**Exhibit4.1**

 

FIRST AMENDED AND RESTATED MULTI-YEAR CREDIT AGREEMENT

a/k/a the “Bolt-On Credit Agreement”

 

dated as of

 

August 12, 2003

 

among

 

PARK PLACE ENTERTAINMENT CORPORATION

 

The Lenders, Co-Documentation Agents, and SyndicationAgent Referred to Herein

 

and

 

BANK OF AMERICA, N.A.

 

as Administrative Agent

 

----

 

BANC OF AMERICA SECURITIES LLC.

 

and

 

J.P. MORGAN SECURITIES INC.

 

Joint Lead Arrangers and Joint Book Managers

 

----

 

**Table of Contents**

 
| 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             | [Intentionally Omitted]                                           |
| 2.04             | Swing Line Loans                                                  |
| 2.05             | Conversion  and Continuation of Committed Loans                   |
| 2.06             | Notice to Lenders;  Funding of Loans                              |
| 2.07             | Notes                                                             |
| 2.08             | Interest Rates                                                    |
| 2.09             | Amendment Fees                                                    |
| 2.10             | Facility Fees                                                     |
| 2.11             | Letter of Credit Fees                                             |
| 2.12             | Optional  Termination or Reduction of Commitments by the Borrower |
| 2.13             | Optional  Termination of Commitments by the Lenders               |
| 2.14             | Scheduled  Termination of Commitments                             |
| 2.15             | Extensions of the  Termination Date                               |
| 2.16             | Optional Prepayments                                              |
| 2.17             | General Provisions  as to Payments                                |
| 2.18             | Funding Losses                                                    |
| 2.19             | Computation of  Interest and Fees                                 |
| 2.20             | Withholding Tax Exemption                                         |
| 2.21             | Letters of Credit                                                 |
| 2.22             | Regulation D Compensation                                         |
| 2.23             | Increased  Commitments; Additional Lenders                        |
| 2.24             | Mandatory  Termination or Reduction of Commitments                |
| ARTICLE III | CONDITIONS                                                        |

 

i

----

 
| 3.01            | Borrowings  and Issuances of Letters of Credit           |
|-----------------|----------------------------------------------------------|
| 3.02            | Effectiveness                                            |
| ARTICLE IV | REPRESENTATIONS  AND WARRANTIES                          |
| 4.01            | Corporate Existence and  Power                           |
| 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                                              |
| 4.14            | Tax Shelter Regulations                                  |
| 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                                  |
| ARTICLE VI | DEFAULTS                                                 |

 

ii

----

 
| 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              |
| 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                                                 |

 

iii

----

 
| 9.10 | Sharing of Set-Offs  |
|------|----------------------|
| 9.11 | WAIVER OF JURY TRIAL |
| 9.12 | Confidentiality      |

 
| 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         | – | Form of Extension  Agreement                         |
| Exhibit F         | – | Form of Opinion of  Gibson, Dunn & Crutcher, LLP |
| Exhibit G         | – | Form of Assignment and  Assumption Agreement         |

 

iv

----

 

FIRST AMENDED AND RESTATED

MULTI-YEAR CREDIT AGREEMENT

a/k/a the “Bolt-On Credit Agreement”

 

FIRST AMENDED AND RESTATED MULTI-YEAR CREDIT AGREEMENTdated as of August 12, 2003, among PARK PLACE ENTERTAINMENT CORPORATION,the Lenders listed on the signature pages hereto, The Bank of Nova Scotia, asSyndication Agent, Societe Generale, Wachovia Bank, National Association,JPMorgan Chase Bank and Deutsche Bank Trust Company Americas, asCo-Documentation Agents, and Bank of America, N.A., as Administrative Agent.

 

**RECITALS**

** **

A.                                   Borrowerhas heretofore entered into a Five-Year Credit Agreement dated as of  December 31, 1998 among the Borrower,the lenders referred to therein, and Bank of America, N.A., as AdministrativeAgent (as at any time amended, the “Five Year Credit Agreement”), the scheduledmaturity of which is December 31, 2003.

 

B.                                     TheLenders party to this agreement are those of the lenders under the Five YearCredit Agreement which are willing to currently commit to extend creditfacilities to the Borrower for an additional two year period commencing on thedate of the termination or scheduled maturity of the credit facilities underthe Five Year Credit Agreement.

 

C.                                     Pursuantto that certain Multi-Year Credit Agreement dated as of August 23, 2001among Borrower, various lenders, Societe Generale, as Syndication Agent,Bankers Trust Company, The Bank of New York and First Union National Bank, asCo-Documentation Agents, and Bank of America, N.A., as Administrative Agent, asamended (as so amended, the “Existing Multi-Year Credit Agreement”), certainLenders provided credit facilities to the Borrower.

 

D.                                    Pursuantto the terms hereof, the Borrower, the Lenders and the Administrative Agentwish to amend and restate the Existing Multi-Year Credit Agreement in itsentirety and to provide credit facilities hereunder that will become availableto the Borrower on the Availability Date described herein concurrently with thematurity of the credit facilities made available under the Five Year CreditAgreement (but which will in no way be deemed duplicative of the creditcommitments under the Five Year Credit Agreement during the period ending onthe Availability Date).

 

The parties hereto agree that the Existing Multi-YearCredit Agreement shall be amended and restated in its entirety 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 inSection 2.23.

 

----

 

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

 

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

 

“Affiliate” means, as to any Person, any other Personwhich directly or indirectly controls, or is under common control with, or iscontrolled by, such Person.  As used inthis definition, “control” (and the correlative terms, “controlled by” and“under common control with”) shall mean possession, directly or indirectly, ofpower to direct or cause the direction of management or policies (whetherthrough ownership of securities or partnership or other ownership interests, bycontract or otherwise); provided that, in any event, any Person thatowns, directly or indirectly, 5% or more of the securities having ordinaryvoting power for the election of directors or other governing body of acorporation that has more than 100 record holders of such securities, or 5% ormore of the partnership or other ownership interests of any other Person thathas more than 100 record holders of such interests, will be deemed to controlsuch corporation or other Person.

 

“Agent-Related Persons” means the AdministrativeAgent, together with its Affiliates (including, in the case of Bank of Americain its capacity as the Administrative Agent, Banc of America Securities LLC),and the officers, directors, employees, agents and attorneys-in-fact of suchPersons and Affiliates.

 

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

 

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

 

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

 

“Assignment Agreement” means an Assignment andAssumption substantially in the form of Exhibit G.

 

“Attorney Costs” means and includes all reasonablefees, expenses and disbursements of any law firm engaged to represent, or otherexternal counsel to, the Administrative Agent (or, if the context clearly sorequires, any Lender or any Indemnitee) in connection herewith or thetransactions contemplated hereby.

 

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

 

“Availability Date” means the earlier of (a) the dateupon which the credit facilities under the Five Year Credit Facility arevoluntarily terminated by the Borrower in accordance with their terms, and (b)December 31, 2003.

 

2

----

 

“Bank of America” means Bank of America, N.A., itssuccessors 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 suchdate (calculated on the basis of a year of 365 or 366 days and the actualnumber of days elapsed) and (b) the Federal Funds Rate in effect on suchdate (calculated on the basis of a year of 360 days and the actual numberof days elapsed) plus 1⁄2 of 1% (50 basis points).

 

“Base Rate Loan” means a Committed Loan made or to bemade by a Lender as a Base Rate Loan in accordance with the applicable Noticeof Borrowing or pursuant to Article VIII.

 

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

 

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

 

“Borrower” means Park Place Entertainment Corporation,a Delaware corporation, and its successors.

 

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

 

“Change of Control” means the occurrence of a RatingDecline in connection with any of the following events: (i) upon anymerger or consolidation of the Borrower with or into any person or any sale,transfer or other conveyance, whether direct or indirect, of all orsubstantially all of the assets of the Borrower, on a consolidated basis, inone transaction or a series of related transactions, if, immediately aftergiving effect to such transaction, any person or group of persons (within themeaning of Section 13 or 14 of the Securities Exchange Act of 1934, asamended) is or becomes the beneficial owner (within the meaning of Rule 13d-3promulgated by the Securities and Exchange Commission under said Act) ofsecurities representing a majority of the total voting power of the aggregateoutstanding securities of the transferee or surviving entity normally entitledto vote in the election of directors, managers, or trustees, as applicable, ofthe 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 of1934, as amended) is or becomes the beneficial owner (within the meaning ofRule 13d-3 promulgated by The Securities and-Exchange Commission under saidAct) of securities representing a majority of total voting power of theaggregate outstanding securities of the Borrower normally entitled to vote inthe election of directors of the Borrower, (iii) when, during any periodof 12 consecutive calendar months, individuals who were directors of theBorrower on the first day of such period (together with any new directors whoseelection by the board of directors of the Borrower or whose nomination forelection by the stockholders of the Borrower was approved by a vote of amajority of the directors then still in office who were either directors at thebeginning of such period or whose election or nomination for election waspreviously so approved) cease for any reason to constitute a majority of theboard of directors of the Borrower, or (iv) the sale or disposition,whether directly or indirectly, by the Borrower of all or substantially all ofits assets.

 

3

----

 

“Co-Documentation Agents” means Societe Generale,Wachovia Bank, National Association, JPMorgan Chase Bank and Deutsche BankTrust Company Americas, each in its capacity as documentation agent for theLenders hereunder.  The capacity of theDocumentation Agents is titular in nature, and the Documentation Agents shallhave no obligations or liabilities under the Loan Documents by reason of actingin such capacity.

 

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

 

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

 

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

 

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

 

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

 

“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) nonrecurring non-cash charges, provided that, in calculating“Consolidated EBITDA”:

 

(a)                                  theoperating results of each New Project which commences operations and recordsnot less than one full fiscal quarter’s operations during the relevant periodshall be annualized; and

 

(b)                                 ConsolidatedEBITDA shall be adjusted, on a pro forma basis, to include the operatingresults of each resort or casino property acquired by the Borrower and itsConsolidated Subsidiaries during the relevant period and to exclude theoperating results of each resort or casino property sold or otherwise disposedof by the Borrower and its Subsidiaries, or whose operations are discontinuedduring the relevant period.

 

“Consolidated Interest Expense” means, for any period,net interest expense of the Borrower and its Consolidated Subsidiaries for suchperiod, determined in accordance with generally accepted accounting principles,provided that in calculating “Consolidated Interest Expense” for anyperiod, the interest expenses of the Borrower and its Consolidated Subsidiariesshall be adjusted for any acquisition or disposition of any resort or casinoproperty acquired or sold or otherwise disposed of by the Borrower and itsSubsidiaries during the relevant period, on a pro forma basis, utilizing areasonable methodology which shall be (i) proposed by the Borrower, (ii)consented to by the Administrative Agent at the time of such calculation, which

 

4

----

 

consent shall not be unreasonably withheld, and (iii)not objected to in writing by the Required Lenders within the ten DomesticBusiness Days following notice of such methodology.

 

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

 

“Consolidated Net Tangible Assets” means the totalamount of assets of the Borrower and its Consolidated Subsidiaries, afterdeducting therefrom (a) all current liabilities of the Borrower and itsConsolidated Subsidiaries (excluding (i) the current portion of long termindebtedness, (ii) inter-company liabilities, and (iii) any liabilitieswhich are by their terms renewable or extendable at the option of  the obligor thereon to a time more thantwelve months from the time as of which the amount thereof is being computed),and (b) all goodwill, trade names, trademarks, patents, unamortized debtdiscount and expense and other like intangibles, all as set forth on the latestconsolidated balance sheet of the Borrower prepared in accordance withgenerally accepted accounting principles.

 

“Consolidated Subsidiary” means at any date anySubsidiary or other entity the accounts of which would be consolidated withthose of the Borrower in its consolidated financial statements as of such date.

 

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

 

“Debt” of any Person means at any date, withoutduplication, (i) all obligations of such Person for borrowed money,(ii) all obligations of such Person evidenced by bonds, debentures, notesor other similar instruments, (iii) all obligations of such Person to paythe deferred purchase price of property or services, except trade accountspayable arising in the ordinary course of business, (iv) all obligationsof such Person as lessee which are capitalized in accordance with generallyaccepted accounting principles, (v) all indebtedness or other obligationssecured by a contractual Lien on any asset of such Person, whether or not suchindebtedness or other obligations are otherwise an obligation of such Person,and (vi) all Guarantees made by such Person (including by way of provisionof letters of credit or other contingent obligations) with respect toindebtedness or other obligations of any other Person which constitute “Debt”of a type or class described in clauses (i) through (v) of this definition.

 

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

 

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

 

“Domestic Business Day” means any day except aSaturday, Sunday or other day on which commercial banks in New York Cityor 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

 

5

----

 

Domestic Lending Office) or such other office as suchLender may hereafter designate as its Domestic Lending Office by notice to theBorrower and the Administrative Agent.

 

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

 

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

 

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

 

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

 

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

 

“Euro-Dollar Business Day” means any Domestic BusinessDay on which commercial banks are open for international business (includingdealings 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 itsAdministrative Questionnaire (or identified in its Administrative Questionnaireas its Euro-Dollar Lending Office) or such other office, branch or affiliate ofsuch Lender as it may hereafter designate as its Euro-Dollar Lending Office bynotice to the Borrower and the Administrative Agent.

 

“Euro-Dollar Loan” means a Committed Loan made or tobe made by a Lender as a Euro-Dollar Loan in accordance with the applicableNotice of Borrowing.

 

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

 

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

 

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

 

6

----

 

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

 

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

 

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

 

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

 

“Facility Fee Rate” has the meaning set forth inSection 2.10.

 

“Federal Funds Rate” means, for any day, the rate perannum equal to the weighted average of the rates on overnight Federal fundstransactions with members of the Federal Reserve System arranged by Federalfunds brokers on such day, as published by the Federal Reserve Bank ofNew York on the Domestic Business Day next succeeding such day; providedthat (a) if such day is not a Domestic Business Day, the Federal FundsRate for such day shall be such rate on such transactions on the next precedingDomestic Business Day as so published on the next succeeding Domestic BusinessDay, and (b) if no such rate is so published on such next succeedingDomestic Business Day, the Federal Funds Rate for such day shall be the averagerate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) chargedto Bank of America on such day on such transactions as determined by theAdministrative Agent.

 

“Five Year Credit Agreement” means the Five-YearCredit Agreement dated as of December 31, 1998 among the Borrower, thelenders referred to therein, and Bank of America, N.A., as administrativeagent, as amended by an Amendment No. 1 thereto dated as of August 31,1999, an Amendment No. 2 thereto dated as of August 28, 2000, an AmendmentNo. 3 thereto dated as of August 23, 2001, an Amendment No. 4 theretodated as of November 5, 2001,

 

7

----

 

an Amendment No. 5 thereto dated as of August 22,2002 and an Amendment No. 6 thereto of even date herewith, and as at any timehereafter amended.

 

“Gaming Board” means, collectively, (a) the NevadaGaming Commission, (b) the Nevada State Gaming Control Board, (c) the NewJersey Casino Control Commission, (d) the New Jersey Division of GamingEnforcement (e) the Mississippi Gaming Commission, and (f) any otherGovernmental Agency that holds regulatory, licensing or permit authority overgambling, gaming or casino activities conducted by the Borrower or itsSubsidiaries within its jurisdiction.

 

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

 

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

 

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

 

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

 

“Increased Commitment” has the meaning set forth inSection 2.23.

 

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

 

“Interest Coverage Ratio” means, as of each date ofdetermination, the ratio of (a) Consolidated EBITDA for the four fiscalquarters ending on that date, to (b) Consolidated Interest Expense for the sameperiod.

 

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

 

8

----

 

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

 

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

 

(c)                                  anyInterest Period which would otherwise end after the Termination Date shall endon 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 RevenueCode of 1986, as amended, or any successor statute.

 

“Investment Grade” means (i) with respect toS&P, a rating of BBB- or higher, and (ii) with respect to Moody’s, arating of Baa3 or higher.

 

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

 

“Joint Lead Arrangers and Joint Book Managers” meansBanc of America Securities LLC and J.P. Morgan Securities Inc.  Following the date of this Agreement, theJoint Lead Arrangers and Joint Book Managers shall have no obligations or liabilitiesunder the Loan Documents.

 

“LC Fee Rate” has the meaning set forth inSection 2.11.

 

“Lender” means each lender listed on the signaturepages hereof and each Lender which accepts an assignment pursuant toSection 9.05, and their respective successors and shall include, as thecontext may require, the Issuing Lender in its capacity as Issuing Lender.

 

“Letter of Credit” means a letter of credit to beissued hereunder by the Issuing Lender in accordance with Section 2.21.

 

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

 

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

 

9

----

 

“Leverage Ratio” means, as of any date ofdetermination, the ratio of (a) Consolidated Debt on such date to (b)Consolidated EBITDA for the period of four consecutive fiscal quarters endingon such date.

 

“License Revocation” means the revocation, failure torenew or suspension of, or the appointment of a receiver, supervisor or similarofficial with respect to, any casino, gambling or gaming license issued by anyGaming Board covering any casino or gaming facility of Borrower and itsSubsidiaries.

 

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

 

“Loan” means a Base Rate Loan or a Euro-Dollar Loanand “Loans” means Base Rate Loans or Euro-Dollar Loans or any combination ofthe foregoing.

 

“Loan Documents” means this Agreement, the Notes andeach other instrument, document or agreement now or hereafter executed by theparties in furtherance of this Agreement.

 

“Margin Adjustment” has the meaning set forth in theSchedule 1.

 

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

 

“Moody’s” means Moody’s Investors Service, Inc., andits successors.

 

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

 

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

 

“Non-Recourse Debt” means Debt in respect of which therecourse of the holder of such Debt is limited to the assets securing such Debtand such Debt does not constitute the general obligation of the Borrower or anySubsidiary.

 

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

 

10

----

 

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

 

“Notice of Conversion/Continuation” has the meaningset forth in Section 2.05.

 

“Notice of Issuance” has the meaning set forth inSection 2.21 (b) .

 

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

 

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

 

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

 

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

 

“Plan” means at any time an employee pension benefitplan (other than a Multiemployer Plan) which is covered by Title IV of ERISA orsubject to the minimum funding standards under Section 412 of the InternalRevenue Code and either (i) is maintained, or contributed to, by anymember 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, orcontributed to, by any Person which was at such time a member of the ERISAGroup for employees of any Person which was at such time a member of the ERISAGroup.

 

“Pre-Opening Expenses” means, with respect to anyfiscal period, the amount of expenses (otherthan ConsolidatedInterest Expense) incurred with respect to capital projects which areclassified as “pre-opening expenses” on the applicable financial statements ofthe Borrower and its Subsidiaries for such period, prepared in accordance withgenerally accepted accounting principles.

 

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

 

“Pricing Period” means (a) the period beginning on theAvailability 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 eachMarch, June, September and December and ending on the last day of thesucceeding May, August, November and February.

 

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

 

“Public Notice” means, without limitation, any filingor report made in accordance with the requirements of the Securities andExchange Commission (or any successor), any press

 

11

----

 

release or public announcement made by the Borrower orany written notice the Borrower gives to the Administrative-Agent or theLenders.

 

“Rating Agencies” means S&P and Moody’s.

 

“Rating Decline” means the occurrence on any date onor within 90 days after the date of the first Public Notice of (i) theoccurrence of an event described in clauses (i)-(iv) of the definition of“Change of Control” or (ii) the intention by the Borrower to effect suchan event (which 90-day period shall be extended so long as the rating of thesenior debt of the Borrower is under publicly announced consideration forpossible downgrade by any of the Rating Agencies) of a decrease in the ratingof the senior debt of the Borrower by any of the Rating Agencies to belowInvestment Grade.

 

“Reference Rate” means the rate of interest publiclyannounced from time to time by Bank of America as its “prime rate” or thesimilar prime rate or reference rate announced by any successor AdministrativeAgent.  Bank of America’s prime rate isa rate set by Bank of America based upon various factors including Bank of America’scosts and desired return, general economic conditions and other factors, and isused 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 anysuccessor Administrative Agent shall take effect at the opening of business onthe day specified in the public announcement of such change.

 

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

 

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

 

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

 

“Revolving Commitment” means, as to each RevolvingLender, the commitment of that Lender to make Loans and to participate inLetters of Credit and Swing Line Loans, in each case as such amount may bereduced from time to time pursuant to Section 2.12, 2.13, 2.14 or 2.24, orincreased pursuant to Section 2.23. As of the Effective Date, the aggregate amount of the RevolvingCommitments under this Agreement is $1,044,441,860 and the respective Pro RataShares of the Revolving Lenders with respect to the Revolving Commitment areset forth in the records of the Administrative Agent.  As of the Effective Date, each Revolving Lender has made aRevolving Commitment which is equal to the amount of the Revolving Note issuedto that Lender on the Effective Date.

 

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

 

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

 

12

----

 

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

 

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

 

“S&P” means Standard & Poor’s, a divisionof The McGraw Hill Companies, and its successors.

 

“Significant Subsidiary” means each Subsidiary of theBorrower at any time having (i) at least 10% of the total consolidatedassets of the Borrower and its Subsidiaries (determined as of the last day ofthe most recent fiscal quarter of the Borrower) or (ii) at least 10% ofthe consolidated revenues of the Borrower and its Subsidiaries for the fiscalyear of the Borrower then most recently ended.

 

“Solvent” as to any Person shall mean that (a) the sumof the assets of such Person, both at a fair valuation and at present fairsaleable value, exceeds its liabilities, including its probable liability inrespect of contingent liabilities, (b) such Person will have sufficient capitalwith which to conduct its business as presently conducted and as proposed to beconducted and (c) such Person has not incurred debts, and does not intend toincur 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 ofperformance if such breach gives rise to a payment, whether or not such rightto an equitable remedy is reduced to judgment, fixed, contingent, matured,unmatured, disputed, undisputed, secured or unsecured.  With respect to any such contingentliabilities, such liabilities shall be computed at the amount which, in lightof all the facts and circumstances existing at the time, represents the amountwhich can reasonably be expected to become an actual or matured liability.

 

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

 

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

 

“Swing Line” means the revolving line of creditestablished by the Swing Line Lender in favor of Borrower pursuant toSection 2.04.

 

“Swing Line Documents” means the promissory note andany other documents executed by Borrower in favor of the Swing Line Lenderin connection with the Swing Line.

 

“Swing Line Loans” means Loans made by theSwing Line Lender to Borrower pursuant to Section 2.04.

 

13

----

 

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

 

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

 

“Syndication Agent” means The Bank of Nova Scotia inits capacity as syndication agent for the Lenders hereunder.  The capacity of the Syndication Agent istitular in nature, and the Syndication Agent shall have no obligations orliabilities under the Loan Documents by reason of acting in such capacity.

 

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

 

“Term Loan Commitment” means, as to each Term LoanLender, the commitment of that Lender to make its Term Loan.  As of the Effective Date, the Term LoanCommitment is $696,294,574 and the respective Pro Rata Shares of the Lenderswith respect to the Term Loan Commitment are set forth in the records of theAdministrative Agent.

 

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

 

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

 

“Termination Date” means the date which is two yearsfollowing the Availability Date (but in any event not later thanDecember 31, 2005), or such later date to which the Revolving CreditPeriod shall have been extended pursuant to Section 2.15, or, if such dayis not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.

 

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

 

1.02                           Accounting Terms and Determinations.  Unless otherwise specified herein, allaccounting terms used herein shall be interpreted, all accountingdeterminations hereunder shall be made, and all financial statements requiredto be delivered hereunder shall be prepared, in accordance with generallyaccepted accounting principles as in effect from time to time, applied on a basisconsistent (except for changes concurred in by the Borrower’s independentpublic accountants and disclosed in such financial statements) with the mostrecent audited consolidated financial statements of the Borrower and itsConsolidated Subsidiaries delivered to the Lenders; provided that, if theBorrower notifies the Administrative Agent that the Borrower wishes to

 

14

----

 

amend any covenant in Article V to eliminate theeffect of any change in generally accepted accounting principles on theoperation of such covenant (or if the Administrative Agent notifies theBorrower that the Required Lenders wish to amend Article V for suchpurpose), then the Borrower’s compliance with such covenant shall be determinedon the basis of generally accepted accounting principles in effect immediatelybefore the relevant change in generally accepted accounting principles becameeffective, until either such notice is withdrawn or such covenant is amended ina manner satisfactory to the Borrower and the Required Lenders.

 

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

 

ARTICLE II

 

THE CREDITS

 

2.01                           Commitments to Lend.

 

(a)                                  Subjectto the terms and conditions set forth in this Agreement, each Term Loan Lenderseverally agrees to lend to the Borrower its Pro Rata Share of the Term LoanCommitment (each individually, a “Term Loan” and, collectively, the “TermLoans”).  The Term Loans shall bemade by the Term Loan Lenders in a single Borrowing on the Availability Date,whereupon the Term Loan Commitment shall terminate.  The Term Loans shall be made by the Term Loan Lenders simultaneouslyand proportionately to their respective Pro Rata Shares, it being understoodthat no Term Loan Lender shall be responsible for any failure by any other TermLoan Lender to perform its obligation to make any Term Loan hereunder nor shallthe Term Loan Commitment of any Term Loan Lender be increased or decreased as aresult of any such failure.  Oncerepaid, Term Loans may not be reborrowed.

 

(b)                                 Duringthe Revolving Credit Period each Revolving Lender severally agrees, on theterms and conditions set forth in this Agreement, to lend to the Borrowerpursuant to this Section from time to time amounts such that (a) theaggregate outstanding principal amount of such Lender’s Revolving Loans andsuch Lender’s Pro Rata Share of outstanding Swing Line Loans and Letter ofCredit Liabilities at any one time outstanding shall not exceed the amount ofsuch Lender’s Revolving Commitment, and (b) the aggregate principal outstandingamount of all Revolving Loans and Swing Line Loans plus the Letter of Credit Liabilitiesshall not exceed the aggregate Revolving Commitments.  Each Borrowing under this Section shall be in an aggregateprincipal amount of $10,000,000 or any larger multiple of $1,000,000; and eachBorrowing of Revolving Loans shall be made from the several Revolving Lendersratably in proportion to their respective Pro Rata Shares of the RevolvingCommitment.  Within the foregoinglimits, the Borrower may borrow under this Section, repay, or to the extent permittedby Section 2.16, prepay Revolving Loans and reborrow at any time on orprior to the

 

15

----

 

Termination Date under this Section.  The Revolving Loans shall mature, and theprincipal amount thereof shall be due and payable, on the Termination Date.

 

2.02                           Notice of Borrowings.  The Borrower shall give the AdministrativeAgent notice (a “Notice of Borrowing”), substantially in the form of ExhibitD hereto, not later than 8:30 A.M. (California local time) on(y) the date of each Base Rate Borrowing and (z) the thirdEuro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:

 

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

 

(b)                                 theaggregate amount of such Borrowing;

 

(c)                                  whetherthe Loans comprising such Borrowing are to be Base Rate Loans or Euro-DollarLoans; and

 

(d)                                 inthe case of a Euro-Dollar Borrowing, the duration of the Interest Periodapplicable thereto, subject to the provisions of the definition of InterestPeriod.

 

Not more than twelve Committed Borrowings which areEuro-Dollar Borrowings having different Interest Periods shall be outstandingat any time.

 

2.03                           [Intentionally Omitted].

 

2.04                           Swing Line Loans.

 

(a)                                  TheSwing Line Lender shall from time to time from the Availability Datethrough the day prior to the Termination Date make Swing Line Loans inDollars to Borrower in such amounts as Borrower may request, providedthat (i) after giving effect to such Swing Line Loan, (A) theaggregate Swing Line Outstandings shall not exceed $15,000,000 and (B) theaggregate principal outstanding amount of all Revolving Loans and Swing LineLoans plus the Letter of Credit Liabilities shall not exceed the aggregateRevolving Commitments, (ii) without the consent of all of the RevolvingLenders, no Swing Line Loan may be made during the continuation of any Defaultor Event of Default and (iii) the Swing Line Lender has not given at leasttwenty-four hours prior notice to Borrower that availability under the SwingLine is suspended or terminated. Borrower may borrow, repay and reborrow under this Section.  Unless notified to the contrary by the SwingLine Lender, borrowings under the Swing Line may be made in amounts which areintegral multiples of $1,000,000 upon telephonic request by a ResponsibleOfficial of Borrower made to the Administrative Agent not later than1:00 P.M. (California local time), on the Domestic Business Day of therequested Swing Line Loan (which telephonic request shall be promptly confirmedin writing by telecopier).  Promptlyafter receipt of such a request for a Swing Line Loan, the Administrative Agentshall provide telephonic verification to the Swing Line Lender that therequested Swing Line Loan is in conformity with this Section.  Unless the Swing Line Lender otherwiseagrees, each repayment of a Swing Line Loan shall be in an amount which is anintegral multiple of $1,000,000.  IfBorrower instructs the Swing Line Lender

 

16

----

 

to debit its demand deposit account at the Swing LineLender in the amount of any payment with respect to a Swing Line Loan, or theSwing Line Lender otherwise receives repayment, after 3:00 p.m.(California local time), on a Domestic Business Day, such payment shall bedeemed received on the next Domestic Business Day.  The Swing Line Lender shall promptly notify the AdministrativeAgent of the Swing Loan Outstandings each time there is a change therein.

 

(b)                                 TheSwing Line Lender shall be responsible for submitting invoices to Borrower forsuch interest.  The interest payable onSwing Line Loans shall be solely for the account of the Swing Line Lenderunless and until the Banks fund their participations therein pursuant toclause (d) of this Section.

 

(c)                                  TheSwing Line Loans shall be payable on demand made by the Swing Line Lender andin any event on the Termination Date.

 

(d)                                 Uponthe making of a Swing Line Loan, each Revolving Lender shall be deemed to havepurchased from the Swing Line Lender a participation therein in an amount equalto that Lender’s Pro Rata Share of the Revolving Commitment of such Swing LineLoan.  Upon demand made by the SwingLine Lender, each Revolving Lender shall, according to its Pro Rata Share ofthe Revolving Commitment, promptly provide to the Swing Line Lender itspurchase price therefor in an amount equal to its participation therein.  The obligation of each Revolving Lender toso provide its purchase price to the Swing Line Lender shall be absolute andunconditional and shall not be affected by the occurrence of a Default or Eventof Default.  Each Revolving Lender thathas provided to the Swing Line Lender the purchase price due for its participationin Swing Line Loans shall thereupon acquire a pro rata participation, to theextent of such payment, in the claim of the Swing Line Lender against Borrowerfor principal and interest and shall share, in accordance with that pro rataparticipation, in any principal payment made by Borrower with respect to suchclaim and in any interest payment made by Borrower (but only with respect toperiods subsequent to the date such Lender paid the Swing Line Lender itspurchase price) with respect to such claim.

 

(e)                                  Inthe event that the Swing Line Outstandings are in excess of $10,000,000 onthree consecutive Domestic Business Days then, on the next DomesticBusiness Day (unless Borrower has made other arrangements acceptable to theSwing Line Lender to reduce the Swing Line Outstandings below $10,000,000),Borrower shall request a Borrowing of Revolving Loans in an amount sufficientto reduce the Swing Line Outstandings below $10,000,000.  In addition, upon any demand for payment ofthe Swing Line Outstandings by the Swing Line Lender (unless Borrower has madeother arrangements acceptable to the Swing Line Lender to reduce the Swing LineOutstandings to $0), Borrower shall request a Borrowing of Revolving Loans inan amount sufficient to repay all Swing Line Outstandings (and, for thispurpose, the limitations as to the minimum amounts of Base Rate Borrowings setforth in Section 2.01(b) shall not apply).  In each case, the Administrative Agent shall automaticallyprovide the responsive Loans made by each Revolving Lender to the Swing LineLender (which the Swing Line Lender shall then apply to the Swing LineOutstandings).  In the event thatBorrower fails to request a Borrowing within the time

 

17

----

 

specified by Section 2.02 on any such date, theAdministrative Agent may, but shall not be required to, without notice to orthe consent of Borrower, cause Revolving Loans to be made by the RevolvingLenders under their Revolving Commitments in amounts which are sufficient toreduce the Swing Line Outstandings as required above.  The conditions precedent set forth in Section 3.01 shall notapply to Revolving Loans to be made by the Revolving Lenders pursuant to thethree preceding sentences.  The proceedsof such Revolving Loans shall be paid directly to the Swing Line Lender forapplication to the Swing Line Outstandings.

 

2.05                           Conversion and Continuation ofCommitted Loans.  Subject to theprovisions 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 partof its outstanding Committed Loans equal to $10,000,000 and integral multiplesof $1,000,000 in excess of that amount from Loans bearing interest at a ratedetermined by reference to one basis to Committed Loans bearing interest at arate determined by reference to an alternative basis or (ii) upon theexpiration of any Interest Period applicable to a Euro-Dollar Loan, to continueall 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 theexpiration 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 8:30 A.M.(California local time) at least one Domestic Business Day in advance of theproposed conversion date (in the case of a conversion to a Base Rate Loan) andat least three Euro-Dollar Business Days in advance of the proposedconversion/continuation date (in the case of a conversion to, or a continuationof, a Euro-Dollar Loan).  A Notice ofConversion/Continuation shall specify (i) the proposedconversion/continuation date (which shall be a Domestic Business Day in thecase of Base Rate Loans and a Euro-Dollar Business Day, in the case ofconversion to or continuation of Euro-Dollar Loans), (ii) the amount andtype of the Loan to be converted/continued, (iii) the nature of theproposed conversion/continuation, (iv) in the case of a conversion to, ora 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-DollarLoan, that no Default or Event of Default has occurred and is continuing.

 

2.06                           Notice to Lenders; Funding of Loans.

 

(a)                                  Uponreceipt of a Notice of Borrowing, the Administrative Agent shall promptlynotify 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 berevocable by the Borrower.

 

(b)                                 Notlater than 11:00 A.M. (California local time) on the date of eachBorrowing, if such Borrowing is to be made in Dollars, each Lenderparticipating therein shall (except as provided in subsection (c) of thisSection) make available its share of such Borrowing in Dollars, in federal orother funds immediately available to the Administrative Agent at its addressreferred to in Section 9.01. Unless the

 

18

----

 

Administrative Agent determines that any applicablecondition specified in Article III has not been satisfied, theAdministrative Agent will make the funds so received from the Lenders availableto the Borrower at the Administrative Agent’s aforesaid address or place.

 

(c)                                  Ifany Lender makes a new Loan hereunder on a day on which the Borrower is torepay all or any part of an outstanding Loan from such Lender, such Lendershall apply the proceeds of its new Loan to make such repayment and only anamount equal to the difference (if any) between the amount being borrowed andthe amount being repaid shall be made available by such Lender to theAdministrative Agent as provided in subsection (b), or remitted by theBorrower to the Administrative Agent as provided in Section 2.17, as thecase may be.

 

(d)                                 Unlessthe Administrative Agent shall have received notice from a Lender prior to thedate of any Borrowing that such Lender will not make available to theAdministrative Agent such Lender’s share of such Borrowing, the AdministrativeAgent may assume that such Lender has made such share available to theAdministrative Agent on the date of such Borrowing in accordance withsubsections (b) and (c) of this Section 2.06 and the AdministrativeAgent may, in reliance upon such assumption, make available to the Borrower onsuch date a corresponding amount.  Ifand to the extent that such Lender shall not have so made such share availableto the Administrative Agent, such Lender and the Borrower severally agree torepay to the Administrative Agent forthwith on demand such corresponding amounttogether with interest thereon, for each day from the date such amount is madeavailable to the Borrower until the date such amount is repaid to theAdministrative Agent, at (i) in the case of the Borrower, a rate per annumequal to the higher of the Federal Funds Rate and the interest rate applicablethereto pursuant to Section 2.08 and (ii) in the case of such Lender,the Federal Funds Rate.  If such Lendershall repay to the Administrative Agent such corresponding amount, such amountso repaid shall constitute such Lender’s Loan included in such Borrowing forpurposes of this Agreement.  If theBorrower pays interest under this subsection (d) at the Federal Funds Rateand the Federal Funds Rate is higher than the interest rate applicable theretopursuant to Section 2.08, the applicable Lender shall pay the Borrower thedifference between such rates.

 

2.07                           Notes.

 

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

 

(b)                                 Uponreceipt of each Lender’s Notes pursuant to Section 3.02(b), theAdministrative 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 eachpayment of principal made by the Borrower with respect thereto, and may, ifsuch Lender so elects in connection with any transfer or enforcement of itsNotes, endorse on

 

19

----

 

the schedule forminga part thereof appropriate notations to evidence the foregoing information withrespect to each such Loan then outstanding; provided that the failure of anyLender to make any such recordation or endorsement shall not affect theobligations of the Borrower hereunder or under the Notes.  Each Lender is hereby irrevocably authorizedby the Borrower so to endorse its Notes and to attach to and make a part of itsNote a continuation of any such schedule as and when required.

 

2.08                           Interest Rates.

 

(a)                                  EachBase 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 rateper annum equal to the Base Rate for such day plus any applicable BaseRate Margin.  Such interest shall bepayable on the last Domestic Business Day of each calendar quarter in arrearsand on the Termination Date.  Any overdueprincipal of or interest on any Base Rate Loan shall, at the option of theRequired Lenders, bear interest, payable on demand, for each day until paid ata rate per annum equal to the sum of the Base Rate plus any applicableBase Rate Margin plus 2% per annum.

 

(b)                                 EachEuro-Dollar Loan shall bear interest on the outstanding principal amountthereof, for each day during the Interest Period applicable thereto, at a rateper 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 eachInterest Period on the last day thereof and, if such Interest Period is longerthan three months, at intervals of three months after the first day thereof.

 

(c)                                  Anyoverdue principal of or interest on any Euro-Dollar Loan shall, at the optionof the Required Lenders, bear interest, payable on demand, for each day untilpaid at a rate per annum equal to the sum of 2% plus the Euro-Dollar Margin forsuch day plus the quotient obtained (rounded upwards, if necessary, to the nexthigher 1/100 of 1%) by dividing (i) the average (rounded upward, ifnecessary, to the next higher 1/16 of 1%) of the respective rates per annum atwhich one day (or, if such amount due remains unpaid more than threeEuro-Dollar Business Days, then for such period of time not longer than 6months as the Administrative Agent may elect) deposits in Dollars in an amountapproximately equal to such overdue payment due to the Administrative Agent areoffered to the Administrative Agent in the London interbank market for theapplicable period determined as provided above by (ii) 1.00 minus theEuro-Dollar Reserve Percentage (or, if the circumstances described in clause(a) or (b) of Section 8.01 shall exist, at a rate per annum equal to thesum of 2% plus the rate applicable to Base Rate Loans for such day).

 

(d)                                 SwingLine Loans shall bear interest at a fluctuating rate per annum equal to theBase Rate plus any applicable Base Rate Margin.  Interest on the Swing Line Loans shall bepayable on such dates, not more frequent than monthly, as may be specified bythe Swing Line Lender and in any event on the Termination Date.

 

20

----

 

Any overdue principal of or interest on any Swing LineLoan shall bear interest, payable on demand, for each day until paid at a rateper annum equal to the sum of the Base Rate plus any applicable BaseRate Margin plus 2% per annum for such day.

 

(e)                                  TheAdministrative Agent shall determine in accordance with the provisions of thisAgreement each interest rate applicable to the Loans hereunder.  The Administrative Agent shall give promptnotice to the Borrower and the participating Lenders of each rate of interestso determined, and its determination thereof shall be conclusive in the absenceof manifest error.

 

2.09                           Amendment Fees. On the date upon which this Agreement is executed, the Borrower shallpay to the Administrative Agent for the account of each consenting Lendernon-refundable amendment fees in the amounts set forth in the term sheet forthis Agreement posted on Intralinks by the Joint Lead Arrangers and Joint BookManagers.

 

2.10                           Facility Fees. The Borrower shall pay to the Administrative Agent for the account ofthe Lenders ratably facility fees at the Facility Fee Rate determined daily inaccordance with the Schedule 1 (the “Facility Fee Rate”).  Such facility fee shall accrue from andincluding the Availability Date to but excluding the Termination Date (orearlier date of termination of the Commitments in their entirety), on the dailyaggregate amount of the Commitments (whether used or unused).  Facility fees shall be payable quarterly inarrears on the first day of each March, June, September andDecember following the Availability Date and upon the date of terminationof the Commitments in their entirety, and are non-refundable.

 

2.11                           Letter of Credit Fees.  The Borrower shall pay to the AdministrativeAgent (i) for the account of the Revolving Lenders ratably a Letter ofCredit fee accruing daily on the aggregate amount then available for drawingunder all Letters of Credit at a rate per annum determined in accordance withthe Schedule 1 (the “LC Fee Rate”) and (ii) for the account of theIssuing Lender a Letter of Credit fronting fee accruing daily on the aggregateamount then available for drawing under all Letters of Credit issued by theIssuing Lender at a rate per annum set forth in a letter agreement between theBorrower and the Issuing Lender.  Letterof Credit fees shall payable quarterly in arrears on the first day of eachMarch, June, September and December following the Availability Dateand upon the date of termination of the Commitments in their entirety and arenon-refundable.

 

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

 

2.13                           Optional Termination of Commitmentsby the Lenders.  Following theoccurrence of a Change of Control, the Required Lenders may in their sole andabsolute discretion elect, during the sixty day period immediately subsequentto the later of (a) such occurrence and (b) the

 

21

----

 

earlierof (i) receipt of the Borrower’s written notice to the AdministrativeAgent of such occurrence and (ii) if no such notice has been received bythe Administrative Agent, the date upon which the Administrative Agent and theLenders have actual knowledge thereof, to terminate all of theCommitments.  In any such case theCommitments shall be terminated effective on the date which is sixty dayssubsequent to the date of written notice from the Administrative Agent to theBorrower thereof, and (i) to the extent that there is then any Debt evidencedby the Notes, the same shall be immediately due and payable, and (ii) to theextent that any Letters of Credit are then outstanding, Borrower shall providecash collateral for the same.  Inaddition thereto, in the event that the lenders under the Five Year CreditAgreement elect to terminate the lending commitments under the Five Year CreditAgreement as a result of a “Change of Control” as defined therein, theCommitments of the Lenders hereunder shall (except as to any Lender to theextent that such Lender otherwise expressly agrees with Borrower in writing) beconcurrently terminated.

 

2.14                           Scheduled Termination of Commitments.  The Commitments shall terminate on theTermination Date and any Loans then outstanding (together with accrued interestthereon) shall be due and payable on such date.

 

2.15                           Extensions of the Termination Date.  The Termination Date may be extended, in themanner set forth in this Section, for a period of up to two years after thedate on which the Termination Date would otherwise have occurred.  If the Borrower wishes to extend theTermination Date, it shall give written notice to that effect to theAdministrative Agent not less than 90 days nor more than 150 days following thedelivery to the Administrative Agent of the audited annual financial statementsof Borrower in accordance with Section 5.01(b), whereupon theAdministrative Agent shall notify each of the Lenders of such notice.  Each Lender will respond to such request,whether affirmatively or negatively, within 30 days (the “Response Date”).  So long as Lenders having Commitment(s)totaling not less than 66 2/3% of the aggregate amount of the Commitment(s)shall have responded affirmatively to such a request, then, subject to receiptby the Administrative Agent of counterparts of an Extension Agreement insubstantially the form of Exhibit E duly completed and signed bythe Borrower and each of the affirmatively responding Lenders, the TerminationDate shall be extended for a period of up to two years to the date stated insuch Extension Agreement provided, however, that, with respect toany Lender or Lenders that respond negatively or fail to timely respond to suchrequest (each non-responding Lender being conclusively deemed to refuse toconsent to the extension), the Termination Date in effect immediately prior tosuch extension shall continue in effect, and the Commitments(s) of suchLender(s) shall terminate on the Termination Date in effect immediately priorto such extension, and the Loans made by such Lender(s) shall be repaid infull, together with accrued and unpaid interest thereon and all other amountsowing hereunder with respect thereto, on such date; provided, further,that the Borrower shall, for a period of 60 days following the Response Date,have the right, with the assistance of the Administrative Agent, to seek asubstitute financial institution(s) (which may be one or more of the Lenders)to assume the Commitment(s) of such non-extending Lender(s).  Not later than the third Domestic BusinessDay prior to the end of the 60-day period referred to in the further proviso tothe preceding sentence, the Borrower may, by notice to the Lenders through theAdministrative Agent, but shall not be required to, (i) terminate, effectiveon the third Domestic Business Day after the giving of such notice, theCommitment(s) of such non-extending Lender(s), and, if the Borrower elects toterminate such Commitments, the Loans made by such Lender(s) shall be

 

22

----

 

repaid in full, together with accrued and unpaidinterest thereon and all other amounts owing hereunder with respect thereto, onsuch date; or (ii) designate one or more new financial institutionsreasonably acceptable to the Administrative Agent to assume the Commitment(s)of such non-extending Lender(s), whereupon the aggregate amount of suchCommitment(s) shall be assumed by such substitute financial institution(s) andsuch non-extending Lender(s) shall assign its or their Commitment(s) to suchnew financial institution(s) and sell its or their Loans and its participationinterests in all outstanding Letters of Credit to such financialinstitution(s), at a price equal to the outstanding principal amount of suchLoans plus accrued and unpaid interest thereon and other amounts due and owinghereunder with respect thereto, pursuant to documentation in substantially theform of Exhibit G hereto.

 

2.16                           Optional Prepayments.

 

(a)                                  Subjectin the case of any Euro-Dollar Borrowing to Section 2.18, the Borrowermay, upon at least one Domestic Business Day’s notice to the AdministrativeAgent, prepay any Base Rate Borrowing or upon at least three Euro-DollarBusiness Days’ notice to the Administrative Agent, with respect to anyEuro-Dollar Borrowing, prepay any Euro-Dollar Borrowing, in each case in wholeat any time, or from time to time in part in amounts aggregating $10,000,000 orany larger multiple of $1,000,000, by paying the principal amount to be prepaidtogether with accrued interest thereon to the date of prepayment.  Each such optional prepayment shall beapplied to prepay ratably the Loans of the several Lenders included in suchBorrowing.

 

(b)                                 Uponreceipt of a notice of prepayment pursuant to this Section, the AdministrativeAgent shall promptly notify each applicable Lender of the contents thereof andof such Lender’s Pro Rata Share (if any) of such prepayment and such noticeshall not thereafter be revocable by the Borrower.

 

2.17                           General Provisions as to Payments.

 

(a)                                  TheBorrower shall make each payment of principal of, and interest on, Loans andLetters of Credit Liabilities and of fees hereunder, in Dollars not later than11:00 A.M. (California local time) on the date when due, in Federal or otherimmediately available funds, to the Administrative Agent at its addressreferred to in Section 9.01, without offset or counterclaim. TheAdministrative Agent will promptly distribute to each Lender its ratable shareof each such payment received by the Administrative Agent for the account ofthe Lenders, in Dollars and in the type of funds received by the AdministrativeAgent.  Whenever any payment ofprincipal of, or interest on, the Base Rate Loans or Letters of CreditLiabilities or of fees shall be due on a day which is not a Domestic BusinessDay, the date for payment thereof shall be extended to the next succeedingDomestic Business Day.  Whenever anypayment of principal of, or interest on, the Euro-Dollar Loans shall be due ona day which is not a Euro-Dollar Business Day, the date for payment thereofshall be extended to the next succeeding Euro-Dollar Business Day unless suchEuro-Dollar Business Day falls in another calendar month, in which case thedate for payment thereof shall be the next preceding Euro-Dollar Business Day.  If the date for any payment of principal isextended by operation of law or otherwise, interest thereon shall be payablefor such extended time.

 

23

----

 

(b)                                 Unlessthe Administrative Agent shall have received notice from the Borrower prior tothe date on which any payment is due to the Lenders hereunder that the Borrowerwill not make such payment in full, the Administrative Agent may assume thatthe Borrower has made such payment in full to the Administrative Agent on suchdate and the Administrative Agent may, in reliance upon such assumption, causeto be distributed to each Lender on such due date an amount equal to the amountthen due such Lender.  If and to theextent that the Borrower shall not have so made such payment, each Lender shallrepay to the Administrative Agent forthwith on demand such amount distributedto such Lender together with interest thereon, for each day from the date suchamount is distributed to such Lender until the date such Lender repays suchamount to the Administrative Agent, at the Federal Funds Rate.

 

2.18                           Funding Losses. If the Borrower makes any payment of principal with respect to anyEuro-Dollar Loan (pursuant to Article VI or VIII or otherwise) on any dayother than the last day of the Interest Period applicable thereto (or the lastday of an applicable period fixed pursuant to Section 2.08(d)), or if theBorrower fails to borrow any Euro-Dollar Loans after notice has been given toany Lender in accordance with section 2.06(a), the Borrower shallreimburse each Lender within 15 days after demand for any resulting loss orexpense incurred by it (or by an existing or prospective participant in therelated Loan), including (without limitation) any loss incurred in obtaining,liquidating or employing deposits from third parties, but excluding loss ofmargin for the period after any such payment or failure to borrow, providedthat such Lender shall have delivered to the Borrower a certificate as to theamount of such loss or expense, which certificate shall be conclusive in theabsence of manifest error.

 

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

 

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

 

Each Lender which so delivers a Form W-8 ECI furtherundertakes to deliver to each of the Borrower and the Administrative Agent twoadditional copies of such form (or a successor form) on or before the date thatsuch form expires or becomes obsolete or after the occurrence of any eventrequiring a change in the most recent form so delivered by it, and suchamendments thereto or extensions or renewals thereof as may be reasonablyrequested by the Borrower or the Administrative Agent, in each case certifyingthat such Lender is entitled to receive payments under this Agreement and theNotes without deduction or withholding of any United States federal incometaxes, unless an event (including without limitation any change in treaty, lawor regulation) has occurred prior to the date on which any such delivery wouldotherwise be

 

24

----

 

required which renders all such forms inapplicable orwhich would prevent such Lender from duly completing and delivering any suchform with respect to it and such Lender advises the Borrower and theAdministrative Agent that it is not capable of receiving payments without anydeduction or withholding of United States federal income tax.

 

2.21                           Letters of Credit.

 

(a)                                  Subjectto the terms and conditions hereof, the Issuing Lender agrees to issue Lettersof Credit hereunder from time to time before the tenth day before theTermination Date upon the request of the Borrower; provided that,immediately after each Letter of Credit is issued, (i) the aggregateamount of the Letter of Credit Liabilities shall not exceed the Letter ofCredit Commitment and (ii) the aggregate amount of the Letter of CreditLiabilities plus the aggregate outstanding amount of all Revolving Loans andSwing Line Loans shall not exceed the aggregate amount of the RevolvingCommitments.  Upon the date of issuanceof a Letter of Credit, the Issuing Lender shall be deemed, without furtheraction by any party hereto, to have sold to each Revolving Lender, and eachRevolving Lender shall be deemed, without further action by any party hereto,to have purchased from the Issuing Lender, a participation in such Letter ofCredit and the related Letter of Credit Liabilities in its Pro Rata Share ofthe Revolving Commitments.  On theAvailability Date, each letter of credit issued by Bank of America as issuinglender for the Lenders under the Five Year Credit Agreement shall be deemedre-issued as a Letter of Credit hereunder without further action by theparties, and the Revolving Lenders hereunder shall thereupon acquire ratablerisk participations therein in accordance with this Section.

 

(b)                                 TheBorrower shall give the Issuing Lender notice at least five days prior to therequested issuance of a Letter of Credit specifying the date such Letter ofCredit is to be issued, and describing the terms of such Letter of Credit andthe nature of the transactions to be supported thereby (such notice, includingany 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 aletter of credit application on the Issuing Bank’s then standard form for theissuance of letters of credit.  Uponreceipt of a Notice of Issuance, the Issuing Lender shall promptly notify theAdministrative Agent, and the Administrative Agent shall promptly notify each RevolvingLender of the contents thereof and of the amount of such Revolving Lender’sparticipation in such Letter of Credit. The issuance by the Issuing Lender of each Letter of Credit shall, inaddition to the conditions precedent set forth in Article III, be subjectto the conditions precedent that such Letter of Credit shall be in such formand contain such terms as shall be satisfactory to the Issuing Lender and thatthe Borrower shall have executed and delivered such other instruments andagreements relating to such Letter of Credit as the Issuing Lender shall havereasonably requested.  The Borrowershall 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 betweenthe Borrower and the Issuing Lender.  The extension or renewal of any Letter of Credit shall be deemedto be an issuance of such Letter of Credit, and if any Letter of Creditcontains a provision pursuant to which it is deemed to be extended unless noticeof termination is given by the Issuing Lender, the Issuing Lender shall timelygive such notice of termination unless it has theretofore timely received aNotice

 

25

----

 

of Issuance and the otherconditions to issuance of a Letter of Credit have also theretofore been metwith respect to such extension.  NoLetter of Credit shall have a term extending or be so extendible beyond thefifth Domestic Business Day preceding the Termination Date.

 

(c)                                  Uponreceipt from the beneficiary of any Letter of Credit of any notice of a drawingunder such Letter of Credit, the Issuing Lender shall notify the AdministrativeAgent and the Administrative Agent shall promptly notify the Borrower and eachother Revolving Lender as to the amount to be paid as a result of such demandor drawing and the payment date.  TheBorrower shall be irrevocably and unconditionally obligated forthwith toreimburse the Issuing Lender for any amounts paid by the Issuing Lender uponany drawing under any Letter of Credit, without presentment, demand, protest orother formalities of any kind.  All suchamounts paid by the Issuing Lender and remaining unpaid by the Borrower shallbear interest, payable on demand, for each day until paid at a rate per annumequal to the sum of 2% plus the rate applicable to Base Rate Loans for suchday.  In addition, each Revolving Lenderwill pay to the Administrative Agent, for the account of the Issuing Lender,immediately upon the Issuing Lender’s demand at any time during the periodcommencing after such drawing until reimbursement therefor in full by theBorrower, an amount equal to such Revolving Lender’s Pro Rata Share of suchdrawing together with interest on such amount for each day from the date of theIssuing Lender’s demand for such payment (or, if such demand is made after 9:00A.M. (California local time) on such date, from the next succeeding DomesticBusiness Day) to the date of payment by such Revolving Lender of such amount ata rate of interest per annum equal to the Federal Funds Rate.  The Issuing Lender will promptly pay to eachRevolving Lender ratably all amounts received from the Borrower for applicationin 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 IssuingLender in respect of such Letter of Credit pursuant hereto.

 

(d)                                 Theobligations of the Borrower and each Revolving Lender under subsection (c)above shall be absolute, unconditional and irrevocable, and shall be performedstrictly in accordance with the terms of this Agreement, under allcircumstances whatsoever, including without limitation the followingcircumstances:

 

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

 

(ii)                                  anyamendment, waiver of or any consent to departure from all or any of theprovisions of this Agreement, any Letter of Credit or any document relatedhereto or thereto;

 

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

 

(iv)                              theexistence of any claim, set-off, defense or other rights that the Borrower mayhave at any time against a beneficiary of a Letter of Credit (or any

 

26

----

 

Person for whom thebeneficiary may be acting), the Revolving Lenders (including the IssuingLender) or any other Person, whether in connection with this Agreement or theLetter of Credit or any document related hereto or thereto or any unrelatedtransaction;

 

(v)                                 anystatement or any other document presented under a Letter of Credit proving tobe forged, fraudulent or invalid in any respect or any statement therein beinguntrue or inaccurate in any respect whatsoever;

 

(vi)                              paymentunder a Letter of Credit to the beneficiary of such Letter of Credit againstpresentation to the Issuing Lender of a draft or certificate that does notcomply with the terms of the Letter of Credit; or

 

(vii)                           anyother 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 orany other event or circumstance whatsoever that might, but for the provisionsof this subsection (vii), constitute a legal or equitable discharge of theBorrower’s or the Lender’s obligations hereunder.

 

(e)                                  TheBorrower hereby indemnifies and holds harmless each Revolving Lender (includingthe Issuing Lender) and the Administrative Agent from and against any and allclaims, damages, losses, liabilities, costs or expenses which such RevolvingLender or the Administrative Agent may incur (including, without limitation,any claims, damages, losses, liabilities, costs or expenses which the IssuingLender may incur by reason of or in connection with the failure of any otherRevolving Lender to fulfill or comply with its obligations to the IssuingLender hereunder (but nothing herein contained shall affect any rights theBorrower may have against such defaulting Revolving Lender)), and none of theRevolving Lenders (including the Issuing Lender) nor the Administrative Agentnor any of their officers or directors or employees or agents shall be liableor responsible, by reason of or in connection with the execution and deliveryor transfer of or payment or failure to pay under any Letter of Credit,including without limitation any of the circumstances enumerated insubsection (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 oftechnical terms, (iii) any loss or delay in the transmission of anydocument required in order to make a drawing under a Letter of Credit,(iv) any consequences arising from causes beyond the control of theIssuing Lender, including without limitation any government acts, or any othercircumstances whatsoever in making or failing to make payment under such Letterof Credit; provided that the Borrower shall not be required to indemnifythe Issuing Lender for any claims, damages, losses, liabilities, costs orexpenses, and the Borrower shall have a claim for direct (but notconsequential) damage suffered by it, to the extent found by a court ofcompetent jurisdiction to have been caused by (x) the willful misconductor gross negligence of the Issuing Lender in determining whether a requestpresented under any Letter of Credit complied with the terms of such Letter ofCredit or (y) the Issuing Lender’s failure to pay under any Letter ofCredit after the presentation to it of a request strictly complying with theterms and conditions of the Letter of Credit. Nothing in this subsection (e) is intended to limit theobligations of the

 

27

----

 

Borrower under any otherprovision of this Agreement.  To theextent the Borrower does not indemnify the Issuing Lender as required by thissubsection, the Revolving Lenders agree to do so ratably in accordance withtheir Revolving Commitments.

 

2.22                           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 rateper 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 theEuro-Dollar Reserve Percentage over (ii) the applicable Euro-DollarRate.  Any Lender wishing to requirepayment of such additional interest (x) shall so notify the Borrower andthe Agent, in which case such additional interest on the Euro-Dollar Loans ofsuch Lender shall be payable to such Lender at the place indicated in suchnotice with respect to each Interest Period commencing at least threeEuro-Dollar Business Days after the giving of such notice and (y) shallnotify the Borrower at least five Euro-Dollar Business Days prior to each dateon which interest is payable on the Euro-Dollar Loans of the amount then due itunder this Section.

 

2.23                           Increased Commitments; AdditionalLenders.

 

(a)                                  Atany time and from time to time, the Borrower may, upon at least 30 days noticeto the Administrative Agent (or such shorter prior notice as the AdministrativeAgent may agree to accept), propose to increase the aggregate amount of theCommitments by an aggregate amount which does not result in the Commitments,when aggregated with the principal amount of Borrower’s then existing seniorshort term bank credit facilities, being in excess of $4,125,000,000 (theamount of any such increase of the Commitments being referred to as the“Increased Commitments”).  If theBorrower elects to increase the Commitments pursuant to this Section 2.23,any such increase shall be made ratably between the aggregate amount of theRevolving Commitments and aggregate amount of the Term Loans or Term LoanCommitments then outstanding.  For theavoidance of doubt, no Lender shall be obligated to increase its Revolving Commitmentsor Term Loan Commitments.

 

(b)                                 TheBorrower may designate any Lender party to this Agreement (with the consent ofsuch Lender, which may be given or withheld in its sole discretion) or anotherPerson 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 thecase of any such Person that is an existing Lender, increase its Commitmentsand (ii) in the case of any other such Person (an “Additional Lender”), becomea party to this Agreement. The sum of the increases in the Commitments of theexisting Lenders pursuant to this subsection (b) plus the Commitments ofthe Additional Lenders shall not in the aggregate exceed the unsubscribedamount of the Increased Commitments.

 

(c)                                  Anincrease in the aggregate amount of the Commitments pursuant to thisSection 2.23 shall become effective upon the receipt by the AdministrativeAgent of an agreement in form and substance satisfactory to the AdministrativeAgent signed by the Borrower, by each Additional Lender and by each otherLender whose Commitments are to be increased, setting forth the new Commitmentsof such Lenders and setting forth the agreement of each Additional Lender tobecome a party to this Agreement and to be

 

28

----

 

bound by all the termsand provisions hereof, together with such evidence of appropriate corporateauthorization on the part of the Borrower with respect to the IncreasedCommitments and such opinions of counsel for the Borrower with respect to theIncreased Commitments as the Administrative Agent may reasonably request.

 

2.24                           Mandatory Termination or Reductionof Commitments.  In the eventthe Borrower exercises its rights under Section 2.12 of the Five YearCredit Agreement to voluntarily reduce the amount of the Commitments thereunder(but does not wholly terminate the credit commitments under the Five YearCredit Agreement), then the aggregate principal amount of the Commitmentsof  each of the Lenders hereunder shallbe concurrently reduced to an amount which is equal to the remaining principalamount of the commitments of that Lender under the Five Year CreditAgreement.  In the event that theBorrower exercises its rights under Section 2.12 of the Five Year CreditAgreement or under any other provision of the Five Year Credit Agreement toterminate the commitment of any one or more of the Lenders thereunder, then theCommitment of that Lender under this Agreement shall be concurrently and  automatically terminated.

 

ARTICLE III

 

CONDITIONS

 

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

 

(a)                                  receiptby the Administrative Agent of a Notice of Borrowing as required bySection 2.02 or 2.03, or receipt by the Issuing Lender of a Notice ofIssuance as required by Section 2.21(b), as the case may be;

 

(b)                                 immediatelyafter any Borrowing of Revolving Loans or Swing Line Loans or issuance of aLetter of Credit, the sum of the aggregate outstanding principal amount ofRevolving Loans and Swing Line Loans and the aggregate amount of Letter ofCredit Liabilities will not exceed the aggregate amount of the RevolvingCommitments;

 

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

 

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

 

(e)                                  inthe case of an issuance of a Letter of Credit, immediately after such issuanceof a Letter of Credit, the aggregate amount of the Letter of Credit Liabilitiesshall not exceed the Letter of Credit Commitment;

 

29

----

 

(f)                                    inthe case of the Borrowing of Term Loans made on the Availability Date, the principalamount of such Loans will not exceed the Term Loan Commitment;

 

(g)                                 inthe case of the making of the initial Loans and the issuance of the initialLetters of Credit hereunder, no Default or Event of Default shall have occurredand remain continuing under the Five Year Credit Agreement; and

 

(h)                                 unlessall of the Lenders otherwise consent in their sole and absolute discretion, noLoan, Letter of Credit or other credit accommodations will in any event beavailable hereunder prior to the Availability Date (and then, only concurrentlywith the termination of the commitments under the Five Year Credit Agreementand the repayment in full of all obligations thereunder).

 

Each Borrowing and issuance of a Letter of Credithereunder shall be deemed to be a representation and warranty by the Borroweron 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 inaccordance with Section 9.04):

 

(a)                                  receiptby the Administrative Agent of counterparts hereof signed by each of theBorrower, the Administrative Agent and the Required Lenders (or, in the case ofany 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 acounterpart hereof by such party);

 

(b)                                 receiptby the Administrative Agent for the account of each Lender of a duly executedNote dated on or before the Effective Date complying with the provisions ofSection 2.07 and of the Swing Line Documents;

 

(c)                                  receiptby the Administrative Agent of an opinion of Gibson, Dunn & Crutcher, LLP,substantially in the form of Exhibit F;

 

(d)                                 receiptby the Administrative Agent of all documents it may reasonably request relatingto the existence of the Borrower, the corporate authority for and the validityof this Agreement and the Notes, and any other matters relevant hereto, all inform and substance satisfactory to the Administrative Agents; and

 

(e)                                  theBorrower shall have concurrently entered into the proposed Amendment No. 6 tothe Five Year Credit Agreement and the proposed Short Term Credit Agreement,substantially in the form previously distributed to the Lenders.

 

The Administrative Agent shall promptly notify theBorrower, the Administrative Agent and each Lender of the effectiveness of thisAgreement, and such notice shall be conclusive and binding on all partieshereto.

 

30

----

 

ARTICLE IV

 

REPRESENTATIONSAND WARRANTIES

 

The Borrower represents and warrants that:

 

4.01                           Corporate Existence and Power.  The Borrower (a) is a corporation dulyincorporated, validly existing and in good standing under the laws of Delaware,(b) has all corporate powers and authority and all material governmentallicenses (including, without limitation, any such license issued by a GamingBoard), authorizations, consents and approvals required to own its property andassets and carry on its business as now conducted and (c) is duly qualified asa foreign corporation and in good standing in each jurisdiction where theownership, leasing and operation of its property or the conduct of its businessrequires such qualification.

 

4.02                           Corporate and GovernmentalAuthorization; Contravention. The execution, delivery and performance by the Borrower of thisAgreement and the Notes are within the Borrower’s corporate powers, have beenduly authorized by all necessary corporate action, require no action by or inrespect of, or filing with, any Governmental Agency and do not contravene, or constitute a default under, anyprovision of applicable law or regulation or of the certificate ofincorporation or by-laws of the Borrower or of any agreement, judgment,injunction, order, decree or other instrument binding upon the Borrower orresult in the creation or imposition of any Lien on any asset of the Borroweror any of its Subsidiaries.

 

4.03                           Binding Effect. This Agreement constitutes a valid and binding agreement of the Borrowerand the Notes, when executed and delivered in accordance with this Agreement,will constitute valid and binding obligations of the Borrower, in each caseenforceable in accordance with their respective terms.

 

4.04                           Financial Information.  Since December 31, 2002, there has beenno material adverse change in the business, financial position, results ofoperations 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 yearended December 31, 2002 or in its 10-Q report for the quarter endedMarch 31, 2003, there is no action, suit or proceeding pending against, or to the knowledge of theBorrower threatened against or affecting, the Borrower or any of itsSubsidiaries before any court or arbitrator or any governmental body, agency orofficial in which there is a reasonable possibility of an adverse decisionwhich could materially adversely affect the business, consolidated financialposition or consolidated results of operations of the Borrower and itsConsolidated Subsidiaries or which in any manner draws into question thevalidity or enforceability of this Agreement or the Notes.  Without limiting the generality of theforegoing, with respect to those litigation matters described above as reportedin the Borrower’s aforementioned form 10-K or 10-Q reports, (a) thedisclosure 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 fulfilledits obligations under the minimum funding standards of ERISA and the InternalRevenue Code with

 

31

----

 

respect to each Plan and is in compliance in allmaterial respects with the presently applicable provisions of ERISA and theInternal Revenue Code with respect to each Plan.  No member of the ERISA Group has (i) sought a waiver of theminimum funding standard under Section 412 of the Internal Revenue Code inrespect of any Plan, (ii) failed to make any contribution or payment toany Plan or Multiemployer Plan or in respect of any Benefit Arrangement, ormade any amendment to any Plan or Benefit Arrangement, which has resulted orcould result in the imposition of a Lien or the posting of a bond or other securityunder ERISA or the Internal Revenue Code or (iii) incurred any liabilityunder Title IV or ERISA other than a liability to the PBGC for premiums underSection 4007 of ERISA.

 

4.07                           Taxes.  TheBorrower and its Significant Subsidiaries have filed all United States Federalincome tax returns and other material tax returns which are required to befiled by them and have paid or agreed to settlements of all taxes due pursuantto such returns or pursuant to any assessment received by the Borrower or anySubsidiary, except for such taxes, if any, as are being contested in good faithand as to which adequate reserves have been provided.  The charges, accruals and reserves on the books of the Borrowerand its Significant Subsidiaries in respect of taxes or other governmentalcharges are, in the opinion of the Borrower, adequate.

 

4.08                           Significant Subsidiaries.  Each of the Significant Subsidiaries (a)is  duly formed, validly existing and ingood standing under the laws of its jurisdiction of formation, (b) has allcorporate 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 assetsand carry on its business as now conducted and (c) is duly qualified and ingood standing in each jurisdiction where the ownership, leasing and operationof its property or the conduct of its business requires such qualification, andthe failure to be so qualified would have a material adverse effect on theBorrower and its 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 thatEnvironmental Laws are unlikely to have a material adverse effect on thebusiness, financial position, results of operations or prospects of theBorrower and its Consolidated Subsidiaries, considered as a whole.

 

4.11                           Full Disclosure.  All information heretofore furnished by the Borrower to theAgents or to any Lender for purposes of or in connection with this Agreement orany transaction contemplated hereby is, and all such information hereafterfurnished 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 ofwhich such information is stated or certified. The Borrower has disclosed to the Lenders in writing or by means of itsfilings with the Securities and Exchange Commission any and all facts whichmaterially and adversely affect or may affect (to the extent the Borrower cannow reasonably foresee), the business, operations or financial position of theBorrower and its Consolidated Subsidiaries, taken as a whole, or the ability ofthe Borrower to perform its obligations under this Agreement.  With respect to any projections or forecastsprovided, such projections or forecasts represent, as of the date thereof,management’s best

 

32

----

 

estimates based on reasonable assumptions and allavailable information, but are subject to the uncertainty inherent in allprojections and forecasts.

 

4.12                           Solvency.  Asof  the Effective Date, the Borrower andits Significant Subsidiaries are, on a consolidated basis, Solvent.

 

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

 

4.14                           Tax Shelter Regulations.  The Borrower does not intend to treat the Loansas being a “reportable transaction” (within the meaning of Treasury RegulationSection 1.6011-4).  In the eventthe Borrower determines to take any action inconsistent with such intention, itwill promptly notify the Administrative Agent thereof.  If the Borrower notifies the AdministrativeAgent, the Borrower acknowledges that one or more of the Lenders may treat itsLoans as part of a transaction that is subject to Treasury RegulationSection 301.6112-1, and such Lender or Lenders, as applicable, willmaintain the lists and other records required by such Treasury Regulation.

 

ARTICLE V

 

COVENANTS

 

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

 

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

 

(a)                                  assoon as available and in any event within 90 days after the end of each fiscalyear of the Borrower, the consolidated balance sheet of the Borrower and itsConsolidated Subsidiaries as of the end of such fiscal year and the relatedconsolidated statements of income and cash flows for such fiscal year, settingforth in each case in comparative form the figures as of the end of and for theprevious fiscal year, all reported on in a manner acceptable to the Securitiesand Exchange Commission by Deloitte & Touche or other independent publicaccountants of nationally recognized standing;

 

(b)                                 assoon as available and in any event within 60 days after the end of each of thefirst three quarters of each fiscal year of the Borrower, the consolidatedbalance sheet of the Borrower and its Consolidated Subsidiaries as of the endof such quarter and the related consolidated statements of income and cashflows for such quarter and for the portion of the Borrower’s fiscal year endedat the end of such quarter, setting forth in the case of such statements ofincome and cash flows in comparative form the figures for the correspondingquarter and the corresponding portion of the Borrower’s previous fiscal year,all certified (subject to normal year-end adjustments) as to fairness ofpresentation, generally accepted accounting principles and consistency by anAuthorized Officer;

 

(c)                                  simultaneouslywith the delivery of each set of financial statements referred to in clauses(a) and (b) above, a Compliance Certificate (i) setting forth in

 

33

----

 

reasonable detail the calculations required toestablish whether the Borrower was in compliance with the requirements ofSections 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 ComplianceCertificate and, if any Default then exists, setting forth the details thereofand the action which the Borrower is taking or proposes to take with respectthereto;

 

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

 

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

 

(f)                                    withinfive Domestic Business Days of any officer of the Borrower obtaining knowledgeof any Default, if such Default is then continuing, a certificate of anAuthorized Officer setting forth the details thereof and the action which theBorrower is taking or proposes to take with respect thereto;

 

(g)                                 promptlyupon the mailing thereof to the shareholders of the Borrower generally, copiesof all financial statements, reports and proxy statements so mailed;

 

(h)                                 promptlyupon the filing thereof, copies of all registration statements (other than theexhibits 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 theBorrower shall have filed with the Securities and Exchange Commission;

 

(i)                                     ifand when any member of the ERISA Group (i) gives or is required to givenotice to the PBGC of any “reportable event” (as defined in Section 4043of ERISA) with respect to any Plan which might constitute grounds for atermination of such Plan under Title IV of ERISA, or knows that the planadministrator of any Plan has given or is required to give notice of any suchreportable event, a copy of the notice of such reportable event given orrequired to be given to the PBGC; (ii) receives notice of complete orpartial withdrawal liability under Title IV of ERISA or notice that anyMultiemployer Plan is in reorganization, is insolvent or has been terminated, acopy of such notice; (iii) receives notice from the PBGC under Title IV ofERISA of an intent to terminate, impose liability (other than for premiumsunder Section 4007 of ERISA) in respect of, or appoint a trustee toadminister, any Plan, a copy of such notice; (iv) applies for a waiver ofthe minimum funding standard under Section 412 of the Internal RevenueCode, a copy of such application; (v) gives notice of intent to terminateany Plan under Section 4041(c) of ERISA, a copy of such notice and otherinformation filed with the PBGC; (vi) gives notice of withdrawal from anyPlan pursuant to Section 4063 of ERISA, a copy of such notice; or(vii) fails to make any payment or contribution to any Plan orMultiemployer Plan or in respect of any Benefit Arrangement or makes any

 

34

----

 

amendment to any Plan orBenefit Arrangement which has resulted or could result in the imposition of aLien or the posting of a bond or other security, a certificate of the chieffinancial officer or the chief accounting officer of the Borrower setting forthdetails as to such occurrence and action, if any, which the Borrower orapplicable member of the ERISA Group is required or proposes to take;

 

(j)                                     forthwith,notice of any change of which the Borrower becomes aware in the rating byS&P or Moody’s, of the Borrower’s outstanding senior unsecured long-termdebt securities;

 

(k)                                  promptlyafter the Borrower has notified the Administrative Agent of any intention bythe Borrower to treat the Loans as being a “reportable transaction” (within themeaning of Treasury Regulation Section 1.6011-4) a duly completed copy ofIRS Form 8886 or any successor form; and

 

(l)                                     fromtime to time such additional information regarding the financial position orbusiness of the Borrower and its subsidiaries as the Administrative Agent, atthe request of any Lender, may reasonably request.

 

5.02                           Maintenance of Property; Insurance.

 

(a)                                  TheBorrower will keep, and will cause each Significant Subsidiary to keep, allproperty useful and necessary in its business in good working order andcondition, ordinary wear and tear excepted, except where failure to do so wouldnot have a material adverse effect on the business, financial position, resultsof operations or prospects of the Borrower and its Consolidated Subsidiaries,considered as a whole.

 

(b)                                 TheBorrower 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) withfinancially sound and responsible insurance companies, insurance on all theirrespective properties in at least such amounts and against at least such risks(and with such risk retention) as are usually insured against in the samegeneral area by companies of established repute engaged in the same or asimilar business and will furnish to the Lenders, upon request from theAdministrative Agent, information presented in reasonable detail as to theinsurance so carried.  Notwithstandingthe foregoing, the Borrower may self-insure with respect to such risks withrespect to which companies of established repute engaged in the same or similarbusiness in the same general area usually self-insure.

 

5.03                           Conduct of Business and Maintenanceof Existence.  The Borrower willcontinue, and will cause each Significant Subsidiary to continue, to engage inbusiness of the same general type conducted by the Borrower and its SignificantSubsidiaries as of the Effective Date, and will preserve, renew and keep infull force and effect, and will cause each Subsidiary to preserve, renew andkeep in full force and effect their respective corporate existence and theirrespective rights, privileges and franchises necessary or desirable in thenormal conduct of business; provided that nothing in this Section 5.03shall prohibit (i) the merger of a Subsidiary into the Borrower or themerger or the consolidation of a Subsidiary with or into another Person if the

 

35

----

 

corporation surviving such consolidation or merger isa Subsidiary and if, in each case, after giving effect thereto, no Defaultshall have occurred and be continuing or (ii) the termination of thecorporate existence of any Subsidiary if (A) the Borrower in good faithdetermines that such termination is in the best 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 eachSignificant Subsidiary to comply, in all material respects with all applicablelaws, ordinances, rules, regulations, and requirements of any GovernmentalAgency (including, without limitation, Environmental Laws, Gaming Laws andERISA and, in each case, the rules and regulations thereunder) except where thenecessity of compliance therewith is contested in good faith by appropriateproceedings.

 

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

 

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

 

(a)                                  Liensexisting as of the Effective Date;

 

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

 

(c)                                  anyLien on any asset securing Debt incurred or assumed for the purpose offinancing 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 isalso an acquisition of the assets of such Person); provided that the Lienattaches to such asset concurrently with or within 180 days after the acquisitionthereof, or such longer period, not to exceed 12 months, due to the Borrower’sinability to retain the requisite governmental approvals with respect to suchacquisition; provided further that, in the case of real estate, (i) theLien attaches within 12 months after the latest of the acquisition thereof, thecompletion of construction thereon or the commencement of full operationthereof 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 suchconstruction;

 

(d)                                 Untilthe date which is ninety days following the Effective Date, any Lien on sharesof any equity security or any warrant or option to purchase an equity securityor any security which is convertible into an equity security issued by anySubsidiary of the

 

36

----

 

Borrower that holds,directly or indirectly through a holding company or otherwise, a license toconduct gaming under any Gaming Law, and in the proceeds thereof; providedthat this clause shall apply only so long as the Gaming Laws of the relevantjurisdiction provide that the creation of any restriction on the disposition ofany of such securities shall not be effective and, if such Gaming Laws at anytime cease to so provide, then this clause shall be of no further effect; and providedfurther that if at any time the Borrower or any of its Subsidiariescreates or suffers to exist a Lien covering such securities in favor of theholder of any other Indebtedness, it will (subject to any approval requiredunder such Gaming Laws) concurrently grant a pari-passu Lien likewise coveringsuch securities in favor of the Administrative Agent for the benefit of theLenders;

 

(e)                                  anyLien on any asset of any corporation or other business entity existing at thetime such corporation or other business entity is merged or consolidated withor into the Borrower or a Subsidiary and not created in contemplation of suchevent;

 

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

 

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

 

(h)                                 Lienssecuring Debt of a Subsidiary to the Borrower or another Subsidiary; and

 

(i)                                     Liensnot otherwise permitted by the foregoing clauses of thisSection encumbering assets of the Borrower and its ConsolidatedSubsidiaries having an aggregate fair market value which is not in excess of10% of Consolidated Net Tangible Assets (determined, in each case, by referenceto the most recent date for which the Borrower has delivered its financialstatements under Section 5.01(a)).

 

5.07                           Consolidations, Mergers and Sales of Assets.  The Borrower and its 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 theBorrower and its 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 thecapital stock or other equity securities of, any Person which is not engaged inthe same general lines of business as the Borrower and its Subsidiaries, if,giving effect to such consolidation, merger, sale or acquisition, the Borroweris not in pro forma compliance with the covenants set forth in Sections 5.10and 5.11; provided that, notwithstanding the foregoing, the Borrower may mergewith another Person only if (A) the Borrower is the corporation survivingsuch merger, and (B) immediately after giving effect to such merger, noDefault shall have occurred and be continuing.

 

5.08                           Hostile Tender Offers.  The Borrower and its Subsidiaries will notmake any offer to purchase or acquire, or prosecute, pursue or consummate a purchaseor acquisition of, 5% or more of the capital stock of any corporation or otherbusiness entity, if the board of directors or

 

37

----

 

other equivalent governing body of such corporation orbusiness entity has notified Borrower or its relevant Subsidiaries that itopposes such offer or purchase and such notice has not been withdrawn orsuperseded.

 

5.09                           Use of Proceeds. The proceeds of the Loans made under this Agreement will be used by theBorrower for general corporate purposes, including but not limited to, on theAvailability Date, to refinance obligations then outstanding under the FiveYear Credit Agreement.  None of suchproceeds will be used, directly or indirectly, for the purpose, whether immediate,incidental or ultimate, of buying or carrying any “margin stock” within themeaning of Regulation U other than “margin stock” issued by the Borrower whichis 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 ofthe Borrower described in the matrix below, exceed the ratio set forth oppositethat fiscal quarter:

 
| **Fiscal  Quarters Ending**                                        |   | **Maximum Ratio** |   |
|--------------------------------------------------------------------|--------|-------------------|--------|
|                                                               |   |              |   |
| September 30,  2003 through and including June 30, 2004  |   | 5.25:1.00         |   |
|                                                               |   |              |   |
| September 30,  2004 through and including March 31, 2005 |   | 5.00:1.00         |   |
|                                                               |   |              |   |
| June 30,  2005                                                |   | 4.75:1.00         |   |
|                                                               |   |              |   |
| Later  Fiscal Quarters                                             |   | 4.50:1.00         |   |

 

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

 

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)                                  theBorrower shall fail to (i) reimburse any drawing under any Letter of Creditwhen required hereunder or (ii) pay when due any principal of any Loan or SwingLine Loan under this Agreement, or (iii) pay within five days of the due datethereof any other interest, fees or other amount payable hereunder;

 

(b)                                 theBorrower shall fail to observe or perform any covenant contained inSections 5.06 to 5.11, inclusive;

 

(c)                                  theBorrower shall fail to observe or perform any covenant or agreement containedin this Agreement (other than those covered by clause (a) or (b) above) for 7days after written notice thereof has been given to the Borrower by theAdministrative

 

38

----

 

Agent, whichnotice shall be delivered to the Borrower by the Administrative Agent at therequest of any Lender;

 

(d)                                 anyrepresentation, warranty, certification or statement made or deemed made by theBorrower in this Agreement or in any certificate, financial statement or otherdocument delivered pursuant to this Agreement shall prove to have beenincorrect in any material respect when made (or deemed made);

 

(e)                                  theBorrower or any Covered Subsidiary or any Significant Subsidiary shall fail tomake any payment in respect of any Debt (other than the Notes and Non-RecourseDebt) when due or within any applicable grace period and the aggregateprincipal amount of such Debt is in excess of $100,000,000;

 

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

 

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

 

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

 

(i)                                     anymember of the ERISA Group shall fail to pay when due an amount or amountsaggregating in excess of $5,000,000 which it shall have become liable to payunder Title IV of ERISA; or notice of intent to terminate a Material Plan shallbe filed under Title IV of ERISA by any member of the ERISA Group, any planadministrator or any combination of the foregoing; or the PBGC shall instituteproceedings under Title IV of ERISA to terminate, to impose liability (otherthan for premiums under Section 4007 of ERISA) in respect of, or to causea trustee to be appointed to administer, any Material Plan; or a conditionshall exist by reason of which the PBGC would be entitled to obtain a decreeadjudicating that any Material Plan must be terminated; or there shall occur a

 

39

----

 

complete or partialwithdrawal from, or a default, within the meaning of Section 4219(c)(5) ofERISA, with respect to, one or more Multiemployer Plans which could cause oneor more members of the ERISA Group to incur a current payment obligation inexcess of $25,000,000;

 

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

 

(k)                                  theoccurrence of a License Revocation with respect to a license issued to theBorrower or any of its Subsidiaries by any Gaming Board of the States ofMississippi, New Jersey or Nevada with respect to gaming operations at anygaming facility accounting for five percent (5%) or more of the consolidatedgross revenues of the Borrower and its Subsidiaries that continues for thirtycalendar days;

 

then, and in every such event, the AdministrativeAgent shall (i) if requested by the Required Lenders, by notice to theBorrower terminate the Commitments and they shall thereupon terminate, and(ii) if requested by the Required Lenders, by notice to the Borrowerdeclare the Loans and the Letter of Credit Liabilities (together with accruedinterest thereon) to be, and the 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 bythe Borrower; provided that in the case of any of the Events of Defaultspecified in clause (g) or (h) above with respect to the Borrower, without anynotice to the Borrower or any other act by the Administrative Agent or theLenders, the Commitments shall thereupon terminate and the Loans and the Letterof Credit Liabilities (together with accrued interest thereon) shall becomeimmediately due and payable without presentment, demand, protest or othernotice of any kind, all of which are hereby waived by the Borrower.

 

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

 

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

 

40

----

 

ARTICLE VII

 

THE  ADMINISTRATIVE AGENT

 

7.01                           Appointment and Authorization ofAdministrative Agent.

 

(a)                                  EachLender hereby irrevocably appoints, designates and authorizes theAdministrative Agent to take such action on its behalf under the provisions ofthis Agreement and each other Loan Document and to exercise such powers andperform such duties as are expressly delegated to it by the terms of thisAgreement or any other Loan Document, together with such powers as are reasonablyincidental thereto.  Notwithstanding anyprovision to the contrary contained elsewhere herein or in any other LoanDocument, the Administrative Agent shall not have any duties orresponsibilities, except those expressly set forth herein, nor shall the AdministrativeAgent have or be deemed to have any fiduciary relationship with any Lender orparticipant, and no implied covenants, functions, responsibilities, duties,obligations or liabilities shall be read into this Agreement or any other LoanDocument or otherwise exist against the Administrative Agent.  Without limiting the generality of theforegoing sentence, the use of the term “agent” herein and in the other LoanDocuments with reference to the Administrative Agent is not intended to connoteany fiduciary or other implied (or express) obligations arising under agencydoctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and isintended to create or reflect only an administrative relationship betweenindependent contracting parties.

 

(b)                                 TheIssuing Lender shall act on behalf of the Lenders with respect to any Lettersof Credit issued by it and the documents associated therewith, and the IssuingLender shall have all of the benefits and immunities (i) provided to theAdministrative Agent in this Article VII with respect to any actstaken or omissions suffered by the Issuing Lender in connection with Letters ofCredit issued by it or proposed to be issued by it and the applications andagreements for letters of credit pertaining to such Letters of Credit as fullyas if the term “Administrative Agent” as used in this Article VIIand in the definition of “Agent-Related Person” included the Issuing Lenderwith respect to such acts or omissions, and (ii) as additionally providedherein with respect to the Issuing Lender.

 

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

 

7.03                           Liability of Administrative Agent.  No Agent-Related Person shall (a) be liableto any Lender for any action taken or omitted to be taken by any of them underor in connection with this Agreement or any other Loan Document or thetransactions contemplated hereby (except for its own gross negligence orwillful 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,

 

41

----

 

statement, representation or warranty made by theBorrower or any officer thereof, contained herein or in any other LoanDocument, or in any certificate, report, statement or other document referredto or provided for in, or received by the Administrative Agent under or inconnection with, this Agreement or any other Loan Document, or the validity,effectiveness, genuineness, enforceability or sufficiency of this Agreement orany other Loan Document, or for any failure of the Borrower or any other partyto any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under anyobligation to any Lender or Participant to ascertain or to inquire as to theobservance or performance of any of the agreements contained in, or conditionsof, 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)                                  TheAdministrative Agent shall be entitled to rely, and shall be fully protected inrelying, upon any writing, communication, signature, resolution,representation, notice, consent, certificate, affidavit, letter, telegram,facsimile, telex or telephone message, electronic mail message, statement orother document or conversation believed by it to be genuine and correct and tohave been signed, sent or made by the proper Person or Persons, and upon adviceand statements of legal counsel (including counsel to the Borrower),independent accountants and other experts selected by the AdministrativeAgent.  The Administrative Agent shallbe fully justified in failing or refusing to take any action under any LoanDocument unless it shall first receive such advice or concurrence of theRequired Lenders as it deems appropriate and, if it so requests, it shall firstbe indemnified to its satisfaction by the Lenders against any and all liabilityand expense which may be incurred by it by reason of taking or continuing to takeany such action.  The AdministrativeAgent shall in all cases be fully protected in acting, or in refraining fromacting, under this Agreement or any other Loan Document in accordance with arequest or consent of the Required Lenders (or such greater number of Lendersas may be expressly required hereby in any instance) and such request and anyaction taken or failure to act pursuant thereto shall be binding upon all theLenders.

 

(b)                                 Forpurposes of determining compliance with the conditions specified inSection 3.02, each Lender that has signed this Agreement shall be deemedto have consented to, approved or accepted or to be satisfied with, eachdocument or other matter required thereunder to be consented to or approved byor acceptable or satisfactory to a Lender unless the Administrative Agent shallhave received notice from such Lender prior to the proposed Effective Datespecifying its objection thereto.

 

7.05                           Notice of Default.  The Administrative Agent shall not be deemed to haveknowledge or notice of the occurrence of any Default, except with respect todefaults in the payment of principal, interest and fees required to be paid tothe Administrative Agent for the account of the Lenders, unless theAdministrative Agent shall have received written notice from a Lender or theBorrower referring to this Agreement, describing such Default and stating thatsuch notice is a “notice of default.” The Administrative Agent will notify the Lenders of its receipt of anysuch notice.  The Administrative Agentshall take such action with respect to such Default as may be directed by theRequired Lenders in accordance with Article VIII; provided, however,that unless and until the Administrative Agent has received any such direction,the

 

42

----

 

Administrative Agent may (but shall not be obligatedto) take such action, or refrain from taking such action, with respect to suchDefault as it shall deem advisable or in the best interest of the Lenders.

 

7.06                           Credit Decision; Disclosure of Information byAdministrative Agent.  Each Lenderacknowledges that neither any Agent nor any Agent-Related Person has made anyrepresentation or warranty to it, and that no act by the Administrative Agentor any other Agent hereafter taken, including any consent to and acceptance ofany assignment or review of the affairs of the Borrower or any Affiliatethereof, shall be deemed to constitute any representation or warranty by anyAgent or Agent-Related Person to any Lender as to any matter, including whethersuch Agent or Agent-Related Persons have disclosed material information intheir possession.  Each Lenderrepresents to the Administrative Agent that it has, independently and withoutreliance upon any Agent or Agent-Related Person and based on such documents andinformation as it has deemed appropriate, made its own appraisal of andinvestigation into the business, prospects, operations, property, financial andother condition and creditworthiness of the Borrower and its Subsidiaries, andall applicable bank or other regulatory laws relating to the transactionscontemplated hereby, and made its own decision to enter into this Agreement andto extend credit to the Borrower hereunder. Each Lender also represents that it will, independently and withoutreliance upon any Agent or Agent-Related Person and based on such documents andinformation as it shall deem appropriate at the time, continue to make its owncredit analysis, appraisals and decisions in taking or not taking action underthis Agreement and the other Loan Documents, and to make such investigations asit 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 otherdocuments expressly required to be furnished to the Lenders by theAdministrative Agent herein, neither the Administrative Agent nor any otherAgent shall have any duty or responsibility to provide any Lender with anycredit or other information concerning the business, prospects, operations,property, financial and other condition or creditworthiness of the Borrower orany of its Affiliates which may come into the possession of any Agent orAgent-Related Person.

 

7.07                           Indemnification of AdministrativeAgent.  Whether or not thetransactions contemplated hereby are consummated, the Lenders shall indemnifyupon demand each Agent-Related Person (to the extent not reimbursed by or onbehalf of the Borrower and without limiting the obligation of the Borrower todo so), pro rata, and hold harmless each Agent-Related Person from and againstany and all Indemnified Liabilities incurred by it; provided, however,that no Lender shall be liable for the payment to any Agent-Related Person ofany portion of such Indemnified Liabilities to the extent determined in afinal, nonappealable judgment by a court of competent jurisdiction to haveresulted from such Agent-Related Person’s own gross negligence or willfulmisconduct; provided, however, that no action taken in accordancewith the directions of the Required Lenders shall be deemed to constitute grossnegligence or willful misconduct for purposes of this Section.  Without limitation of the foregoing, eachLender shall reimburse the Administrative Agent upon demand for its ratableshare 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 legaladvice in respect of rights or responsibilities under, this Agreement, anyother Loan Document, or any document contemplated by or referred to herein, tothe extent that the Administrative Agent is

 

43

----

 

not reimbursed for such expenses by or on behalf ofthe Borrower.  The undertaking in thisSection shall survive termination of the Commitments, the payment of allother Obligations and the resignation of the Administrative Agent.

 

7.08                           Administrative Agent in itsIndividual Capacity.  Bank ofAmerica and its Affiliates may make loans to, issue letters of credit for theaccount of, accept deposits from, acquire equity interests in and generallyengage in any kind of banking, trust, financial advisory, underwriting or otherbusiness with the Borrower and its Affiliates as though Bank of America werenot the Administrative Agent or Issuing Lender hereunder and without notice toor consent of the Lenders.  The Lendersacknowledge that, pursuant to such activities, Bank of America or itsAffiliates may receive information regarding the Borrower or its Affiliates(including information that may be subject to confidentiality obligations infavor of the Borrower or such Affiliate) and acknowledge that theAdministrative Agent shall be under no obligation to provide such informationto them.  With respect to its Loans,Bank of America shall have the same rights and powers under this Agreement asany other Lender and may exercise such rights and powers as though it were notthe Administrative Agent, and the terms “Lender” and “Lenders” include Bank ofAmerica in its individual capacity.

 

7.09                           Successor Administrative Agent.  The Administrative Agent may resign asAdministrative Agent upon 30 days’ notice to the Lenders; provided that anysuch resignation by Bank of America shall also constitute its resignation asIssuing Lender and Swing Line Lender. If the Administrative Agent resigns under this Agreement, the RequiredLenders shall appoint from among the Lenders a successor administrative agentfor the Lenders, which successor administrative agent shall be consented to bythe Borrower at all times other than during the existence of an Event ofDefault (which consent of the Borrower shall not be unreasonably withheld ordelayed).  If no successoradministrative agent is appointed prior to the effective date of theresignation of the Administrative Agent, the Administrative Agent may appoint,after consulting with the Lenders and the Borrower, a successor administrativeagent from among the Lenders.  Upon theacceptance of its appointment as successor administrative agent hereunder, thePerson acting as such successor administrative agent shall succeed to all therights, powers and duties of the retiring Administrative Agent, Issuing Lenderand Swing Line Lender and the respective terms “Administrative Agent”, “IssuingLender” and “Swing Line Lender” shall mean such successor administrative agent,Issuing Lender and Swing Line Lender and the retiring Administrative Agent’sappointment, powers and duties as Administrative Agent shall be terminated andthe retiring Issuing Lender’s and Swing Line Lender’s rights, powers and dutiesas such shall be terminated, without any other or further act or deed on thepart 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 ofcredit in substitution for the Letters of Credit, if any, outstanding at thetime of such succession or to make other arrangements satisfactory to theretiring Issuing Lender to effectively assume the obligations of the retiringIssuing Lender with respect to such Letters of Credit.  After any retiring Administrative Agent’sresignation hereunder as Administrative Agent, the provisions of this Article VIIand Section 9.03 shall inure to its benefit as to any actions taken oromitted to be taken by it while it was Administrative Agent under thisAgreement.  If no successoradministrative agent has accepted appointment as Administrative Agent by thedate which is 30 days following a retiring Administrative Agent’s notice ofresignation, the retiring Administrative Agent’s resignation shall neverthelessthereupon become effective and the Lenders shall perform all of the duties ofthe Administrative

 

44

----

 

Agent hereunder until such time, if any, as theRequired Lenders appoint a successor agent as provided for above.

 

7.10                           Administrative Agent May FileProofs of Claim.  In case of thependency of any receivership, insolvency, liquidation, bankruptcy,reorganization, arrangement, adjustment, composition or other judicialproceeding relative to the Borrower, the Administrative Agent (irrespective ofwhether the principal of any Loan or Letter of Credit Liabilities shall then bedue and payable as herein expressed or by declaration or otherwise andirrespective of whether the Administrative Agent shall have made any demand onthe Borrower) shall be entitled and empowered, by intervention in suchproceeding or otherwise

 

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

 

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

 

and any custodian, receiver, assignee, trustee,liquidator, sequestrator or other similar official in any such judicialproceeding is hereby authorized by each Lender to make such payments to theAdministrative Agent and, in the event that the Administrative Agent shallconsent to the making of such payments directly to the Lenders, to pay to theAdministrative Agent any amount due for the reasonable compensation, expenses,disbursements and advances of the Administrative Agent and its agents andcounsel, and any other amounts due the Administrative Agent underSection 9.03.

 

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

 

7.11                           Other Agents; Arrangers and Managers.  None of the Lenders or other Personsidentified on the facing page or signature pages of this Agreement as a“syndication agent,” “co-documentation agents,” “joint book manager,” or “jointlead arranger” shall have any right, power, obligation, liability,responsibility or duty under this Agreement other than, in the case of suchLenders, those applicable to all Lenders as such.  Without limiting the foregoing, none of the Lenders or otherPersons so identified shall have or be deemed to have any fiduciaryrelationship with any Lender.  EachLender acknowledges that it has not relied, and will not rely, on any of theLenders or other Persons so identified in deciding to enter into this Agreementor in taking or not taking action hereunder. None of the Lenders or Agents shall be under any obligation to any otherLender or any Participant to ascertain or to inquire as to the observance or

 

45

----

 

performance of any of the agreements contained in, orconditions of, this Agreement or any other Loan Document, or to inspect theproperties, books or records of the Borrower or any Affiliate thereof.  Each Agent and its Affiliates may make loansto, issue letters of credit for the account of, accept deposits from, acquireequity interests in and generally engage in any kind of banking, trust,financial advisory, underwriting or other business with the Borrower and itsAffiliates as though such Agent were not an Agent hereunder and without noticeto or consent of the Lenders.  TheLenders acknowledge that, pursuant to such activities, such Agent or itsAffiliates may receive information regarding the Borrower or its Affiliates(including information that may be subject to confidentiality obligations infavor of the Borrower or such Affiliate) and acknowledge that such Agent shallbe under no obligation to provide such information to them.  With respect to its Loans, such Agent, ifalso a Lender hereunder, shall have the same rights and powers under thisAgreement as any other Lender and may exercise such rights and powers as thoughit were not an Agent, and the terms “Lender” and “Lenders” include such Agentin its individual capacity.

 

ARTICLE VIII

 

CHANGE IN CIRCUMSTANCES

 

8.01                           Basis for Determining Interest RateInadequate or Unfair.  If on orprior to the first day of any Interest Period for any Borrowing of Euro-DollarLoans:

 

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

 

(b)                                 inthe case of a Committed Borrowing, Lenders having 50% or more of the aggregateamount of the Commitments advise the Administrative Agent that the Euro-DollarRate, as determined by the Administrative Agent, will not adequately and fairlyreflect the cost to such Lenders of funding their Euro-Dollar Loans for suchInterest Period,

 

the Administrative Agent shall forthwith give noticethereof to the Borrower and the Lenders, whereupon until the AdministrativeAgent notifies the Borrower that the circumstances giving rise to suchsuspension no longer exist, the obligations of the Lenders to make Euro-DollarLoans shall be suspended.  Unless theBorrower notifies the Administrative Agent at least two Domestic Business Daysbefore the date of any Borrowing of Euro-Dollar Loans for which a Notice ofBorrowing 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 promptlynotify the Lenders of any election by the Borrower pursuant to the precedingsentence.

 

8.02                           Illegality. If, on or after the date of this Agreement, the adoption of anyapplicable law, rule or regulation, or any change in any applicable law, ruleor regulation, or any change in the interpretation or administration thereof byany governmental authority, central bank or comparable agency charged with theinterpretation or administration thereof, or compliance by any Lender (or itsEuro-Dollar Lending Office) with any request or directive (whether or nothaving the force of law) of any such authority, central bank or comparable

 

46

----

 

agency shall make it unlawful or impossible for anyLender (or its Euro-Dollar Lending Office) to make, maintain or fund itsEuro-Dollar Loans and such Lender shall so notify the Administrative Agent, theAdministrative Agent shall forthwith give notice thereof to the other Lendersand the Borrower, whereupon until such Lender notifies the Borrower and theAdministrative Agent that the circumstances giving rise to such suspension nolonger exist, the obligation of such Lender to make Euro-Dollar Loans shall besuspended.  Before giving any notice tothe Administrative Agent pursuant to this Section, such Lender shall designatea different Euro-Dollar Lending Office if such designation will avoid the needfor giving such notice and will not, in the sole judgment of such Lender, beotherwise disadvantageous to such Lender. If such Lender shall determine that it may not lawfully continue tomaintain and fund any of its outstanding Euro-Dollar Loans to maturity andshall so specify in such notice, the Borrower shall immediately prepay in fullthe then outstanding principal amount of each such Euro-Dollar Loan, togetherwith accrued interest thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrowershall borrow a Base Rate Loan in an equal principal amount from such Lender (onwhich interest and principal shall be payable contemporaneously with therelated Euro-Dollar Loans of the other Lenders), and such Lender shall makesuch a Base Rate Loan.

 

8.03                           Increased Cost and Reduced Return.

 

(a)                                  Ifon or after the date hereof, in the case of any Committed Loan or Letter ofCredit or any obligation to make Committed Loans or issue or participate in anyLetter of Credit, the adoption of any applicable law, rule or regulation, orany change in any applicable law, rule or regulation, or any change in theinterpretation or administration thereof by any governmental authority, centralbank or comparable agency charged with the interpretation or administrationthereof, or compliance by any Lender (or its Applicable Lending Office) withany request or directive (whether or not having the force of law) of any suchauthority, central bank or comparable agency:

 

(i)                                     shallsubject any Lender (or its Applicable Lending Office) to any tax, duty or othercharge with respect to its Euro-Dollar Loans, its Note or its obligation tomake Euro-Dollar Loans or its obligations hereunder in respect of Letters ofCredit, or shall change the basis of taxation of payments to any Lender (or itsApplicable Lending Office) of the principal of or interest on its Euro-DollarLoans or any other amounts due under this Agreement in respect of itsEuro-Dollar Loans or its obligation to make Euro-Dollar Loans (except forchanges in the rate of tax on the overall net income of such Lender or itsApplicable Lending Office imposed by the jurisdiction in which such Lender’sprincipal executive office or Applicable Lending Office is located); or

 

(ii)                                  shallimpose, modify or deem applicable any reserve (including, without limitation,any such requirement imposed by the Board of Governors of the Federal ReserveSystem, but excluding, with respect to any Euro-Dollar Loan any suchrequirement included in an applicable Euro-Dollar Reserve Percentage), special deposit,insurance assessment or similar requirement against assets of, deposits with orfor the account of, or credit extended by, any Lender (or its ApplicableLending Office) or shall impose on any Lender (or its Applicable 

 

47

----

 

Lending Office) or on theUnited States market for certificates of deposit or the London interbank marketany other condition affecting its Euro-Dollar Loans, its Note or its obligationto make Euro-Dollar Loans or its obligations hereunder in respect to Letters ofCredit;

 

and the result of any of the foregoing is to increasethe cost to such Lender (or its Applicable Lending Office) of making ormaintaining any Euro-Dollar Loan or of issuing or participating in any Letterof Credit, or to reduce the amount of any sum received or receivable by suchLender (or its Applicable Lending Office) under this Agreement or under itsNote 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 theAdministrative Agent), the Borrower shall pay to such Lender such additionalamount or amounts as will compensate such Lender for such increased cost orreduction.

 

(b)                                 If,after the date hereof, any Lender shall have determined that any applicablelaw, rule or regulation regarding capital adequacy (irrespective of the actualtiming of the adoption or implementation thereof and including, withoutlimitation, any law or regulation adopted pursuant to the July 1988 reportof the Basle Committee on Banking Regulations and Supervisory Practices) or anychange therein, or any change in the interpretation or administration thereofby any governmental authority, central bank or comparable agency charged withthe interpretation or administration thereof, or compliance by any Lender (orits Applicable Lending Office) with any request or directive regarding capitaladequacy (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 therate of return on capital of such Lender (or its Parent) as a consequence ofsuch Lender’s obligations hereunder to a level below that which such Lender (orits Parent) could have achieved but for such law, regulation, change or compliance(taking into consideration its policies with respect to capital adequacy) by anamount deemed by such Lender to be material, then from time to time, within 15days after demand by such Lender (with a copy to the Administrative Agent), theBorrower shall pay to such Lender such additional amount or amounts as willcompensate such Lender (or its Parent) for such reduction.

 

(c)                                  EachLender will promptly notify the Borrower and the Administrative Agent of anyevent of which it has knowledge, occurring after the date hereof, which willentitle such Lender to compensation pursuant to this Section and willdesignate a different Applicable Lending Office if such designation will avoidthe need for, or reduce the amount of, such compensation and will not, in thesole judgment of such Lender, be otherwise disadvantageous to such Lender.  A certificate of any Lender claimingcompensation under this Section and setting forth the additional amount oramounts to be paid to it hereunder shall be conclusive in the absence ofmanifest error.  In determining suchamount, such Lender may use any reasonable averaging and attribution methods.

 

8.04                           Base Rate Loans Substituted forAffected Euro-Dollar Loans.  If(i) the obligation of any Lender to make Euro-Dollar Loans has beensuspended pursuant to Section 8.02 or (ii) any Lender has demandedcompensation under Section 8.03(a) and the Borrower shall, by at leastfive Euro-Dollar Business Days, prior notice to such Lender through theAdministrative

 

48

----

 

Agent, have elected that the provisions of thisSection shall apply to such Lender, then, unless and until such Lendernotifies the Borrower that the circumstances giving rise to such suspension ordemand for compensation no longer exist:

 

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

 

(b)                                 aftereach of its Euro-Dollar Loans has been repaid, all payments of principal whichwould otherwise be applied to repay such Euro-Dollar Loans shall be applied torepay its Base Rate Loans instead.

 

ARTICLE IX

 

MISCELLANEOUS

 

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

 

(a)                                  ifto the Borrower, the Administrative Agent, the Issuing Lender or the Swing LineLender to the address, facsimile number, electronic mail address or telephonenumber specified for such Person on its signature page hereto or to such otheraddress, facsimile number, electronic mail address or telephone number as shallbe designated by such party in a notice to the other parties; and

 

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

 

All such notices and other communications shall bedeemed to be given or made upon the earlier to occur of (i) actual receipt bythe relevant party hereto and (ii) (A) if delivered by hand or by courier, whensigned for by or on behalf of the relevant party hereto; (B) if delivered bymail, four Business Days after deposit in the mails, postage prepaid; (C) ifdelivered by facsimile, when sent and receipt has been confirmed by telephone;and (D) if delivered by electronic mail (which form of delivery is subject tothe provisions of subsection (c) below), when delivered; provided, however,that notices and other communications to the Administrative Agent, the IssuingLender and the Swing Line Lender pursuant to Article II shall notbe effective until actually received by such Person.  In no event shall a voicemail message be effective as a notice,communication or confirmation hereunder.

 

49

----

 

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

 

(d)                                 Electronicmail and Internet and intranet websites may be used only to distribute routinecommunications, such as financial statements and other information as providedin Section 5.01, and to distribute Loan Documents for execution by theparties thereto, and may not be used for any other purpose.

 

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

 

9.02                           No Waivers. No failure or delay by the Administrative Agent or any Lender inexercising any right, power or privilege hereunder or under any Note shalloperate as a waiver thereof nor shall any single or partial exercise thereofpreclude any other or further exercise thereof or the exercise of any otherright, power or privilege.  The rightsand remedies herein provided shall be cumulative and not exclusive of anyrights or remedies provided by law.

 

9.03                           Expenses; Documentary Taxes;Indemnification.

 

(a)                                  TheBorrower agrees (a) to pay or reimburse the Administrative Agent for allreasonable costs and expenses incurred in connection with the development,preparation, negotiation and execution of this Agreement and the other LoanDocuments and any amendment, waiver, consent or other modification of theprovisions hereof and thereof (whether or not the transactions contemplatedhereby or thereby are consummated), and the consummation and administration ofthe transactions contemplated hereby and thereby, including all Attorney Costs,and (b) to pay or reimburse the Administrative Agent and each Lender for allreasonable costs and expenses incurred after an Event of Default in connectionwith the enforcement, attempted enforcement, or preservation of any rights orremedies under this Agreement or the other Loan Documents (including all suchcosts and expenses incurred after an Event of Default during any “workout” or restructuringin respect of the Obligations and during any legal proceeding, including anyproceeding under any Debtor Relief Law), including all Attorney Costs.  The foregoing costs and expenses shallinclude all search, filing,

 

50

----

 

recording, titleinsurance and appraisal charges and fees and taxes related thereto, and otherout-of-pocket expenses incurred by the Administrative Agent and the cost ofindependent public accountants and other outside experts retained by theAdministrative Agent or any Lender.  Allamounts due under this Section 9.03(a) shall be payable within tenBusiness Days after demand therefor. The agreements in this Section shall survive the termination of theCommitments and repayment of all other Obligations.

 

(b)                                 Whetheror not the transactions contemplated hereby are consummated, the Borrower shallindemnify and hold harmless each Agent-Related Person, each Lender and theirrespective Affiliates, directors, officers, employees, counsel, agents andattorneys-in-fact (collectively the “Indemnitees”) from and against any and allliabilities, 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, incurredby or asserted against any such Indemnitee in any way relating to or arisingout 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 contemplatedthereby or the consummation of the transactions contemplated thereby, (b) anyCommitment, Loan or Letter of Credit or the use or proposed use of the proceedstherefrom (including any refusal by the Issuing Lender to honor a demand forpayment under a Letter of Credit if the documents presented in connection withsuch demand do not strictly comply with the terms of such Letter of Credit), or(c) any actual or prospective claim, litigation, investigation or proceedingrelating to any of the foregoing, whether based on contract, tort or any othertheory (including any investigation of, preparation for, or defense of anypending or threatened claim, investigation, litigation or proceeding) andregardless of whether any Indemnitee is a party thereto (all the foregoing,collectively, the “Indemnified Liabilities”) provided that such indemnity shallnot, 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 competentjurisdiction by final and nonappealable judgment to have resulted from thegross negligence or willful misconduct of such Indemnitee.  No Indemnitee shall be liable for anydamages arising from the use by others of any information or other materialsobtained through IntraLinks or other similar information transmission systemsin connection with this Agreement, nor shall any Indemnitee have any liabilityfor any indirect or consequential damages relating to this Agreement or anyother Loan Document or arising out of its activities in connection herewith ortherewith (whether before or after the Effective Date).  All amounts due under thisSection 9.03(b) shall be payable within ten Business Days after demandtherefor.  The agreements in this Section shallsurvive the resignation of the Administrative Agent, the replacement of anyLender, the termination of the Commitments and the repayment, satisfaction ordischarge of all the other Obligations.

 

9.04                           Amendments and Waivers.  No amendment or waiver of any provision ofthis Agreement or any other Loan Document, and no consent to any departure bythe Borrower therefrom, shall be effective unless in writing signed by theRequired Lenders and the Borrower, and acknowledged by the AdministrativeAgent, and each such waiver or consent shall be

 

51

----

 

effective only in the specific instance and for thespecific purpose for which given; provided, however, that no such amendment,waiver or consent shall:

 

(a)                                  waiveany condition set forth in Section 3.02 without the written consent ofeach Lender;

 

(b)                                 extendor increase the Commitment of any Lender (or reinstate any Commitmentterminated pursuant to Section 6.01) without the written consent of suchLender;

 

(c)                                  postponeany date fixed by this Agreement or any other Loan Document for any scheduledpayment of principal, interest, fees or other amounts due to the Lenders (orany of them) or waive or excuse any such payment or postpone any scheduledreduction of the Commitments hereunder or under any other Loan Document withoutthe written consent of each Lender directly affected thereby;

 

(d)                                 reducethe 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) anyfees or other amounts payable hereunder or under any other Loan Documentwithout the written consent of each Lender directly affected thereby;

 

(e)                                  changeSection 9.10 in a manner that would alter the pro rata sharing of paymentsrequired thereby without the written consent of each Lender;

 

(f)                                    amendSection 2.23 without the written consent of the Borrower, theAdministrative Agent and Lenders holding Commitments aggregating / at least 662/3%of the aggregate amount of the Commitments; or

 

(g)                                 changeany provision of this Section or the definition of “Required Lenders” orany other provision hereof specifying the number or percentage of Lendersrequired to amend, waive or otherwise modify any rights hereunder or make anydetermination or grant any consent hereunder, without the written consent ofeach Lender;

 

and, providedfurther, that (i) noamendment, waiver or consent shall, unless in writing and signed by the IssuingLender in addition to the Lenders required above, affect the rights or dutiesof the Issuing Lender under this Agreement or any Letter of Credit applicationrelating to any Letter of Credit issued or to be issued by it; (ii) noamendment, waiver or consent shall, unless in writing and signed by the SwingLine Lender in addition to the Lenders required above, affect the rights orduties of the Swing Line Lender under this Agreement; (iii) no amendment,waiver or consent shall, unless in writing and signed by the AdministrativeAgent in addition to the Lenders required above, affect the rights or duties ofthe Administrative Agent under this Agreement or any other Loan Document; (iv)Section 9.05(h) may not be amended, waived or otherwise modified withoutthe consent of each Granting Lender all or any part of whose Loans are beingfunded 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 thereunderwaived, in a writing executed only by the parties thereto.

 

52

----

 

9.05                           Successors and Assigns.

 

(a)                                  Theprovisions of this Agreement shall be binding upon and inure to the benefit ofthe parties hereto and their respective successors and assigns permittedhereby, except that the Borrower may not assign or otherwise transfer any ofits rights or obligations hereunder without the prior written consent of eachLender and no Lender may assign or otherwise transfer any of its rights orobligations hereunder except (i) to an Eligible Assignee in accordance with theprovisions of subsection (b) of this Section, (ii) by way of participationin accordance with the provisions of subsection (d) of this Section, (iii)by way of pledge or assignment of a security interest subject to therestrictions of subsection (f) or (i) of this Section, or (iv) to an SPCin accordance with the provisions of subsection (h) of thisSection (and any other attempted assignment or transfer by any partyhereto shall be null and void).  Nothingin this Agreement, expressed or implied, shall be construed to confer upon anyPerson (other than the parties hereto, their respective successors and assignspermitted hereby, Participants to the extent provided in subsection (d) ofthis Section and, to the extent expressly contemplated hereby, theIndemnitees) any legal or equitable right, remedy or claim under or by reasonof this Agreement.  Each Lenderrepresents that it is not acquiring its Note with a view to the distributionthereof within the meaning of the Securities Act of 1933, as amended.

 

(b)                                 AnyLender may at any time assign to one or more Eligible Assignees all or aportion of its rights and obligations under this Agreement (including all or aportion of its Commitments and its Loans (including for purposes of thissubsection (b), participations in Letter of Credit  Liabilities and in Swing Line Loans) at thetime owing to it); provided that (i) except in the case of an assignmentof the entire remaining amount of the assigning Lender’s Commitment and Loansat the time owing to it or in the case of an assignment to a Lender or anAffiliate of a Lender or an Approved Fund (as defined in subsection (g) ofthis Section) with respect to a Lender, the aggregate amount of the Commitment(which for this purpose includes Loans outstanding thereunder) subject to eachsuch assignment, determined as of the date the Assignment Agreement withrespect 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 otherwiseconsents (each such consent not to be unreasonably withheld or delayed); (ii)each partial assignment shall be made as an assignment of a proportionate partof all the assigning Lender’s rights and obligations under this Agreement withrespect 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 assignmentof a Revolving Commitment must be approved by the Administrative Agent, theIssuing Lender and the Swing Line Lender and, as long as no Default hasoccurred and is continuing, the Borrower (each such consent not to beunreasonably withheld or delayed) unless the Person that is the proposedassignee is itself a Lender (whether or not the proposed assignee wouldotherwise qualify as an Eligible Assignee); (iv) any assignment of TermLoans or a Term Loan Commitment must be approved by the Administrative Agentand, so long as no Default has occurred and is continuing, the Borrower (eachsuch consent not to be unreasonably withheld or delayed) unless the Person thatis the proposed assignee is itself a Lender (whether or not the proposed

 

53

----

 

assignee would otherwise qualifyas an Eligible Assignee); and (v) the parties to each assignment shall executeand deliver to the Administrative Agent an Assignment Agreement, together witha processing and recordation fee of $3,500. Subject to acceptance and recording thereof by the Administrative Agentpursuant to subsection (c) of this Section, from and after the effectivedate specified in each Assignment Agreement, the Eligible Assignee thereundershall be a party to this Agreement and, to the extent of the interest assignedby such Assignment Agreement, have the rights and obligations of a Lender underthis Agreement, and the assigning Lender thereunder shall, to the extent of theinterest assigned by such Assignment Agreement, be released from itsobligations under this Agreement (and, in the case of an Assignment Agreementcovering all of the assigning Lender’s rights and obligations under thisAgreement, such Lender shall cease to be a party hereto but shall continue tobe entitled to the benefits of Sections 2.15, 2.18, 8.03 and 9.03 with respectto facts and circumstances occurring prior to the effective date of suchassignment).  Upon request, the Borrower(at its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender ofrights or obligations under this Agreement that does not comply with thissubsection shall be treated for purposes of this Agreement as a sale bysuch Lender of a participation in such rights and obligations in accordancewith subsection (d) of this Section.

 

(c)                                  TheAdministrative Agent, acting solely for this purpose as an agent of theBorrower, shall maintain at the Administrative Agent’s Office a copy of eachAssignment Agreement delivered to it and a register for the recordation of thenames and addresses of the Lenders, and the Commitments of, and principalamounts of the Loans and Letter of Credit Liabilities owing to, each Lenderpursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall beconclusive, and the Borrower, the Administrative Agent and the Lenders maytreat each Person whose name is recorded in the Register pursuant to the termshereof 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 anyLender, at any reasonable time and from time to time upon reasonable priornotice.

 

(d)                                 AnyLender may at any time, without the consent of, or notice to, the Borrower orthe Administrative Agent, sell participations to any Person (other than anatural person, Borrower or any of Borrower’s Affiliates or Subsidiaries)(each, a “Participant”) in all or a portion of such Lender’s rightsand/or obligations under this Agreement (including all or a portion of itsCommitment and/or Loans (including such Lender’s participations in Letter ofCredit 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 theperformance of such obligations and (iii) the Borrower, the AdministrativeAgent and the other Lenders shall continue to deal solely and directly withsuch Lender in connection with such Lender’s rights and obligations under thisAgreement.  Any agreement or instrumentpursuant to which a Lender sells such a participation shall provide that suchLender shall retain the sole right to enforce this Agreement and to approve anyamendment, modification or waiver of any provision of this Agreement; provided that such agreement orinstrument may provide that such Lender will not,

 

54

----

 

without the consent ofthe Participant, agree to any amendment, waiver or other modification describedin subsections (c) or (d) of Section 9.04 that directly affects suchParticipant.

 

(e)                                  AParticipant shall not be a Lender hereunder for any purpose except, ifthe 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 theBorrower does not exceed the cost which the Borrower would have incurred inrespect of such Lender absent the participation.

 

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

 

(g)                                 Asused 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 otherwiseinvesting in commercial loans and similar extensions of credit in the ordinarycourse of its business.

 

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

 

(h)                                 Notwithstandinganything to the contrary contained herein, any Lender (a “Granting Lender”) maygrant to a special purpose funding vehicle identified as such in writing fromtime 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 suchGranting Lender would otherwise be obligated to make pursuant to thisAgreement; provided that (i) nothing herein shall constitute acommitment by any SPC to fund any Loan, and (ii) if an SPC elects not toexercise 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 termshereof.  Each party hereto hereby agreesthat (i) neither the grant to any SPC nor the exercise by any SPC of suchoption shall increase the costs or expenses or otherwise increase or change theobligations of the Borrower under this Agreement (including their obligationsunder Sections 2.18 and 8.03), (ii) no SPC shall be liable for anyindemnity or similar payment obligation under this Agreement for which a Lenderwould be liable, and (iii) the Granting Lender shall for all purposes,including the approval of any amendment, waiver or other modification of anyprovision of any Loan Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereundershall utilize the Commitment of the Granting Lender to the same extent, and asif, 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 tothe date that is one year and one day after the payment in full of alloutstanding

 

55

----

 

commercial paper or othersenior debt of any SPC, it will not institute against, or join any other Personin instituting against, such SPC any bankruptcy, reorganization, arrangement,insolvency, or liquidation proceeding under the laws of the United States orany State thereof with respect to matters directly related to thisAgreement.  Notwithstanding anything tothe contrary contained herein, any SPC may (i) with notice to, but withoutprior consent of the Borrower and the Administrative Agent, assign all or anyportion of its right to receive payment with respect to any Loan to theGranting Lender and (ii) disclose on a confidential basis any non-publicinformation relating to its funding of Loans to any rating agency, commercialpaper dealer or provider of any surety or guarantee or credit or liquidityenhancement to such SPC.

 

(i)                                     Notwithstandinganything to the contrary contained herein, any Lender that is a Fund may createa security interest in all or any portion of the Loans owing to it and theNote, if any, held by it to the trustee for holders of obligations owed, orsecurities issued, by such Fund as security for such obligations or securities,provided that unless and until such trustee actually becomes a Lender incompliance with the other provisions of this Section 9.05, (i) no suchpledge shall release the pledging Lender from any of its obligations under theLoan Documents and (ii) such trustee shall not be entitled to exercise any ofthe rights of a Lender under the Loan Documents even though such trustee mayhave acquired ownership rights with respect to the pledged interest throughforeclosure or otherwise.

 

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

 

(k)                                  Notwithstandinganything to the contrary contained herein, if at any time Bank of Americaassigns 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 theevent of any such resignation as Issuing Lender or Swing Line Lender, theBorrower shall be entitled to appoint from among the Lenders a successor IssuingLender or Swing Line Lender hereunder; provided, however, that nofailure by the Borrower to appoint any such successor shall affect theresignation of Bank of America as Issuing Lender or Swing Line Lender, as thecase may be.  If Bank of America resignsas Issuing Lender, it shall retain all the rights and obligations of theIssuing Lender hereunder with respect to all Letters of Credit outstanding asof the effective date of its resignation as Issuing Lender and all Letter ofCredit Liabilities with respect thereto (including the right to require theLenders to fund risk participations in drawn Letters of Credit pursuant toSection 2.12(e)).  If Bank ofAmerica resigns as Swing Line Lender, it shall retain all the rights of theSwing Line Lender provided for hereunder with respect to Swing Line Loans madeby it and outstanding as of the effective date of such resignation, includingthe right to require the Lenders to make Committed Revolving Loans or fund riskparticipations in outstanding Swing Line Loans pursuant toSection 2.05(e).

 

56

----

 

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

 

9.07                           California Law; Submission toJurisdiction.  This Agreementand each Note shall be construed in accordance with and governed by the laws ofthe State of California.  The Borrowerhereby submits to the nonexclusive jurisdiction of the United States DistrictCourt for the Central District of California and of any California State courtsitting in Los Angeles, California for purposes of all legal proceedingsarising out of or relating to this Agreement or the transactions contemplatedhereby.  The Borrower irrevocably,waives, to the fullest extent permitted by law, any objection which it may nowor hereafter have to the laying of the venue of any such proceeding brought insuch a court and any claim that any such proceeding brought in such a court hasbeen brought in an inconvenient forum.

 

9.08                           Counterparts; Integration.  This Agreement may be signed in any numberof counterparts, each of which shall be an original, with the same effect as ifthe signatures thereto and hereto were upon the same instrument.  This Agreement constitutes the entireagreement and understanding among the parties hereto and supersedes any and allprior agreements and understandings, oral or written, relating to the subjectmatter hereof.

 

9.09                           Several Obligations.  The obligations of the Lenders hereunder areseveral.  Neither the failure of anyLender to carry out its obligations hereunder nor the failure of this Agreementto be duly authorized, executed and delivered by any Lender shall relieve anyother Lender of its obligations hereunder (or affect the rights hereunder ofsuch other Lender).  No Lender shall beresponsible for the obligations of, or any action taken or omitted by, anyother Lender hereunder.

 

9.10                           Sharing of Set-Offs.  Each Lender agrees that if it shall, by exercising any right ofset-off or counterclaim or otherwise, receive payment of a proportion of theaggregate amount of principal and interest due with respect to any Note held byit and any Letter of Credit Liabilities which is greater than the proportionreceived by any other Lender in respect of the aggregate amount of principaland interest due with respect to any Note and any Letter of Credit Liabilitiesheld by such other Lender, the Lender receiving such proportionately greaterpayment shall purchase such participations in the Notes and Letter of CreditLiabilities held by the other Lenders, and such other adjustments shall bemade, as may be required so that all such payments of principal and interestwith respect to the Notes and Letter of Credit Liabilities held by the Lendersshall be shared by the Lenders pro rata; provided that nothing in thisSection shall impair the right of any Lender to exercise any right ofset-off or counterclaim it may have and to apply the amount subject to suchexercise to the payment of indebtedness of the Borrower other than itsindebtedness under the Notes.  TheBorrower agrees, to the fullest extent it may effectively do so underapplicable law, that any holder of a participation in a Note or Letter ofCredit Liability, whether or not acquired pursuant to the foregoingarrangements, may exercise rights of set-off or counterclaim and other rightswith respect to such participation as fully as if such holder of aparticipation were a direct creditor of the Borrower in the amount of suchparticipation.

 

57

----

 

9.11                           WAIVER OF JURY TRIAL.  EACH OF THE BORROWER, THE AGENTS AND THELENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANYLEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THETRANSACTIONS CONTEMPLATED HEREBY.

 

9.12                           Confidentiality.  The Lenders hereby agree to hold any confidential informationthat they may receive from the Borrower or its Subsidiaries pursuant to thisAgreement in confidence, except for disclosure:  (a) to their respective Affiliates and to other parties to thisAgreement; (b) to legal counsel and accountants for any such party; (c) toother professional advisors to any such party, provided that the recipient hasaccepted such information subject to a confidentiality agreement substantiallysimilar to this paragraph or has notified such professional advisors of the confidentialityof such information; (d) to regulatory officials having jurisdiction over thatLender; (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 underapplicable law, to give the Borrower reasonable prior notice thereof to allowthe Borrower to seek a protective order) or in connection with any legalproceeding 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 relatingto or involving any of the rights or obligations of that Lender under thisAgreement or to another financial institution in connection with a dispositionor proposed disposition to that financial institution of all or part of thatLender’s interests hereunder or a participation interest in its Note, providedin each case that the recipient has accepted such information subject to aconfidentiality agreement substantially similar to this Section.  For purposes of the foregoing, “confidentialinformation” shall mean any information respecting the Borrower or itsSubsidiaries reasonably considered by them to be confidential, other than (i)information previously filed with any governmental agency and available to thepublic, (ii) information previously published in any public medium from asource other than, directly or indirectly, that Lender, and(iii) information previously disclosed by the Borrower or its Subsidiariesto any person not associated therewith without a confidentiality agreementsubstantially similar to this Section. Notwithstanding anything herein to the contrary, “confidentialinformation” shall not include, and the Borrower, the Administrative Agent andeach Lender (and each authorized employee, representative, or other authorizedperson thereof) may disclose to any and all Persons, without limitation of anykind, the “tax treatment” and “tax structure” (in each case, within the meaningof Treasury Regulation Section 1.6011-4) of the transactions contemplatedhereby and all materials of any kind (including opinions or other tax analyses)that are provided to the Borrower, the Administrative Agent or such Lenderrelating to such tax treatment and tax structure; provided that withrespect to any document or similar item that in either case containsinformation concerning the tax treatment or tax structure of the transaction aswell as other information, this sentence shall only apply to such portions ofthe document or similar item that relate to the tax treatment or tax structureof the Loans and transactions contemplated hereby.  Nothing in this Section shall be construed to create or giverise to any fiduciary duty on the part of any Lender.

 

[Remainder of thispage intentionally left blank]

 

58

----

 

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

 
|   | PARK PLACE  ENTERTAINMENT CORPORATION  |
|--------|----------------------------------------|
|   |                                   |
|   | By:                                    |   |   |
|   | Name:                                  |   |   |
|   | Title:                                 |   |   |
|   |                                   |
|   | Address for  Notices:                  |
|   | Park Place  Entertainment Corporation  |
|   | 3930 Howard  Hughes Parkway, 4th Floor |
|   | Las Vegas,  Nevada  89109         |
|   | Attn:  Chief Financial Officer    |
|   | Telephone:  702/699-5030          |
|   | Telecopier:  702/699-5190         |
|   |                                   |
|   | With a copy  to:                       |
|   | Park Place  Entertainment Corporation  |
|   | 3930 Howard  Hughes Parkway, 4th Floor |
|   | Las Vegas,  Nevada 89109               |
|   | Attn:  Chief Legal Officer        |
|   | Telephone:  702/699-5033          |
|   | Telecopier:  702/699-5110         |

 

----

 
|   | BANK OF  AMERICA, N.A., as Administrative Agent,  Issuing Lender and Swing Line Lender |
|--------|----------------------------------------------------------------------------------------|
|   |                                                                                   |
|   |                                                                                   |
|   | By:                                                                                    |   |   |
|   | Name:                                                                                  |   |   |
|   | Title:                                                                                 |   |   |
|   |                                                                                   |
|   | 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                                                   |
|   | Attn:  Janice Hammond, Vice President                                             |
|   | Telecopier:  (213) 345-1213                                                       |
|   | Telephone:  (213) 345-1210                                                        |
|   |                                                                                   |
|   | BANK OF  AMERICA, N.A., as a Lender                                                    |
|   |                                                                                   |
|   |                                                                                   |
|   | By:                                                                                    |   |   |
|   | Name:                                                                                  |   |   |
|   | Title:                                                                                 |   |   |
|   |                                                                                   |
|   | 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                                                   |
|   | Attn:  Matthew J. Koenig, Managing Director                                       |
|   | Telecopier:  (213) 345-1215                                                       |
|   | Telephone:  (213) 345-1198                                                        |
|   |                                                                                   |
|   | 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                                                   |
|   | Attn:  William S. Newby, Managing Director                                        |
|   | Telecopier:  (213) 345-1214                                                       |
|   | Telephone:  (213) 345-1194                                                        |
|        |                                                                                        |  |  |  |

 

----

 

SCHEDULE 1

Pricing Schedule –First Amended and Restated Multi-Year Credit Facility

 

This Schedule 1 is attached to and made a part ofthe First Amended and Restated Multi-Year Credit Agreement dated as ofAugust 12, 2003, among Park Place Entertainment Corporation, a Delawarecorporation, the Lenders, Syndication Agent and Documentation Agent referred totherein, Bank of America, N.A., as Administrative Agent, and Banc of AmericaSecurities LLC and J.P. Morgan Securities Inc. as Joint Lead Arrangers andJoint Book Managers (the “Credit Agreement”). Capitalized terms used in this Schedule 1 are used with themeanings set forth for those terms in the Credit Agreement.

 

The “Euro-Dollar Margin,” “Base Rate Margin,”“Facility Fee Rate” and “LC Fee Rate” referred to in the Credit Agreement shallbe determined for any day on the basis of the Status (as defined below) of theBorrower as of that date, provided that in the event that the Borrowerfails to deliver any Compliance Certificate or Pricing Certificate on the datewhen required by Section 5.01, and it is ultimately determined that theStatus of Borrower would have been changed on the basis of such delivery, then(a) the rate at which interest, facility fees, and letter of credit fees accrueunder the Credit Agreement shall be increased in accordance with this Schedule,with retroactive effect to the first day of the Pricing Period to which suchCompliance Certificate or Pricing Certificate relates, and (b) Borrower shall,within 10 Business Days of a request by the Administrative Agent, make suchadditional payments to the Lenders through the Administrative Agent as arerequired to give effect to such increased interest rates, facility fees andletter of credit fees in respect of any payments previously made byBorrower.  As of each date ofdetermination, the Euro-Dollar Margin, Facility Fee Rates and LC Fee Ratesshall equal the percentages set forth below under the column corresponding tothe Status that exists on such day, provided that the Euro-Dollar Marginshall be increased or decreased by the “Margin Adjustment” described below:

 
| **Status**          |   | **Level I** |   | **Level II** |   | **Level III** |   | **Level IV** |   | **Level V** |   | **Level VI** |   |
|---------------------|--------|-------------|--------|--------------|--------|---------------|--------|--------------|--------|-------------|--------|--------------|--------|
| Facility  Fee Rate  |   | 0.100       | %      | 0.125        | %      | 0.150         | %      | 0.200        | %      | 0.250       | %      | 0.300        | %      |
| Euro-Dollar  Margin |   | 0.500       | %      | 0.625        | %      | 0.850         | %      | 0.925        | %      | 1.125       | %      | 1.450        | %      |
| LC  Fee Rate        |   | 0.600       | %      | 0.750        | %      | 1.000         | %      | 1.125        | %      | 1.375       | %      | 1.750        | %      |

 

The “Base Rate Margin” shall, as of each date ofdetermination, be the percentage, not less than 0.000% per annum, which isequal to then prevailing Euro-Dollar Margin (after adjustment upwards ordownwards by the Margin Adjustment), minus 1.250%

 

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

 

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

 

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

 

1

----

 

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

 

“Level I Status” exists at any date if, at such date,either (x) the Debt Rating assigned by S&P is A- or higher or the DebtRating assigned by Moody’s is A3 or higher, or (y) the Applicable LeverageRatio is less than 1.50:1.

 

“Level II Status” exists at any date if, at such date,(i) either (x) the Debt Rating assigned by S&P is BBB+ or higheror the Debt Rating assigned by Moody’s is Baa1 or higher, or (y) theApplicable Leverage Ratio is less than 2.25:1 and (ii) Level I Status doesnot exist.

 

“Level III Status” exists at any date, if, at suchdate, (i) either (x) the Debt Rating assigned by S&P is BBB orhigher or the Debt Rating assigned by Moody’s is Baa2 or higher, or(y) the Applicable Leverage Ratio is less than 3.00:1 and(ii) neither Level I Status nor Level II Status exists.

 

“Level IV Status” exists at any date, if, at suchdate, (i) either (x) the Debt Rating Assigned by S&P is BBB- orhigher or the Debt Rating assigned by Moody’s is Baa3 or higher, or(y) the Applicable Leverage Ratio is less than 3.75 and (ii) none ofLevel I Status, Level II Status or Level III Status exists.

 

“Level V Status” exists at any date, if, at such date,(i) either (x) the Debt Rating assigned by S&P is BB+ or higheror the Debt Rating assigned by Moody’s is Ba1 or higher or (y) the ApplicableLeverage Ratio is less than 4.25:1 and (ii) none of Level I Status, LevelII Status, Level III Status or Level IV Status exists.

 

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

 

For purposes of this Schedule, the following termshave the following meanings, subject to the final two paragraphs of thisSchedule:

 

“Margin Adjustment” means, (a) as of any date ofdetermination when the Applicable Leverage Ratio is in excess of 3.50:1 butequal to or less than 4.00:1, an incremental interest margin of 0.075% perannum to be added to the Euro-Dollar Margin in determining the rate applicableto Euro-Dollar Loans, (b) as of any date of determination when the ApplicableLeverage Ratio is in excess of 4.00:1 but equal to or less than 4.75:1, anincremental interest margin of 0.150% per annum to be added to the Euro-DollarMargin in determining the rate applicable to Euro-Dollar Loans, (c) as of anydate of determination when the Applicable Leverage Ratio is in excess of 4.75:1,an incremental interest margin of 0.225% per annum to be added to theEuro-Dollar Margin in determining the rate applicable to Euro-Dollar Loans, and(d) as of any date of determination when the Applicable Leverage Ratio is lessthan 2.00:1, a deduction of 0.075% per annum to be subtracted from theEuro-Dollar Margin in determining the rate applicable to Euro-Dollar Loans.

 

“Debt Rating” means, as of any date of determination,the rating assigned by the Rating Agencies to the senior unsecured long-termdebt securities of the Borrower without third-party credit enhancement (and anyrating assigned to any other debt security of the Borrower shall bedisregarded) as of the close of business on such date, provided that(a) if such securities receive a

 

2

----

 

split-rating and the rating differential is one level,the higher of the two ratings will apply (e.g. A-/Baa1 results in Level I Status and A-/Baa2 results in Level IIStatus), and (b) if the Borrower is split-rated and the ratings differential ismore than one level, the average of the two ratings (or the higher of any twointermediate ratings) shall be used (e.g. A-/Baa2 results in Level II Status, as does A-/Baa3).

 

3

----