Exhibit 4.8


 




 





 


HARRAH’S
OPERATING COMPANY, INC.,

as Issuer

and


HARRAH’S
ENTERTAINMENT, INC.,

as Guarantor


 


 


Floating
Rate Contingent Convertible Senior Notes Due 2024


 


 










 


AMENDED
AND RESTATED INDENTURE


 










 


 


U.S. BANK
NATIONAL ASSOCIATION,

as Trustee


 


 


Dated as
of July 28, 2005


 




 





 





















 


CROSS-REFERENCE
TABLE


 


	
  TIA

  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

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
  314

  	
  (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.

  



 










N.A. means Not Applicable.


 


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


 





















 


	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  317

  	
  (a)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
  318

  	
  (a)

  	
   

  	
  N.A.

  



 





















 


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

  	
   

  



 


i





















 


	
  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

  	
   

  
	
  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

  	
   

  



 


ii





















 


	
  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.

  	
  Remedies
  Subject to Applicable Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  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

  	
   

  
	
   

  	
   

  	
   

  
	
  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

  	
   

  



 


iii





















 


	
  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.

  	
  Parent
  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

  	
   

  
	
  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.

  	
  Company
  Actions or Rights

  	
   

  
	
  Section 11.12.

  	
  Successors

  	
   

  
	
  Section 11.13.

  	
  Multiple
  Originals

  	
   

  
	
  Section 11.14.

  	
  Table
  of Contents and Headings

  	
   

  



 


iv





















 


	
  ARTICLE 12

  	
   

  
	
   

  	
   

  	
   

  
	
  GUARANTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.01.

  	
  Guarantee

  	
   

  
	
  Section 12.02.

  	
  Execution
  and Delivery of Guarantee

  	
   

  
	
  Section 12.03.

  	
  Release
  of Parent

  	
   

  
	
  Section 12.04.

  	
  When
  Parent May Merge, Etc.

  	
   

  



 


	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  —

  	
  Form of
  Global Security

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
  —

  	
  Transfer
  Certificate

  



 


v





















 


This AMENDED
AND RESTATED INDENTURE dated as of July 28, 2005 is among Harrah’s
Entertainment, Inc., a Delaware corporation (the “Parent”),
Harrah’s Operating Company, Inc., a Delaware corporation and the direct,
wholly-owned subsidiary of the Parent (the “Company”),
and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized
under the laws of the United States of America (the “Trustee”).


 


W I T N E S S E T H


 


WHEREAS,
reference is made to that certain Indenture, dated as of November 4, 2004,
between the Company, as successor to Caesars Entertainment, Inc., a
Delaware corporation (“Caesars”), and the Trustee, as amended and
supplemented by that certain First Supplemental Indenture, dated as of November 4,
2004, and as further amended and supplemented by that certain Second
Supplemental Indenture, dated as of June 13, 2005 (as so amended and supplemented,
the “Original Indenture,” and as further amended and restated hereby,
the “Indenture”), with respect to the Company’s Floating Rate Contingent
Convertible Senior Notes due 2024 (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 and the Company desire to amend and restate 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 has agreed to fully and unconditionally guarantee the Company’s
obligations under this Indenture and the Securities, which guarantee is
provided in this Indenture, as permitted pursuant to Section 9.01 of the
Original Indenture; and


 


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


 


NOW,
THEREFORE, 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 Securities:


 





















 


ARTICLE 1


 


DEFINITIONS AND INCORPORATION BY REFERENCE


 


Section 1.01.     Definitions.


 


“Affiliate” has the meaning provided in Rule 405 under
the Securities Act, as in effect on the date hereof.


 


“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.


 


“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” means:


 


(a)           in the case of a corporation, corporate stock;


 


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


 


2





















 


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


 


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


 


“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 or the Parent, 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 or the Parent of any plan or proposal for the
liquidation or dissolution of the Company or the Parent, as applicable, whether
or not otherwise in compliance with this Indenture;


 


(c)           any Person or Group, other than the
Parent, any Subsidiary of the Parent or any employee benefit plan of the Parent
or any such Subsidiary, becomes the Beneficial Owner, directly or indirectly,
of shares of Capital Stock of the Company or the Parent 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 the Parent;


 


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


 


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


 


“Common Stock” shall mean shares of the Parent’s Common
Stock, $0.01 par value per share, as they exist at the Effective Time, or any
other shares of Capital Stock of the Parent 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 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.


 


3





















 


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


 


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


 


“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, as of the Effective Time, $68.65
share of Common Stock, subject to the adjustments described in 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 14.57 as of the date of the
Effective Time.


 


“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 U.S. Bank National Association,
Goodwin Square, 225 Asylum Street, 23rd Floor, Hartford, Connecticut 06103,
Attention:  Corporate Trust
Administration, 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.


 


“Effective Time” means the time at which the Merger became
effective in accordance with the Delaware General Corporation Law.


 


“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.


 


“GAAP” means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified


 


4





















 


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 Amended and Restated 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., J.P. Morgan Securities Inc., Banc of America Securities LLC, Citigroup
Global Markets Inc., SG Cowen Securities Corporation, Wells Fargo Securities,
LLC, Scotia Capital (USA) Inc., Commerzbank Capital Markets Corporation and The
Royal Bank of Scotland plc.


 


“Liquidated Damages” has the meaning set forth in the
Registration Rights Agreement dated as of April 7, 2004 between the
Company and the Initial Purchaser.


 


“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.


 


“Merger” means the merger of Caesars Entertainment, Inc.,
with and into Harrah’s Operating Company, Inc., with Harrah’s Operating
Company, Inc. being the surviving corporation, pursuant to that certain
merger agreement, dated as of July 14, 2004, among Caesars Entertainment, Inc.,
Harrah’s Operating Company, Inc. and Harrah’s Entertainment, Inc.


 


“Non-recourse Debt” means debt the terms of which provide
that the lender’s claim for repayment of such debt is limited solely to a claim
against the property which secures the debt.


 


“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 and
Liquidated Damages, if any.


 


“Offering Memorandum” means the offering memorandum of the
Company dated March 30, 2004 relating to the offering of the Securities.


 


“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


 


5





















 


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 (i) the designation of any such Officer of the Company by the Board
of Directors shall be evidenced in a Board Resolution and (ii) the designation
of any such Officer of the Parent shall be evidenced in a Parent Board Resolution.


 


“Officers’ Certificate” means, for any entity, a written
certificate containing the information specified in Sections 11.04 and 11.05, with
respect to such entity, signed in the name of such entity 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 such entity 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, the Parent or the Trustee.


 


“Parent” means the party named as the “Parent” 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.


 


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


 


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


 


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


 


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


 


“Person” 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.


 


6





















 


“Principal Property” means any real estate or other physical
facility or depreciable asset, the net book value of which on the date of
determination exceeds the greater of $25 million or 2% of Consolidated Net
Tangible Assets of the Company.


 


“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, 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.


 


“Security” or “Securities”
means any of the Company’s Floating Rate Convertible Senior Notes Due 2024
issued under this Indenture.


 


“Significant Subsidiary” means any Subsidiary of the Company
that is a “significant subsidiary” as defined in Rule 1.02(v) of
Regulation S-X under the Securities Act and organized and existing under the
laws of the United States of America and the principal business of which is
carried on within the United States of America, which either (i) owns, or
is a lessee pursuant to a capital lease of, any Principal Property or (ii) is
a Subsidiary in which the investment of the Company and all of its Subsidiaries
exceeds 5% of Consolidated Net Tangible Assets as of the date of determination;
provided, however, that the term “Significant
Subsidiary” shall not include any Subsidiary whose business primarily consists
of finance, banking, credit, leasing, insurance, financial services or other
similar operations, or any combination thereof, or any Subsidiary formed or
acquired after the date hereof for the purpose of developing new assets or
acquiring the business or assets of another Person and which does not acquire
any part of the business or assets of the Company or any Subsidiary described
in clauses (i) or (ii) above.


 


“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 specified Person:


 


7





















 


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


 


(b)           any partnership (i) the sole general partner or the
managing general partner of which is such Person or a subsidiary of such Person
or (ii) the only general partners of which are that Person or one or more
of the other Subsidiaries of that 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 New York Stock Exchange.


 


“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 calculation date from three independent nationally
recognized securities dealers the Company selects; 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 bid for $5,000,000 in principal amount of
Securities from a nationally recognized securities dealer 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 will
be determined in good faith by a member firm of the New York Stock Exchange
selected 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).


 


8





















 


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)

  
	
  Guarantee

  	
   

  	
  12.01

  	
  (a)

  
	
  Legal Holiday

  	
   

  	
  11.08

  	
   

  
	
  Net Share Amount

  	
   

  	
  10.14

  	
  (b)

  
	
  Net Shares

  	
   

  	
  10.14

  	
  (b)

  
	
  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)

  



 


9





















 


	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  Ten Day Average Closing Stock Price

  	
   

  	
  10.14

  	
  (a)

  
	
  Transaction Conversion Period

  	
   

  	
  10.01

  	
  (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.


 


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)           Whenever
in this Indenture it is provided that the Holders of a specified percentage in
aggregate principal amount of the Securities may take action (including the
making


 


10





















 


of any demand or request, the
giving of any direction, notice, consent or waiver or the taking of any other
action) the fact that at the time of taking any such action the Holders of such
specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Holders in
person or by agent or proxy appointed in writing, (b) by the record of the
Holders voting in favor thereof at any meeting of Holders duly called and held
in accordance with procedures approved by the Trustee, (c) by a combination
of such instrument or instruments and any such record of such a meeting of
Holders or (d) in the case of Securities evidenced by a Global Security,
by any electronic transmission or other message, whether or not in written
format, that complies with the Applicable Procedures.  Such evidence (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the “Act” of the relevant Holders.  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.


 


(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, the Company or the
Parent 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,


 


11





















 


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 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.


 


12





















 


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
has authenticated and delivered Securities for original issue in an aggregate
principal amount of $375,000,000. The aggregate principal amount of Securities
outstanding at any time may not exceed the amount set forth in the foregoing sentence,
except as provided in Section 2.07.


 


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
and the Parent, as applicable, 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 or the Parent shall notify the
Trustee, in advance, of the name and address of any such Agent.  If the Company and the Parent fail 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, the Parent or any of the Subsidiaries
or Affiliates of the Parent 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.


 


13





















 


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 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 becoming
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 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 January 15, April 15, July 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 January 15, April 15, July 15 and October 15
shall contain the list of Holders as of the immediately preceding January 1,
April 1, July 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.


 


14





















 


The Company
shall not charge a service charge for any registration of transfer or exchange,
but the Company may require payment of a 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 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, (ii) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
available), (iii) pursuant to an effective registration statement under
the Securities Act or (iv) to the Company or any of its Subsidiaries, 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.


 


Any
certificate evidencing a Security (and all securities issued in exchange
therefore 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


 


15





















 


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 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


 


16





















 


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 Parent or any Affiliate of the Parent 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, the Parent or any other
obligor upon the Securities or any Affiliate of the Parent 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 Parent or an Affiliate of the Parent offers to
purchase or acquires pursuant to an offer, exchange offer, tender offer or
otherwise shall not be deemed to be owned by the Parent or such Affiliate of the
Parent until legal title to such Securities passes to the Parent 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, prior to 11:00 a.m., New
York City Time, 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; 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.


 


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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
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.


 


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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, (2) the Company has provided the Depositary
with written notice that it has decided to discontinue use of the system of
book-entry transfer through the Depositary or any successor Depositary or (3) 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 exchanged pursuant to clause (1) or (2) above shall be so
exchanged in whole and not in part, and any Global Security exchanged pursuant
to clause (3) 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


 


19





















 


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 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 20, 2009, the Company, at its option, may redeem
the Securities in whole at any time or in part from time to time, in any
integral multiple of $1,000, 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.


 


Section 3.04.     Effect of Notice of
Redemption.  Once notice of
redemption is given by the Company, Securities called for redemption become due
and payable on the Redemption Date and at the Redemption Price stated in the
notice of redemption, together


 


22





















 


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.


 


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:


 


23





















 


(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 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. 
The Company shall give written notice of each Repurchase Date to 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


 


24





















 


30 Business Days prior to any
Repurchase Date.  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);


 


(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 or (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.


 


25





















 


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.


 


(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 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 not
more than 30 days 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)


 


26





















 


(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 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.


 


27





















 


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 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)           Prior
to a Change in Control Repurchase Date, the Company shall use its commercially
reasonable efforts to either (i) obtain the consents under all existing
indebtedness required to permit the repurchase of the Securities pursuant to
any Company Change in Control Repurchase Notice or (ii) repay in full all
existing indebtedness and terminate all commitments under all existing
indebtedness, in each case the terms of which would prohibit the repurchase of
the Securities pursuant to any Company Change in Control Repurchase Notice; provided that if no Holders deliver a Change in Control
Repurchase Notice prior to such date or if the Company shall have satisfied its
obligations to repurchase the Securities of all Holders that have submitted a
Change in Control Repurchase Notice, the Company shall be deemed to have
satisfied the requirements of this Section 3.09(d).


 


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


 


28





















 


respect of which a Repurchase
Notice or Change in 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 Business Day immediately following the Repurchase 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


 


29





















 


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 Section 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 Section 3.08 or 3.09 to be exercised in the time and in the manner
specified in Section 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 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 Parent 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


 


30





















 


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, 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 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.


 


(c)           The
Company will notify the Trustee in writing of any such 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.


 


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


 


31





















 


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
quarterly, 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 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 December 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, specifying 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
specifying 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


 


32





















 


Company in respect of the
Securities and this Indenture may be served. 
The Trustee’s office located at U.S. Bank National Association, 100 Wall
Street, Suite 1600, New York, New York 10005, shall initially be such
office or agency where Securities may be surrendered for payment, and the
Corporate Trust Office shall initially be such office or agency for all of the
other 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 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.


 


Section 4.06.     Delivery of Certain
Information.


 


(a)           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, 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 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.


 


(b)           At any time when the Parent is not
subject to Section 13 or 15(d) of the Exchange Act, upon the request
of a holder or any Beneficial Owner of Common Stock delivered upon conversion
of the Securities, the Parent will promptly furnish or cause to be furnished Rule 144A
Information to such holder or any Beneficial Owner of Common Stock or to a
prospective purchaser of any such Common Stock by any such holder, as the case
may be, to the extent required to permit compliance by such holder with Rule 144A
under the Securities Act in connection with the resale of any such Common
Stock.  Whether a Person is a Beneficial
Owner shall be determined by the Parent to the Parent’s reasonable
satisfaction.


 


Section 4.07.     Liquidated Damages.  If at any time Liquidated Damages become
payable by the Company or the Parent 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 or the Parent has paid


 


33





















 


Liquidated Damages directly to
the Persons entitled to them, the Company or the Parent 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, 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.


 


34





















 


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)           default in the payment of any
interest (including Liquidated Damages, if any) on any Securities when the same
becomes due and payable and the continuation of such default for a period of 30
days;


 


(b)           default in the payment of principal
or premium, if any, on any Securities, when due (including the failure to make
cash payments due upon conversion or make a payment to repurchase Securities
tendered pursuant to a Repurchase Notice or Change in Control Repurchase Notice);


 


(c)           a default in the performance, or
breach, of any covenant or warranty of the Company or the Parent contained in
this Indenture which default continues uncured for a period of 60 days after
written notice to the Company or the Parent by the Trustee or to the Company or
the Parent and the Trustee by the Holders of at least 25% in aggregate
principal amount of the outstanding Securities;


 


(d)           an acceleration of the maturity of
debt of the Company (other than Non-recourse Debt), at any one time, in an
aggregate amount in excess of the greater of $25.0 million and 5% of
Consolidated Net Tangible Assets, if such acceleration is not annulled within
30 days after written notice to the Company by the Trustee and the Holders of
at least 25% in aggregate principal amount of the outstanding Securities;


 


(e)           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


 


(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


 


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(f)            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 (e) or
(f) 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 (including Liquidated Damages, if any) 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 (e) or (f) of Section 6.01
occurs and is continuing, then all unpaid Obligations 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 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 (c) 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.


 


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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 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 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;


 


37





















 


(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, 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.


 


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;


 


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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


 


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


 


39





















 


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.     Remedies Subject to Applicable Laws
..  All rights, remedies and powers
provided by this Article 6 may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of law, and all the
provisions of this Indenture are intended to be subject to all applicable laws,
including applicable gaming laws, and to be limited to the extent necessary so
that they will not render this Indenture invalid, unenforceable or not entitled
to be recorded, registered or filed under the provisions of any applicable law.


 


ARTICLE 7


 


TRUSTEE


 


Section 7.01.     Duties of Trustee.


 


(a)           If
an Event of Default has occurred and is continuing, and subject to compliance
with applicable gaming laws, 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 man would exercise or use under the circumstances in the
conduct of his 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:


 


40





















 


(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).


 


(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 any gaming authority of any jurisdiction in which
the Company or any of its subsidiaries conducts or proposes to conduct gaming and
shall produce any document or information as any of them may request.


 


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;


 


41





















 


(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 without limiting the generality of the foregoing, the Trustee may
appoint an agent (i) to obtain the quotations referred to in the
definition of “Trading Price of the Securities,” (ii) to determine 3-month
LIBOR and (iii) to report such quotations or determinations to the Company
and the Depositary on behalf of the Trustee; 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;


 


(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 or the Parent mentioned herein shall be
sufficiently evidenced by a Company Order or Parent Order, as applicable, 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


 


42





















 


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 or the Parent 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 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; and anything in
this Indenture to the contrary notwithstanding, to the extent permitted by the
TIA 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 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


 


43





















 


preceding sentence, except in
the case of an Event of Default described in Sections 6.01(a) and (b), the
Trustee may withhold the notice if and so long as a trust committee of 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 May 15 beginning with the May 15 following the date of this
Indenture, the Trustee shall mail to each Holder a brief report dated as of
such July 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 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 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 their part, arising
out of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending themselves 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,


 


44





















 


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(e) or
Section 6.01(f), 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.  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;


 


(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 Board Resolution, a successor
Trustee.


 


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.


 


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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.  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. 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.


 


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. 
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.


 


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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 and the Company deposits
with the Trustee cash or the Parent deposits 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, cease to be of further effect.  The Trustee shall join in the execution of a
document prepared by the Company and the Parent acknowledging satisfaction and
discharge of this Indenture on demand at the cost and expense of the Company and
the Parent 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 money, or
to the Parent upon written request, 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 or the Parent, as applicable, Holders entitled to the money or shares
of Common Stock must look to the Company or the Parent, as applicable, 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.


 


ARTICLE 9


 


AMENDMENTS


 


Section 9.01.     Without Consent of Holders.  The Company, the Parent 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, Section 10.11
or Article 12;


 


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


 


(c)           to make any other change that does
not adversely affect the rights of any Holder in any material respect;


 


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


 


47





















 


(e)           to conform the text of this Indenture
or the Securities to any provision of the Description of the Notes section of
the Offering Memorandum to the extent that such provision in such Description
of the Notes section was intended to be a verbatim recitation of a provision
of this Indenture or the Securities;


 


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


 


(g)           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.


 


Section 9.02.     With Consent of Holders.  The Company, the Parent and the Trustee may
amend or supplement this Indenture or the Securities without notice to any
Holder but with the consent of the Holders of 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 waive compliance
by the Company or the Parent with the 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 consent 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 (including Liquidated Damages, if
any) on, any Security;


 


(b)           reduce the principal amount or
Redemption Price of, or the rate of interest (including Liquidated Damages, if
any) 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 (including Liquidated Damages, if any) 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;


 


48





















 


(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.


 


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 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 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 the Parent, 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)


 


49





















 


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 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 calendar quarter (the “Quarter”)
commencing on or after July 1, 2004, 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 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 a period of five
consecutive Trading Days in which the average 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
held 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”);


 


50





















 


(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 or other assets, evidences
of Parent indebtedness, rights or warrants to purchase or subscribe for Capital
Stock or other securities of the Parent, where the fair market value of such
distribution per share of Common Stock (as determined by the Parent’s 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 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 then applicable Conversion Price without
conversion of such Holder’s Securities; or


 


(v)           if
the Company or the Parent 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”).


 


(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).


 


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(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 Parent’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.


 


(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


 


52





















 


as practicable after the
Conversion Date and in any event within four Business Days thereof, the Company
and the Parent shall deliver to the Holder through the Conversion Agent (1) to
the extent applicable, cash in the amount calculated in accordance with Section 10.14,
(2) 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.


 


(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
Parent 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 Parent 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.  Neither the Company nor the
Parent 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 Parent shall
pay any documentary, stamp or similar issue or transfer tax due on the issue of


 


53





















 


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.   Parent to Provide Stock.  The Parent 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 HARRAH’S ENTERTAINMENT, INC. (THE “COMPANY”) THAT (A) THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(I) 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, (II) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (III) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (IV) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, 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 PURCHASER OF
THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.”


 


54





















 


The Parent
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 Parent
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 and
the Parent as follows:


 


(a)           In case the Parent shall (i) pay
a dividend or other distribution in shares of Common Stock to all holders of
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 Parent 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 (or securities convertible into Common Stock) at a price
per share less than the average Common Stock Price for the 10 Trading Days
immediately preceding the date the distribution of such rights, warrants or
options was first publicly announced by the Parent, 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 issue 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


 


55





















 


(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 of the Securities may participate in
the transaction on a basis and with notice that the Parent’s Board of Directors
determines to be fair and appropriate.


 


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 Parent shall distribute
to all holders of Common Stock any shares of Capital Stock of the Parent (other
than Common Stock) or evidences of its indebtedness, other securities or other
assets, or shall distribute to all holders of Common Stock, 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, distributions, subdivisions and combinations referred to in Section 10.05(a);
and (iii) those dividends and 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,


 


(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 Parent’s
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


 


56





















 


will be made if Holders of the
Securities may participate in the transaction on a basis and with notice that
the Parent’s Board of Directors determines to be fair and appropriate.


 


(d)           In case the Parent or any Subsidiary
of the Parent makes a payment to Holders of Common Stock in respect of a tender
or exchange offer other than an odd-lot offer, for the 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 payable in respect of
any tender or exchange offer by the Parent of any of its Subsidiaries for
shares of the Common Stock consummated within the preceding 12 months not
triggering a Conversion Price adjustment, exceeds an amount equal to 12.5% 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


 


(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 Parent is obligated to purchase shares pursuant to any such
tender or exchange offer, but the Parent 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 Parent 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, and


 


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(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 no
adjustment to the Conversion Price or the ability of a Holder of a Security to
convert will be made if the Parent provides that Holders of Securities will
participate in the cash dividend or cash distribution without conversion; 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 received had such Holder converted its Security immediately prior to
the record date for such cash dividend or cash distribution at the Conversion
Rate and for the Conversion Value in effect at such time.  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
Parent’s Rights Agreement dated as of October 5, 1996 (as amended from
time to time, the “Stockholder Rights Plan”),
have separated from the Common Stock in accordance with the provisions of the
Stockholder 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 Parent may amend the Stockholder 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 such Holder
would have received had such holder converted its Security solely into Common
Stock at the then applicable Conversion Price and the rights had not become
separated from the Common Stock under the Stockholder Rights Plan.  To the extent that the Parent 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 such
Holder would have received had such holder converted its Security 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 Parent 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 cash, shares of
Common Stock and other Capital Stock of the Parent issuable upon such
conversion over and above the cash, shares of Common Stock and other Capital
Stock of the Parent issuable upon such conversion only on the basis of the
Conversion Price prior to adjustment; and, in lieu of the cash and shares the
issuance of which is so deferred, the Parent shall issue or cause its transfer
agents to issue due bills or other appropriate evidence of the right to receive
such shares.


 


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(h)           Before
taking any action which would cause an adjustment decreasing the Conversion
Price so that the shares of Common Stock issuable upon conversion of the
Securities would be issued for less than the par value of such Common Stock,
the Parent will take all corporate action which may be necessary in order that
the Parent may validly and legally issue fully paid and non-assessable shares
of such Common Stock at such adjusted Conversion Price.


 


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 ten thousandth (0.0001) of a share, with
each 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 under any present or future
employee benefits plan or program of the Parent.


 


No adjustment
need be made upon the issuance of Common Stock pursuant to (i) the
exercise of any options, warrants or rights to purchase such Common Stock, (ii) the
exchange of any exchangeable securities for such Common Stock or (iii) the
conversion of any convertible securities into such Common Stock, in each case
so long as such options, warrants, rights to purchase, exchangeable securities
or convertible securities are 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 Parent other than shares of Common Stock, thereafter the
Conversion Price of such other shares so receivable upon conversion of any
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 Parent shall be
entitled to make such reductions in the Conversion Price, in addition to those
required by Section 10.05, as the Parent’s 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 Parent to its holders of Common Stock shall not be
taxable to such holders.


 


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Section 10.09.   Notice of Adjustment.  Whenever the Conversion Price is adjusted, or
Holders become entitled to other securities or due bills, the Company and the
Parent 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, absent manifest error, 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 Parent shall declare a dividend
(or any other distribution) on the Common Stock; or


 


(b)           the Parent 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 Parent (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 Parent 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 Parent; or


 


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


 


the Company
and the Parent 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 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


 


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result of a subdivision or
combination); (ii) any consolidation, combination, merger or share
exchange to which the Company or the Parent is a party other than a merger in
which the Company and/or the Parent 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 or the Parent,
then the Company and the Parent, 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
and 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


 


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Holders of the Securities as
the Parent 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 Parent 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 Parent for purposes of this Section 10.11.


 


In the event
the Company and the Parent shall execute a supplemental indenture pursuant to
this Section 10.11, each of the Company and the Parent shall promptly file
with the Trustee (i) an Opinion of Counsel stating that such supplemental
indenture is authorized or permitted by this Indenture and (ii) 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 or the Parent’s failure to comply with any provisions of this
Article 10.  Each Conversion Agent
(other than the Company, the Parent or an Affiliate of the Company or the
Parent) 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 and the Parent are obligated to file with the Trustee pursuant to Section 10.11.


 


Section 10.13.   Voluntary Reduction.  The Parent from time to time may reduce the
Conversion Price by any amount for any period of time if such period is at least
20 Trading Days or such longer period as may be required by law and if the
reduction is irrevocable during such period; if the Parent’s Board of Directors
determines, in good faith, that such decrease would be in the best interests of
the Parent; 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 Parent’s Board of Directors shall be conclusive.


 


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


 


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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 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”); provided
that if the shares of Common Stock are not listed on The New York Stock
Exchange, then the Ten Day Average Closing Stock Price shall be determined by
the Company by reference to the Common Stock Price as reported by NASDAQ.


 


(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
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.


 


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 and the Parent 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


 


63





















 


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 Parent 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 Parent (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
Parent’s 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.


 


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:


 


64





















 


if to the
Company or the Parent, to:


 


Harrah’s Entertainment, Inc.

Harrah’s Operating Company, Inc.

One Harrah’s Court

Las Vegas, Nevada  89119

Attention: General Counsel

Facsimile No.:  (702) 407-6286


 


if to the
Trustee, to:


 


U.S. Bank National Association

60 Livingston Avenue

St. Paul, MN 55107-2292

Attention:  Corporate Trust
Administration 

Facsimile No.:  (651) 495-8097


 


The Company, the
Parent 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 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
or the Parent 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 Parent, 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 or the Parent to the Trustee to take
or refrain from taking any action under this Indenture, the Company or the
Parent, as applicable, 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


 


65





















 


(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 or the Parent 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 or the Parent stating the information on which 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.


 


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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.


 


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 or the Parent shall not have any liability for any
Obligations of the Company or the Parent, as applicable, 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.   Company Actions or Rights.  Any action or right reserved to or retained
by the Company pursuant to this Indenture and/or the Securities may be taken by
the Parent without the consent of the Trustee or any Holder and the Parent
shall be entitled to execute any and all future documents and/or instruments in
furtherance of any such action or right.


 


Section 11.12.   Successors.  All agreements of the Company and the Parent in
this Indenture and the Securities shall bind its successor.  All agreements of the Trustee in this
Indenture shall bind its successor.


 


Section 11.13.   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 11.14.   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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ARTICLE 12


 


GUARANTEE


 


Section 12.01.   Guarantee.


 


(a)           Subject to Section 12.01(b),
below, the Parent 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 this Indenture and the Securities hereunder, 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, of the Securities, if lawful, and all other
obligations of the Company to the Holders and the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof, 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 shall be obligated to pay the same
immediately. The Parent hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Securities or this Indenture, the absence of any action to enforce the
same, any waiver or consent by any Holder of the Securities with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
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
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 this
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 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 is guaranteed hereby.


 


(b)           It is the intention of the Parent and
the Company that the obligations of the Parent 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 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 was insolvent or
unable to pay its debts as they mature or left with an unreasonably small
capital, then the obligations of the Parent under the Guarantee shall be
reduced by such court if such reduction


 


68





















 


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 shall be subrogated to all
rights of the Holders against the Company in respect of any amounts paid by Parent
pursuant to the provisions of the Guarantee or this Indenture; provided,
however, that the Parent 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 hereunder
shall have been paid in full.


 


Section 12.02.   Execution and Delivery of
Guarantee.  To evidence the Guarantee set
forth in Section 12.01, the Company and the Parent 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 C, and shall be executed on behalf of the Parent
by an Officer thereof.


 


The Parent
hereby agrees that the Guarantee set forth in Section 12.01 shall remain
in full force and effect notwithstanding any failure to endorse on each
Security a notation of the Guarantee.


 


If an officer
whose signature is on this Indenture no longer holds that office at the time
the Trustee authenticates the Security on which the Guarantee is endorsed, the
Guarantee shall be valid nevertheless.


 


The delivery
of any Security by the Trustee, after the authentication thereof hereunder,
shall constitute due delivery of the Guarantee set forth in this Indenture on
behalf of the Parent.


 


Section 12.03.   Release of Parent.  The Parent shall be
released from all of its obligations under the Guarantee and under this Indenture
if:


 


(a)           the Company or the Parent 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
this Indenture and:


 


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


 


69





















 


(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 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 12.03 and that all conditions precedent
herein provided for relating to such transaction have been complied with;


 


(b)           the Parent liquidates (other than
pursuant to any Bankruptcy Law) and complies, if applicable, with the
provisions of this Indenture; provided that if a Person and its Affiliates, if
any, shall acquire all or substantially all of the assets of the Parent upon such
liquidation the Parent 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
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Parent, under the Guarantee and this 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 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 12.03 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 (as such term is defined in Rule 1-02(z)
of the Regulation S-X promulgated by the SEC).


 


Upon any
assumption of the Guarantee by any Person pursuant to this Section 12.03,
such Person may exercise every right and power of the Parent under this
Indenture with the same effect as if such successor corporation had been named
as the Parent herein, and all the obligations of the Parent, hereunder and
under the Guarantee and the Indenture shall terminate.


 


Section 12.04.   When Parent May Merge, Etc.  The Parent 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, whether in a single transaction or a series of related transactions,
unless:


 


70





















 


(a)           either the Parent shall be the
continuing person, or the Person (if other than the Parent) formed by such
consolidation or into or with which the Parent is merged or to which the assets
of the Parent 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 an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Parent under the Guarantee and this 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 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 12.04 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, in accordance with this Section 12.04,
the successor corporation formed by such consolidation or into or with which
the Parent is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Parent under
this Indenture with the same effect as if such successor corporation had been
named as the Parent herein, and all the obligations of the predecessor Parent
hereunder and under the Guarantee and the Indenture shall terminate.


 


71





















 


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.


 


	
   

  	
  HARRAH’S OPERATING COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan S. Halkyard

  
	
   

  	
   

  	
  Name:

  	
  Jonathan S. Halkyard

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice-President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HARRAH’S ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan S. Halkyard

  
	
   

  	
   

  	
  Name:

  	
  Jonathan S. Halkyard

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice-President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard Prokosch

  
	
   

  	
   

  	
  Name:

  	
  Richard
  Prokosch

  
	
   

  	
   

  	
  Title:

  	
  Vice-President

  



 


S-1


















 


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 HARRAH’S OPERATING COMPANY, INC. (THE “COMPANY”)
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) 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, (II) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (III) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (IV) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES,
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 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


 


A-1





















 


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





















 


HARRAH’S
OPERATING COMPANY, INC.


 


Floating
Rate Convertible Senior Note Due 2024


 


	
  No.:

  	
   

  	
  CUSIP:  [127687AA9](a)

  	
   

  
	
   

  	
   

  	
  ISIN:  [US127687AA90]

  	
   

  
	
   

  	
   

  	
   

  
	
  Issue Date:

  	
   

  	
  Principal
  Amount:

  



 


HARRAH’S
OPERATING COMPANY, INC., a Delaware corporation, promises to pay to [Cede &
Co.](b) 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:  January 15, April 15,
July 15 and October 15 commencing July 15, 2004.


 


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


 










(a)           For Rule 144A Global Security only.


 


(b)           Include only on Global Security.


 


A-3





















 


	
   

  	
  HARRAH’S OPERATING COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


A-4





















 


TRUSTEE’S CERTIFICATE OF AUTHENTICATION


 


U.S. 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-5





















 


[FORM OF
REVERSE SIDE OF NOTE]


 


HARRAH’S
OPERATING COMPANY,  INC.


 


Floating
Rate Convertible Senior Note Due 2024


 


(1)                                  Interest.


 


(A)          This Security will bear interest from April 7,
2004 or from the most recent date to which interest has been paid or duly
provided for, quarterly in arrears on January 15, April 15, July 15
and October 15 of each year, subject to Section 11.08 of the
Indenture, commencing July 15, 2004. 
This Security will bear interest from April 7, 2004 to but
excluding July 15, 2004 at a rate of 1.11% per annum.  Thereafter, this Security will bear interest
at a rate per annum equal to 3-month LIBOR, reset quarterly.  The 3-month LIBOR applicable to any quarterly
period beginning on a January 15, April 15, July 15 and October 15
shall be 3-month LIBOR on the second London banking day immediately preceding
such January 15, April 15, July 15 and October 15 (a “LIBOR Determination Date”). 
Regardless of the level of 3-month LIBOR, however, the interest rate on
the Securities will never be less than zero. 
The Company will pay interest on any overdue principal amount at the
interest rate borne by the Securities at the time such interest on the overdue
principal amount accrues, compounded quarterly, and it shall pay interest on
overdue installments of interest and Liquidated Damages, if any (without regard
to any applicable grace period), at the same interest rate, compounded
quarterly.  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.


 


“London banking day” means a day on which commercial banks
are open for business, including dealings in United States dollars, in London,
England.


 


“3-month LIBOR,” as determined by the Trustee, means with
respect to any LIBOR Determination Date:


 


(i)            the
rate for three-month deposits in United States dollars commencing on the second
London banking day succeeding such LIBOR Determination Date, that appears on
the Moneyline Telerate Page 3750 as of 11:00 a.m., London time, on
the LIBOR Determination Date, or


 


(ii)           if
no rate appears on the particular LIBOR Determination Date on the Moneyline
Telerate Page 3750, the rate calculated by the Trustee as the arithmetic
mean of at least two offered quotations obtained by the Trustee after
requesting the principal London offices of each of four major reference banks
in the London interbank market to provide the Trustee with its offered
quotation for deposits in United States dollars for the period of three months,
commencing on the second London banking day succeeding such LIBOR Determination
Date, to prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on that LIBOR Determination Date and in a principal


 


A-6





















 


amount that is representative for a single transaction in United States
dollars in that market at that time, or


 


(iii)          if
fewer than two offered quotations referred to in clause (ii) are provided
as requested, the rate calculated by the Trustee as the arithmetic mean of the
rates quoted at approximately 11:00 a.m., New York time, on the particular
LIBOR Determination Date by three major banks in The City of New York selected
by the Trustee for loans in United States dollars to leading European banks for
a period of three months commencing on second London banking day succeeding
such LIBOR Determination Date, and in a principal amount that is representative
for a single transaction in United States dollars in that market at that time,
or


 


(iv)          if
the banks so selected by the Trustee are not quoting as mentioned in clause
(iii), 3-month LIBOR in effect on the preceding LIBOR Determination Date (or
1.11% per annum in the case of the interest payment date on July 15,
2004).


 


“Moneyline Telerate Page 3750” means the display on
Moneyline Telerate (or any successor service) on such page (or any other page as
may replace such page on such service) or such other service or services
as may be nominated by the British Bankers’ Association as the information
vendor for the purpose of displaying the London interbank rates of major banks
for United States dollars.


 


(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 January 1, April 1, July 1 and 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-7





















 


(3)                                  Paying
Agent, Conversion Agent and Registrar.


 


Initially,
U.S. 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 Securities
were issued under an Indenture dated as of April 7, 2004 between the
Company, as successor to Caesars Entertainment, Inc. (“Caesars”), and the Trustee, as supplemented by the First
Supplemental Indenture, dated as of November 4, 2004, and the Second
Supplemental Indenture, dated as of June 13, 2005, and as amended and
restated by the Amended and Restated Indenture, dated as of July 28, 2005,
among the Company (as successor to Caesars), the Parent and the Trustee (as so
amended and restated, the “Indenture”).  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 Securities
are general unsecured obligations of the Company limited to $375,000,000
aggregate principal amount.  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. 
Beginning on April 20, 2009 and during the periods thereafter to
maturity, the Securities are redeemable as a 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, 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,
interest will be payable to the Holders in whose names the Securities are
registered at the close of business on the relevant interest record date.


 


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


 


A-8





















 


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 Authority


 


(A)          Each Holder, by this Security, will be
deemed to have agreed that if the gaming authority of any jurisdiction in which
the Parent 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, 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 license, qualification or finding of suitability, the Holder or Beneficial
Owner will not have any further right with respect to this Security to:


 


(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 or the
Parent for services rendered or otherwise, except for the redemption of this
Security.


 


(C)           The Company will notify the Trustee
in writing of any such redemption as soon as practicable.  The Company or the Parent 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.


 


A-9





















 


(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 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 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 will be payable to the Holders in
whose names the Securities are registered at the close of business on the
relevant record date).  Holders have the
right to withdraw any Repurchase Notice or Change in Control Repurchase Notice,
as the case may 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


 


A-10





















 


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 $68.65 per share of Common Stock.  The Conversion Rate shall, as of the date of
the Indenture, initially be approximately 14.57. 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 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 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 of
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.


 


A-11





















 


(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.


 


(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 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 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, the Parent 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, (ii) to
comply with ARTICLE 5, Section 10.11 or Article 12 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 or the Holders of not less than 25% in principal amount of Securities
then outstanding may 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


 


A-12





















 


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 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 or the Parent shall
not have any liability for any obligations of the Company or the Parent, as
applicable, 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 unsecured senior 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 LAWS OF
THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS SECURITY.


 


(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


 


A-13





















 


as a convenience to the Holders
of the Securities.  No 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-14





















 


	
  ASSIGNMENT

  	
   

  	
  CONVERSION NOTICE

  
	
   

  	
   

  	
   

  
	
  To assign this Security, fill in the form below

  	
   

  	
   

  	
  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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I or we assign and transfer this Security
  to

  	
   

  	
   

  	
  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

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  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.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Participant in a Recognized Signature

  	
   

  	
   

  	
   

  	
   

  
											



 


A-15





















 


	
  Guarantee Medallion Program

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  	
   

  	
   

  



 


A-16





















 


FORM OF REPURCHASE NOTICE


 


To:          Harrah’s Operating Company, 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 6 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-17





















 


FORM OF OPTION TO ELECT REPURCHASE 

UPON A CHANGE IN CONTROL


 


To:  Harrah’s Operating Company, Inc.


 


The
undersigned registered holder of this Security hereby acknowledges receipt of a
notice from Harrah’s Operating Company, Inc. (the “Company”) as to the
occurrence of a Change in Control with respect to the Company or the Parent 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-18





















 


SCHEDULE I*


 


HARRAH’S OPERATING COMPANY, INC.

Floating Rate Convertible Senior Notes Due 2024


 


No:


 


	
  Date

  	
   

  	
  Principal Amount

  	
   

  	
  Notation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


 










* Include only on Global Security


 


A-19





















 


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            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; or


 


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


 


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(s)e
  Guaranteed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant
  in a Recognized Signature

  Guarantee Medallion Program

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  
					



 


B-1





















 


EXHIBIT C


 


FORM OF NOTATION OF GUARANTEE


 


NOTATION OF GUARANTEE OF HARRAH’S
ENTERTAINMENT, INC.


 


For value
received, the undersigned, Harrah’s Entertainment, Inc. (the “Parent”) (which term includes any
successor person under the Indenture), has unconditionally guaranteed, to the
extent set forth in the Indenture and subject to the provisions in the Indenture,
dated as of April 7, 2004, between Harrah’s Operating Company, Inc.
(the “Company”),
as successor to Caesars Entertainment, Inc. (“Caesars”),
and U.S. Bank National Association, as trustee (the “Trustee”),
as supplemented by the First Supplemental Indenture, dated as of November 4,
2004, and the Second Supplemental Indenture, dated as of June 13, 2005, 
and as further amended and restated by the Amended and Restated Indenture, dated
as of July 28, 2005, among the Company (as successor to Caesars), the
Parent and the Trustee (as so amended and restated, the “Indenture”),
(a) the due and punctual payment of the principal of, premium, if any, and
interest on, the Securities, 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 or the
Trustee all in accordance with the terms of the Indenture and the First
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 to the Holders of Securities and to
the Trustee pursuant to the Guarantee and the Indenture are expressly set forth
in Article 12 of the Indenture, and reference is hereby made to the
Indenture for the precise terms of the Guarantee.


 


Capitalized
terms used but not defined herein have the meanings given to them in the
Indenture.


 


 


	
   

  	
  HARAH’S ENTERTAINMENT, INC.,

  
	
   

  	
  as Parent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


C-1