

 

Section 7.04.  Trustee’s Disclaimer

 

Section 7.05.  Notice of Defaults

 

Section 7.06.  Reports by Trustee to Holders

 

Section 7.07.  Compensation and Indemnity

 

Section 7.08.  Replacement of Trustee

 

Section 7.09.  Successor Trustee by Merger Etc

 

Section 7.10.  Eligibility; Disqualification

 

Section 7.11.  Preferential Collection of Claims Against Company

 

Section 7.12.  Force Majeure

 

Section 7.13.  Gaming License Requirements

 

 

 

Article 8
DISCHARGE OF INDENTURE

 

 

 

Section 8.01.  Discharge of Liability on Securities

 

Section 8.02.  Repayment to the Company

 

 

 

Article 9
AMENDMENTS

 

 

 

Section 9.01.  Without Consent of Holders

 

Section 9.02.  With Consent of Holders.

 

Section 9.03.  Compliance with Trust Indenture Act

 

Section 9.04.  Revocation and Effect of Consents

 

Section 9.05.  Notation on or Exchange of Securities

 

Section 9.06.  Trustee to Sign Supplemental Indentures

 

Section 9.07.  Effect of Supplemental Indentures

 

 

 

Article 10
CONVERSION OF THE SECURITIES

 

 

 

Section 10.01.  Conversion Privilege.

 

Section 10.02.  Conversion Procedure.

 

Section 10.03.  Taxes on Conversion

 

Section 10.04.  Company to Provide Stock

 

Section 10.05.  Adjustment of Conversion Price

 

Section 10.06.  No Adjustment

 

Section 10.07.  Equivalent Adjustments

 

Section 10.08.  Adjustment for Tax Purposes

 

 

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Section 10.09.  Notice of Adjustment

 

Section 10.10.  Notice of Certain Transactions

 

Section 10.11.  Effect of Reclassification, Consolidation, Merger, Share
Exchange or Sale on Conversion Privilege

 

Section 10.12.  Trustee’s Disclaimer

 

Section 10.13.  Voluntary Reduction

 

Section 10.14.  Conversion Value of Securities Tendered.

 

Section 10.15.  Simultaneous Adjustments

 

 

 

Article 11
MISCELLANEOUS

 

 

 

Section 11.01.  Trust Indenture Act Controls

 

Section 11.02.  Notices

 

Section 11.03.  Communication by Holders with Other Holders

 

Section 11.04.  Certificate and Opinion as to Conditions Precedent

 

Section 11.05.  Statements Required in Certificate or Opinion

 

Section 11.06.  Separability Clause

 

Section 11.07.  Rules by Trustee, Paying Agent, Conversion Agent and Registrar

 

Section 11.08.  Legal Holidays

 

Section 11.09.  Governing Law

 

Section 11.10.  No Recourse Against Others

 

Section 11.11.  Successors

 

Section 11.12.  Multiple Originals

 

Section 11.13.  Table of Contents and Headings

 

 

Exhibit A

–

Form of Global Security

Exhibit B

–

Transfer Certificate

 

v

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INDENTURE dated as of April 21, 2004 between SHUFFLE MASTER, INC., a Minnesota
corporation (the “Company”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association organized under the laws of the United States of
America (the “Trustee”).

 

Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders (as defined below) of the Company’s
1.25% Contingent Convertible Senior Notes Due 2024 (the “Securities”):

 

ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.  Definitions.

 

“Additional Securities” means an unlimited principal amount of Securities (other
than the Initial Securities) issued from time to time with the same terms and
the same CUSIP number as the Initial Securities under this Indenture in
accordance with Section 2.02 hereof.

 

“Affiliate” has the meaning provided in Rule 405 under the Securities Act.

 

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

 

“Applicable Procedures” means, with respect to any transfer or transaction
involving a Global Security or beneficial interests therein, the rules and
procedures of the Depositary for such Global Security, in each case to the
extent applicable to such transaction and as in effect from time to time.

 

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

 

“Beneficial Owner” shall be determined in accordance with Rule 13d-3 and Rule
13d-5 promulgated by the SEC under the Exchange Act or any successor provision,
except that, (i) a person shall be deemed to have “Beneficial Ownership” of all
shares of Common Stock that the Person has the right to acquire, whether
exercisable immediately or only after the passage of time and (ii) any
percentage of “Beneficial Ownership” shall be determined using the definition in
clause (i) in both the numerator and the denominator.

 

“Board of Directors” means either the board of directors of the Company or any
duly authorized committee of such board of directors authorized to act for it
with respect to this Indenture.

 

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“Board Resolution” means a copy of one or more resolutions, certified by an
Officer of the Company to have been duly adopted or consented to by the Board of
Directors and to be in full force and effect, and delivered to the Trustee.

 

“Business Day” means any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which commercial banks are authorized or required by
law, regulation or executive order to close in The City of New York.

 

“Capital Stock” for any corporation means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation, but
excluding from all of the foregoing any debt securities convertible into Capital
Stock, whether or not such debt securities include any right of participation
with Capital Stock.

 

“Change in Control” means the occurrence of one or more of the following events:

 

(a)           any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the properties
and assets of the Company, to any Person or group of related Persons, as defined
in Section 13(d) of the Exchange Act (a “Group”);

 

(b)           the approval by the holders of the Capital Stock of the Company of
any plan or proposal for the liquidation or dissolution of the Company, whether
or not otherwise in compliance with this Indenture;

 

(c)           any Person or Group, other than the Company, any Subsidiary of the
Company or any employee benefit plan of the Company or any such Subsidiary,
becomes the Beneficial Owner, directly or indirectly, of shares of Capital Stock
of the Company entitling such Person or Group to exercise in excess of 50% of
the aggregate ordinary voting power of all shares of Voting Stock of the
Company; or

 

(d)           the first day on which a majority of the members of the Board of
Directors are not Continuing Directors.

 

“Common Stock” shall mean shares of the Company’s Common Stock, $.01 par value
per share, as they exist on the date of this Indenture or any other shares of
Capital Stock of the Company into which the Common Stock shall be reclassified
or changed.

 

“Common Stock Price” on any date means the closing sale price per share (or if
no closing sale price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid and the average

 

2

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ask prices) on such date for the Common Stock as reported in composite
transactions on the principal United States securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United States
national or regional securities exchange, as reported by The NASDAQ System.

 

“Company” means the party named as the “Company” in the first paragraph of this
Indenture until a successor replaces it pursuant to the applicable provisions of
this Indenture and, thereafter, shall mean such successor.  The foregoing
sentence shall likewise apply to any subsequent successor or successors.

 

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

 

“Continuing Directors” means, as of any date of determination, any member of the
Board of Directors who (a) was a member of the Board of Directors as of the date
hereof or (b) was nominated for election or elected to the Board of Directors
with the approval of a majority of the Continuing Directors who were members of
the Board of Directors at the time of such nomination or election.

 

“Conversion Price” means $42.11 per share of Common Stock as of the date of this
Indenture, subject to the adjustments described in Section 10.05 hereof.

 

“Conversion Rate” means the number of shares of Common Stock equal to $1,000
divided by the Conversion Price, which shall be approximately 23.7473 as of the
date of this Indenture.

 

“Corporate Trust Office” means the office of the Trustee at which at any time
the trust created by this Indenture shall be administered, which office at the
date hereof is located at Wells Fargo Bank, National Association, Sixth Street &
Marquette Avenue, N9303-120, Minneapolis, MN 55479, Attention: Shuffle Master,
Inc. Administrator, or such other address as the Trustee may designate from time
to time by notice to the Holders and the Company, or the principal corporate
trust office of any successor Trustee (or such other address as a successor
Trustee may designate from time to time by notice to the Holders and the
Company).

 

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

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.

 

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

 

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

 

“Indenture” means this Indenture, as amended or supplemented from time to time
in accordance with the terms hereof, including the provisions of the TIA that
are deemed to be a part hereof.

 

“Initial Purchasers” shall mean Deutsche Bank Securities Inc. and Goldman, Sachs
& Co.

 

“Initial Securities” means Securities in an aggregate principal amount of up to
$125,000,000 (which amount shall be increased by up to $25,000,000 in principal
amount of additional Initial Securities purchased pursuant to the Initial
Purchasers’ option to purchase additional Securities) issued under this
Indenture.

 

 “Liquidated Damages” has the meaning set forth in the Registration Rights
Agreement dated as of April 21, 2004 between the Company and the Initial
Purchasers.

 

“Market Price” means the average of the Common Stock Prices for 20 consecutive
Trading Days commencing 30 Trading Days before the record date with respect to
any distribution, issuance or other event requiring such computation,
appropriately adjusted (as determined in good faith by the Board of Directors,
whose determination shall be conclusive) to take into account the occurrence,
during the period commencing on the first of such 20 consecutive Trading Days
and ending on such record date, of any event requiring adjustment of the
Conversion Price under this Indenture.

 

“Obligations” means all obligations for principal, premium, interest, penalties,
fees, indemnifications, reimbursements, damages and other liabilities payable
under the documentation under which any indebtedness is created, evidenced or
secured, including in the case of the Securities, Liquidated Damages, if any.

 

“Offering Memorandum” means the offering memorandum of the Company dated April
15, 2004 relating to the offering of the Securities.

 

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“Officer” means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President (whether or not such
title is preceded by any modifier such as “Executive, “Senior” or the like), the
Chief Financial Officer, the Treasurer, the Controller or the Secretary of such
Person or any other officer designated by the board of directors of such Person
serving in a similar capacity; provided that the designation of any such Officer
of the Company by the Board of Directors shall be evidenced in a Board
Resolution.

 

“Officers’ Certificate” means a written certificate containing the information
specified in Sections 11.04 and 11.05, signed in the name of the Company by any
two Officers, and delivered to the Trustee.  An Officers’ Certificate given
pursuant to Section 4.03 shall be signed by the principal executive officer,
principal financial officer or the principal accounting officer of the Company
but need not contain the information specified in Sections 11.04 and 11.05.

 

“Opinion of Counsel” means a written opinion containing the information
specified in Sections 11.04 and 11.05, from legal counsel who is acceptable to
the Trustee in its reasonable discretion.  The counsel may be an employee of, or
counsel to, the Company or the Trustee.

 

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

 

“Redemption Date” shall mean a date specified for redemption of the Securities
in accordance with the terms of this Indenture.

 

“Responsible Officer” shall mean, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person’s knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.

 

“Rule 144A” means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, as in effect from time to time.

 

5

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“Security” or “Securities” means any of the Company’s 1.25% Contingent
Convertible Senior Notes Due 2024 issued under this Indenture.  The Initial
Securities and any Additional Securities shall be treated as a single series
which means that, in circumstances where the Indenture provides for the Holders
to vote or take any action, the Holders of Initial Securities and the Holders of
Additional Securities will vote or take that action as a single class.

 

“Significant Subsidiary” has the meaning ascribed to such term in Regulation S-X
(17 CFR Part 210).

 

“Stated Maturity”, when used with respect to any Security, means the date
specified in such Security as the fixed date on which an amount equal to the
principal amount of such Security is due and payable.

 

“Subsidiary” means, with respect to any Person, (i) any corporation of which the
outstanding Capital Stock having at least a majority of the votes entitled to be
cast in the election of directors under ordinary circumstances (determined
without regard to any classification of directors) shall at the time be owned,
directly or indirectly, by such Person, (ii) any other Person (other than a
partnership) of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person or
(iii) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or one or more Subsidiaries of such
Person (or any combination thereof).

 

“TIA” means the Trust Indenture Act of 1939 as in effect on the date of this
Indenture, provided that in the event the TIA is amended after such date, TIA
means, to the extent required by any such amendment, the TIA as so amended.

 

“Trading Day” means any regular or abbreviated trading day of the Nasdaq
National Market.

 

“Trading Price of the Securities” on any date of determination means the average
of the secondary market bid quotations per $1,000 in principal amount of
Securities obtained by the Trustee for $5,000,000 in principal amount of the
Securities at approximately 3:30 p.m., New York City time, on such determination
date from three independent nationally recognized securities dealers the Company
selects, which may include the Initial Purchasers; provided that if at least
three such bids cannot reasonably be obtained by the Trustee, but two such bids
are obtained, then the average of the two bids shall be used, and if only one
such bid can reasonably be obtained by the Trustee, this one bid shall be used. 
If the Trustee cannot reasonably obtain at least one such bid or, in the
Company’s reasonable judgment, the bid quotations are not indicative of the
secondary market value of the Securities, then the Trading Price of the
Securities

 

6

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will be determined in good faith by the Trustee, taking into account in such
determination such factors as it, in its sole discretion after consultation with
the Company, deems appropriate.  The Trustee shall not be required to determine
the Trading Price of the Securities unless requested in writing by the Company.

 

“Transfer Restricted Securities Legend” means the legend labeled as such and
that is set forth in Exhibit A hereto.

 

“Trustee” means the party named as the “Trustee” in the first paragraph of this
Indenture until a successor replaces it pursuant to the applicable provisions of
this Indenture and, thereafter, shall mean such successor.  The foregoing
sentence shall likewise apply to any subsequent such successor or successors.

 

“Voting Stock” of a Person means Capital Stock of such Person of the class or
classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances (determined without regard to any classification of
directors) to elect at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the time Capital
Stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).

 

Section 1.02.  Other Definitions

 

Term

 

Defined in Section

 

 

 

 

 

Acceleration Notice

 

6.02(a)

 

Act

 

1.05(a)

 

Agent Members

 

2.12(e)

 

Authenticating Agent

 

2.02

 

Change in Control Repurchase Date

 

3.09(a)

 

Change in Control Repurchase Notice

 

3.09(c)

 

Change in Control Repurchase Price

 

3.09(a)

 

Company Change in Control Repurchase Notice

 

3.09(b)

 

Company Repurchase Notice

 

3.08(b)

 

Conversion Agent

 

2.03

 

Conversion Date

 

10.02(a)

 

Conversion Value

 

10.14(a)

 

Depositary

 

2.01(b)

 

Determination Date

 

10.14(b)

 

Disqualified Holder

 

3.15(a)

 

Dividend Adjustment Amount

 

10.05(e)

 

DTC

 

2.01(b)

 

Event of Default

 

6.01

 

Ex-Dividend Date

 

10.01(c)

 

Expiration Time

 

10.05(d)

 

 

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Term

 

Defined in Section

 

 

 

 

 

Global Security

 

2.01(b)

 

Legal Holiday

 

11.08

 

Net Share Amount

 

10.14(b)

 

Net Shares

 

10.14(b)

 

Paying Agent

 

2.03

 

Pre-Dividend Sale Price

 

10.05(e)

 

Principal Return

 

10.14(b)

 

Principal Value Conversion

 

10.01(a)

 

Purchased Shares

 

10.05(d)

 

QIBs

 

2.06(e)

 

Quarter

 

10.01(a)

 

Redemption Price

 

3.01(a)

 

Registrar

 

2.03

 

Repurchase Date

 

3.08(a)

 

Repurchase Notice

 

3.08(a)

 

Repurchase Price

 

3.08(a)

 

Rule 144A Information

 

4.06

 

Shareholder Rights Plan

 

10.05(f)

 

Ten Day Average Closing Stock Price

 

10.14(a)

 

Transfer Restricted Securities

 

2.06(e)

 

 

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
incorporated by reference in this Indenture have the following meanings:

 

“Commission” means the SEC.

 

“Indenture Securities” means the Securities.

 

“Indenture Security Holder” means a Holder.

 

“Indenture to be Qualified” means this Indenture.

 

“Indenture Trustee” or “Institutional Trustee” means the Trustee.

 

“Obligor” on the indenture securities means the Company.

 

All other TIA terms incorporated by reference in this Indenture that are defined
by the TIA, defined by a TIA reference to another statute or defined by an SEC
rule have the meanings assigned to them by such definitions.

 

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Section 1.04.  Rules of Construction.  Unless the context otherwise requires:

 

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

 

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

 

(c)        “or” is not exclusive;

 

(d)        “including” means including, without limitation; and

 

(e)        words in the singular include the plural, and words in the plural
include the singular.

 

Section 1.05.  Acts of Holders.

 

(a)        Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company.  Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of Holders signing such
instrument or instruments.  Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.

 

(b)        The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution thereof. 
Where such execution is by a signer acting in a capacity other than such
signer’s individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer’s authority.

 

The fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.

 

(c)        The ownership of Securities shall be proved by the register
maintained by the Registrar.

 

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(d)        Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.

 

(e)        If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so.  If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.

 

ARTICLE 2
THE SECURITIES

 

Section 2.01.  Form and Dating.

 

(a)        Forms.  The Securities and the Trustee’s certificate of
authentication shall be substantially in the forms set forth on Exhibit A, which
are a part of this Indenture and incorporated by reference herein.  The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage; provided that any such notation, legend or endorsement
required by usage is in a form acceptable to the Company.  The Company shall
provide any such notations, legends or endorsements to the Trustee in writing. 
Each Security shall be dated the date of its authentication.

 

(b)        Global Securities.  Unless otherwise required by law or otherwise
contemplated by Section 2.12(a), all of the Securities will be represented by
one or more Securities in global form (a “Global Security”), which shall be
deposited with the Trustee at its Corporate Trust Office, as custodian for the
Depositary and registered in the name of The Depository Trust Company (“DTC”) or
the nominee thereof (such depositary, or any successor thereto, and any such
nominee

 

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being hereinafter referred to as the “Depositary”), duly executed by the Company
and authenticated by the Trustee as hereinafter provided.

 

Each Global Security shall represent such of the outstanding Securities as shall
be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Securities from time to time endorsed thereon
and that the aggregate amount of outstanding Securities represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges,
redemptions and conversions.

 

Any adjustment of the aggregate principal amount of a Global Security to reflect
the amount of any increase or decrease in the amount of outstanding Securities
represented thereby shall be made by the Trustee as required by Section 2.12
hereof and shall be made on the records of the Trustee and the Depositary.

 

Section 2.02.  Execution and Authentication.  The Securities shall be executed
on behalf of the Company by the manual or facsimile signature of any Officer.

 

Securities bearing the manual or facsimile signatures of individuals who were at
the time of the execution of the Securities the proper Officers of the Company
shall bind the Company, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices at the date of authentication of
such Securities.

 

No Security shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security a certificate
of authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.

 

The Trustee may appoint an authenticating agent (the “Authenticating Agent”)
reasonably acceptable to the Company to authenticate Securities.  Unless
otherwise provided in the appointment, the Authenticating Agent may authenticate
Securities whenever the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by the Authenticating
Agent.  The Authenticating Agent has the same rights as an Agent to deal with
the Company or with any Affiliate of the Company.

 

The Trustee shall authenticate and deliver Initial Securities for original issue
in an aggregate principal amount of up to $125,000,000 (which amount shall be
increased by up to $25,000,000 in principal amount of additional Initial
Securities purchased pursuant to the Initial Purchasers’ option to purchase

 

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additional Securities) upon a Company Order without any further action by the
Company.  In addition, the Trustee shall authenticate and deliver Additional
Securities in aggregate principal amounts specified by the Company, if such
Additional Securities would be part of the “same issue” as the Initial
Securities for U.S. federal income tax purposes.

 

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

 

Section 2.03.  Registrar, Paying Agent and Conversion Agent.  The Company shall
maintain an office or agency with the Trustee where Securities may be presented
for registration of transfer or for exchange (the “Registrar”), an office or
agency where Securities may be presented for repurchase or payment (the “Paying
Agent”) and an office or agency where Securities may be presented for conversion
(the “Conversion Agent”).  The Registrar shall keep a register of the Securities
and of their transfer and exchange.  The Company, upon prior written notice to
the Trustee, may have one or more co-registrars, one or more additional paying
agents reasonably acceptable to the Trustee and one or more additional
conversion agents.  The term “Paying Agent” includes any additional paying
agent, including any named pursuant to Section 4.05.  The term “Conversion
Agent” includes any additional conversion agent, including any named pursuant to
Section 4.05.

 

The Company shall enter into an appropriate agency agreement with any Registrar,
Paying Agent, Conversion Agent or co-registrar (if other than the Trustee). 
Such agreement shall implement the provisions of this Indenture that relate to
such Agent.  The Company shall notify the Trustee, in advance, of the name and
address of any such Agent.  If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.07.  The Company or
any of its Subsidiaries or an Affiliate of the Company or any of its
Subsidiaries may act as Paying Agent, Registrar, Conversion Agent or
co-registrar.

 

The Company initially appoints the Trustee as Registrar, Conversion Agent and
Paying Agent in connection with the Securities.

 

Section 2.04.  Paying Agent to Hold Money in Trust.  Except as otherwise
provided herein, not later than 11:00 a.m. (New York City time) on the Business
Day prior to each due date of payments in respect of any Security, the Company
shall deposit with the Paying Agent a sum of money sufficient to make such
payments when they become due.  The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that such Paying Agent shall hold
in trust for the benefit of Holders or the Trustee all money held by such Paying

 

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Agent for the making of payments in respect of the Securities and shall notify
the Trustee of any default by the Company in making any such payment.  At any
time during the continuance of any such default, such Paying Agent shall, upon
the written request of the Trustee, forthwith pay to the Trustee all moneys held
in trust.  If the Company, a Subsidiary of the Company or an Affiliate of the
Company or any of its Subsidiaries acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it as a separate trust fund.  The
Company at any time may require each Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by it.  Upon doing so, such
Paying Agent shall have no further liability for such money or shares of Common
Stock, as the case may be.

 

Section 2.05.  Holder Lists.  The Trustee shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names and
addresses of Holders.  If the Trustee is not the Registrar, the Company shall
cause to be furnished to the Trustee on each April 15 and October 15 and at such
other times as the Trustee may request in writing a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
Holders, which list may be conclusively relied upon by the Trustee and dated not
more than 15 days prior to the time such information is furnished; provided that
the list of Holders provided on April 15 and October 15 shall contain the list
of Holders as of the immediately preceding April 1 and October 1, respectively.

 

Section 2.06.  Transfer and Exchange.

 

(a)        Subject to Section 2.12 hereof, upon surrender for registration of
transfer of any Securities to the Registrar, together with a written instrument
of transfer satisfactory to the Registrar, substantially in the form affixed to
the form of Security attached as Exhibit A hereto, duly executed by the Holder
thereof or such Holder’s attorney duly authorized in writing, at the office or
agency of the Registrar or co-registrar, the Company shall execute and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of any authorized denomination or
denominations of a like aggregate principal amount.

 

At the option of the Holder thereof, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by such Holder or such Holder’s attorney duly authorized in writing, at
the office or agency of the Registrar or co-registrar.  Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities that the Holder making the
exchange is entitled to receive.  The Company shall not charge a service charge
for any registration of transfer or exchange, but the Company may require
payment of a

 

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sum sufficient to pay all taxes, assessments or other governmental charges that
may be imposed in connection with the transfer or exchange of the Securities
from the Holder requesting such transfer or exchange.

 

The Company shall not be required to make, and the Registrar need not register,
transfers or exchanges of Securities selected for redemption (except, in the
case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Repurchase Notice or Change in
Control Repurchase Notice has been given and not withdrawn by the Holder thereof
in accordance with the terms of this Indenture (except, in the case of
Securities to be repurchased in part, the portion thereof not to be repurchased)
or any Securities for a period of 15 days before the mailing of a notice of
redemption to each Holder of Securities to be redeemed, as provided in Section
3.03.

 

(b)        Successive registrations and registrations of transfers and exchanges
as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.

 

(c)        The Registrar shall provide to the Trustee such information as the
Trustee may reasonably require in connection with the delivery by the Registrar
of Securities upon transfer or exchange of Securities.

 

(d)        The Registrar shall not be required to make registrations of transfer
or exchange of Securities during any periods designated in the Securities or in
this Indenture as periods during which such registration of transfers and
exchanges need not be made.

 

(e)        Notwithstanding any other provision of this Indenture or the
Securities, until the expiration of the applicable holding period set forth in
Rule 144(k) of the Securities Act (or any successor provision), the Securities
may not be transferred or exchanged in whole or in part other than (i) to the
Company or any of its Subsidiaries, (ii) to a person whom the seller reasonably
believes is a qualified institutional buyer, as such term is defined in Rule
144A (a “QIB”), in reliance on Rule 144A, (iii) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
available) or (iv) pursuant to an effective registration statement under the
Securities Act, in each of cases (i) through (iv) in accordance with any
applicable securities laws of any state of the United States.  Whenever any
Security is presented or surrendered for registration of transfer or exchange
for a Security registered in a name other than that of the Holder thereof, such
Security must be accompanied by a certificate in substantially the form set
forth in Exhibit B, dated the date of such surrender and signed by the Holder of
such Security, as to compliance with such restrictions on transfer.  The
Registrar shall not be required to accept for such registration of transfer or
exchange any Security not so accompanied by a properly completed certificate.

 

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Any certificate evidencing a Security (and all securities issued in exchange
therefor or substitution thereof) shall bear the Transfer Restricted Securities
Legend, unless (1) such Security has been sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer) or pursuant to Rule 144
under the Securities Act or any similar provision then in force, (2) such
Security is eligible for resale pursuant to Rule 144(k) under the Securities Act
(or any successor provision) or (3) otherwise agreed by the Company in writing,
with written notice thereof to the Trustee.

 

Every Security that bears or is required under this Section 2.06(e) to bear the
Transfer Restricted Securities Legend (the “Transfer Restricted Securities”)
shall be subject to the restrictions on transfer set forth in this Section
2.06(e) (including those set forth in the Transfer Restricted Securities Legend)
unless such restrictions on transfer shall be waived by written consent of the
Company, and the Holder of each such Transfer Restricted Security, by such
Security Holder’s acceptance thereof, agrees to be bound by all such
restrictions on transfer.  As used in this Section 2.06(e), the term “transfer”
encompasses any sale, pledge, loan, transfer or other disposition whatsoever of
any Transfer Restricted Security or any interest therein.

 

Any Security (or Security issued in exchange or substitution therefor) as to
which such restrictions on transfer shall have expired in accordance with their
terms or as to conditions for removal of the Transfer Restricted Securities
Legend have been satisfied may, upon surrender of such Security for exchange to
the Registrar in accordance with the provisions of this Section 2.06, be
exchanged for a new Security or Securities, of like tenor and aggregate
principal amount, which shall not bear the Transfer Restricted Securities
Legend.  If the Transfer Restricted Security surrendered for exchange is
represented by a Global Security bearing a Transfer Restricted Securities
Legend, the principal amount of the Global Security so legended shall be reduced
by the appropriate principal amount and the principal amount of a Global
Security without the Transfer Restricted Securities Legend shall be increased by
an equal principal amount.  If a Global Security without the Transfer Restricted
Securities Legend is not then outstanding, the Company shall execute and the
Trustee shall authenticate and deliver a Global Security without the Transfer
Restricted Securities Legend to the Depositary.

 

Section 2.07.  Replacement Securities.  If any mutilated Security is surrendered
to the Trustee, or the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a
protected purchaser (within the meaning of Section 8-303 of the Uniform
Commercial Code

 

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as adopted in the State of New York), the Company shall execute, and upon the
Company’s written request the Trustee shall authenticate and deliver, in
exchange for any such mutilated Security or in lieu of any such destroyed, lost
or stolen Security, a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

 

In case any such mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, or is about to be redeemed or repurchased by
the Company pursuant to Article 3 hereof, the Company in its discretion may,
instead of issuing a new Security, pay, redeem or repurchase such Security, as
the case may be.

 

Upon the issuance of any new Securities under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

 

Every new Security issued pursuant to this Section in lieu of any mutilated,
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.

 

The provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities.

 

Section 2.08.  Outstanding Securities; Determinations of Holders’ Action. 
Securities outstanding at any time are all the Securities authenticated by the
Trustee, except for those cancelled by it, those delivered to it for
cancellation pursuant to Section 2.10 and those described in this Section 2.08
as not outstanding.  A Security does not cease to be outstanding because the
Company or any Affiliate of the Company holds the Security; provided that in
determining whether the Holders of the requisite principal amount of Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded; and provided further that Securities that the
Company or an Affiliate offers to purchase or acquires pursuant to an offer,
exchange offer, tender offer or otherwise shall not be deemed to be owned by the
Company or an Affiliate until

 

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legal title to such Securities passes to the Company or such Affiliate, as the
case may be.  Subject to the foregoing, only Securities outstanding at the time
of such determination shall be considered in any such determination (including,
without limitation, determinations pursuant to Articles 6 and 9).

 

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

 

If the Paying Agent holds, in accordance with this Indenture, on a Redemption
Date, or on the Business Day following a Repurchase Date or a Change in Control
Repurchase Date, or on Stated Maturity, money sufficient to pay amounts owed
with respect to Securities payable on that date, then immediately after such
Redemption Date, Repurchase Date, Change in Control Repurchase Date or Stated
Maturity, as the case may be, such Securities shall cease to be outstanding and
interest (including Liquidated Damages, if any) on such Securities shall cease
to accrue whether or not the Securities are delivered to the Paying Agent;
provided that if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.  Thereafter, all other rights of the
Holder of such Securities shall terminate, other than the rights to receive the
Redemption Price, the Repurchase Price, the Change in Control Repurchase Price
or the principal amount of such Securities due and payable on Stated Maturity,
as the case may be, upon delivery of the Securities.

 

If a Security is converted in accordance with Article 10, then from and after
the time of conversion on the Conversion Date, such Security shall cease to be
outstanding and interest shall cease to accrue on such Security.

 

Section 2.09.  Temporary Securities.  Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, and with such appropriate insertions, omissions, substitutions and
other variations as the Officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.

 

If temporary Securities are issued, the Company will cause definitive Securities
to be prepared without unreasonable delay.  After the preparation of definitive
Securities, the temporary Securities shall be exchangeable for definitive
Securities upon surrender of the temporary Securities at the office or agency of
the Company designated for such purpose pursuant to Section 2.03, without charge
to the Holder.  Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute and the Trustee shall

 

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authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations.  Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.

 

Section 2.10.  Cancellation.  All Securities surrendered for payment,
redemption, repurchase, conversion, exchange or registration of transfer shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it, or, if surrendered to the Trustee, shall
be promptly cancelled by it.  The Company may at any time deliver to the Trustee
for cancellation any Securities previously authenticated and delivered hereunder
that the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee.  The Company may not
issue new Securities to replace Securities it has paid or delivered to the
Trustee for cancellation or that any Holder has converted pursuant to Article
10.  No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture.  All cancelled Securities held by the Trustee shall be
disposed of by the Trustee in accordance with the Trustee’s customary
procedures.

 

Section 2.11.  Persons Deemed Owners.  Prior to due presentment of a Security
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
the principal amount of the Security or the payment of any Redemption Price,
Repurchase Price or Change in Control Repurchase Price in respect thereof, and
accrued but unpaid interest (including Liquidated Damages, if any) thereon, for
the purpose of conversion and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary.

 

Section 2.12.  Global Securities.

 

(a)        Notwithstanding any other provisions of this Indenture or the
Securities, a Global Security shall not be exchanged in whole or in part for a
Security registered in the name of any Person other than the Depositary, any
successor Depositary or one or more nominees thereof; provided that a Global
Security may be exchanged for Securities registered in the name of any Person
designated by the Depositary if  (1) the Depositary has notified the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or such Depositary has ceased to be a “clearing agency” registered
under the Exchange Act, and a successor Depositary is not appointed by the
Company within 90 days, or (2) an Event of Default has occurred and is
continuing with respect to the Securities, and the Depositary notifies the
Trustee that it elects to cause the issuance of Securities in definitive form. 
Any Global Security

 

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exchanged pursuant to clause (1) above shall be so exchanged in whole and not in
part, and any Global Security exchanged pursuant to clause (2) above may be
exchanged in whole or from time to time in part as directed by the Depositary. 
Any Security issued in exchange for a Global Security or any portion thereof
shall be a Global Security; provided that any such Security so issued that is
registered in the name of a Person other than the Depositary or a nominee
thereof shall not be a Global Security.

 

(b)        Securities issued in exchange for a Global Security or any portion
thereof shall be issued in definitive, fully registered form, without interest
coupons, shall have an aggregate principal amount equal to that of such Global
Security or portion thereof to be so exchanged, shall be registered in such
names and be in such authorized denominations as the Depositary shall designate
and shall bear the applicable legends provided for herein.  Any Global Security
to be exchanged in whole shall be surrendered by the Depositary to the Trustee,
as Registrar.  With regard to any Global Security to be exchanged in part,
either such Global Security shall be so surrendered for exchange or, if the
Trustee is acting as custodian for the Depositary or its nominee with respect to
such Global Security, the principal amount thereof shall be reduced by an amount
equal to the portion thereof to be so exchanged, by means of an appropriate
adjustment made on the records of the Trustee.  Upon any such surrender or
adjustment, the Trustee shall authenticate and deliver the Security issuable on
such exchange to or upon the order of the Depositary or an authorized
representative thereof.

 

(c)        Subject to the provisions of Section 2.12(e), the registered Holder
may grant proxies and otherwise authorize any Person, including Agent Members
(as defined below) and Persons that may hold interests through Agent Members, to
take any action which a Holder is entitled to take under this Indenture or the
Securities.

 

(d)        If any of the events specified in Section 2.12(a) occurs, the Company
will promptly make available to the Trustee a reasonable supply of Securities in
definitive form.

 

(e)        Neither any members of, or participants in, the Depositary
(collectively, the “Agent Members”) nor any other Persons on whose behalf Agent
Members may act shall have any rights under this Indenture with respect to any
Global Security registered in the name of the Depositary or any nominee thereof,
or under any such Global Security, and the Depositary or such nominee, as the
case may be, may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and holder of such Global Security
for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or such nominee, as the case may be,
or

 

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impair, as between the Depositary, its Agent Members and any other Person on
whose behalf an Agent Member may act, the operation of customary practices of
such Persons governing the exercise of the rights of a holder of any Security.

 

(f)         With respect to any Global Security, the Company, the Registrar and
the Trustee shall be entitled to treat the Person in whose name such Global
Security is registered as the absolute owner of such Security for all purposes
of this Indenture, and neither the Company, the Registrar nor the Trustee shall
have any responsibility or obligation to any Agent Members or other beneficial
owners of the Securities represented by such Global Security.  Without limiting
the immediately preceding sentence, neither the Company, the Registrar nor the
Trustee shall have any responsibility or obligation with respect to (1) the
accuracy of the records of the Depositary or any other Person with respect to
any ownership interest in any Global Security, (2) the delivery to any Person,
other than a Holder, of any notice with respect to the Securities represented by
a Global Security, including any notice of redemption or repurchase, (3) the
selection of the particular Securities or portions thereof to be redeemed or
repurchased in the event of a partial redemption or repurchase of part of the
Securities outstanding or (4) the payment to any Person, other than a Holder, of
any amount with respect to the principal of or Redemption Price, Repurchase
Price, Change in Control Repurchase Price or accrued but unpaid interest
(including Liquidated Damages, if any) with respect to any Global Security.

 

Section 2.13.  CUSIP Numbers.  The Company may issue the Securities with one or
more CUSIP numbers (if then generally in use), and, if the Company so elects,
the Trustee shall use CUSIP numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers. 
The Company will promptly notify the Trustee in writing of any change in the
CUSIP numbers.

 

Section 2.14.  Designation.  The indebtedness evidenced by the Securities is
hereby irrevocably designated as “senior indebtedness” or such other term
denoting seniority for the purposes of any other existing or future indebtedness
of the Company which the Company makes subordinate in right of payment to any
senior (or such other term denoting seniority) indebtedness of the Company.

 

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ARTICLE 3
REDEMPTION AND REPURCHASES

 

Section 3.01.  Right to Redeem; Notices to Trustee.

 

(a)        Optional Redemption.  On or after April 21, 2009, the Company, at its
option, may redeem the Securities, in whole at any time, or in part from time to
time, for cash at a price equal to 100% of the principal amount of the
Securities to be redeemed (the “Redemption Price”), together with accrued but
unpaid interest (including Liquidated Damages, if any) thereon, up to but not
including the Redemption Date; provided that if the Redemption Date is between
the close of business on an interest record date and the opening of business on
the related interest payment date, accrued but unpaid interest (including
Liquidated Damages, if any) will be payable to the Holders in whose names the
Securities are registered at the close of business on the relevant interest
record date.

 

(b)        Notice to Trustee.  If the Company elects to redeem Securities
pursuant to this Section 3.01, it shall notify the Trustee in writing of the
Redemption Date, the principal amount of Securities to be redeemed and the
Redemption Price.  The Company shall give the notice to the Trustee provided for
in this Section 3.01(b) by a Company Order at least ten days before the date
notice of redemption is to be given to Holders pursuant to Section 3.03 (unless
a shorter notice shall be satisfactory to the Trustee).

 

Section 3.02.  Selection of Securities to Be Redeemed.  If less than all the
Securities are to be redeemed, subject to the Applicable Procedures in the case
of Global Securities to be so redeemed, the Trustee shall select the Securities
to be redeemed by any method that the Trustee deems fair and appropriate.  In
the event of a partial redemption, the Trustee may select for redemption
portions of the principal amount of Securities in principal amounts of $1,000
and integral multiples thereof.

 

Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption.  The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.

 

If any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed (so far as
possible) to be the portion selected for redemption.  Securities that have been
converted during a selection of Securities to be redeemed may be treated by the
Trustee as outstanding for the purpose of such selection.

 

Section 3.03.  Notice of Redemption.  At least 30 days but not more than 60 days
before any Redemption Date, the Company shall mail a notice of redemption by
first-class mail, postage prepaid, to each Holder of Securities to be redeemed
at such Holder’s registered address.

 

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The notice of redemption shall identify the Securities to be redeemed and shall
state:

 

(a)        the Redemption Date;

 

(b)        the Redemption Price and, to the extent known at the time of such
notice the amount of accrued but unpaid interest (including Liquidated Damages,
if any) payable on the Redemption Date;

 

(c)        the current Conversion Price;

 

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

 

(e)        that Securities called for redemption may be converted at any time
before the close of business on the second Business Day immediately preceding
the Redemption Date;

 

(f)         that Holders who want to convert Securities must satisfy the
requirements set forth in the Securities and Article 10 of this Indenture;

 

(g)        that Securities called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price therefor, together with
accrued but unpaid interest (including Liquidated Damages, if any) thereon;

 

(h)        if fewer than all the outstanding Securities are to be redeemed, the
certificate numbers, if any, and principal amounts of the particular Securities
to be redeemed;

 

(i)         that, unless the Company defaults in paying the Redemption Price,
interest (including Liquidated Damages, if any) on Securities called for
redemption will cease to accrue on and after the Redemption Date and the
Securities called for redemption will cease to be outstanding; and

 

(j)         the CUSIP number of the Securities called for redemption.

 

At the Company’s request, the Trustee shall give the notice of redemption in the
Company’s name and at the Company’s expense, so long as the Company makes such
request at least five Business Days prior to the date by which such notice of
redemption is to be given to Holders in accordance with this Section 3.03 and
the Company provides the Trustee with all information required for such notice
of redemption.

 

If any of the Securities is in the form of a Global Security, then the Company
shall modify such notice to the extent necessary to accord with the Applicable
Procedures that apply to the redemption of Global Securities.

 

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Section 3.04.  Effect of Notice of Redemption.  Once notice of redemption is
given, Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price stated in the notice of redemption, together
with accrued but unpaid interest (including Liquidated Damages, if any) thereon,
except for Securities which are converted in accordance with the terms of this
Indenture.  Upon surrender to the Paying Agent, such Securities shall be paid at
the Redemption Price stated in the notice of redemption, together with accrued
but unpaid interest (including Liquidated Damages, if any) thereon, up to but
not including the Redemption Date.

 

Section 3.05.  Deposit of Redemption Price.  Prior to 11:00 a.m. (New York City
time) on the Redemption Date, the Company shall deposit with the Paying Agent
(or if the Company or a Subsidiary thereof or an Affiliate of either of them is
the Paying Agent, shall segregate and hold in trust) money sufficient to pay the
aggregate Redemption Price of all Securities to be redeemed on the Redemption
Date, together with accrued but unpaid interest (including Liquidated Damages,
if any) thereon, up to but not including the Redemption Date, other than
Securities or portions of Securities called for redemption that on or prior
thereto have been delivered by the Company to the Trustee for cancellation or
have been converted pursuant to Article 10.  The Paying Agent shall as promptly
as practicable return to the Company any money not required for making payments
on the Redemption Date because of conversion of Securities pursuant to Article
10.  If such money is then held by the Company in trust and is not required for
making payments on the Redemption Date, it shall be discharged from such trust.

 

Section 3.06.  Securities Redeemed in Part.  Upon surrender of a Security that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to, and in exchange for, the
unredeemed portion of the principal amount of the Security surrendered.

 

Section 3.07.  Sinking Fund.  There shall be no sinking fund provided for the
Securities.

 

Section 3.08.  Repurchase of Securities at Option of the Holder on Specified
Dates.

 

(a)        At the option of the Holder, the Company shall repurchase all or a
portion of the Securities tendered pursuant to this Section 3.08 on April 15,
2009, April 15, 2014 and April 15, 2019 (each, a “Repurchase Date”) for cash at
a price per Security equal to 100% of the aggregate principal amount of the
Security (the “Repurchase Price”), together with accrued but unpaid interest
(including Liquidated Damages, if any) thereon, up to but not including the
Repurchase Date.

 

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Securities shall be repurchased pursuant to this Section 3.08 at the option of
the Holder thereof upon:

 

(i)            delivery to the Company and the Paying Agent by the Holder of a
written notice (a “Repurchase Notice”) at any time from the opening of business
on the date that is 30 Business Days prior to the Repurchase Date until the
close of business on the Business Day prior to such Repurchase Date stating:

 

(A)             if the Security which the Holder will deliver to be repurchased
is a Security in definitive form, the certificate number of such Security, or if
such Security is a Global Security, the notice must comply with the Applicable
Procedures;

 

(B)              the portion of the principal amount of the Security which the
Holder will deliver to be repurchased, which portion must be in a principal
amount of $1,000 or any integral multiple thereof; and

 

(C)              that such Security shall be repurchased as of the Repurchase
Date pursuant to the terms and conditions specified in this Indenture; and

 

(ii)           delivery or book-entry transfer of such Security to the Paying
Agent prior to, on or after the Repurchase Date (together with all necessary
endorsements) at the offices of the Paying Agent, such delivery being a
condition to receipt by the Holder of the Repurchase Price therefor, together
with accrued but unpaid interest (including Liquidated Damages, if any);
provided that the Repurchase Price, together with accrued but unpaid interest
(including Liquidated Damages, if any) thereon, shall be so paid pursuant to
this Section 3.08 only if the Security so delivered to the Paying Agent shall
conform in all respects to the description thereof in the related Repurchase
Notice.

 

The Company shall repurchase from the Holder thereof, pursuant to this Section
3.08, a portion of a Security if the principal amount of such portion is $1,000
or an integral multiple of $1,000.  Provisions of this Indenture that apply to
the repurchase of all of a Security also apply to the repurchase of a portion of
a Security.

 

Any repurchase by the Company contemplated pursuant to the provisions of this
Section 3.08 shall be consummated by the delivery to the Paying Agent of the
Repurchase Price, together with accrued but unpaid interest (including
Liquidated Damages, if any) thereon, to be received by the Holder promptly

 

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following the later of the Repurchase Date and the time of delivery or
book-entry transfer of the Security to the Paying Agent in accordance with this
Section 3.08.

 

Notwithstanding anything herein to the contrary, any Holder delivering to the
Paying Agent the Repurchase Notice contemplated by this Section 3.08(a) shall
have the right to withdraw such Repurchase Notice at any time prior to the close
of business on the Repurchase Date by delivery of a written notice of withdrawal
to the Paying Agent at the principal office of the Paying Agent in accordance
with Section 3.10.

 

The Paying Agent shall promptly notify the Company of the receipt by it of any
Repurchase Notice or written notice of withdrawal thereof.

 

(b)        Company Repurchase Notice.  In connection with any repurchase of
Securities pursuant to this Section 3.08, the Company shall give written notice
of each Repurchase Date to the Trustee and the Holders (the “Company Repurchase
Notice”).  The Company Repurchase Notice shall be sent by first-class mail to
the Trustee and to each Holder not less than 30 Business Days prior to each
Repurchase Date, and to Beneficial Owners as required by applicable law.  Each
Company Repurchase Notice shall include a form of Repurchase Notice to be
completed by a Holder and shall state:

 

(i)            the Repurchase Price, the Conversion Price and, to the extent
known at the time of such notice, the amount of accrued but unpaid interest
(including Liquidated Damages, if any) that will be payable with respect to the
Securities on the Repurchase Date;

 

(ii)           the name and address of the Paying Agent and the Conversion
Agent;

 

(iii)          that Securities as to which a Repurchase Notice has been given
may be converted only if the applicable Repurchase Notice has been withdrawn in
accordance with the terms of this Indenture;

 

(iv)          that Securities must be surrendered to the Paying Agent to collect
payment of the Repurchase Price and accrued but unpaid interest (including
Liquidated Damages, if any);

 

(v)           that the Repurchase Price for any Securities as to which a
Repurchase Notice has been given and not withdrawn, together with accrued but
unpaid interest (including Liquidated Damages, if any) payable with respect
thereto, shall be paid promptly following the later of the Repurchase Date and
the time of surrender of such Securities as described in clause (iv);

 

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(vi)          the procedures the Holder must follow under this Section 3.08;

 

(vii)         briefly, the conversion rights of the Securities;

 

(viii)        that, unless the Company defaults in making payment of such
Repurchase Price, interest (including Liquidated Damages, if any) on Securities
covered by any Repurchase Notice will cease to accrue on and after the
Repurchase Date;

 

(ix)           the CUSIP number of the Securities; and

 

(x)            the procedures for withdrawing a Repurchase Notice (as specified
in Section 3.10).

 

At the Company’s request, which shall be made at least five Business Days prior
to the date by which a Company Repurchase Notice is to be given to the Holders
in accordance with this Section 3.08, and at the Company’s expense, the Trustee
shall give such Company Repurchase Notice in the Company’s name; provided that,
in all cases, the text of such Company Repurchase Notice shall be prepared by
the Company.

 

If any of the Securities is in the form of a Global Security, then the Company
shall modify such notice to the extent necessary to accord with the Applicable
Procedures that apply to the repurchase of Global Securities.

 

Section 3.09.  Repurchase of Securities at Option of the Holder Upon Change in
Control.

 

(a)        If at any time that Securities remain outstanding there shall have
occurred a Change in Control, Securities shall be repurchased by the Company, at
the option of the Holder thereof, at a price in cash (the “Change in Control
Repurchase Price”) equal to 100% of the aggregate principal amount of such
Securities plus accrued but unpaid interest (including Liquidated Damages, if
any) thereon, up to but not including the date (the “Change in Control
Repurchase Date”) fixed by the Company that is not less than 30 days nor more
than 45 days after the date the Company Change in Control Repurchase Notice (as
defined below) is given, subject to satisfaction by or on behalf of the Holder
of the requirements set forth in Section 3.09(c); provided that if the Change in
Control Repurchase Date is between the close of business on an interest record
date and the opening of business on the related interest payment date, accrued
but unpaid interest (including Liquidated Damages, if any) will be payable to
the Holders in whose names the Securities are registered at the close of
business on the relevant interest record date.

 

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(b)        Company Change in Control Repurchase Notice.  In connection with any
repurchase of Securities pursuant to this Section 3.09, the Company shall give
written notice of the occurrence of a Change in Control, the repurchase right
arising as a result thereof and the Change in Control Repurchase Date to the
Trustee and the Holders (the “Company Change in Control Repurchase Notice”). 
The Company Change in Control Repurchase Notice shall be sent by first-class
mail to the Trustee and to each Holder on or before the 30th day after the
occurrence of a Change in Control.  Each Company Change in Control Repurchase
Notice shall include a form of Change in Control Repurchase Notice to be
completed by a Holder and shall state:

 

(i)            the Change in Control Repurchase Price, the Conversion Price and,
to the extent known at the time of such notice, the amount of accrued but unpaid
interest (including Liquidated Damages, if any) that will be payable with
respect to the Securities on the Change in Control Repurchase Date;

 

(ii)           the name and address of the Paying Agent and the Conversion
Agent;

 

(iii)          that Securities as to which a Change in Control Repurchase Notice
has been given may be converted only if such Change in Control Repurchase Notice
has been withdrawn in accordance with the terms of this Indenture;

 

(iv)          that Securities must be surrendered to the Paying Agent to collect
payment of the Change in Control Repurchase Price and accrued but unpaid
interest (including Liquidated Damages, if any);

 

(v)           that the Change in Control Repurchase Price for any Securities as
to which a Change in Control Repurchase Notice has been given and not withdrawn,
together with any accrued but unpaid interest (including Liquidated Damages, if
any) payable with respect thereto, shall be paid promptly following the later of
the Change in Control Repurchase Date and the time of surrender of such
Securities as described in clause (iv);

 

(vi)          the procedures the Holder must follow under this Section 3.09;

 

(vii)         briefly, the conversion rights of the Securities;

 

(viii)        that, unless the Company defaults in making payment of such Change
in Control Repurchase Price, interest (including Liquidated Damages, if any) on
Securities covered by any Change in Control

 

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Repurchase Notice will cease to accrue on and after the Change in Control
Repurchase Date;

 

(ix)           the CUSIP number of the Securities; and

 

(x)            the procedures for withdrawing a Change in Control Repurchase
Notice (as specified in Section 3.10).

 

At the Company’s request, which shall be made at least five Business Days prior
to the date by which a Company Change in Control Repurchase Notice is to be
given to the Holders in accordance with this Section 3.09 and at the Company’s
expense, the Trustee shall give such Company Change in Control Repurchase Notice
in the Company’s name; provided that, in all cases, the text of such Company
Change in Control Repurchase Notice shall be prepared by the Company.  If any of
the Securities is in the form of a Global Security, then the Company shall
modify such notice to the extent necessary to accord with the Applicable
Procedures that apply to the repurchase of Global Securities.

 

(c)        For a Security to be so repurchased at the option of the Holder upon
a Change in Control, the Paying Agent must receive such Security with the form
entitled “Option to Elect Repurchase Upon a Change in Control” (a “Change in
Control Repurchase Notice”) on the reverse thereof duly completed, together with
such Security duly endorsed for transfer, on or before the close of business on
the Business Day prior to the Change in Control Repurchase Date.  All questions
as to the validity, eligibility (including time of receipt) and acceptance of
any Security for repurchase shall be determined by the Company, whose
determination shall be final and binding.

 

The Company shall repurchase from the Holder thereof, pursuant to this Section
3.09, a portion of a Security if the principal amount of such portion is $1,000
or an integral multiple of $1,000.  Provisions of this Indenture that apply to
the repurchase of all of a Security also apply to the repurchase of a portion of
a Security.

 

Any repurchase by the Company contemplated pursuant to the provisions of this
Section 3.09 shall be consummated by the delivery to the Paying Agent of the
Change in Control Repurchase Price, together with accrued but unpaid interest
(including Liquidated Damages, if any) thereon, to be received by the Holder
promptly following the later of the Change in Control Repurchase Date and the
time of delivery or book-entry transfer of the Security to the Paying Agent in
accordance with this Section 3.09.

 

Notwithstanding anything herein to the contrary, any Holder delivering to the
Paying Agent the Change in Control Repurchase Notice contemplated by this
Section 3.09(c) shall have the right to withdraw such Change in Control

 

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Repurchase Notice at any time prior to the close of business on the Change in
Control Repurchase Date by delivery of a written notice of withdrawal to the
Paying Agent at the principal office of the Paying Agent in accordance with
Section 3.10.

 

The Paying Agent shall promptly notify the Company of the receipt by it of any
Change in Control Repurchase Notice or written withdrawal thereof.

 

Notwithstanding anything herein to the contrary, the Company’s obligations
pursuant to this Section 3.09 shall be satisfied if a third party makes an offer
to repurchase outstanding Securities after a Change in Control in the manner and
at the times and otherwise in compliance in all material respects with the
requirements of this Section 3.09 and such third party purchases all Securities
properly tendered and not withdrawn pursuant to the requirements of this Section
3.09.

 

(d)        The Company shall use its commercially reasonable efforts to, within
30 days following any Change in Control, either (i) obtain the consents under
all indebtedness required to permit the repurchase of the Securities pursuant to
any Company Change in Control Repurchase Notice or (ii) repay in full all
indebtedness and terminate all commitments under all indebtedness, the terms of
which would prohibit the repurchase of the Securities pursuant to any Company
Change in Control Repurchase Notice.

 

Section 3.10.  Effect of Repurchase Notice or Change in Control Repurchase
Notice.  Upon receipt by the Paying Agent of a Repurchase Notice or Change in
Control Repurchase Notice, the Holder of the Security in respect of which such
Repurchase Notice or Change in Control Repurchase Notice, as the case may be,
was given shall (unless such Repurchase Notice or Change in Control Repurchase
Notice is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Repurchase Price or Change in Control Repurchase
Price, together with accrued but unpaid interest (including Liquidated Damages,
if any) thereon, to but not including the Repurchase Date or Change in Control
Repurchase Date, as the case may be, with respect to such Security.  Such
Repurchase Price or Change in Control Repurchase Price, together with accrued
but unpaid interest (including Liquidated Damages, if any) thereon, to but not
including the Repurchase Date or Change in Control Repurchase Date, as the case
may be, shall be paid to such Holder, subject to receipt of funds by the Paying
Agent, promptly following the later of (x) the Repurchase Date or the Change in
Control Repurchase Date, as the case may be, with respect to such Security
(provided that the conditions in Section 3.08 or Section 3.09, as applicable,
have been satisfied) and (y) the time of delivery or book-entry transfer of such
Security to the Paying Agent by the Holder thereof in the manner required by
Section 3.08 or Section 3.09(c), as applicable.  Securities in respect of which
a Repurchase Notice or Change in

 

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Control Repurchase Notice, as the case may be, has been given by the Holder
thereof may not be converted pursuant to Article 10 hereof on or after the date
of the delivery of such Repurchase Notice or Change in Control Repurchase
Notice, as the case may be, unless such Repurchase Notice or Change in Control
Repurchase Notice, as the case may be, has first been validly withdrawn as
specified in the following two paragraphs.

 

A Repurchase Notice or Change in Control Repurchase Notice, as the case may be,
may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent in accordance with the Repurchase Notice or Change in
Control Repurchase Notice, as the case may be, at any time prior to the close of
business on the Repurchase Date or the Change in Control Repurchase Date, as the
case may be, specifying:

 

(i)            if the Security with respect to which such notice of withdrawal
is being submitted is a Security in definitive form, the certificate number of
such Security, or if such Security is a Global Security, the notice must comply
with the Applicable Procedures;

 

(ii)           the principal amount of the Security with respect to which such
notice of withdrawal is being submitted; and

 

(iii)          the principal amount, if any, of such Security which remains
subject to the original Repurchase Notice or Change in Control Repurchase
Notice, as the case may be, and which has been or will be delivered for
repurchase by the Company.

 

There shall be no repurchase of any Securities pursuant to Section 3.08 or
Section 3.09 or redemption pursuant to Section 3.01 if an Event of Default
(other than a default in the payment of the Redemption Price, Repurchase Price
or Change in Control Repurchase Price, as the case may be) has occurred prior
to, on or after, as the case may be, the giving by the Holders of such
Securities of the required Repurchase Notice or Change in Control Repurchase
Notice, or the giving by the Company of the notice of redemption, as the case
may be, and such Event of Default is continuing.  The Paying Agent will promptly
return to the respective Holders thereof any Securities (x) with respect to
which a Repurchase Notice or Change in Control Repurchase Notice, as the case
may be, has been withdrawn in compliance with this Indenture, or (y) held by it
during the continuance of an Event of Default (other than a default in the
payment of the Repurchase Price or Change in Control Repurchase Price, as the
case may be) in which case, upon such return, the Repurchase Notice or Change in
Control Repurchase Notice with respect thereto shall be deemed to have been
withdrawn.

 

Section 3.11.  Deposit of Repurchase Price or Change in Control Repurchase
Price.  Prior to 11:00 a.m. (New York City time) on the Repurchase

 

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Date or the Change in Control Repurchase Date, as the case may be, the Company
shall deposit with the Trustee or with the Paying Agent (or, if the Company or a
Subsidiary thereof or an Affiliate of either of them is acting as the Paying
Agent, shall segregate and hold in trust as provided in Section 2.04) an amount
of money (in immediately available funds if deposited on such Business Day)
sufficient to pay the aggregate Repurchase Price or Change in Control Repurchase
Price, as the case may be, together with accrued but unpaid interest (including
Liquidated Damages, if any) thereon, to but not including the Repurchase Date or
Change in Control Repurchase Date, as the case may be, of all the Securities or
portions thereof which are to be repurchased as of the Repurchase Date or Change
in Control Repurchase Date, as the case may be.

 

Section 3.12.  Securities Repurchased in Part.  Any Security in definitive form
that is to be repurchased only in part shall be surrendered at the office of the
Paying Agent (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
one or more new Securities in definitive form, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in exchange
for, the portion of the principal amount of the Security in definitive form so
surrendered which is not repurchased.

 

Section 3.13.  Covenant to Comply with Securities Laws upon Repurchase of
Securities.  When complying with the provisions of Sections 3.08 or 3.09 hereof
(so long as such offer or repurchase constitutes an “issuer tender offer” for
purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or
repurchase), the Company shall (i) comply in all material respects with Rule
13e-4 and Rule 14e-1 under the Exchange Act, (ii) file the related Schedule TO
(or any successor schedule, form or report) under the Exchange Act and (iii)
otherwise comply in all material respects with all federal and state securities
laws so as to permit the rights and obligations under Sections 3.08 or 3.09 to
be exercised in the time and in the manner specified in Sections 3.08 or 3.09.

 

Section 3.14.  Repayment to the Company.  To the extent that the aggregate
amount of cash deposited by the Company pursuant to Section 3.11 exceeds the
aggregate Repurchase Price or Change in Control Repurchase Price, as the case
may be, of the Securities or portions thereof which the Company is obligated to
repurchase as of the Repurchase Date or Change in Control Repurchase Date, as
the case may be, together with accrued but unpaid interest (including Liquidated
Damages, if any) thereon, then, unless otherwise agreed in writing with the
Company, promptly after the Business Day following the Repurchase Date or Change
in Control Repurchase Date, as the case may be, the

 

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Trustee shall return any such excess to the Company together with interest, if
any, thereon (subject to the provisions of Section 7.01(f)).

 

Section 3.15.  Mandatory Disposition Pursuant to Gaming Laws.

 

(a)        Each Holder, by accepting a Security, will be deemed to have agreed
that if the gaming authority of any jurisdiction in which the Company or any of
its subsidiaries conducts or proposes to conduct gaming operations requires that
a Person who is a Holder or the Beneficial Owner of Securities (or an affiliate
of such Holder or Beneficial Owner) be licensed, qualified or found suitable
under applicable gaming laws, such Holder or the Beneficial Owner, as the case
may be, will apply for a license, qualification or a finding of suitability
within the required time period.  If such Person fails to apply or become
licensed or qualified or is found unsuitable (a “Disqualified Holder”), the
Company will have the right, at any time, at its option:

 

(i)            to require such Person to dispose of its Securities or beneficial
interest therein within 30 days of receipt of notice of the Company’s election
or such earlier date as may be requested or prescribed by such gaming authority,
or

 

(ii)           to redeem such Securities at a redemption price equal to the
lesser of (1) such Person’s cost, (2) 100% of the principal amount thereof, plus
accrued and unpaid interest (including Liquidated Damages, if any), to the
earlier of the redemption date or the date of the finding of unsuitability,
which redemption date may be less than 30 days following the notice of
redemption if so requested or prescribed by the applicable gaming authority or
(3) such lesser amount as may be required by an applicable gaming authority.

 

(b)        Immediately upon a determination by a gaming authority that a Holder
or Beneficial Owner of Securities (or an affiliate thereof) will not be
licensed, qualified or found suitable or is denied a license, qualification or
finding of suitability, the Holder or Beneficial Owner will not have any further
right with respect to the Securities to:

 

(i)            exercise, directly or indirectly, through any Person, any right
conferred by the Securities; or

 

(ii)           receive any interest (including Liquidated Damages, if any), or
any other distribution or payment with respect to the Securities, or any
remuneration in any form from the Company for services rendered or otherwise,
except for the redemption of the Securities.

 

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(c)        The Company will notify the Trustee in writing of any such
Disqualified Holder status or redemption of Securities as soon as practicable. 
The Company will not be responsible for any costs or expenses any such Holder or
Beneficial Owner may incur in connection with its application for a license,
qualification or a finding of suitability.

 

ARTICLE 4
COVENANTS

 

Section 4.01.  Payment of Securities.  The Company shall promptly make all
payments in respect of the Securities on the dates and in the manner provided in
the Securities or pursuant to this Indenture.  Any amounts to be given to the
Trustee or Paying Agent, as the case may be, shall be deposited with the Trustee
or Paying Agent, as the case may be, by 11:00 a.m. (New York City time), on the
dates required pursuant to Section 2.04 hereof.  Interest installments,
Liquidated Damages, principal amount, Redemption Price, Repurchase Price, Change
in Control Repurchase Price and interest, if any, due on overdue amounts shall
be considered paid on the applicable date due if at 11:00 a.m. (New York City
time) on such date, the Trustee or the Paying Agent, as the case may be, holds,
in accordance with this Indenture, money sufficient to pay all such amounts then
due.

 

The Company shall, to the extent permitted by law, pay interest on overdue
amounts at the rate per annum set forth in paragraph 1 of the Securities,
compounded semiannually, which interest shall accrue from the date such overdue
amount was originally due to the date payment of such amount, including interest
thereon, has been made or duly provided for.  All such interest shall be payable
on demand.  The accrual of such interest on overdue amounts shall be in addition
to the continued accrual of interest on the Securities.

 

Section 4.02.  SEC and Other Reports.  The Company shall file with the Trustee,
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual report and 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 is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act.  In the event the Company is at any time no longer subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, it shall
continue to provide the Trustee with reports containing substantially the same
information as would have been required to be filed with the SEC had the Company
continued to have been subject to such reporting requirements.  In such event,
such reports shall be provided to the Trustee at the times the Company would
have been required to provide reports had it continued

 

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to have been subject to such reporting requirements.  In addition, the Company
shall comply with the other provisions of TIA Section 314(a).

 

Section 4.03.  Compliance Certificate; Notice of Default.

 

(a)        The Company shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Company (beginning with the fiscal year ending on
October 31, 2004) an Officers’ Certificate, stating whether or not to the best
knowledge of the signers thereof the Company is in Default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder), and if the Company shall be in Default, describing all such Defaults
and the nature and status thereof of which the signers thereof may have
knowledge.

 

(b)        The Company shall, so long as any of the Securities are outstanding,
deliver to the Trustee promptly, and in any event within 30 days after becoming
aware of any Default or Event of Default under this Indenture, an Officers’
Certificate describing such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.  The Trustee shall
not be deemed to have knowledge of a Default or Event of Default unless one of
its Responsible Officers receives written notice of the Default or Event of
Default from the Company or any of the Holders.

 

Section 4.04.  Further Instruments and Acts.  Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.

 

Section 4.05.  Maintenance of Office or Agency.  The Company will maintain in
the Borough of Manhattan, The City of New York, an office or agency of the
Trustee, Registrar, Paying Agent and Conversion Agent where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer, exchange, repurchase, redemption or conversion and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served.  The Trustee’s Corporate Trust Office shall
initially be such office or agency for all of the aforesaid purposes.  The
Company shall give prompt written notice to the Trustee of the location, and of
any change in the location, of any such office or agency (other than a change in
the location of the office or agency of the Trustee).  If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 11.02.  The Company may also from time to time designate one or
more other offices or agencies where the Securities may be presented or
surrendered for any

 

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or all such purposes, and may from time to time rescind such designations;
provided that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain at least one Paying Agent having an office
or agency in the Borough of Manhattan, The City of New York, for such purposes.

 

Section 4.06.  Delivery of Certain Information.  At any time when the Company is
not subject to Section 13 or 15(d) of the Exchange Act, upon the request of a
Holder or any Beneficial Owner of Securities or holder or Beneficial Owner of
Common Stock delivered upon conversion thereof, the Company will promptly
furnish or cause to be furnished Rule 144A Information (as defined below) to
such Holder or any Beneficial Owner of Securities or holder or Beneficial Owner
of Common Stock delivered upon conversion thereof or to a prospective purchaser
of any such security designated by any such holder, as the case may be, to the
extent required to permit compliance by such Holder or holder with Rule 144A
under the Securities Act in connection with the resale of any such security. 
“Rule 144A Information” shall be such information as is specified pursuant to
Rule 144A(d)(4) under the Securities Act or any successor provisions.  Whether a
Person is a Beneficial Owner shall be determined by the Company to the Company’s
reasonable satisfaction.

 

Section 4.07.  Liquidated Damages.  If at any time Liquidated Damages become
payable by the Company pursuant to the Registration Rights Agreement, the
Company shall promptly deliver to the Trustee a certificate to that effect and
stating (i) the amount of such Liquidated Damages that are payable and (ii) the
date on which such Liquidated Damages are payable pursuant to the terms of the
Registration Rights Agreement.  Unless and until a Responsible Officer of the
Trustee receives such a certificate, the Trustee may assume without inquiry that
no Liquidated Damages are payable.  If the Company has paid Liquidated Damages
directly to the Persons entitled to them, the Company shall deliver to the
Trustee a certificate setting forth the particulars of such payment.

 

ARTICLE 5
SUCCESSOR CORPORATION

 

Section 5.01.  When the Company May Consolidate, Merge or Transfer Assets.  The
Company shall not consolidate with or merge with or into any other Person or
sell, lease, exchange or otherwise transfer (in one transaction or a series of
related transactions) all or substantially all of its properties and assets to
any other Person, unless:

 

(a)        (i) the Company shall be the resulting or surviving corporation or
(ii) the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or the Person which acquires by sale, lease,

 

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exchange or other transfer all or substantially all of the properties and assets
of the Company (A) shall be a corporation, limited partnership, limited
liability company or other business entity organized and validly existing under
the laws of the United States or any State thereof or the District of Columbia,
and (B) shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, all of the
obligations of the Company under the Securities and this Indenture; and

 

(b)        immediately after giving effect to such transaction, no Event of
Default and no Default shall have occurred and be continuing.

 

For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of the properties and assets of one or more Subsidiaries (other than
to the Company or another Subsidiary of the Company), which, if such assets were
owned by the Company would constitute all or substantially all of the properties
and assets of the Company, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.  The successor
Person formed by such consolidation or into which the Company is merged or the
successor Person to which such sale, lease, exchange or other transfer is made
shall succeed to, and (except in the case of a lease) be substituted for, and
may exercise every right and power of, the Company under this Indenture with the
same effect as if such successor had been named as the Company herein; and
thereafter, except in the case of a lease and except for obligations the Company
may have under a supplemental indenture pursuant to Section 9.06, the Company
shall be discharged from all obligations and covenants under this Indenture and
the Securities.  Subject to Section 9.06, the Company, the Trustee and the
successor Person shall enter into a supplemental indenture to evidence the
succession and substitution of such successor Person and such discharge and
release of the Company, as applicable.

 

ARTICLE 6
DEFAULTS AND REMEDIES

 

Section 6.01.  Events of Default.  Subject to the provisions set forth below in
this Section 6.01, each of the following events is an “Event of Default”:

 

(a)        the failure to pay interest (including Liquidated Damages, if any) on
any Security when the same becomes due and payable and the continuation of such
default for a period of 30 days, whether or not such failure shall be due to
compliance with agreements with respect to any other indebtedness or any other
cause;

 

(b)        the failure to pay the principal of any Security, when such principal
becomes due and payable, at the stated maturity, upon acceleration, upon

 

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redemption or otherwise (including the failure to make cash payments due upon
conversion, failure to make a Change in Control offer or make a payment to
repurchase Securities tendered pursuant to a Change in Control offer or failure
to repurchase Securities pursuant to Section 3.08 hereof), whether or not such
failure shall be due to compliance with agreements with respect to any other
indebtedness or any other cause;

 

(c)        the failure to provide a Company Change in Control Repurchase Notice
in accordance with the terms of Section 3.09(b) hereof;

 

(d)        a default in the observance or performance of any other covenant or
agreement contained in this Indenture that continues for a period of 60 days
after the Company has received written notice specifying the default (and
demanding that such default be remedied) from the Trustee or the Holders of at
least 25% of the outstanding principal amount of the Securities;

 

(e)        a default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
indebtedness of the Company or any of its Subsidiaries, or the payment of which
is guaranteed by the Company or any of its Subsidiaries, whether such
indebtedness now exists or is created after the date hereof, which default
results in the acceleration of such indebtedness prior to its express maturity
and the principal amount of such indebtedness, together with the principal
amount of any other such indebtedness the maturity of which has been so
accelerated, aggregates at least $10,000,000;

 

(f)         one or more judgments in an uninsured aggregate amount in excess of
$10,000,000 shall have been rendered against the Company or any of its
Subsidiaries and remain undischarged, unpaid or unstayed for a period of 60 days
after such judgment or judgments become final and nonappealable;

 

(g)        the Company or any of its Significant Subsidiaries pursuant to or
under or within the meaning of any Bankruptcy Law:

 

(i)            commences a voluntary case or proceeding;

 

(ii)           consents to the entry of an order for relief against it in an
involuntary case or proceeding;

 

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

 

(iv)          makes a general assignment for the benefit of its creditors; or

 

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(v)           shall generally not pay its debts when such debts become due or
shall admit in writing its inability to pay its debts generally; or

 

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

 

(i)            is for relief against the Company or any Significant Subsidiary
of the Company in an involuntary case or proceeding;

 

(ii)           appoints a custodian of the Company or any Significant Subsidiary
of the Company for all or substantially all of its properties; or

 

(iii)          orders the liquidation of the Company or any Significant
Subsidiary of Company;

 

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

 

Section 6.02.  Acceleration.

 

(a)        If an Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01) shall occur and be continuing, the Trustee
may, and at the written request of the Holders of at least 25% in principal
amount of outstanding Securities shall, declare the principal of and accrued but
unpaid interest on all the Securities to be due and payable by notice in writing
to the Company (the “Acceleration Notice”).  Such notice shall specify the
respective Event of Default and that it is a “notice of acceleration.”  Upon the
giving of an Acceleration Notice, the principal of and accrued but unpaid
interest (including Liquidated Damages, if any) on all the Securities shall
become immediately due and payable.  If an Event of Default specified in clause
(g) or (h) of Section 6.01 occurs and is continuing, then all unpaid principal
of, and premium, if any, and accrued but unpaid interest (including Liquidated
Damages, if any) on all of the outstanding Securities 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.

 

(b)        At any time after a declaration of acceleration with respect to the
Securities as described in the preceding paragraph, the Holders of a majority in
aggregate principal amount of the Securities at the time outstanding may rescind
and cancel such declaration and its consequences (i) if the rescission would not
conflict with any judgment or decree, (ii) if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of such acceleration, (iii) if interest on overdue
installments of interest (to the extent the payment of such interest is lawful)
and on overdue principal, which has become due otherwise than by such
declaration of

 

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acceleration, has been paid, (iv) if the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of an
Event of Default of the type described in clause (d) of Section 6.01, the
Trustee shall have received an Officers’ Certificate and an Opinion of Counsel
that such Event of Default has been cured or waived.  No such rescission shall
affect any subsequent Event of Default or impair any right consequent thereto.

 

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 the
principal amount of all the Securities plus accrued but unpaid interest
(including Liquidated Damages, if any) thereon, or to enforce the performance of
any provision of the Securities or this Indenture.

 

The Trustee may maintain a proceeding even if the Trustee does not possess any
of the Securities or does not produce any of the Securities in the proceeding. 
A delay or omission by the Trustee or any Holder 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.  No remedy is
exclusive of any other remedy.  All available remedies are cumulative to the
extent permitted by law.

 

Section 6.04.  Waiver of Past Defaults.  The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding, by notice in writing
to the Trustee (and without notice to any other Holder), may waive an existing
Event of Default and its consequences, except (i) an Event of Default described
in Section 6.01(a) or Section 6.01(b), (ii) an Event of Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Holder affected or (iii) an Event of Default which constitutes a failure to
convert any Security in accordance with the terms of Article 10.  When an Event
of Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Event of Default or impair any consequent right.  This
Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such
Section 316(a)(1)(B) is hereby expressly excluded from this Indenture, as
permitted by the TIA.

 

Section 6.05.  Control by Majority.  The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee.  However,
the Trustee may refuse to follow any direction that conflicts with law
(including gaming laws) or this Indenture or that the Trustee determines in good
faith is unduly prejudicial to the rights of other Holders or would involve the
Trustee in personal liability unless the Trustee is offered indemnity
satisfactory to it.  This Section 6.05 shall be in lieu of Section 316(a)(1)(A)
of the

 

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TIA and such Section 316(a)(1)(A) is hereby expressly excluded from this
Indenture, as permitted by the TIA.

 

Section 6.06.  Limitation on Suits.  A Holder may not pursue any remedy with
respect to this Indenture or the Securities unless:

 

(a)        the Holder gives to the Trustee written notice stating that an Event
of Default is continuing;

 

(b)        the Holders of at least 25% in aggregate principal amount of the
Securities at the time outstanding make a written request to the Trustee to
pursue the remedy;

 

(c)        such Holder or Holders offer to the Trustee security or 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 such notice, request and offer of security or indemnity; and

 

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

 

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

 

Section 6.07.  Rights of Holders to Receive Payment and to Convert. 
Notwithstanding any other provision of this Indenture, except for restrictions
imposed by applicable gaming regulatory authorities or pursuant to applicable
gaming laws, the right of any Holder to receive payment of interest installments
(including Liquidated Damages, if any), the principal amount, Redemption Price,
Repurchase Price, Change in Control Repurchase Price or interest, if any, due on
overdue amounts in respect of the Securities held by such Holder, on or after
the respective due dates expressed in the Securities, and to convert the
Securities in accordance with Article 10, or to bring suit for the enforcement
of any such payment on or after such respective dates or the enforcement of the
right to convert, shall not be impaired or affected adversely without the
consent of such Holder.

 

Section 6.08.  Collection Suit by Trustee.  If an Event of Default described in
Section 6.01(a) or 6.01(b) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor upon the Securities for the whole amount owing with respect
to the Securities and the amounts provided for in Section 7.07.

 

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Section 6.09.  Trustee May File Proofs of Claim.  In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to the Company or
any other obligor upon the Securities or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of whether any
amounts in respect of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of any such amounts)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,

 

(a)        to file and prove a claim for any accrued but unpaid amounts due in
respect of the Securities, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel or any other amounts due the Trustee under
Section 7.07) and of the Holders allowed in such judicial proceeding, and

 

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

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.

 

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

 

Section 6.10.  Priorities.  If the Trustee collects any money pursuant to this
Article 6, it shall pay out the money in the following order:

 

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

 

SECOND:  to Holders for amounts due and unpaid on the Securities and for any
accrued but unpaid interest amounts due in respect of the Securities, ratably,
without preference or priority of any kind, according to such amounts due and
payable on the Securities; and

 

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THIRD:  the balance, if any, to the Company.

 

The Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section 6.10.  At least 15 days before such record date, the
Trustee shall mail to each Holder and the Company a notice that states the
record date, the payment date and the amount to be paid.

 

Section 6.11.  Suits.  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 (other than the Trustee) 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 and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant.  This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit
by Holders of more than 10% in aggregate principal amount of the Securities at
the time outstanding.  This Section 6.11 shall be in lieu of Section 315(e) of
the TIA and such Section 315(e) is hereby expressly excluded from this
Indenture, as permitted by the TIA.

 

Section 6.12.  Waiver of Stay, Extension or Usury Laws.  The Company covenants
(to the fullest extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other law wherever
enacted, now or at any time hereafter in force, which would prohibit or forgive
the Company from paying all or any portion of any amounts due in respect of the
Securities, as contemplated herein, or which may affect the covenants or the
performance of this Indenture; and the Company (to the fullest extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

 

Section 6.13.   Disqualified Holders. To the extent required by applicable
gaming laws, Securities held by a Disqualified Holder shall, so long as held by
such Person, be disregarded for purposes of providing notices, directions,
waivers or other actions and determining the sufficiency of such notices,
directions waivers or actions under this Article 6.

 

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ARTICLE 7
TRUSTEE

 

Section 7.01.  Duties of Trustee.

 

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

 

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

 

(i)            the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others; and

 

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

 

This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.

 

(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 (c) does not limit the effect of paragraph (b) of
this Section 7.01;

 

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

 

(iii)          the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.02, 6.04 or 6.05.

 

Sections 7.01(c)(i), (ii) and (iii) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.

 

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

 

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(e)        The Trustee may refuse to perform any duty or exercise any right or
power or expend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.

 

(f)         Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law.  The Trustee (acting in
any capacity hereunder) shall be under no liability for interest on any money
received by it hereunder unless otherwise agreed in writing with the Company.

 

(g)           The Trustee shall cooperate with, produce any document or
information (to the extent previously provided to the Trustee in connection with
this Indenture) requested in writing by, and comply with any order or directive
of any gaming authority of any jurisdiction in which the Company or any
Subsidiary conducts or proposes to conduct gaming in connection with this
Indenture, including that the Trustee submit an application for any license,
finding of suitability or other approval pursuant to any applicable gaming laws
(unless the Trustee shall have submitted its resignation) and will cooperate
fully and completely in any proceeding related to such application; provided the
Company agrees to prepare all documentation in connection with any such order,
directive, application and proceeding and to reimburse the Trustee for all costs
and expenses incurred by it in connection therewith.

 

Section 7.02.  Rights of Trustee.  Subject to its duties and responsibilities
under the TIA,

 

(a)        the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed or presented by
the proper party or parties;

 

(b)        whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may obtain and, in the absence of bad faith
or negligence on its part, conclusively rely upon an Officers’ Certificate
and/or an Opinion of Counsel;

 

(c)        the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
custodians or nominees and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee appointed with due care by it hereunder;

 

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(d)           the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith which it reasonably believes to be
authorized or within its rights or powers conferred under this Indenture;

 

(e)           the Trustee may consult with counsel selected by it and any advice
or opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion of such counsel;

 

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

 

(g)           any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Order and any resolution of the Board of
Directors shall be sufficiently evidenced by a Board Resolution;

 

(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,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled, during normal
business hours, to examine the books, records and premises of the Company,
personally or by agent or attorney at the sole cost of the Company and shall
incur no liability or additional liability of any kind by reason of such inquiry
or investigation;

 

(i)            the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
Default is received by the Trustee at the Corporate Trust Office, and such
notice references the Securities and this Indenture;

 

(j)            the rights, privileges, protections, immunities and benefits
given to the Trustee, including its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder
(including Paying Agent, Registrar and Conversion Agent), and to all other
Persons employed to act hereunder, including the Trustee’s officers, employees,
agents and custodians;

 

(k)           the Trustee may request that the Company deliver an Officers’
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which

 

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Officers’ Certificate may be signed by any person authorized to sign an
Officers’ Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded;

 

(l)            neither the Trustee nor any of its officers, directors, employees
or agents shall be liable for any action taken or omitted under this Indenture
or in connection therewith except to the extent caused by the Trustee’s gross
negligence, bad faith or willful misconduct, as determined by the final judgment
of a court of competent jurisdiction, no longer subject to appeal or review. 
Anything in this Indenture to the contrary notwithstanding, in no event shall
the Trustee be liable for special, indirect or consequential loss or damage of
any kind whatsoever (including but not limited to lost profits), even if the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action;

 

(m)          the Trustee is not required to give any bond or surety with respect
to the performance of its duties or the exercise of its powers under this
Indenture; and

 

(n)           notwithstanding anything else herein contained, whenever any
provision of this Indenture indicates that any confirmation of a condition or
event is qualified by the words “to the knowledge of” or “known to” the Trustee
or other words of similar meaning, said words shall mean and refer to the
current awareness of one or more Responsible Officers who are located at the
Corporate Trust Office.

 

Section 7.03.  Individual Rights of Trustee.  The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.  Any Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with like rights.  However, the Trustee must comply
with Sections 7.10 and 7.11.

 

Section 7.04.  Trustee’s Disclaimer.  The Trustee makes no representation as to
the validity or adequacy of this Indenture or the Securities, shall not be
accountable for the Company’s use or application of the proceeds from the
Securities, and shall not be responsible for any statement in any registration
statement for the Securities under the Securities Act or in any offering
document for the Securities, the Indenture or the Securities (other than its
certificate of authentication), or the determination as to which Beneficial
Owners are entitled to receive any notices hereunder.

 

Section 7.05.  Notice of Defaults.  If an Event of Default occurs and if it is
actually known to a Responsible Officer of the Trustee, the Trustee shall give
to each Holder notice of all current Event of Defaults known to it within 90
days

 

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after any such Event of Default occurs or, if later, within 15 days after it is
known to the Trustee, unless such Event of Default shall have been cured or
waived before the giving of such notice.  Notwithstanding the preceding
sentence, except in the case of an Event of Default described in Sections
6.01(a) and 6.01(b), the Trustee may withhold the notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or officers of the Trustee in good faith determines that withholding the
notice is in the interests of Holders.  The second sentence of this Section 7.05
shall be in lieu of the proviso to Section 315(b) of the TIA and such proviso is
hereby expressly excluded from this Indenture, as permitted by the TIA.

 

Section 7.06.  Reports by Trustee to Holders.  Within 60 days after each October
31 beginning with the October 31 following the date of this Indenture, the
Trustee shall mail to each Holder a brief report dated as of such October 31
that complies with TIA Section 313(a), if required by such Section 313(a), but
only to the extent any such report is required to be given pursuant to said TIA
Section 313(a), or any successor provision of the TIA.  The Trustee also shall
comply with TIA Section 313(b).

 

Commencing at the time this Indenture is qualified under the TIA, a copy of each
report at the time of its mailing to Holders shall be filed with the SEC and
each securities exchange, if any, on which the Securities are listed.  The
Company agrees to notify the Trustee in writing promptly whenever the Indenture
is qualified under the TIA and the Securities become listed on any securities
exchange and of any delisting thereof.

 

Section 7.07.  Compensation and Indemnity.  The Company agrees:

 

(a)           to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation as the Company and the Trustee shall from time to
time agree in writing for all services rendered by it hereunder (which
compensation shall not be limited (to the extent permitted by law) by any
provision of law in regard to the compensation of a trustee of an express
trust);

 

(b)           to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture or any documents executed in
connection herewith (including costs incurred in connection with applications to
any gaming authority and the reasonable compensation and the expenses, advances
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, bad faith or
willful misconduct; and

 

(c)           to indemnify the Trustee or any predecessor Trustee and their
respective agents, officers, directors and employees for, and to hold them

 

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harmless against, any loss, damage, claim, liability, cost or expense (including
attorneys’ fees and expenses and taxes (other than franchise, capital, net
worth, employment and ad valorem taxes and taxes based upon, measured by or
determined by the income or gross receipts of the Trustee)) incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim (whether asserted by the Company or any
Holder or any other Person) or liability in connection with the Trustee’s
exercise or performance of any of its powers or duties hereunder.

 

To secure the Company’s payment obligations in this Section 7.07, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except any money or property held in trust to pay
interest installments (including Liquidated Damages, if any), the principal
amount, Redemption Price, Repurchase Price, Change in Control Repurchase Price
or interest, if any, due on overdue amounts, as the case may be, in respect of
any particular Securities.

 

The Company’s payment obligations pursuant to this Section 7.07 shall survive
the discharge of this Indenture or the earlier termination or resignation of the
Trustee.  When the Trustee incurs expenses after the occurrence of an Event of
Default specified in Section 6.01(g) or Section 6.01(h), the expenses, including
the reasonable charges and expenses of its counsel, are intended to constitute
expenses of administration under any Bankruptcy Law.

 

Any amounts due and owing the Trustee hereunder (whether in nature of fees,
expenses, indemnification payments or reimbursement for advances) which have not
been paid by or on behalf of the Company within 15 days following written notice
thereof given to the Company in accordance with the provisions of Section 11.02,
shall bear interest at an interest rate equal to the Trustee’s announced prime
rate in effect from time to time, plus four percent (4.0%) per annum.

 

Section 7.08.  Replacement of Trustee.  Subject to compliance with applicable
gaming laws, the Trustee may resign by so notifying the Company; provided that
no such resignation shall be effective until a successor Trustee has accepted
its appointment pursuant to this Section 7.08.  The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding may remove
the Trustee by so notifying the Trustee and the Company in writing.  The Company
shall remove the Trustee if:

 

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

 

(b)           the Trustee is adjudged bankrupt or insolvent;

 

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

 

(d)           the Trustee otherwise becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint, by resolution of its
Board of Directors, a successor Trustee.  As soon as practicable, the successor
Trustee shall mail a notice of its succession to the Company and the Holders. 
Any such successor must nevertheless be eligible and qualified under the
provisions of Section 7.01 hereof.

 

A successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company satisfactory in form and substance to the
retiring Trustee and 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; provided,
notwithstanding the foregoing, the effectiveness of any such resignation or
removal shall be conditioned on receipt by the retiring Trustee of all amounts
due and owing under Section 7.07 hereof.  The successor Trustee shall mail a
notice of its succession to Holders.  The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject to
the lien provided for in Section 7.07.

 

If a successor Trustee does not take office within 30 days after the retiring
Trustee gives its notice of resignation or is removed, the retiring Trustee, the
Company or the Holders of a majority in aggregate principal amount of the
Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.

 

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

 

Section 7.09.  Successor Trustee by Merger Etc.  Subject to compliance with
applicable gaming laws, if the Trustee consolidates with, merges or converts
into, or transfers all or substantially all its corporate trust business or
assets (including the administration of the trust created by this Indenture) to,
another Person, the resulting or surviving Person without any further act shall
be the successor Trustee.

 

Section 7.10.  Eligibility; Disqualification.  The Trustee shall at all times
satisfy the requirements of TIA Section 310(a)(1).  The Trustee (or its parent
holding company) shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent filed annual report of condition.

 

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Nothing herein contained shall prevent the Trustee from filing with the SEC the
application referred to in the penultimate paragraph of TIA Section 310(b).  The
Trustee shall comply with TIA Section 310(b); provided that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or indentures
under which other securities or certificates of interest or participation in
other securities of the Company are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.

 

If at any time the Trustee shall cease to be eligible in accordance with this
Section 7.10, it shall resign immediately in the manner and with the effect
specified in Article 7.

 

Section 7.11.  Preferential Collection of Claims Against Company.  The Trustee
shall comply with TIA Section 311(a), excluding any creditor relationship listed
in TIA Section 311(b).  A Trustee who has resigned or been removed shall be
subject to TIA Section 311(a) to the extent indicated therein.

 

Section 7.12.  Force Majeure.  To the extent permitted by the TIA, in no event
shall the Trustee be liable for any failure or delay in the performance of its
obligations hereunder because of circumstances beyond the Trustee’s control,
including, but not limited to, acts of God, flood, war (whether declared or
undeclared), terrorism, fire, riot, embargo or government action, including any
laws, ordinances, regulations, governmental action or the like which delay,
restrict or prohibit the providing of the services contemplated by this
Indenture.

 

Section 7.13.  Gaming License Requirements.  To the extent required by gaming
laws, the Trustee will provide any applicable gaming authority upon its or the
Company’s written request with:

 

(1)           copies of all notices, reports and other written communications
which the Trustee gives to holders of Securities;

 

(2)           a list of holders of Securities promptly after the original
issuance of the Securities, eight months and two months prior to the expiration
date of each then-current gaming license held by the Company or its
Subsidiaries, and upon demand;

 

(3)           notice of any Event of Default or of any Default, any acceleration
of the indebtedness evidenced or secured hereby, the institution of any legal
actions or proceedings before any court or governmental authority in respect of
this Indenture and any rescission, annulment or waiver in respect of an Event of
Default;

 

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

 

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(5)           notice of any transfer or assignment of rights under this
Indenture (but no transfers or assignments of the Notes) within five Business
Days thereof; and

 

(6)           a copy of any amendment to the Notes or this Indenture within five
Business Days of the effectiveness thereof.

 

The notice specified in clause (3) above shall be in writing and, except as set
forth below, shall be given within five Business Days after the Trustee has
transmitted the notice required by Section 6.02.  In the case of any notice in
respect of any Event of Default, such notice shall be accompanied by a copy of
any notice from the holders of the Notes, or a representative thereof or the
Trustee, to the Company and, if accompanied by any such notice to the Company,
shall be given simultaneously with the giving of any such notice to the
Company.  In the case of any legal actions or proceedings, such notice shall be
accompanied by a copy of the complaint or other initial pleading or document.

 

The Trustee shall in accordance with the limitations set forth herein cooperate
with any applicable gaming authority in order to provide such gaming authority
with information and documentation relevant to compliance with clause (3) above
and as otherwise required by any applicable gaming laws.

 

ARTICLE 8
DISCHARGE OF INDENTURE

 

Section 8.01.  Discharge of Liability on Securities.  When (a) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation or (b) all outstanding
Securities have become due and payable whether at stated maturity or any
Redemption Date, or any Repurchase Date, or upon Conversion or otherwise, and
the Company deposits with the Trustee, the Paying Agent, or the Conversion
Agent, if applicable, cash or shares of Common Stock (as applicable under the
terms of this Indenture) sufficient to pay all amounts due and owing on all
outstanding Securities (other than Securities replaced pursuant to Section
2.07), and if in either case the Company pays all other sums payable hereunder
by the Company, then this Indenture shall, subject to Section 7.07, be satisfied
and discharged and cease to be of further effect.  The Trustee shall join in the
execution of a document prepared by the Company acknowledging satisfaction and
discharge of this Indenture on demand at the cost and expense of the Company and
accompanied by an Officers’ Certificate and Opinion of Counsel.

 

Section 8.02.  Repayment to the Company.  The Trustee, the Paying Agent and the
Conversion Agent shall return to the Company upon written request any

 

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money or shares of Common Stock held by them for the payment of any amount and
any shares of Common Stock with respect to the Securities that remain unclaimed
for two years, subject to applicable unclaimed property law.  After return to
the Company, as applicable, Holders entitled to the money or shares of Common
Stock must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person and the Trustee, the
Paying Agent and the Conversion Agent shall have no further liability to the
Holders with respect to such money or shares of Common Stock for that period
commencing after the return thereof.

 

The terms of any document entered into pursuant to this Article 8 shall be
subject to prior approval, if required, of any applicable gaming authority.

 

ARTICLE 9
AMENDMENTS

 

Section 9.01.  Without Consent of Holders.  The Company and the Trustee may
amend or supplement this Indenture or the Securities without notice to or
consent of any Holder:

 

(a)           to comply with Article 5 or Section 10.11;

 

(b)           to cure any ambiguity, omission, defect or inconsistency in this
Indenture;

 

(c)           to make any change that does not adversely affect the rights of
any Holder in any material respect; provided that any change to conform this
Indenture to the Offering Memorandum shall be deemed not to adversely affect the
rights of any Holder;

 

(d)           to make provisions with respect to the conversion right of the
Holders pursuant to the requirements of Section 10.01;

 

(e)           to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities;

 

(f)            to comply with the provisions of the TIA, or with any requirement
of the SEC arising as a result of the qualification of this Indenture under the
TIA; or

 

(g)           to provide for the issuance of Additional Securities in accordance
with this Indenture.

 

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The terms of any document entered into pursuant to this Section 9.01 shall be
subject to prior approval, if required, of any applicable gaming authority.

 

Section 9.02.  With Consent of Holders.

 

The Company and the Trustee may amend or supplement this Indenture or the
Securities without notice to any Holder but with the written consent or consent
pursuant to DTC procedures of the Holders of at least a majority in aggregate
principal amount of the Securities at the time outstanding.  The Holders of a
majority in aggregate principal amount of the Securities at the time outstanding
may, on behalf of the Holders of all outstanding Securities, waive compliance by
the Company with restrictive provisions of this Indenture other than as set
forth in this Section 9.02 below, and waive any past Event of Default under this
Indenture and its consequences, except a default in the payment of the principal
of, or Redemption Price, Repurchase Price, Change in Control Repurchase Price
of, or any interest on, any Security, or in respect of a provision which under
this Indenture cannot be modified or amended without the consent of the Holder
of each outstanding Security affected.

 

Subject to Section 9.04, without the written consent or consent pursuant to DTC
procedures of each Holder affected, however, an amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, may not:

 

(a)           change the Stated Maturity of, or any payment date of any
installment of interest on, any Security;

 

(b)           reduce the principal amount or Redemption Price of, or the rate of
interest on, any Security, whether upon acceleration, redemption or otherwise,
or alter the manner of calculation of interest or the rate of accrual thereof on
any Security;

 

(c)           change the currency for payment of principal of, or interest on,
any Security;

 

(d)           impair the right to institute suit for the enforcement of any
payment of any amount with respect to any Security when due;

 

(e)           adversely affect the conversion rights provided in Article 10;

 

(f)            modify the provisions of this Indenture requiring the Company to
make an offer to repurchase Securities upon a Change in Control pursuant to
Section 3.09, or to repurchase the Securities at the option of the Holders
pursuant to Section 3.08;

 

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(g)           reduce the percentage of principal amount of the outstanding
Securities necessary to modify or amend this Indenture or to consent to any
waiver provided for in this Indenture;

 

(h)           waive a default in the payment of any amount or shares of Common
Stock with respect to any Security when due (except as provided in Section
6.02); or

 

(i)            make any changes to Section 6.04, Section 6.07 or this Section
9.02.

 

It shall not be necessary for the consent of the Holders under this Section 9.02
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.

 

After an amendment under this Section 9.02 becomes effective, the Company shall
mail to each Holder a notice briefly describing the amendment.  Failure to mail
the notice or a defect in the notice shall not affect the validity of the
amendment.

 

The terms of any documents entered into pursuant to this Section 9.02 shall be
subject to prior approval, if required, of any applicable gaming authority. To
the extent required by applicable gaming laws, Securities held by a Disqualified
Holder shall, so long as held by such a Person, be disregarded for purposes of
providing consents and determining the sufficiency of consents under this
Section 9.02.

 

Section 9.03.  Compliance with Trust Indenture Act.  Every supplemental
indenture executed pursuant to this Article 9 shall comply with the TIA.

 

Section 9.04.  Revocation and Effect of Consents.  Until an amendment, waiver or
other action by Holders becomes effective, a consent thereto by a Holder of a
Security hereunder is a continuing consent by such Holder and every subsequent
Holder of such Security or portion of such Security that evidences the same
obligation as the consenting Holder’s Security, even if notation of the consent,
waiver or action is not made on such Security.  However, unless otherwise agreed
in writing by such Holder or a predecessor Holder, any such Holder or subsequent
Holder may revoke the consent, waiver or action as to such Holder’s Security or
portion of the Security if the Trustee receives the notice of revocation before
the date the amendment, waiver or action becomes effective.  After an amendment,
waiver or action becomes effective, it shall bind every Holder.

 

Section 9.05.  Notation on or Exchange of Securities.  Securities authenticated
and delivered after the execution of any supplemental indenture pursuant to this
Article 9 may, and shall if required by the Trustee, bear a notation

 

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in form approved by the Trustee as to any matter provided for in such
supplemental indenture.  If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company, and such new Securities may be authenticated and delivered by the
Trustee in exchange for outstanding Securities.

 

Section 9.06.  Trustee to Sign Supplemental Indentures.  The Trustee shall sign
any supplemental indenture authorized pursuant to this Article 9 if the
amendment contained therein does not, in the sole determination of the Trustee,
adversely affect the rights, duties, powers, privileges, benefits, indemnities,
liabilities or immunities of the Trustee.  If it does, the Trustee may, but need
not, sign such supplemental indenture.  In signing any supplemental indenture
the Trustee shall be entitled to receive, and (subject to the provisions of
Section 7.01) shall be fully protected in relying upon, an Officers’ Certificate
and an Opinion of Counsel stating that such amendment is authorized or permitted
by this Indenture.

 

Section 9.07.  Effect of Supplemental Indentures.  Upon the execution of any
supplemental indenture under this Article 9, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes, and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

 

ARTICLE 10
CONVERSION OF THE SECURITIES

 

Section 10.01.  Conversion Privilege.

 

(a)           Subject to the provisions of this Article 10, a Holder of a
Security, except a Disqualified Holder, may convert such Security into cash and,
if applicable, Common Stock equal to the Conversion Value in accordance with
Section 10.14, if any of the following conditions is satisfied:

 

(i)    during any fiscal quarter (the “Quarter”) commencing after the date of
original issuance of the Securities, if the Common Stock Price for at least 20
Trading Days in the period of 30 consecutive Trading Days ending on the last
Trading Day of the Quarter immediately preceding such Quarter (appropriately
adjusted to take into account the occurrence, during such 30 consecutive Trading
Day period, of any event requiring adjustment of the Conversion Price under this
Indenture) is more than 120% of the Conversion Price on such 30th Trading Day;

 

(ii)   such Security has been called for redemption by the Company pursuant to
Section 3.01 and the redemption has not yet

 

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occurred, so long as the Holder surrenders such Security for conversion prior to
the close of business on the date that is two Business Days prior to the
applicable Redemption Date, even if the Security is not otherwise convertible at
such time;

 

(iii)  (A)          during the five Trading Day period immediately after any
period of five consecutive Trading Days in which the Trading Price of the
Securities for each Trading Day in such period was less than 95% of the product
of (x) the Common Stock Price on such Trading Day and (y) the Conversion Rate on
such Trading Day;

 

(B)           notwithstanding the foregoing, if on the date of any conversion
pursuant to Section 10.01(a)(iii)(A), the Common Stock Price on such date is
greater than the Conversion Price on such date but less than 120% of the
Conversion Price on such date, then, for purposes of Section 10.14, the
Conversion Value a Holder of Securities will be entitled to receive will be
equal to the principal amount of the Securities surrendered by such Holder plus
accrued and unpaid interest (including Liquidated Damages, if any) as of the
Conversion Date (such a conversion, a “Principal Value Conversion”);

 

(iv)  (A)          a distribution to all holders of Common Stock of rights,
warrants or options entitling them (for a period commencing no earlier than the
date of distribution and expiring not more than 60 days after the date of
distribution) to subscribe for or purchase shares of Common Stock at a price
less than the average Common Stock Price for the 10 Trading Days immediately
preceding the date such distribution was first publicly announced; or

 

(B)           a distribution to all holders of Common Stock of cash, other
assets, debt securities or certain rights or warrants to purchase Capital Stock
or other securities of the Company, where the fair market value of such
distribution per share of Common Stock (as determined by the Board of Directors,
whose determination shall be conclusive evidence of such fair market value)
exceeds 10% of the Common Stock Price on the Trading Day immediately preceding
the date that such distribution was first publicly announced;

 

provided that the Holder shall have no right to convert any Security pursuant to
this Section 10.01(a)(iv) hereof if the Holder of a Security otherwise
participates in the distribution described in this Section 10.01(a)(iv) on an
as-converted basis solely into Common Stock at the

 

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then applicable Conversion Price without conversion of such Holder’s Securities;
or

 

(v)   if the Company is party to a consolidation, merger, share exchange, sale
of all or substantially all of its properties and assets or other similar
transaction, in each case pursuant to which the Common Stock is subject to
conversion into cash, securities or other property, from and after the effective
date of such transaction until and including the date that is 30 days after the
effective date of such transaction.

 

(b)           In the case of Section 10.01(a)(iii), the Trustee shall have no
obligation to determine the Trading Price of the Securities unless the Company
has requested such determination in writing, and the Company shall have no
obligation to make such request unless a Holder of the Securities provides the
Company with reasonable evidence that the Trading Price of the Securities on any
date would be less than 95% of the product of (x) the Common Stock Price on such
date and (y) the Conversion Rate then in effect.  Upon receipt of such
reasonable evidence, the Company shall instruct the Trustee in writing to
determine the Trading Price of the Securities beginning on the next Trading Day
and on each successive Trading Day until the Trading Price of the Securities is
greater than or equal to 95% of the product of the Common Stock Price and the
Conversion Rate.  Neither the Trustee nor the Conversion Agent shall be under
any duty or obligation to make the calculations described in Section
10.01(a)(iii) hereof or to determine whether the Securities are convertible
pursuant to such Section.  The Company shall make the calculations described in
Section 10.01(a)(iii) hereof using the Trading Price of the Securities provided
by the Trustee, shall determine whether the Securities are convertible under
Section 10.01(a)(iii) and shall advise the Trustee (or Conversion Agent, as the
case may be) of any determination that the Securities are convertible under
Section 10.01(a)(iii).

 

(c)           In the case of the foregoing Sections 10.01(a)(iv)(A) and
10.01(a)(iv)(B), the Company shall cause a notice of such distribution to be
filed with the Trustee and the Conversion Agent and to be mailed to each Holder
of Securities no later than 20 days prior to the Ex-Dividend Date for such
distribution.  Once the Company has given such notice, Holders may surrender
their Securities for conversion at any time thereafter until the earlier of the
close of business on the Business Day prior to the Ex-Dividend Date or the
Company’s announcement that such distribution will not take place.  The
“Ex-Dividend Date” for any such issuance or distribution means the date
immediately prior to the commencement of “ex-dividend” trading for such issuance
or distribution on The New York Stock Exchange or such other national securities
exchange or The Nasdaq Stock Market or similar system of automated dissemination
of quotations of securities prices on which the Common Stock is then listed or
quoted.

 

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(d)           A Holder may convert a portion of a Security equal to $1,000 or
any integral multiple thereof.  Provisions of this Indenture that apply to
conversion of all of a Security also apply to conversion of a portion of a
Security.

 

If a Security is called for redemption pursuant to Section 3.01, in order to
convert such Security, the Holder must deliver the Security to the Conversion
Agent (or, if the Security is held in book-entry form, complete and deliver to
the Depositary appropriate instructions in accordance with the Applicable
Procedures) at any time prior to the close of business on the day that is two
Business Days prior to the applicable Redemption Date for such Security (unless
the Company shall default in paying the Redemption Price when due, in which case
the conversion right shall terminate on the date such default is cured and such
Security is redeemed).  A Security in respect of which a Holder has delivered a
Repurchase Notice pursuant to Section 3.08 or a Change in Control Repurchase
Notice pursuant to Section 3.09 exercising the option of such Holder to require
the Company to repurchase such Security may be converted only if such Repurchase
Notice or Change in Control Repurchase Notice, as the case may be, is withdrawn
by a written notice of withdrawal delivered to the Paying Agent prior to the
close of business on the Repurchase Date or the Change in Control Repurchase
Date, as the case may be, in accordance with Section 3.10.

 

(e)           A Holder of Securities is not entitled to any rights of a holder
of Common Stock until such Holder has converted its Securities into Common
Stock.

 

Section 10.02.  Conversion Procedure.

 

(a)           To convert a Security, a Holder must (i) if the Security is in
definitive form, complete and manually sign the irrevocable conversion notice on
the back of the Security and deliver such notice to the Conversion Agent, (ii)
if the Security is in definitive form, surrender the Security to the Conversion
Agent, (iii) if the Security is in definitive form, furnish appropriate
endorsements and transfer documents if required by the Registrar or the
Conversion Agent, (iv) pay any transfer or other tax, if required by Section
10.03 and (v) if the Security is held in book-entry form, complete and deliver
to the Depositary appropriate instructions pursuant to the Applicable
Procedures.  The later of (x) the date on which the Holder satisfies all of the
foregoing requirements and (y) the Determination Date is the “Conversion Date”. 
As promptly as practicable after the Conversion Date and in any event within
four Business Days thereof, the Company shall deliver to the Holder through the
Conversion Agent (1) cash in the amount calculated in accordance with Section
10.14, (2) either a certificate for or a book-entry notation of the number of
whole shares of Common Stock issuable upon the conversion and (3) cash in lieu
of any fractional shares pursuant to Section 10.14.

 

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(b)           The Person in whose name the Security is registered shall be
deemed to be a stockholder of record on the Conversion Date; provided that no
surrender of a Security on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the Person or Persons entitled
to receive the shares of Common Stock upon such conversion as the record holder
or holders of such shares of Common Stock on such date, but such surrender shall
be effective to constitute the Person or Persons entitled to receive such shares
of Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; provided, further, that such conversion shall be at the Conversion
Price in effect on the date that such Security shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been closed. 
Upon conversion of a Security, such Person shall no longer be a Holder of such
Security.

 

(c)           No payment or adjustment will be made for accrued but unpaid
interest (including Liquidated Damages, if any) on a converted Security or for
dividends or distributions on shares of Common Stock issued upon conversion of a
Security.  The Company shall not adjust the Conversion Price to account for the
accrued but unpaid interest.  Nonetheless, if Securities are converted after the
close of business on a regular record date and prior to the opening of business
on the next interest payment date, including the date of maturity, Holders of
such converted Securities at the close of business on such regular record date
shall receive the accrued but unpaid interest (including Liquidated Damages, if
any) payable on such Securities on the corresponding interest payment date
notwithstanding the conversion.  In such event, such Security, when surrendered
for conversion, must be accompanied by delivery of a check payable to the
Conversion Agent in an amount equal to the accrued but unpaid interest
(including Liquidated Damages, if any) payable on such interest payment date on
the portion so converted.  If such payment does not accompany such Security, the
Security shall not be converted; provided that no such check shall be required
if such Security has been called for redemption on a redemption date within the
period between the close of business on such record date and the opening of
business on such interest payment date, or if such Security is surrendered for
conversion on the interest payment date.  If the Company defaults in the payment
of interest (including Liquidated Damages, if any) payable on the interest
payment date, the Conversion Agent shall repay such funds to the Holder.

 

(d)           Upon surrender of a Security that is converted in part, the
Company shall execute, and the Trustee shall, upon receipt of a Company Order,
authenticate and deliver to the Holder, a new Security equal in principal amount
to the unconverted portion of the Security surrendered.

 

Section 10.03.  Taxes on Conversion.  If a Holder converts a Security, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on

 

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the issue of shares of Common Stock upon such conversion.  However, the Holder
shall pay any tax which is due because the Holder requests the shares to be
issued in a name other than the Holder’s name.  The Conversion Agent may refuse
to deliver the certificates representing the Common Stock being issued in a name
other than the Holder’s name until the Conversion Agent receives a sum
sufficient to pay any tax which will be due because the shares are to be issued
in a name other than the Holder’s name.  Nothing herein shall preclude any tax
withholding required by law or regulations.

 

Section 10.04.  Company to Provide Stock.  The Company shall, prior to issuance
of any Securities hereunder, and from time to time as may be necessary, reserve,
out of its authorized but unissued Common Stock, a sufficient number of shares
of Common Stock to permit the conversion of all outstanding Securities into
shares of Common Stock.  The certificates representing the shares of Common
Stock issued upon conversion of Transfer Restricted Securities shall bear a
legend substantially in the following form:

 

THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, OR THE
“SECURITIES ACT”, AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM.  EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

 

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF SHUFFLE MASTER, INC. (THE
“COMPANY”) THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (II) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY

 

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APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

 

The Company covenants that all shares of Common Stock delivered upon conversion
of the Securities shall be newly issued shares or treasury shares, shall be duly
authorized, validly issued, fully paid and non-assessable and shall be free from
preemptive rights and free of any lien or adverse claim.

 

The Company will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or in the
over-the-counter market or such other market on which the Common Stock is then
listed or quoted.

 

Section 10.05.  Adjustment of Conversion Price.  The Conversion Price shall be
adjusted (without duplication) from time to time by the Company as follows:

 

(a)           In case the Company shall (i) issue shares of Common Stock to all
holders of Common Stock as a dividend or distribution on Common Stock, (ii)
subdivide its outstanding Common Stock into a greater number of shares or (iii)
combine its outstanding Common Stock into a smaller number of shares, the
Conversion Price shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Common Stock which it would have owned or been entitled to receive had such
Security been converted immediately prior to the happening of such event.  For
the purposes of calculating the Conversion Price adjustment pursuant to this
Section 10.05(a), Holders of a Security shall be treated as if they had the
right to convert the Security solely into Common Stock at the then applicable
Conversion Price.  An adjustment made pursuant to this Section 10.05(a) shall
become effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of subdivision, combination or reclassification.

 

(b)           In case the Company shall issue to all holders of Common Stock
rights, warrants or options entitling such holders (for a period commencing no
earlier than the date of distribution and expiring not more than 60 days after
the date of distribution) to subscribe for or purchase shares of Common Stock at
a price per share less than the average Common Stock Price for the 10 Trading
Days immediately preceding the date that such distribution was first publicly
announced, the Conversion Price shall be decreased so that the Conversion Price

 

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shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to such record date by a fraction,

 

(i)    the numerator of which shall be the number of shares of Common Stock
outstanding on such date of public announcement, plus the number of shares which
the aggregate subscription or purchase price for the total number of shares of
Common Stock offered by the rights, warrants or options so issued (or the
aggregate conversion price of the convertible securities offered by such rights,
warrants or options) would purchase at such average Common Stock Price, and

 

(ii)   the denominator of which shall be the number of shares of Common Stock
outstanding on such date of public announcement plus the number of additional
shares of Common Stock offered by such rights, warrants or options (or into
which the convertible securities so offered by such rights, warrants or options
are convertible);

 

provided that no adjustment will be made if Holders are entitled to participate
in the distribution on substantially the same terms as holders of Common Stock
as if such Holders had converted their Securities solely into Common Stock
immediately prior to such distribution at the then applicable Conversion Price.

 

Such adjustment shall be made successively whenever any such rights, warrants or
options are issued, and shall become effective immediately after such record
date.  If at the end of the period during which such rights, warrants or options
are exercisable not all rights, warrants or options shall have been exercised,
the adjusted Conversion Price shall be immediately readjusted to what it would
have been upon application of the foregoing adjustment substituting the number
of additional shares of Common Stock actually issued (or the number of shares of
Common Stock issuable upon conversion of convertible securities actually issued)
for the total number of shares of Common Stock offered (or convertible
securities offered).

 

(c)           In case the Company shall distribute to all holders of Common
Stock evidences of its indebtedness, shares of Capital Stock of the Company
(other than Common Stock), other securities or other assets, or rights, warrants
or options to subscribe for or purchase any of its securities (excluding (i)
those rights, options and warrants referred to in Section 10.05(b); (ii) those
dividends and distributions referred to in Section 10.05(a); and (iii) those
dividends or distributions paid in cash referred to in Section 10.05(e)), then
in each such case the Conversion Price shall be decreased so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date of such distribution by a fraction,

 

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(i)    the numerator of which shall be the Market Price on the record date for
the determination of holders of Common Stock entitled to receive such
distribution less the fair market value on such record date (as determined by
the Board of Directors, whose determination shall be conclusive evidence of such
fair market value) of the portion of the Capital Stock or evidences of
indebtedness, securities or assets so distributed or of such rights, warrants or
options, in each case applicable to one share of Common Stock, and

 

(ii)   the denominator of which shall be the Market Price on such record date,

 

such adjustment to become effective immediately after the record date for such
distribution; provided that if the numerator of the foregoing fraction is less
than $1.00 (including a negative amount), then in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive upon conversion, in addition to the cash and Common Stock
issuable upon such conversion, the distribution such Holder would have received
had such Holder converted its Security solely into Common Stock at the then
applicable Conversion Price immediately prior to the record date for such
distribution; provided further that no adjustment will be made if Holders are
entitled to participate in the distribution on substantially the same terms as
holders of Common Stock as if such Holders had converted their Securities solely
into Common Stock immediately prior to such distribution at the then applicable
Conversion Price.

 

(d)           In case the Company or any of its Subsidiaries makes a payment to
holders of Common Stock in respect of a tender or exchange offer, other than an
odd lot offer, for shares of Common Stock to the extent that the offer involves
aggregate consideration that, together with any cash and the fair market value
of any other consideration in respect of any tender or exchange offer by the
Company or any of its Subsidiaries for shares of Common Stock consummated within
the preceding 12 months not triggering a Conversion Price adjustment, exceeds an
amount equal to 5.0% of the market capitalization of the Common Stock on the
expiration date of the tender offer, the Conversion Price shall be decreased so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the expiration time of such tender or
exchange offer (the “Expiration Time”) by a fraction,

 

(i)    the numerator of which shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the Expiration Time
multiplied by the Common Stock Price on the Trading Day next succeeding the
Expiration Time, and

 

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(ii)   the denominator of which shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to holders of
Common Stock based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares of Common Stock validly tendered
or exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted up to any such maximum being referred to as the “Purchased Shares”) and
(y) the product of the number of shares of Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the Common Stock Price on the
Trading Day next succeeding the Expiration Time,

 

such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time.  If the Company is obligated to
purchase shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Price shall again be adjusted
to be the Conversion Price that would then be in effect if such tender or
exchange offer had not been made.

 

(e)           In case the Company shall declare a cash dividend or cash
distribution to all of the holders of Common Stock, the Conversion Price shall
be decreased so that the Conversion Price shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the record date
for such dividend or distribution by a fraction,

 

(i)    the numerator of which shall be the average of the Common Stock Price for
the three consecutive Trading Days ending on the Trading Day immediately
preceding the record date for such dividend or distribution (the “Pre-Dividend
Sale Price”), minus the full amount of such cash dividend or cash distribution
applicable to one share of Common Stock (the “Dividend Adjustment Amount”), and

 

(ii)   the denominator of which shall be the Pre-Dividend Sale Price,

 

such adjustment to become effective immediately after the record date for such
dividend or distribution; provided that no adjustment will be made if Holders
are entitled to participate in the distribution on substantially the same terms
as holders of Common Stock as if such Holders had converted their Securities
solely into Common Stock immediately prior to such distribution at the then
applicable Conversion Price; and provided further that if the numerator of the
foregoing fraction is less than $1.00 (including a negative amount), then in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion, in addition to the cash
and Common Stock issuable upon such conversion, the amount of cash such Holder
would have

 

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received had such Holder converted its Security solely into Common Stock at the
then applicable Conversion Price immediately prior to the record date for such
cash dividend or cash distribution.  If such cash dividend or cash distribution
is not so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price that would then be in effect if such dividend or distribution
had not been declared.

 

(f)            If the rights provided for in the Company’s Shareholder Rights
Plan dated as of June 26, 1998 (the “Shareholder Rights Plan”), have separated
from the Common Stock in accordance with the provisions of the Shareholder
Rights Plan so that the Holders of the Securities would not be entitled to
receive any rights in respect of Common Stock issuable upon conversion of the
Securities, the Conversion Price will be adjusted as provided in Section
10.05(c) above, subject to readjustment in the event of the expiration,
termination or redemption of the rights.  In lieu of any such adjustment, the
Company may amend the Shareholder Rights Plan to provide that upon conversion of
the Securities the Holders will receive, in addition to the cash and Common
Stock issuable upon such conversion, the rights which would have attached to the
shares of Common Stock issuable upon conversion of the Securities solely into
Common Stock at the then applicable Conversion Price, if the rights had not
become separated from the Common Stock under the Shareholder Rights Plan.  To
the extent that the Company adopts any future rights plan, upon conversion of
the Securities, Holders will receive, in addition to the cash and Common Stock
issuable upon such conversion, the rights under the future rights plan in
respect of the shares of Common Stock issuable upon conversion of the Securities
solely into Common Stock at the then applicable Conversion Price, whether or not
the rights have separated from the Common Stock at the time of conversion, and
no adjustment to the Conversion Price will be made in connection with any
distribution of rights thereunder.

 

(g)           In any case in which this Section 10.05 shall require that an
adjustment be made immediately following a record date established for purposes
of this Section 10.05, the Company may elect to defer (but only until five
Business Days following the filing by the Company with the Trustee of the
certificate described in Section 10.09) issuing to the holder of any Security
converted after such record date the shares of Common Stock and other Capital
Stock of the Company issuable upon such conversion over and above the shares of
Common Stock and other Capital Stock of the Company issuable upon such
conversion only on the basis of the Conversion Price prior to adjustment; and,
in lieu of the shares the issuance of which is so deferred, the Company shall
issue or cause its transfer agents to issue due bills or other appropriate
evidence of the right to receive such shares.

 

(h)           Before taking any action which would cause an adjustment
decreasing the Conversion Price so that the shares of Common Stock issuable

 

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upon conversion of the Securities would be issued for less than the par value of
such Common Stock, the Company will take all corporate action which may be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of such Common Stock at such adjusted Conversion Price.

 

(i)            If the Company is required by law to withhold any taxes with
respect to a deemed distribution to a Holder or Beneficial Owner resulting from
a Conversion Price adjustment, such taxes may be withheld from interest payments
made to such Holder or Beneficial Owner on or after the date of such Conversion
Price adjustment.

 

Section 10.06.  No Adjustment.  No adjustment in the Conversion Price shall be
required unless the adjustment would require an increase or decrease of at least
1% in the Conversion Price as last adjusted; provided that any adjustments which
by reason of this Section 10.06 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.  All calculations
under this Article 10 shall be made to the nearest cent, with one-half cent
rounded up, or to the nearest one-ten thousandth (0.0001) of a share, with
one-five hundred thousandth (0.00005) of a share being rounded up, as the case
may be.

 

No adjustment need be made upon the issuance of Common Stock (or securities
convertible into or exchangeable for Common Stock) under any present or future
employee benefit plan or program of the Company.

 

No adjustment need be made upon the issuance of Common Stock (or securities
convertible into or exchangeable for Common Stock) pursuant to (i) the exercise
of any option, warrant or right to purchase such Common Stock, (ii) the exchange
of any exchangeable security for such Common Stock or (iii) the conversion of
any convertible security into such Common Stock, in each case so long as such
option, warrant, right to purchase, exchangeable security or convertible
security is outstanding as of the date on which the Securities are first issued.

 

No adjustment need be made for a change in the par value or a change to no par
value of the Common Stock.

 

To the extent that the Securities become convertible into cash, no adjustment
need be made thereafter as to the cash.  Interest will not accrue on the cash.

 

Section 10.07.  Equivalent Adjustments.  If, as a result of an adjustment made
pursuant to Section 10.05 above, the Holder of any Security thereafter
surrendered for conversion shall become entitled to receive any shares of
Capital Stock of the Company other than shares of Common Stock, thereafter the
Conversion Price of such other shares so receivable upon conversion of any

 

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Securities shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Common Stock contained in this Article 10.

 

Section 10.08.  Adjustment for Tax Purposes.  The Company shall be entitled to
make such reductions in the Conversion Price, in addition to those required by
Section 10.05, as the Board of Directors in its discretion shall determine to be
advisable in order that any stock dividends, subdivisions of shares,
distributions of rights to purchase stock or other securities, or distributions
of securities convertible into or exchangeable for stock hereafter made by the
Company to its holders of Common Stock shall not be taxable to such holders.

 

Section 10.09.  Notice of Adjustment.  Whenever the Conversion Price is
adjusted, or Holders become entitled to other securities or due bills, the
Company shall promptly mail to Holders a notice of the adjustment and file with
the Trustee an Officers’ Certificate briefly stating the facts requiring the
adjustment and the manner of computing it.  The certificate shall be conclusive
evidence of the correctness of such adjustment and the Trustee may conclusively
assume that, unless and until such certificate is received by it, no such
adjustment is required.

 

Section 10.10.  Notice of Certain Transactions.  In case:

 

(a)           the Company shall declare a dividend (or any other distribution)
on the Common Stock; or

 

(b)           the Company shall authorize the granting to the holders of Common
Stock of rights, warrants or options to subscribe for or purchase any share of
any class or any other rights, warrants or options; or

 

(c)           of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value to par
value), or of any consolidation, merger, or share exchange to which the Company
is a party and for which approval of any holders of Common Stock is required, or
of the sale or transfer of all or substantially all of the properties and assets
of the Company; or

 

(d)           of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;

 

the Company shall cause to be filed with the Trustee and the Conversion Agent
and to be mailed to each Holder of Securities at its address appearing on the
list provided for in Section 2.05, as promptly as possible but in any event at
least ten days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or

 

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rights, warrants or options, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined, or (y) the date on which such
reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, share
exchange, sale, transfer, dissolution, liquidation or winding-up.  Failure to
give such notice, or any defect therein, shall not affect the legality or
validity of such dividend, distribution, reclassification, consolidation,
merger, sale, share exchange, transfer, dissolution, liquidation or winding-up.

 

Section 10.11.  Effect of Reclassification, Consolidation, Merger, Share
Exchange or Sale on Conversion Privilege.  If any of the following shall occur,
namely:  (i) any reclassification or change of outstanding shares of Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination);
(ii) any consolidation, combination, merger or share exchange to which the
Company is a party other than a merger in which the Company is the resulting or
surviving corporation and which does not result in any reclassification of, or
change (other than a change in name, or par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination) in, outstanding shares of Common Stock; or (iii) any sale or
conveyance of all or substantially all of the properties and assets of the
Company, in each case pursuant to which the shares of Common Stock are converted
into cash, securities, or other property, then the Company, or such successor or
purchasing corporation, as the case may be, shall, as a condition precedent to
such reclassification, change, consolidation, combination, merger, share
exchange, sale or conveyance, execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have
the right to convert such Security into the kind and amount of cash, securities
and other property receivable upon such reclassification, change, consolidation,
combination, merger, share exchange, sale or conveyance by a holder of the
number of shares of Common Stock deliverable upon conversion of such Security
solely into Common Stock at the then applicable Conversion Price immediately
prior to the effective date of such reclassification, change, consolidation,
combination, merger, share exchange, sale or conveyance.  Such supplemental
indenture shall provide for adjustments of the Conversion Price which shall be
as nearly equivalent as may be practicable to the adjustments of the Conversion
Price provided for in this Article 10.  If, in the case of any such
consolidation, merger, share exchange, sale or conveyance, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Common Stock includes shares of Capital Stock or other securities and property
of a corporation other than the successor or

 

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purchasing corporation, as the case may be, in such consolidation, merger, share
exchange, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the Holders of the Securities as the Board of
Directors shall reasonably consider necessary by reason of the foregoing.  The
provision of this Section 10.11 shall similarly apply to successive
consolidations, mergers, share exchanges, sales or conveyances.  Notwithstanding
the foregoing, a distribution by the Company to all or substantially all holders
of Common Stock for which an adjustment to the Conversion Price or provision for
conversion of the Securities may be made pursuant to Section 10.05 shall not be
deemed to be a sale or conveyance of all or substantially all of the properties
and assets of the Company for purposes of this Section 10.11.

 

In the event the Company shall execute a supplemental indenture pursuant to this
Section 10.11, the Company shall promptly file with the Trustee an Opinion of
Counsel stating that such supplemental indenture is authorized or permitted by
this Indenture and an Officers’ Certificate briefly stating the reasons
therefor, the kind or amount of cash, securities or other property receivable by
Holders of the Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, share exchange, sale or
conveyance, any adjustment to be made with respect thereto and that all
conditions precedent have been complied with.

 

Section 10.12.  Trustee’s Disclaimer.  The Trustee has no duty to determine when
an adjustment under this Article 10 should be made, how it should be made or
what such adjustment should be made, but may accept as conclusive evidence of
the correctness of any such adjustment, and shall be fully protected in relying
upon, the Officers’ Certificate with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 10.09.  The Trustee shall
not be accountable for and makes no representation as to the validity or value
of any securities or assets issued upon conversion of Securities, and the
Trustee shall not be responsible for the Company’s failure to comply with any
provisions of this Article 10.  Each Conversion Agent (other than the Company or
an Affiliate of the Company) shall have the same protection under this Section
10.12 as the Trustee.

 

The Trustee shall not be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture executed pursuant to
Section 10.11, but may accept as conclusive evidence of the correctness thereof,
and shall be protected in relying upon, the Officers’ Certificate with respect
thereto which the Company is obligated to file with the Trustee pursuant to
Section 10.11.

 

Section 10.13.  Voluntary Reduction.  The Company may from time to time reduce
the Conversion Price if the Board of Directors determines that this

 

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reduction would be in the best interests of the Company; provided that in no
event may the Conversion Price be less than the par value of a share of Common
Stock.  Any such determination by the Board of Directors shall be conclusive. 
Any such reduction in the Conversion Price must remain in effect for at least 20
trading days or such longer period as may be required by law.  In addition, the
Company may from time to time reduce the Conversion Price if the Board of
Directors deems it advisable to avoid or diminish any income tax to Holders of
Common Stock resulting from any stock or rights distribution on Common Stock.

 

Section 10.14.  Conversion Value of Securities Tendered.

 

(a)           Subject to certain exceptions described in Sections 10.01(a)(iii)
and 10.01(a)(iv), Holders tendering the Securities for conversion shall be
entitled to receive, upon conversion of such Securities, cash and, if
applicable, shares of Common Stock, the value of which (the “Conversion Value”)
shall be equal to the product of:

 

(i)    (A) the aggregate principal amount of Securities to be converted divided
by 1,000 multiplied by (B) the then applicable Conversion Rate; and

 

(ii)   the average of the Common Stock Prices for the ten consecutive Trading
Days (appropriately adjusted to take into account the occurrence during such
period of stock splits, stock dividends and similar events) beginning on the
second Trading Day immediately following the day the Securities are tendered for
conversion (the “Ten Day Average Closing Stock Price”).

 

(b)           Subject to certain exceptions described below and under Sections
10.01(a)(iii) and 10.01(a)(iv), the Company shall deliver the Conversion Value
to converting holders as follows:

 

(i)    an amount in cash (the “Principal Return”) equal to the lesser of (a) the
aggregate Conversion Value of the Securities to be converted and (b) the
aggregate principal amount of the Securities to be converted;

 

(ii)   if the Conversion Value of the Securities to be converted is greater than
the Principal Return, an amount in whole shares (the “Net Shares”), determined
as set forth below, equal to such aggregate Conversion Value less the Principal
Return (the “Net Share Amount”); and

 

(iii)  an amount paid in cash, determined as set forth below, in lieu of any
fractional shares of Common Stock.

 

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The number of Net Shares to be paid shall be determined by dividing the Net
Share Amount by the Ten Day Average Closing Stock Price.  Holders of Securities
will not receive fractional shares upon conversion of Securities.  In lieu of
fractional shares, Holders will receive cash for the value of the fractional
shares, which cash payment shall be based on the Ten Day Average Closing Stock
Price.

 

The Conversion Value, Principal Return, number of Net Shares and Net Share
Amount shall be determined by the Company at the end of the ten consecutive
Trading Day period beginning on the second Trading Day immediately following the
day the Securities are tendered for conversion (the “Determination Date”).

 

(c)           The Company shall pay the Principal Return and cash for fractional
shares and deliver the Net Shares, if any, as promptly as practicable after the
Conversion Date, but in no event later than four Business Days thereafter. 
Except as provided in Section 10.02(c), delivery of the Principal Return, Net
Shares and cash in lieu of fractional shares shall be deemed to satisfy the
Company’s obligation to pay the principal amount of a converted Security and
accrued but unpaid interest (including Liquidated Damages, if any) thereon.  Any
accrued interest (including Liquidated Damages, if any) payable on a converted
Security shall be deemed paid in full rather than canceled, extinguished or
forfeited.  The Company will not adjust the Conversion Price to account for
accrued interest.

 

(d)           Neither the Trustee nor the Conversion Agent has any duty to
determine or calculate the Conversion Value, Principal Return, number of Net
Shares, the Net Share Amount or any other computation required under this
Article 10, all of which shall be determined by the Company (or the Trustee, as
the case may be) in accordance with the provisions of this Indenture, and the
Trustee and Conversion Agent shall not be under any responsibility to determine
the correctness of any such determinations and/or calculations and may
conclusively rely on the correctness thereof.

 

Section 10.15.  Simultaneous Adjustments.  In the event that this Article 10
requires adjustments to the Conversion Price under more than one of Sections
10.05(a) and (c), and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made by
applying, first, the provisions of Section 10.05(c), as applicable, and, second,
the provisions of Section 10.05(a).  If more than one event requiring adjustment
pursuant to Section 10.05 shall occur before completing the determination of the
Conversion Price for the first event requiring such adjustment, then the Board
of Directors (whose determination shall, if made in good faith, be conclusive)
shall make such adjustments to the Conversion Price (and the calculation
thereof) after giving effect to all such events as shall preserve for Holders
the Conversion Price protection provided in Section 10.05.

 

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ARTICLE 11
MISCELLANEOUS

 

Section 11.01.  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 11.02.  Notices.  Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing, in the English language and
delivered in person or mailed by first-class mail, postage prepaid, addressed as
follows, or transmitted by facsimile transmission (confirmed orally) to the
following facsimile numbers:

 

if to the Company, to:

 

Shuffle Master, Inc.

1106 Palms Airport Drive

Las Vegas, Nevada 89119

Attention: General Counsel

Facsimile No.: (702) 270-5161

 

with a copy to:

 

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

Facsimile No.: (212) 751-4864

Attention:                                         Kirk A. Davenport II

 

 

if to the Trustee, to:

 

Wells Fargo Bank, National Association

Corporate Trust Services

Sixth Street & Marquette Avenue

Minneapolis, MN 55479

Attn: Jeffery Rose

Facsimile No.: (612) 667-9825

 

The Company or the Trustee by notice given to the other in the manner provided
above may designate additional or different addresses for subsequent notices or
communications.

 

Any notice or communication given to a Holder shall be mailed to the Holder, by
first-class mail, postage prepaid, at the Holder’s address as it appears

 

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on the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.

 

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

 

If the Company mails a notice or communication to the Holders, it shall mail a
copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or
co-registrar.

 

Section 11.03.  Communication by Holders with Other Holders.  Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Securities.  The Company, the Trustee,
the Registrar, the Paying Agent, the Conversion Agent and anyone else shall have
the protection of TIA Section 312(c).

 

Section 11.04.  Certificate and Opinion as to Conditions Precedent.  Upon any
request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:

 

(a)        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

 

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

 

In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such eligible and qualified Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an officer of the Company may be based, insofar as
it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based are erroneous.  Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating the
information on which

 

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counsel is relying unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.

 

Section 11.05.  Statements Required in Certificate or Opinion.  Each Officers’
Certificate or Opinion of Counsel with respect to compliance with a covenant or
condition provided for in this Indenture shall include:

 

(a)        a statement that each person making such Officers’ Certificate or
Opinion of Counsel has read such covenant or condition;

 

(b)        a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers’
Certificate or Opinion of Counsel are based;

 

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

 

(d)        a statement that, in the opinion of such person, such covenant or
condition has been complied with.

 

Section 11.06.  Separability Clause.  In case any provision in this Indenture or
in the Securities 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 11.07.  Rules by Trustee, Paying Agent, Conversion Agent and Registrar. 
The Trustee may make reasonable rules for action by or a meeting of Holders. 
The Registrar, the Conversion Agent and the Paying Agent may make reasonable
rules for their functions.

 

Section 11.08.  Legal Holidays.  A “Legal Holiday” is any day other than a
Business Day.  If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Securities, no interest (including Liquidated Damages, if any),
shall accrue for the intervening period.

 

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Section 11.09.  Governing Law.  THIS INDENTURE AND EACH SECURITY SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

 

Section 11.10.  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 Securities or for any claim based on, in
respect of or by reason of such Obligations or their creation.  By accepting a
Security, each Holder shall waive and release all such liability.  The waiver
and release shall be part of the consideration for the issue of the Securities.

 

Section 11.11.  Successors.  All agreements of the Company in this Indenture and
the Securities shall bind its successor.  All agreements of the Trustee in this
Indenture shall bind its successor.

 

Section 11.12.  Multiple Originals.  This Indenture may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.

 

Section 11.13.  Table of Contents and Headings.  The Table of Contents and the
headings of the Articles or Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered as part of this
Indenture and shall in no way modify or restrict any of the terms or provisions
hereof.

 

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IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed this
Indenture on behalf of the respective parties hereto as of the date first above
written.

 

 

SHUFFLE MASTER, INC.

 

 

 

 

 

By:

/s/ Paul Meyer

 

 

 

Name:

Paul Meyer

 

 

Title:

President

 

 

 

 

WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee

 

 

 

 

 

By:

/s/ Jeffrey Rose

 

 

 

Name:

Jeffrey Rose

 

 

Title:

Corporate Trust Officer

 

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EXHIBIT A

 

[FORM OF FACE OF GLOBAL SECURITY]

 

[Transfer Restricted Securities Legend — Include only on Transfer Restricted
Securities]

 

[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, OR THE
“SECURITIES ACT”, AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM.  EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

 

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF SHUFFLE MASTER, INC. (THE
“COMPANY”) THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (II) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS SECURITY FROM IT
OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

 

THE FOREGOING LEGEND MAY BE REMOVED FROM THE SECURITY ON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]

 

[Global Securities Legend — Include only on Global Securities]

 

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF

 

A-1

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TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.  TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE DEPOSITORY
TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF.]

 

A-2

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SHUFFLE MASTER, INC.

 

1.25% Contingent Convertible Senior Note Due 2024

 

No.:  1

CUSIP:  [825549AA6]*

 

 

Issue Date:  April 21, 2004

 

 

SHUFFLE MASTER, INC., a Minnesota corporation, promises to pay to [Cede & Co.]**
or registered assigns, [the principal amount of                    ] [the
principal amount as set forth on Schedule I hereto]**, on April 15, 2024,
subject 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.  This Security is convertible as specified on the
other side of this Security.

 

Interest Payment Dates:  April 15 and October 15, commencing October 15, 2004.

 

Record Dates:  April 1 and October 1, commencing October 1, 2004.

 

 

SHUFFLE MASTER, INC.

 

 

 

 

 

By:

/s/

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

* For Rule 144A Global Security only.

** Include only on Global Security.

 

A-3

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TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

Wells Fargo Bank, National Association, as Trustee, certifies that this is one
of the Securities referred to in the within-mentioned Indenture.

 

By:

 

 

 

Authorized Signatory

 

 

Dated:

 

A-4

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[FORM OF REVERSE SIDE OF NOTE]

 

SHUFFLE MASTER, INC.

 

1.25% Contingent Convertible Senior Note Due 2024

 

(1)           Interest.

 

This Security will bear interest at the rate of 1.25% per annum from April 21,
2004 or from the most recent date to which interest has been paid or duly
provided for, semiannually in arrears on April 15 and October 15 of each year,
subject to Section 11.08 of the Indenture, commencing October 15, 2004.  The
Company will pay interest on any overdue principal amount and on overdue
installments of interest and Liquidated Damages, if any (without regard to any
applicable grace period), at the rate of 1.25% per annum, compounded
semiannually.  Interest (including Liquidated Damages, if any) on the Securities
will be computed on the basis of a 360-day year comprised of twelve 30-day
months.

 

(2)           Method of Payment.

 

The Company will pay interest (including Liquidated Damages, if any) on this
Security to the Person who is the registered Holder of this Security at the
close of business on April 1 or October 1, as the case may be, immediately
preceding the related interest payment date.  Subject to the terms and
conditions of the Indenture, the Company will make payments in respect of the
Redemption Price, Repurchase Price, Change in Control Repurchase Price and the
principal amount at Stated Maturity, as the case may be, to the Holder who
surrenders a Security to a Paying Agent to collect such payments in respect of
the Security.  The Company will pay cash amounts in money of the United States
that at the time of payment is legal tender for payment of public and private
debts.  However, the Company may pay interest (including Liquidated Damages, if
any), the Redemption Price, Repurchase Price, Change in Control Repurchase Price
and the principal amount at Stated Maturity, as the case may be, to a Holder
holding Securities in definitive form by check or wire payable in such money;
provided that a Holder holding Securities in definitive form with an aggregate
principal amount in excess of $1,000,000 may request payment by wire transfer in
immediately available funds to an account in North America at the election of
such Holder.  The Company may mail an interest check to the Holder’s registered
address.  Notwithstanding the foregoing, so long as this Security is registered
in the name of a Depositary or its nominee, all payments hereon shall be made by
wire transfer of immediately available funds to the account of the Depositary or
its nominee.

 

A-5

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(3)           Paying Agent, Conversion Agent and Registrar.

 

Initially, Wells Fargo Bank, National Association (the “Trustee”) will act as
Paying Agent, Conversion Agent and Registrar.  The Company may appoint and
change any Paying Agent, Conversion Agent or Registrar without notice, other
than notice to the Trustee; provided that the Company will maintain at least one
Paying Agent having an office or agency in the State of New York, City of New
York, Borough of Manhattan, which shall initially be an office or agency of the
Trustee.  The Company or any of its Subsidiaries or any of their Affiliates may
act as Paying Agent, Conversion Agent or Registrar.

 

(4)           Indenture.

 

The Company issued the Securities under an Indenture dated as of April 21, 2004
(the “Indenture”), between the Company and the Trustee.  The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as in effect from
time to time (the “TIA”).  Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture.  The Securities are subject
to all such terms, and Holders are referred to the Indenture and the TIA for a
statement of those terms.

 

The Initial Securities are general unsecured obligations of the Company limited
to up to $125,000,000 aggregate principal amount (which amount shall be
increased by up to $25,000,000 in principal amount of additional Initial
Securities purchased pursuant to the Initial Purchasers’ option to purchase
additional Securities).  The Indenture provides that Additional Securities may
be issued pursuant to the Indenture, and the originally issued Initial
Securities and all such Additional Securities vote together for all purposes as
a single class.  The Indenture does not limit other indebtedness of the Company,
secured or unsecured.

 

(5)           Redemption at the Option of the Company.

 

No sinking fund is provided for the Securities.  On or after April 21, 2009, the
Securities are redeemable in whole at any time, or in part from time to time, in
any integral multiple of $1,000, at the option of the Company for cash at a
Redemption Price equal to 100% of the principal amount of the Securities to be
redeemed, together with accrued but unpaid interest (including Liquidated
Damages, if any) thereon, up to but not including the Redemption Date; provided
that, if the Redemption Date is between the close of business on an interest
record date and the opening of business on the related interest payment date,
accrued but unpaid interest (including Liquidated Damages, if any) will be
payable to the Holders in whose names the Securities are registered at the close
of business on the relevant interest record date.

 

A-6

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Notice of redemption pursuant to paragraph 5 of this Security will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at the Holder’s registered address.  If
money sufficient to pay the Redemption Price of all Securities (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent prior to 11:00 a.m., New York City time, on the Redemption Date,
immediately after such Redemption Date, interest (including Liquidated Damages,
if any) shall cease to accrue on such Securities or portions thereof. 
Securities in denominations larger than $1,000 of principal amount may be
redeemed in part but only in integral multiples of $1,000 of principal amount.

 

(6)           Mandatory Disposition Pursuant to Gaming Laws

 

(A)          Each Holder, by accepting this Security, will be deemed to have
agreed that if the gaming authority of any jurisdiction in which the Company or
any of its Subsidiaries conducts or proposes to conduct gaming operations
requires that a Person who is a Holder or the Beneficial Owner of this Security
(or an affiliate of such Holder or Beneficial Owner) be licensed, qualified or
found suitable under applicable gaming laws, such Holder or the Beneficial
Owner, as the case may be, will apply for a license, qualification or a finding
of suitability within the required time period.  If such Person fails to apply
or become licensed or qualified or is found unsuitable (a “Disqualified
Holder”), the Company will have the right, at any time, at its option:

 

(i)    to require such Person to dispose of this Security or beneficial interest
herein within 30 days of receipt of notice of the Company’s election or such
earlier date as may be requested or prescribed by such gaming authority, or

 

(ii)   to redeem such Securities at a redemption price equal to the lesser of
(1) such Person’s cost, (2) 100% of the principal amount thereof, plus accrued
and unpaid interest (including Liquidated Damages, if any) to the earlier of the
redemption date or the date of the finding of unsuitability, which redemption
date may be less than 30 days following the notice of redemption if so requested
or prescribed by the applicable gaming authority or (3) such lesser amount as
may be required by an applicable gaming authority.

 

(B)           Immediately upon a determination by a gaming authority that a
Holder or Beneficial Owner of this Security (or an affiliate thereof) will not
be licensed, qualified or found suitable or is denied a license, qualification
or finding of suitability, the Holder or Beneficial Owner will not have any
further right with respect to this Security to:

 

A-7

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(i)    exercise, directly or indirectly, through any Person, any right conferred
by this Security; or

 

(ii)   receive any interest (including Liquidated Damages, if any), or any other
distribution or payment with respect to this Security, or any remuneration in
any form from the Company for services rendered or otherwise, except for the
redemption of this Security.

 

(C)           The Company will notify the Trustee in writing of any such
Disqualified Holder status or redemption as soon as practicable.  The Company
will not be responsible for any costs or expenses any such Holder or the
Beneficial Owner may incur in connection with its application for a license,
qualification or a finding of suitability.

 

(7)           Repurchase By the Company at the Option of the Holder on Specified
Dates; Repurchase at the Option of the Holder Upon a Change in Control.

 

Subject to the terms and conditions of the Indenture, the Company shall become
obligated to repurchase, at the option of the Holder, all or a portion of the
Securities tendered pursuant to the Indenture, in any integral multiple of
$1,000, on April 15, 2009, April 15, 2014 and April 15, 2019 (each, a
“Repurchase Date”), for cash at a price per Security equal to 100% of the
aggregate principal amount of the Security (the “Repurchase Price”), together
with accrued but unpaid interest (including Liquidated Damages, if any) thereon,
up to but not including the Repurchase Date upon delivery of a Repurchase Notice
containing the information set forth in the Indenture, together with the
Securities subject thereto, at any time from the opening of business on the date
that is 30 Business Days prior to such Repurchase Date until the close of
business on the Business Day prior to such Repurchase Date, and upon delivery or
book-entry transfer of the Securities to the Paying Agent by the Holder as set
forth in the Indenture.

 

At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to repurchase the Securities held
by such Holder after the occurrence of a Change in Control of the Company for a
Change in Control Repurchase Price equal to 100% of the aggregate principal
amount thereof plus accrued but unpaid interest (including Liquidated Damages,
if any) thereon, up to but not including the Change in Control Repurchase Date
which Change in Control Repurchase Price shall be paid in cash (provided that if
the Change in Control Repurchase Date is between the close of business on an
interest record date and the opening of business on the related interest payment
date, accrued but unpaid interest (including Liquidated Damages, if any) will be
payable to the Holders in whose names the Securities are registered at the close
of business on the relevant interest record date).  Holders have the right to
withdraw any Repurchase Notice or Change in Control Repurchase Notice, as the
case may

 

A-8

--------------------------------------------------------------------------------

 

be, by delivering to the Paying Agent a written notice of withdrawal in
accordance with the provisions of the Indenture.

 

If cash sufficient to pay the Repurchase Price or Change in Control Repurchase
Price, as the case may be, and accrued but unpaid interest (including Liquidated
Damages, if any) on all Securities or portions thereof to be repurchased as of
the Repurchase Date or the Change in Control Repurchase Date, as the case may
be, is held by the Paying Agent by 11:00 a.m., New York City time, on the
Business Day immediately following the Repurchase Date or the Change in Control
Repurchase Date, interest (including Liquidated Damages, if any) shall cease to
accrue on such Securities (or portions thereof) as of such Repurchase Date or
Change in Control Repurchase Date, and the Holder thereof shall have no other
rights as such, other than the right to receive the Repurchase Price or Change
in Control Repurchase Price, as the case may be, and interest (including
Liquidated Damages, if any) upon surrender of such Security.

 

(8)           Conversion.

 

Upon satisfaction of the conditions set forth in Section 10.01(a) of the
Indenture, a Holder of a Security may convert any portion of the principal
amount of any Security that is an integral multiple of $1,000 into cash and
fully paid and non-assessable shares (calculated as to each conversion to the
nearest 1/10000th of a share) of Common Stock in accordance with the provisions
of Section 10.14 of the Indenture; provided that if such Security is called for
redemption, the conversion right will terminate at the close of business on the
second Business Day immediately preceding the Redemption Date of such Security
(unless the Company shall default in making the redemption payment when due, in
which case the conversion right shall terminate at the close of business on the
date such Default is cured and such Security is redeemed).  Such conversion
right shall commence on the initial issuance date of the Securities and expire
at the close of business on the Business Day immediately preceding the date of
maturity, subject, in the case of conversion of any Global Security, to any
Applicable Procedures.  The Conversion Price shall, as of the date of the
Indenture, initially be $42.11 per share of Common Stock.  The Conversion Rate
shall, as of the date of the Indenture, initially be approximately 23.7473.  The
Conversion Price and Conversion Rate will be adjusted under the circumstances
specified in the Indenture.  Upon conversion, no adjustment for interest
(including Liquidated Damages, if any) or dividends will be made.  No fractional
shares will be issued upon conversion; in lieu thereof, an amount will be paid
in cash based upon the Ten Day Average Closing Stock Price (as defined in the
Indenture).  Except as provided in Section 10.02(c) of the Indenture, delivery
of the Principal Return, Net Shares and cash in lieu of fractional shares shall
be deemed to satisfy the Company’s obligation to pay the principal amount of a
converted Security and accrued but unpaid interest (including Liquidated
Damages, if any) thereon.  Any accrued interest (including Liquidated Damages,
if any) payable on a converted

 

A-9

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Security will be deemed paid in full, rather than canceled, extinguished or
forfeited.

 

To convert a Security, a Holder must (a) complete and manually sign the
conversion notice set forth below and deliver such notice to the Conversion
Agent, (b) surrender the Security to the Conversion Agent, (c) furnish
appropriate endorsements and transfer documents if required by the Registrar or
the Conversion Agent, (d) pay any transfer or other tax, if required and (e) if
the Security is held in book-entry form, complete and deliver to the Depositary
appropriate instructions pursuant to the Applicable Procedures.  If a Holder
surrenders a Security for conversion between the close of business on the record
date for the payment of an installment of interest and the opening of business
on the related interest payment date, the Security must be accompanied by
payment of an amount equal to the interest (including Liquidated Damages, if
any) payable on such interest payment date on the principal amount of the
Security or portion thereof then converted; provided that no such payment shall
be required if such Security has been called for redemption on a Redemption Date
within the period between the close of business on such record date and the
opening of business on such interest payment date, or if such Security is
surrendered for conversion on the interest payment date.  A Holder may convert a
portion of a Security equal to $1,000 or any integral multiple thereof.

 

A Security in respect of which a Holder has delivered a Repurchase Notice or a
Change in Control Repurchase Notice exercising the option of such Holder to
require the Company to repurchase such Security as provided in Section 3.08 or
Section 3.09, respectively, of the Indenture may be converted only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.

 

(9)           Denominations; Transfer; Exchange.

 

The Securities are in fully registered form, without coupons, in denominations
of $1,000 of principal amount and integral multiples of $1,000.  A Holder may
transfer or exchange Securities in accordance with the Indenture.  The Registrar
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture.  The Registrar need not transfer or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed), or any
Securities in respect of which a Repurchase Notice or a Change in Control
Repurchase Notice has been given and not withdrawn (except, in the case of a
Security to be repurchased in part, the portion of the Security not to be
repurchased), or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.

 

A-10

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(10)         Persons Deemed Owners.

 

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

 

(11)         Amendment; Waiver.

 

Subject to certain exceptions set forth in the Indenture, (i) the Indenture or
the Securities may be amended with the written consent or consent pursuant to
DTC procedures of the Holders of at least a majority in aggregate principal
amount of the Securities at the time outstanding and (ii) certain defaults may
be waived with the written consent or consent pursuant to DTC procedures of the
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding.  Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder, the Company and the Trustee may amend the
Indenture or the Securities (i) to cure any ambiguity, omission, defect or
inconsistency, or make any other change that does not adversely affect the
rights of any Holder in any material respect; provided that any change to
conform the Indenture to the Offering Memorandum shall be deemed not to
adversely affect the rights of any Holder, (ii) to comply with Article 5 or
Section 10.11 of the Indenture, (iii) to make provisions with respect to the
conversion right of Holders pursuant to the requirements of Section 10.01 of the
Indenture, (iv) to evidence and provide for the acceptance of appointment under
the Indenture by a successor Trustee, or (v) to comply with the provisions of
the TIA or any requirement of the SEC in connection with the qualification of
the Indenture under the TIA.

 

(12)         Defaults and Remedies.

 

Except as set forth in the Indenture, if an Event of Default occurs and is
continuing, the Trustee may, and at the written request of the Holders of at
least 25% in principal amount of outstanding Securities shall, declare all the
Securities to be due and payable in the manner, at the time and with the effect
provided in the Indenture.  Holders of Securities may not enforce the Indenture
or the Securities except as provided in the Indenture.  The Trustee is not
obligated to enforce the Indenture or the Securities unless it has received
security or indemnity reasonably satisfactory to it.  The Indenture permits,
subject to certain limitations therein provided, Holders of a majority in
aggregate principal amount of the Securities at the time outstanding to direct
the Trustee in its exercise of any trust or power.  The Trustee may withhold
from Holders of Securities notice of any continuing Default or Event of Default
(except a default in payment of principal or interest when due, for any reason)
if it determines in good faith that withholding notice is in the interests of
Holders.

 

(13)         Trustee Dealings with the Company.

 

Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or

 

A-11

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pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

 

(14)         No Recourse Against Others.

 

A director, officer, employee or shareholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  By accepting a Security, each Holder waives and
releases all such liability.  The waiver and release are part of the
consideration for the issue of the Securities.

 

(15)         Ranking.

 

The Securities shall be senior unsecured obligations of the Company and shall
rank equally in right of payment with any other existing and future senior
indebtedness of the Company and senior to any future subordinated indebtedness
of the Company.

 

(16)         Authentication.

 

This Security shall not be valid until an authorized signatory of the Trustee
manually signs the Trustee’s Certificate of Authentication on the other side of
this Security.

 

(17)         Abbreviations.

 

Customary abbreviations may be used in the name of a Holder or an assignee, such
as TEN COM (“Tenants In Common”), TEN ENT (“Tenants By The Entireties”), JT TEN
(“Joint Tenants With Right Of Survivorship And Not As Tenants In Common”), CUST
(“Custodian”) and U/G/M/A (“Uniform Gift To Minors Act”).

 

(18)         Governing Law.

 

THE INDENTURE AND THIS SECURITY SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

(19)         CUSIP Numbers.

 

Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused CUSIP numbers to be printed on
the Securities as a convenience to the Holders of the Securities.  No

 

A-12

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representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.

 

A-13

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ASSIGNMENT FORM

 

CONVERSION NOTICE

 

 

 

To assign this Security, fill in the form below

 

To convert this Security into Cash and Common Stock of the Company, check the
box   o

 

 

 

I or we assign and transfer this Security to

 

To convert only part of this Security, state the principal amount to be
converted (which must be $1,000 or an integral multiple of $1,000):

 

 

 

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

 

If you want the stock certificate made out in another person’s name fill in the
form below:

 

 

 

 

 

 

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

 

(Insert the other person’s soc.  sec.  tax ID no.)

 

 

 

 

 

 

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

 

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

 

 

 

Date:

 

 

 

Your Signature:

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Signature Guaranteed

 

 

 

 

 

 

 

 

Participant in a Recognized Signature Guarantee Medallion Program

 

 

 

 

 

By:

 

 

 

 

Authorized Signatory

 

 

 

A-14

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FORM OF REPURCHASE NOTICE

 

To:          Shuffle Master, Inc.

 

The undersigned registered holder of this Security requests and instructs the
Company to repurchase this Security, or the portion hereof (which is $1,000
principal amount or a multiple thereof) designated below, on the date specified
below, in accordance with the terms and conditions specified in paragraph 7 of
this Security and the Indenture referred to in this Security and directs that
the check in payment for this Security or the portion thereof and any Securities
representing the portion of principal amount hereof not to be so repurchased, be
issued and delivered to the registered holder hereof unless a different name has
been indicated below.  If any portion of this Security not repurchased is to be
issued in the name of a Person other than the undersigned, the undersigned shall
pay all transfer taxes payable with respect thereto.

 

Dated:

 

 

 

 

 

Signature(s)

 

Fill in for registration of Securities not repurchased if
to be issued other than to and in the name
of registered holder:

 

 

 

(Name)

 

 

(Street Address)

 

 

(City, state and zip code)

 

 

Please print name and address

 

principal amount to be repurchased (if less than all):  $   ,000

 

date of requested repurchase:  April 15, 20  
(specify either April 15, 2009, 2014 or 2019)

 

A-15

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FORM OF OPTION TO ELECT REPURCHASE
UPON A CHANGE IN CONTROL

 

To:  Shuffle Master, Inc.

 

The undersigned registered holder of this Security hereby acknowledges receipt
of a notice from Shuffle Master, Inc. (the “Company”) as to the occurrence of a
Change in Control with respect to the Company and requests and instructs the
Company to repurchase this Security, or the portion hereof (which is $1,000
principal amount or a multiple thereof) designated below, in accordance with the
terms of the Indenture referred to in this Security and directs that the check
in payment for this Security or the portion thereof and any Securities
representing any unrepurchased principal amount hereof, be issued and delivered
to the registered holder hereof unless a different name has been indicated
below. If any portion of this Security not repurchased is to be issued in the
name of a Person other than the undersigned, the undersigned shall pay all
transfer taxes payable with respect thereto.

 

Dated:

 

 

 

 

 

Signature(s)

 

 

Fill in for registration of Securities not repurchased if
to be issued other than to and in the name of
registered holder:

 

 

 

(Name)

 

 

(Street Address)

 

 

(City, state and zip code)

 

Please print name and address

 

principal amount to be repurchased (if less than all):  $  ,000

 

A-16

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SCHEDULE I*

 

 

SHUFFLE MASTER, INC.
1.25% Contingent Convertible Senior Notes Due 2024

 

No:

 

Date

 

Principal Amount

 

Notation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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* Include only on Global Security

 

A-17

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EXHIBIT B

 

Transfer Certificate

 

In connection with any transfer of any of the Securities within the period prior
to the expiration of the holding period applicable to the sales thereof under
Rule 144(k) under the Securities Act of 1933, as amended (the “Securities Act”)
(or any successor provision), the undersigned registered owner of this Security
hereby certifies with respect to $                  principal amount of the
above-captioned Securities presented or surrendered on the date hereof (the
“Surrendered Securities”) for registration of transfer, or for exchange or
conversion where the securities deliverable upon such exchange or conversion are
to be registered in a name other than that of the undersigned registered owner
(each such transaction being a “transfer”), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Securities for the
reason checked below:

 

o            A transfer of the Surrendered Securities is made to the Company or
any of its subsidiaries; or

 

o            The transfer of the Surrendered Securities complies with Rule 144A
under the U.S.  Securities Act of 1933, as amended (the “Securities Act”); or

 

o            The transfer of the Surrendered Securities is pursuant to an
exemption from the registration requirement of the Securities Act provided by
Rule 144 thereunder; or

 

o            The transfer of the Surrendered Securities is pursuant to an
effective registration statement under the Securities Act.

 

The undersigned confirms that, to the undersigned’s knowledge, such Securities
are not being transferred to an “affiliate” of the Company as defined in Rule
144 under the Securities Act (an “Affiliate”).

 

Date:

 

 

 

 

 

 

 

 

Signature(s)

 

 

(If the registered owner is a corporation, partnership or fiduciary, the title
of the Person signing on behalf of such registered owner must be stated.)

 

Signature Guaranteed

 

 

 

 

Participant in a Recognized Signature
Guarantee Medallion Program

 

 

 

By:

 

 

 

 

Authorized Signatory

 

 

 

B-1

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