Document:

Exhibit
4.1

 

Published CUSIP Number:
                         

 

 

CREDIT AGREEMENT

 

 

dated as of

 

April 20, 2004

 

among

 

CAESARS ENTERTAINMENT, INC.

 

The Lenders, Co-Documentation Agents, Co-Syndication
Agents and Senior Managing Agents

Referred to Herein

 

and

 

BANK OF AMERICA, N.A.

 

as Administrative Agent

 

 

BANC OF AMERICA SECURITIES LLC

 

and

 

DEUTSCHE BANK SECURITIES, INC.

 

Joint Lead Arrangers and Joint Book Managers

 

 

 

	
  ARTICLE I

  	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.01

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.02

  	
  Accounting Terms
  and Determinations

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.03

  	
  Types of
  Borrowings

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
  THE CREDITS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.01

  	
  Commitments
  to Lend

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.02

  	
  Notice
  of Borrowings

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.03

  	
  Swing Line
  Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.04

  	
  Conversion
  and Continuation of Committed Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.05

  	
  Notice to Lenders;
  Funding of Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.06

  	
  Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.07

  	
  Interest Rates

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.08

  	
  Upfront Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.09

  	
  Unused Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.10

  	
  Letter
  of Credit Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.11

  	
  Optional
  Termination or Reduction of Commitments by the Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.12

  	
  Optional
  Termination of Commitments by the Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.13

  	
  Scheduled
  Termination of Commitments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.14

  	
  Optional
  Prepayments and Mandatory Term Loan Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.15

  	
  General Provisions
  as to Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.16

  	
  Funding Losses

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.17

  	
  Computation of
  Interest and Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.18

  	
  Withholding Tax Exemption

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.19

  	
  Letters of
  Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.20

  	
  Regulation D Compensation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.21

  	
  Increased
  Commitments; Additional Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  CONDITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.01

  	
  Borrowings
  and Issuances of Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.02

  	
  Effectiveness

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.01

  	
  Corporate Existence and
  Power

  	
   

  

 

i

 

	
   

  	
  4.02

  	
  Corporate and Governmental
  Authorization; Contravention

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.03

  	
  Binding Effect

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.04

  	
  Financial
  Information

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.05

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.06

  	
  Compliance
  with ERISA

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.07

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.08

  	
  Significant
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.09

  	
  Not
  an Investment Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.10

  	
  Environmental
  Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.11

  	
  Full Disclosure

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.12

  	
  Solvency

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.13

  	
  Gaming Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.01

  	
  Information

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.02

  	
  Maintenance
  of Property; Insurance

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.03

  	
  Conduct
  of Business and Maintenance of Existence

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.04

  	
  Compliance
  with Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.05

  	
  Inspection
  of Property, Books and Records

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.06

  	
  Negative Pledge

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.07

  	
  Consolidations,
  Mergers and Sales of Assets

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.08

  	
  Hostile
  Tender Offers

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.09

  	
  Use of Proceeds

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.10

  	
  Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.11

  	
  Interest
  Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.12

  	
  Limitations
  on Unrestricted Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
  DEFAULTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.01

  	
  Events of
  Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.02

  	
  Notice of
  Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.03

  	
  Cash Cover

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
  THE
  ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.01

  	
  Appointment and
  Authorization of Administrative Agent

  	
   

  

 

ii

 

	
   

  	
  7.02

  	
  Delegation
  of Duties

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.03

  	
  Liability of
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.04

  	
  Reliance by
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.05

  	
  Notice of
  Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.06

  	
  Credit Decision;
  Disclosure of Information by Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.07

  	
  Indemnification
  of Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.08

  	
  Administrative
  Agent in its Individual Capacity

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.09

  	
  Successor Administrative
  Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.10

  	
  Administrative Agent May
  File Proofs of Claim

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.11

  	
  Other Agents;
  Arrangers and Managers

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
  CHANGE IN
  CIRCUMSTANCES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.01

  	
  Basis
  for Determining Interest Rate Inadequate or Unfair

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.02

  	
  Illegality

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.03

  	
  Increased Cost
  and Reduced Return

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.04

  	
  Base Rate Loans
  Substituted for Affected Euro-Dollar Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.01

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.02

  	
  No Waivers

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.03

  	
  Expenses; Documentary Taxes;
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.04

  	
  Amendments
  and Waivers

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.05

  	
  Successors
  and Assigns

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.06

  	
  Collateral

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.07

  	
  California Law;
  Submission to Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.08

  	
  Counterparts;
  Integration

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.09

  	
  Several
  Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.10

  	
  Sharing of
  Set-Offs

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.11

  	
  WAIVER
  OF JURY TRIAL

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.12

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.13

  	
  USA
  PATRIOT Act Notice

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.14

  	
  Removal of
  a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.15

  	
  Gaming Boards

  	
   

  

 

iii

 

	
   

  	
  9.16

  	
  Gaming
  Regulations

  	
   

  

 

	
  Schedule:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1

  	
  -

  	
  Pricing
  Schedule

  
	
   

  	
   

  	
   

  
	
  List of Exhibits:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of Compliance Certificate

  
	
  Exhibit B-1

  	
  -

  	
  Form of Term Note

  
	
  Exhibit B-2

  	
  -

  	
  Form of Revolving Note

  
	
  Exhibit C

  	
  -

  	
  Form of Pricing Certificate

  
	
  Exhibit D

  	
  -

  	
  Form of Notice of Borrowings

  
	
  Exhibit E-1

  	
  -

  	
  Form of Opinion of Sills Cummis Epstein & Gross,
  P.C.

  
	
   

  	
   

  	
   

  
	
  Exhibit E-2

  	
  -

  	
  Form of Opinion of Latham & Watkins LLP

  
	
   

  	
   

  	
   

  
	
  Exhibit F

  	
  -

  	
  Form of Assignment and Assumption Agreement

  

 

iv

 

 

CREDIT AGREEMENT

 

CREDIT AGREEMENT dated as
of April 20, 2004, among CAESARS ENTERTAINMENT, INC., the Lenders listed
on the signature pages hereto, Citicorp USA, Inc., Deutsche Bank Trust Company
Americas, JPMorgan Chase Bank and Societe Generale, as Co-Syndication Agents,
The Bank of Nova Scotia, Wachovia Bank, National Association and Wells Fargo
Bank, N.A., as Co-Documentation Agents, Commerzbank AG, New York and Grand
Cayman Branches and The Royal Bank of Scotland PLC, as Senior Managing Agents
and Bank of America, N.A., as Administrative Agent.  Banc of America Securities LLC and Deutsche Bank Securities, Inc.
are the Joint Lead Arrangers and Joint Book Managers for the Credit Agreement.

 

The Borrower has
requested that the Lenders provide a revolving credit and a term loan facility,
and the Lenders are willing to do so on the terms and conditions set forth
herein.

 

In consideration of the
mutual covenants and agreements herein contained, the parties hereto covenant
and agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.01                           Definitions. 
The following terms, as used herein, have the following meanings:

 

“Additional Lender” has
the meaning set forth in Section 2.21.

 

“Administrative Agent”
means Bank of America, N.A. in its capacity as administrative agent for the
Lenders hereunder, and its successors in such capacity.

 

“Administrative
Questionnaire” means, with respect to each Lender, an administrative
questionnaire in the form prepared by the Administrative Agent and submitted to
the Administrative Agent (with a copy to the Borrower) duly completed by such
Lender.

 

“Affiliate” means, as to
any Person, any other Person which directly or indirectly controls, or is under
common control with, or is controlled by, such Person.  As used in this definition, “control” (and
the correlative terms, “controlled by” and “under common control with”) shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise); provided
that, in any event, any Person that owns, directly or indirectly, 5% or more of
the securities having ordinary voting power for the election of directors or
other governing body of a corporation that has more than 100 record holders of
such securities, or 5% or more of the partnership or other ownership interests
of any other Person that has more than 100 record holders of such interests,
will be deemed to control such corporation or other Person.

 

“Agent-Related Persons”
means the Administrative Agent, together with its Affiliates (including, in the
case of Bank of America in its capacity as the Administrative Agent, Banc of

 

 

America Securities
LLC), and the officers, directors, employees, agents and attorneys-in-fact of
such Persons and Affiliates.

 

“Agents” mean,
collectively, the Administrative Agent, the Co-Syndication Agents, and the
Co-Documentation Agents, and “Agent” means any of them.

 

“Applicable Lending
Office” means, with respect to any Lender, (i) in the case of its Base
Rate Loans, its Domestic Lending Office and (ii) in the case of its
Euro-Dollar Loans, its Euro-Dollar Lending Office.

 

“Approved Fund” has the
meaning set forth in Section 9.05(g).

 

“Assignment Agreement”
means an Assignment and Assumption substantially in the form of Exhibit F.

 

“Attorney Costs” means
and includes all reasonable fees, expenses and disbursements of any law firm
engaged to represent, or other external counsel to, the Administrative Agent
(or, if the context clearly so requires, any Lender or any Indemnitee) in
connection herewith or the transactions contemplated hereby.

 

“Authorized Officer”
means any of the controller, the treasurer or the chief financial officer of
the Borrower.

 

“Bank of America” means
Bank of America, N.A., its successors and assigns.

 

“Base Rate” means, as of
any date of determination, the rate per annum (rounded upwards, if necessary,
to the next 1/100 of 1%) equal to the higher of (a) the Reference
Rate in effect on such date (calculated on the basis of a year of 365 or
366 days and the actual number of days elapsed) and (b) the Federal
Funds Rate in effect on such date (calculated on the basis of a year of
360 days and the actual number of days elapsed) plus 1⁄2 of 1%
(50 basis points).

 

“Base Rate Loan” means a
Loan that bears interest based on the Base Rate.

 

“Base Rate Margin” has
the meaning set forth on Schedule 1.

 

“Benefit Arrangement”
means at any time an employee benefit plan within the meaning of
Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.

 

“Borrower” means Caesars
Entertainment, Inc., a Delaware corporation formerly known as Park Place
Entertainment Corporation, and its successors.

 

“Borrowing” means the
aggregation of Loans of one or more Lenders to be made to the Borrower pursuant
to Article II on a single date and, in the case of Borrowings consisting
of Euro-Dollar Loans, for a single Interest Period.

 

“Change of Control” means
the occurrence of a Rating Decline in connection with any of the following
events: (i) upon any merger or consolidation of the Borrower with or into
any

 

2

 

person or any
sale, transfer or other conveyance, whether direct or indirect, of all or
substantially all of the assets of the Borrower, on a consolidated basis, in
one transaction or a series of related transactions, if, immediately after
giving effect to such transaction, any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) is or becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of
securities representing a majority of the total voting power of the aggregate
outstanding securities of the transferee or surviving entity normally entitled
to vote in the election of directors, managers, or trustees, as applicable, of
the transferee or surviving entity, (ii) when any person or group of
persons (within the meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) is or becomes the beneficial owner (within the meaning
of Rule 13d-3 promulgated by The Securities and-Exchange Commission under said
Act) of securities representing a majority of total voting power of the
aggregate outstanding securities of the Borrower normally entitled to vote in
the election of directors of the Borrower, (iii) when, during any period
of 12 consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period (together with any new directors whose
election by the board of directors of the Borrower or whose nomination for
election by the stockholders of the Borrower was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
board of directors of the Borrower, or (iv) the sale or disposition,
whether directly or indirectly, by the Borrower of all or substantially all of
its assets.

 

“Co-Documentation Agents”
means The Bank of Nova Scotia, Wachovia Bank, National Association and Wells Fargo
Bank, N.A., each in its capacity as documentation agent for the Lenders
hereunder.  The capacity of the
Co-Documentation Agents is titular in nature, and the Co-Documentation Agents
shall have no obligations or liabilities under the Loan Documents by reason of
acting in such capacity.

 

“Commitment” means for
each Lender, such Lender’s Revolving Commitment and/or Term Loan Commitment.

 

“Commitments” means the
Revolving Commitments and the Term Loan Commitments.

 

“Committed Loan” means a
Loan made or to be made by a Lender pursuant to Section 2.01.

 

“Compliance Certificate”
means a certificate, substantially in the form of Exhibit A,
properly completed and signed by an Authorized Officer.

 

“Consolidated Debt” means
at any date the Debt of the Borrower and its Consolidated Subsidiaries,
determined on a consolidated basis as of such date, provided that
Consolidated Debt shall exclude any Debt of the Borrower or a Subsidiary as to
which cash and cash equivalents sufficient to provide for payment in full of such
Debt at its scheduled maturity or at an earlier date at which it shall have
been or may be called for redemption shall have been irrevocably deposited in
trust for the benefit of the holders of such Debt or a representative of such
holders, which deposit shall have resulted in the legal or in-substance
defeasance thereof.

 

3

 

“Consolidated EBITDA”
means, for any period, Consolidated Net Income for such period before
(i) income taxes, (ii) interest expense, (iii) depreciation and
amortization, (iv) minority interest, (v) extraordinary losses or
gains, (vi) Pre-Opening Expenses, and
(vii) non-cash items, provided that, in calculating “Consolidated
EBITDA”:

 

(a)                                  the
operating results of each New Project which commences operations and records
not less than one full fiscal quarter’s operations during the relevant period
shall be annualized; and

 

(b)                                 Consolidated
EBITDA shall be adjusted, on a pro forma basis, to include the operating
results of each resort or casino property acquired by the Borrower and its
Consolidated Subsidiaries during the relevant period and to exclude the
operating results of each resort or casino property sold or otherwise disposed
of by the Borrower and its Consolidated Subsidiaries, or whose operations are
discontinued during the relevant period.

 

“Consolidated Interest
Expense” means, for any period, net interest expense of the Borrower and its
Consolidated Subsidiaries for such period, determined in accordance with
generally accepted accounting principles, provided that in calculating
“Consolidated Interest Expense” for any period, the interest expenses of the
Borrower and its Consolidated Subsidiaries shall be adjusted for any
acquisition or disposition of any resort or casino property acquired or sold or
otherwise disposed of by the Borrower and its Consolidated Subsidiaries during
the relevant period, on a pro forma basis, utilizing a reasonable methodology
which shall be (i) proposed by the Borrower, (ii) consented to by the Administrative
Agent at the time of such calculation, which consent shall not be unreasonably
withheld, and (iii) not objected to in writing by the Required Lenders within
the ten Domestic Business Days following notice of such methodology.

 

“Consolidated Net Income”
means, for any period, the consolidated net income of the Borrower and its
Consolidated Subsidiaries for such period.

 

“Consolidated Net
Tangible Assets” means the total amount of assets of the Borrower and its
Consolidated Subsidiaries, after deducting therefrom (a) all current
liabilities of the Borrower and its Consolidated Subsidiaries (excluding (i)
the current portion of long term indebtedness, (ii) inter-company
liabilities, and (iii) any liabilities which are by their terms renewable or
extendable at the option of the obligor thereon to a time more than twelve
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 expense and other like intangibles, all as set forth on the latest
consolidated balance sheet of the Borrower prepared in accordance with
generally accepted accounting principles.

 

“Consolidated Subsidiary”
means at any date any Subsidiary or, except as otherwise provided in Section
1.02(b), any other entity the accounts of which would be consolidated with
those of the Borrower in its consolidated financial statements as of such date,
excluding all Unrestricted Subsidiaries.

 

4

 

“Co-Syndication Agents”
means Citicorp USA, Inc., Deutsche Bank Trust Company Americas, JPMorgan Chase
Bank and Societe Generale in their capacity as co-syndication agents for the
Lenders hereunder.  The capacity of the
Co-Syndication Agents is titular in nature, and the Co-Syndication Agents shall
have no obligations or liabilities under the Loan Documents by reason of acting
in such capacity.

 

“Covered Subsidiary”
means at any time any Restricted Subsidiary of the Borrower that has
consolidated assets in an amount greater than $5,000,000.

 

“Debt” of any Person
means at any date, without duplication, (i) all obligations of such Person
for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable arising in the ordinary course of business,
(iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all
indebtedness or other obligations secured by a contractual Lien on any asset of
such Person, whether or not such indebtedness or other obligations are
otherwise an obligation of such Person, and (vi) all Guarantees made by
such Person (including by way of provision of letters of credit or other
contingent obligations) with respect to indebtedness or other obligations of
any other Person which constitute “Debt” of a type or class described in
clauses (i) through (v) of this definition.

 

“Debt Rating” means, as
of any date of determination, the credit rating assigned as of the close of
business on such date to the Borrower’s most senior unsecured public Debt (or
if the Committed Loans should then be rated, the rating assigned to the
Committed Loans) by a nationally recognized credit reporting agency selected by
the Borrower, reasonably approved by the Administrative Agent and not objected
to by the Required Lenders within five Business Days following notice of such
designation.

 

“Default” means any
condition or event which constitutes an Event of Default or which with the
giving of notice or lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Disqualification” means,
with respect to any Lender: (a) the failure of that Person timely to file
pursuant to applicable Gaming Laws (i) any application requested of that Person
by any Gaming Board in connection with any licensing required of that Person as
a lender to the Borrower or (ii) any required application or other papers in
connection with determination of the suitability of that Person as a lender to
the Borrower; (b) the withdrawal by that Person (except where requested or
permitted by the Gaming Board) of any such application or other required
papers; or (c) any final determination by a Gaming Board pursuant to applicable
Gaming Laws (i) that such Person is “unsuitable” as a lender to the Borrower,
(ii) that such Person shall be “disqualified” as a lender to the Borrower or
(iii) denying the issuance to that Person of any license required under
applicable Gaming Laws to be held by all lenders to the Borrower.

 

“Dollars” and the sign
“$” mean lawful money of the United States.

 

5

 

“Domestic Business Day”
means any day except a Saturday, Sunday or other day on which commercial banks
in New York City or Los Angeles are authorized or required by law to
close.

 

“Domestic Lending Office”
means, as to each Lender, its office located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Domestic Lending Office) or such other office as such Lender may
hereafter designate as its Domestic Lending Office by notice to the Borrower
and the Administrative Agent.

 

“Effective Date” means
the date this Agreement becomes effective in accordance with Section 3.02.

 

“Eligible Assignee” means
(a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d)
any other Person (other than a natural person) approved by (i) the
Administrative Agent and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.

 

“Environmental Laws”
means any and all statutes, regulations, permits, licenses or other
governmental restrictions relating to the environment or to releases of
petroleum or petroleum products, chemicals or toxic or hazardous substances or
wastes into the environment.

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, or any successor
statute.

 

“ERISA Group” means the
Borrower, any Subsidiary and all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any Subsidiary, are treated as a single
employer under Section 414 of the Internal Revenue Code.

 

“Euro-Dollar Business
Day” means any Domestic Business Day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London.

 

“Euro-Dollar Lending
office” means, as to each Lender, its office, branch or affiliate located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Euro-Dollar Lending Office) or such other
office, branch or affiliate of such Lender as it may hereafter designate as its
Euro-Dollar Lending Office by notice to the Borrower and the Administrative
Agent.

 

“Euro-Dollar Loan” means
a Loan that bears interest at a rate based on the Euro-Dollar Rate.

 

“Euro-Dollar Margin” has
the meaning set forth on Schedule 1.

 

“Euro-Dollar Rate” means
for any Interest Period with respect to any Euro-Dollar Loan:

 

6

 

(a)                                  the
rate per annum equal to the rate determined by the Administrative Agent to be
the offered rate that appears on the page of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Euro-Dollar
Business Days prior to the first day of such Interest Period, or

 

(b)                                 if
the rate referenced in the preceding clause (a) does not appear on such page or
service or such page or service shall not be available, the rate per annum
equal to the rate determined by the Administrative Agent to be the offered rate
on such other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two Euro-Dollar
Business Days prior to the first day of such Interest Period, or

 

(c)                                  if
the rates referenced in the preceding clauses (a) and (b) are not available,
the rate per annum determined by the Administrative Agent as the rate of
interest at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Euro-Dollar
Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch to major banks in the London interbank eurodollar market at their
request at approximately 4:00 p.m. (London time) two Euro-Dollar Business Days
prior to the first day of such Interest Period.

 

“Euro-Dollar Reserve
Percentage” means for any day that percentage (expressed as a decimal) which is
in effect on such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement for a member bank of the Federal Reserve System with deposits
exceeding five billion Dollars in respect of “eurocurrency liabilities” (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any bank to United States residents).

 

“Event of Default” has
the meaning set forth in Section 6.01.

 

“Existing Credit
Agreements” means that certain First Amended and Restated Multi-Year Credit
Agreement dated as of August 12, 2003 among the Borrower, the lenders referred
to therein and Bank of America, N.A., as administrative agent, and that certain
Short Term Credit Agreement dated as of August 12, 2003 among the Borrower, the
lenders referred to therein and Bank of America, N.A., as administrative agent,
as the same may have been amended prior to the date hereof.

 

“Federal Funds Rate”
means, for any day, the rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal

 

7

 

Reserve Bank of
New York on the Domestic Business Day next succeeding such day; provided
that (a) if such day is not a Domestic Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (b) if no such rate is so published on such next succeeding
Domestic Business Day, the Federal Funds Rate for such day shall be the average
rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged
to Bank of America on such day on such transactions as determined by the
Administrative Agent.

 

“Gaming Board” means,
collectively, (a) the Nevada Gaming Commission, (b) the Nevada State Gaming
Control Board, (c) the New Jersey Casino Control Commission, (d) the
New Jersey Division of Gaming Enforcement, (e) the Mississippi Gaming
Commission, (f) the Indiana Gaming Commission, and (g) any other Governmental
Agency that holds regulatory, licensing or permit authority over gambling,
gaming or casino activities conducted by the Borrower or its Subsidiaries
within its jurisdiction.

 

“Gaming Laws” means all
laws pursuant to which any Gaming Board possesses regulatory, licensing or
permit authority over gambling, gaming or casino activities conducted by the
Borrower or its Subsidiaries within its jurisdiction.

 

“Governmental Agency”
means (a) any international, foreign, federal, state, county or municipal
government, or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau, commission, department,
instrumentality or public body (including any Gaming Board) or (c) any court or
administrative tribunal of competent jurisdiction.

 

“Granting Lender” has the
meaning set forth in Section 9.05(h).

 

“Guarantee” by any Person
means any obligation, contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt (whether arising by virtue of
partnership arrangements, to purchase assets, goods, securities or services, to
take-or-pay or otherwise) or (ii) entered into for the purpose of assuring
in any other manner the holder of such Debt of the payment thereof or to
protect such holder against loss in respect thereof (in whole or in part),
including by way of provision of letters of credit or other contingent
obligations with respect thereto, provided that the term Guarantee shall not
include (x) endorsements for collection or deposit in the ordinary course
of business, (y) performance or completion guarantees or (z) agreements to
keep-well or to maintain financial statement conditions.  The term “Guarantee” used as a verb has a
corresponding meaning.

 

“IBOR Interest Period”
means, with respect to any IBOR Rate Loan, each period commencing on the date
such Swing Line Loan is made or continued or converted from a Base Rate Loan to
an IBOR Rate Loan or the last day of the next preceding IBOR Interest Period
with respect to such IBOR Rate Loan, and ending at least one day but no more
than fifteen (15) days thereafter, as the Borrower may select as provided in
Section 2.03(a).  Notwithstanding the
foregoing: (a) each IBOR Interest Period shall end on a Domestic Business Day;
(b) no IBOR

 

8

 

Interest Period
may extend beyond the scheduled Termination Date; and (c) no more than four
IBOR Interest Periods shall be in effect at the same time.

 

“IBOR Margin” has the
meaning set forth on Schedule 1.

 

“IBOR Rate” means the
interest rate at which Bank of America’s Grand Cayman Banking Center, Grand
Cayman, British West Indies, would offer Dollar deposits for the applicable
IBOR Interest Period to other major banks in the offshore Dollar interbank
market.

 

“IBOR Rate Loan” means a
Swing Line Loan that bears interest at a rate based on the IBOR Rate.

 

“Increased Commitment”
has the meaning set forth in Section 2.21.

 

“Indemnitee” has the
meaning set forth in Section 9.03(b).

 

“Interest Coverage Ratio”
means, as of each date of determination, the ratio of (a) Consolidated EBITDA
for the four fiscal quarters ending on that date, to (b) Consolidated Interest
Expense for the same period.

 

“Interest Period” means,
with respect to each Euro-Dollar Borrowing, the period commencing on the date
of such Borrowing and ending one week or 1, 2, 3 or 6 months thereafter, as the
Borrower may elect in the applicable Notice of Borrowing or Notice of
Conversion/Continuation; provided that:

 

(a)                                  any
Interest Period which would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Euro-Dollar Business
Day;

 

(b)                                 any
Interest Period which begins on the last Euro-Dollar Business Day in a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to clause (c)
below, end on the last Euro-Dollar Business Day in the calendar month which is
the last calendar month which commences in such Interest Period; and

 

(c)                                  any
Interest Period which would otherwise end after the Termination Date shall end
on the Termination Date, or, if such date is not a Euro-Dollar Business Day,
then on the next preceding Euro-Dollar Business Day.

 

“Internal Revenue Code”
means the Internal Revenue Code of 1986, as amended, or any successor statute.

 

“Investment Grade” means
that the Debt Rating assigned is a rating which, as reasonably determined by
the Administrative Agent, would be the lowest rating granted by the relevant
credit rating agency which is generally treated as “investment grade” in the
ratings regime of that credit rating agency.

 

9

 

“Issuing Lender” means
Bank of America, in its capacity as issuer of a Letter of Credit hereunder.

 

“Joint Lead Arrangers and
Joint Book Managers” means Banc of America Securities LLC and Deutsche Bank
Securities, Inc.  Following the date of
this Agreement, the Joint Lead Arrangers and Joint Book Managers shall have no
obligations or liabilities under the Loan Documents.

 

“LC Fee Rate” has the
meaning set forth in Section 2.10.

 

“Lender” means each
lender listed on the signature pages hereof and each Lender which accepts an
assignment pursuant to Section 9.05, and their respective successors and shall
include, as the context may require, the Issuing Lender in its capacity as
Issuing Lender.

 

“Letter of Credit” means
a letter of credit to be issued hereunder by the Issuing Lender in accordance
with Section 2.19.

 

“Letter of Credit
Commitment” means the lesser of (x) $250,000,000 and (y) the
aggregate Commitments.

 

“Letter of Credit
Liabilities” means, for any Lender and at any time, such Lender’s ratable
participation in the sum of (x) the amounts then owing by the Borrower in
respect of amounts drawn under Letters of Credit and (y) the aggregate
amount then available for drawing under all Letters of Credit.

 

“Leverage Ratio” means,
as of any date of determination, the ratio of (a) Consolidated Debt on such
date to (b) Consolidated EBITDA for the period of four consecutive fiscal
quarters ending on such date.  For
purposes of calculating the Leverage Ratio, Guarantees of indebtedness, up to
an aggregate amount of $400,000,000, made by the Borrower shall be excluded
from the calculation of Consolidated Debt, except for Guarantees of
indebtedness that the Borrower is required to reflect as a liability on the
Borrower’s financial statements at the end of each quarter pursuant to
generally accepted accounting principles as in effect from time to time.  Should any amount of any Guarantee of
indebtedness become due and payable, such amount shall be included in the
Consolidated Debt calculation (without duplication of any amount otherwise
included in Consolidated Debt). 
Guarantees of indebtedness in excess of the aggregate $400,000,000 limit
shall be included dollar-for-dollar in the calculation of Consolidated Debt for
purposes of the Leverage Ratio definition.

 

“License Revocation”
means the revocation, failure to renew or suspension of, or the appointment of
a receiver, supervisor or similar official with respect to, any casino,
gambling or gaming license issued by any Gaming Board covering any casino or
gaming facility of Borrower and its Restricted Subsidiaries.

 

“Lien” means, with
respect to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.  For the purposes of this Agreement, the Borrower or any
Subsidiary shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.

 

10

 

“Loan” means a Base Rate
Loan, a Euro-Dollar Loan or an IBOR Rate Loan and “Loans” means Base Rate
Loans, Euro-Dollar Loans or IBOR Rate Loans or any combination of the
foregoing.

 

“Loan Documents” means
this Agreement, the Notes, the Swing Line Note and each other instrument,
document or agreement now or hereafter executed by the parties in furtherance
of this Agreement.

 

“Material Plan” means at
any time a Plan or Plans having aggregate Unfunded Liabilities in excess of
$25,000,000.

 

“Multiemployer Plan”
means at any time an employee pension benefit plan within the meaning of
Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then
making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group during such five year
period.

 

“New Project” means each
new hotel - casino, casino or resort project (as opposed to any project which
consists of an extension or redevelopment of an operating hotel, casino or
resort) having a development and construction budget in excess of $25,000,000
which hereafter receives a certificate of completion or occupancy and all
relevant gaming and other licenses, and in fact commences operations.

 

“Non-Recourse Debt” means
Debt in respect of which the recourse of the holder of such Debt is limited to
the assets securing such Debt and such Debt does not constitute the general
obligation of the Borrower or any Subsidiary.

 

“Notes” means promissory
notes of the Borrower, substantially in the form of Exhibit B hereto,
evidencing the obligation of the Borrower to repay the Loans, and “Note” means
any one of such promissory notes issued hereunder.

 

“Notice of Borrowing”
means a Notice of Borrowing (as defined in Section 2.02).

 

“Notice of
Conversion/Continuation” has the meaning set forth in Section 2.04.

 

“Notice of Issuance” has
the meaning set forth in Section 2.19 (b).

 

“Obligations” means all
present and future obligations of every kind or nature of the Borrower at any
time and from time to time owed to the Administrative Agent, the Issuing
Lender, the Swing Line Lender or the Lenders or any one or more of them, under
any one or more of the Loan Documents, whether due or to become due, matured or
unmatured, liquidated or unliquidated, or contingent or noncontingent, including
obligations of performance as well as obligations of payment, and including
interest that accrues after the commencement of any proceeding of the type
specified in clause (g) or (h) of Section 6.01 by or against the
Borrower, whether or not allowed as a claim in such proceeding.

 

“Parent” means, with
respect to any Lender, any Person controlling such Lender.

 

11

 

“Participant” has the
meaning set forth in Section 9.05(d).

 

“PBGC” means the Pension
Benefit Guaranty Corporation or any entity succeeding to any or all of its
functions under ERISA.

 

“Person” means an
individual, a corporation, a partnership, an association, a trust or any other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.

 

“Plan” means at any time
an employee pension benefit plan (other than a Multiemployer Plan) which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Internal Revenue Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees
of any member of the ERISA Group or (ii) has at any time within the
preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.

 

“Pre-Opening Expenses”
means, with respect to any fiscal period, the amount of expenses (other  than
Consolidated Interest Expense) incurred with respect to capital projects which
are classified as “pre-opening expenses” on the applicable financial statements
of the Borrower and its Consolidated Subsidiaries for such period, prepared in
accordance with generally accepted accounting principles.

 

“Pricing Certificate”
means a Pricing Certificate substantially in the form of Exhibit C
hereto, properly completed and signed by an Authorized Officer of the Borrower.

 

“Pricing Period” means
(a) the period beginning on the Effective Date and ending on the last day of
the next succeeding February, May, August, or November, and (b) each subsequent
period of three months beginning on the first day of each March, June,
September and December and ending on the last day of the succeeding May,
August, November and February.

 

“Pro Rata Share” means,
with respect to any Commitment of a Lender at any time, a fraction (expressed
as a percentage, carried out to the ninth decimal place), the numerator of
which is the amount of the respective Commitment of such Lender at such time
and the denominator of which is the amount of the aggregate amount of such
Commitments at such time.

 

“Public Notice” means,
without limitation, any filing or report made in accordance with the
requirements of the Securities and Exchange Commission (or any successor), any
press release or public announcement made by the Borrower or any written notice
the Borrower gives to the Administrative-Agent or the Lenders.

 

“Rating Decline” means
the occurrence on any date on or within 90 days after the date of the first
Public Notice of (i) the occurrence of an event described in clauses
(i)-(iv) of the definition of “Change of Control” or (ii) the intention by
the Borrower to effect such an event (which 90-day period shall be extended so
long as the Debt Rating is under publicly announced consideration for possible
downgrade by the applicable credit reporting agency) of a decrease in the Debt
Rating to below Investment Grade.

 

12

 

“Reference Rate” means
the rate of interest publicly announced from time to time by Bank of America as
its “prime rate” or the similar prime rate or reference rate announced by any
successor Administrative Agent.  Bank of
America’s prime rate is a rate set by Bank of America based upon various
factors including Bank of America’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate.  Any change in the Reference Rate announced
by Bank of America or any successor Administrative Agent shall take effect at
the opening of business on the day specified in the public announcement of such
change.

 

“Register” has the
meaning set forth in Section 9.05(c).

 

“Regulation U” means
Regulation U of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

 

“Required Lenders” means
at any time Lenders having at least 51% of the aggregate amount of the
Commitments or, if the Commitments shall have been terminated, holding at least
51% of the sum of the aggregate unpaid principal amount of the Loans and the
aggregate amount of Letter of Credit Liabilities.

 

“Restricted Subsidiary”
means (a) each Subsidiary of the Borrower existing as of the Effective Date and
(b) each Subsidiary of the Borrower formed or acquired following the Effective
Date which is not designated by the Borrower as an Unrestricted Subsidiary.

 

“Revolving Commitment”
means, as to each Revolving Lender, the commitment of that Lender to make Loans
and to participate in Letters of Credit and Swing Line Loans, in each case as
such amount may be reduced from time to time pursuant to Section 2.11,
2.12 or 2.13, or increased pursuant to Section 2.21.  As of the Effective Date, the aggregate amount of the Revolving
Commitments under this Agreement is $1,300,000,000 and the respective Pro Rata
Shares of the Revolving Lenders with respect to the Revolving Commitment are
set forth in the records of the Administrative Agent.  As of the Effective Date, each Revolving Lender has made a
Revolving Commitment which is equal to the amount of the Revolving Note issued
to that Lender on the Effective Date.

 

“Revolving Credit Period”
means the period from and including the Effective Date to but not including the
Termination Date.

 

“Revolving Lender” means
each Lender that holds a Revolving Commitment.

 

“Revolving Loan” means
each Loan made by a Revolving Lender under the Revolving Commitment.

 

“Revolving Note” means
the promissory note made by the Borrower to a Revolving Lender evidencing that
Lender’s Pro Rata Share of the Revolving Commitment, substantially in the form
of Exhibit B-2, either as originally executed or as the same may from time
to time be supplemented, modified, amended, renewed, extended or supplanted.

 

“Significant Subsidiary”
means each Restricted Subsidiary of the Borrower at any time having (i) at
least 10% of the total consolidated assets of the Borrower and its Restricted

 

13

 

Subsidiaries
(determined as of the last day of the most recent fiscal quarter of the
Borrower) or (ii) at least 10% of the consolidated revenues of the
Borrower and its Restricted Subsidiaries for the fiscal year of the Borrower then
most recently ended.

 

“Solvent” as to any
Person shall mean that (a) the sum of the assets of such Person, both at a fair
valuation and at present fair saleable value, exceeds its liabilities,
including its probable liability in respect of contingent liabilities, (b) such
Person will have sufficient capital with which to conduct its business as
presently conducted and as proposed to be conducted and (c) such Person has not
incurred debts, and does not intend to incur debts, beyond its ability to pay
such debts as they mature.  For purposes
of this definition, “debt” means any liability on a claim, and “claim” means
(x) a right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, or (y) a right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.  With respect to any such
contingent liabilities, such liabilities shall be computed at the amount which,
in light of all the facts and circumstances existing at the time, represents
the amount which can reasonably be expected to become an actual or matured
liability.

 

“SPC” has the meaning set
forth in Section 9.05(h).

 

“Subsidiary” means any
corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by the Borrower.

 

“Superior Investment
Grade” means that the Debt Rating assigned by the relevant credit rating agency
is a rating which, as reasonably determined by the Administrative Agent, would
be a rating which is higher than the Debt Rating which is the Investment Grade
debt rating in the ratings regime of that credit rating agency.

 

“Swing Line” means the
revolving line of credit established by the Swing Line Lender in favor of
Borrower pursuant to Section 2.03.

 

“Swing Line Documents”
means the Swing Line Note and any other documents executed by Borrower in favor
of the Swing Line Lender in connection with the Swing Line.

 

“Swing Line Lender”
means, when acting in such capacity, Bank of America, its successors and
assigns.

 

“Swing Line Loans” means
Loans made by the Swing Line Lender to Borrower pursuant to Section 2.03.

 

“Swing Line Note” means
the promissory note made by the Borrower to the Swing Line Lender evidencing
the Swing Line Outstandings.

 

“Swing Line Outstandings”
means, as of any date of determination, the aggregate principal indebtedness of
the Borrower on all Swing Line Loans then outstanding.

 

14

 

“Term Loan” has the
meaning set forth in Section 2.01(a).

 

“Term Loan Commitment”
means, as to each Term Loan Lender, the commitment of that Lender to make its
Term Loan, as such amount may be increased pursuant to Section 2.21.  As of the Effective Date, the Term Loan
Commitment is $700,000,000 and the respective Pro Rata Shares of the Lenders
with respect to the Term Loan Commitment are set forth in the records of the
Administrative Agent.

 

“Term Loan Lender” means
each Lender that holds Term Loan and/or a Term Loan Commitment.

 

“Term Note” means the
promissory note made by the Borrower to a Term Loan Lender evidencing that
Lender’s Pro Rata Share of the Term Loan Commitment, substantially in the form
of Exhibit B-1, either as originally executed or as the same may from time
to time be supplemented, modified, amended, renewed, extended or supplanted.

 

“Termination Date” means
April 20, 2009, or if such day is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day.

 

“Unfunded Liabilities”
means, with respect to any Plan at any time, the amount (if any) by which
(i) the value of all benefit liabilities under such Plan, determined on a
plan termination basis using the assumptions prescribed by the PBGC for
purposes of Section 4044 of ERISA, exceeds (ii) the fair market value
of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.

 

“Unrestricted Subsidiary”
means any Subsidiary created after the Effective Date designated by the
Borrower to be an Unrestricted Subsidiary by a then effective written notice to
the Administrative Agent; provided that Borrower may, by written notice
to the Administrative Agent, terminate any such designation if (i) at least one
year has passed since Subsidiary was designated as an Unrestricted Subsidiary
and (ii) no Default or Event of Default then exists or would result therefrom,
whereupon such Unrestricted Subsidiary shall become a Restricted Subsidiary
hereunder.

 

“Unused Fee Rate” means
the percentage per annum set forth in Schedule 1 as the Unused Fee Rate.

 

1.02                           Accounting Terms and Determinations.

 

(a)                                  Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower’s independent public accountants and disclosed in such financial
statements) with the most recent audited consolidated financial statements of
the Borrower and its Consolidated Subsidiaries

 

15

 

delivered to the Lenders; provided that, if the
Borrower notifies the Administrative Agent that the Borrower wishes to amend
any covenant in Article V to eliminate the effect of any change in
generally accepted accounting principles on the operation of such covenant (or
if the Administrative Agent notifies the Borrower that the Required Lenders
wish to amend Article V for such purpose), then the Borrower’s compliance
with such covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders.

 

(b)                                 Notwithstanding
the foregoing, no entity that is consolidated with the Borrower solely as a
result of the application of the Financial Accounting Standard Board’s
Interpretation 46 (Consolidation of Variable Interest Entities), as amended or
revised from time to time (“FIN 46”) and that does not otherwise satisfy the
criteria of the definition of the term “Subsidiary” shall be deemed to be a
Subsidiary of the Borrower for any purpose of this Agreement.  Accordingly, neither the earnings nor the Debt
of any such entity shall be included in the calculation of the financial
covenants hereunder nor shall any such entity be subject to any other
provisions of this Agreement solely as a result of FIN 46.  If, however, the Debt of any such entity is
recourse to the Borrower or any Restricted Subsidiary of the Borrower, such
Debt shall be included in the calculation of the financial covenants
hereunder.  For the avoidance of doubt,
any entity that satisfies the criteria of the definition of the term “Subsidiary”
shall be treated as such for all purposes of this Agreement.

 

1.03                           Types of Borrowings.  Borrowings are classified for purposes of
this Agreement either by reference to the pricing of Loans comprising such
Borrowing (e.g., a “Euro-Dollar Borrowing” is a Borrowing comprised of
Euro-Dollar Loans) or by reference to the provisions of Article II under
which participation therein is determined (i.e., a “Committed Borrowing”
is a Borrowing under Section 2.01 in which all Lenders participate in
proportion to their commitments).

 

ARTICLE II

THE CREDITS

 

2.01                           Commitments to Lend.

 

(a)                                  Subject
to the terms and conditions set forth in this Agreement, each Term Loan Lender
severally agrees to lend to the Borrower its Pro Rata Share of the Term Loan
Commitment (each individually, a “Term Loan” and, collectively, the “Term
Loans”).  Subject to Section 2.21,
the Term Loans shall be made by the Term Loan Lenders on the Effective
Date.  The Term Loans shall be made by
the Term Loan Lenders simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that no Term Loan Lender shall be
responsible for any failure by any other Term Loan Lender to perform its
obligation to make any Term Loan hereunder nor shall the Term Loan Commitment
of any Term Loan Lender be increased or decreased as a result of any such
failure.  Once repaid, Term Loans may
not be reborrowed.

 

16

 

(b)                                 During
the Revolving Credit Period each Revolving Lender severally agrees, on the
terms and conditions set forth in this Agreement, to lend to the Borrower
pursuant to this Section from time to time amounts such that (a) the aggregate
outstanding principal amount of such Lender’s Revolving Loans and such Lender’s
Pro Rata Share of outstanding Swing Line Loans and Letter of Credit Liabilities
at any one time outstanding shall not exceed the amount of such Lender’s
Revolving Commitment, and (b) the aggregate principal outstanding amount of all
Revolving Loans and Swing Line Loans plus the Letter of Credit Liabilities
shall not exceed the aggregate Revolving Commitments.  Each Borrowing under this Section shall be in an aggregate
principal amount of $10,000,000 or any larger multiple of $1,000,000; and each
Borrowing of Revolving Loans shall be made from the several Revolving Lenders
ratably in proportion to their respective Pro Rata Shares of the Revolving
Commitment.  Within the foregoing
limits, the Borrower may borrow under this Section, repay, or to the extent
permitted by Section 2.14, prepay Revolving Loans and reborrow at any time
on or prior to the Termination Date under this Section.  The Revolving Loans shall mature, and the
principal amount thereof shall be due and payable, on the Termination Date.

 

2.02                           Notice of Borrowings.  The Borrower shall give the Administrative
Agent notice (a “Notice of Borrowing”), substantially in the form of Exhibit
D hereto, not later than 9:00 A.M. (California local time) on
(y) the date of each Base Rate Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:

 

(a)                                  the
date of such Borrowing, which shall be a Domestic Business Day in the case of a
Base Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing;

 

(b)                                 the
aggregate amount of such Borrowing;

 

(c)                                  whether
the Loans comprising such Borrowing are to be Base Rate Loans or Euro-Dollar
Loans; and

 

(d)                                 in
the case of a Euro-Dollar Borrowing, the duration of the Interest Period
applicable thereto, subject to the provisions of the definition of Interest
Period.

 

Not more than twelve
Committed Borrowings which are Euro-Dollar Borrowings having different Interest
Periods shall be outstanding at any time.

 

2.03                           Swing Line Loans.

 

(a)                                  The
Swing Line Lender shall from time to time from the Effective Date through
the day prior to the Termination Date make Swing Line Loans in Dollars to
Borrower in such amounts as Borrower may request, provided that
(i) after giving effect to such Swing Line Loan, (A) the aggregate
Swing Line Outstandings shall not exceed $30,000,000 and (B) the aggregate
principal outstanding amount of all Revolving Loans and Swing Line Loans plus
the Letter of Credit Liabilities shall not exceed the aggregate Revolving
Commitments, (ii) without the consent of all of the Revolving Lenders, no
Swing Line Loan may be made during the continuation of any Default or Event of
Default and (iii) the Swing Line Lender has not given at least twenty-four
hours prior

 

17

 

notice to Borrower that availability under the Swing
Line is suspended or terminated. 
Borrower may borrow, repay and reborrow under this Section.  Unless notified to the contrary by the Swing
Line Lender, borrowings under the Swing Line may be made in amounts which are
integral multiples of $500,000 and, in the case of an IBOR Rate Loan, for the
IBOR Interest Period selected by the Borrower, upon telephonic request by the
Borrower made to the Administrative Agent not later than 10:00 A.M.
(California local time) in the case of requests for Swing Line Loans bearing
interest by reference to the IBOR Rate or 1:00 P.M. (California local
time) in the case of requests for Swing Line Loans bearing interest by
reference to the Base Rate, on the Domestic Business Day of the requested Swing
Line Loan (which telephonic request shall be promptly confirmed in writing by
telecopier).  Promptly after receipt of
such a request for a Swing Line Loan, the Administrative Agent shall provide
telephonic verification to the Swing Line Lender that the requested Swing Line
Loan is in conformity with this Section. 
Unless the Swing Line Lender otherwise agrees, each repayment of a Swing
Line Loan shall be in an amount which is an integral multiple of $500,000.  If Borrower instructs the Swing Line Lender
to debit its demand deposit account at the Swing Line Lender in the amount of
any payment with respect to a Swing Line Loan, or the Swing Line Lender
otherwise receives repayment, after 3:00 p.m. (California local time), on
a Domestic Business Day, such payment shall be deemed received on the next
Domestic Business Day.  The Swing Line
Lender shall promptly notify the Administrative Agent of the Swing Line
Outstandings each time there is a change therein.

 

(b)                                 The
Swing Line Lender shall be responsible for submitting invoices to Borrower for
such interest.  The interest payable on
Swing Line Loans shall be solely for the account of the Swing Line Lender
unless and until the Lenders fund their participations therein pursuant to
clause (d) of this Section.

 

(c)                                  All
Swing Line Loans bearing interest by reference to the Base Rate shall be
payable on demand made by the Swing Line Lender and in any event on the
Termination Date, and all IBOR Rate Loans shall be payable on the maturity of
the relevant IBOR Interest Period and in any event on the Termination Date.

 

(d)                                 Upon
the making of a Swing Line Loan, each Revolving Lender shall be deemed to have
purchased from the Swing Line Lender a participation therein in an amount equal
to that Lender’s Pro Rata Share of the Revolving Commitment of such Swing Line
Loan.  Upon demand made by the Swing
Line Lender, each Revolving Lender shall, according to its Pro Rata Share of
the Revolving Commitment, promptly provide to the Swing Line Lender its
purchase price therefor in an amount equal to its participation therein.  The obligation of each Revolving Lender to
so provide its purchase price to the Swing Line Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a Default or Event
of Default.  Each Revolving Lender that
has provided to the Swing Line Lender the purchase price due for its
participation in Swing Line Loans shall thereupon acquire a pro rata
participation, to the extent of such payment, in the claim of the Swing Line
Lender against Borrower for principal and interest and shall share, in
accordance with that pro rata participation, in any principal payment made by
Borrower with respect to such claim and in any interest payment made

 

18

 

by Borrower (but only with respect to periods
subsequent to the date such Lender paid the Swing Line Lender its purchase
price) with respect to such claim.

 

(e)                                  In
the event that the Swing Line Outstandings are in excess of $10,000,000 on three consecutive
Domestic Business Days then, on the next Domestic Business Day (unless Borrower
has made other arrangements acceptable to the Swing Line Lender to reduce the
Swing Line Outstandings below $10,000,000), Borrower shall request a Borrowing
of Revolving Loans in an amount sufficient to reduce the Swing Line
Outstandings below $10,000,000.  In
addition, upon the expiry of any IBOR Interest Period or any demand for payment
of any Swing Line Outstandings by the Swing Line Lender (unless Borrower has
made other arrangements acceptable to the Swing Line Lender to reduce the Swing
Line Outstandings to $0), Borrower shall request a Borrowing of Revolving Loans
in an amount sufficient to repay all Swing Line Outstandings (and, for this
purpose, the limitations as to the minimum amounts of Base Rate Borrowings set
forth in Section 2.01(b) shall not apply).  In each case, the Administrative Agent shall automatically
provide the responsive Loans made by each Revolving Lender to the Swing Line
Lender (which the Swing Line Lender shall then apply to the Swing Line
Outstandings).  In the event that
Borrower fails to request a Borrowing within the time specified by
Section 2.02 on any such date, the Administrative Agent may, but shall not
be required to, without notice to or the consent of Borrower, cause Revolving
Loans to be made by the Revolving Lenders under their Revolving Commitments in
amounts which are sufficient to reduce the Swing Line Outstandings as required
above.  The conditions precedent set
forth in Section 3.01 shall not apply to Revolving Loans to be made by the
Revolving Lenders pursuant to the three preceding sentences.  The proceeds of such Revolving Loans shall
be paid directly to the Swing Line Lender for application to the Swing Line
Outstandings.

 

2.04                           Conversion and Continuation of
Committed Loans.  Subject to the
provisions of this Article II governing the making of Euro-Dollar Loans,
Borrower shall have the option at any time (i) to convert all or any part
of its outstanding Committed Loans equal to $10,000,000 and integral multiples
of $1,000,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Committed Loans bearing interest at a
rate determined by reference to an alternative basis or (ii) upon the
expiration of any Interest Period applicable to a Euro-Dollar Loan, to continue
all or any portion of such Loan equal to $1,000,000 and integral multiples of
$100,000 in excess of that amount as a Euro-Dollar Loan; provided,  however,
that a Euro-Dollar Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.

 

Borrower shall deliver,
to the Administrative Agent, notice of any such conversion or continuation,
substantially in the form of Exhibit D (each a “Notice of
Conversion/Continuation”), no later than 9:00 A.M. (California local time)
at least one Domestic Business Day in advance of the proposed conversion date
(in the case of a conversion to a Base Rate Loan) and at least three Euro-Dollar
Business Days in advance of the proposed conversion/continuation date (in the
case of a conversion to, or a continuation of, a Euro-

 

19

 

Dollar Loan).  A Notice of Conversion/Continuation shall specify
(i) the proposed conversion/continuation date (which shall be a Domestic
Business Day in the case of Base Rate Loans and a Euro-Dollar Business Day, in
the case of conversion to or continuation of Euro-Dollar Loans), (ii) the
amount and type of the Loan to be converted/continued, (iii) the nature of
the proposed conversion/continuation, (iv) in the case of a conversion to,
or a continuation of, a Euro-Dollar Loan, the requested Interest Period, and
(v) in the case of a conversion to, or a continuation of, a Euro-Dollar
Loan, that no Default or Event of Default has occurred and is continuing.  If the Borrower fails to give a timely
Notice of Conversion/Continuation with respect to any Euro-Dollar Loans, then
the applicable Committed Loans shall be converted to Base Rate Loans.  Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Euro-dollar Loans, subject to the
Borrower’s right to thereafter convert such Base Rate Loans to Euro-Dollar
Loans pursuant to this Section 2.04.

 

2.05                           Notice to Lenders; Funding of Loans.

 

(a)                                  Upon
receipt of a Notice of Borrowing, the Administrative Agent shall promptly
notify each Lender of the contents thereof and of such Lender’s share (if any)
of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.

 

(b)                                 Not
later than 11:00 A.M. (California local time) on the date of each
Borrowing, each Lender participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing
in Dollars, in federal or other funds immediately available to the
Administrative Agent at its address referred to in Section 9.01.  Unless the Administrative Agent determines
that any applicable condition specified in Article III has not been
satisfied, the Administrative Agent will make the funds so received from the
Lenders available to the Borrower at the Administrative Agent’s aforesaid
address or place.

 

(c)                                  If
any Lender makes a new Loan hereunder on a day on which the Borrower is to
repay all or any part of an outstanding Loan from such Lender, such Lender
shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by such Lender to the
Administrative Agent as provided in subsection (b), or remitted by the
Borrower to the Administrative Agent as provided in Section 2.15, as the
case may be.

 

(d)                                 Unless
the Administrative Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent
may assume that such Lender has made such share available to the Administrative
Agent on the date of such Borrowing in accordance with subsections (b) and
(c) of this Section 2.05 and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount.  If and to the
extent that such Lender shall not have so made such share available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrower, a rate per

 

20

 

annum equal to the higher of the Federal Funds Rate
and the interest rate applicable thereto pursuant to Section 2.07 and
(ii) in the case of such Lender, the Federal Funds Rate.  If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender’s Loan included in such Borrowing for purposes of this
Agreement.  If the Borrower pays interest
under this subsection (d) at the Federal Funds Rate and the Federal Funds
Rate is higher than the interest rate applicable thereto pursuant to
Section 2.07, the applicable Lender shall pay the Borrower the difference
between such rates.

 

2.06                           Notes.

 

(a)                                  The
Term Loans and the Revolving Loans of each Lender shall each be evidenced by a
single Note, substantially in the form of Exhibits B-1 and B-2 hereto, payable
to the order of such Lender for the account of its Applicable Lending Office in
an amount equal to the aggregate unpaid principal amount of such Lender’s Term
Loan and Revolving Commitment, respectively.

 

(b)                                 Upon
receipt of each Lender’s Notes pursuant to Section 3.02(b), the
Administrative Agent shall forward such Notes to such Lender.  Each Lender shall record the date, amount,
type and maturity of each Loan made by it and the date and amount of each
payment of principal made by the Borrower with respect thereto, and may, if
such Lender so elects in connection with any transfer or enforcement of its
Notes, endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes.  Each
Lender is hereby irrevocably authorized by the Borrower so to endorse its Notes
and to attach to and make a part of its Note a continuation of any such
schedule as and when required.

 

2.07                           Interest Rates.

 

(a)                                  Each
Base Rate Loan shall bear interest on the outstanding principal amount thereof,
for each day from the date such Loan is made until it becomes due, at a rate
per annum equal to the Base Rate for such day plus any applicable Base
Rate Margin.  Such interest shall be
payable on the last Domestic Business Day of each calendar quarter in arrears
and on the Termination Date.  Any
overdue principal of or interest on any Base Rate Loan shall, at the option of
the Required Lenders, bear interest, payable on demand, for each day until paid
at a rate per annum equal to the sum of the Base Rate plus any
applicable Base Rate Margin plus 2% per annum.

 

(b)                                 Each
Euro-Dollar Loan shall bear interest on the outstanding principal amount
thereof, for each day during the Interest Period applicable thereto, at a rate
per annum equal to the sum of (a) the Euro-Dollar Margin for such day plus (b)
the applicable Euro-Dollar Rate for such Interest Period.  Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than three months, at intervals of three months after the first day thereof.

 

21

 

(c)                                  Any
overdue principal of or interest on any Euro-Dollar Loan shall, at the option
of the Required Lenders, bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of the Euro-Dollar Rate otherwise
applicable to such Loan plus 2% plus the Euro-Dollar Margin for
such day (or, if the circumstances described in clause (a) or (b) of
Section 8.01 shall exist, at a rate per annum equal to the sum of 2% plus
the rate applicable to Base Rate Loans for such day).

 

(d)                                 Swing
Line Loans shall bear interest at a fluctuating rate per annum equal to the
Base Rate plus any applicable Base Rate Margin or at the IBOR Rate plus
the IBOR Margin.  Interest on the Swing
Line Loans bearing interest by reference to the Base Rate shall be payable on
such dates, not more frequent than monthly, as may be specified by the Swing
Line Lender and in any event on the Termination Date.  Interest on the IBOR Rate Loans shall be payable on the last day
of the applicable IBOR Interest Period. 
Any overdue principal of or interest on any Swing Line Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of the Base Rate plus any applicable Base Rate Margin plus
2% per annum for such day.

 

(e)                                  The
Administrative Agent shall determine in accordance with the provisions of this
Agreement each interest rate applicable to the Loans hereunder.  The Administrative Agent shall give prompt
notice to the Borrower and the participating Lenders of each rate of interest
so determined, and its determination thereof shall be conclusive in the absence
of manifest error.

 

2.08                           Upfront Fees. 
On the date upon which this Agreement is executed, the Borrower shall
pay to the Administrative Agent for the account of each Lender upfront fees in
the amounts previously agreed to by the Borrower and posted on Intralinks by
the Joint Lead Arrangers and Joint Book Managers.  Such upfront fees are for the Commitments by each Lender under
this Agreement and are fully earned when paid. 
The upfront fees paid to each Lender are solely for its own account and
are nonrefundable.

 

2.09                           Unused Fees. 
The Borrower shall pay to the Administrative Agent for the account of
each Revolving Lender in accordance with its Pro Rata Share, an unused fee at
the Unused Fee Rate times the actual daily amount by which the aggregate
Revolving Commitments exceed the sum of (i) the outstanding principal amount of
Revolving Loans and (ii) the outstanding amount of Letter of Credit
Liabilities.  The unused fee shall
accrue at all times during the Revolving Credit Period, including at any time
during which one or more of the conditions in Section 3.01 is not met, and
shall be due and payable quarterly in arrears on the last Domestic Business Day
of each March, June, September and
December, commencing with the first such date to occur after the Effective
Date, and on the Termination Date.  The
unused fee shall be calculated quarterly in arrears, and if there is any change
in the Unused Fee Rate during any quarter, the actual daily amount shall be
computed and multiplied by the Unused Fee Rate separately for each period
during such quarter that such Unused Fee Rate was in effect.

 

2.10                           Letter of Credit Fees.  The Borrower shall pay to the Administrative
Agent (i) for the account of the Revolving Lenders ratably a Letter of
Credit fee accruing daily on the aggregate amount then available for drawing
under all Letters of Credit at a rate per annum determined in accordance with
Schedule 1 (the “LC Fee Rate”) and (ii) for the account of the

 

22

 

Issuing Lender a
Letter of Credit fronting fee accruing daily on the aggregate amount then
available for drawing under all Letters of Credit issued by the Issuing Lender
at the rate of 0.125% per annum.  Letter
of Credit fees shall be payable quarterly in arrears on the last day of each
March, June, September and December following the Effective Date and upon the
date of termination of the Commitments in their entirety and are
non-refundable.  In addition, the
Borrower shall pay directly to the Issuing Lender for its own account the
customary issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the Issuing Lender relating to letters of
credit as from time to time in effect. 
Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.

 

2.11                           Optional Termination or Reduction of
Commitments by the Borrower.  During
the Revolving Credit Period, the Borrower may, upon at least five Domestic
Business Days’ notice to the Administrative Agent, (i) terminate the
Revolving Commitments at any time, if no Revolving Loans, Swing Line Loans or
Letter of Credit Liabilities are outstanding at such time or (ii) ratably
and permanently reduce from time to time by an aggregate amount of $25,000,000
or any larger amount in multiples of $1,000,000, the aggregate amount of the
Revolving Commitments in excess of the sum of the aggregate outstanding
principal balance of the Revolving Loans, the Swing Line Loans and the
aggregate amount of Letter of Credit Liabilities.

 

2.12                           Optional Termination of Commitments
by the Lenders.  Following the
occurrence of a Change of Control, the Required Lenders may in their sole and
absolute discretion elect, during the sixty day period immediately subsequent
to the later of (a) such occurrence and (b) the earlier
of (i) receipt of the Borrower’s written notice to the Administrative
Agent of such occurrence and (ii) if no such notice has been received by
the Administrative Agent, the date upon which the Administrative Agent and the
Lenders have actual knowledge thereof, to terminate all of the
Commitments.  In any such case the
Commitments shall be terminated effective on the date which is sixty days
subsequent to the date of written notice from the Administrative Agent to the
Borrower thereof, and (i) to the extent that there is then any Debt evidenced
by the Notes or the Swing Line Note, the same shall be immediately due and
payable, and (ii) to the extent that any Letters of Credit are then
outstanding, Borrower shall provide cash collateral for the same.

 

2.13                           Scheduled Termination of Commitments.  The Commitments shall terminate on the
Termination Date and any Committed Loans and Swing Line Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such date.

 

2.14                           Optional Prepayments and Mandatory Term
Loan Payments.

 

(a)                                  Subject
in the case of any Euro-Dollar Borrowing to Section 2.16, the Borrower
may, upon at least one Domestic Business Day’s notice to the Administrative
Agent, prepay any Base Rate Borrowing or upon at least three Euro-Dollar
Business Days’ notice to the Administrative Agent, with respect to any
Euro-Dollar Borrowing, prepay any Euro-Dollar Borrowing, in each case in whole
at any time, or from time to time in part in amounts aggregating $10,000,000 or
any larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment.  Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Lenders included in such
Borrowing.  Prepayments of Term

 

23

 

Loans shall be applied to installments of the Term
Loans in the inverse order of maturity. 
Upon receipt of a notice of prepayment pursuant to this Section, the
Administrative Agent shall promptly notify each applicable Lender of the
contents thereof and of such Lender’s Pro Rata Share (if any) of such
prepayment and such notice shall not thereafter be revocable by the Borrower.

 

(b)                                 The
Borrower shall make repayments of the Term Loans on the last day of each fiscal
quarter of the Borrower set forth below in the amount set forth opposite such
date:

 

	
  Fiscal Quarter Ending

  	
   

  	
  Percentage of Term Loans

  Outstanding on Effective Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2006 through and

  including March 31, 2007

  	
   

  	
  0.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2007 through and

  including March 31, 2008

  	
   

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2008 through and

  including March 31, 2009

  	
   

  	
  3.75

  	
  %

  

 

In the event that
the outstanding principal amount of Term Loans shall be increased pursuant to
Section 2.21, the applicable percentage set forth above will be applied to the
amount of such increase.

 

2.15                           General Provisions as to Payments.

 

(a)                                  The
Borrower shall make each payment of principal of, and interest on, Loans and
Letter of Credit Liabilities and of fees hereunder, in Dollars not later than
11:00 A.M. (California local time) on the date when due, in Federal or other
immediately available funds, to the Administrative Agent at its address
referred to in Section 9.01, without offset or counterclaim. The
Administrative Agent will promptly distribute to each Lender its ratable share
of each such payment received by the Administrative Agent for the account of
the Lenders, in Dollars and in the type of funds received by the Administrative
Agent.  Whenever any payment of
principal of, or interest on, the Base Rate Loans, IBOR Rate Loans or Letter of
Credit Liabilities or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. 
Whenever any payment of principal of, or interest on, the Euro-Dollar
Loans shall be due on a day which is not a Euro-Dollar Business Day, the date
for payment thereof shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case the date for payment thereof shall be the next preceding
Euro-Dollar Business Day.  If the date
for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.

 

24

 

(b)                                 Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders hereunder that the Borrower
will not make such payment in full, the Administrative Agent may assume that
the Borrower has made such payment in full to the Administrative Agent on such
date and the Administrative Agent may, in reliance upon such assumption, cause
to be distributed to each Lender on such due date an amount equal to the amount
then due such Lender.  If and to the
extent that the Borrower shall not have so made such payment, each Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Federal Funds Rate.

 

2.16                           Funding Losses. 
If the Borrower makes any payment of principal with respect to any
Euro-Dollar Loan (pursuant to Article VI or VIII or otherwise) on any day
other than the last day of the Interest Period applicable thereto, or if the
Borrower fails to borrow any Euro-Dollar Loans after notice has been given to
any Lender in accordance with Section 2.05(a), the Borrower shall
reimburse each Lender within 15 days after demand for any resulting loss or
expense incurred by it (or by an existing or prospective participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or failure to borrow, provided
that such Lender shall have delivered to the Borrower a certificate as to the
amount of such loss or expense, which certificate shall be conclusive in the
absence of manifest error.

 

2.17                           Computation of Interest and Fees.  Interest based on the Reference Rate and all
fees hereunder shall be computed on the basis of a year of 365 days (or 366
days in a leap year) and paid for the actual number of days elapsed (including
the first day but excluding the last day). All other interest shall be computed
on the basis of a year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last day).

 

2.18                           Withholding Tax Exemption.  At least five Domestic Business Days prior
to the first date on which interest or fees are payable hereunder for the
account of any Lender, each Lender that is not incorporated under the laws of
the United States of America or a state thereof agrees that it will deliver to
each of the Borrower and the Administrative Agent two duly completed copies of
United States Internal Revenue Service Form W-8 ECI, certifying in either case
that such Lender is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes.

 

Each Lender which so
delivers a Form W-8 ECI further undertakes to deliver to each of the Borrower
and the Administrative Agent two additional copies of such form (or a successor
form) on or before the date that such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Administrative Agent, in
each case certifying that such Lender is entitled to receive payments under
this Agreement and the Notes without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from

 

25

 

duly completing
and delivering any such form with respect to it and such Lender advises the
Borrower and the Administrative Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax.

 

2.19                           Letters of Credit.

 

(a)                                  Subject
to the terms and conditions hereof, the Issuing Lender agrees to issue Letters
of Credit hereunder from time to time before the tenth day before the
Termination Date upon the request of the Borrower; provided that,
immediately after each Letter of Credit is issued, (i) the aggregate
amount of the Letter of Credit Liabilities shall not exceed the Letter of
Credit Commitment and (ii) the aggregate amount of the Letter of Credit
Liabilities plus the aggregate outstanding amount of all Revolving Loans and
Swing Line Loans shall not exceed the aggregate amount of the Revolving
Commitments.  Upon the date of issuance
of a Letter of Credit, the Issuing Lender shall be deemed, without further
action by any party hereto, to have sold to each Revolving Lender, and each Revolving
Lender shall be deemed, without further action by any party hereto, to have
purchased from the Issuing Lender, a participation in such Letter of Credit and
the related Letter of Credit Liabilities in its Pro Rata Share of the Revolving
Commitments.  On the Effective Date,
each letter of credit issued by Bank of America as issuing lender for the
Lenders under the Existing Credit Agreements shall be deemed re-issued as a
Letter of Credit hereunder without further action by the parties, and the
Revolving Lenders hereunder shall thereupon acquire ratable risk participations
therein in accordance with this Section.

 

(b)                                 The
Borrower shall give the Issuing Lender notice at least five days prior to the
requested issuance of a Letter of Credit specifying the date such Letter of
Credit is to be issued, and describing the terms of such Letter of Credit and
the nature of the transactions to be supported thereby (such notice, including
any such notice given in connection with the extension of a Letter of Credit, a
“Notice of Issuance”) and shall concurrently submit to the Issuing Bank a
letter of credit application on the Issuing Bank’s then standard form for the
issuance of letters of credit.  Upon
receipt of a Notice of Issuance, the Issuing Lender shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Revolving Lender of the contents thereof and of the amount of such Revolving
Lender’s participation in such Letter of Credit.  The issuance by the Issuing Lender of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article III,
be subject to the conditions precedent that such Letter of Credit shall be in
such form and contain such terms as shall be satisfactory to the Issuing Lender
and that the Borrower shall have executed and delivered such other instruments
and agreements relating to such Letter of Credit as the Issuing Lender shall
have reasonably requested.  The Borrower
shall also pay to the Issuing Lender for its own account issuance, drawing,
amendment and extension charges in the amounts and at the times as agreed
between the Borrower and the Issuing Lender. 
The extension or renewal of any Letter of Credit shall be deemed to be
an issuance of such Letter of Credit, and if any Letter of Credit contains a
provision pursuant to which it is deemed to be extended unless notice of
termination is given by the Issuing Lender, the Issuing Lender shall timely
give such notice of termination unless it has theretofore timely received a Notice
of Issuance and the other conditions to issuance of a Letter of Credit have
also theretofore

 

26

 

been met with respect to such extension.  No Letter of Credit shall have a term
extending or be so extendible beyond the fifth Domestic Business Day preceding
the Termination Date.

 

(c)                                  Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the Issuing Lender shall notify the Administrative
Agent and the Administrative Agent shall promptly notify the Borrower and each
other Revolving Lender as to the amount to be paid as a result of such demand
or drawing and the payment date.  The
Borrower shall be irrevocably and unconditionally obligated forthwith to
reimburse the Issuing Lender for any amounts paid by the Issuing Lender upon
any drawing under any Letter of Credit, without presentment, demand, protest or
other formalities of any kind.  All such
amounts paid by the Issuing Lender and remaining unpaid by the Borrower shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for such
day.  In addition, each Revolving Lender
will pay to the Administrative Agent, for the account of the Issuing Lender,
immediately upon the Issuing Lender’s demand at any time during the period
commencing after such drawing until reimbursement therefor in full by the
Borrower, an amount equal to such Revolving Lender’s Pro Rata Share of such
drawing together with interest on such amount for each day from the date of the
Issuing Lender’s demand for such payment (or, if such demand is made after 9:00
A.M. (California local time) on such date, from the next succeeding Domestic
Business Day) to the date of payment by such Revolving Lender of such amount at
a rate of interest per annum equal to the Federal Funds Rate.  The Issuing Lender will promptly pay to each
Revolving Lender ratably all amounts received from the Borrower for application
in payment of its reimbursement obligations in respect of any Letter of Credit,
but only to the extent such Revolving Lender has made payment to the Issuing
Lender in respect of such Letter of Credit pursuant hereto.

 

(d)                                 The
obligations of the Borrower and each Revolving Lender under subsection (c)
above shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including without limitation the following
circumstances:

 

(i)                                     any
lack of validity or enforceability of this Agreement or any Letter of Credit or
any document related hereto or thereto;

 

(ii)                                  any
amendment, waiver of or any consent to departure from all or any of the
provisions of this Agreement, any Letter of Credit or any document related
hereto or thereto;

 

(iii)                               the
use which may be made of the Letter of Credit by, or any acts or omission of, a
beneficiary of a Letter of Credit (or any Person for whom the beneficiary may
be acting);

 

(iv)                              the
existence of any claim, set-off, defense or other rights that the Borrower may
have at any time against a beneficiary of a Letter of Credit (or any Person for
whom the beneficiary may be acting), the Revolving Lenders

 

27

 

(including the Issuing Lender) or any other Person,
whether in connection with this Agreement or the Letter of Credit or any
document related hereto or thereto or any unrelated transaction;

 

(v)                                 any
statement or any other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever;

 

(vi)                              payment
under a Letter of Credit to the beneficiary of such Letter of Credit against
presentation to the Issuing Lender of a draft or certificate that does not
comply with the terms of the Letter of Credit; or

 

(vii)                           any
other act or omission to act or delay of any kind by any Revolving Lender
(including the Issuing Lender), the Administrative Agent or any other Person or
any other event or circumstance whatsoever that might, but for the provisions
of this subsection (vii), constitute a legal or equitable discharge of the
Borrower’s or the Lender’s obligations hereunder.

 

(e)                                  The
Borrower hereby indemnifies and holds harmless each Revolving Lender (including
the Issuing Lender) and the Administrative Agent from and against any and all
claims, damages, losses, liabilities, costs or expenses which such Revolving
Lender or the Administrative Agent may incur (including, without limitation,
any claims, damages, losses, liabilities, costs or expenses which the Issuing
Lender may incur by reason of or in connection with the failure of any other
Revolving Lender to fulfill or comply with its obligations to the Issuing
Lender hereunder (but nothing herein contained shall affect any rights the
Borrower may have against such defaulting Revolving Lender)), and none of the
Revolving Lenders (including the Issuing Lender) nor the Administrative Agent
nor any of their officers or directors or employees or agents shall be liable
or responsible, by reason of or in connection with the execution and delivery
or transfer of or payment or failure to pay under any Letter of Credit,
including without limitation any of the circumstances enumerated in
subsection (d) above, as well as (i) any error, omission,
interruption or delay in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, (ii) any error in interpretation of
technical terms, (iii) any loss or delay in the transmission of any
document required in order to make a drawing under a Letter of Credit,
(iv) any consequences arising from causes beyond the control of the
Issuing Lender, including without limitation any government acts, or any other
circumstances whatsoever in making or failing to make payment under such Letter
of Credit; provided that the Borrower shall not be required to indemnify
the Issuing Lender for any claims, damages, losses, liabilities, costs or
expenses, and the Borrower shall have a claim for direct (but not
consequential) damage suffered by it, to the extent found by a court of
competent jurisdiction to have been caused by (x) the willful misconduct
or gross negligence of the Issuing Lender in determining whether a request
presented under any Letter of Credit complied with the terms of such Letter of
Credit or (y) the Issuing Lender’s failure to pay under any Letter of
Credit after the presentation to it of a request strictly complying with the
terms and conditions of the Letter of Credit. 
Nothing in this subsection (e) is intended to limit the
obligations of the Borrower under any other provision of this Agreement.  To the extent the Borrower does

 

28

 

not indemnify the Issuing Lender as required by this
subsection, the Revolving Lenders agree to do so ratably in accordance with
their Revolving Commitments.

 

2.20                           Regulation D Compensation.  Each Lender may require the Borrower to pay,
contemporaneously with each payment of interest on the Euro-Dollar Loans,
additional interest on the related Euro-Dollar Loan of such Lender at a rate
per annum determined by such Lender up to but not exceeding the excess of (i)
(A) the applicable Euro-Dollar Rate divided by (B) one minus the
Euro-Dollar Reserve Percentage over (ii) the applicable Euro-Dollar
Rate.  Any Lender wishing to require
payment of such additional interest (x) shall so notify the Borrower and
the Agent, in which case such additional interest on the Euro-Dollar Loans of
such Lender shall be payable to such Lender at the place indicated in such
notice with respect to each Interest Period commencing at least three
Euro-Dollar Business Days after the giving of such notice and (y) shall
notify the Borrower at least five Euro-Dollar Business Days prior to each date
on which interest is payable on the Euro-Dollar Loans of the amount then due it
under this Section.

 

2.21                           Increased Commitments; Additional
Lenders.

 

(a)                                  At
any time and from time to time, the Borrower may, upon at least 30 days notice
to the Administrative Agent (or such shorter prior notice as the Administrative
Agent may agree to accept), propose to increase the aggregate amount of the
Commitments by an aggregate amount which does not result in the Commitments
being in excess of $2,500,000,000 (the amount of any such increase of the
Commitments being referred to as the “Increased Commitments”).  If the Borrower elects to increase the
Commitments pursuant to this Section 2.21, any such increase shall be
allocated, at the sole discretion of the Borrower, between the aggregate amount
of the Revolving Commitments and aggregate amount of the Term Loans or Term
Loan Commitments.  For the avoidance of
doubt, no Lender shall be obligated to increase its Revolving Commitments or
Term Loan Commitments.

 

(b)                                 The
Borrower may designate any Lender party to this Agreement (with the consent of
such Lender, which may be given or withheld in its sole discretion) or another
Person which qualifies as an Eligible Assignee (which may be, but need not be,
one or more of the existing Lenders), which at the time agrees to (i) in the
case of any such Person that is an existing Lender, increase its Commitments
and (ii) in the case of any other such Person (an “Additional Lender”), become
a party to this Agreement. The sum of the increases in the Commitments of the
existing Lenders pursuant to this subsection (b) plus the Commitments of the
Additional Lenders shall not in the aggregate exceed the unsubscribed amount of
the Increased Commitments.

 

(c)                                  An
increase in the aggregate amount of the Commitments pursuant to this
Section 2.21 shall become effective upon the receipt by the Administrative
Agent of an agreement in form and substance satisfactory to the Administrative
Agent signed by the Borrower, by each Additional Lender and by each other
Lender whose Commitments are to be increased, setting forth the new Commitments
of such Lenders and setting forth the agreement of each Additional Lender to
become a party to this Agreement and to be bound by all the terms and
provisions hereof, together with such new Notes as may be required and evidence
of appropriate corporate authorization on the part of the Borrower

 

29

 

with respect to the Increased Commitments and such
opinions of counsel for the Borrower with respect to the Increased Commitments
as the Administrative Agent may reasonably request.

 

ARTICLE III

CONDITIONS

 

3.01                           Borrowings and Issuances of Letters
of Credit.  The obligation of
any Lender to make a Loan on the occasion of any Borrowing, the obligation of
the Issuing Lender to issue (or renew or extend the term of) any Letter of
Credit and the obligation of the Swing Line Lender to make any Swing Line Loan
are each subject to the satisfaction of the following conditions:

 

(a)                                  receipt
by the Administrative Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, or receipt by the Issuing Lender of a Notice of
Issuance as required by Section 2.19(b), as the case may be;

 

(b)                                 immediately
after any Borrowing of Revolving Loans or Swing Line Loans or issuance of a
Letter of Credit, the sum of the aggregate outstanding principal amount of
Revolving Loans and Swing Line Loans and the aggregate amount of Letter of
Credit Liabilities will not exceed the aggregate amount of the Revolving
Commitments;

 

(c)                                  immediately
before and after any Borrowing or issuance of a Letter of Credit, no Default or
Event of Default shall have occurred and be continuing;

 

(d)                                 the
representations and warranties of the Borrower contained in this Agreement
(except the representations and warranties set forth in Section 4.04 and
Section 4.05, in each case as to any matter which has theretofore been
disclosed in writing by the Borrower to the Lenders) shall be true on and as of
the date of such Borrowing or issuance of such Letter of Credit;

 

(e)                                  in
the case of an issuance of a Letter of Credit, immediately after such issuance
of a Letter of Credit, the aggregate amount of the Letter of Credit Liabilities
shall not exceed the Letter of Credit Commitment; and

 

(f)                                    in
the case of the Borrowing of Term Loans, the principal amount of such Loans
will not exceed the Term Loan Commitment.

 

Each Borrowing and
issuance of a Letter of Credit hereunder shall be deemed to be a representation
and warranty by the Borrower on the date of such Borrowing or issuance as to
the facts specified in clauses (b), (c), (d), (e) and (f) of this Section,
as applicable.

 

3.02                           Effectiveness. 
This agreement shall become effective on the date (the “Effective Date”)
that each of the following conditions shall have been satisfied (or waived in
accordance with Section 9.04):

 

(a)                                  receipt
by the Administrative Agent of counterparts hereof signed by each of the
Borrower, the Administrative Agent and the Required Lenders (or, in the case of

 

30

 

any party as to which an executed counterpart shall
not have been received, receipt by the Administrative Agent in form
satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party);

 

(b)                                 receipt
by the Administrative Agent for the account of each Lender of a duly executed
Note dated on or before the Effective Date complying with the provisions of
Section 2.06 and of the Swing Line Documents;

 

(c)                                  receipt
by the Administrative Agent of an opinion of Sills Cummis Epstein & Gross
P.C., substantially in the form of Exhibit E-1, and an opinion of Latham
& Watkins LLP, substantially in the form of Exhibit E-2;

 

(d)                                 receipt
by the Administrative Agent of all documents it may reasonably request relating
to the existence of the Borrower, the corporate authority for and the validity
of this Agreement and the Notes, and any other matters relevant hereto, all in
form and substance satisfactory to the Administrative Agent; and

 

(e)                                  receipt
by the Administrative Agent of evidence that the commitments under the Existing
Credit Agreements have been or concurrently with the Effective Date are being
terminated.

 

The Administrative Agent
shall promptly notify the Borrower, the Administrative Agent and each Lender of
the effectiveness of this Agreement, and such notice shall be conclusive and
binding on all parties hereto.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents
and warrants that:

 

4.01                           Corporate Existence and Power.  The Borrower (a) is a corporation duly
incorporated, validly existing and in good standing under the laws of Delaware,
(b) has all corporate powers and authority and all material governmental
licenses (including, without limitation, any such license issued by a Gaming
Board), authorizations, consents and approvals required to own its property and
assets and carry on its business as now conducted and (c) is duly qualified as
a foreign corporation and in good standing in each jurisdiction where the
ownership, leasing and operation of its property or the conduct of its business
requires such qualification and the failure to be so qualified would have a
material adverse effect on the Borrower and its Consolidated Subsidiaries.

 

4.02                           Corporate and Governmental
Authorization; Contravention.  The
execution, delivery and performance by the Borrower of this Agreement, the
Notes and the Swing Line Note are within the Borrower’s corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any Governmental Agency (except for any such
actions or filings under applicable law which are not required to be taken or
made prior to the Effective Date, which actions or filings will be sought or
made by the Borrower in due course after the Effective Date) and do not
contravene, or constitute a default

 

31

 

under, any provision
of applicable law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Borrower or result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.

 

4.03                           Binding Effect. 
This Agreement constitutes a valid and binding agreement of the Borrower
and the Notes and the Swing Line Note, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations
of the Borrower, in each case enforceable in accordance with their respective
terms except as enforcement may be limited by (i) bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights generally, (ii) Gaming
Laws or (iii) equitable principles relating to the granting of specific
performance and other equitable remedies as a matter of judicial discretion.

 

4.04                           Financial Information.  Since December 31, 2003, there has been no
material adverse change in the business, financial position, results of
operations or prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.

 

4.05                           Litigation. 
Except as disclosed in the Borrower’s Form 10-K report for the year
ended December 31, 2003, there is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against or affecting,
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Consolidated Subsidiaries or which in any manner draws
into question the validity or enforceability of this Agreement, the Notes or
the Swing Line Note.  Without limiting
the generality of the foregoing, with respect to those litigation matters
described above as reported in the Borrower’s aforementioned form 10-K report,
(a) the disclosure contained therein was accurate as of the date thereof,
and (b) since such date there has been no material adverse development.

 

4.06                           Compliance with ERISA.  Each member of the ERISA Group has fulfilled
its obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Internal
Revenue Code with respect to each Plan. 
No member of the ERISA Group has (i) sought a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code in respect
of any Plan, (ii) failed to make any contribution or payment to any Plan
or Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Internal Revenue Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA.

 

4.07                           Taxes.  The
Borrower and its Significant Subsidiaries have filed all United States Federal
income tax returns and other material tax returns which are required to be
filed by them and have paid or agreed to settlements of all taxes due pursuant
to such returns or pursuant to any assessment received by the Borrower or any
Significant Subsidiary, except for such taxes, if any, as are being contested
in good faith and as to which adequate reserves have been provided.  The

 

32

 

charges, accruals
and reserves on the books of the Borrower and its Significant Subsidiaries in
respect of taxes or other governmental charges are, in the opinion of the
Borrower, adequate.

 

4.08                           Significant Subsidiaries.  Each of the Significant Subsidiaries (a) is
duly formed, validly existing and in good standing under the laws of its
jurisdiction of formation, (b) has all corporate or other powers and authority
and all material governmental licenses (including, without limitation, any such
license issued by a Gaming Board), authorizations, consents and approvals
required to own its property and assets and carry on its business as now
conducted and (c) is duly qualified and in good standing in each jurisdiction
where the ownership, leasing and operation of its property or the conduct of
its business requires such qualification, and the failure to be so qualified
would have a material adverse effect on the Borrower and its Consolidated
Subsidiaries.

 

4.09                           Not an Investment Company.  The Borrower is not an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.

 

4.10                           Environmental Matters.  The Borrower has reasonably concluded that
Environmental Laws are unlikely to have a material adverse effect on the
business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.

 

4.11                           Full Disclosure.  All information heretofore furnished by the Borrower to the
Agents or to any Lender for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all such information hereafter
furnished by the Borrower to the Administrative Agent or any Lender will be,
taken as a whole, true and accurate in all material respects on the date as of
which such information is stated or certified. 
The Borrower has disclosed to the Lenders in writing or by means of its filings
with the Securities and Exchange Commission any and all facts which materially
and adversely affect or may affect (to the extent the Borrower can now
reasonably foresee), the business, operations or financial position of the
Borrower and its Consolidated Subsidiaries, taken as a whole, or the ability of
the Borrower to perform its obligations under this Agreement.  With respect to any projections or forecasts
provided, such projections or forecasts represent, as of the date thereof,
management’s best estimates based on reasonable assumptions and all available
information, but are subject to the uncertainty inherent in all projections and
forecasts.

 

4.12                           Solvency.  As
of the Effective Date, the Borrower and its Significant Subsidiaries are, on a
consolidated basis, Solvent.

 

4.13                           Gaming Laws. 
The Borrower and its Subsidiaries are in material compliance with all
applicable Gaming Laws.

 

ARTICLE V

COVENANTS

 

The Borrower agrees that,
so long as any Lender has any Commitment hereunder or any amount payable under
any Note or any Letter of Credit Liability remains unpaid:

 

33

 

5.01                           Information. 
The Borrower will deliver to the Administrative Agent (who shall
promptly distribute the same to the Lenders or advise the Lenders thereof):

 

(a)                                  as
soon as available and in any event within 90 days after the end of each fiscal
year of the Borrower, the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income and cash flows for such fiscal year, setting
forth in each case in comparative form the figures as of the end of and for the
previous fiscal year, all reported on in a manner acceptable to the Securities
and Exchange Commission by the Borrower’s independent public accountants of
nationally recognized standing;

 

(b)                                 as
soon as available and in any event within 60 days after the end of each of the
first three quarters of each fiscal year of the Borrower, the consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of the end
of such quarter and the related consolidated statements of income and cash
flows for such quarter and for the portion of the Borrower’s fiscal year ended
at the end of such quarter, setting forth in the case of such statements of
income and cash flows in comparative form the figures for the corresponding
quarter and the corresponding portion of the Borrower’s previous fiscal year,
all certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by an
Authorized Officer;

 

(c)                                  simultaneously
with the delivery of each set of financial statements referred to in clauses
(a) and (b) above, a Compliance Certificate (i) setting forth in
reasonable detail the calculations required to establish whether the Borrower
was in compliance with the requirements of Sections 5.06, 5.10 and 5.11 on
the date of such financial statements, and (ii) stating whether any Default
exists on the date of such Compliance Certificate and, if any Default then
exists, setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;

 

(d)                                 simultaneously
with the delivery of each set of financial statements referred to in clause (a)
above, a statement of the firm of independent public accountants which reported
on such statements (i) whether anything has come to their attention to
cause them to believe that any Default existed on the date of such statements
and (ii) confirming the calculations set forth in the officer’s
certificate delivered simultaneously therewith;

 

(e)                                  as
soon as available and in any event not later than the last day of February of
each year, a completed Pricing Certificate as of December 31 of the prior year;

 

(f)                                    as
soon as practicable, and in any event within 90 days after the commencement of
each fiscal year of the Borrower, a budget and projection for that fiscal year,
including projected consolidated balance sheets, statements of
operations and statements of cash flow, all in reasonable detail;

 

(g)                                 within
five Domestic Business Days of any officer of the Borrower obtaining knowledge
of any Default, if such Default is then continuing, a certificate of an

 

34

 

Authorized Officer setting forth the details thereof
and the action which the Borrower is taking or proposes to take with respect
thereto;

 

(h)                                 promptly
upon the mailing thereof to the shareholders of the Borrower generally, copies
of all financial statements, reports and proxy statements so mailed;

 

(i)                                     promptly
upon the filing thereof, copies of all registration statements (other than the
exhibits thereto and any registration statements on Form S-8 or its equivalent)
and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) which the
Borrower shall have filed with the Securities and Exchange Commission;

 

(j)                                     if
and when any member of the ERISA Group (i) gives or is required to give
notice to the PBGC of any “reportable event” (as defined in Section 4043
of ERISA) with respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been terminated, a
copy of such notice; (iii) receives notice from the PBGC under Title IV of
ERISA of an intent to terminate, impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer, any Plan, a copy of such notice; (iv) applies for a waiver of
the minimum funding standard under Section 412 of the Internal Revenue
Code, a copy of such application; (v) gives notice of intent to terminate
any Plan under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer of
the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or applicable member of the ERISA Group is required or
proposes to take;

 

(k)                                  forthwith,
notice of any change of which the Borrower becomes aware in the Debt Rating;
and

 

(l)                                     from
time to time such additional information regarding the financial position or
business of the Borrower and its Subsidiaries as the Administrative Agent, at
the request of any Lender, may reasonably request.

 

The Borrower hereby
acknowledges that (a) the Administrative Agent and/or the Joint Lead Arrangers
and Joint Book Managers will make available to the Lenders and the Issuing
Lender materials and/or information provided by or on behalf of the Borrower
hereunder (collectively, “Borrower Materials”) by posting the Borrower
Materials on IntraLinks or another similar electronic system (the “Platform”)
and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that
do not wish to receive material non-public information with respect to the

 

35

 

Borrower or its
securities) (each, a “Public Lender”). 
The Borrower hereby agrees that (w) all Borrower Materials that are to
be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC”, the Borrower shall be deemed to have authorized the Administrative
Agent, the Joint Lead Arrangers and Joint Book Managers, the Issuing Lender and
the Lenders to treat such Borrower Materials as either publicly available
information or not material information (although it may be sensitive and
proprietary) with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws; (y) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Investor;” and (z) the Administrative Agent and the
Joint Lead Arrangers and Joint Book Managers shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor.”

 

5.02                           Maintenance of Property; Insurance.

 

(a)                                  The
Borrower will keep, and will cause each Significant Subsidiary to keep, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted, except where failure to do so would
not have a material adverse effect on the business, financial position, results
of operations or prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.

 

(b)                                 The
Borrower will, and will cause each of its Significant Subsidiaries to, maintain
(either in the name of the Borrower or in such Subsidiary’s own name) with
financially sound and responsible insurance companies, insurance on all their
respective properties in at least such amounts and against at least such risks
(and with such risk retention) as are usually insured against in the same
general area by companies of established repute engaged in the same or a
similar business and will furnish to the Lenders, upon request from the
Administrative Agent, information presented in reasonable detail as to the
insurance so carried.  Notwithstanding
the foregoing, the Borrower may self-insure with respect to such risks with
respect to which companies of established repute engaged in the same or similar
business in the same general area usually self-insure.

 

5.03                           Conduct of Business and Maintenance of
Existence.  The Borrower will
continue, and will cause each Significant Subsidiary to continue, to engage in
business of the same general type conducted by the Borrower and its Significant
Subsidiaries as of the Effective Date, and will preserve, renew and keep in
full force and effect, and will cause each Significant Subsidiary to preserve,
renew and keep in full force and effect their respective corporate existence
and their respective rights, privileges and franchises necessary or desirable
in the normal conduct of business; provided that nothing in this
Section 5.03 shall prohibit (i) the merger of a Restricted Subsidiary
into the Borrower or the merger or the consolidation of a Restricted Subsidiary
with or into another Person if the corporation or other entity surviving such
consolidation or merger is a Restricted Subsidiary and if, in each case, after
giving effect thereto, no Default shall have occurred and be continuing or
(ii) the termination of the corporate existence of any Restricted
Subsidiary if (A) the Borrower in good faith determines that such termination
is in the best

 

36

 

interest of the
Borrower and (B) such termination is not materially disadvantageous to the
Lenders.

 

5.04                           Compliance with Laws.  The Borrower will comply, and cause each
Significant Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of any Governmental
Agency (including, without limitation, Environmental Laws, Gaming Laws and
ERISA and, in each case, the rules and regulations thereunder) except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings.

 

5.05                           Inspection of Property, Books and
Records.  The Borrower will keep,
and will cause each Significant Subsidiary to keep, proper books of record and
account in which full, true and correct entries shall be made of all dealings
and transactions in relation to its business and activities; and will permit,
and will cause each Significant Subsidiary to permit, representatives of any
Lender at such Lender’s expense to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books
and records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants, all at
such reasonable times and as often as may reasonably be desired.

 

5.06                           Negative Pledge.  None of the Borrower, any Covered Subsidiary or any Significant
Subsidiary will create or assume any Lien on any asset now owned or hereafter
acquired by it, except:

 

(a)                                  Liens
existing as of the Effective Date;

 

(b)                                 any
Lien existing on any asset of any corporation at the time such corporation
becomes a Subsidiary and not created in contemplation of such event;

 

(c)                                  any
Lien on any asset securing Debt incurred or assumed for the purpose of
financing all or any part of the cost of acquiring or constructing such asset
(it being understood that, for this purpose, the acquisition of a Person is
also an acquisition of the assets of such Person); provided that the Lien
attaches to such asset concurrently with or within 180 days after the
acquisition thereof, or such longer period, not to exceed 12 months, due to the
Borrower’s inability to retain the requisite governmental approvals with
respect to such acquisition; provided further that, in the case of real estate,
(i) the Lien attaches within 12 months after the latest of the acquisition
thereof, the completion of construction thereon or the commencement of full
operation thereof and (ii) the Debt so secured does not exceed the sum of
(x) the purchase price of such real estate plus (y) the costs of such
construction;

 

(d)                                 Until
the date which is one hundred eighty (180) days following the Effective Date,
any Lien on shares of any equity security or any warrant or option to purchase
an equity security or any security which is convertible into an equity security
issued by any Subsidiary of the Borrower that holds, directly or indirectly
through a holding company or otherwise, a license to conduct gaming under any
Gaming Law, and in the proceeds thereof; provided that this clause shall
apply only so long as the Gaming

 

37

 

Laws of the relevant jurisdiction provide that the
creation of any Lien or other restriction on the disposition of any of such
securities shall not be effective and, if such Gaming Laws at any time cease to
so provide, then this clause shall be of no further effect; and provided
further that if at any time the Borrower or any of its Subsidiaries
creates or suffers to exist a Lien covering such securities in favor of the
holder of any other Indebtedness, it will (subject to any approval required
under such Gaming Laws) concurrently grant a pari-passu Lien likewise covering
such securities in favor of the Administrative Agent for the benefit of the
Lenders;

 

(e)                                  any
Lien on any asset of any corporation or other business entity existing at the
time such corporation or other business entity is merged or consolidated with
or into the Borrower or a Subsidiary and not created in contemplation of such
event;

 

(f)                                    any
Lien existing on any asset prior to the acquisition thereof by the Borrower or
a Subsidiary and not created in contemplation of such acquisition;

 

(g)                                 any
Lien arising out of the refinancing, extension, renewal or refunding of any
Debt secured by any Lien permitted by any of the foregoing clauses of this
Section, provided that such Debt is not increased (other than to cover any
transaction costs of such refinancing, extension, renewal or refunding) and is
not secured by any additional assets;

 

(h)                                 Liens
securing Debt of a Restricted Subsidiary to the Borrower or another Restricted
Subsidiary; and

 

(i)                                     Liens
not otherwise permitted by the foregoing clauses of this
Section encumbering assets of the Borrower and its Consolidated Subsidiaries
having an aggregate fair market value which is not in excess of 10% of
Consolidated Net Tangible Assets (determined, in each case, by reference to the
most recent date for which the Borrower has delivered its financial statements
under Section 5.01(a) or (b)).

 

5.07                           Consolidations, Mergers and Sales of Assets.  The Borrower and its Restricted Subsidiaries
will not (i) consolidate or merge with or into any other Person or
(ii) sell, lease or otherwise transfer all or any substantial part of the
assets of the Borrower and its Restricted Subsidiaries, taken as a whole, to
any other Person, or (iii) acquire all or substantially all of the assets of,
or more than 49% of the capital stock or other equity securities of, any Person
which is not engaged in the same general lines of business as the Borrower and
its Restricted Subsidiaries, if, giving effect to such consolidation, merger,
sale or acquisition, the Borrower is not in pro forma compliance with the
covenants set forth in Sections 5.10 and 5.11; provided that, notwithstanding
the foregoing, the Borrower may merge with another Person only if (A) the
Borrower is the corporation surviving such merger, and (B) immediately
after giving effect to such merger, no Default shall have occurred and be
continuing.

 

5.08                           Hostile Tender Offers.  The Borrower and its Subsidiaries will not
make any offer to purchase or acquire, or prosecute, pursue or consummate a
purchase or acquisition of, 5% or more of the capital stock of any corporation
or other business entity, if the board of directors or other equivalent
governing body of such corporation or business entity has notified Borrower or

 

38

 

its relevant
Subsidiaries that it opposes such offer or purchase and such notice has not
been withdrawn or superseded.

 

5.09                           Use of Proceeds. 
The proceeds of the Loans made under this Agreement will be used by the
Borrower for general corporate purposes, including but not limited to capital
expenditures, working capital requirements, acquisitions and, on the Effective
Date, to refinance obligations then outstanding under the Existing Credit
Agreements.  None of such proceeds will
be used, directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of buying or carrying any “margin stock” within the meaning of
Regulation U other than “margin stock” issued by the Borrower which is retired
upon purchase or for any purpose which violates Section 5.08.

 

5.10                           Leverage Ratio. 
The Leverage Ratio will not, as of the last day of any fiscal quarter of
the Borrower described in the matrix below, exceed the ratio set forth opposite
that fiscal quarter:

 

	
  Fiscal
  Quarters Ending

  	
   

  	
  Maximum
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2004
  and June 30, 2004

  	
   

  	
  5.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2004 through and

  including September 30, 2005

  	
   

  	
  5.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2005 and March 31, 2006

  	
   

  	
  4.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2006
  and thereafter

  	
   

  	
  4.50:1.00

  	
   

  

 

provided,
however, that if the Borrower shall complete the sale of the Las Vegas
Hilton on or before June 30, 2004, the maximum Leverage Ratio for the fiscal
quarter ending June 30, 2004 shall be 5.00:1.00.

 

5.11                           Interest Coverage Ratio.  The Interest Coverage Ratio shall not, as of
the last day of any fiscal quarter of the Borrower, be less than 2.75:1.00.

 

5.12                           Limitations on Unrestricted
Subsidiaries.

 

(a)                                  No
Unrestricted Subsidiary shall incur any Debt that is direct recourse to the
Borrower or any Restricted Subsidiary.

 

(b)                                 Neither
the Borrower nor any Restricted Subsidiary will (i) consolidate or merge with
or into any Unrestricted Subsidiary or (ii) sell, lease or otherwise transfer
all or any substantial part of its assets to an Unrestricted Subsidiary, or
make or incur any loan, advance, capital contributions or other investment of
any type in an Unrestricted Subsidiary unless the aggregate amount of all
assets so transferred or loans, advances, capital contributions or other
investments so made does not exceed $100,000,000 in the aggregate.

 

39

 

ARTICLE VI

DEFAULTS

 

6.01                           Events of Default.  If one or more of the following events (“Events of Default”)
shall have occurred and be continuing:

 

(a)                                  the
Borrower shall fail to (i) reimburse any drawing under any Letter of Credit
when required hereunder or (ii) pay when due any principal of any Loan or Swing
Line Loan under this Agreement, or (iii) pay within five days of the due date
thereof any other interest, fees or other amount payable hereunder;

 

(b)                                 the
Borrower shall fail to observe or perform any covenant contained in
Sections 5.06 to 5.11, inclusive;

 

(c)                                  the
Borrower shall fail to observe or perform any covenant or agreement contained
in this Agreement (other than those covered by clause (a) or (b) above) for 7
days after written notice thereof has been given to the Borrower by the
Administrative Agent, which notice shall be delivered to the Borrower by the
Administrative Agent at the request of any Lender;

 

(d)                                 any
representation, warranty, certification or statement made or deemed made by the
Borrower in this Agreement or in any certificate, financial statement or other
document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);

 

(e)                                  the
Borrower or any Covered Subsidiary or any Significant Subsidiary shall fail to
make any payment in respect of any Debt (other than the Notes and Non-Recourse
Debt) when due or within any applicable grace period and the aggregate
principal amount of such Debt is in excess of $100,000,000;

 

(f)                                    any
event or condition shall occur which results in the acceleration of the
maturity of any Debt (other than Non-Recourse Debt) in excess of
$100,000,000 of the Borrower or any Covered Subsidiary or any Significant
Subsidiary or enables or entitles the holder of such Debt or any Person acting
on such holder’s behalf to accelerate the maturity thereof;

 

(g)                                 the
Borrower or any Significant Subsidiary shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;

 

40

 

(h)                                 an
involuntary case or other proceeding shall be commenced against the Borrower or
any Significant Subsidiary seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Significant Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;

 

(i)                                     any
member of the ERISA Group shall fail to pay when due an amount or amounts
aggregating in excess of $5,000,000 which it shall have become liable to pay
under Title IV of ERISA; or notice of intent to terminate a Material Plan shall
be filed under Title IV of ERISA by any member of the ERISA Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate, to impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer, any Material Plan; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer
Plans which could cause one or more members of the ERISA Group to incur a
current payment obligation in excess of $25,000,000;

 

(j)                                     a
final judgment or order for the payment of money in excess of $25,000,000 shall
be rendered against the Borrower or any Restricted Subsidiary and such judgment
or order shall continue unsatisfied, unstayed or unbonded for a period of 30
days; or

 

(k)                                  the
occurrence of a License Revocation with respect to a license issued to the
Borrower or any of its Restricted Subsidiaries by any Gaming Board of the
States of Mississippi, New Jersey or Nevada with respect to gaming operations
at any gaming facility accounting for five percent (5%) or more of the
consolidated gross revenues of the Borrower and its Restricted Subsidiaries
that continues for thirty calendar days;

 

then, and in every such
event, the Administrative Agent shall (i) if requested by the Required
Lenders, by notice to the Borrower terminate the Commitments and they shall
thereupon terminate, and (ii) if requested by the Required Lenders, by
notice to the Borrower declare the Committed Loans, Swing Line Loans and the
Letter of Credit Liabilities (together with accrued interest thereon) to be,
and the Committed Loans and Swing Line Loans (together with accrued interest
thereon) shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; provided that in the case of any of the
Events of Default specified in clause (g) or (h) above with respect to the
Borrower, without any notice to the Borrower or any other act by the
Administrative Agent or the Lenders, the Commitments shall thereupon terminate
and the Loans and the Letter of Credit Liabilities (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.

 

41

 

6.02                           Notice of Default.  The Administrative Agent shall give notice to the Borrower under
Section 6.01(c) promptly upon being requested to do so by any Lender and
shall thereupon notify all the Lenders thereof.

 

6.03                           Cash Cover. 
The Borrower agrees, in addition to the provisions of Section 6.01
hereof, that upon the occurrence and during the continuance of any Event of
Default, it shall, if requested by the Administrative Agent upon the
instruction of the Required Lenders, pay to the Administrative Agent an amount
in immediately available funds (which funds shall be held as collateral
pursuant to arrangements satisfactory to the Administrative Agent) equal to the
aggregate amount available for drawing under all Letters of Credit then
outstanding at such time, provided that, upon the occurrence of any Event of
Default specified in Section 6.01(g) or 6.01(h) with respect to the
Borrower or any of its Significant Subsidiaries, the Borrower shall pay such
amount forthwith without any notice or demand or any other act by the
Administrative Agent or the Lenders.

 

ARTICLE VII

THE ADMINISTRATIVE AGENT

 

7.01                           Appointment and Authorization of
Administrative Agent.

 

(a)                                  Each
Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. 
Notwithstanding any provision to the contrary contained elsewhere herein
or in any other Loan Document, the Administrative Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Administrative Agent have or be deemed to have any fiduciary relationship
with any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.  Without limiting
the generality of the foregoing sentence, the use of the term “agent” herein
and in the other Loan Documents with reference to the Administrative Agent is
not intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship
between independent contracting parties.

 

(b)                                 The
Issuing Lender shall act on behalf of the Lenders with respect to any Letters
of Credit issued by it and the documents associated therewith, and the Issuing
Lender shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article VII with respect to any acts taken
or omissions suffered by the Issuing Lender in connection with Letters of
Credit issued by it or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to such Letters of Credit as fully
as if the term “Administrative Agent” as used in this Article VII and in
the definition of “Agent-Related Person” included the Issuing Lender with
respect to such

 

42

 

acts or omissions, and (ii) as additionally
provided herein with respect to the Issuing Lender.

 

7.02                           Delegation of Duties.  The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties.  The Administrative Agent
shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.

 

7.03                           Liability of Administrative Agent.  No Agent-Related Person shall (a) be liable
to any Lender for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct in connection with its duties expressly set forth herein),
or (b) be responsible in any manner to any Lender or Participant for any
recital, statement, representation or warranty made by the Borrower or any
officer thereof, contained herein or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any
obligation to any Lender or Participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Borrower or any Affiliate thereof.

 

7.04                           Reliance by Administrative Agent.

 

(a)                                  The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under any Loan Document
unless it shall first receive such advice or concurrence of the Required
Lenders as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.  The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders (or such greater
number of Lenders as may be expressly required hereby in any instance) and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders.

 

43

 

(b)                                 For
purposes of determining compliance with the conditions specified in
Section 3.02, each Lender that has signed this Agreement shall be deemed
to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Effective Date
specifying its objection thereto.

 

7.05                           Notice of Default.  The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender or the Borrower
referring to this Agreement, describing such Default and stating that such
notice is a “notice of default.”  The
Administrative Agent will notify the Lenders of its receipt of any such notice.  The Administrative Agent shall take such
action with respect to such Default as may be directed by the Required Lenders
in accordance with Article VI; provided, however,
that unless and until the Administrative Agent has received any such direction,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default as it shall
deem advisable or in the best interest of the Lenders.

 

7.06                           Credit Decision; Disclosure of Information by
Administrative Agent.  Each Lender
acknowledges that neither any Agent nor any Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
or any other Agent hereafter taken, including any consent to and acceptance of
any assignment or review of the affairs of the Borrower or any Affiliate
thereof, shall be deemed to constitute any representation or warranty by any
Agent or Agent-Related Person to any Lender as to any matter, including whether
such Agent or Agent-Related Persons have disclosed material information in
their possession.  Each Lender
represents to the Administrative Agent that it has, independently and without
reliance upon any Agent or Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower and its Subsidiaries, and
all applicable bank or other regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. 
Each Lender also represents that it will, independently and without
reliance upon any Agent or Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the
Borrower.  Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, neither the Administrative Agent nor any other
Agent shall have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower or
any of its Affiliates which may come into the possession of any Agent or
Agent-Related Person.

 

44

 

7.07                           Indemnification of Administrative
Agent.  Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to
do so), pro rata, and hold harmless each Agent-Related Person from and against
any and all Indemnified Liabilities incurred by it; provided, however,
that (a) no Lender shall be liable for the payment to any Agent-Related Person
of any portion of such Indemnified Liabilities to the extent determined in a
final, nonappealable judgment by a court of competent jurisdiction to have
resulted from such Agent-Related Person’s own gross negligence or willful
misconduct; provided, however, that no action taken in accordance
with the directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section, and (b) no
Lender shall be liable for the payment of any portion of an Indemnified
Liability pursuant to this Section unless such Indemnified Liability was
incurred by the Administrative Agent in its capacity as such or by another
Agent-Related Person acting for the Administrative Agent in such capacity.  Without limitation of the foregoing, each
Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower.  The undertaking
in this Section shall survive termination of the Commitments, the payment of all
other Obligations and the resignation of the Administrative Agent.

 

7.08                           Administrative Agent in its
Individual Capacity.  Bank of
America and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Borrower and its Affiliates as though Bank of America were
not the Administrative Agent or Issuing Lender hereunder and without notice to
or consent of the Lenders.  The Lenders
acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding the Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information
to them.  With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent, and the terms “Lender” and “Lenders” include Bank of
America in its individual capacity.

 

7.09                           Successor Administrative Agent.  The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Lenders; provided that any
such resignation by Bank of America shall also constitute its resignation as
Issuing Lender and Swing Line Lender. 
If the Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders, which successor administrative agent shall be consented to by
the Borrower at all times other than during the existence of an Event of
Default (which consent of the Borrower shall not be unreasonably withheld or
delayed).  If no successor
administrative agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint,
after

 

45

 

consulting with
the Lenders and the Borrower, a successor administrative agent from among the
Lenders.  Upon the acceptance of its
appointment as successor administrative agent hereunder, the Person acting as
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent, Issuing Lender and Swing Line
Lender and the respective terms “Administrative Agent”, “Issuing Lender” and
“Swing Line Lender” shall mean such successor administrative agent, Issuing
Lender and Swing Line Lender and the retiring Administrative Agent’s
appointment, powers and duties as Administrative Agent shall be terminated and
the retiring Issuing Lender’s and Swing Line Lender’s rights, powers and duties
as such shall be terminated, without any other or further act or deed on the
part of such retiring Issuing Lender or Swing Line Lender or any other Lender,
other than the obligation of the successor Issuing Lender to issue letters of
credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession or to make other arrangements satisfactory to the
retiring Issuing Lender to effectively assume the obligations of the retiring
Issuing Lender with respect to such Letters of Credit.  After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this Article
VII and Section 9.03 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement.  If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent’s notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.

 

7.10                           Administrative Agent 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 Borrower, the Administrative Agent (irrespective of whether the principal
of any Loan or Letter of Credit Liabilities shall then be due and payable as
herein expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise

 

(a)                                  to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, Letter of Credit Liabilities and all other
Obligations that are owing and unpaid and to file such other documents as may
be necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative
Agent and their respective agents and counsel and all other amounts due the
Lenders and the Administrative Agent under Section 9.03) allowed in such
judicial proceeding; and

 

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

 

and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make
such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to the Administrative Agent any amount due for

 

46

 

the reasonable
compensation, expenses, disbursements and advances of the Administrative Agent
and its agents and counsel, and any other amounts due the Administrative Agent
under Section 9.03.

 

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

 

7.11                           Other Agents; Arrangers and Managers.  None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a
“syndication agent,” “co-documentation agents,” “joint book manager,” or “joint
lead arranger” shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such.  Without limiting the foregoing, none of the Lenders or other
Persons so identified shall have or be deemed to have any fiduciary
relationship with any Lender.  Each
Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders or other Persons so identified in deciding to enter into this Agreement
or in taking or not taking action hereunder. 
None of the Lenders or Agents shall be under any obligation to any other
Lender or any Participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower or any Affiliate thereof.  Each Agent and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in
and generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with the Borrower and its Affiliates as though
such Agent were not an Agent hereunder and without notice to or consent of the
Lenders.  The Lenders acknowledge that,
pursuant to such activities, such Agent or its Affiliates may receive
information regarding the Borrower or its Affiliates (including information
that may be subject to confidentiality obligations in favor of the Borrower or
such Affiliate) and acknowledge that such Agent shall be under no obligation to
provide such information to them.  With
respect to its Loans, such Agent, if also a Lender hereunder, shall have the
same rights and powers under this Agreement as any other Lender and may
exercise such rights and powers as though it were not an Agent, and the terms
“Lender” and “Lenders” include such Agent in its individual capacity.

 

ARTICLE VIII

CHANGE IN CIRCUMSTANCES

 

8.01                           Basis for Determining Interest Rate
Inadequate or Unfair.  If on or
prior to the first day of any Interest Period for any Borrowing of Euro-Dollar
Loans:

 

(a)                                  the
Administrative Agent is advised by the Required Lenders that deposits in
Dollars and in the required amounts are not being offered to the Lenders in the
relevant market for such Interest Period, or

 

47

 

(b)                                 in
the case of a Committed Borrowing, Lenders having 50% or more of the aggregate
amount of the Commitments advise the Administrative Agent that the Euro-Dollar
Rate, as determined by the Administrative Agent, will not adequately and fairly
reflect the cost to such Lenders of funding their Euro-Dollar Loans for such
Interest Period,

 

the Administrative Agent
shall forthwith give notice thereof to the Borrower and the Lenders, whereupon
until the Administrative Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, the obligations of the Lenders
to make Euro-Dollar Loans shall be suspended. 
Unless the Borrower notifies the Administrative Agent at least two
Domestic Business Days before the date of any Borrowing of Euro-Dollar Loans
for which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, such Borrowing shall instead be made as a Base Rate
Borrowing.  The Administrative Agent
shall promptly notify the Lenders of any election by the Borrower pursuant to
the preceding sentence.

 

8.02                           Illegality. 
If, on or after the date of this Agreement, the adoption of any
applicable law, rule or regulation, or any change in any applicable law, rule
or regulation, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Euro-Dollar Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Lender (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Lender
shall so notify the Administrative Agent, the Administrative Agent shall
forthwith give notice thereof to the other Lenders and the Borrower, whereupon
until such Lender notifies the Borrower and the Administrative Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Lender to make Euro-Dollar Loans shall be suspended.  Before giving any notice to the
Administrative Agent pursuant to this Section, such Lender shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need
for giving such notice and will not, in the sole judgment of such Lender, be
otherwise disadvantageous to such Lender. 
If such Lender shall determine that it may not lawfully continue to
maintain and fund any of its outstanding Euro-Dollar Loans to maturity and
shall so specify in such notice, the Borrower shall immediately prepay in full
the then outstanding principal amount of each such Euro-Dollar Loan, together
with accrued interest thereon.  Concurrently
with prepaying each such Euro-Dollar Loan, the Borrower shall borrow a Base
Rate Loan in an equal principal amount from such Lender (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar Loans
of the other Lenders), and such Lender shall make such a Base Rate Loan.

 

8.03                           Increased Cost and Reduced Return.

 

(a)                                  If
on or after the date hereof, in the case of any Committed Loan or Letter of
Credit or any obligation to make Committed Loans or issue or participate in any
Letter of Credit, the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its

 

48

 

Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:

 

(i)                                     shall
subject any Lender (or its Applicable Lending Office) to any tax, duty or other
charge with respect to its Euro-Dollar Loans, its Note or its obligation to
make Euro-Dollar Loans or its obligations hereunder in respect of Letters of
Credit, or shall change the basis of taxation of payments to any Lender (or its
Applicable Lending Office) of the principal of or interest on its Euro-Dollar
Loans or any other amounts due under this Agreement in respect of its
Euro-Dollar Loans or its obligation to make Euro-Dollar Loans (except for
changes in the rate of tax on the overall net income of such Lender or its
Applicable Lending Office imposed by the jurisdiction in which such Lender’s
principal executive office or Applicable Lending Office is located); or

 

(ii)                                  shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding, with respect to any Euro-Dollar Loan any such requirement
included in an applicable Euro-Dollar Reserve Percentage), special deposit,
insurance assessment or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Lender (or its Applicable
Lending Office) or shall impose on any Lender (or its Applicable Lending
Office) or on the United States market for certificates of deposit or the
London interbank market any other condition affecting its Euro-Dollar Loans,
its Note or its obligation to make Euro-Dollar Loans or its obligations
hereunder in respect to Letters of Credit;

 

and the result of any of
the foregoing is to increase the cost to such Lender (or its Applicable Lending
Office) of making or maintaining any Euro-Dollar Loan or of issuing or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Lender (or its Applicable Lending Office) under
this Agreement or under its Note with respect thereto, by an amount deemed by
such Lender to be material, then, within 15 days after demand by such Lender
(with a copy to the Administrative Agent), the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for
such increased cost or reduction.

 

(b)                                 If,
after the date hereof, any Lender shall have determined that any applicable
law, rule or regulation regarding capital adequacy (irrespective of the actual
timing of the adoption or implementation thereof and including, without
limitation, any law or regulation adopted pursuant to the July 1988 report
of the Basle Committee on Banking Regulations and Supervisory Practices) or any
change therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender (or
its Applicable Lending Office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Lender (or its Parent)

 

49

 

as a consequence of such Lender’s obligations
hereunder to a level below that which such Lender (or its Parent) could have
achieved but for such law, regulation, change or compliance (taking into
consideration its policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, within 15 days
after demand by such Lender (with a copy to the Administrative Agent), the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender (or its Parent) for such reduction.

 

(c)                                  Each
Lender will promptly notify the Borrower and the Administrative Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will designate
a different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the sole
judgment of such Lender, be otherwise disadvantageous to such Lender.  A certificate of any Lender claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error.  In determining such
amount, such Lender may use any reasonable averaging and attribution methods.

 

8.04                           Base Rate Loans Substituted for Affected
Euro-Dollar Loans.  If (i) the
obligation of any Lender to make Euro-Dollar Loans has been suspended pursuant
to Section 8.02 or (ii) any Lender has demanded compensation under
Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar
Business Days, prior notice to such Lender through the Administrative Agent,
have elected that the provisions of this Section shall apply to such
Lender, then, unless and until such Lender notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer exist:

 

(a)                                  all
Loans which would otherwise be made by such Lender as Euro-Dollar Loans shall
be made instead as Base Rate Loans (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the other
Lenders), and

 

(b)                                 after
each of its Euro-Dollar Loans has been repaid, all payments of principal which
would otherwise be applied to repay such Euro-Dollar Loans shall be applied to
repay its Base Rate Loans instead.

 

ARTICLE IX

MISCELLANEOUS

 

9.01                           Notices.  Unless
otherwise expressly provided herein, all notices and other communications
provided for hereunder shall be in writing (including by facsimile
transmission).  All such written notices
shall be mailed, faxed or delivered to the applicable address, facsimile number
or (subject to subsection (d) below) electronic mail address, and all notices
and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:

 

(a)                                  if
to the Borrower, the Administrative Agent, the Issuing Lender or the Swing Line
Lender to the address, facsimile number, electronic mail address or telephone

 

50

 

number specified for such Person on its signature page
hereto or to such other address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a notice to the other
parties; and

 

(b)                                 if
to any other Lender, to the address, facsimile number, electronic mail address
or telephone number specified in its Administrative Questionnaire or to such
other address, facsimile number, electronic mail address or telephone number as
shall be designated by such party in a notice to the Borrower, the Administrative
Agent, the Issuing Lender and the Swing Line Lender.

 

All such notices and
other communications shall be deemed to be given or made upon the earlier to
occur of (i) actual receipt by the relevant party hereto and (ii) (A) if
delivered by hand or by courier, when signed for by or on behalf of the
relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; provided, however, that notices and other
communications to the Administrative Agent, the Issuing Lender and the Swing
Line Lender pursuant to Article II shall not be effective until
actually received by such Person.  In no
event shall a voicemail message be effective as a notice, communication or
confirmation hereunder.

 

(c)                                  Loan
Documents may be transmitted and/or signed by facsimile.  The effectiveness of any such documents and
signatures shall, subject to applicable law, have the same force and effect as
manually-signed originals and shall be binding on all parties hereto.  The Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.

 

(d)                                 Electronic
mail and Internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as provided
in Section 5.01, and to distribute Loan Documents for execution by the parties
thereto, and may not be used for any other purpose.

 

(e)                                  The
Administrative Agent and the Lenders shall be entitled to rely and act upon any
notices (including telephonic Notices of Borrowing) purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by
the recipient, varied from any confirmation thereof.  The Borrower shall indemnify each Agent-Related Person and each
Lender from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the
Borrower.  All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

51

 

9.02                           No Waivers. 
No failure or delay by the Administrative Agent or any Lender in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.

 

9.03                           Expenses; Documentary Taxes; Indemnification.

 

(a)                                  The
Borrower agrees (a) to pay or reimburse the Administrative Agent for all
reasonable costs and expenses incurred in connection with the development,
preparation, negotiation and execution of this Agreement and the other Loan
Documents and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all Attorney Costs,
and (b) to pay or reimburse the Administrative Agent and each Lender for all
reasonable costs and expenses incurred after an Event of Default in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or the other Loan Documents (including all such
costs and expenses incurred after an Event of Default during any “workout” or
restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs.  The foregoing costs and expenses
shall include all search, filing, recording, title insurance and appraisal
charges and fees and taxes related thereto, and other out-of-pocket expenses
incurred by the Administrative Agent and the cost of independent public accountants
and other outside experts retained by the Administrative Agent or any
Lender.  All amounts due under this
Section 9.03(a) shall be payable within ten Business Days after demand
therefor.  The agreements in this
Section shall survive the termination of the Commitments and repayment of all
other Obligations.

 

(b)                                 Whether
or not the transactions contemplated hereby are consummated, the Borrower shall
indemnify and hold harmless each Agent-Related Person, each Lender and their
respective Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the “Indemnitees”) from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including Attorney Costs)
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against any such Indemnitee in any way relating to or arising
out of or in connection with (a) the execution, delivery, enforcement,
performance or administration of any Loan Document or any other agreement,
letter or instrument delivered in connection with the transactions contemplated
thereby or the consummation of the transactions contemplated thereby, (b) any
Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the Issuing Lender to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit), or
(c) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory (including any investigation of, preparation for, or defense of any
pending or threatened claim, investigation, litigation or

 

52

 

proceeding) and regardless of whether any Indemnitee
is a party thereto (all the foregoing, collectively, the “Indemnified Liabilities”)
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such liabilities, obligations, losses, damages, penalties,
claims, demands, actions, judgments, suits, costs, expenses or disbursements
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.  No Indemnitee shall be
liable for any damages arising from the use by others of any information or other
materials obtained through IntraLinks or other similar information transmission
systems in connection with this Agreement, nor shall any Indemnitee have any
liability for any indirect or consequential damages relating to this Agreement
or any other Loan Document or arising out of its activities in connection
herewith or therewith (whether before or after the Effective Date).  All amounts due under this Section 9.03(b)
shall be payable within ten Business Days after demand therefor.  The agreements in this Section shall survive
the resignation of the Administrative Agent, the replacement of any Lender, the
termination of the Commitments and the repayment, satisfaction or discharge of
all the other Obligations.

 

9.04                           Amendments and Waivers.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower therefrom, shall be effective unless in writing signed by the
Required Lenders and the Borrower, and acknowledged by the Administrative Agent,
and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such amendment, waiver or consent shall:

 

(a)                                  waive
any condition set forth in Section 3.02 without the written consent of each
Lender;

 

(b)                                 extend
or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 6.01) without the written consent of such
Lender;

 

(c)                                  postpone
any date fixed by this Agreement or any other Loan Document for any scheduled
payment of principal, interest, fees or other amounts due to the Lenders (or
any of them) or waive or excuse any such payment or postpone any scheduled
reduction of the Commitments hereunder or under any other Loan Document without
the written consent of each Lender directly affected thereby;

 

(d)                                 reduce
the principal of, or the rate of interest specified herein on, any Loan or
(subject to clause (ii) of the second proviso to this Section 9.04) any fees or
other amounts payable hereunder or under any other Loan Document without the
written consent of each Lender directly affected thereby;

 

(e)                                  change
Section 9.10 in a manner that would alter the pro rata sharing of payments
required thereby without the written consent of each Lender; or

 

(f)                                    change
any provision of this Section or the definition of “Required Lenders” or any
other provision hereof specifying the number or percentage of Lenders

 

53

 

required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender;

 

and, provided  further,
that (i) no amendment, waiver or consent shall, unless in writing and signed by
the Issuing Lender in addition to the Lenders required above, affect the rights
or duties of the Issuing Lender under this Agreement or any Letter of Credit
application relating to any Letter of Credit issued or to be issued by it; (ii)
no amendment, waiver or consent shall, unless in writing and signed by the
Swing Line Lender in addition to the Lenders required above, affect the rights
or duties of the Swing Line Lender under this Agreement; (iii) no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent in addition to the Lenders required above, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document; (iv)
Section 9.05(h) may not be amended, waived or otherwise modified without the
consent of each Granting Lender all or any part of whose Loans are being funded
by an SPC at the time of such amendment, waiver or other modification; and (v)
any fee letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto. 
Each amendment, modification, supplement, extension, termination,
waiver, approval and consent under this Agreement and the other Loan Documents
shall be subject to the terms of all applicable laws, including Gaming Laws.

 

9.05                           Successors and Assigns.

 

(a)                                  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that the Borrower may not assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
subsection (f) or (i) of this Section, or (iv) to an SPC in accordance with the
provisions of subsection (h) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in subsection (d) of this Section and, to the extent
expressly contemplated hereby, the Indemnitees) any legal or equitable right,
remedy or claim under or by reason of this Agreement.  Each Lender represents that it is not acquiring its Note with a
view to the distribution thereof within the meaning of the Securities Act of
1933, as amended.

 

(b)                                 Any
Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and its Loans (including for purposes of this
subsection (b), participations in Letter of Credit Liabilities and in Swing
Line Loans) at the time owing to it); provided that (i) except in the
case of an assignment of the entire remaining amount of the assigning Lender’s
Commitment and Loans at the time owing to it or in the case of an assignment to
a Lender or an Affiliate of a Lender or an Approved Fund (as defined in

 

54

 

subsection (g) of this Section) with respect to a
Lender, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) subject to each such assignment, determined as of
the date the Assignment Agreement with respect to such assignment is delivered
to the Administrative Agent or, if “Trade Date” is specified in the Assignment
Agreement, as of the Trade Date, shall not be less than $1,000,000 unless each
of the Administrative Agent and, so long as no Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender’s rights
and obligations under this Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not apply to rights in
respect of Swing Line Loans; (iii) any assignment of a Revolving Commitment
must be approved by the Administrative Agent, the Issuing Lender and the Swing
Line Lender and, as long as no Default has occurred and is continuing, the
Borrower (each such consent not to be unreasonably withheld or delayed) unless
the Person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee);
(iv) any assignment of Term Loans or a Term Loan Commitment must be
approved by the Administrative Agent and, so long as no Default has occurred
and is continuing, the Borrower (each such consent not to be unreasonably
withheld or delayed) unless the Person that is the proposed assignee is itself a
Lender (whether or not the proposed assignee would otherwise qualify as an
Eligible Assignee); and (v) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment Agreement, together with a
processing and recordation fee of $3,500. 
Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment Agreement, the Eligible Assignee thereunder shall
be a party to this Agreement and, to the extent of the interest assigned by
such Assignment Agreement, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment Agreement, be released from its
obligations under this Agreement (and, in the case of an Assignment Agreement
covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 2.16, 8.03 and 9.03 with respect to
facts and circumstances occurring prior to the effective date of such
assignment).  Upon request, the Borrower
(at its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

 

(c)                                  The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment Agreement delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and Letter of Credit Liabilities owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in

 

55

 

the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

 

(d)                                 Any
Lender may at any time, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to any Person (other than a
natural person, Borrower or any of Borrower’s Affiliates or Subsidiaries)
(each, a “Participant”) in all or a portion of such Lender’s rights
and/or obligations under this Agreement (including all or a portion of its
Commitment and/or Loans (including such Lender’s participations in Letter of
Credit Liabilities and/or Swing Line Loans) owing to it)); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, waiver or other
modification described in subsections (c) or (d) of Section 9.04 that
directly affects such Participant.

 

(e)                                  A
Participant shall not be a Lender hereunder for any purpose except, if
the participation agreement so provides, for the purposes of
Sections 2.18, 8.03 and 9.03 but only to the extent that the cost of such
benefits to the Borrower does not exceed the cost which the Borrower would have
incurred in respect of such Lender absent the participation.

 

(f)                                    Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Note, if any)
to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such
pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

 

(g)                                 As
used herein, the following terms have the following meanings:

 

“Fund” means any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.

 

“Approved Fund”
means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

56

 

(h)                                 Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”) may
grant to a special purpose funding vehicle identified as such in writing from
time to time by the Granting Lender to the Administrative Agent and Borrower (an
“SPC”) the option to provide all or any part of any Loan that such
Granting Lender would otherwise be obligated to make pursuant to this
Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to
exercise such option or otherwise fails to make all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof.  Each party hereto hereby agrees
that (i) neither the grant to any SPC nor the exercise by any SPC of such
option shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrower under this Agreement (including their obligations
under Sections 2.16 and 8.03), (ii) no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement for which a Lender
would be liable, and (iii) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Loan Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party hereto hereby agrees
(which agreement shall survive the termination of this Agreement) that, prior
to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior debt of any SPC, it will not institute
against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding
under the laws of the United States or any State thereof with respect to
matters directly related to this Agreement. 
Notwithstanding anything to the contrary contained herein, any SPC may
(i) with notice to, but without prior consent of the Borrower and the
Administrative Agent, assign all or any portion of its right to receive payment
with respect to any Loan to the Granting Lender and (ii) disclose on a
confidential basis any non-public information relating to its funding of Loans
to any rating agency, commercial paper dealer or provider of any surety or
guarantee or credit or liquidity enhancement to such SPC.

 

(i)                                     Notwithstanding
anything to the contrary contained herein, any Lender that is a Fund may create
a security interest in all or any portion of the Loans owing to it and the
Note, if any, held by it to the trustee for holders of obligations owed, or
securities issued, by such Fund as security for such obligations or securities,
provided that unless and until such trustee actually becomes a Lender in
compliance with the other provisions of this Section 9.05, (i) no such
pledge shall release the pledging Lender from any of its obligations under the
Loan Documents and (ii) such trustee shall not be entitled to exercise any of
the rights of a Lender under the Loan Documents even though such trustee may
have acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise.

 

(j)                                     Notwithstanding
anything to the contrary herein, the rights of the Lenders to make assignment
of, and grant participations in, their Commitments shall be subject to the
approval of any Gaming Board, to the extent required by applicable Gaming Laws.

 

57

 

(k)                                  Notwithstanding
anything to the contrary contained herein, if at any time Bank of America
assigns all of its Commitments and Loans pursuant to subsection (b) above, Bank
of America may, (i) upon 30 days’ notice to the Borrower and the Lenders,
resign as Issuing Lender and/or (ii) upon 30 days’ notice to the Borrower,
resign as Swing Line Lender.  In the event
of any such resignation as Issuing Lender or Swing Line Lender, the Borrower
shall be entitled to appoint from among the Lenders a successor Issuing Lender
or Swing Line Lender hereunder; provided, however, that no
failure by the Borrower to appoint any such successor shall affect the resignation
of Bank of America as Issuing Lender or Swing Line Lender, as the case may
be.  If Bank of America resigns as
Issuing Lender, it shall retain all the rights and obligations of the Issuing
Lender hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as Issuing Lender and all Letter of Credit
Liabilities with respect thereto (including the right to require the Lenders to
fund risk participations in drawn Letters of Credit pursuant to Section 2.19).  If Bank of America resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Committed Revolving Loans or fund risk participations in outstanding
Swing Line Loans pursuant to Section 2.03.

 

9.06                           Collateral. 
Each of the Lenders represents to each Agent and each of the other
Lenders that it in good faith is not relying upon any “margin stock” (as
defined in Regulation U) as collateral in the extension or maintenance of the
credit provided for in this Agreement.

 

9.07                           California Law; Submission to Jurisdiction.  This Agreement and each Note shall be
construed in accordance with and governed by the laws of the State of
California.  The Borrower hereby submits
to the nonexclusive jurisdiction of the United States District Court for the
Central District of California and of any California State court sitting in Los
Angeles, California for purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby.  The Borrower irrevocably, waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.

 

9.08                           Counterparts; Integration.  This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.  This Agreement constitutes the entire
agreement and understanding among the parties hereto and supersedes any and all
prior agreements and understandings, oral or written, relating to the subject
matter hereof.

 

9.09                           Several Obligations.  The obligations of the Lenders hereunder are
several.  Neither the failure of any
Lender to carry out its obligations hereunder nor the failure of this Agreement
to be duly authorized, executed and delivered by any Lender shall relieve any
other Lender of its obligations hereunder (or affect the rights hereunder of
such other Lender).  No Lender shall be
responsible for the obligations of, or any action taken or omitted by, any
other Lender hereunder.

 

58

 

9.10                           Sharing of Set-Offs.  Each Lender agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest due with respect to any Note held by
it and any Letter of Credit Liabilities which is greater than the proportion
received by any other Lender in respect of the aggregate amount of principal
and interest due with respect to any Note and any Letter of Credit Liabilities
held by such other Lender, the Lender receiving such proportionately greater
payment shall purchase such participations in the Notes and Letter of Credit
Liabilities held by the other Lenders, and such other adjustments shall be
made, as may be required so that all such payments of principal and interest
with respect to the Notes and Letter of Credit Liabilities held by the Lenders
shall be shared by the Lenders pro rata; provided that nothing in this
Section shall impair the right of any Lender to exercise any right of set-off
or counterclaim it may have and to apply the amount subject to such exercise to
the payment of indebtedness of the Borrower other than its indebtedness under
the Notes.  The Borrower agrees, to the
fullest extent it may effectively do so under applicable law, that any holder
of a participation in a Note or Letter of Credit Liability, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.

 

9.11                           WAIVER OF JURY TRIAL.  EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.

 

9.12                           Confidentiality.  The Lenders hereby agree to hold any confidential information
that they may receive from the Borrower or its Subsidiaries pursuant to this
Agreement in confidence, except for disclosure:  (a) to their respective Affiliates and to other parties to this
Agreement; (b) to legal counsel and accountants for any such party; (c) to
other professional advisors to any such party, provided that the recipient has
accepted such information subject to a confidentiality agreement substantially
similar to this paragraph or has notified such professional advisors of the
confidentiality of such information; (d) to regulatory officials having
jurisdiction over that Lender; (e) to any Gaming Board; (f) as required by law
or legal process (provided that the Lender shall endeavor, to the extent it may
do so under applicable law, to give the Borrower reasonable prior notice
thereof to allow the Borrower to seek a protective order) or in connection with
any legal proceeding to which that Lender and the Borrower are adverse parties;
and (g) to another financial institution (or a professional advisor
thereof) in connection with any swap, securitization or derivative transaction
relating to or involving any of the rights or obligations of that Lender under
this Agreement or to another financial institution in connection with a

 

59

 

disposition or
proposed disposition to that financial institution of all or part of that
Lender’s interests hereunder or a participation interest in its Note, provided
in each case that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section.  For purposes of the foregoing, “confidential
information” shall mean any information respecting the Borrower or its
Subsidiaries reasonably considered by them to be confidential, other than (i)
information previously filed with any governmental agency and available to the
public, (ii) information previously published in any public medium from a
source other than, directly or indirectly, that Lender, and
(iii) information previously disclosed by the Borrower or its Subsidiaries
to any person not associated therewith without a confidentiality agreement
substantially similar to this Section. 
Notwithstanding anything herein to the contrary, “confidential
information” shall not include, and the Borrower, the Administrative Agent and
each Lender (and each authorized employee, representative, or other authorized
person thereof) may disclose to any and all Persons, without limitation of any
kind, the “tax treatment” and “tax structure” (in each case, within the meaning
of Treasury Regulation Section 1.6011-4) of the transactions contemplated
hereby and all materials of any kind (including opinions or other tax analyses)
that are provided to the Borrower, the Administrative Agent or such Lender
relating to such tax treatment and tax structure; provided that with
respect to any document or similar item that in either case contains
information concerning the tax treatment or tax structure of the transaction as
well as other information, this sentence shall only apply to such portions of
the document or similar item that relate to the tax treatment or tax structure
of the Loans and transactions contemplated hereby.  Nothing in this Section shall be construed to create or give rise
to any fiduciary duty on the part of any Lender.

 

9.13                           USA PATRIOT Act Notice.  Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the Act.

 

9.14                           Removal of a Lender.  The Borrower shall have the right to remove a Lender as a party
to this Agreement pursuant to this Section in the event that such Lender is the
subject of a Disqualification.  If the
Borrower is entitled to remove a Lender pursuant to this Section either: (a)
upon notice from the Borrower, the Lender being removed shall execute and
deliver an Assignment Agreement covering that Lender’s Pro Rata Share of the
Commitments and the Loans thereunder (and in the case of the Revolving Commitment,
participations in the Letters of Credit and Swing Line Loans) held by that
Lender, in favor of one or more Eligible Assignees designated by the Borrower
and reasonably acceptable to the Administrative Agent, subject to payment of a
purchase price by such Eligible Assignee equal to all principal and accrued
interest, fees and other amounts payable to such Lender under this Agreement
through the date of the Assignment Agreement; or (b) the Borrower may reduce
the applicable Commitment(s) pursuant to Section 2.11 (and, for this
purpose, the numerical requirements of such Section shall not apply) by an
amount equal to that Lender’s Pro Rata Share of such Commitments, pay and
provide to such Lender an amount equal to all principal and accrued interest, fees
and other amounts then owing to such Lender under this Agreement, and release
such Lender from its Pro Rata Share of such Commitments, upon which the
applicable Pro Rata Shares of the remaining

 

60

 

Lenders (including
without limitation such remaining Lenders’ respective participations in
outstanding Swing Line Loans, Letters of Credit and Letter of Credit
Liabilities) shall be ratably increased (but without any increase in the Dollar
amount of the Pro Rata Shares of such Lenders).  If, upon the removal of a Lender and the reduction in the
applicable Commitments pursuant to clause (b) of this Section 9.14, the
aggregate principal outstanding amount of all Revolving Loans and Swing Line
Loans plus the Letter of Credit Liabilities exceeds the aggregate Revolving
Commitments, the Borrower shall immediately repay the Revolving Loans in the
amount of such excess.

 

9.15                           Gaming Boards. 
The Lenders agree to cooperate with all Gaming Boards in connection with
the administration of their regulatory jurisdiction over the Borrower and its
Subsidiaries, including the provision of such documents or other information as
may be requested by any such Gaming Board relating to the Borrower or any of
its Subsidiaries or to the Loan Documents.

 

9.16                           Gaming Regulations.  Each party to this Agreement hereby acknowledges that the
consummation of the transactions contemplated by the Loan Documents is subject
to applicable Gaming Laws.

 

[Remainder of this page intentionally left blank]

 

61

 

IN WITNESS
WHEREOF, the Borrower, the Administrative Agent and the Lenders have caused
this Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.

 

 

	
   

  	
  CAESARS ENTERTAINMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ HARRY C. HAGERTY

  
	
   

  	
  Name:

  	
  Harry C. Hagerty

  
	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Caesars Entertainment, Inc.

  
	
   

  	
  3930 Howard Hughes Parkway, 4th Floor

  
	
   

  	
  Las Vegas, Nevada  89109

  
	
   

  	
  Attention:  Chief Financial
  Officer

  
	
   

  	
  Telephone: 702-699-5030

  
	
   

  	
  Facsimile: 702-699-5190

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Caesars Entertainment, Inc.

  
	
   

  	
  3930 Howard Hughes Parkway, 4th Floor

  
	
   

  	
  Las Vegas, Nevada 89109

  
	
   

  	
  Attention: Chief Legal Officer

  
	
   

  	
  Telephone: 702-699-5033

  
	
   

  	
  Facsimile: 702-699-5110

  
					

 

 

	
   

  	
  BANK OF AMERICA, N.A., as Administrative Agent, Issuing Lender and
  Swing Line Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JANICE HAMMOND

  
	
   

  	
  Name:

  	
  Janice Hammond

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  Gaming and Leisure Industries Group

  
	
   

  	
  Portfolio Management - CA9-706-17-54

  
	
   

  	
  555 South Flower Street, 17th Floor

  
	
   

  	
  Los Angeles, California  90071

  
	
   

  	
  Attention: Janice Hammond, Vice President

  
	
   

  	
  Telephone: 213-345-1210

  
	
   

  	
  Facsimile: 213-345-1213

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MATTHEW KOENIG

  
	
   

  	
  Name:

  	
  Matthew Koenig

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  Gaming and Leisure Industries Group

  
	
   

  	
  Portfolio Management - CA9-706-17-54

  
	
   

  	
  555 South Flower Street, 17th Floor

  
	
   

  	
  Los Angeles, California  90071

  
	
   

  	
  Attention:  Matthew J. Koenig,
  Managing Director

  
	
   

  	
  Telephone:  213-345-1198

  
	
   

  	
  Facsimile:  213-345-1215

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  Gaming and Leisure Industries Group

  
	
   

  	
  Client Management - CA9-706-17-54

  
	
   

  	
  555 South Flower Street, 17th Floor

  
	
   

  	
  Los Angeles, California  90071

  
	
   

  	
  Attention: William S. Newby, Managing Director

  
	
   

  	
  Telephone: 213-345-1194

  
	
   

  	
  Facsimile: 213-345-1214

  
					

 

 

	
   

  	
  ALLIED IRISH BANKS, PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN FARRACE

  
	
   

  	
  Name:

  	
  John Farrace

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Allied Irish Banks, plc

  
	
   

  	
  Suite 4650

  
	
   

  	
  601 S. Figueroa Street

  
	
   

  	
  Los Angeles, CA 90017

  
	
   

  	
  Attention: John Farrace

  
	
   

  	
  Telephone: 213-593-4785

  
	
   

  	
  Facsimile: 212-593-4766

  
					

 

 

	
   

  	
  BANK OF HAWAII

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SCOTT NAHME

  
	
   

  	
  Name:

  	
  Scott Nahme

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Bank of Hawaii

  
	
   

  	
  130 Merchant Street

  
	
   

  	
  Floor 20

  
	
   

  	
  Honolulu, HI 96813

  
	
   

  	
  Attention: Luke Yeh

  
	
   

  	
  Telephone: 808-537-8014

  
	
   

  	
  Facsimile: 808-537-8301

  
					

 

 

	
   

  	
  THE BANK OF NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MEHRASA RAYGANI

  
	
   

  	
  Name:

  	
  Mehrasa Raygani

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  The Bank of New York

  
	
   

  	
  10990 Wilshire Boulevard

  
	
   

  	
  Suite 1125

  
	
   

  	
  Los Angeles, CA 90024

  
	
   

  	
  Attention: Mehrasa Raygani

  
	
   

  	
  Telephone: 310-996-8660

  
	
   

  	
  Facsimile: 310-996-8667

  
					

 

 

	
   

  	
  THE BANK OF NOVA SCOTIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MICHAEL MITCHELL

  
	
   

  	
  Name:

  	
  Michael Mitchell

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  The Bank of Nova Scotia

  
	
   

  	
  580 California Street

  
	
   

  	
  Suite 2100

  
	
   

  	
  San Francisco, CA 94104

  
	
   

  	
  Attention:  Michael Mitchell

  
	
   

  	
  Telephone: 415-986-1100

  
	
   

  	
  Facsimile: 415-397-0791

  
					

 

 

	
   

  	
  BANK OF SCOTLAND

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOSEPH FRATUS

  
	
   

  	
  Name:

  	
  Joseph Fratus

  
	
   

  	
  Title:

  	
  First Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Bank of Scotland, New York Office

  
	
   

  	
  565 Fifth Avenue

  
	
   

  	
  New York, NY 10017

  
	
   

  	
  Attention: Shirley Vargas

  
	
   

  	
  Telephone: 212-450-0875

  
	
   

  	
  Facsimile: 212-479-2807

  
					

 

 

	
   

  	
  BARCLAYS BANK PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ L. PETER YETMAN

  
	
   

  	
  Name:

  	
  L. Peter Yetman

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Barclays Bank PLC

  
	
   

  	
  200 Park Avenue

  
	
   

  	
  Floor 4

  
	
   

  	
  New York, NY 10166

  
	
   

  	
  Attention: Peter Yetman

  
	
   

  	
  Telephone: 212-412-7683

  
	
   

  	
  Facsimile: 212-412-7600

  
					

 

 

	
   

  	
  BNP PARIBAS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JANICE S. H. HO

  
	
   

  	
  Name:

  	
  Janice S.H. Ho

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CLIVE BETTLES

  
	
   

  	
  Name:

  	
  Clive Bettles

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  BNP Paribas

  
	
   

  	
  725 South Figueroa Street

  
	
   

  	
  Suite 2090

  
	
   

  	
  Los Angeles, CA 90017

  
	
   

  	
  Attention: Janice Ho

  
	
   

  	
  Telephone: 213-688-6411

  
	
   

  	
  Facsimile: 213-488-9602

  
					

 

 

	
   

  	
  CITICORP USA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ROBERT PARR

  
	
   

  	
  Name:

  	
  Robert Parr

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Citicorp USA, Inc.

  
	
   

  	
  388 Greenwich Street

  
	
   

  	
  New York, NY 10013

  
	
   

  	
  Attention: Breddy Boom

  
	
   

  	
  Telephone: 212-816-8188

  
	
   

  	
  Facsimile: 212-816-8084

  
					

 

 

	
   

  	
  COMERICA WEST INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ EOIN P. COLLINS

  
	
   

  	
  Name:

  	
  Eoin P. Collins

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Comerica West Incorporated

  
	
   

  	
  3980 Howard Hughes Pkwy

  
	
   

  	
  Suite 350

  
	
   

  	
  Las Vegas, NV 89109

  
	
   

  	
  Attention: Eoin P. Collins

  
	
   

  	
  Telephone: 702-791-4802

  
	
   

  	
  Facsimile: 702-791-2371

  
					

 

 

	
   

  	
  COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ WERNER SCHMIDBAUER

  
	
   

  	
  Name:

  	
  Werner Schmidbauer

  
	
   

  	
  Title:

  	
  SVP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ YANGLING SI

  
	
   

  	
  Name:

  	
  Yangling Si

  
	
   

  	
  Title:

  	
  AVP

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Commerzbank AG, Los Angeles Branch

  
	
   

  	
  633 West Fifth Street

  
	
   

  	
  Suite 6600

  
	
   

  	
  Los Angeles, CA 90071

  
	
   

  	
  Attention: Werner Schmidbauer

  
	
   

  	
  Telephone: 213-623-8223

  
	
   

  	
  Facsimile: 213-623-0039

  
					

 

 

	
   

  	
  CREDIT LYONNAIS NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ F. FRANK HERRARA

  
	
   

  	
  Name:

  	
  F. Frank Herrara

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Credit Lyonnais

  
	
   

  	
  515 South Flower Street

  
	
   

  	
  Suite 2200

  
	
   

  	
  Los Angeles, CA 90071

  
	
   

  	
  Attention: Donald Schubert

  
	
   

  	
  Telephone: 213-362-5956

  
	
   

  	
  Facsimile: 213-623-3437

  
					

 

 

	
   

  	
  DEUTSCHE BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LINDA WANG

  
	
   

  	
  Name:

  	
  Linda Wang

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank AG

  
	
   

  	
  90 Hudson Street

  
	
   

  	
  Jersey City, NJ 07302

  
	
   

  	
  Attention:  Marlene A. Coombs

  
	
   

  	
  Telephone: 201-593-2366

  
	
   

  	
  Facsimile: 201-593-2520

  
					

 

 

	
   

  	
  E.SUN COMMERCIAL BANK, LTD., LOS ANGELES BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ BENJAMIN LIN

  
	
   

  	
  Name:

  	
  Benjamin Lin

  
	
   

  	
  Title:

  	
  EVP & General Manager

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  E.Sun Commercial Bank, Ltd.

  
	
   

  	
  17700 Castleton Street

  
	
   

  	
  Suite 500

  
	
   

  	
  City of Industry, CA 91748

  
	
   

  	
  Attention: Nina Siu

  
	
   

  	
  Telephone: 626-810-2400 Ext. 223

  
	
   

  	
  Facsimile: 626-839-5531

  
					

 

 

	
   

  	
  ERSTE BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ BRYAN J. LYNCH

  
	
   

  	
  Name:

  	
  Bryan J. Lynch

  
	
   

  	
  Title:

  	
  First Vice President

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ BRANDON A. MEYERSON

  
	
   

  	
  Name:

  	
  Brandon A. Meyerson

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Erste Bank New York

  
	
   

  	
  280 Park Avenue

  
	
   

  	
  West Building, Floor 32

  
	
   

  	
  New York, NY 10017

  
	
   

  	
  Attention: Bob Wagman

  
	
   

  	
  Telephone: 212-984-5633

  
	
   

  	
  Facsimile: 212-984-5627

  
					

 

 

	
   

  	
  FIRST TENNESSEE BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. SHANE NORMAN

  
	
   

  	
  Name:

  	
  R. Shane Norman

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  First Tennessee Bank National Association

  
	
   

  	
  165 Madison Avenue

  
	
   

  	
  Floor 9

  
	
   

  	
  Memphis, TN 38103-2723

  
	
   

  	
  Attention: James H. Moore, Jr.

  
	
   

  	
  Telephone: 901-523-4108

  
	
   

  	
  Facsimile: 901-523-4267

  
					

 

 

	
   

  	
  JPMORGAN CHASE BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DONALD S. SHOKRIAN

  
	
   

  	
  Name:

  	
  Donald S. Shokrian

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  JPMorgan Chase Bank

  
	
   

  	
  270 Park Avenue

  
	
   

  	
  Floor 4

  
	
   

  	
  New York, NY 10017

  
	
   

  	
  Attention: Donald Shokrian

  
	
   

  	
  Telephone: 212-270-0606

  
	
   

  	
  Facsimile: 212-270-5100

  
					

 

 

	
   

  	
  KEYBANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ROBERT W. BOSWELL

  
	
   

  	
  Name:

  	
  Robert W. Boswell

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  KeyBank National Association

  
	
   

  	
  601 108th Avenue N.E.

  
	
   

  	
  Bellevue, WA 98004

  
	
   

  	
  Attention: Michael Vegh

  
	
   

  	
  Telephone: 425-709-4578

  
	
   

  	
  Facsimile: 425-709-4587

  
				

 

 

	
   

  	
  MIZUHO CORPORATE BANK, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARK GRONICH

  
	
   

  	
  Name:

  	
  Mark Gronich

  
	
   

  	
  Title:

  	
  SVP

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Mizuho Corporate Bank, Ltd.

  
	
   

  	
  1251 Avenue of the Americas

  
	
   

  	
  New York, NY 10020-1104

  
	
   

  	
  Attention: Marvin Lazar

  
	
   

  	
  Telephone: 212-262-4538

  
	
   

  	
  Facsimile: 212-282-4488

  
					

 

 

	
   

  	
  NATIONAL CITY BANK OF MICHIGAN/ ILLINOIS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ RUSSEL H. LIEBETRAU, JR.

  
	
   

  	
  Name:

  	
  Russell H. Liebetrau, Jr.

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  National City Bank of Michigan/Illinois

  
	
   

  	
  1001 South Worth Street

  
	
   

  	
  Birmingham, MI 48009

  
	
   

  	
  Attention: Russell Liebetrau

  
	
   

  	
  Telephone: 248-901-2392

  
	
   

  	
  Facsimile: 248-901-2221

  
					

 

 

	
   

  	
  THE PEOPLES BANK, BILOXI, MISSISSIPPI

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CHEVIS C. SWETMAN

  
	
   

  	
  Name:

  	
  Chevis C. Swetman

  
	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  The Peoples Bank, Biloxi, Mississippi

  
	
   

  	
  152 Lameuse Street

  
	
   

  	
  Biloxi, MS 39530

  
	
   

  	
  Attention: Chevis C. Swetman

  
	
   

  	
  Telephone: 228-435-8205

  
	
   

  	
  Facsimile: 228-435-8417

  
					

 

 

	
   

  	
  THE ROYAL BANK OF SCOTLAND PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARIA AMARAL-LEBLANC

  
	
   

  	
  Name:

  	
  Maria Amaral-LeBlanc

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  The Royal Bank of Scotland plc

  
	
   

  	
  101 Park Avenue

  
	
   

  	
  Floor 12

  
	
   

  	
  New York, NY 10178

  
	
   

  	
  Attention: David Apps

  
	
   

  	
  Telephone: 212-401-3745

  
	
   

  	
  Facsimile: 212-401-3456

  
					

 

 

	
   

  	
  SOCIETE GENERALE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ THOMAS K. DAY

  
	
   

  	
  Name:

  	
  Thomas K. Day

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Societe Generale

  
	
   

  	
  Four Embarcadero

  
	
   

  	
  Floor 12

  
	
   

  	
  San Francisco, CA 94111

  
	
   

  	
  Attention: Mary Brickley

  
	
   

  	
  Telephone: 415-646-7328

  
	
   

  	
  Facsimile: 415-989-9922

  
					

 

 

	
   

  	
  SUMITOMO MITSUI BANKING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ AL GALLUZZO

  
	
   

  	
  Name:

  	
  Al Galluzzo

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Sumitomo Mitsui Banking Corporation

  
	
   

  	
  777 South Figueroa Street

  
	
   

  	
  Suite 2600

  
	
   

  	
  Los Angeles, CA 90017-5824

  
	
   

  	
  Attention: Al Galluzzo

  
	
   

  	
  Telephone: 213-995-0855

  
	
   

  	
  Facsimile: 213-623-6832

  
					

 

 

	
   

  	
  TRUSTMARK NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CRAIG E. SOSEBEE

  
	
   

  	
  Name:

  	
  Craig E. Sosebee

  
	
   

  	
  Title:

  	
  First Vice-President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Trustmark National Bank

  
	
   

  	
  248 East Capitol Street

  
	
   

  	
  Jackson, MS 39201

  
	
   

  	
  Attention: Craig E. Sosebee

  
	
   

  	
  Telephone: 601-208-5939

  
	
   

  	
  Facsimile: 601-208-5030

  
					

 

 

	
   

  	
  UFJ BANK LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOSHIKO BOYD

  
	
   

  	
  Name:

  	
  Joshiko Boyd

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  UFJ Bank Limited

  
	
   

  	
  601 South Figueroa Street

  
	
   

  	
  Floor 5

  
	
   

  	
  Los Angeles, CA 90017

  
	
   

  	
  Attention: Toshiko Boyd

  
	
   

  	
  Telephone: 213-533-7407

  
	
   

  	
  Facsimile: 213-533-7494

  
					

 

 

	
   

  	
  UNION BANK OF CALIFORNIA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CLIFFORD F. CHOI

  
	
   

  	
  Name:

  	
  Clifford F. Choi

  
	
   

  	
  Title:

  	
  Assistant Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Union Bank of California, N.A.

  
	
   

  	
  445 South Figueroa Street

  
	
   

  	
  Floor 16

  
	
   

  	
  Los Angeles, CA 90071

  
	
   

  	
  Attention: Cliff Cho

  
	
   

  	
  Telephone: 213-236-5534

  
	
   

  	
  Facsimile: 213-236-7636

  
					

 

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SCOTT J. BELL

  
	
   

  	
  Name:

  	
  Scott J. Bell

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  U.S. Bank National Association

  
	
   

  	
  555 S.W. Oak Street

  
	
   

  	
  Suite 400

  
	
   

  	
  Portland, OR 97204

  
	
   

  	
  Attention: Scott J. Bell

  
	
   

  	
  Telephone: 503-275-4809

  
	
   

  	
  Facsimile: 503-275-5428

  
					

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DANIEL EVANS

  
	
   

  	
  Name:

  	
  Daniel Evans

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Wachovia Bank, National Association

  
	
   

  	
  191 Peachtree Street

  
	
   

  	
  Atlanta, GA 30303

  
	
   

  	
  Attention: Daniel Evans

  
	
   

  	
  Telephone: 404-332-4475

  
	
   

  	
  Facsimile: 404-332-4058

  
					

 

 

	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CATHRYN SANTORO

  
	
   

  	
  Name:

  	
  Cathryn Santoro

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Wells Fargo Bank West,
  N.A.

  
	
   

  	
  3800 Howard Hughes
  Parkway

  
	
   

  	
  Las Vegas, NV 89109

  
	
   

  	
  Attention: Cathy Santoro

  
	
   

  	
  Telephone: 702-791-6372

  
	
   

  	
  Facsimile: 702-791-6248

  
					

 

 

SCHEDULE 1

Pricing Schedule –
Credit Agreement

 

This Schedule 1 is
attached to and made a part of the Credit Agreement dated as of April 20, 2004,
among Caesars Entertainment, Inc., a Delaware corporation, the Lenders,
Co-Syndication Agents and Co-Documentation Agents referred to therein, and Bank
of America, N.A., as Administrative Agent (the “Credit Agreement”).  Capitalized terms used in this Schedule 1
are used with the meanings set forth for those terms in the Credit Agreement.

 

The “Euro-Dollar Margin,”
“Base Rate Margin,” “Unused Fee Rate”, “IBOR Margin” and “LC Fee Rate” referred
to in the Credit Agreement shall be determined for any day on the basis of the
Status (as defined below) of the Borrower as of that date, provided that
in the event that the Borrower fails to deliver any Compliance Certificate or
Pricing Certificate on the date when required by Section 5.01, and it is
ultimately determined that the Status of Borrower would have been changed on
the basis of such delivery, then (a) the rate at which interest, unused fees,
and letter of credit fees accrue under the Credit Agreement shall be increased
in accordance with this Schedule, with retroactive effect to the first day of
the Pricing Period to which such Compliance Certificate or Pricing Certificate
relates, and (b) Borrower shall, within 10 Business Days of a request by the
Administrative Agent, make such additional payments to the Lenders through the
Administrative Agent as are required to give effect to such increased interest
rates, unused fees and letter of credit fees in respect of any payments
previously made by Borrower.  As of each
date of determination, the Euro-Dollar Margin and Unused Fee Rate shall equal
the percentages set forth below under the column corresponding to the Status
that exists on such day:

 

	
  Status

  	
   

  	
  Level I

  	
   

  	
  Level II

  	
   

  	
  Level III

  	
   

  	
  Level IV

  	
   

  	
  Level V

  	
   

  
	
  Unused Fee Rate

  	
   

  	
  0.200

  	
  %

  	
  0.200

  	
  %

  	
  0.250

  	
  %

  	
  0.300

  	
  %

  	
  0.300

  	
  %

  
	
  Euro-Dollar
  Margin

  	
   

  	
  0.900

  	
  %

  	
  1.150

  	
  %

  	
  1.500

  	
  %

  	
  1.625

  	
  %

  	
  1.750

  	
  %

  

 

The “IBOR Margin” and the
“LC Fee Rate” shall, as of each date of determination, be the percentage which
is equal to the then prevailing Euro-Dollar Margin.

 

The “Base Rate Margin”
shall, as of each date of determination, be the percentage, not less than
0.000% per annum, which is equal to the then prevailing Euro-Dollar Margin minus
1.250%

 

As of each date of
determination, the Status of the Borrower shall be determined on the basis of:

 

(a)                                  the
Borrower’s Debt Rating as of that date; or

 

(b)                                 the
Leverage Ratio as of the last day of the fiscal quarter of Borrower ending
immediately prior to the first day of the Pricing Period in which such date of
determination occurs (the “Applicable Leverage Ratio”);

 

whichever such criteria
yields the more favorable pricing to the Borrower according to the following
standards:

 

1

 

“Level I Status” exists
at any date if, at such date, either (x) the Debt Rating is Superior
Investment Grade or higher or (y) the Applicable Leverage Ratio is less
than 3.50:1.

 

“Level II Status” exists
at any date if, at such date, (i) either (x) the Debt Rating is
Investment Grade or (y) the Applicable Leverage Ratio is less than 4.00:1
and (ii) Level I Status does not exist.

 

“Level III Status” exists
at any date, if, at such date, (i) the Applicable Leverage Ratio is less
than 4.50:1 and (ii) neither Level I Status nor Level II Status exists.

 

“Level IV Status” exists
at any date, if, at such date, (i) the Applicable Leverage Ratio is less
than 5.00 and (ii) none of Level I Status, Level II Status or
Level III Status exists.

 

“Level V Status” exists
at any date if, at such date, no such other Status exists.

 

2Exhibit 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;

 

19

 

(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).

 

24

 

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

 

37

 

(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.

 

38

 

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.

 

40

 

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}]]