Exhibit 4.6


 


Caesars Entertainment, Inc.


 


 


Floating Rate Contingent Convertible Senior
Notes due 2024


 


 


First Supplemental Indenture


 


Dated as of November 4, 2004


 


To Indenture dated as of April 7, 2004,


 


 


U.S. Bank National Association


 


as Trustee


 





















 


FIRST SUPPLEMENTAL INDENTURE, dated as of
November 4, 2004 (this “Supplemental Indenture”), among Caesars Entertainment,
Inc., a Delaware corporation (the “Company”), and U.S. Bank National
Association, as trustee (the “Trustee”).


 


W I T N E S S E T H:


 


WHEREAS, the Company and the Trustee executed
and delivered an Indenture, dated as of April 7, 2004 (the “Indenture”),
providing for the issuance of Caesars Floating Rate Contingent Convertible
Senior Notes due 2024 (the “Securities”)(all capitalized terms used herein and
not defined have the definitions given them in the Indenture);


 


WHEREAS, as indicated by references to
Section 10.14 of the Indenture in Sections 10.01 and 10.02 of the Indenture and
Section 8 of the Security, Section 10.14 of the Indenture was intended to be
applicable to the conversion of the Securities after the 15-day period referred
to in Section 10.01(a)(v).


 


WHEREAS, Section 10.11 of the Indenture is
silent (i) as to application of Article 10 of the Indenture in the context of a
consolidation, combination, merger or share exchange in which the Company’s
stockholders are entitled to elect different types of consideration, and (ii)
as to whether Section 10.14 would continue to be the basis for conversion of
the Securities after the 15-day period referred to in Section 10.01(a)(v),
which omissions, when taken together with the provisions of Sections 10.01,
10.02 and 10.14 of the Indenture, as well as Section 8 of the Security, create
an ambiguity in the Indenture with respect to whether holders of Securities
would receive the consideration contemplated by Section 10.14 upon conversion
of the Securities after the 15-day period referred to in Section 10.01(a)(v);


 


WHEREAS, Section 10.01(a)(v) of the Indenture
establishes a 15-day time period during which holders of the Securities may
convert the Securities into merger consideration, while Section 10.11 contains
no limitation as to the time period;


 


WHEREAS, Section 10.11 of the Indenture
contemplates that a supplemental indenture entered into in connection with any
such Transaction will 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 by Article 10, but does not address the applicability
of such adjustments in an election merger;


 


WHEREAS, pursuant to Sections 9.01(b) of the
Indenture, the Company and the Trustee may amend or supplement the Indenture to
cure any ambiguity, omission, defect or inconsistency of the Indenture, and
pursuant to Section 9.01(c) of the Indenture, Caesars and the Trustee may amend
or supplement the Indenture to make any other change that does not adversely
affect the rights of any Holder in any material respect;


 


WHEREAS, regardless of whether a Holder would
be permitted to convert the Securities into merger consideration after the
15-day period referred to in Section 10.01(a)(v) or would be permitted to
convert the Securities pursuant to the “net share settle” feature of Section
10.14 after the 15-day period referred to in Section 10.01(a)(v), such holder
would receive cash, securities or other property having the same aggregate
value and therefore would not be adversely affected in any material respect by
the applicability of Section 10.14 after such period;


 





















 


WHEREAS, this Supplemental Indenture is
intended to cure the foregoing ambiguities, omissions and inconsistencies and
to provide for the continued applicability of Section 10.14 after the 15-day
period referred to in Section 10.01(a)(v);


 


WHEREAS, the execution and delivery of this
Supplemental Indenture has been duly authorized by the parties hereto, and all
other acts necessary to make this Supplemental Indenture a valid and binding
supplement to the Indenture effectively amending the Indenture as set forth herein
have been duly taken;


 


NOW THEREFORE, THIS INDENTURE WITNESSETH,
that, for and in consideration of the above premises, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:


 


Section 1.              Amendments to the Indenture.


 


The Company and the Trustee hereby agree as
follows:


 


(a)           Section 1.02 of the
Indenture is amended in its entirety to read as follows:


 


“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)

  
	
  Consolidated Net Tangible Assets

  	
   

  	
  6.01

  
	
  Conversion Agent

  	
   

  	
  2.03

  
	
  Conversion Date

  	
   

  	
  10.02(a)

  
	
  Conversion Value

  	
   

  	
  10.14(a)

  
	
  Depositary

  	
   

  	
  2.01(b)

  
	
  Determination Date

  	
   

  	
  10.14(b)

  
	
  DTC

  	
   

  	
  2.01(b)

  
	
  Event of Default

  	
   

  	
  6.01

  
	
  Ex-Dividend Date

  	
   

  	
  10.01(c)

  
	
  Expiration Time

  	
   

  	
  10.05(d)

  
	
  Global Security

  	
   

  	
  2.01(b)

  
	
  Legal Holiday

  	
   

  	
  11.08

  
	
  Net Share Amount

  	
   

  	
  10.14(b)

  
	
  Net Shares

  	
   

  	
  10.14(b)

  



 


2





















 


	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  Non-recourse Debt

  	
   

  	
  6.01

  
	
  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)

  
	
  QIB

  	
   

  	
  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

  
	
  Stockholder Rights Plan

  	
   

  	
  10.05(f)

  
	
  Ten Day Average Closing Stock Price

  	
   

  	
  10.14(a)

  
	
  Transaction Consideration

  	
   

  	
  10.11

  
	
  Transaction Conversion Period

  	
   

  	
  10.01(a)

  
	
  Transfer Restricted Securities

  	
   

  	
  2.06(e)

  



”


(b)           Section
10.01(a)(v) of the Indenture is amended in its entirety to read as follows:


 


“(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 15 days after the effective
date of such transaction (the “Transaction Conversion
Period”).”


 


(c)           Clause
(1) of Section 10.02(a) of the Indenture is amended in its entirety to read as
follows:


 


“(1) to the extent applicable, cash in the
amount calculated in accordance with Section 10.14,”


 


(d)           The
first paragraph of Section 10.11 of the Indenture is amended in its entirety to
read as follows:


 


“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


 


3





















 


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, then the
Company, or such successor or purchasing corporation, as the case may be,
shall, as a condition precedent to such reclassification, change,
consolidation, merger, share exchange, sale or conveyance, execute and deliver
to the Trustee a supplemental indenture providing that (i) during the
Transaction Conversion Period, the Holder of each Security then outstanding
shall have the right to convert such Security into the kind and amount of cash,
securities or other property receivable upon such reclassification, change,
consolidation, 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
such reclassification, change, consolidation, merger, share exchange, sale or
conveyance; provided that, if the holders of Common
Stock have a right of election as to the kind or amount of cash, securities or
other property receivable upon such reclassification, change, consolidation,
merger, share exchange, sale or conveyance, the Holder of each Security then
outstanding shall have the right to elect to convert such Security (based on
the number of shares of Common Stock deliverable upon conversion of such
Security solely into Common Stock) into the kind and amount of cash, securities
or other property receivable by a holder of Common Stock that exercised such
election or the kind of amount of cash, securities or other property receivable
by a holder of Common Stock that did not exercise such election on the same
basis as the holders of the Common Stock , and (ii) after the Transaction
Conversion Period (x) the Securities shall be convertible into the common stock
of the surviving entity of such reclassification, change, consolidation,
merger, share exchange, sale or conveyance (or the parent of such entity, if
the holders of Common Stock received the parent’s common stock in such
reclassification, change, consolidation, merger, share exchange, sale or
conveyance) as and to the extent convertible into the Common Stock in this
Article 10; (y) such common stock shall be the basis for determining the
Conversion Value pursuant to Section 10.01, Section 10.14 and the Securities
(with the initial Conversion Rate in respect of such common stock equal to the
then-existing Conversion Rate multiplied by the number of shares (or fraction
thereof) of such common stock issuable for each share of Common Stock in such
transaction, assuming conversion of the Securities entirely into Common Stock,
and the initial Conversion Price in respect of such common stock equal to the
then-existing Conversion Price divided by such number of shares (or fraction
thereof)); and (z) such common stock shall be subject to all adjustments
contemplated by this Article 10. 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 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


 


4





















 


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.”


 


(e)           The
first paragraph of the “CONVERSION NOTICE” included in Exhibit A to the
Indenture shall be amended in its entirety as follows:


 


“To convert this Security into Cash and Common
Stock of the Company pursuant to Sections 10.01(a)(i), 10.01(a)(ii),
10.01(a)(iii) or 10.01(a)(iv) of the Indenture, check this box o


 


To convert this Security pursuant to Section
10.01(a)(v) of the Indenture, check this box o


 


If you are converting this Security pursuant
to Section 10.01(a)(v), state, if applicable, whether you elect to receive the
consideration paid to an electing stockholder or a non-electing stockholder:


 


	
  Electing o

  	
   

  	
  Non-Electing
  o

  



 


[The form for election by a holder in the
event of a transaction contemplated by Section 10.11 of the Indenture shall be
adjusted as necessary to give effect to the terms of such transaction.]”


 


Section 2.              Ratification and Effect.


 


Except as hereby expressly amended, the
Indenture is in all respects ratified and confirmed and all the terms,
provisions and conditions thereof shall be and remain in full force and effect.


 


Upon and after the execution of this
Supplemental Indenture, each reference in the Indenture to “this Indenture,” “hereunder,”
“hereof” or words of like import referring to the Indenture shall mean and be a
reference to the Indenture as modified hereby.


 


Section 3.              Governing Law.


 


THE INTERNAL LAWS OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE, THE INDENTURE
AS SUPPLEMENTED AND AMENDED HEREBY, THE SECURITIES AND THE GUARANTEE WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.


 


5





















 


Section 4.              Counterpart Originals.


 


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


 


Section 5.              The Trustee.


 


The recitals in this Supplemental Indenture
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. 
The Trustee shall not be responsible or accountable in any manner
whatsoever for or with respect to the validity or sufficiency of this
Supplemental Indenture.


 


[Signatures on following page]


 


6





















 


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


 


	
   

  	
  CAESARS ENTERTAINMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wesley
  D. Allison

  	
   

  
	
   

  	
  Name:

  	
  Wesley D. Allison

  
	
   

  	
  Title:

  	
  Senior Vice President, Interim

  
	
   

  	
   

  	
  Chief Financial Officer and Controller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. Bank National Association, as
  “Trustee”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lorianne
  Rosenberg

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory