Exhibit 4.1


 


SECOND SUPPLEMENTAL INDENTURE


(1998
Indenture)


 


THIS SECOND SUPPLEMENTAL
INDENTURE (this “Second Supplemental Indenture”), dated as of July 28,
2005, is by and among Harrah’s Entertainment, Inc., a Delaware corporation
(the “Parent Guarantor”), Harrah’s Operating Company, Inc., a
Delaware corporation and a wholly owned subsidiary of the Parent Guarantor (the
“Company”), and Wachovia Bank, National Association, as successor to First
Union National Bank, as trustee under the indenture referred to below (the “Trustee”).


 


W I T N E S S E T H


 


WHEREAS, reference is
made to that certain Indenture, dated as of December 21, 1998, between the
Company, as successor to Caesars Entertainment, Inc., f/k/a Park Place
Entertainment Corporation, a Delaware corporation (“Caesars”), and the
Trustee, as amended and supplemented by that certain First Supplemental
Indenture, dated as of June 13, 2005 (as so amended and supplemented, the “Original
Indenture,” and as further amended and supplemented hereby, the “Indenture”),
with respect to the Company’s 7.875% Senior Subordinated Notes due 2005 (the “Securities”);


 


WHEREAS, in accordance
with Section 9.02 of the Original Indenture, the Company and the Trustee
may amend the Original Indenture with the written consent of holders of at
least a majority in principal amount of the Securities outstanding;


 


WHEREAS, the Parent
Guarantor and the Company desire to amend the Original Indenture in accordance
with Section 9.02 of the Original Indenture and have solicited consents from
the holders of the Securities to certain amendments to the Original Indenture
pursuant to a Consent Solicitation Statement dated July 8, 2005;


 


WHEREAS, the holders of
at least a majority in principal amount of the Securities outstanding have
consented to the amendments to the Original Indenture contained herein;


 


WHEREAS, the Parent
Guarantor has agreed to fully and unconditionally guarantee the Company’s
obligation under the Indenture and the Securities, which guarantee is provided
in this Second Supplemental Indenture, as permitted pursuant to Section 9.01
of the Original Indenture; and


 


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


 


NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company, the
Parent Guarantor and the Trustee mutually covenant and agree as follows:


 


1.             Capitalized
Terms and Definitions.  Capitalized
terms used herein without definition shall have the meanings ascribed to them
in the Original Indenture. For all purposes of this


 





















 


Second Supplemental Indenture, except as otherwise expressly provided
or unless the context otherwise requires:


 


“Officers’ Certificate”
means a certificate signed by the Chairman of the Board, the President, the
Chief Executive Officer, the Chief Financial Officer or a Vice President
(regardless of Vice Presidential designation), and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Parent
Guarantor and in form and substance reasonably satisfactory to, and delivered
to, the Trustee.


 


“Opinion of Counsel”
means a written opinion of counsel, who may be counsel for the Parent Guarantor
or the Trustee, and who shall be acceptable to the Trustee, and which opinion
shall be in form and substance reasonably satisfactory to the Trustee.


 


2.             Amendments
to the Indenture.  Section 10.11(a) of
the Original Indenture is amended and restated in its entirety to read as
follows:


 


“Commission Reports. The Company shall deliver to the Trustee
within 15 days after it files them with the Commission copies of the annual
reports and the information, documents, and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and
regulations prescribe) which the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act.  The
Company also shall comply with the other provisions of the Trust Indenture Act § 314(a). 
Delivery of reports, information and documents to the Trustee under this Section is
for informational purposes only and the Trustee’s receipt of the foregoing
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein.”


 


3.             Agreement
to Guarantee.  The Parent Guarantor
hereby agrees as follows:


 


(a)           Subject to
Subsection 3(b) below, the Parent Guarantor (or any successor person
pursuant to the applicable provisions of this Second Supplemental Indenture)
hereby irrevocably and unconditionally guarantees (such guarantee being the “Guarantee”)
to each Holder of a Security authenticated and delivered by the Trustee and to
the Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture and the Securities thereunder, that: (i) the
principal of, premium, if any, and interest on the Securities promptly will be
paid in full when due, whether at the Maturity, by acceleration, call for
redemption or otherwise, and interest on the overdue principal, premium, if
any, and interest, if any, on the Securities, if lawful, and all other
obligations of the Company to the Holders and the Trustee under the Indenture
and the Securities thereunder will be promptly paid in full or performed, all
in accordance with the terms of the Indenture and the Securities thereunder,
and (ii) in case of any extension of time of payment or renewal of any
Securities or any of such other obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise. Failing
payment when due by the Company of any amount so guaranteed for whatever
reason, the Parent Guarantor shall be obligated to pay the same immediately.
The Parent Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Indenture or the Securities thereunder, the absence of any action to enforce
the same, any waiver or consent by any Holder of the Securities with respect to


 





















 


any provisions of the Indenture or the Securities thereunder, the
recovery of any judgment against the Company, or any action to enforce the same
or any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. The Parent Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that this Guarantee shall not be discharged except by
complete performance of the obligations contained in the Securities and the Indenture.
If any Holder or the Trustee is required by any court or otherwise to return to
the Company or any custodian, Trustee, liquidator or other similar official
acting in relation to the Company, any amount paid by the Company to the
Trustee or such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. The Parent Guarantor agrees that
it shall not be entitled to any right of subrogation in relation to the Holders
in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby.


 


(b)           It
is the intention of the Parent Guarantor and the Company that the obligations
of the Parent Guarantor hereunder shall be, but not in excess of, the maximum
amount permitted by applicable law. Accordingly, if the obligations in respect
of the Guarantee would be annulled, avoided or subordinated to the creditors of
the Parent Guarantor by a court of competent jurisdiction in a proceeding
actually pending before such court as a result of a determination both that
such Guarantee was made without fair consideration and, immediately after
giving effect thereto, the Parent Guarantor was insolvent or unable to pay its
debts as they mature or left with an unreasonably small capital, then the
obligations of the Parent Guarantor under the Guarantee shall be reduced by
such court if such reduction would result in the avoidance of such annulment,
avoidance or subordination; provided, however, that any reduction pursuant to
this paragraph shall be made in the smallest amount as is strictly necessary to
reach such result. For purposes of this paragraph, “fair consideration,” “insolvency,”
“unable to pay its debts as they mature,” “unreasonably small capital” and the
effective times of reductions, if any, required by this paragraph shall be
determined in accordance with applicable law.


 


(c)           The
Parent Guarantor shall be subrogated to all rights of the Holders against the
Company in respect of any amounts paid by Parent Guarantor pursuant to the provisions
of the Guarantee or the Indenture; provided, however, that the Parent Guarantor
shall not be entitled to enforce or to receive any payments arising out of, or
based upon, such right of subrogation until the principal of, premium, if any,
and interest on all Securities issued under the Indenture shall have been paid
in full.


 


4.             Execution
and Delivery of Guarantee.  To evidence the Guarantee set
forth in Section 3, the Company and the Parent Guarantor hereby agree that
a notation of such Guarantee shall be endorsed on each Security authenticated
and delivered by the Trustee, that such notation of such Guarantee shall be in
the form attached hereto as Exhibit A, and shall be executed on behalf of
the Parent Guarantor by an officer thereof.


 


The Parent Guarantor
hereby agrees that the Guarantee set forth in Section 3 shall remain in
full force and effect notwithstanding any failure to endorse on each Security a
notation of the Guarantee.


 





















 


5.             Release
of Parent Guarantor.  The Parent Guarantor shall be released from
all of its obligations under the Guarantee and under the Indenture if:


 


(a)           the
Company or the Parent Guarantor has transferred all or substantially all of its
properties and assets to any Person (whether by sale, merger or consolidation
or otherwise), or has merged into or consolidated with another Person, pursuant
to a transaction in compliance with the Indenture and:


 


(i)            the
corporation to whom all or substantially all of the properties and assets of
the Company or the Parent Guarantor are transferred, or whom the Company or the
Parent Guarantor has merged into or consolidated with, has expressly assumed,
by an indenture supplemental to the Indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of the Parent
Guarantor under the Guarantee and the Indenture;


 


(ii)           immediately
before and immediately after giving effect to such transaction, no Event of
Default, and no event or condition which, after notice or lapse of time or
both, would become an Event of Default, shall have occurred and be continuing;
and


 


(iii)          the
Parent Guarantor has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
and such supplemental indenture comply with this Section 5 and that all
conditions precedent herein provided for relating to such transaction have been
complied with;


 


(b)           the
Parent Guarantor liquidates (other than pursuant to any Bankruptcy Law) and
complies, if applicable, with the provisions of the Indenture; provided that if
a Person and its Affiliates, if any, shall acquire all or substantially all of
the assets of the Parent Guarantor upon such liquidation the Parent Guarantor
shall liquidate only if:


 


(i)            the
Person and each such Affiliate (or the common corporate parent of such Person
and its Affiliates, if such Person and its Affiliates are wholly owned by such
parent) which acquire or will acquire all or a portion of the assets of the
Parent Guarantor shall expressly assume, by an indenture supplemental to the
Indenture, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Parent Guarantor, under the Guarantee and
the Indenture and such Person or any of such Affiliates (or such parent) shall
be a corporation organized and existing under the laws of the United States or
any State thereof or the District of Columbia;


 


(ii)           immediately
after giving effect to such transaction, no Event of Default, and no event or
condition which, after notice or lapse of time or both, would become an Event
of Default, shall have occurred and be continuing; and


 


(iii)          the
Parent Guarantor has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such liquidation and such supplemental
indenture comply with this Section 5 and that all conditions precedent
herein provided for relating to such transaction have been complied with; or


 





















 


(c)           the
Company ceases for any reason to be a “wholly owned subsidiary” of the Parent
Guarantor (as such term is defined in Rule 1-02(z) of Regulation S-X
promulgated by the Commission).


 


Upon any assumption of
the Guarantee by any Person pursuant to this Section 5, such Person may
exercise every right and power of the Parent Guarantor under the Guarantee and
the Indenture with the same effect as if such successor corporation had been
named as the Parent Guarantor herein, and all the obligations of the Parent
Guarantor under the Guarantee and the Indenture shall terminate.


 


6.             When
Parent Guarantor May Merge, Etc.  The Parent Guarantor shall not consolidate
with or merge with or into any other Person or, directly or indirectly, sell,
lease or convey all or substantially all of its assets (computed on a
consolidated basis) to another Person, and may not permit any Person to,
directly or indirectly, sell, lease or convey all or substantially all of its
assets to the Parent Guarantor, whether in a single transaction or a series of
related transactions, unless:


 


(a)           either
the Parent Guarantor shall be the continuing person, or the Person (if other
than the Parent Guarantor) formed by such consolidation or into or with which
the Parent Guarantor is merged or to which the assets of the Parent Guarantor
are transferred shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia and
shall expressly assume, by a supplemental indenture to the Indenture, executed
and delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Parent Guarantor under the Guarantee and the Indenture;


 


(b)           immediately
after giving effect to such transaction, no Event of Default, and no event or
condition which, after notice or lapse of time or both, would become an Event
of Default, shall have occurred and be continuing; and


 


(c)           the
Parent Guarantor has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
conveyance or lease and such supplemental indenture comply with this Section 6
and that all conditions precedent herein provided for relating to such
transaction have been complied with.


 


Upon any consolidation or
merger, or any sale, conveyance or lease of all or substantially all of the
assets of the Parent Guarantor, in accordance with this Section 6, the
successor corporation formed by such consolidation or into or with which the
Parent Guarantor is merged or to which such transfer is made shall succeed to,
and be substituted for (so that from and after the date of such consolidation,
merger, sale, lease, conveyance or other disposition, the provisions of this Second
Supplemental Indenture referring to the “Parent Guarantor” shall refer instead
to the successor corporation and not to the Parent Guarantor), and may exercise
every right and power of, the Parent Guarantor under the Guarantee and the
Indenture with the same effect as if such successor corporation had been named
as the Parent Guarantor herein, and all the obligations of the predecessor
Parent Guarantor under the Guarantee and the Indenture shall terminate.


 





















 


7.             Limitation
on Individual Liability.  No recourse
under or upon any obligation, covenant or agreement contained in this Second
Supplemental Indenture or the Guarantee, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Parent Guarantor, the Company or any successor Person, either directly or
through the Parent Guarantor or the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Second Supplemental Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall
attach to, or is or shall be incurred by, the incorporators, shareholders,
officers or directors, as such, of the Parent Guarantor, the Company or any
successor Person, or any of them, because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations, covenants or
agreements contained in this Second Supplemental Indenture or in the Guarantee
or implied therefrom; and that any and all such personal liability of every
name and nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, shareholder, officer or director, as such, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Second Supplemental
Indenture or in the Guarantee or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Second Supplemental Indenture and the issuance of the Guarantee.


 


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


 


9.             New
York Law To Govern.  This Second Supplemental
Indenture shall be governed by the laws of the State of New York without regard
to the conflict of law principles that would result in the application of any
law other than the law of the State of New York.


 


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


 


11.           Effect
of Headings.  The Section headings
herein are for convenience only and shall not affect the construction hereof.


 





















 


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


 


 


	
   

  	
  Harrah’s
  Operating Company, Inc.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jonathan S. Halkyard

  
	
   

  	
   

  	
  Name:

  	
  Jonathan
  S. Halkyard

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice-President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Harrah’s
  Entertainment, Inc.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jonathan S. Halkyard

  
	
   

  	
   

  	
  Name:

  	
  Jonathan
  S. Halkyard

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice-President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Wachovia
  Bank, National Association,

  
	
   

  	
  as
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Shawn K. Bednasek

  
	
   

  	
   

  	
  Name:

  	
  Shawn
  K. Bednasek

  
	
   

  	
   

  	
  Title:

  	
  Vice-President

  



 





















 


Exhibit A


 


FORM OF
NOTATION OF GUARANTEE


 


NOTATION OF
GUARANTEE OF HARRAH’S ENTERTAINMENT, INC.


 


For value received, the undersigned, Harrah’s
Entertainment, Inc., a Delaware corporation (the “Parent Guarantor”,
which term includes any successor person under the indenture referred to
below), has unconditionally guaranteed, to the extent set forth in, and subject
to the provisions of, the Second Supplemental Indenture, dated as of July 28,
2005 (the “Second Supplemental Indenture”), among Harrah’s Operating
Company, Inc., a Delaware corporation and a wholly owned subsidiary of
Parent Guarantor (the “Company”), the Parent Guarantor and Wachovia
Bank, National Association, as successor to First Union National Bank, as
trustee (the “Trustee”), (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Securities (as defined in
the Second Supplemental Indenture), whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal of and interest on the Securities, if any, if lawful, and the due and
punctual performance of all other obligations of the Company to the holders of
the Securities or the Trustee all in accordance with the terms of the Indenture,
dated as of December 21, 1998, between the Company, as successor to Caesars
Entertainment, Inc., f/k/a Park Place Entertainment Corporation, a
Delaware corporation (“Caesars”), and the Trustee, with respect to the Company’s
7.875% Senior Subordinated Notes due 2005, the First Supplemental Indenture,
dated as of June 13, 2005, among Caesars, the Company and the Trustee, and
the Second Supplemental Indenture, and (b) in case of any extension of
time of payment or renewal of any Securities or any of such other obligations,
that the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. The obligations of the Parent Guarantor to the
holders of the Securities and to the Trustee pursuant to this guarantee are
expressly set forth in Sections 3 through 6 of the Second Supplemental
Indenture, and reference is hereby made to the Second Supplemental Indenture
for the precise terms of this guarantee.


 


 


	
   

  	
  HARRAH’S ENTERTAINMENT, INC.,

  
	
   

  	
  as Parent Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title: