**Exhibit4.3**

 

SHORT TERM CREDITAGREEMENT

 

dated as of

 

August 12, 2003

 

among

 

PARK PLACE ENTERTAINMENTCORPORATION

 

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

 

and

 

BANK OF AMERICA, N.A.as Administrative Agent

 

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BANC OF AMERICASECURITIES LLC.

 

and

 

J.P. MORGAN SECURITIESINC.

 

Joint Lead Arrangers andJoint Book Managers

 

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**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                            | Conversion  and Continuation of Loans |
|             | 2.04                            | Notice to Lenders; Funding of Loans |
|             | 2.05                            | Notes |
|             | 2.06                            | Interest  Rates |
|             | 2.07                            | Upfront Fees |
|             | 2.08                            | Facility  Fees |
|             | 2.09                            | Optional Termination or Reduction of  Commitments by the Borrower |
|             | 2.10                            | Optional Termination of Commitments by  the Lenders |
|             | 2.11                            | Scheduled Termination of Commitments |
|             | 2.12                            | Extensions  of the Termination Date |
|             | 2.13                            | Optional Prepayments |
|             | 2.14                            | General  Provisions as to Payments |
|             | 2.15                            | Funding Losses |
|             | 2.16                            | Computation  of Interest and Fees |
|             | 2.17                            | Withholding  Tax Exemption |
|             | 2.18                            | Regulation D  Compensation |
| ARTICLE III | CONDITIONS                      |
|             | 3.01                            | Borrowings |
|             | 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 |

 

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|             | 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                 |
|             | 6.01                     | Events of Default                                      |
|             | 6.02                     | Notice of Default                                      |
| ARTICLE VII | THE ADMINISTRATIVE AGENT |
|             | 7.01                     | Appointment  and Authorization of Administrative Agent |
|             | 7.02                     | Delegation  of Duties                                  |
|             | 7.03                     | Liability  of Administrative Agent                     |
|                  |                          |                                                        |  |

 

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|              | 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; Consents                                                |
|              | 9.05                     | Successors and Assigns                                              |
|              | 9.06                     | Collateral                                                          |
|              | 9.07                     | California Law;  Submission to Jurisdiction                         |
|              | 9.08                     | Counterparts; Integration                                           |
|              | 9.09                     | Several Obligations                                                 |
|              | 9.10                     | Sharing of Set-Offs                                                 |
|              | 9.11                     | WAIVER OF JURY TRIAL                                                |
|              | 9.12                     | Confidentiality                                                     |
|                   |                          |                                                                     |  |

 

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SHORT TERM CREDITAGREEMENT

 

SHORT TERM CREDIT AGREEMENT dated as ofAugust 12, 2003, among PARK PLACE ENTERTAINMENT CORPORATION, the Lenderslisted on the signature pages hereto, Societe Generale, as Syndication Agent,Deutsche Bank Trust Company Americas, Bank of New York, Citicorp USA, Inc. and JPMorgan Chase Bank, asCo-Documentation Agents and BANK OF AMERICA, N.A., as Administrative Agent.

 

RECITALS

 

The Borrower has requested that the Lenders provide arevolving credit facility and the Lenders have agreed to do so on the terms andconditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises andthe agreements, provisions and covenants herein contained, the parties heretoagree as follows:

 

ARTICLE IDEFINITIONS

 

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

 

“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, or5% or more of the partnership or other ownership interests of any other Personthat has more than 100 record holders of such interests, will be deemed tocontrol such 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.

 

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

 

“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.

 

“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 Loan made or to be made by aLender as a Base Rate Loan in accordance with the applicable Notice ofBorrowing 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 any merger or consolidation ofthe Borrower with or into any person or any sale, transfer or other conveyance,whether direct or indirect, of all or substantially all of the assets of theBorrower, on a consolidated basis, in one transaction or a series of related

 

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transactions, if, immediatelyafter giving effect to such transaction, any person or group of persons (withinthe meaning 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 ofpersons (within the meaning of Section 13 or 14 of the Securities ExchangeAct of 1934, as amended) is or becomes the beneficial owner (within the meaningof Rule 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 in theelection of directors of the Borrower, (iii) when, during any period of 12consecutive calendar months, individuals who were directors of the Borrower onthe first day of such period (together with any new directors whose election bythe board of directors of the Borrower or whose nomination for election by thestockholders of the Borrower was approved by a vote of a majority of thedirectors then still in office who were either directors at the beginning ofsuch period or whose election or nomination for election was previously soapproved) cease for any reason to constitute a majority of the board ofdirectors of the Borrower, or (iv) the sale or disposition, whetherdirectly or indirectly, by the Borrower of all or substantially all of itsassets.

 

“Co-Documentation Agents” mean Deutsche Bank TrustCompany Americas, Bank of New York, Citicorp USA, Inc. and JPMorgan Chase Bank,each in its capacity as documentation agent for the Lenders hereunder.  The capacity of the Co-Documentation Agentsis titular in nature, and the Co-Documentation Agents shall have no obligationsor liabilities under the Loan Documents by reason of acting in such capacity.

 

“Commitment” means, as to each Lender, the commitmentof that Lender to make Loans in each case as such amount may be reduced fromtime to time pursuant to Section 2.09, 2.10 or 2.11.  The aggregate amount of the Commitmentsunder this Agreement as of the Effective Date is $493,046,806.  As of the Effective Date, each Lender hasmade a Commitment which is equal to the amount of the Note issued to thatLender on the Effective Date.

 

“Compliance Certificate” means a certificate,substantially in the form of Exhibit A, properly completed and signed by anAuthorized 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 equivalentssufficient to provide for payment in full of such Debt at its scheduledmaturity or at an earlier date at which it shall have been or may be called forredemption shall have been irrevocably deposited in trust for the benefit ofthe holders of such Debt or a representative of such holders, which depositshall have resulted in the 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-cashcharges, provided that, in calculating “Consolidated EBITDA”:

 

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(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 suchcalculation, which consent shall not be unreasonably withheld, and(iii) not objected to in writing by the Required Lenders within the tenDomestic Business 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) anyliabilities which are by their terms renewable or extendable at the option ofthe obligor thereon to a time more than twelve months from the time as of whichthe amount thereof is being computed), and (b) all goodwill, trade names,trademarks, patents, unamortized debt discount and expense and other likeintangibles, all as set forth on the latest consolidated balance sheet of theBorrower prepared in accordance with generally 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 pay thedeferred purchase price of property or services, except trade accounts payablearising in the ordinary course of business, (iv) all obligations of suchPerson as lessee which are capitalized in accordance with generally acceptedaccounting principles, (v) all indebtedness or other 

 

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obligations secured by acontractual Lien on any asset of such Person, whether or not such indebtednessor other obligations are otherwise an obligation of such Person, and(vi) all Guarantees made by such Person (including by way of provision ofletters of credit or other contingent obligations) with respect to indebtednessor other obligations of any other Person which constitute “Debt” of a type orclass 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 Domestic LendingOffice) or such other office as such Lender may hereafter designate as its DomesticLending Office by notice to the Borrower 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

 

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AdministrativeQuestionnaire as its Euro-Dollar Lending Office) or such other office, branchor affiliate of such Lender as it may hereafter designate as its Euro-DollarLending Office by notice to the Borrower and the Administrative Agent.

 

“Euro-Dollar Loan” means a Loan made or to be made bya Lender as a Euro-Dollar Loan in accordance with the applicable Notice ofBorrowing.

 

“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

 

(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.

 

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“Facility Fee Rate” has the meaning set forth inSection 2.08.

 

“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 on theDomestic Business Day next succeeding such day; provided that (a) ifsuch day is not a Domestic Business Day, the Federal Funds Rate for such dayshall be such rate on such transactions on the next preceding Domestic BusinessDay as so published on the next succeeding Domestic Business Day, and (b) if nosuch rate is so published on such next succeeding Domestic Business Day, theFederal Funds Rate for such day shall be the average rate (rounded upward, ifnecessary, to a whole multiple of 1/100 of 1%) charged to Bank of America onsuch day on such transactions as determined by the Administrative Agent.

 

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

 

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

 

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

 

“Guarantee” by any Person means any obligation,contingent or otherwise, of such Person directly or indirectly guaranteeing anyDebt of any other Person and, without limiting the generality of the foregoing,any obligation, direct or indirect, contingent or otherwise, of such Person(i) to purchase or pay (or advance or supply funds for the purchase 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, providedthat the term Guarantee shall not include (x) endorsements for collectionor deposit in the ordinary course of business or (y) performance orcompletion guarantees.  The term“Guarantee” used as a verb has a corresponding meaning.

 

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

 

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“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 thesame period.

 

“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; providedthat:

 

(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 toclause (a)(iii) below, end on the last Euro-Dollar Business Day in thecalendar month which is the last calendar month which commences in suchInterest 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.

 

“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 orliabilities under the Loan Documents.

 

“Lender” means each lender listed on the signaturepages hereof and each Lender which accepts an assignment pursuant toSection 9.05, and their respective successors.

 

“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 quartersending on 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 the Borrower and itsSubsidiaries.

 

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“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 loan made or to be made by a Lenderpursuant to Section 2.01.  A Loanmay be a Base Rate Loan or a Euro-Dollar Loan.

 

“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 made contributions,including for these purposes any Person which ceased to be a member of theERISA 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 obligation of theBorrower to repay the Loans, and “Note” means any one of such promissory notesissued hereunder.

 

“Notice of Borrowing” has the meaning set forth inSection 2.02.

 

“Notice of Conversion\Continuation” has the meaningset forth in Section 2.03.

 

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

 

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

 

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“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 ofERISA or subject to the minimum funding standards under Section 412 of theInternal Revenue Code and either (i) is maintained, or contributed to, byany member of the ERISA Group for employees of any member of the ERISA Group or(ii) has at any time within the preceding five years been maintained, 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 and signed byan Authorized Officer of the Borrower.

 

“Pricing Period” means (a) the period beginningon the Effective Date and ending on August 31, 2003, and (b) eachperiod of three months beginning on the first day of each March, June,September and December and ending on the last day of the succeedingMay, August, November and February.

 

“Public Notice” means, without limitation, any filingor report made in accordance with the requirements of the Securities andExchange Commission (or any successor), any press release or publicannouncement made by the Borrower or any written notice the Borrower gives tothe Administrative Agent or the Lenders.

 

“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) the occurrence of an event described in clauses (i)-(iv) of thedefinition of “Change of Control” or (ii) the intention by the Borrower toeffect such an event (which 90-day period shall be extended so long as therating of the senior debt of the Borrower is under publicly announcedconsideration for possible downgrade by any of the Rating Agencies) of adecrease in the rating of the senior debt of the Borrower by any of the RatingAgencies to below Investment 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 ofAmerica’s costs and desired return, general

 

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economic conditions andother factors, and is used as a reference point for pricing some loans, whichmay be priced at, above, or below such announced rate.  Any change in the Reference Rate announcedby Bank of America or any successor Administrative Agent shall take effect atthe opening of business on the day specified in the public announcement of suchchange.

 

“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.

 

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

 

“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 sum of the assets of such Person, both at a fair valuation and atpresent fair saleable value, exceeds its liabilities, including its probableliability in respect of contingent liabilities, (b) such Person will havesufficient capital with which to conduct its business as presently conductedand as proposed to be conducted and (c) such Person has not incurreddebts, and does not intend to incur debts, beyond its ability to pay such debtsas they mature.  For purposes of thisdefinition, “debt” means any liability on a claim, and “claim” means (x) aright 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 equitableremedy for breach of performance if such breach gives rise to a payment,whether or not such right to an equitable remedy is reduced to judgment, fixed,contingent, matured, unmatured, disputed, undisputed, secured orunsecured.  With respect to any suchcontingent liabilities, such liabilities shall be computed at the amount which,in light of all the facts and circumstances existing at the time, representsthe amount which can reasonably be expected to become an actual or maturedliability.

 

“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.

 

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“Syndication Agent” means Societe Generale, in itscapacity 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.

 

“Termination Date” means August 10, 2004 or suchlater date to which the Revolving Credit Period shall have been extendedpursuant to Section 2.12, or, if such day is not a Euro-Dollar BusinessDay, 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                           AccountingTerms and Determinations.  Unless otherwisespecified herein, all accounting terms used herein shall be interpreted, allaccounting determinations hereunder shall be made, and all financial statementsrequired to be delivered hereunder shall be prepared, in accordance withgenerally accepted accounting principles as in effect from time to time,applied on a basis consistent (except for changes concurred in by theBorrower’s independent public accountants and disclosed in such financialstatements) with the most recent audited consolidated financial statements ofthe Borrower and its Consolidated Subsidiaries delivered to the Lenders; providedthat, if the Borrower notifies the Administrative Agent that the Borrowerwishes to amend any covenant in Article V to eliminate the effect of anychange in generally accepted accounting principles on the operation of suchcovenant (or if the Administrative Agent notifies the Borrower that theRequired Lenders wish to amend Article V for such purpose), then theBorrower’s compliance with such covenant shall be determined on the basis ofgenerally accepted accounting principles in effect immediately before therelevant change in generally accepted accounting principles became effective,until either such notice is withdrawn or such covenant is amended in a mannersatisfactory to the Borrower and the Required Lenders.

 

1.03                           Typesof Borrowings. Borrowings are classified for purposes of this Agreement either byreference to the pricing of Loans comprising such Borrowing (e.g., a“Euro-Dollar Borrowing” is a Borrowing comprised of Euro-Dollar Loans) or byreference to the provisions of Article II under which participationtherein is determined (i.e., a “Borrowing” is a Borrowing underSection 2.01 in which all Lenders participate in proportion to theircommitments).

 

ARTICLE IITHE CREDITS

 

2.01                           Commitmentsto Lend.  During theRevolving Credit Period each Lender severally agrees, on the terms andconditions set forth in this Agreement, to lend to the Borrower pursuant tothis Section from time to time amounts such that (a) the aggregateprincipal of Loans 

 

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by such Lender at any onetime outstanding shall not exceed the amount of its Commitment, and(b) the aggregate principal outstanding amount of all Loans shall notexceed the aggregate Commitments.  EachBorrowing under this Section shall be in an aggregate principal amount of$10,000,000 or any larger multiple of $1,000,000; and each Borrowing shall bemade from the several Lenders ratably in proportion to their respectiveCommitments.  Within the foregoing limits,the Borrower may borrow under this Section, repay, or to the extent permittedby Section 2.13, prepay Loans and reborrow at any time on or prior to theTermination Date under this Section. The Loans shall mature, and the principal amount thereof shall be dueand payable, on the Termination Date.

 

2.02                           Noticeof Borrowings.  TheBorrower shall give the Administrative Agent notice (a ”Notice ofBorrowing”), substantially in the form of Exhibit D hereto, not later than8:30 A.M. (California local time) on (y) the date of each Base RateBorrowing and (z) the third Euro-Dollar Business Day before eachEuro-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 Borrowings which are Euro-Dollar Borrowings havingdifferent Interest Periods shall be outstanding at any time.

 

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

 

The Borrower shall deliver, to the AdministrativeAgent, notice of any such conversion or continuation, substantially in the formof Exhibit D (each a “Notice of Conversion/Continuation”), no later than8:30 A.M. (California local time) at least one Domestic Business Day inadvance of the proposed conversion date (in the case of a conversion to a BaseRate Loan) and at least three Euro-Dollar Business Days in advance of theproposed conversion/ continuation date (in the case of a conversion to, or acontinuation of, a Euro-Dollar Loan).  ANotice of Conversion/Continuation shall specify (i) the proposedconversion/continuation date

 

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(which shall be aDomestic Business Day in the case of Base Rate Loans and a Euro-Dollar BusinessDay, in the case of conversion to or continuation of Euro-Dollar Loans),(ii) the amount and type of the Loan to be converted/continued,(iii) the nature of the proposed conversion/continuation, (iv) in thecase of a conversion to, or a continuation of, a Euro-Dollar Loan, therequested Interest Period, and (v) in the case of a conversion to, or acontinuation of, a Euro-Dollar Loan, that no Default or Event of Default hasoccurred and is continuing.

 

2.04                           Noticeto 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.  Unlessthe Administrative Agent determines that any applicable condition specified inArticle III has not been satisfied, the Administrative Agent will make thefunds so received from the Lenders available to the Borrower at theAdministrative 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 2.14, 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 2.04 and theAdministrative Agent may, in reliance upon such assumption, make available tothe Borrower on such date a corresponding amount.  If and to the extent that such Lender shall not have so made suchshare available to the Administrative Agent, such Lender and the Borrowerseverally agree to repay to the Administrative Agent forthwith on demand suchcorresponding amount together with interest thereon, for each day from the datesuch amount is made available to the Borrower until the date such amount isrepaid to the Administrative Agent, at (i) in the case of the Borrower, arate per annum equal to the higher of the Federal Funds Rate and the interestrate applicable thereto pursuant to Section 2.06 and (ii) in the caseof such Lender, the Federal Funds Rate. If such Lender shall repay to the Administrative Agent suchcorresponding

 

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amount, suchamount so repaid shall constitute such Lender’s Loan included in such Borrowingfor purposes 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 2.06, the applicable Lender shall pay the Borrower thedifference between such rates.

 

2.05                           Notes.

 

(a)                                  TheLoans of each Lender shall be evidenced by a single Note payable to the orderof such Lender for the account of its Applicable Lending Office in an amountequal to such Lender’s Commitment.

 

(b)                                 Uponreceipt of each Lender’s Note pursuant to Section 3.02(b), theAdministrative Agent shall forward such Note 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 itsNote, endorse on the schedule forming a part thereof appropriate notationsto evidence the foregoing information with respect to each such Loan thenoutstanding; provided that the failure of any Lender to make any suchrecordation or endorsement shall not affect the obligations of the Borrowerhereunder or under the Notes.  EachLender is hereby irrevocably authorized by the Borrower so to endorse its Noteand to attach to and make a part of its Note a continuation of any such schedule asand when required.

 

2.06                           InterestRates.

 

(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

 

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the respectiverates per annum at which one day (or, if such amount due remains unpaid morethan three Euro-Dollar Business Days, then for such period of time not longerthan 6 months as the Administrative Agent may elect) deposits in Dollars in anamount approximately equal to such overdue payment due to the AdministrativeAgent are offered to the Administrative Agent in the London interbank marketfor the applicable period determined as provided above by (ii) 1.00 minusthe Euro-Dollar Reserve Percentage (or, if the circumstances described inclause (a) or (b) of Section 8.01 shall exist, at a rate per annumequal to the sum of 2% plus the rate applicable to Base Rate Loans for suchday).

 

(d)                                 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.

 

2.07                           UpfrontFees.  On the date upon whichthis Agreement is executed, the Borrower shall pay to the Administrative Agentfor the account of each Lender non-refundable upfront fees in the amounts setforth in the term sheet for this Agreement posted on Intralinks by the JointLead Arrangers and Joint Book Managers.

 

2.08                           FacilityFees.  The Borrower shall payto the Administrative Agent for the account of the Lenders ratably facilityfees at the Facility Fee Rate determined daily in accordance with theSchedule 1 (the “Facility Fee Rate”). Such facility fee shall accrue from and including the Effective Date tobut excluding the Termination Date (or earlier date of termination of theCommitments in their entirety), on the daily aggregate amount of theCommitments (whether used or unused). Facility fees shall be payable quarterly in arrears on December 1,2001 and on the first day of each subsequent March, June, September andDecember and upon the date of termination of the Commitments in theirentirety, and are non-refundable.

 

2.09                           OptionalTermination or Reduction of Commitments by the Borrower.  During the Revolving Credit Period, theBorrower may, upon at least five Domestic Business Days’ notice to theAdministrative Agent, (i) terminate the Commitments at any time, if noLoans are outstanding at such time or (ii) ratably and permanently reducefrom time to time by an aggregate amount of $25,000,000 or any larger amount inmultiples of $1,000,000, the aggregate amount of the Commitments in excess ofthe aggregate outstanding principal balance of the Loans.

 

2.10                           OptionalTermination of Commitments by the Lenders.  Following the occurrence of a Change ofControl, the Required Lenders may in their sole and absolute discretion elect,during the sixty day period immediately subsequent to the later of (a) suchoccurrence and (b) the earlier of (i) receipt of theBorrower’s written notice to the Administrative Agent of such occurrence and(ii) if no such notice has been received by the Administrative Agent, thedate upon which the Administrative Agent and the Lenders have actual knowledgethereof, to terminate all of the Commitments. In any such case the Commitments shall be terminated effective on thedate which is sixty days subsequent to the date of written notice from the

 

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Administrative Agent tothe Borrower thereof, and, to the extent that there is then any Debt evidencedby the Notes, the same shall be immediately due and payable.

 

2.11                           ScheduledTermination of Commitments. The Commitments shall terminate on the Termination Date and any Loansthen outstanding (together with accrued interest thereon) shall be due andpayable on such date.

 

2.12                           Extensionsof the Termination Date. The Termination Date may be extended, in the manner set forth in thisSection, for a period of 364 days after the date on which the TerminationDate would otherwise have occurred.  Ifthe Borrower wishes to extend the Termination Date, it shall give writtennotice to that effect to the Administrative Agent not less than 45 daysnor more than 60 days prior to the then current Termination Date,whereupon the Administrative Agent shall notify each of the Lenders of suchnotice.  Each Lender will respond tosuch request, whether affirmatively or negatively, within the period which ends20 days following the Borrower’s request. If a Lender or Lenders respond negatively or fail to timely respond tosuch request (each non-responding Lender being conclusively deemed to refuse toconsent to the extension), but such non-extending Lender(s) have Commitment(s)aggregating less than 33 1/3% of the aggregate amount of the Commitments,the Borrower shall have the right, with the assistance of the AdministrativeAgent, to seek a mutually satisfactory substitute financial institution orfinancial institutions (which may be one or more of the Lenders) to assume theCommitment(s) of such non-extending Lender(s). Not later than the third Domestic Business Day prior to the theneffective Termination Date, the Borrower may designate one or more newfinancial institutions reasonably acceptable to the Administrative Agent toassume the Commitments of such non-extending Lenders, whereupon the aggregateamount of such Commitment(s) shall be assumed by such substitute financialinstitution or financial institutions on the then current TerminationDate.  So long as Lenders havingCommitment(s) totaling not less than 66 2/3% of the aggregate amount of theCommitment(s) shall have responded affirmatively to such a request then,subject to receipt by the Administrative Agent of counterparts of an ExtensionAgreement in substantially the form of Exhibit E duly completed and signed bythe Borrower and each of the affirmatively responding Lenders, the TerminationDate shall be extended, effective on such extension date, for a period of364 days to the date stated in such Extension Agreement.

 

2.13                           OptionalPrepayments.

 

(a)                                  Subjectin the case of any Euro-Dollar Borrowing to Section 2.15, 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 Lender of the contents thereof and of

 

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such Lender’sratable share (if any) of such prepayment and such notice shall not thereafterbe revocable by the Borrower.

 

2.14                           GeneralProvisions as to Payments.

 

(a)                                  TheBorrower shall make each payment of principal of, and interest on, Loans and offees hereunder, in Dollars not later than 11:00 A.M. (California localtime) on the date when due, in Federal or other immediately available funds, tothe Administrative Agent at its address referred to in Section 9.01, withoutoffset 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 of fees shall be due on aday which is not a Domestic Business Day, the date for payment thereof shall beextended to the next succeeding Domestic Business Day.  Whenever any payment of principal of, orinterest on, the Euro-Dollar Loans shall be due on a day which is not aEuro-Dollar Business Day, the date for payment thereof shall be extended to thenext succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Dayfalls in another calendar month, in which case the date for payment thereofshall be the next preceding Euro-Dollar Business Day.  If the date for any payment of principal is extended by operationof law or otherwise, interest thereon shall be payable for such extended time.

 

(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.

 

2.15                           FundingLosses.  If theBorrower makes any payment of principal with respect to any Euro-Dollar Loan(pursuant to Article VI or VIII or otherwise) on any day other than thelast day of the Interest Period applicable thereto, or if the Borrower fails toborrow any Euro-Dollar Loans after notice has been given to any Lender in accordancewith Section 2.04(a), the Borrower shall reimburse each Lender within15 days after demand for any resulting loss or expense incurred by it (orby an existing or prospective participant in the related Loan), including(without limitation) any loss incurred in obtaining, liquidating or employingdeposits from third parties, but excluding loss of margin for the period afterany such payment or failure to borrow, provided that such Lender shall havedelivered to the Borrower a certificate as to the amount of such loss orexpense, which certificate shall be conclusive in the absence of manifesterror.

 

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2.16                           Computationof Interest and Fees. Interest based on the Reference Rate and all fees hereunder shall becomputed on the basis of a year of 365 days (or 366 days in a leapyear) and paid for the actual number of days elapsed (including the first daybut excluding the last day).  All otherinterest shall be computed on the basis of a year of 360 days and paid forthe actual number of days elapsed (including the first day but excluding thelast day).

 

2.17                           WithholdingTax Exemption.  Atleast five Domestic Business Days prior to the first date on which interest orfees are payable hereunder for the account of any Lender, each Lender that isnot incorporated under the laws of the United States of America or a statethereof agrees that it will deliver to each of the Borrower and theAdministrative Agent two duly completed copies of United States Internal RevenueService Form W-8 ECI, certifying in either case that such Lender is entitled toreceive payments under this Agreement and the Notes without deduction orwithholding of any United States federal income taxes.

 

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 required which renders all such forms inapplicable or which wouldprevent such Lender from duly completing and delivering any such form withrespect to it and such Lender advises the Borrower and the Administrative Agentthat it is not capable of receiving payments without any deduction orwithholding of United States federal income tax.

 

2.18                           RegulationD Compensation.  EachLender may require the Borrower to pay, contemporaneously with each payment ofinterest on the Euro-Dollar Loans, additional interest on the relatedEuro-Dollar Loan of such Lender at a rate per annum determined by such Lenderup to but not exceeding the excess of (i) (A) the applicableEuro-Dollar Rate divided by (B) one minus the Euro-Dollar ReservePercentage over (ii) the applicable Euro-Dollar Rate.  Any Lender wishing to require payment ofsuch additional interest (x) shall so notify the Borrower and the Agent,in which case such additional interest on the Euro-Dollar Loans of such Lendershall be payable to such Lender at the place indicated in such notice withrespect to each Interest Period commencing at least three Euro-Dollar BusinessDays after the giving of such notice and (y) shall notify the Borrower atleast five Euro-Dollar Business Days prior to each date on which interest ispayable on the Euro-Dollar Loans of the amount then due it under this Section.

 

ARTICLE IIICONDITIONS

 

3.01                           Borrowings.  The obligation of any Lender to make a Loanon the occasion of any Borrowing is subject to the satisfaction of thefollowing conditions:

 

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(a)                                  receiptby the Administrative Agent of a Notice of Borrowing as required bySection 2.02;

 

(b)                                 immediatelyafter such Borrowing, the sum of the aggregate outstanding principal amount ofthe Loans will not exceed the aggregate amount of the Commitments;

 

(c)                                  immediatelybefore and after such Borrowing, no Default or Event of Default shall haveoccurred and be continuing; and

 

(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.

 

Each Borrowing hereunder shall be deemed to be a representation andwarranty by the Borrower on the date of such Borrowing as to the factsspecified in clauses (b), (c) and (d) of this Section.

 

3.02                           Effectiveness.  This Agreement shall become effective on thedate that each of the following conditions shall have been satisfied (or waivedin accordance with Section 9.04):

 

(a)                                  receiptby the Administrative Agent of counterparts hereof signed by each of theparties hereto (or, in the case of any party as to which an executedcounterpart shall not have been received, receipt by the Administrative Agentin form satisfactory to it of telegraphic, telex or other written confirmationfrom such party of execution of a counterpart 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 2.05;

 

(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 Agent; and

 

(e)                                  theBorrower shall have concurrently entered into the proposed Amendment No. 6to the Five Year Credit Agreement and the First Amended and Restated Multi-YearCredit Agreement, substantially in the form previously distributed to theLenders.

 

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

 

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ARTICLE IVREPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants that:

 

4.01                           CorporateExistence and Power. The Borrower (a) is a corporation duly incorporated, validlyexisting and in good standing under the laws of Delaware, (b) has allcorporate powers and authority and all material governmental licenses (including,without limitation, any such license issued by a Gaming Board), authorizations,consents and approvals required to own its property and assets and carry on itsbusiness as now conducted and (c) is duly qualified as a foreigncorporation and in good standing in each jurisdiction where the ownership,leasing and operation of its property or the conduct of its business requiressuch qualification.

 

4.02                           Corporateand Governmental Authorization; Contravention.  The execution, delivery and performance bythe Borrower of this Agreement and the Notes are within the Borrower’scorporate powers, have been duly authorized by all necessary corporate action,require no action by or in respect of, or filing with, any Governmental Agencyand do not contravene, or constitute a default under, any provision ofapplicable law or regulation or of the certificate of incorporation or by-lawsof the Borrower or of any agreement, judgment, injunction, order, decree orother instrument binding upon the Borrower or result in the creation orimposition of any Lien on any asset of the Borrower or any of its Subsidiaries.

 

4.03                           BindingEffect.  ThisAgreement constitutes a valid and binding agreement of the Borrower and theNotes, when executed and delivered in accordance with this Agreement, willconstitute valid and binding obligations of the Borrower, in each caseenforceable in accordance with their respective terms.

 

4.04                           FinancialInformation.  SinceDecember 31, 2002, there has been no material adverse change in thebusiness, financial position, results of operations or prospects of theBorrower and its Consolidated Subsidiaries, considered as a whole.

 

4.05                           Litigation.  Except as disclosed in the Borrower’s form10-K report for the year ended December 31, 2002 or in its 10-Q reportsfor the quarter ended March 31, 2003, there is no action, suit orproceeding pending against, or to the knowledge of the Borrower threatenedagainst or affecting, the Borrower or any of its Subsidiaries before any courtor arbitrator or any governmental body, agency or official in which there is areasonable possibility of an adverse decision which could materially adverselyaffect the business, consolidated financial position or consolidated results ofoperations of the Borrower and its Consolidated Subsidiaries or which in anymanner draws into question the validity or enforceability of this Agreement orthe Notes.  Without limiting thegenerality of the foregoing, with respect to those litigation matters describedabove as reported in the Borrower’s aforementioned form 10-K or 10-Q reports,(a) the disclosure contained therein was accurate as of the date ofthereof, and (b) since such date there has been no material adversedevelopment.

 

4.06                           Compliancewith ERISA.  Eachmember of the ERISA Group has fulfilled its obligations under the minimumfunding standards of ERISA and the Internal Revenue Code with

 

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respect to each Plan andis in compliance in all material respects with the presently applicableprovisions of ERISA and the Internal Revenue Code with respect to eachPlan.  No member of the ERISA Group has(i) sought a waiver of the minimum funding standard under Section 412of the Internal Revenue Code in respect of any Plan, (ii) failed to makeany contribution or payment to any Plan or Multiemployer Plan or in respect ofany Benefit Arrangement, or made any amendment to any Plan or BenefitArrangement, which has resulted or could result in the imposition of a Lien orthe posting of a bond or other security under ERISA or the Internal RevenueCode or (iii) incurred any liability under Title IV or ERISA otherthan a liability to the PBGC for premiums under Section 4007 of ERISA.

 

4.07                           Taxes.  The Borrower and its SignificantSubsidiaries have filed all United States Federal income tax returns and othermaterial tax returns which are required to be filed by them and have paid oragreed to settlements of all taxes due pursuant to such returns or pursuant toany assessment received by the Borrower or any Subsidiary, except for such taxes,if any, as are being contested in good faith and as to which adequate reserveshave been provided.  The charges,accruals and reserves on the books of the Borrower and its SignificantSubsidiaries in respect of taxes or other governmental charges are, in theopinion of the Borrower, adequate.

 

4.08                           SignificantSubsidiaries.  Each ofthe 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 andin good standing in each jurisdiction where the ownership, leasing andoperation of its property or the conduct of its business requires suchqualification, and the failure to be so qualified would have a material adverseeffect on the Borrower and its Subsidiaries.

 

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

 

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

 

4.11                           FullDisclosure.  Allinformation heretofore furnished by the Borrower to the Agents or to any Lenderfor purposes of or in connection with this Agreement or any transactioncontemplated hereby is, and all such information hereafter furnished by theBorrower to the Administrative Agent or any Lender will be, taken as a whole,true and accurate in all material respects on the date as of which suchinformation is stated or certified.  TheBorrower has disclosed to the Lenders in writing or by means of its filingswith the Securities and Exchange Commission any and all facts which materiallyand adversely affect or may affect (to the extent the Borrower can nowreasonably 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 

 

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estimates based onreasonable assumptions and all available information, but are subject to theuncertainty inherent in all projections and forecasts.

 

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

 

4.13                           GamingLaws.  The Borrowerand its Subsidiaries are in material compliance with all applicable GamingLaws.

 

4.14                           TaxShelter Regulations.  The Borrowerdoes not intend to treat the Loans as being a “reportable transaction” (withinthe meaning of Treasury Regulation Section 1.6011-4).  In the event the Borrower determines to takeany action inconsistent with such intention, it will promptly notify theAdministrative Agent thereof.  If theBorrower notifies the Administrative Agent, the Borrower acknowledges that oneor more of the Lenders may treat its Loans as part of a transaction that issubject to Treasury Regulation Section 301.6112-1, and such Lender orLenders, as applicable, will maintain the lists and other records required bysuch Treasury Regulation..

 

ARTICLE VCOVENANTS

 

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

 

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

 

(a)                                  assoon as available and in any event within 90 days after the end of eachfiscal year of the Borrower, the consolidated balance sheet of the Borrower andits Consolidated 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 ofthe first 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 cash flowsfor such quarter and for the portion of the Borrower’s fiscal year ended at theend of such quarter, setting forth in the case of such statements of income andcash flows in comparative form the figures for the corresponding quarter andthe corresponding portion of the Borrower’s previous fiscal year, all certified(subject to normal year-end adjustments) as to fairness of presentation,generally accepted accounting principles and consistency by an AuthorizedOfficer;

 

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

 

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reasonable detailthe calculations required to establish whether the Borrower was in compliancewith the requirements of Sections 5.06, 5.10 and 5.11 on the date of suchfinancial statements, and (ii) stating whether any Default exists on thedate of such Compliance Certificate and, if any Default then exists, setting forththe details thereof and the action which the Borrower is taking or proposes totake with respect thereto;

 

(d)                                 simultaneouslywith the delivery of each set of financial statements referred to inclause (a) above, a statement of the firm of independent public accountantswhich reported on such statements (i) whether anything has come to theirattention to cause them to believe that any Default existed on the date of suchstatements and (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 underTitle IV of ERISA of an intent to terminate, impose liability (other thanfor premiums under Section 4007 of ERISA) in respect of, or appoint atrustee to administer, any Plan, a copy of such notice; (iv) applies for awaiver of the minimum funding standard under Section 412 of the InternalRevenue Code, a copy of such application; (v) gives notice of intent toterminate any Plan under Section 4041(c) of ERISA, a copy of such noticeand other information filed with the PBGC; (vi) gives notice of withdrawalfrom any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or(vii) fails to make any payment or contribution to any Plan orMultiemployer Plan or in respect of any Benefit Arrangement or makes any

 

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amendment to anyPlan or Benefit Arrangement which has resulted or could result in theimposition of a Lien or the posting of a bond or other security, a certificateof the chief financial officer or the chief accounting officer of the Borrowersetting forth details as to such occurrence and action, if any, which theBorrower or applicable member of the ERISA Group is required or proposes totake;

 

(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                           Maintenanceof 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 (andwith such risk retention) as are usually insured against in the same generalarea by companies of established repute engaged in the same or a similarbusiness and will furnish to the Lenders, upon request from the AdministrativeAgent, information presented in reasonable detail as to the insurance socarried.  Notwithstanding the foregoing,the Borrower may self-insure with respect to such risks with respect to whichcompanies of established repute engaged in the same or similar business in thesame general area usually self-insure.

 

5.03                           Conductof Business and Maintenance of Existence.  The Borrower will continue, and will causeeach Significant Subsidiary to continue, to engage in business of the samegeneral type conducted by the Borrower and its Significant Subsidiaries as ofthe Effective Date, and will preserve, renew and keep in full force and effect,and will cause each Subsidiary to preserve, renew and keep in full force andeffect their respective corporate existence and their respective rights,privileges and franchises necessary or desirable in the normal conduct ofbusiness; provided that nothing in this Section 5.03 shall prohibit(i) the merger of a Subsidiary into the Borrower or the merger or theconsolidation of a Subsidiary with or into another Person if the

 

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corporation survivingsuch consolidation or merger is a Subsidiary and if, in each case, after givingeffect thereto, no Default shall have occurred and be continuing or(ii) the termination of the corporate existence of any Subsidiary if(A) the Borrower in good faith determines that such termination is in thebest interest of the Borrower and (B) such termination is not materiallydisadvantageous to the Lenders.

 

5.04                           Compliancewith Laws.  The Borrower willcomply, and cause each Significant Subsidiary to comply, in all materialrespects with all applicable laws, ordinances, rules, regulations, andrequirements of any Governmental Agency (including, without limitation,Environmental Laws, Gaming Laws and ERISA and, in each case, the rules andregulations thereunder) except where the necessity of compliance therewith iscontested in good faith by appropriate proceedings.

 

5.05                           Inspectionof Property, Books and Records.  TheBorrower will keep, and will cause each Significant Subsidiary to keep, properbooks of record and account in which full, true and correct entries shall bemade of all dealings and transactions in relation to its business andactivities; and will permit, and will cause each Significant Subsidiary topermit, representatives of any Lender at such Lender’s expense to visit andinspect any of their respective properties, to examine and make abstracts fromany of their respective books and records and to discuss their respectiveaffairs, finances and accounts with their respective officers, employees andindependent public accountants, all at such reasonable times and as often asmay reasonably be desired.

 

5.06                           NegativePledge.  None of the Borrower, anyCovered Subsidiary or any Significant Subsidiary will create or assume any Lienon any asset now owned or hereafter acquired by it, except:

 

(a)                                  Liensexisting as of the Effective Date;

 

(b)                                 anyLien existing on any asset of any corporation at the time such corporation becomesa 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 theLien attaches to such asset concurrently with or within 180 days after theacquisition thereof, or such longer period, not to exceed 12 months, due to theBorrower’s inability to retain the requisite governmental approvals withrespect to such acquisition; providedfurtherthat, in thecase of real estate, (i) the Lien attaches within 12 months after thelatest of the acquisition thereof, the completion of construction thereon orthe commencement of full operation thereof and (ii) the Debt so secureddoes not exceed the sum of (x) the purchase price of such real estate plus(y) the costs of such construction;

 

(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

 

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Borrower thatholds, directly or indirectly through a holding company or otherwise, a licenseto conduct 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 coverany transaction costs of such refinancing, extension, renewal or refunding) andis not 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.  TheBorrower and its Subsidiaries will not (i) consolidate or merge with orinto any other Person or (ii) sell, lease or otherwise transfer all or anysubstantial part of the assets of the Borrower and its Subsidiaries, taken as awhole, to any other Person, or (iii) acquire all or substantially all ofthe assets of, or more than 49% of the capital stock or other equity securitiesof, any Person which is not engaged in the same general lines of business asthe Borrower and its Subsidiaries, if, giving effect to such consolidation,merger, sale or acquisition, the Borrower is not in pro forma compliance withthe covenants set forth in Sections 5.10 and 5.11; provided that,notwithstanding the foregoing, the Borrower may merge with another Person onlyif (A) the Borrower is the corporation surviving such merger, and(B) immediately after giving effect to such merger, no Default shall haveoccurred and be continuing.

 

5.08                           HostileTender Offers.  TheBorrower and its Subsidiaries will not make any offer to purchase or acquire,or prosecute, pursue or consummate a purchase or acquisition of, 5% or more ofthe capital stock of any corporation or other business entity, if the board ofdirectors or

 

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other equivalentgoverning body of such corporation or business entity has notified the Borroweror its relevant Subsidiaries that it opposes such offer or purchase and suchnotice has not been withdrawn or superseded.

 

5.09                           Useof Proceeds.  Theproceeds of the Loans made under this Agreement will be used by the Borrower torefinance amounts outstanding, if any, under the Amended and Restated ShortTerm Credit Agreement dated as of August 22, 2002 among the Borrower,certain lenders and Bank of America, N.A., as administrative agent for suchlenders, and for general corporate purposes. None of such proceeds will be used, directly or indirectly, for thepurpose, whether immediate, incidental or ultimate, of buying or carrying any“margin stock” within the meaning of Regulation U other than “margin stock”issued by the Borrower which is retired upon purchase or for any purpose whichviolates Section 5.08.

 

5.10                           LeverageRatio.  The Leverage Ratio will not,as of the last day of any fiscal quarter of the Borrower, exceed 5.25:1.00.

 

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

 

ARTICLE VIDEFAULTS

 

6.01                           Eventsof Default.  If one ormore of the following events (“Events of Default”) shall have occurred and becontinuing:

 

(a)                                  theBorrower shall fail to (i) pay when due any principal of any Loan underthis Agreement, or (ii) pay within five days of the due date thereof anyinterest, 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 7 days after written notice thereof has been given to the Borrower bythe Administrative Agent, which notice shall be delivered to the Borrower bythe Administrative Agent at the request 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;

 

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(f)                                    anyevent or condition shall occur which results in the acceleration of thematurity of any Debt (other than Non-Recourse Debt) in excess of $100,000,000of the Borrower or any Covered Subsidiary or any Significant Subsidiary orenables or entitles the holder of such Debt or any Person acting on suchholder’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 orderfor relief 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 Planshall be filed under Title IV of ERISA by any member of the ERISA Group,any plan administrator or any combination of the foregoing; or the PBGC shallinstitute proceedings under Title IV of ERISA to terminate, to imposeliability (other than for premiums under Section 4007 of ERISA) in respectof, or to cause a trustee to be appointed to administer, any Material Plan; ora condition shall exist by reason of which the PBGC would be entitled to obtaina decree adjudicating that any Material Plan must be terminated; or there shalloccur a complete or partial withdrawal from, or a default, within the meaningof Section 4219(c)(5) of ERISA, with respect to, one or more MultiemployerPlans which could cause one or more members of the ERISA Group to incur acurrent payment obligation in excess 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

 

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accounting forfive percent (5%) or more of the consolidated gross revenues of theBorrower and its Subsidiaries that continues for thirty calendar days;

 

then, and in every such event, the Administrative Agent shall(i) if requested by the Required Lenders, by notice to the Borrowerterminate the Commitments and they shall thereupon terminate, and (ii) ifrequested by the Required Lenders, by notice to the Borrower declare the Loans (togetherwith accrued interest thereon) to be, and the Loans (together with accruedinterest thereon) shall thereupon become, immediately due and payable withoutpresentment, demand, protest or other notice of any kind, all of which arehereby waived by the Borrower; provided that in the case of any of theEvents of Default specified in clause (g) or (h) above with respect to theBorrower, without any notice to the Borrower or any other act by theAdministrative Agent or the Lenders, the Commitments shall thereupon terminateand the Loans (together with accrued interest thereon) shall become immediatelydue and payable without presentment, demand, protest or other notice of anykind, all of which are hereby waived by the Borrower.

 

6.02                           Noticeof Default.  TheAdministrative 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.

 

ARTICLE VIITHE ADMINISTRATIVE AGENT

 

7.01                           Appointmentand Authorization of Administrative Agent.  Each Lender hereby irrevocably appoints,designates and authorizes the Administrative Agent to take such action on itsbehalf under the provisions of this Agreement and each other Loan Document andto exercise such powers and perform such duties as are expressly delegated toit by the terms of this Agreement or any other Loan Document, together withsuch powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary contained elsewhereherein or in any other Loan Document, the Administrative Agent shall not haveany duties or responsibilities, except those expressly set forth herein, norshall the Administrative Agent have or be deemed to have any fiduciaryrelationship with any Lender or participant, and no implied covenants,functions, responsibilities, duties, obligations or liabilities shall be readinto this Agreement or any other Loan Document or otherwise exist against theAdministrative Agent.  Without limitingthe generality of the foregoing sentence, the use of the term “agent” hereinand in the other Loan Documents with reference to the Administrative Agent isnot intended to connote any fiduciary or other implied (or express) obligationsarising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom,and is intended to create or reflect only an administrative relationshipbetween independent contracting parties.

 

7.02                           Delegation of Duties.  The Administrative Agentmay execute any of its duties under this Agreement or any other Loan Documentby or through agents, employees or attorneys-in-fact and shall be entitled toadvice of counsel and other consultants or experts concerning all matterspertaining to such duties.  TheAdministrative Agent shall not be responsible for the negligence or misconductof any agent or attorney-in-fact that it selects in the absence of grossnegligence or willful misconduct.

 

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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 anyrecital, statement, representation or warranty made by the Borrower or anyofficer thereof, contained herein or in any other Loan Document, or in anycertificate, report, statement or other document referred to or provided forin, or received by the Administrative Agent under or in connection with, thisAgreement or any other Loan Document, or the validity, effectiveness,genuineness, enforceability or sufficiency of this Agreement or any other LoanDocument, or for any failure of the Borrower or any other party to any LoanDocument 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                           Relianceby 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 totake any such action.  TheAdministrative Agent shall in all cases be fully protected in acting, or inrefraining from acting, under this Agreement or any other Loan Document inaccordance with a request or consent of the Required Lenders (or such greaternumber of Lenders as may be expressly required hereby in any instance) and suchrequest and any action taken or failure to act pursuant thereto shall bebinding upon all the Lenders.

 

(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 Date specifyingits objection thereto.

 

7.05                           Notice of Default.  The Administrative Agent shall not be deemed to have knowledge ornotice of the occurrence of any Default, except with respect to defaults in thepayment of principal, interest and fees required to be paid to theAdministrative Agent for the account of the Lenders, unless the AdministrativeAgent shall have received written notice from

 

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a Lender or the Borrowerreferring to this Agreement, describing such Default and stating that suchnotice is a “notice of default.”  TheAdministrative Agent will notify the Lenders of its receipt of any suchnotice.  The Administrative Agent shalltake such action with respect to such Default as may be directed by the RequiredLenders in accordance with Article VIII; provided, however,that unless and until the Administrative Agent has received any such direction,the Administrative Agent may (but shall not be obligated to) take such action,or refrain from taking such action, with respect to such Default as it shalldeem advisable or in the best interest of the Lenders.

 

7.06                           CreditDecision; Disclosure of Information by Administrative Agent.  Each Lender acknowledges that neither anyAgent nor any Agent-Related Person has made any representation or warranty toit, and that no act by the Administrative Agent or any other Agent hereaftertaken, including any consent to and acceptance of any assignment or review ofthe affairs of the Borrower or any Affiliate thereof, shall be deemed toconstitute any representation or warranty by any Agent or Agent-Related Personto any Lender as to any matter, including whether such Agent or Agent-RelatedPersons have disclosed material information in their possession.  Each Lender represents to the AdministrativeAgent that it has, independently and without reliance upon any Agent orAgent-Related Person and based on such documents and information as it hasdeemed appropriate, made its own appraisal of and investigation into thebusiness, prospects, operations, property, financial and other condition andcreditworthiness of the Borrower and its Subsidiaries, and all applicable bankor other regulatory laws relating to the transactions contemplated hereby, andmade its own decision to enter into this Agreement and to extend credit to theBorrower hereunder.  Each Lender alsorepresents that it will, independently and without reliance upon any Agent orAgent-Related Person and based on such documents and information as it shalldeem appropriate at the time, continue to make its own credit analysis,appraisals and decisions in taking or not taking action under this Agreementand the other Loan Documents, and to make such investigations as it deemsnecessary 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 the AdministrativeAgent herein, neither the Administrative Agent nor any other Agent shall haveany duty or responsibility to provide any Lender with any credit or otherinformation concerning the business, prospects, operations, property, financialand other condition or creditworthiness of the Borrower or any of itsAffiliates which may come into the possession of any Agent or Agent-RelatedPerson.

 

7.07                           Indemnification of Administrative Agent.  Whether or not the transactions contemplatedhereby are consummated, the Lenders shall indemnify upon demand eachAgent-Related Person (to the extent not reimbursed by or on behalf of theBorrower and without limiting the obligation of the Borrower to do so), prorata, and hold harmless each Agent-Related Person from and against any and allIndemnified Liabilities incurred by it; provided, however, thatno Lender shall be liable for the payment to any Agent-Related Person of anyportion of such Indemnified Liabilities to the extent determined in a final,nonappealable judgment by a court of competent jurisdiction to have resultedfrom such Agent-Related Person’s own gross negligence or willful misconduct; provided,however, that no action taken in accordance with the directions of theRequired Lenders shall be deemed to constitute gross negligence or willfulmisconduct for purposes of this Section. Without limitation of the foregoing, each Lender shall reimburse theAdministrative Agent upon demand for its ratable share of any costs or out-of-

 

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pocket expenses (includingAttorney Costs) incurred by the Administrative Agent in connection with thepreparation, execution, delivery, administration, modification, amendment orenforcement (whether through negotiations, legal proceedings or otherwise) of,or legal advice in respect of rights or responsibilities under, this Agreement,any other Loan Document, or any document contemplated by or referred to herein,to the extent that the Administrative Agent is not reimbursed for such expensesby or on behalf of the Borrower.  Theundertaking in this Section shall survive termination of the Commitments,the payment of all other Obligations and the resignation of the AdministrativeAgent.

 

7.08                           Administrative Agent in its Individual Capacity.  Bank of America and its Affiliates may makeloans to, issue letters of credit for the account of, accept deposits from,acquire equity interests in and generally engage in any kind of banking, trust,financial advisory, underwriting or other business with the Borrower and itsAffiliates as though Bank of America were not the Administrative Agenthereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant tosuch activities, Bank of America or its Affiliates may receive informationregarding the Borrower or its Affiliates (including information that may besubject to confidentiality obligations in favor of the Borrower or suchAffiliate) and acknowledge that the Administrative Agent shall be under noobligation to provide such information to them.  With respect to its Loans, Bank of America shall have the samerights and powers under this Agreement as any other Lender and may exercisesuch rights and powers as though it were not the Administrative Agent, and theterms “Lender” and “Lenders” include Bank of America in its individualcapacity.

 

7.09                           Successor Administrative Agent.  The Administrative Agent may resign asAdministrative Agent upon 30 days’ notice to the Lenders.  If the Administrative Agent resigns underthis Agreement, the Required Lenders shall appoint from among the Lenders asuccessor administrative agent for the Lenders, which successor administrativeagent shall be consented to by the Borrower at all times other than during theexistence of an Event of Default (which consent of the Borrower shall not beunreasonably withheld or delayed).  Ifno successor administrative agent is appointed prior to the effective date ofthe resignation of the Administrative Agent, the Administrative Agent mayappoint, after consulting with the Lenders and the Borrower, a successoradministrative agent from among the Lenders. Upon the acceptance of its appointment as successor administrative agenthereunder, the Person acting as such successor administrative agent shall succeedto all the rights, powers and duties of the retiring Administrative Agent andthe term “Administrative Agent” shall mean such successor administrative agentand the retiring Administrative Agent’s appointment, powers and duties asAdministrative Agent shall be terminated. After any retiring Administrative Agent’s resignation hereunder asAdministrative Agent, the provisions of this Article VII andSection 9.03 shall inure to its benefit as to any actions taken or omittedto be taken by it while it was Administrative Agent under this Agreement.  If no successor administrative agent hasaccepted appointment as Administrative Agent by the date which is 30 daysfollowing a retiring Administrative Agent’s notice of resignation, the retiringAdministrative Agent’s resignation shall nevertheless thereupon becomeeffective and the Lenders shall perform all of the duties of the AdministrativeAgent hereunder until such time, if any, as the Required Lenders appoint asuccessor agent as provided for above.

 

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7.10                           Administrative Agent May File Proofs of Claim.  In case of the pendency of any receivership,insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,composition or other judicial proceeding relative to the Borrower , theAdministrative Agent (irrespective of whether the principal of any Loan shallthen be due 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 and all other Obligations that are owing andunpaid and to file such other documents as may be necessary or advisable inorder to have the claims of the Lenders and the Administrative Agent (includingany claim for the reasonable compensation, expenses, disbursements and advancesof the Lenders and the Administrative Agent and their respective agents andcounsel and all other amounts due the Lenders and the Administrative Agentunder Section 9.03) allowed in such judicial 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 judicial proceeding ishereby authorized by each Lender to make such payments to the AdministrativeAgent and, in the event that the Administrative Agent shall consent to themaking of such payments directly to the Lenders, to pay to the AdministrativeAgent any amount due for the reasonable compensation, expenses, disbursementsand advances of the Administrative Agent and its agents and counsel, and anyother amounts due the Administrative Agent under Section 9.03.

 

Nothing contained herein shall be deemed to authorizethe Administrative Agent to authorize or consent to or accept or adopt on behalfof 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                           OtherAgents; Arrangers and Managers.  None of the Lenders or other Persons identified on the facingpage or signature pages of this Agreement as a “syndication agent,”“co-documentation agents,” “joint book manager,” or “joint lead arranger” shallhave any right, power, obligation, liability, responsibility or duty under thisAgreement other than, in the case of such Lenders, those applicable to allLenders as such.  Without limiting theforegoing, none of the Lenders or other Persons so identified shall have or bedeemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has notrelied, and will not rely, on any of the Lenders or other Persons so identifiedin deciding to enter into this Agreement or in taking or not taking actionhereunder.  None of the Lenders orAgents shall be under any obligation to any other Lender or any Participant toascertain or to inquire as to the observance or performance of any of theagreements contained in, or conditions of, this Agreement or any other LoanDocument, or to inspect the properties, books or records of the Borrower or anyAffiliate thereof.  Each Agent and itsAffiliates may make loans to, issue letters of credit for the account

 

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of, accept deposits from,acquire equity interests in and generally engage in any kind of banking, trust,financial advisory, underwriting or other business with the Borrower and 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 VIIICHANGE IN CIRCUMSTANCES

 

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

 

(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)                                 Lendershaving 50% or more of the aggregate amount of the Commitments advise theAdministrative Agent that the Euro-Dollar Rate, as determined by theAdministrative Agent, will not adequately and fairly reflect the cost to suchLenders of funding their Euro-Dollar Loans for such Interest Period,

 

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

 

8.02                           Illegality.  If, on or after the date of this Agreement,the adoption of any applicable law, rule or regulation, or any change in anyapplicable law, rule or regulation, or any change in the interpretation oradministration thereof by any governmental authority, central bank orcomparable agency charged with the interpretation or administration thereof, orcompliance by any Lender (or its Euro-Dollar Lending Office) with any requestor directive (whether or not having the force of law) of any such authority,central bank or comparable agency shall make it unlawful or impossible for 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 the 

 

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Administrative Agent thatthe circumstances giving rise to such suspension no longer exist, theobligation of such Lender to make Euro-Dollar Loans shall be suspended.  Before giving any notice to the AdministrativeAgent pursuant to this Section, such Lender shall designate a differentEuro-Dollar Lending Office if such designation will avoid the need for givingsuch notice and will not, in the sole judgment of such Lender, be otherwisedisadvantageous to such Lender.  If suchLender shall determine that it may not lawfully continue to maintain and fundany of its outstanding Euro-Dollar Loans to maturity and shall so specify insuch notice, the Borrower shall immediately prepay in full the then outstandingprincipal amount of each such Euro-Dollar Loan, together with accrued interestthereon.  Concurrently with prepayingeach such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in anequal principal amount from such Lender (on which interest and principal shallbe payable contemporaneously with the related Euro-Dollar Loans of the otherLenders), and such Lender shall make such a Base Rate Loan.

 

8.03         Increased Costand Reduced Return.

 

(a)                                  Ifon or after the date hereof, the adoption of any applicable law, rule orregulation, or any change in any applicable law, rule or regulation, or anychange in the interpretation or administration thereof by any governmentalauthority, central bank or comparable agency charged with the interpretation oradministration thereof, or compliance by any Lender (or its Applicable LendingOffice) with any request or directive (whether or not having the force of law)of any such authority, 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 shall change the basis of taxation of payments toany Lender (or its Applicable Lending Office) of the principal of or intereston its Euro-Dollar Loans or any other amounts due under this Agreement inrespect of its Euro-Dollar Loans or its obligation to make Euro-Dollar Loans(except for changes in the rate of tax on the overall net income of such Lenderor its Applicable Lending Office imposed by the jurisdiction in which suchLender’s principal 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), specialdeposit, insurance assessment or similar requirement against assets of,deposits with or for the account of, or credit extended by, any Lender (or itsApplicable Lending Office) or shall impose on any Lender (or its ApplicableLending Office) or on the United States market for certificates of deposit orthe London interbank market any other condition affecting its Euro-DollarLoans, its Note or its obligation to make Euro-Dollar Loans;

 

and the result of any of the foregoing is to increase the cost to suchLender (or its Applicable Lending Office) of making or maintaining anyEuro-Dollar Loan, or to reduce the amount of any

 

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sum received or receivable by such Lender (or its Applicable LendingOffice) under this Agreement or under its Note with respect thereto, by anamount deemed by such Lender to be material, then, within 15 days afterdemand by such Lender (with a copy to the Administrative Agent), the Borrowershall pay to such Lender such additional amount or amounts as will compensatesuch Lender for such increased cost or reduction.

 

(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 thereof byany governmental authority, central bank or comparable agency charged with theinterpretation or administration thereof, or compliance by any Lender (or itsApplicable 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 orcompliance (taking into consideration its policies with respect to capitaladequacy) by an amount deemed by such Lender to be material, then from time totime, 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 (or its Parent) for suchreduction.

 

(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                           BaseRate Loans Substituted for Affected Euro-Dollar Loans.  If (i) the obligation of any Lender tomake Euro-Dollar Loans has been suspended pursuant to Section 8.02 or(ii) any Lender has demanded compensation under Section 8.03(a) andthe Borrower shall, by at least five Euro-Dollar Business Days, prior notice tosuch Lender through the Administrative Agent, have elected that the provisionsof this Section shall apply to such Lender, then, unless and until suchLender notifies the Borrower that the circumstances giving rise to suchsuspension or demand 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 otherLenders), and

 

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(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 IXMISCELLANEOUS

 

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

 

(a)                                  ifto the Borrower or the Administrative Agent to the address, facsimile number,electronic mail address or telephone number specified for such Person on itssignature page hereto or to such other address, facsimile number, electronicmail address or telephone number as shall be designated by such party in anotice to the other parties; and

 

(b)                                 ifto any other Lender, to the address, facsimile number, electronic mail address ortelephone number specified in its Administrative Questionnaire or to such otheraddress, facsimile number, electronic mail address or telephone number as shallbe designated by such party in a notice to the Borrower and the AdministrativeAgent.

 

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

 

(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 as manually-signedoriginals and shall be binding on all parties hereto.  The Administrative Agent may also require that any such documentsand signatures be confirmed by a manually-signed original thereof; provided, however,that the failure to request or deliver the same shall not limit theeffectiveness 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

 

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provided inSection 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 the AdministrativeAgent, and each of the parties hereto hereby consents to such recording..

 

9.02                           NoWaivers.  No failureor delay by the Administrative Agent or any Lender in exercising any right,power or privilege hereunder or under any Note shall operate as a waiverthereof nor shall any single or partial exercise thereof preclude any other orfurther exercise thereof or the exercise of any other right, power orprivilege.  The rights and remediesherein provided shall be cumulative and not exclusive of any rights or remediesprovided 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” orrestructuring in respect of the Obligations and during any legal proceeding,including any proceeding under any Debtor Relief Law), including all AttorneyCosts.  The foregoing costs and expensesshall include all search, filing, recording, title insurance and appraisalcharges and fees and taxes related thereto, and other out-of-pocket expensesincurred by the Administrative Agent and the cost of independent publicaccountants and other outside experts retained by the Administrative Agent orany Lender.  All amounts due under thisSection 9.03(a) shall be payable within ten Business Days after demandtherefor.  The agreements in thisSection shall survive the termination of the Commitments and repayment ofall 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 and

 

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attorneys-in-fact(collectively the “Indemnitees”) from and against any and all liabilities,obligations, losses, damages, penalties, claims, demands, actions, judgments,suits, costs, expenses and disbursements (including Attorney Costs) of any kindor nature whatsoever which may at any time be imposed on, incurred by orasserted against any such Indemnitee in any way relating to or arising out ofor in connection with (a) the execution, delivery, enforcement, performance oradministration of any Loan Document or any other agreement, letter orinstrument delivered in connection with the transactions contemplated therebyor the consummation of the transactions contemplated thereby, (b) anyCommitment or Loan or the use or proposed use of the proceeds therefrom 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 competent jurisdictionby final and nonappealable judgment to have resulted from the gross negligenceor willful misconduct of such Indemnitee. No Indemnitee shall be liable for any damages arising from the use byothers of any information or other materials obtained through IntraLinks orother similar information transmission systems in connection with this Agreement,nor shall any Indemnitee have any liability for any indirect or consequentialdamages relating to this Agreement or any other Loan Document or arising out ofits activities in connection herewith or therewith (whether before or after theEffective Date).  All amounts due underthis Section 9.03(b) shall be payable within ten Business Days afterdemand therefor.  The agreements in thisSection shall survive the resignation of the Administrative Agent, thereplacement of any Lender, the termination of the Commitments and therepayment, satisfaction or discharge of all the other Obligations.

 

9.04                           Amendments;Consents.  No amendment or waiver ofany provision of this Agreement or any other Loan Document, and no consent toany departure by the Borrower therefrom, shall be effective unless in writingsigned by the Required Lenders and the Borrower, and acknowledged by theAdministrative Agent, and each such waiver or consent shall be effective onlyin the specific instance and for the specific 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 scheduled

 

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reduction of theCommitments hereunder or under any other Loan Document without the writtenconsent 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 2.12 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) no amendment, waiver orconsent shall, unless in writing and signed by the Administrative Agent inaddition to the Lenders required above, affect the rights or duties of theAdministrative Agent under this Agreement or any other Loan Document; (ii)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 (iii) any fee letter may be amended, or rights or privileges thereunderwaived, in a writing executed only by the parties thereto.

 

9.05         Successorsand 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 party heretoshall be null and void).  Nothing inthis 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

 

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the distributionthereof within the meaning of the Securities Act of 1933, as amended (subjectto any requirement that disposition of such Note must be within the control ofsuch Lender).

 

(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 at the time owing to it); providedthat (i) except in the case of an assignment of the entire remaining amount ofthe assigning Lender’s Commitment and Loans at the time owing to it or in thecase of an assignment to a Lender or an Affiliate of a Lender or an ApprovedFund (as defined in subsection (g) of this Section) with respect to aLender, the aggregate amount of the Commitment (which for this purpose includesLoans outstanding thereunder) subject to each such assignment, determined as ofthe date the Assignment Agreement with respect to such assignment is deliveredto the Administrative Agent or, if “Trade Date” is specified in the AssignmentAgreement, as of the Trade Date, shall not be less than $1,000,000 unless eachof the Administrative Agent and, so long as no Default has occurred and iscontinuing, the Borrower otherwise consents (each such consent not to beunreasonably withheld or delayed); (ii) each partial assignment shall be madeas an assignment of a proportionate part of all the assigning Lender’s rightsand obligations under this Agreement with respect to the Loans or theCommitment assigned; (iii) any assignment must be approved by theAdministrative Agent and, as long as no Default has occurred and is continuing,the Borrower (each such consent not to be unreasonably withheld or delayed)unless the Person that is the proposed assignee is itself a Lender (whether ornot the proposed assignee would otherwise qualify as an Eligible Assignee); and(iv) the parties to each assignment shall execute and deliver to theAdministrative Agent an Assignment Agreement, together with a processing andrecordation fee of $3,500.  Subject toacceptance and recording thereof by the Administrative Agent pursuant tosubsection (c) of this Section, from and after the effective date specifiedin each Assignment Agreement, the Eligible Assignee thereunder shall be a partyto this Agreement and, to the extent of the interest assigned by suchAssignment Agreement, have the rights and obligations of a Lender under thisAgreement, 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 owing to, each

 

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Lender pursuant tothe 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 prior notice.

 

(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); provided that (i) such Lender’s obligationsunder this Agreement shall remain unchanged, (ii) such Lender shall remainsolely responsible to the other parties hereto for the performance of suchobligations and (iii) the Borrower, the Administrative Agent and the otherLenders shall continue to deal solely and directly with such Lender inconnection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant towhich a Lender sells such a participation shall provide that such Lender shallretain the sole right to enforce this Agreement and to approve any amendment, modificationor waiver of any  provision of thisAgreement; provided that such agreement or instrument may provide thatsuch Lender will not, without the consent of the Participant, agree to anyamendment, waiver or other modification described in subsections (c) or(d) of Section 9.04 that directly affects such Participant.

 

(e)                                  AParticipant shall not be a Lender hereunder for any purpose except, ifthe participation agreement so provides, for the purposes ofSections 2.18, 8.03 and 9.03 but only to the extent that the cost of suchbenefits to the Borrower does not exceed the cost which the Borrower would haveincurred in respect of such Lender absent the participation.

 

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

 

(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 otherwise investing in commercial loans and similarextensions of credit in the ordinary course of its business.

 

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

 

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(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 any indemnity orsimilar payment obligation under this Agreement for which a Lender would be liable,and (iii) the Granting Lender shall for all purposes, including the approval ofany amendment, waiver or other modification of any provision of any LoanDocument, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder shall utilize theCommitment of the Granting Lender to the same extent, and as if, such Loan weremade by such Granting Lender.  Infurtherance of the foregoing, each party hereto hereby agrees (which agreementshall survive the termination of this Agreement) that, prior to the date thatis one year and one day after the payment in full of all outstanding commercialpaper or other senior debt of any SPC, it will not institute against, or joinany other Person in instituting against, such SPC any bankruptcy, reorganization,arrangement, insolvency, or liquidation proceeding under the laws of the UnitedStates or any 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-public informationrelating to its funding of Loans to any rating agency, commercial paper dealeror provider of any surety or guarantee or credit or liquidity enhancement tosuch 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.

 

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

 

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

 

9.08                           Counterparts;Integration.  This Agreement may besigned in any number of counterparts, each of which shall be an original, withthe same effect as if the signatures thereto and hereto were upon the sameinstrument.  This Agreement constitutesthe entire agreement and understanding among the parties hereto and supersedesany and all prior agreements and understandings, oral or written, relating tothe subject matter hereof.

 

9.09                           SeveralObligations.  Theobligations of the Lenders hereunder are several.  Neither the failure of any Lender to carry out its obligationshereunder nor the failure of this Agreement to be duly authorized, executed anddelivered by any Lender shall relieve any other Lender of its obligationshereunder (or affect the rights hereunder of such other Lender).  No Lender shall be responsible for theobligations of, or any action taken or omitted by, any other Lender hereunder.

 

9.10                           Sharingof Set-Offs.  EachLender agrees that if it shall, by exercising any right of set-off orcounterclaim or otherwise, receive payment of a proportion of the aggregateamount of principal and interest due with respect to any Note held by it whichis greater than the proportion received by any other Lender in respect of theaggregate amount of principal and interest due with respect to any Note held bysuch other Lender, the Lender receiving such proportionately greater paymentshall purchase such participations in the Notes held by the other Lenders, andsuch other adjustments shall be made, as may be required so that all suchpayments of principal and interest with respect to the Notes held by theLenders shall be shared by the Lenders pro rata; provided that nothingin this Section shall impair the right of any Lender to exercise any rightof set-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, whether or notacquired pursuant to the foregoing arrangements, may exercise rights of set-offor counterclaim and other rights with respect to such participation as fully asif such holder of a participation were a direct creditor of the Borrower in theamount of such participation.

 

9.11                           WAIVEROF JURY TRIAL.  EACH OF THEBORROWER, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALLRIGHT TO

 

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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 anyconfidential information that they may receive from Borrower or itsSubsidiaries pursuant to this Agreement in confidence, except fordisclosure:  (a) to theirrespective Affiliates and to other parties to this Agreement; (b) to legalcounsel and accountants for any such party; (c) to other professionaladvisors to any such party, provided that the recipient has accepted suchinformation subject to a confidentiality agreement substantially similar tothis paragraph or has notified such professional advisors of theconfidentiality of such information; (d) to regulatory officials havingjurisdiction over that Lender; (e) to any Gaming Board; (f) asrequired by law or legal process (provided that the Lender shall endeavor, tothe extent it may do so under applicable law, to give the Borrower reasonableprior notice thereof to allow the Borrower to seek a protective order) or inconnection with any legal proceeding to which that Lender and the Borrower areadverse parties; and (g) to another financial institution in connectionwith a disposition or proposed disposition to that financial institution of allor part of that Lender’s interests hereunder or a participation interest in itsNote, provided that the recipient has accepted such information subject to a confidentialityagreement substantially similar to this Section.  For purposes of the foregoing, “confidential information” shallmean any information respecting the Borrower or its Subsidiaries reasonablyconsidered by them to be confidential, other than (i) informationpreviously filed with any governmental agency and available to the public,(ii) information previously published in any public medium from a sourceother than, directly or indirectly, that Lender, and (iii) informationpreviously disclosed by the Borrower or its Subsidiaries to any person notassociated therewith without a confidentiality agreement substantially similarto this Section.  Notwithstandinganything herein to the contrary, “confidential information” shall not include,and the Borrower, the Administrative Agent and each Lender (and each authorizedemployee, representative, or other authorized person thereof) may disclose toany and all Persons, without limitation of any kind, the “tax treatment” and“tax structure” (in each case, within the meaning of Treasury RegulationSection 1.6011-4) of the transactions contemplated hereby and allmaterials of any kind (including opinions or other tax analyses) that areprovided to the Borrower, the Administrative Agent or such Lender relating tosuch tax treatment and tax structure; provided that with respect to anydocument or similar item that in either case contains information concerningthe tax treatment or tax structure of the transaction as well as otherinformation, this sentence shall only apply to such portions of the document orsimilar item that relate to the tax treatment or tax structure of the Loans andtransactions contemplated hereby. Nothing in this Section shall be construed to create or give riseto any fiduciary duty on the part of any Lender.

 

[Remainder of this page intentionally left blank.]

 

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IN WITNESSWHEREOF, the parties hereto have caused this Agreement to be duly executed bytheir respective authorized officers as of the day and year first abovewritten.

 
|   | 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         |

 

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|   | BANK OF  AMERICA, N.A., as Administrative Agent  |
|--------|--------------------------------------------------|
|   |                                             |
|   |                                             |
|   | 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                  |
|        |                                                  |  |  |  |

 

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**Schedule 1 - Pricing Schedule - Short TermCredit Facility**

** **

This Schedule 1 is attached to and made a part ofthe Short Term Credit Agreement dated as of August 12, 2003 among ParkPlace Entertainment Corporation, a Delaware corporation, the Lenders, Bank ofAmerica, N.A., as Administrative Agent, and Banc of America Securities, LLC andJ.P. Morgan Securities Inc. as Joint Lead Arrangers and Joint Book Managers(the “Credit Agreement”).  Capitalizedterms used in this Schedule 1 are used with the meanings set forth forthose terms in the Credit Agreement.

 

The “Euro-Dollar Margin,” “Base Rate Margin,” and“Facility Fee Rate” referred to in the Credit Agreement shall be determined forany day on the basis of the Status (as defined below) of the Borrower as ofthat date, provided, that in the event that the Borrower fails to deliver anyCompliance Certificate or Pricing Certificate on the date when required bySection 5.01, and it is ultimately determined that the Status of theBorrower would have been changed on the basis of such delivery, then(a) the rate at which interest and facility fees accrue under the CreditAgreement shall be increased in accordance with this Schedule, with retroactiveeffect to the first day of the Pricing Period to which such ComplianceCertificate relates, and (b) the Borrower shall, within 10 BusinessDays of a request by the Administrative Agent, make such additional payments tothe Lenders through the Administrative Agent as are required to give effect tosuch increased interest rates and facility fees in respect of any paymentspreviously made by the Borrower.  As ofeach date of determination, the Euro-Dollar Margin and Facility Fee Rates shallequal the percentages set forth below under the column corresponding to theStatus 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  |   | 0.080       | %      | 0.100        | %      | 0.125         | %      | 0.150        | %      | 0.200       | %      | 0.250        | %      |
| Euro-Dollar Margin |   | 0.520       | %      | 0.650        | %      | 0.875         | %      | 0.975        | %      | 1.175       | %      | 1.500        | %      |

 

The “Base Rate Margin” shall, as of each date ofdetermination, be the percentage, not less than 0.000% per annum, which isequal to the 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 the Borrower endingimmediately prior to the first day of the Pricing Period in which such date ofdetermination occurs (the “Applicable Leverage Ratio”);

 

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

 

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“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 3.75:1 and (ii) noneof Level 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) theApplicable Leverage Ratio is less than 4.25:1 and (ii) none of Level IStatus, Level II 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 ofany date of determination when the Applicable Leverage Ratio is in excess of4.75:1, 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 isless than 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 split-rating and the rating differentialis one level, the higher of the two ratings will apply (e.g. A-/Baa1 results inLevel I Status), and (b) if the Borrower is split-rated and the ratings

 

2

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differential is more thanone level, the average of the two ratings (or the higher of any twointermediate ratings) shall be used (e.g., A-/Baa2 results in Level IIStatus, as does A-/Baa3).

 

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