Exhibit 4.2


 


Execution Copy


 




 





CAESARS ENTERTAINMENT INC.,

as Issuer


 


 


Floating Rate Contingent Convertible Senior Notes Due 2024


 


 










 


INDENTURE


 










 


 


U.S. BANK NATIONAL ASSOCIATION,

as Trustee


 


 


Dated as of April 7, 2004


 




 





 
















 


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.

  
	
  (b)

  	
   

  	
   

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
   

  	
   

  	
  N.A.

  
	
  317(a)(1)

  	
   

  	
  N.A.

  
	
  (a)(2)

  	
   

  	
   

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
   

  	
   

  	
  N.A.

  
	
  318(a)

  	
   

  	
  N.A.

  



 










N.A. means Not Applicable.


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


 
















 


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

  	
   

  
	
  Section 6.09.

  	
  Trustee May File
  Proofs of Claim

  	
   

  



 


ii
















 


	
  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.

  	
  Company To Provide Stock

  	
   

  
	
  Section 10.05.

  	
  Adjustment of Conversion Price

  	
   

  
	
  Section 10.06.

  	
  No Adjustment

  	
   

  
	
  Section 10.07.

  	
  Equivalent Adjustments

  	
   

  
	
  Section 10.08.

  	
  Adjustment for Tax Purposes

  	
   

  
	
  Section 10.09.

  	
  Notice of Adjustment

  	
   

  
	
  Section 10.10.

  	
  Notice of Certain Transactions

  	
   

  
	
  Section 10.11.

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

  	
   

  
	
  Section 10.12.

  	
  Trustee’s Disclaimer

  	
   

  
	
  Section 10.13.

  	
  Voluntary Reduction

  	
   

  
	
  Section 10.14.

  	
  Conversion Value of Securities Tendered

  	
   

  
	
  Section 10.15.

  	
  Simultaneous Adjustments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  11

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Trust Indenture Act Controls

  	
   

  
	
  Section 11.02.

  	
  Notices

  	
   

  
	
  Section 11.03.

  	
  Communication by Holders with Other
  Holders

  	
   

  
	
  Section 11.04.

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
   

  
	
  Section 11.05.

  	
  Statements Required in Certificate or
  Opinion

  	
   

  
	
  Section 11.06.

  	
  Separability Clause

  	
   

  
	
  Section 11.07.

  	
  Rules by Trustee, Paying Agent,
  Conversion Agent and Registrar

  	
   

  
	
  Section 11.08.

  	
  Legal Holidays

  	
   

  
	
  Section 11.09.

  	
  Governing Law

  	
   

  
	
  Section 11.10.

  	
  No Recourse Against Others

  	
   

  
	
  Section 11.11.

  	
  Successors

  	
   

  
	
  Section 11.12.

  	
  Multiple Originals

  	
   

  
	
  Section 11.13.

  	
  Table of Contents and Headings

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  A

  	
  —

  	
  Form
  of Global Security

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  B 

  	
  —

  	
  Transfer
  Certificate

  	
   

  
							



 


iv
















 


INDENTURE dated as of April 7, 2004 among CAESARS
ENTERTAINMENT INC., a Delaware corporation (the “Company”), and U.S. BANK NATIONAL ASSOCIATION, a national banking
association organized under the laws of the United States of America (the “Trustee”).


 


Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders (as defined below)
of the Company’s Floating Rate Contingent Convertible Senior Notes Due 2024
(the “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”
for any corporation means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) stock issued by that corporation, but excluding from all
of the foregoing any debt securities convertible into Capital Stock, whether or
not such debt securities include any right of participation with Capital Stock.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Common Stock Price”
on any date means the closing sale price per share (or if no closing sale price
is reported, the average of the bid and ask prices or, if more than one in either
case, the average of the average bid and the average ask prices) on such date
for the Common Stock as reported in composite transactions on the principal United
States securities exchange on which the Common Stock is traded or, if the
Common Stock is not listed on a United States national or regional securities
exchange, as reported by The NASDAQ System.


 


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


 


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


 


2
















 


“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 date of this Indenture, $22.29 per 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 44.8632 as of the date of this Indenture.


 


“Corporate Trust
Office” means the office of the Trustee at which at any time the trust
created by this Indenture shall be administered, which office at the date
hereof is located at 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.


 


“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
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.


 


3
















 


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


 


“Initial Purchasers”
shall mean Deutsche Bank Securities Inc., 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.


 


“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 by any modifier such as “Executive, “Senior” or the like), the
Chief Financial Officer, the Treasurer, the Controller or the Secretary of such
Person or any other officer designated by the board of directors of such Person
serving in a similar capacity; provided
that the designation of any such Officer of the Company by the Board of
Directors shall be evidenced in a Board Resolution.


 


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


 


4
















 


“Opinion of Counsel”
means a written opinion containing the information specified in Sections 11.04
and11.05, from legal counsel who is acceptable to the Trustee in its reasonable
discretion.  The counsel may be an
employee of, or counsel to, the Company or the Trustee.


 


“Person” 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.


 


“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.


 


5
















 


“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 any corporation of which at least a majority of the outstanding Capital
Stock having by the terms thereof ordinary voting power to elect a majority of
the directors of such corporation is, at the time directly or indirectly, owned
by the Company or by one or more Subsidiaries thereof, or by the Company and
one or more Subsidiaries.


 


“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).


 


6
















 


Section 1.02.                             Other Definitions.


 


	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  Acceleration Notice

  	
   

  	
  6.02(a)

  
	
  Act

  	
   

  	
  1.05(a)

  
	
  Agent Members

  	
   

  	
  2.12(e)

  
	
  Authenticating Agent

  	
   

  	
  2.02

  
	
  Change in Control Repurchase Date

  	
   

  	
  3.09(a)

  
	
  Change in Control Repurchase Notice

  	
   

  	
  3.09(c)

  
	
  Change in Control Repurchase Price

  	
   

  	
  3.09(a)

  
	
  Company Change in Control Repurchase Notice

  	
   

  	
  3.09(b)

  
	
  Company Repurchase Notice

  	
   

  	
  3.08(b)

  
	
  Consolidated Net Tangible Assets

  	
   

  	
  6.01

  
	
  Conversion Agent

  	
   

  	
  2.03

  
	
  Conversion Date

  	
   

  	
  10.02(a)

  
	
  Conversion Value

  	
   

  	
  10.14(a)

  
	
  Depositary

  	
   

  	
  2.01(b)

  
	
  Determination Date

  	
   

  	
  10.14(b)

  
	
  DTC

  	
   

  	
  2.01(b)

  
	
  Event of Default

  	
   

  	
  6.01

  
	
  Ex-Dividend Date

  	
   

  	
  10.01(c)

  
	
  Expiration Time

  	
   

  	
  10.05(d)

  
	
  Global Security

  	
   

  	
  2.01(b)

  
	
  Legal Holiday

  	
   

  	
  11.08

  
	
  Net Share Amount

  	
   

  	
  10.14(b)

  
	
  Net Shares

  	
   

  	
  10.14(b)

  
	
  Non-recourse Debt

  	
   

  	
  6.01

  
	
  Paying Agent

  	
   

  	
  2.03

  
	
  Pre-Dividend Sale Price

  	
   

  	
  10.05(e)

  
	
  Principal Return

  	
   

  	
  10.14(b)

  
	
  Principal Value Conversion

  	
   

  	
  10.01(a)

  
	
  Purchased Shares

  	
   

  	
  10.05(d)

  
	
  QIB

  	
   

  	
  2.06(e)

  
	
  Quarter

  	
   

  	
  10.01(a)

  
	
  Redemption Price

  	
   

  	
  3.01(a)

  
	
  Registrar

  	
   

  	
  2.03

  
	
  Repurchase Date

  	
   

  	
  3.08(a)

  
	
  Repurchase Notice

  	
   

  	
  3.08(a)

  
	
  Repurchase Price

  	
   

  	
  3.08(a)

  
	
  Rule 144A Information

  	
   

  	
  4.06

  
	
  Stockholder Rights Plan

  	
   

  	
  10.05(f)

  
	
  Ten Day Average Closing Stock Price

  	
   

  	
  10.14(a)

  
	
  Transfer Restricted Securities

  	
   

  	
  2.06(e)

  



 


7
















 


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 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


 


8
















 


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 or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.


 


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


 


9
















 


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.


 


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.


 


10
















 


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


 


The Trustee shall authenticate and deliver Securities for
original issue in an aggregate principal amount of up to $375,000,000 (which
shall include the Initial Purchaser’s option to purchase additional Securities
in an aggregate principal amount of up to $75,000,000) upon a Company Order
without any further action by the Company. 
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 shall enter into an appropriate agency
agreement with any Registrar, Paying Agent, Conversion Agent or co-registrar
(if other than the Trustee).  Such
agreement shall implement the provisions of this Indenture that relate to such
Agent.  The Company shall notify the
Trustee, in advance, of the name and address of any such Agent.  If the Company fails to maintain a Registrar,
Paying Agent or Conversion Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07.  The Company or any of its Subsidiaries or an
Affiliate of the Company or any of its Subsidiaries may act as Paying Agent, Registrar,
Conversion Agent or co-registrar.


 


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


 


Section
2.04.                             Paying Agent To Hold Money in Trust.  Except as otherwise provided herein, not
later than 11:00 a.m. (New York City time) on 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


 


11
















 


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.


 


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.


 


12
















 


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 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.


 


13
















 


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 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


 


14
















 


Company,
whether or not the destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.


 


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


 


Section
2.08.                             Outstanding Securities; Determinations of Holders’ Action.  Securities outstanding at any time are all
the Securities authenticated by the Trustee, except for those cancelled by it,
those delivered to it for cancellation pursuant to Section 2.10 and those described
in this Section 2.08 as not outstanding. 
A Security does not cease to be outstanding because the Company or any
Affiliate of the Company holds the Security; provided that in determining whether the Holders of the requisite
principal amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which a Responsible Officer of the Trustee actually
knows to be so owned shall be so disregarded; and provided further that Securities that the Company or an Affiliate
offers to purchase or acquires pursuant to an offer, exchange offer, tender
offer or otherwise shall not be deemed to be owned by the Company or an
Affiliate until legal title to such Notes passes to the Company or such Affiliate,
as the case may be.  Subject to the
foregoing, only Securities outstanding at the time of such determination shall
be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).


 


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


 


If the Paying Agent holds, in accordance with this
Indenture, 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.


 


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.


 


15
















 


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.


 


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


 


16
















 


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
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,


 


17
















 


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.


 


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


 


18
















 


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.


 


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;


 


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(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 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


 


20
















 


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:


 


(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


 


21
















 


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 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;


 


22
















 


(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.


 


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


 


23
















 


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)


 


(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).


 


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


 


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


 


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


 


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


 


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


 


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


 


25
















 


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 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


 


26
















 


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 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


 


27
















 


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
Company or any of its subsidiaries conducts or proposes to conduct gaming
operations requires that a Person who is a Holder or the Beneficial Owner of
Securities (or an affiliate of such Holder or Beneficial Owner) be licensed,
qualified or found suitable under applicable gaming laws, such Holder or the
Beneficial Owner, as the case may be, will apply for a license, qualification
or a finding of suitability within the required time period.  If such Person fails to apply or become
licensed or qualified or is found unsuitable, 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.


 


28
















 


(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 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 the event the Company is at any time no
longer subject to the


 


29
















 


reporting requirements
of Section 13 or 15(d) of the Exchange Act, it shall continue to provide the
Trustee with reports containing substantially the same information as would
have been required to be filed with the SEC had the Company continued to have
been subject to such reporting requirements. 
In such event, such reports shall be provided to the Trustee at the
times the Company would have been required to provide reports had it continued
to have been subject to such reporting requirements.  In addition, the Company shall comply with
the other provisions of TIA Section 314(a).


 


Section 4.03.                             Compliance Certificate; Notice of Default.


 


(a)                                  The Company shall deliver to the Trustee within 120
days after the end of each fiscal year of the Company (beginning with the
fiscal year ending on 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 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


 


30
















 


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


 


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


 


ARTICLE 5


 


SUCCESSOR CORPORATION


 


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


 


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


 


31
















 


and delivered to the Trustee, in form satisfactory to
the Trustee, all of the obligations of the Company under the Securities and
this Indenture; and


 


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


 


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


 


ARTICLE 6


 


DEFAULTS AND REMEDIES


 


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


 


(a)                                  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 contained in this Indenture which default
continues uncured for a period of 60 days after written notice to the Company
by the Trustee or to the Company 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


 


32
















 


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


 


(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


 


33
















 


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.


 


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


 


34
















 


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;


 


(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


 


35
















 


upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether any amounts in respect of the Securities shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of any such amounts) shall be entitled and empowered, by
intervention in such proceeding or otherwise,


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


36
















 


it as Trustee, a court
in its discretion may require the filing by any party litigant (other than the
Trustee) in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys’ fees and expenses, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant.  This Section 6.11 does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07
or a suit by Holders of more than 10% in aggregate principal amount of the
Securities at the time outstanding.  This
Section 6.11 shall be in lieu of Section 315(e) of the TIA and such Section
315(e) is hereby expressly excluded from this Indenture, as permitted by the
TIA.


 


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


 


Section 6.13.                             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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(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.


 


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


 


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


 


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


 


(c)                                  the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees, and 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 mentioned
herein shall be sufficiently evidenced by a Company Order and any resolution of
the Board of Directors shall be sufficiently evidenced by a Board Resolution;


 


(h)                                 the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation


 


39
















 


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


 


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


 


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


 


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


 


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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 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


 


41
















 


(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, 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.


 


42
















 


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


 


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


 


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


 


Section 7.09.                             Successor Trustee by Merger Etc.  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.


 


43
















 


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.


 


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 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 acknowledging satisfaction and discharge of
this Indenture on demand at the cost and expense of the Company and accompanied
by an Officers’ Certificate and Opinion of Counsel.


 


Section 8.02.                             Repayment to the Company.  The Trustee, the Paying Agent and the
Conversion Agent shall return to the Company upon written request any money or
shares of Common Stock held by them for the payment of any amount and any
shares of Common Stock with respect to the Securities that remain unclaimed for
two years, subject to applicable unclaimed property law.  After return to the Company, as applicable,
Holders entitled to the money or shares of Common Stock must look to the
Company for payment as general creditors unless an applicable abandoned
property law designates another person and the Trustee, the Paying Agent and
the Conversion Agent shall have no further liability to the Holders with
respect to such money or shares of Common Stock for that period commencing
after the return thereof.


 


ARTICLE 9


 


AMENDMENTS


 


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


 


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


 


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


 


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


 


44
















 


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


 


(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 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 with restrictive
provisions of this Indenture other than as set forth in this Section 9.02
below, and waive any past Event of Default under this Indenture and its
consequences, except a default in the payment of the principal of, or
Redemption Price, Repurchase Price, Change in Control Repurchase Price of, or
any interest on, any Security, or in respect of a provision which under this
Indenture cannot be modified or amended without the consent of the Holder of
each outstanding Security affected.


 


Subject to Section 9.04, without the 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;


 


45
















 


(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 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


 


46
















 


7.01) shall be fully protected in relying upon, an Officers’ Certificate
and an Opinion of Counsel stating that such amendment is authorized or
permitted by this Indenture.


 


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


 


ARTICLE 10


 


CONVERSION OF THE SECURITIES


 


Section 10.01.                       Conversion Privilege.


 


(a)                                  Subject to the provisions of this Article 10, a
Holder of a Security 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”);


 


47
















 


(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 Company indebtedness, rights or warrants to purchase or subscribe for
Capital Stock or other securities of the Company, where the fair market value
of such distribution per share of Common Stock (as determined by the Board of
Directors, whose determination shall be conclusive evidence of such fair market
value) exceeds 10% of the Common Stock Price on the Trading Day immediately
preceding the date 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 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.


 


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


 


(c)                                  In the case of the foregoing Sections 10.01(a)(iv)(A)
and 10.01(a)(iv)(B), the Company shall cause a notice of such distribution to
be filed with the Trustee and the Conversion


 


48
















 


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


 


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


 


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


 


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


 


Section 10.02.                       Conversion
Procedure.


 


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


 


49
















 


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


 


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


 


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


 


Section 10.03.                       Taxes on Conversion.  If a Holder converts a Security, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on the
issue of shares of Common Stock upon such conversion.  However, the Holder shall pay any tax which is
due because the Holder requests the shares to be issued in a name other than
the Holder’s name.  The Conversion Agent
may refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder’s name until the Conversion Agent
receives a


 


50
















 


sum sufficient to pay any tax which will be due because the shares are to
be issued in a name other than the Holder’s name.  Nothing herein shall preclude any tax
withholding required by law or regulations.


 


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


 


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


 


THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF CAESARS
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.


 


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


 


The Company will endeavor promptly to comply with all
federal and state securities laws regulating the offer and delivery of shares
of Common Stock upon conversion of Securities,


 


51
















 


if any, and will list or cause to
have quoted such shares of Common Stock on each national securities exchange or
in the over-the-counter market or such other market on which the Common Stock
is then listed or quoted.


 


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


 


(a)                                  In
case the Company shall (i) 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 Company shall issue to all holders of Common Stock rights, warrants or
options entitling such holders (for a period commencing no earlier than the
date of distribution and expiring not more than 60 days after the date of
distribution) to subscribe for or purchase shares of Common Stock (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 Company, 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


 


(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 Company’s Board of Directors
determines to be fair and appropriate.


 


52
















 


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


 


(c)                                  In case the Company shall distribute to all holders of
Common Stock any shares of Capital Stock of the Company (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 Board of
Directors, whose determination shall be conclusive evidence of such fair market
value) of the portion of the Capital Stock or evidences of indebtedness,
securities or assets so distributed or of such rights, warrants or options, in
each case applicable to one share of Common Stock, and


 


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


 


such adjustment to become effective immediately after the
record date for such distribution; provided,
that if the numerator of the foregoing fraction is less than $1.00 (including a
negative amount), then in lieu of the foregoing adjustment, adequate provision
shall be made so that each Holder shall have the right to receive upon
conversion, in addition to the cash and Common Stock issuable upon such
conversion, the distribution such Holder would have received had such Holder
converted its Security solely into Common Stock at the then applicable Conversion
Price immediately prior to the record date for such distribution; provided, further,  that no adjustment will be made if
Holders of the Securities may participate in the transaction on a basis and
with notice that the Company’s Board of Directors determines to be fair and appropriate.


 


(d)                                 In case the Company or any Subsidiary of the Company
makes a payment to Holders of Common Stock in respect of a tender or exchange
offer other than an odd-lot offer, for the Company’s 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 Company of any of its Subsidiaries for shares
of the Company’s 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


 


53
















 


Company’s 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 Company is obligated to purchase
shares pursuant to any such tender or exchange offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Price shall again be adjusted
to be the Conversion Price that would then be in effect if such tender or exchange
offer had not been made.


 


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


 


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


 


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


 


such adjustment to become effective immediately after the
record date for such dividend or distribution; provided no adjustment to the Conversion Price or the ability of a
Holder of a Security to convert will be made if the Company 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


 


54
















 


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 Company’s Rights
Agreement dated as of December 29, 1998 (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 Company 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 Company adopts any
future rights plan, upon conversion of the Securities, Holders will receive, in
addition to the cash and Common Stock issuable upon such conversion, the rights
under the future rights plan in respect of the shares of Common Stock 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 Company may elect to defer (but only until
five Business Days following the filing by the Company with the Trustee of the
certificate described in Section 10.09) issuing to the holder of any Security
converted after such record date the cash, shares of Common Stock and other
Capital Stock of the Company issuable upon such conversion over and above the
cash, shares of Common Stock and other Capital Stock of the Company issuable
upon such conversion only on the basis of the Conversion Price prior to
adjustment; and, in lieu of the cash and shares the issuance of which is so
deferred, the Company shall issue or cause its transfer agents to issue due
bills or other appropriate evidence of the right to receive such shares.


 


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


 


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%


 


55
















 


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
Company.


 


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


 


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


 


56
















 


Section 10.10.                       Notice
of Certain Transactions.  In case:


 


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


 


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


 


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


 


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


 


the Company shall cause to be filed with the Trustee and
the Conversion Agent and to be mailed to each Holder of Securities at its
address appearing on the list provided for in Section 2.05, as promptly as
possible but in any event at least ten days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights, warrants or options, or,
if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution or rights are to
be determined, or (y) the date on which such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding-up is expected to become effective or occur, and the date as of
which it is expected that holders of Common Stock of record shall be entitled
to exchange their Common Stock for securities or other property deliverable
upon such reclassification, consolidation, merger, share exchange, sale,
transfer, dissolution, liquidation or winding-up.  Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, share exchange,
transfer, dissolution, liquidation or winding-up.


 


Section 10.11.                       Effect of Reclassification, Consolidation,
Merger, Share Exchange or Sale on Conversion Privilege.  If any of the following shall occur,
namely:  (i) any reclassification or
change of outstanding shares of Common Stock (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination); (ii) any consolidation,
combination, merger or share exchange to which the Company is a party other
than a merger in which the Company is the resulting or surviving corporation
and which does not result in any reclassification of, or change (other than a
change in name, or par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination) in,
outstanding shares of Common Stock; or (iii) any sale or conveyance of all
or substantially all of the properties and assets of the Company, then the
Company, or such successor or purchasing corporation, as the case may be,
shall, as a condition precedent to such reclassification, change,
consolidation, merger, share exchange,


 


57
















 


sale or conveyance, execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall
have the right to convert such Security into the kind and amount of cash,
securities 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.  Such supplemental indenture
shall provide for adjustments of the Conversion Price which shall be as nearly
equivalent as may be practicable to the adjustments of the Conversion Price
provided for in this Article 10. 
If, in the case of any such consolidation, merger, share exchange, sale
or conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of Common Stock includes shares of Capital
Stock or other securities and property of a corporation other than the
successor or purchasing corporation, as the case may be, in such consolidation,
merger, share exchange, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of the Securities
as the Board of Directors shall reasonably consider necessary by reason of the
foregoing.  The provision of this Section
10.11 shall similarly apply to successive consolidations, mergers, share
exchanges, sales or conveyances. 
Notwithstanding the foregoing, a distribution by the Company to all or
substantially all holders of Common Stock for which an adjustment to the
Conversion Price or provision for conversion of the Securities may be made pursuant
to Section 10.05 shall not be deemed to be a sale or conveyance of all or
substantially all of the properties and assets of the Company for purposes of
this Section 10.11.


 


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


 


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


 


The Trustee shall not be under any responsibility to
determine the correctness of any provisions contained in any supplemental
indenture executed pursuant to Section 10.11, but may accept as conclusive
evidence of the correctness thereof, and shall be protected in relying


 


58
















 


upon, the Officers’ Certificate
with respect thereto which the Company is obligated to file with the Trustee
pursuant to Section 10.11.


 


Section 10.13.                       Voluntary Reduction.  The Company 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 Board of Directors
determines, in good faith, that such decrease would be in the best interests of
the Company; provided that in no
event may the Conversion Price be less than the par value of a share of Common
Stock. Any such determination by the Board of Directors shall be conclusive.


 


Section 10.14.                       Conversion
Value of Securities Tendered.


 


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


 


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


 


(ii)                                  the
average of the Common Stock Prices for the ten consecutive Trading Days
(appropriately adjusted to take into account the occurrence during such period
of stock splits 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.


 


59
















 


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


 


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


 


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


 


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


 


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


 


60
















 


ARTICLE 11


 


MISCELLANEOUS


 


Section 11.01.                       Trust Indenture Act Controls.  If any provision of this Indenture limits,
qualifies, or conflicts with another provision which is required to be included
in this Indenture by the TIA, the required provision shall control.


 


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


 


	
   

  	
  if to the
  Company, to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Caesars
  Entertainment Inc.

  
	
   

  	
   

  	
  3930 Howard
  Hughes Parkway

  
	
   

  	
   

  	
  Las Vegas,
  Nevada  89109

  
	
   

  	
   

  	
  Attention:  General Counsel

  
	
   

  	
   

  	
  Facsimile
  No.:  (702) 699-5121

  
	
   

  	
   

  	
   

  
	
   

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


 


Section 11.03.                       Communication by Holders with Other Holders.  Holders may communicate pursuant to TIA
Section 312(b) with other Holders with respect to their rights under this
Indenture or the Securities.  The
Company, the Trustee, the Registrar, the


 


61
















 


Paying Agent, the Conversion Agent and anyone else shall have the
protection of TIA Section 312(c).


 


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


 


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


 


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


 


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


 


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


 


62
















 


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


 


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


 


Section 11.06.                       Separability Clause.  In case any provision in this Indenture or in
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.


 


Section 11.07.                       Rules by Trustee, Paying Agent, Conversion
Agent and Registrar.  The Trustee may
make reasonable rules for action by or a meeting of Holders.  The Registrar, the Conversion Agent and the
Paying Agent may make reasonable rules for their functions.


 


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


 


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


 


Section 11.10.                       No Recourse Against Others.  A director, officer, employee or stockholder,
as such, of the Company shall not have any liability for any Obligations of the
Company under the Securities or for any claim based on, in respect of or by
reason of such Obligations or their creation. 
By accepting a Security, each Holder shall waive and release all such
liability.  The waiver and release shall
be part of the consideration for the issue of the Securities.


 


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


 


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


 


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


 


63
















 


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.


 


	
   

  	
  CAESARS ENTERTAINMENT INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


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 CAESARS
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 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 IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS


 


A-1
















 


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
















 


CAESARS ENTERTAINMENT INC.


 


Floating Rate Convertible Senior Note Due 2024


 


	
  No.:

  	
   

  	
  CUSIP:  [127687AA9](a)

  
	
   

  	
   

  	
  ISIN:  [US127687AA90]

  
	
   

  	
   

  	
   

  
	
  Issue Date:

  	
   

  	
  Principal Amount:

  



 


CAESARS ENTERTAINMENT 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
















 


	
   

  	
  CAESARS ENTERTAINMENT 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]


 


CAESARS ENTERTAINMENT  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 Company issued the Securities under an Indenture dated
as of April 7, 2004 (the “Indenture”),
between the Company and the Trustee.  The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as in
effect from time to time (the “TIA”).  Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of those
terms.


 


The Securities are general unsecured obligations of the
Company limited to up to $375,000,000 aggregate principal amount (which shall
include Deutsche Bank Securities Inc.’s option to purchase up to $75,000,000
aggregate principal amount of additional Securities).  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 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.


 


A-8
















 


(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 Company or any of its Subsidiaries
conducts or proposes to conduct gaming operations requires that a Person who is
a Holder or the Beneficial Owner of this Security (or an affiliate of such
Holder or Beneficial Owner) be licensed, qualified or found suitable under applicable
gaming laws, such Holder or the Beneficial Owner, as the case may be, will
apply for a license, qualification or a finding of suitability within the required
time period.  If such Person fails to
apply or become licensed or qualified or is found unsuitable, 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 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 will not be
responsible for any costs or expenses any such Holder or the Beneficial Owner
may incur in connection with its application for a license, qualification or a
finding of suitability.


 


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


 


Subject to the terms and conditions of the Indenture, the
Company shall become obligated to repurchase, at the option of the Holder, all
or a portion of the Securities tendered pursuant to the Indenture, in any integral
multiple of $1,000, on April 15, 2009, April 15, 2014, and April 15, 2019
(each, a “Repurchase Date”), for
cash at a price per Security equal to 100%


 


A-9
















 


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 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


 


A-10
















 


case of conversion of any Global
Security, to any Applicable Procedures. 
The Conversion Price shall, as of the date of the Indenture, initially
be $22.29 per share of Common Stock.  The
Conversion Rate shall, as of the date of the Indenture, initially be
approximately 44.8632.  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.


 


(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


 


A-11
















 


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 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 or Section 10.11 of the Indenture, (iii) to make provisions
with respect to the conversion right of Holders pursuant to the requirements of
Section 10.01 of the Indenture, (iv) to evidence and provide for the
acceptance of appointment under the Indenture by a successor Trustee, or
(v) to comply with the provisions of the TIA or any requirement of the SEC
in connection with the qualification of the Indenture under the TIA.


 


(12)                            Defaults
and Remedies.


 


Except as set forth in the Indenture, if an Event of
Default occurs and is continuing, the Trustee 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 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.


 


A-12
















 


(14)                            No
Recourse Against Others.


 


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


 


(15)                            Ranking.


 


The Securities shall be 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 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-13
















 


	
  ASSIGNMENT

  	
   

  	
  CONVERSION NOTICE

  
	
   

  	
   

  	
   

  
	
  To assign this Security, fill in the form below

  	
   

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

  
	
   

  	
   

  	
   

  
	
  I or we assign and transfer this Security to

  	
   

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

  
	
   

  	
   

  	
   

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

  	
   

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

  
	
   

  	
   

  	
   

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

  	
   

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

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  



 


	
  Date:

  	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant in a Recognized Signature

  Guarantee Medallion Program

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  
							



 


A-14
















 


FORM OF REPURCHASE
NOTICE


 


To:                              Caesars
Entertainment 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-15
















 


FORM OF OPTION TO
ELECT REPURCHASE 

UPON A CHANGE IN CONTROL


 


To:  Caesars
Entertainment Inc.


 


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


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Signature(s)

  



 


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


 


	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Street Address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (City, state and zip code)

  	
   

  



 


Please print name and address


 


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


 


A-16
















 


SCHEDULE I*


 


CAESARS
ENTERTAINMENT INC.

Floating Rate Convertible Senior Notes Due 2024


 


No:


 


 


	
  Date

  	
   

  	
  Principal Amount

  	
   

  	
  Notation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


 










* Include only on Global Security


 


A-17
















 


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