Exhibit 10.1


 


Published CUSIP Number:                         


 


 


 


EXECUTION


 


 


SECOND AMENDED AND RESTATED CREDIT AGREEMENT


 


Dated as of January 31, 2005


 


among


 


HARRAH’S ENTERTAINMENT, INC.


 


as Guarantor


 


HARRAH’S OPERATING COMPANY, INC.


 


as Borrower


 


The Lenders, Syndication Agent and Co-Documentation
Agents Herein Named


 


and


 


BANK OF AMERICA, N.A.,


 


as Administrative Agent


 


BANC OF AMERICA SECURITIES LLC


 


and


 


WELLS FARGO BANK, NATIONAL ASSOCIATION,

Joint Lead Arrangers and Joint Book Managers


 


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE 1
  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
   

  	
   

  
	
  1.1

  	
  Defined Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Use of Defined Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Accounting Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  1.4

  	
  Rounding

  	
   

  
	
   

  	
   

  	
   

  
	
  1.5

  	
  Exhibits and
  Schedules

  	
   

  
	
   

  	
   

  	
   

  
	
  1.6

  	
  Other
  Interpretive Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  1.7

  	
  Letter of Credit
  Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
  1.8

  	
  Times of Day

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 LOANS
  AND LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Committed Loans
  - General

  	
   

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Base Rate Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Eurodollar Rate
  Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  2.4

  	
  Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Swing Lines

  	
   

  
	
   

  	
   

  	
   

  
	
  2.6

  	
  Voluntary
  Increase to the Aggregate Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  2.7

  	
  Voluntary
  Reduction of the Aggregate Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  2.8

  	
  Optional
  Termination of Aggregate Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  2.9

  	
  Additional Borrowers

  	
   

  
	
   

  	
   

  	
   

  
	
  2.10

  	
  Payment
  Presumptions by Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  2.11

  	
  Sharing
  of Payments by Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3
  PAYMENTS AND FEES

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Principal and
  Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Arrangement Fee

  	
   

  



 


i





















 


	
  3.3

  	
  Upfront Fees;
  Amendment Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Facility Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Letter of Credit
  Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  3.6

  	
  Agency Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  3.7

  	
  Increased
  Commitment Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  3.8

  	
  Eurodollar
  Costs and Related Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  3.9

  	
  Default Rate

  	
   

  
	
   

  	
   

  	
   

  
	
  3.10

  	
  Computation
  of Interest and Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  3.11

  	
  Non-Business Days

  	
   

  
	
   

  	
   

  	
   

  
	
  3.12

  	
  Manner
  and Treatment of Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  3.13

  	
  Funding Sources

  	
   

  
	
   

  	
   

  	
   

  
	
  3.14

  	
  Failure
  to Charge Not Subsequent Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  3.15

  	
  Fee
  Determination Detail

  	
   

  
	
   

  	
   

  	
   

  
	
  3.16

  	
  Survivability

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Existence
  and Qualification; Power; Compliance With Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Authority;
  Compliance With Other Agreements and Instruments and Government Regulations

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  No Governmental
  Approvals Required

  	
   

  
	
   

  	
   

  	
   

  
	
  4.4

  	
  Significant Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  4.5

  	
  Financial Statements

  	
   

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  No
  Other Liabilities; No Material Adverse Effect

  	
   

  
	
   

  	
   

  	
   

  
	
  4.7

  	
  Title to Property

  	
   

  
	
   

  	
   

  	
   

  
	
  4.8

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  
	
  4.9

  	
  Binding Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  4.10

  	
  No Default

  	
   

  
	
   

  	
   

  	
   

  
	
  4.11

  	
  ERISA

  	
   

  



 


ii





















 


	
  4.12

  	
  Regulations T,
  U and X; Investment Company Act

  	
   

  
	
   

  	
   

  	
   

  
	
  4.13

  	
  Disclosure

  	
   

  
	
   

  	
   

  	
   

  
	
  4.14

  	
  Tax Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  4.15

  	
  Projections

  	
   

  
	
   

  	
   

  	
   

  
	
  4.16

  	
  Hazardous Materials

  	
   

  
	
   

  	
   

  	
   

  
	
  4.17

  	
  Gaming Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  4.18

  	
  The Caesars Merger;
  Solvency

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Preservation of Existence

  	
   

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Maintenance of Properties

  	
   

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Maintenance of Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Compliance With Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  5.5

  	
  Inspection Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  5.6

  	
  Keeping of
  Records and Books of Account

  	
   

  
	
   

  	
   

  	
   

  
	
  5.7

  	
  Use of Proceeds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Consolidations,
  Mergers and Sales of Assets

  	
   

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Hostile Tender Offers

  	
   

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Change in Nature of
  Business

  	
   

  
	
   

  	
   

  	
   

  
	
  6.4

  	
  Liens,
  Negative Pledges, Sale Leasebacks and Rights of Others

  	
   

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  Total Debt Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
  6.6

  	
  Interest Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
  6.7

  	
  Subsidiary Indebtedness

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7
  INFORMATION AND REPORTING REQUIREMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Financial and
  Business Information

  	
   

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Compliance Certificates

  	
   

  



 


iii





















 


	
  7.3

  	
  Borrower Materials

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8
  CONDITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Initial Advances, Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Any Increasing Advance,
  Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9
  EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Remedies Upon Event of
  Default

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10
  ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Appointment and Authority

  	
   

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Rights as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
  10.3

  	
  Exculpatory Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  10.4

  	
  Reliance by
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  10.5

  	
  Delegation of Duties

  	
   

  
	
   

  	
   

  	
   

  
	
  10.6

  	
  Resignation by
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  10.7

  	
  Non-Reliance
  on Administrative Agent and Other Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  10.8

  	
  No Other Duties, Etc

  	
   

  
	
   

  	
   

  	
   

  
	
  10.9

  	
  Administrative
  Agent May File Proofs of Claim

  	
   

  
	
   

  	
   

  	
   

  
	
  10.10

  	
  No Obligations of
  Parent or Borrowers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Cumulative Remedies; No
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  11.2

  	
  Amendments; Consents

  	
   

  
	
   

  	
   

  	
   

  
	
  11.3

  	
  Costs, Expenses and Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  11.4

  	
  Obligations of Lenders
  Several

  	
   

  
	
   

  	
   

  	
   

  
	
  11.5

  	
  Survival of
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  11.6

  	
  Notices;
  Effectiveness; Electronic Communication

  	
   

  
	
   

  	
   

  	
   

  
	
  11.7

  	
  Execution of Loan Documents

  	
   

  



 


iv





















 


	
  11.8

  	
  Successors and Assigns

  	
   

  
	
   

  	
   

  	
   

  
	
  11.9

  	
  Sharing of Setoffs

  	
   

  
	
   

  	
   

  	
   

  
	
  11.10

  	
  Indemnity by Parent
  and Borrowers

  	
   

  
	
   

  	
   

  	
   

  
	
  11.11

  	
  Nonliability of the Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  11.12

  	
  No Third Parties Benefited

  	
   

  
	
   

  	
   

  	
   

  
	
  11.13

  	
  Treatment
  of Certain Information; Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  11.14

  	
  Removal of a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
  11.15

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  11.16

  	
  Integration

  	
   

  
	
   

  	
   

  	
   

  
	
  11.17

  	
  Governing Law,
  Jurisdiction, Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  11.18

  	
  Severability of Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  11.19

  	
  Headings

  	
   

  
	
   

  	
   

  	
   

  
	
  11.20

  	
  Time of the Essence

  	
   

  
	
   

  	
   

  	
   

  
	
  11.21

  	
  Foreign Lenders and
  Participants

  	
   

  
	
   

  	
   

  	
   

  
	
  11.22

  	
  Gaming Boards

  	
   

  
	
   

  	
   

  	
   

  
	
  11.23

  	
  Nature of the
  Borrowers’ Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  11.24

  	
  Designated Senior Debt

  	
   

  
	
   

  	
   

  	
   

  
	
  11.25

  	
  Gaming Regulations

  	
   

  
	
   

  	
   

  	
   

  
	
  11.26

  	
  Waiver of Jury Trial

  	
   

  
	
   

  	
   

  	
   

  
	
  11.27

  	
  USA Patriot Act Notice

  	
   

  
	
   

  	
   

  	
   

  
	
  11.28

  	
  Payments Set Aside

  	
   

  
	
   

  	
   

  	
   

  
	
  11.29

  	
  Purported Oral Amendments

  	
   

  



 


v





















 


SECOND AMENDED AND
RESTATED CREDIT AGREEMENT


 


This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”),
dated as of January 31, 2005, is entered into among Harrah’s Operating
Company, Inc., a Delaware corporation (“Company”), each of the
Subsidiaries that becomes a borrower pursuant to Section 2.9 hereof (the
Company and each such borrower are individually a “Borrower” and
collectively the “Borrowers”), as Borrowers, Harrah’s Entertainment,
Inc., a Delaware corporation (the “Parent”), as Guarantor, Bank of
America, N.A. and each lender whose name is set forth on the signature pages of
this Agreement and each other lender which may hereafter become a party to this
Agreement pursuant to Section 11.8 (collectively, the “Lenders” and
individually, a “Lender”), Deutsche Bank Trust Company Americas, as
Syndication Agent, Citicorp USA, Inc., JPMorgan Chase Bank, Wells Fargo Bank,
N.A., and The Royal Bank of Scotland, PLC as Co-Documentation Agents, and
Bank of America, N.A., as Administrative Agent. 
While not party to this Agreement, Banc of America Securities LLC and
Wells Fargo Bank, National Association have served as Joint Lead Arrangers and
Joint Book Managers.  The parties hereby
agree with reference to the following facts:


 


RECITALS


 


A.                                   Pursuant to the Existing Credit Agreement
referred to below, certain of the Lenders provide credit facilities to Company
in an aggregate principal amount of $2,500,000,000.


 


B.                                     Pursuant to the Caesars Merger Agreement
referred to below among Parent, the Company and Caesars, Caesars has agreed to
merge with and into the Company (with the Company as the survivor) in
consideration of the issuance of certain shares of common stock of the Parent
and the making of certain cash payments to the existing shareholders in
Caesars.


 


C.                                     Among other conditions specified in the
Caesars Merger Agreement, the Caesars Merger is subject to certain regulatory
approvals, each of which is anticipated to be obtained prior to August 15,
2005.


 


D.                                    In order to finance a portion of the
consideration payable pursuant to the Caesars Merger Agreement, and for the
other purposes provided herein, Parent, the Company, the Administrative Agent
and the Lenders desire to amend and restate the Existing Credit Agreement in
its entirety by this Agreement (to be effective on the Effective Date
immediately prior to the consummation of the Caesars Merger), and to thereby
provide, inter alia (and subject to the terms and conditions set forth herein),
for an increase in the amount of the credit facilities provided by the Existing
Credit Agreement from $2,500,000,000 to $4,000,000,000, and revisions to the
covenants of the Parent and the Company as set forth therein.


 


E.                                      Pending the Effective Date, the Existing
Credit Agreement shall remain in effect.


 


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


 


ARTICLE 1

DEFINITIONS AND ACCOUNTING TERMS


 


1.1                                 Defined Terms.  As used in this Agreement, the
following terms shall have the meanings set forth below:


 


1





















 


“Administrative Agent” means Bank of America,
when acting in its capacity as the Administrative Agent under any of the Loan
Documents, or any successor Administrative Agent.


 


“Administrative Agent’s Office” means the
Administrative Agent’s address as set forth on the signature pages of this
Agreement, or such other address as the Administrative Agent hereafter may
designate by written notice to Borrowers and the Lenders.


 


“Administrative Questionnaire” means an
Administrative Questionnaire in a form supplied by the Administrative Agent.


 


“Advance” means any advance made or to be made
by any Lender to a Borrower as provided in Article 2, and includes each
Base Rate Advance, Eurodollar Rate Advance, Committed Advance and Swing Line
Advance.


 


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


 


“Aggregate Commitments” means the Commitments
of all of the Lenders.  As of the date
hereof, the Aggregate Commitments are $4,000,000,000.


 


“Aggregate Sublimit” means with respect to each
Subsidiary of Parent which hereafter becomes a Borrower, such aggregate amount
as shall be established in accordance with Section 2.9.


 


“Agreement” means this Credit Agreement, either
as originally executed or as it may from time to time be supplemented,
modified, amended, restated or extended.


 


2





















 


“Anticipated
Synergies” means, in respect of each Fiscal Quarter described in the matrix
below, the amount set forth opposite that Fiscal Quarter:


 




	
  Fiscal Quarters Ending During Period

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Effective Date through
  first full Fiscal Quarter following Effective Date

  	
   

  	
  $

  	
  80,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Second full Fiscal Quarter
  following the Effective Date

  	
   

  	
  $

  	
  60,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Third full Fiscal Quarter
  following the Effective Date

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fourth full Fiscal Quarter
  following the Effective Date

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Later Fiscal Quarters

  	
   

  	
  $

  	
  0

  	
   

  






 


“Applicable Percentage” means with respect to
any Lender at any time, the percentage (carried out to the ninth decimal place)
of the Aggregate Commitments held by that Lender at such time.  If the commitment of each Lender to make
Loans and the obligation of the Issuing Lenders to make L/C Credit Extensions
have been terminated pursuant to Section 9.2 or if the Commitments have
expired, then the Applicable Percentage of each Lender shall be determined based
on the Applicable Percentage of such Lender most recently in effect, giving
effect to any subsequent assignments. 
The initial Applicable Percentage of each Lender is set forth opposite
the name of such Lender on Schedule 1.1 or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable.


 


“Applicable Rates” means, as of each date of
determination, the following percentages per annum, based upon the then
prevailing Pricing Level:


 




	
  Pricing Level

  	
   

  	
  Base Rate Margin

  	
   

  	
  Facility Fee

  	
   

  	
  Letter of Credit Fee

  Eurodollar Margin

  	
   

  
	
  I

  	
   

  	
  0.000

  	
  %

  	
  0.100

  	
  %

  	
  0.200

  	
  %

  
	
  II

  	
   

  	
  0.000

  	
  %

  	
  0.125

  	
  %

  	
  0.375

  	
  %

  
	
  III

  	
   

  	
  0.000

  	
  %

  	
  0.150

  	
  %

  	
  0.550

  	
  %

  
	
  IV

  	
   

  	
  0.000

  	
  %

  	
  0.175

  	
  %

  	
  0.700

  	
  %

  
	
  V

  	
   

  	
  0.000

  	
  %

  	
  0.200

  	
  %

  	
  0.850

  	
  %

  
	
  VI

  	
   

  	
  0.015

  	
  %

  	
  0.250

  	
  %

  	
  1.050

  	
  %

  






 


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


 


3





















 


(a)                                  a Lender;


 


(b)                                 an Affiliate of a Lender; or


 


(c)                                  an entity or an Affiliate of an entity
that administers or manages a Lender.


 


“Assignee Group” means two or more Eligible
Assignees that are Affiliates of one another or two or more Approved Funds
managed by the same investment advisor.


 


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


 


“Assumed Caesars Subordinated Debt” means:


 


(a)                                  the following senior subordinated notes
issued by Caesars prior to the Signing Date:


 


(i)                                     the $400,000,000 outstanding principal
balance of Caesars 7.875% Senior Subordinated Notes due 2005;


 


(ii)                                  the $500,000,000 outstanding principal
balance of Caesars 9.375% Senior Subordinated Notes due 2007;


 


(iii)                               the $400,000,000 outstanding principal
balance of Caesars 8.875% Senior Subordinated Notes due 2008;


 


(iv)                              the $375,000,000 outstanding principal
balance of Caesars 7.875% Senior Subordinated Notes due 2010;


 


(v)                                 the approximately $348,000,000
outstanding principal balance of Caesars 8.125% Senior Subordinated Notes due
2011; and


 


(b)                                 any additional senior subordinated notes
issued by Caesars following the Signing Date in compliance with the terms of
the Caesars Credit Agreement.


 


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


 


“Base Rate” means for any day a fluctuating
rate per annum equal to the higher of:


 


(a)                                  the Federal Funds Rate plus 1/2 of 1%;
and


 


(b)                                 the rate of interest in effect for such
day as publicly announced from time to time by Bank of America as its “prime
rate.”


 


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


 


“Base Rate Advance” and “Base Rate Loan”
mean, respectively, a Committed Advance or a Committed Loan made hereunder and
specified to be a Base Rate Advance or Loan in accordance with Article 2.


 


4





















 


“Base Rate Margin” means, as of each date of
determination, the relevant interest rate margin set forth in the definition of
Applicable Rates.


 


“Borrower Materials” has the meaning set forth
for that term in Section 7.3.


 


“Borrowers” means, collectively, Company and
each Wholly-Owned Subsidiary which is hereafter designated as a Borrower in
accordance with Section 2.9, and their respective successors and permitted
assigns.


 


“Borrowing” means a borrowing consisting of
Committed Loans or Swing Line Advances, as the context may require.


 


“Business Day” means any Monday, Tuesday,
Wednesday, Thursday or Friday, other than a day on which commercial banks are
authorized or required to be closed in Dallas, Texas or New York.


 


“Caesars” means Caesars Entertainment, Inc., a
Delaware corporation.


 


“Caesars Credit Agreement” means the Credit
Agreement dated as of April 13, 2004 among Caesars, the lenders referred
to therein, and Bank of America, as administrative agent, as at any time
amended, replaced or supplanted.


 


“Caesars Letters of Credit” means any letters
of credit issued by any of the Issuing Lenders under this Agreement pursuant to
the Caesars Credit Agreement, in each case to the extent that the Borrowers
elect to have such letters remain outstanding as Letters of Credit hereunder
prior to the Effective Date by a writing addressed to the Administrative Agent.


 


“Caesars Merger” means the merger of the
Company with Caesars pursuant to the Caesars Merger Agreement, with the Company
the survivor.


 


“Caesars Merger Agreement” means the Agreement
and Plan of Merger dated as of July 14, 2004 by and among Parent,
Borrower, and Caesars, as amended and in effect on the date of this Agreement,
together with any further amendments thereto.


 


“Capital Lease Obligations” means all monetary
obligations of a Person under any leasing or similar arrangement which, in
accordance with Generally Accepted Accounting Principles, is classified as a
capital lease.


 


“Cash” means, when used in connection with any
Person, all monetary and non-monetary items owned by that Person that are
treated as cash in accordance with Generally Accepted Accounting Principles,
consistently applied.


 


“Cash Collateralize” means to pledge and
deposit with or deliver to the Administrative Agent, for the benefit of the
Issuing Lenders and the Lenders, as collateral for the L/C Obligations, cash or
deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent (which documents are hereby consented
to by the Issuing Lenders and the Lenders).


 


“Certificate of a Responsible Official” means a
certificate signed by a Responsible Official of the Person providing the
certificate.


 


5





















 


“Change in Control” means the occurrence of a
Rating Decline in connection with any of the following events (or, if the Debt
Ratings are not then Investment Grade, any further decline in the Debt
Ratings):


 


(a)                                  upon any merger or consolidation of
Parent 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
Parent, on a consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such transaction, any
person or group of persons (within the meaning of Section 13 or 14 of the
Securities Exchange Act of 1934, as amended) is or becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of securities representing a majority of
the total voting power of the aggregate outstanding securities of the
transferee or surviving entity normally entitled to vote in the election of
directors, managers, or trustees, as applicable, of the transferee or surviving
entity;


 


(b)                                 when any person or group of persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act of
1934, as amended) is or becomes the beneficial owner (within the meaning of
Rule 13d-3 promulgated by the Securities and-Exchange Commission under
said Act) of securities representing a majority of total voting power of the
aggregate outstanding securities of Parent normally entitled to vote in the
election of directors of Parent;


 


(c)                                  when, during any period of 12 consecutive
calendar months, individuals who were directors of Parent on the first day of
such period (together with any new directors whose election by the board of
directors of Parent or whose nomination for election by the stockholders of
Parent was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the board of directors of Parent; or


 


(d)                                 the sale or disposition, whether directly
or indirectly, by Parent of all or substantially all of its assets.


 


“Change in Law” means the occurrence, after the
date of this Agreement, of any of the following:


 


(a)                                  the adoption or taking effect of any law,
rule, regulation or treaty;


 


(b)                                 any change in any law, rule, regulation
or treaty or in the administration, interpretation or application thereof by
any Governmental Agency; or


 


(c)                                  the making or issuance of any request,
guideline or directive (whether or not having the force of law) by any
Governmental Agency.


 


“Code” means the Internal Revenue Code of 1986,
as amended or replaced and as in effect from time to time.


 


“Commitment” means, as to each Lender, its
obligation to:


 


(a)                                  make Committed Advances to the Borrowers
pursuant to Section 2.1;


 


(b)                                 purchase participations in L/C
Obligations; and


 


6





















 


(c)                                  purchase participations in Swing Line
Advances;


 


in each case, in an aggregate principal amount at any
one time outstanding not to exceed the amount set forth opposite such Lender’s
name on Schedule 1.1 or in the Assignment and Assumption pursuant to which
such Lender becomes a party hereto, as applicable, as such amount may be adjusted
from time to time in accordance with this Agreement.


 


“Committed Advance” means any Advance made to a
Borrower by any Lender in accordance with its Applicable Percentage pursuant to
Section 2.1(a).


 


“Committed Advance Note” means the promissory
note made by the Company (or in the appropriate case, by each other Borrower)
to a  Lender evidencing the Committed
Advances under that Lender’s Commitment to the Company (or to that Borrower),
substantially in the form of Exhibit B, either as originally executed or
as the same may from time to time be supplemented, modified, amended, renewed,
extended or supplanted.


 


“Committed Loans” means the group of loans that
are comprised of Committed Advances.


 


“Company” means Harrah’s Operating Company,
Inc., its successors and permitted assigns.


 


“Compliance Certificate” means a certificate
substantially in the form of Exhibit C, properly completed and signed on
behalf of Borrowers by a Senior Officer of each Borrower.


 


“Confidential Information Memorandum” means the
Confidential Information Memorandum dated December, 2004, distributed to the
Lenders in connection with the credit facilities provided herein.


 


“Contingent Obligation” means, as to any
Person, any:


 


(a)                                  guarantee by that Person of Indebtedness
of, or other obligation performable by, any other Person; or


 


(b)                                 assurance given by that Person to an
obligee of any other Person with respect to the performance of an obligation
by, or the financial condition of, such other Person, whether direct, indirect
or contingent, including any purchase or repurchase agreement covering such
obligation or any collateral security therefor, any agreement to provide funds
(by means of loans, capital contributions or otherwise) to such other Person,
any agreement to support the solvency or level of any balance sheet item of
such other Person or any “keep-well”, “make-well” or other arrangement of
whatever nature given for the purpose of assuring or holding harmless such
obligee against loss with respect to any obligation of such other Person;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.


 


“Contractual Obligation” means, as to any
Person, any provision of any outstanding security issued by that Person or of
any material agreement, instrument or undertaking to which that Person is a
party or by which it or any of its Property is bound.


 


“Credit Extension” means each of the following:


 


(a)                                  a Borrowing; and


 


7





















 


(b)                                 a L/C Credit Extension.


 


“Creditors” means, collectively, the
Administrative Agent, each Issuing Lender, the Swing Line Lenders, each Lender,
the Syndication Agent, the Co-Documentation Agents, and, where the context requires,
any one or more of them.


 


“Debt Rating” means, as of any date of
determination, the credit ratings assigned by Moody’s and S&P to senior
unsecured Indebtedness of the Company, provided however that (a) if the credit
facilities hereunder receive a split-rating and the rating differential is one
level, the higher of the two ratings will apply, and (b) if the credit
facilities hereunder are “split-rated” and the ratings differential is more
than one level, the highest intermediate rating shall be used.


 


“Debtor Relief Laws” means the Bankruptcy Code
of the United States of America, as amended from time to time, and all other
applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws from
time to time in effect affecting the rights of creditors generally.


 


“Default” means any event that, with the giving
of any applicable notice or passage of time specified in Section 9.1, or
both, would be an Event of Default.


 


“Default Rate” means the interest rate
prescribed in Section 3.9.


 


“Defaulting Lender” means any Lender that:


 


(a)                                  has failed to fund any portion of the
Committed Loans, participations in L/C Obligations or participations in Swing
Line Advances required to be funded by it hereunder within one Business Day of
the date required to be funded by it hereunder;


 


(b)                                 has otherwise failed to pay over to the
Administrative Agent, any other Lender or Borrowers any other amount required
to be paid by it hereunder within one Business Day of the date when due, unless
the subject of a good faith dispute; or


 


(c)                                  has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding.


 


“Defeased Debt” means any Indebtedness of
Parent and its Subsidiaries which, at any relevant time, is subject to legal or
covenant defeasance in a manner which is reasonably acceptable to the
Administrative Agent.


 


“Designated Deposit Account” means a deposit
account to be maintained by Borrowers with Bank of America, as from time to
time designated by Borrowers by written notification to the Administrative
Agent.


 


“Designated Eurodollar Market” means, with
respect to any Eurodollar Rate Loan:


 


(a)                                  the London Eurodollar Market; or


 


(b)                                 if prime banks in the London Eurodollar Market
are at the relevant time not accepting deposits of Dollars or if the
Administrative Agent determines that the London Eurodollar Market does not
represent at the relevant time the effective pricing to the Lenders for


 


8





















 


deposits of Dollars in the London Eurodollar Market,
the Cayman Islands Eurodollar Market; or


 


(c)                                  if prime banks in the Cayman Islands
Eurodollar Market are at the relevant time not accepting deposits of Dollars or
if the Administrative Agent determines that the Cayman Islands Eurodollar
Market does not represent at the relevant time the effective pricing to the
Lenders for deposits of Dollars in the Cayman Islands Eurodollar Market, such
other Eurodollar Market as may from time to time be selected by the
Administrative Agent with the approval of Borrowers and the Requisite Lenders.


 


“Disqualification” means, with respect to any
Lender:


 


(a)                                  the failure of that Person timely to file
pursuant to applicable Gaming Laws:


 


(i)                                     any application requested of that Person
by any Gaming Board in connection with any licensing required of that Person as
a lender to Borrowers; or


 


(ii)                                  any required application or other papers
in connection with determination of the suitability of that Person as a lender
to Borrowers;


 


(b)                                 the withdrawal by that Person (except
where requested or permitted by the Gaming Board) of any such application or
other required papers; or


 


(c)                                  any final determination by a Gaming Board
pursuant to applicable Gaming Laws:


 


(i)                                     that such Person is “unsuitable” as a
lender to Borrowers;


 


(ii)                                  that such Person shall be “disqualified”
as a lender to Borrowers; or


 


(iii)                               denying the issuance to that Person of
any license required under applicable Gaming Laws to be held by all lenders to
Borrowers.


 


“Dollars” or “$” means United States dollars.


 


“EBITDA” means, for any period, Net Income for
such period before:


 


(a)                                  income taxes;


 


(b)                                 Interest Expense;


 


(c)                                  depreciation and amortization;


 


(d)                                 minority interest;


 


(e)                                  extraordinary losses or gains;


 


(f)                                    Pre-Opening Expenses; and


 


(g)                                 nonrecurring non-cash charges, and after
deduction of any nonrecurring non-cash gains;


 


provided that, in calculating “EBITDA,” and to
the extent otherwise included in Net Income for any portion of the relevant
period:


 


9





















 


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


 


(ii)                                  EBITDA shall be adjusted, on a pro forma
basis, (A) to include the operating results of each Person or group of
operating assets or property acquired by Parent and its Subsidiaries during the
relevant period (including without limitation the results of operations of
Caesars and its Subsidiaries) for a consideration which is in excess of
$50,000,000, and (B) to exclude the operating results of each Person or group
of operating assets (1) which are sold or otherwise disposed of by Parent and
its Subsidiaries for a consideration in excess of $50,000,000 (including
without limitation any Persons or assets which are the subject of any
divestiture by Parent, the Borrowers or Caesars in connection with the Caesars
Merger), or (2) whose operations are discontinued during the relevant period.


 


“Effective Date”
means the time and Business Day on which the conditions set forth in Section 8.1
are satisfied or waived, and the initial Loans hereunder are made.


 


“Election to Become a Borrower” means an Election
to Become a Borrower, substantially in the form of Exhibit D to this
Agreement, properly completed and duly executed by each required party thereto.


 


“Eligible Assignee” means:


 


(a)                                  a Lender;


 


(b)                                 an Affiliate of a Lender;


 


(c)                                  an Approved Fund; and


 


(d)                                 any other Person (other than a natural
person) approved by the Administrative Agent, and (unless an Event of Default
has occurred and is continuing), the Parent and the Borrowers (each such
approval not to be unreasonably withheld or delayed);


 


provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Parent and the Borrowers or any of their
respective Affiliates or Subsidiaries.


 


“ERISA” means the Employee Retirement Income
Security Act of 1974, and any regulations issued pursuant thereto, as amended
or replaced and as in effect from time to time.


 


“Eurodollar Base Rate” has the meaning
specified in the definition of Eurodollar Rate.


 


“Eurodollar Business Day” means any Business
Day on which dealings in Dollar deposits are conducted by and among banks in
the Designated Eurodollar Market.


 


“Eurodollar Margin” means, as of each date of
determination, the relevant interest rate margin set forth in the definition of
Applicable Rates.


 


“Eurodollar Market” means a regular established
market located outside the United States of America by and among banks for the
solicitation, offer and acceptance of Dollar deposits in such banks.


 


10





















 


“Eurodollar Rate”  means for any Interest Period with respect to
a Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent
pursuant to the following formula: 


 


	
  Eurodollar Rate  =

  	
  Eurodollar Base Rate

  
	
  1.00 — Eurodollar
  Reserve Percentage

  



 


Where,


 


“Eurodollar Base Rate” means, for such Interest
Period:


 


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


 


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


 


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


 


“Eurodollar Reserve Percentage” means, for any
day during any Interest Period, the reserve percentage (expressed as a decimal,
carried out to five decimal places) in effect on such day, whether or not
applicable to any Lender, under regulations issued from time to time by the FRB
for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as “Eurocurrency liabilities”).  The Eurodollar Rate for each outstanding
Eurodollar Rate Loan shall be adjusted automatically as of the effective date
of any change in the Eurodollar Reserve Percentage.


 


“Eurodollar Rate Advance” and “Eurodollar
Rate Loan” mean, respectively, a Committed Advance or a Committed Loan made
hereunder and specified to be a Base Rate Advance or Loan in accordance with Article 2.


 


11





















 


“Event of Default” shall have the meaning
provided in Section 9.1.


 


“Existing Credit Agreement” means the Amended
and Restated Credit Agreement dated as of June 24, 2004, among Borrowers,
Parent, the lenders therein named and Bank of America, as Administrative Agent,
as heretofore amended.


 


“Existing Letters of Credit” means those of the
letters of credit issued under the Existing Credit Agreement which remain
outstanding as of the Effective Date. 
Prior to the Effective Date, the Administrative Agent shall provide the
Lenders with an advice concerning the aggregate amount of the Existing Letters
of Credit, with a breakdown of amounts and maturity dates of each Existing
Letter of Credit.


 


“Existing Harrah’s Subordinated Debt” means the
approximately $589,500,000 balance of the Company’s 7.875% Senior Subordinated
Notes due 2005 issued pursuant to the Indenture dated December 9, 1998
among the Company and IBJ Schroeder Bank and Trust Company, as Trustee and the
First Supplemental Indenture with respect thereto dated as of December 9,
1998 among the Company, the Parent and the Trustee.


 


“Facility Fee Rate” means, as of each date of
determination, the rate set forth in the applicable column in the definition of
Applicable Rates.


 


“Federal Funds Rate” means, for any day, the
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided  that:


 


(a)                                  if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day; and


 


(b)                                 if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by
the Administrative Agent.


 


“Fiscal Quarter” means the fiscal quarter of
Parent consisting of a three month fiscal period ending on each March 31, June 30,
September 30, December 31.


 


“Fiscal Year” means the fiscal year of Parent
consisting of a twelve month fiscal period ending on each December 31.


 


“Foreign Lender” means any Lender that is
organized under the laws of a jurisdiction other than that in which the
Borrowers are resident for tax purposes. 
For purposes of this definition, the United States, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.


 


“Gaming Board” means any Governmental Agency
that holds regulatory, licensing or permit authority over gambling, gaming or
casino activities conducted by Parent and its Subsidiaries within its
jurisdiction, or before which an application for licensing to conduct such
activities is pending.


 


12





















 


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


 


“Generally Accepted Accounting Principles”
means, as of any date of determination, accounting principles:


 


(a)                                  set forth as generally accepted in then
currently effective Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants;


 


(b)                                 set forth as generally accepted in then
currently effective Statements of the Financial Accounting Standards Board; or


 


(c)                                  that are then approved by such other
entity as may be approved by a significant segment of the accounting profession
in the United States of America.


 


The term “consistently applied,” as used in
connection therewith, means that the accounting principles applied are
consistent in all material respects to those applied at prior dates or for
prior periods.


 


“Governmental Agency” means the government of
the United States or any other nation, or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government (including any supra-national bodies such as the
European Union or the European Central Bank).


 


“Granting Lender” has the meaning specified in Section 11.8(h).


 


“Hazardous Materials” means substances defined
as hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. § 9601 et seq., or as
hazardous, toxic or pollutant pursuant to the Hazardous Materials
Transportation Act, 49 U.S.C. § 1801, et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. § 6901, et seq., or in any other
applicable Hazardous Materials Law, in each case as such Laws are amended from
time to time.


 


“Hazardous Materials Laws” means all federal,
state or local laws, ordinances, rules or regulations governing the disposal of
Hazardous Materials applicable to any of the Real Property.


 


“Indebtedness” means, as to any Person and as
of each date of determination, without duplication:


 


(a)                                  all obligations of such Person for
borrowed money;


 


(b)                                 all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments;


 


(c)                                  all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business;


 


(d)                                 all obligations of such Person as lessee
which are capitalized in accordance with Generally Accepted Accounting
Principles;


 


13





















 


(e)                                  all indebtedness or other obligations
secured by a contractual Lien on any asset of such Person, whether or not such indebtedness
or other obligations are otherwise an obligation of such Person; and


 


(f)                                    all Contingent Obligations made by such
Person (including by way of provision of letters of credit or other contingent
obligations) with respect to indebtedness or other obligations of any other
Person which constitute “Indebtedness” of a type or class described in
clauses (a) through (e) of this definition.


 


“Indicative
Ratings” means indicative Debt Ratings issued prior to the Caesars Merger
which represent the respective credit ratings agency’s anticipated rating of
the Company’s Indebtedness, after giving effect to the Caesars Merger and the
other transactions anticipated to occur on the Effective Date.


 


“Initial
Pricing Period” means the period beginning on the Effective Date and ending
(a) May 31, 2005, if the Effective Date is prior to May 31, 2005, or (b) if the
Effective Date is May 31, 2005 or a later date, August 31, 2005.


 


“Intangible Assets” means assets that are
considered intangible assets under Generally Accepted Accounting Principles, including
customer lists, goodwill, computer software, copyrights, trade names,
trademarks and patents.


 


“Intercompany Debt” means any Indebtedness owed
by a Subsidiary of any Borrower to a Borrower.


 


“Interest Coverage Ratio” means, as of the last
day of any Fiscal Quarter, the ratio of:


 


(a)                                  EBITDA for the four Fiscal Quarter period
ending on that date plus the Anticipated Synergies as of the last day of
that Fiscal Quarter; to


 


(b)                                 Interest Expense for the four Fiscal
Quarter period then ended, provided that for each of the first four
Fiscal Quarters ending following the Effective Date, Interest Expense shall be
calculated on an annualized straight line basis for the period from the
Effective Date through the date of calculation.


 


“Interest Differential” means, with respect to
any prepayment of a Eurodollar Rate Loan on a day prior to the last day of the
applicable Interest Period and with respect to any failure to borrow a
Eurodollar Rate Loan on the date or in the amount specified in any Request for
Loan:


 


(a)                                  the per annum interest rate payable
pursuant to Section 3.1(c) with respect to the Eurodollar Rate Loan; minus


 


(b)                                 the Eurodollar Rate on, or as near as
practicable to the date of the prepayment or failure to borrow for, a
Eurodollar Rate Loan commencing on such date and ending on the last day of the
Interest Period of the Eurodollar Rate Loan so prepaid or which would have been
borrowed on such date.


 


“Interest Expense” means, as of the last day of
any fiscal period, the sum of:


 


(a)                                  all interest, fees, charges and related
expenses paid or payable (without duplication) for that fiscal period to a
lender in connection with borrowed money or the deferred purchase


 


14





















 


price of assets that are considered “interest expense”
under Generally Accepted Accounting Principles, plus


 


(b)                                 the portion of rent paid or payable
(without duplication) for that fiscal period under Capital Lease Obligations
that should be treated as interest in accordance with Financial Accounting
Standards Board Statement No. 13.


 


provided, however, that in the case of the first
four Fiscal Quarters ending following the Effective Date, such interest expense
shall be calculated on an annualized straight line basis for the period from
the Effective Date to the last day of the relevant Fiscal Quarter.


 


“Interest Period” means, as to each Eurodollar
Rate Loan, the period commencing on the date such Eurodollar Rate Loan is
disbursed or converted to or continued as a Eurodollar Rate Loan and ending on
the date one week, 1, 2, 3 or 6 months thereafter, as selected by the Borrowers
in their Request for Loan, or such other period requested by the Borrowers and
consented to by all the Lenders; provided  that:


 


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


 


(b)                                 any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and


 


(c)                                  no Interest Period shall extend beyond
the Maturity Date.


 


“Investment” means, when used in connection
with any Person, any investment by or of that Person, whether by means of
purchase or other acquisition of stock or other securities of any other Person
or by means of a loan, advance creating a debt, capital contribution, guaranty
or other debt or equity participation or interest in any other Person, including
any partnership and joint venture interests of such Person.  The amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.


 


“Investment Grade” means:


 


(a)                                  with respect to S&P, a rating of BBB-
or higher; and


 


(b)                                 with respect to Moody’s, a rating of Baa3
or higher.


 


“ISP”
means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time
issuance).


 


“Issuer Documents” means with respect to any
Letter of Credit, the Request for Letter of Credit, an Application for Letter
of Credit, and any other document, agreement and instrument entered into by the
Issuing Lender in respect of the relevant Letter of Credit and any Borrower or
in favor of an Issuing Lender and relating to any such Letter of Credit.


 


15





















 


“Issuing Lender” means, as to each Letter of
Credit, the Lender which issues the same in accordance with Section 2.4,
but only when acting in its capacity as Issuing Lender for that Letter of
Credit.  Subject to the procedures set
forth in Section 2.4, any Lender may, at its option, be a Issuing Lender
for Letters of Credit issued under this Agreement.


 


“Joint Venture Holding Company” means any
Subsidiary of Parent which has no substantial assets other than equity
securities, securities convertible into equity securities and warrants, options
or similar rights to purchase such equity securities or convertible securities
(and any dividends, cash, instruments or other property received in respect of
or in exchange for any of the foregoing), in each case issued by Persons which
are not Subsidiaries of Parent.


 


“Laws” means, collectively, all international,
foreign, federal, state and local statutes, treaties, rules, regulations,
ordinances, codes and administrative or judicial precedents.


 


“L/C Advance” means, with respect to each
Lender, such Lender’s funding of its participation in any L/C Borrowing in
accordance with its Applicable Percentage.


 


“L/C Borrowing” means an extension of credit
resulting from a drawing under any Letter of Credit which has not been
reimbursed on the date when made or refinanced by a Committed Loan.


 


“L/C Credit Extension” means, with respect to
any Letter of Credit, the issuance thereof or extension of the expiry date
thereof, or the increase of the amount thereof.


 


“L/C Obligations” means, as at any date of
determination, the aggregate undrawn amount of all outstanding Letters of
Credit plus the aggregate of all Unreimbursed Amounts, including all L/C
Borrowings.  For purposes of computing
the amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.7. For
all purposes of this Agreement, if on any date of determination a Letter of
Credit has expired by its terms but any amount may still be drawn thereunder by
reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be
deemed to be “outstanding” in the amount so remaining available to be drawn.


 


“Lead Arrangers” means Banc of America
Securities LLC and Wells Fargo Bank, National Association.  The Lead Arrangers shall have no duties or obligations
under this Agreement or the other Loan Documents.


 


“Letter of Credit” means any letter of credit
issued hereunder and shall include the Existing Letters of Credit and any
Caesars Letters of Credit.  A Letter of
Credit may be a commercial letter of credit or a standby letter of credit.


 


“Letter of Credit Application” means an
application and agreement for the issuance or amendment of a Letter of Credit
in the form from time to time in use by the relevant Issuing Lender.


 


“Letter of Credit Fee” means, as of each date
of determination, the rate set forth in the definition of Applicable Rates.


 


“Letter of Credit Sublimit” means an amount
equal to $300,000,000.   The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.


 


16





















 


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


 


“Lien” means any mortgage, deed of trust,
pledge, hypothecation, assignment for security, security interest, encumbrance,
lien or charge of any kind, whether voluntarily incurred or arising by
operation of Law or otherwise, affecting any Property, including any
agreement to grant any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature of a security interest, and/or the
filing of or agreement to give any financing statement (other  than
a precautionary financing statement with respect to a lease or other agreement
that is not in the nature of a security interest) under the Uniform Commercial
Code or comparable Law of any jurisdiction with respect to any Property.


 


“Loan” means the aggregate of the Advances made
at any one time by the Lenders pursuant to Article 2, and includes each
Swing Line Advance.


 


“Loan Documents” means, collectively, this
Agreement, the Committed Advance Notes, the Letters of Credit, the Swing Line
Documents, the Parent Guaranty, any Request for Loan, any Request for Letter of
Credit, each Application for Letter of Credit, any Compliance Certificate and
any other instruments, documents or agreements of any type or nature hereafter
executed and delivered by Parent or any of its Subsidiaries or Affiliates to
the Administrative Agent or any other Creditor in any way relating to or in
furtherance of this Agreement, in each case either as originally executed or as
the same may from time to time be supplemented, modified, amended, restated,
extended or supplanted.


 


“Loan Parties” means, collectively, the
Borrowers and the Parent.


 


“Management Company” means any Subsidiary of
Parent which has no substantial assets other than contractual rights to receive
fees under management agreements, development agreements or similar
instruments.


 


“Margin Stock” means “margin stock” as such
term is defined in Regulation U.


 


“Material Adverse Effect” means any set of
circumstances or events which:


 


(a)                                  has or could reasonably be expected to
have any material adverse effect whatsoever upon the validity or enforceability
of any Loan Document;


 


(b)                                 is or could reasonably be expected to be
material and adverse to the condition (financial or otherwise), assets,
business or operations of Parent and its Subsidiaries, taken as a whole; or


 


(c)                                  materially impairs or could reasonably be
expected to materially impair the ability of Parent and its Subsidiaries, taken
as a whole, to perform the Obligations.


 


“Maturity Date” means April 23, 2009.


 


“Moody’s” means Moody’s Investor Service, Inc.,
its successors and assigns.


 


17





















 


“Multiemployer Plan” means any employee benefit
plan of the type described in Section 4001(a)(3) of ERISA.


 


“Negative Pledge” means a Contractual
Obligation that contains a covenant binding on Parent or any of its
Subsidiaries that prohibits Liens on any of its or their Property, other
than


 


(a)                                  any such covenant contained in a
Contractual Obligation granting a Lien permitted under Section 6.4 which
affects only the Property that is the subject of such permitted Lien and


 


(b)                                 any such covenant that does not apply to
Liens securing the Obligations.


 


“Net Income” means, with respect to any fiscal
period, the consolidated net income of Parent and its Subsidiaries for that
period, determined in accordance with Generally Accepted Accounting Principles,
consistently applied.


 


“Net Tangible Assets” means, as of each date of
determination, the total amount of assets of Parent and its Subsidiaries as of
the last day of the most recent Fiscal Quarter for which financial statements
have been delivered in accordance with Section 7.1, after deducting
therefrom:


 


(a)                                  all current liabilities of Parent and its
Subsidiaries (excluding (i) the current portion of long term Indebtedness, (ii)
inter-company liabilities, and (iii) any liabilities which are by their terms
renewable or extendable at the option of the obligor thereon to a time more
than twelve months from the time as of which the amount thereof is being
computed); and


 


(b)                                 all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangibles, all
as set forth on the latest consolidated balance sheet of Parent prepared in
accordance with Generally Accepted Accounting Principles.


 


“New Project” means each capital project which
is either a new gaming project or a new feature at an existing gaming project
owned by Parent or its Subsidiaries having a development and construction
budget in excess of $100,000,000 which hereafter receives a certificate of
completion or occupancy and all relevant gaming and other licenses, and in fact
commences operations.


 


“Obligations” means all present and future
obligations of every kind or nature of Parent, Borrowers or any Party at any
time and from time to time owed to the Creditors or any one or more of them,
under any one or more of the Loan Documents, whether due or to become due,
matured or unmatured, liquidated or unliquidated, or contingent or
noncontingent, including obligations of performance as well as
obligations of payment, and including interest that accrues after the
commencement of any proceeding under any Debtor Relief Law by or against Parent,
any Borrower or any Subsidiary of Parent.


 


“Opinions of Counsel” means:


 


(a)                                  the favorable written legal opinion of
Borrower’s Vice President and Associate General Counsel; and


 


(b)                                 the favorable written legal opinion of
Latham & Watkins, LLP, special counsel to Parent and the Company,
substantially in the form of Exhibit E, together with copies of all factual
certificates and legal opinions upon which such counsel have relied.


 


18





















 


“Other Taxes” means all present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or under any other Loan Document
or from the execution, delivery or enforcement of, or otherwise with respect
to, this Agreement or any other Loan Document.


 


“Outstanding Amount” means:


 


(a)                                  with respect to Committed Loans and Swing
Line Advances on any date, the aggregate outstanding principal amount thereof
after giving effect to any borrowings and prepayments or repayments of
Committed Loans and Swing Line Advances, as the case may be, occurring on such
date; and


 


(b)                                 with respect to any L/C Obligations on
any date, the amount of such L/C Obligations on such date after giving effect
to any L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements by the Borrowers of Unreimbursed Amounts.


 


“Parent” means Harrah’s Entertainment, Inc., a
Delaware corporation, and its permitted successors and assigns.


 


“Parent Guaranty” means the Second Amended and
Restated Guaranty executed by Parent on the Effective Date with respect to the
Obligations, substantially in the form of Exhibit F, either as originally executed
or as it may from time to time be supplemented, modified, amended, restated or
extended.


 


“Participant” has the meaning specified in Section 11.8(d).


 


“Party” means any Person other than Creditors
which now or hereafter is a party to any of the Loan Documents.


 


“Pension Plan” means any “employee pension
benefit plan” (as such term is defined in Section 3(2) of ERISA), other
than a Multiemployer Plan, which is subject to Title IV of ERISA
and is maintained by Parent or any of its Subsidiaries or to which Parent or
any of its Subsidiaries contributes or has an obligation to contribute.


 


“Permitted Encumbrances” means:


 


(a)                                  inchoate Liens incident to construction
or maintenance of Real Property; or Liens incident to construction or
maintenance of Real Property now or hereafter filed of record for which
adequate reserves have been set aside (or deposits made pursuant to applicable
Law) and which are being contested in good faith by appropriate proceedings and
have not proceeded to judgment, provided that, by reason of nonpayment
of the obligations secured by such Liens, no such Real Property is subject to a
material risk of loss or forfeiture;


 


(b)                                 Liens for taxes and assessments on and
similar charges with respect to Real Property which are not yet past due; or
Liens for taxes and assessments on Real Property for which adequate reserves
have been set aside and are being contested in good faith by appropriate
proceedings and have not proceeded to judgment, provided that, by reason
of nonpayment of the obligations secured by such Liens, no material Real
Property is subject to a material risk of loss or forfeiture;


 


19





















 


(c)                                  defects and irregularities in title to
any Real Property which in the aggregate do not materially impair the fair
market value or use of the Real Property for the purposes for which it is or
may reasonably be expected to be held;


 


(d)                                 easements, exceptions, reservations, or
other agreements for the purpose of pipelines, conduits, cables, wire communication
lines, power lines and substations, streets, trails, walkways, driveways,
drainage, irrigation, water, and sewerage purposes, dikes, canals, ditches, the
removal of oil, gas, coal, or other minerals, and other like purposes affecting
Real Property, facilities, or equipment which in the aggregate do not
materially burden or impair the fair market value or use of such Real Property
for the purposes for which it is or may reasonably be expected to be held;


 


(e)                                  easements, exceptions, reservations, or
other agreements for the purpose of facilitating the joint or common use of
property which in the aggregate do not materially burden or impair the fair
market value or use of such property for the purposes for which it is or may
reasonably be expected to be held;


 


(f)                                    rights reserved to or vested in any
Governmental Agency to control or regulate, or obligations or duties to any
Governmental Agency with respect to, the use of any Real Property;


 


(g)                                 rights reserved to or vested in any
Governmental Agency to control or regulate, or obligations or duties to any
Governmental Agency with respect to, any right, power, franchise, grant,
license, or permit;


 


(h)                                 present or future zoning laws, building
codes and ordinances, zoning restrictions, or other laws and ordinances
restricting the occupancy, use, or enjoyment of Real Property;


 


(i)                                     statutory Liens, other than those
described in clauses (a) or (b) above, arising in the ordinary course of
business with respect to obligations which are not delinquent or are being
contested in good faith, provided that, if delinquent, adequate reserves
have been set aside with respect thereto and, by reason of nonpayment, no
property is subject to a material risk of loss or forfeiture;


 


(j)                                     covenants, conditions, and restrictions
affecting the use of Real Property which in the aggregate do not materially
impair the fair market value or use of the Real Property for the purposes for
which it is or may reasonably be expected to be held;


 


(k)                                  rights of tenants under leases and rental
agreements covering Real Property entered into in the ordinary course of
business of the Person owning such Real Property;


 


(l)                                     Liens consisting of pledges or deposits
to secure obligations under workers’ compensation laws or similar legislation,
including Liens of judgments thereunder which are not currently dischargeable;


 


(m)                               Liens consisting of pledges or deposits
of property to secure performance in connection with operating leases made in
the ordinary course of business to which Parent or any of its Subsidiaries is a
party as lessee, provided the aggregate value of all such pledges and
deposits in connection with any such lease does not at any time exceed 20% of
the annual fixed rentals payable under such lease;


 


20










 













 


(n)                                 Liens consisting of deposits of property
to secure bids made with respect to, or performance of, contracts (other
than contracts creating or evidencing an extension of credit to the
depositor) in the ordinary course of business;


 


(o)                                 Liens consisting of any right of offset,
or statutory bankers’ lien, on bank deposit accounts maintained in the ordinary
course of business so long as such bank deposit accounts are not established or
maintained for the purpose of providing such right of offset or bankers’ lien;


 


(p)                                 Liens consisting of deposits of property
to secure statutory obligations of Parent or any of its Subsidiaries in the
ordinary course of its business;


 


(q)                                 Liens consisting of deposits of property
to secure (or in lieu of) surety, appeal or customs bonds in proceedings to
which Parent or any of its Subsidiaries is a party in the ordinary course of
business;


 


(r)                                    Liens created by or resulting from any
litigation or legal proceeding involving Parent or any of its Subsidiaries in
the ordinary course of its business which is currently being contested in good
faith by appropriate proceedings, provided that adequate reserves have
been set aside and no material property is subject to a material risk of loss
or forfeiture;


 


(s)                                  precautionary UCC financing statement
filings made in connection with operating leases and not constituting Liens;
and


 


(t)                                    other non-consensual Liens incurred in
the ordinary course of business but not in connection with an extension of
credit, which do not in the aggregate, when taken together with all other
Liens, materially impair the value or use of the Property of Parent and its
Subsidiaries, taken as a whole.


 


“Permitted Right of Others” means a Right of
Others consisting of:


 


(a)                                  an interest (other than a legal or
equitable co-ownership interest, an option or right to acquire a legal or
equitable co-ownership interest and any interest of a ground lessor under a
ground lease), that does not materially impair the value or use of Property for
the purposes for which it is or may reasonably be expected to be held;


 


(b)                                 an option or right to acquire a Lien that
would be a Permitted Encumbrance;


 


(c)                                  the subordination of a lease or sublease
in favor of a financing entity; and


 


(d)                                 a license, or similar right, of or to
Intangible Assets granted in the ordinary course of business.


 


“Person” means any entity, whether an
individual, trustee, corporation, general partnership, limited partnership,
joint stock company, trust, estate, unincorporated organization, business
association, firm, joint venture, Governmental Agency, or otherwise.


 


“Pre-Opening Expenses” means, with respect to
any fiscal period, the amount of expenses (other  than interest
expense) incurred with respect to capital projects which are classified as “pre-opening
expenses” on the applicable financial statements of Parent and its Subsidiaries
for such period, prepared in accordance with Generally Accepted Accounting
Principles.


 


21





















 


“Pricing Level” means, as of each date of determination,
the pricing level set forth below opposite (a) the Debt Rating then in effect
or (b) the Total Debt Ratio as of the last day of the Fiscal Quarter ending
approximately 60 days prior to the first day of that Pricing Period in which
such date occurs (whichever criteria yields the lowest interest rates and other
pricing to the Borrowers), provided that (i) as of the Effective Date,
the Debt Ratings shall be deemed to be the Indicative Debt Ratings (unless and
until the relevant credit agencies issue new Debt Ratings), and (ii) during the
Initial Pricing Period, the Total Debt Ratio will be determined based upon the
combined pro forma financial condition of the Company and Caesars as of the
Effective Date, in each case as set forth in the certificate of the Company
delivered pursuant to Section 8.1(a)(ix):


 


	
  Applicable Pricing Level

  	
   

  	
  Total Debt Ratio

  	
   

  	
  Debt Rating

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pricing
  Level I

  	
   

  	
  Not
  Applicable

  	
   

  	
  A-/A3
  or higher

  	
   

  
	
  Pricing
  Level II

  	
   

  	
  Not
  Applicable

  	
   

  	
  BBB+/Baa1

  	
   

  
	
  Pricing
  Level III

  	
   

  	
  <
  3.25:1.00

  	
   

  	
  BBB/Baa2

  	
   

  
	
  Pricing
  Level IV

  	
   

  	
  > 3.25:1.00 but < 3.75:1.00

  	
   

  	
  BBB-/Baa3

  	
   

  
	
  Pricing
  Level V

  	
   

  	
  > 3.75:1.00 but < 4.25:1.00

  	
   

  	
  BB+/Ba1

  	
   

  
	
  Pricing
  Level VI

  	
   

  	
  > 4.25:1.00 but < 4.75:1.00

  	
   

  	
  BB/Ba2
  or lower or unrated

  	
   

  



 


“Pricing Period”
means (a) the Initial Pricing Period, and (b) each subsequent three month
period beginning on each March 1, June 1, September 1 and December 1.


 


“Projections” means the financial projections
contained in the Confidential Information Memorandum.


 


“Property” means any interest in any kind of property
or asset, whether real, personal or mixed, or tangible or intangible.


 


“Public Lender” has the meaning set forth for
that term in Section 7.3.


 


“Quarterly Payment Date” means each March 31,
June 30, September 30 and December 31.


 


“Rating Decline” means the occurrence of a
decrease in the Debt Rating by either Moody’s or S&P to below Investment
Grade on any date on or within 90 days after the date of the first public
notice of:


 


(a)                                  the occurrence of an event described in
clauses (a)-(d) of the definition of “Change in Control;” or


 


(b)                                 the intention by any of the Parent or
Borrowers to effect such an event (which 90-day period shall be extended so
long as the Debt Rating is under publicly announced consideration for possible
downgrade by Moody’s or S&P).


 


“Real Property” means, as of any date of
determination, all real property then or theretofore owned, leased or occupied
by Parent or any of its Subsidiaries.


 


“Register” has the meaning specified in Section 11.8(c).


 


22





















 


“Regulations T, U and X” means
Regulations T, U and X, as at any time amended, of the Board of Governors
of the Federal Reserve System, or any other regulations in substance
substituted therefor.


 


“Related Parties” means, with respect to any
Person, such Person’s Affiliates and the partners, directors, officers,
employees, agents and advisors of such Person and of such Person’s Affiliates.


 


“Request for Letter of Credit” means a written
request for a Letter of Credit substantially in the form of Exhibit G, together
with any forms of application for letter of credit required by the relevant
Issuing Lender therefor, in each case signed by a Responsible Official of a
Borrower on behalf of that Borrower and properly completed to provide all information
required to be included therein (provided that it is understood that the terms
of the Loan Documents shall govern and control in the event of any conflict
between the terms of any such application and the Loan Documents).


 


“Request for Loan” means a written request for
a Loan substantially in the form of Exhibit H, signed by a Responsible
Official of a Borrower, on behalf of that Borrower, and properly completed to
provide all information required to be included therein.


 


“Requirement of Law” means, as to any Person,
the articles or certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any Law, or judgment,
award, decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to which
such Person or any of its Property is subject.


 


“Requisite Lenders” means:


 


(a)                                  as of any date of determination prior to
the termination of the Commitments, Lenders having in the aggregate 51% or more
of the Aggregate Commitments; and


 


(b)                                 as of any date of determination if the
Commitments have then been terminated, Lenders holding 51% of the Total
Outstandings.


 


“Responsible Official” means when used with
reference to a Person other than an individual, any corporate officer of such
Person, general partner of such Person, corporate officer of a corporate
general partner of such Person, or corporate officer of a corporate general
partner of a partnership that is a general partner of such Person, or any other
responsible official thereof duly acting on behalf thereof.  Any document or certificate hereunder that is
signed or executed by a Responsible Official of another Person shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such other Person.


 


“Right of Others” means, as to any Property in
which a Person has an interest, any legal or equitable ownership right, title
or other interest (other than a Lien) held by any other Person in that
Property, and any option or right held by any other Person to acquire any such
right, title or other interest in that Property, including any option or
right to acquire a Lien; provided, however, that


 


(a)                                  any covenant restricting the use or
disposition of Property of such Person contained in any Contractual Obligation
of such Person,


 


23





















 


(b)                                 any provision contained in a contract
creating a right of payment or performance in favor of a Person that
conditions, limits, restricts, diminishes, transfers or terminates such right,
and


 


(c)                                  any residual rights held by a lessor or
vendor of Property, shall not be deemed to constitute a Right of Others.


 


“S&P” means Standard & Poor’s Ratings
Services, a division of McGraw Hill, Inc., its successors and assigns.


 


“Sale and Leaseback” means, with respect to any
Person, the sale of Property owned by that Person (the “Seller”) to another
Person (the “Buyer”), together with the substantially concurrent leasing of
such Property (or any portion thereof) by the Buyer to the Seller.


 


“Senior Officer” means Parent’s and each
Borrower’s: chief executive officer, president, chief financial officer,
treasurer, vice presidents or secretaries.


 


“Significant Subsidiary” means, as of any date
of determination, each Subsidiary of Parent that had on the last day of the
Fiscal Quarter then most recently ended total assets (determined in accordance
with Generally Accepted Accounting Principles) of $50,000,000 or more.


 


“Signing Date” means the date upon which this
Agreement is executed, January 31, 2005.


 


“SPC” has the meaning specified in Section 11.8(h).


 


“Special Eurodollar Circumstance” means the
application or adoption after the date hereof of any Law or interpretation, or
any change therein or thereof, or any change in the interpretation or
administration thereof by any Governmental Agency, central bank or comparable
authority charged with the interpretation or administration thereof, or
compliance by any Lender or its Eurodollar Lending Office with any request or
directive (whether or not having the force of Law) of any such Governmental
Agency, central bank or comparable authority, or the existence or occurrence of
circumstances affecting the Designated Eurodollar Market generally that are
beyond the reasonable control of the Lenders.


 


“Solvent” as to any Person shall mean that:


 


(a)                                  the sum of the assets of such Person,
both at a fair valuation and at present fair saleable value, exceeds its
liabilities, including its probable liability in respect of contingent
liabilities;


 


(b)                                 such Person will have sufficient capital
with which to conduct its business as presently conducted and as proposed to be
conducted; and


 


(c)                                  such Person has not incurred debts, and
does not intend to incur debts, beyond its ability to pay such debts as they
mature.


 


For purposes of this definition, “debt” means any
liability on a claim, and “claim” means (x) a right to payment, whether or
not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured, or (y) a right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right
to an equitable remedy is reduced to judgment, fixed,


 


24





















 


contingent, matured, unmatured, disputed, undisputed,
secured or unsecured.  With respect to
any such contingent liabilities, such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represents the amount which can reasonably be expected to become an actual or
matured liability.


 


“Subordinated Debt” means:


 


(a)                                  the Existing Harrah’s Subordinated Debt;


 


(b)                                 the Assumed Caesars Subordinated Debt;


 


(c)                                  any other Indebtedness of Parent or the
Company which according to its terms is, or in any manner purports to be,
contractually subordinated to the Obligations.


 


“Subsidiary” of a Person means a corporation,
partnership, joint venture, limited liability company or other business entity
of which a majority of the shares of securities or other interests having
ordinary voting power for the election of directors or other governing body
(other than securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned, or the
management of which is otherwise controlled, directly, or indirectly through
one or more intermediaries, or both, by such Person.


 


“Swing Lines” means one or more revolving lines
of credit established by the Swing Line Lenders in favor of Borrowers pursuant
to Section 2.5.


 


“Swing Line Advances” means Advances made by
the Swing Line Lenders to any of the Borrowers pursuant to Section 2.5.


 


“Swing Line Documents” means the promissory
notes and any other documents executed by Borrowers in favor of the Swing Line
Lenders in connection with the Swing Lines.


 


“Swing Line Lenders” means (a) initially Bank
of America, and (b) any of the other Lenders designated by the Borrowers from
time to time in a writing delivered to the Administrative Agent, provided
that not more than three Lenders shall be Swing Line Lenders at any time.


 


“Swing Line Outstandings” means, as of any date
of determination, the aggregate principal Indebtedness of Borrowers on all
Swing Line Advances then outstanding.


 


“Syndication Agent” means Deutsche Bank Trust
Company Americas.  Deutsche Bank Trust
Company Americas shall not have any additional rights, duties or obligations
under this Agreement or the other Loan Documents by reason of its being a
Syndication Agent.


 


“Taxes” means all present or future taxes,
levies, imposts, duties, deductions, withholdings, assessments, fees or other
charges imposed by any Governmental Agency, including any interest, additions
to tax or penalties applicable thereto.


 


“Total Debt” means, as of any date of
determination, the sum (without duplication) of:


 


(a)                                  the outstanding principal Indebtedness of
Parent and its Subsidiaries for borrowed money (including debt securities
issued by Parent or any of its Subsidiaries) on that date; plus


 


25





















 


(b)                                 the aggregate amount of all Capital Lease
Obligations of Parent and its Subsidiaries on that date; plus


 


(c)                                  all obligations in respect of letters of
credit or other similar instruments for which Parent or any of its Subsidiaries
are account parties or are otherwise obligated; plus


 


(d)                                 the aggregate amount of all Contingent
Obligations and other similar contingent obligations of Parent and its
Subsidiaries with respect to any of the foregoing; and plus


 


(e)                                  any obligations of Parent or any of its
Subsidiaries to the extent that the same are secured by a Lien on any of the
assets of Parent or its Subsidiaries.


 


In computing “Total Debt,” the amount of any
Contingent Obligation or letter of credit shall be deemed to be zero unless and
until (1) in the case of obligations in respect of letters of credit, a drawing
is made with respect thereto and (2) in the case of any other Contingent
Obligations, demand for payment is made with respect thereto.


 


“Total Debt Ratio” means, as of the last day of
any Fiscal Quarter, determined for Parent and its Subsidiaries in accordance
with Generally Accepted Accounting Principles, the ratio of:


 


(a)                                  Total Debt on that date; to


 


(b)                                 EBITDA for the four Fiscal Quarter period
ending on that date, plus the Anticipated Synergies as of that Fiscal
Quarter.


 


“type”, when used with respect to any Loan or
Advance, means the designation of whether such Loan or Advance is a Base Rate
Loan or Advance, or a Eurodollar Rate Loan or Advance.


 


“Total Outstandings” means the aggregate
Outstanding Amount of all Loans and all L/C Obligations.


 


“Unreimbursed Amount” has the meaning specified
in Section 2.4(g).


 


“Wholly-Owned Subsidiary” means, as to any
Person any other Person, 100% of whose capital stock, partnership interests,
membership interests or other forms of equity ownership interest (other than
directors qualifying shares and similar interests) is at the time owned,
directly or indirectly, by such Person.


 


1.2                                 Use of Defined Terms. 
Any defined term used in the plural shall refer to all members of the
relevant class, and any defined term used in the singular shall refer to any
one or more of the members of the relevant class.


 


1.3                                 Accounting Terms. 
All accounting terms not specifically defined in this Agreement shall be
construed in conformity with, and all financial data required to be submitted
by this Agreement shall be prepared in conformity with, Generally Accepted
Accounting Principles applied on a consistent basis, except as otherwise
specifically prescribed herein.  In the
event that Generally Accepted Accounting Principles change during the term of
this Agreement such that the covenants contained in Sections 6.5 and 6.6
would then be calculated in a different manner or with different components,


 


26





















 


(a)                                  Parent, Borrowers and the Lenders agree
to amend this Agreement in such respects as are necessary to conform those
covenants as criteria for evaluating Parent’s consolidated financial condition
to substantially the same criteria as were effective prior to such change in
Generally Accepted Accounting Principles, and


 


(b)                                 Parent and Borrowers shall be deemed to
be in compliance with the covenants contained in the aforesaid Sections during
the 90 day period following any such change in Generally Accepted Accounting
Principles if and to the extent that Parent and Borrowers would have been in
compliance therewith under Generally Accepted Accounting Principles as in
effect immediately prior to such change.


 


1.4                                 Rounding.  Any financial
ratios required to be maintained by Parent and Borrowers pursuant to this
Agreement shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of
places by which such ratio is expressed in this Agreement and rounding the
result up or down to the nearest number (with a round-up if there is no nearest
number) to the number of places by which such ratio is expressed in this
Agreement.


 


1.5                                 Exhibits and Schedules. 
All Exhibits and Schedules to this Agreement, either as originally
existing or as the same may from time to time be supplemented, modified or
amended, are incorporated herein by this reference.  A matter disclosed on any Schedule shall
be deemed disclosed on all Schedules.


 


1.6                                 Other Interpretive Provisions. 
With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:


 


(a)                                  The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have
the same meaning and effect as the word “shall.”  Unless the context requires otherwise,


 


(i)                                     any definition of or reference to any
agreement, instrument or other document shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document),


 


(ii)                                  any reference herein to any Person shall
be construed to include such Person’s successors and assigns,


 


(iii)                               the words “herein,” “hereof” and “hereunder,”
and words of similar import when used in any Loan Document, shall be construed
to refer to such Loan Document in its entirety and not to any particular
provision thereof,


 


(iv)                              all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear,


 


27





















 


(v)                                 any reference to any law shall include
all statutory and regulatory provisions consolidating, amending replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and


 


(vi)                              the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.


 


(b)                                 In the computation of periods of time
from a specified date to a later specified date, the word “from” means “from
and including;” the words “to” and “until” each mean “to but excluding;” and
the word “through” means “to and including.”


 


(c)                                  The use of the word “or” is not
exclusive.


 


1.7                                 Letter of Credit Amounts. 
Unless otherwise specified, all references herein to the amount of a
Letter of Credit at any time shall be deemed to mean the maximum face amount of
such Letter of Credit after giving effect to all increases thereof contemplated
by such Letter of Credit or the Issuer Documents related thereto, whether or
not such maximum face amount is in effect at such time.


 


1.8                                 Times of Day. 
Unless otherwise specified, all references herein to times of day shall
be references to Las Vegas, Nevada local time (daylight or standard, as
applicable).


 


28





















 


ARTICLE 2

LOANS AND LETTERS OF CREDIT


 


2.1                                 Committed Loans - General.


 


(a)                                  Subject to the terms and conditions set
forth in this Agreement, at any time and from time to time from the Effective
Date through (but excluding) the Maturity Date, each Lender shall, pro rata
according to that Lender’s Applicable Percentage of the then applicable
Aggregate Commitment, make Committed Advances in Dollars to Borrowers in such
amounts as any Borrower may request provided that:


 


(i)                                     giving effect to such Advances, the Total
Outstandings shall not exceed the Aggregate Commitments at any time; and


 


(ii)                                  without the consent of all of the
Lenders, the Total Outstandings of each Borrower hereafter designated as such
pursuant to Section 2.9 shall not exceed that Borrower’s Aggregate
Sublimit at any time.  Subject to the
limitations set forth herein, each of the Borrowers may borrow, repay and
reborrow under the Aggregate Commitments without premium or penalty.


 


(b)                                 Subject to the next sentence, each
Committed Loan shall be made pursuant to a Request for Loan executed by the
relevant Borrower which shall specify the requested:


 


(i)                                     date of such Loan;


 


(ii)                                  type of Loan;


 


(iii)                               amount of such Loan; and


 


(iv)                              in the case of a Eurodollar Rate Loan,
the Interest Period for such Loan.


 


Unless the Administrative Agent has notified, in its
sole and absolute discretion, Borrowers to the contrary, a Loan may be requested
by telephone by a Responsible Official of any Borrower, in which case that
Borrower shall confirm such request by promptly delivering a Request for Loan
in person or by telecopier conforming to the preceding sentence to the
Administrative Agent.  The Administrative
Agent shall incur no liability whatsoever hereunder in acting upon any
telephonic request for loan purportedly made by a Responsible Official of a
Borrower, and each Borrower hereby jointly and severally (but as between
Borrowers, ratably) agrees to indemnify the Administrative Agent from any loss,
cost, expense or liability as a result of so acting.


 


(c)                                  Promptly following receipt of a Request
for Loan, the Administrative Agent shall notify each Lender of any Loan
requested by telephone or telecopier (and if by telephone, promptly confirmed
by telecopier) of the identity of the relevant Borrower, the date and type of
the Loan, the applicable Interest Period, and that Lender’s Applicable
Percentage of the requested Loan.  Not
later than 12:00 noon, Las Vegas local time, on the date specified for any Loan
(which must be a Business Day), each Lender shall make its Applicable
Percentage of the Committed Loan in immediately available funds available to
the Administrative Agent at the Administrative Agent’s Office.  Upon satisfaction or waiver of the applicable
conditions set forth in Article 8, all Committed Advances shall


 


29





















 


be
credited on that date in immediately available funds to the Designated Deposit
Account.


 


(d)                                 Unless the Requisite Lenders otherwise
consent, each Committed Loan shall be an integral multiple of $1,000,000 and
shall be not less than $10,000,000.


 


(e)                                  The Committed Advances made by each
Lender to each Borrower shall be evidenced by a Committed Advance Note issued
by that Borrower and made payable to that Lender.


 


(f)                                    A Request for Loan shall be irrevocable
upon the Administrative Agent’s first notification thereof.


 


(g)                                 If no Request for Loan (or telephonic
request for loan referred to in the second sentence of Section 2.1(b), if
applicable) has been made within the requisite notice periods set forth in
Sections 2.2 or 2.3 in connection with a Loan which, if made and giving
effect to the application of the proceeds thereof, would not increase the
outstanding principal Indebtedness evidenced by the Committed Advance Notes of
the relevant Borrower, then that Borrower shall be deemed to have requested, as
of the date upon which the related then outstanding Loan is due pursuant to Section 3.1(e)(i),
a Base Rate Loan in an amount equal to the amount necessary to cause the
outstanding principal Indebtedness evidenced by such Committed Advance Notes to
remain the same and the Lenders shall make the Advances necessary to make such
Loan notwithstanding Sections 2.1(b), 2.2 and 2.3.


 


2.2                                 Base Rate Loans. 
Each request by a Borrower for a Base Rate Loan shall be made pursuant
to a Request for Loan (or telephonic or other request for loan referred to in
the second sentence of Section 2.1(b), if applicable) received by the
Administrative Agent, at the Administrative Agent’s Office, not later than
10:00 a.m. Las Vegas local time, on the date (which must be a Business
Day) of the requested Base Rate Loan. 
All Committed Loans shall constitute Base Rate Loans unless properly
designated as a Eurodollar Rate Loan pursuant to Section 2.3.


 


2.3                                 Eurodollar Rate Loans.


 


(a)                                  Each request by a Borrower for a
Eurodollar Rate Loan shall be made pursuant to a Request for Loan (or
telephonic or other request for loan referred to in the second sentence of Section 2.1(b),
if applicable) received by the Administrative Agent, at the Administrative
Agent’s Office, not later than 10:00 a.m., Las Vegas local time, at least
three Eurodollar Business Days before the first day of the applicable Interest
Period.


 


(b)                                 On the date which is two Eurodollar
Business Days before the first day of the applicable Interest Period, the
Administrative Agent shall confirm its determination of the applicable
Eurodollar Rate (which determination shall be conclusive in the absence of
manifest error) and promptly shall give notice of the same to Borrowers and the
applicable Lenders by telephone or telecopier (and if by telephone, promptly
confirmed by telecopier).


 


(c)                                  Unless the Administrative Agent and the
Requisite Lenders otherwise consent, no more than twenty Eurodollar Rate Loans
shall be outstanding at any one time.


 


(d)                                 No Eurodollar Rate Loan may be requested
during the existence of a Default or Event of Default.


 


30





















 


(e)                                  No Lender shall be required to obtain the
funds necessary to fund its Eurodollar Rate Advances in the Designated
Eurodollar Market or from any other particular source of funds, rather each
Lender shall be free to obtain such funds from any legal source.


 


2.4                                 Letters of Credit.


 


(a)                                  From time to time, each Lender which has
agreed with the Borrowers to be designated as an Issuing Lender hereunder
agrees to issue Letters of Credit for the account of the Borrowers or any of their
Subsidiaries in accordance with this Section 2.4.   No Lender will be obligated to agree to be
designated as an Issuing Lender, provided that Bank of America has
agreed to act as an Issuing Lender.  On
the Effective Date, each of the Existing Letters of Credit and Caesars Letters
of Credit designated in accordance with Section 8.1(a)(xi) shall continue
to be outstanding hereunder, but the risk participations therein shall be
adjusted to give effect to the relative interests of the Lenders in the Aggregate
Commitments of each Lender hereunder (as in effect on the Effective Date), and
each issuer of a Existing Letter of Credit hereby consents to the termination,
concurrently with the Effective Date, of the participation therein of each of
the lenders under the Existing Credit Agreement which is not a party to this
Agreement.


 


(b)                                 Subject to the terms and conditions
hereof, at any time and from time to time from the Effective Date through the
day prior to the Maturity Date, any one or more of the Borrowers may request
that any one or more of the Lenders issue, as Issuing Lender, additional
Letters of Credit under the Aggregate Commitments (each of which shall be
denominated in Dollars) by submission of a Request for Letter of Credit and an
Application for Letter of Credit to such Issuing Lender (with a copy to the
Administrative Agent); provided that giving effect to all such Letters
of Credit, (i) the Total Outstandings shall not exceed the Aggregate
Commitments at any time, (ii) without the consent of all of the Lenders, the
aggregate principal amount of the Total Outstandings of each Borrower hereafter
designated as such pursuant to Section 2.9 shall not exceed that Borrower’s
Aggregate Sublimit at any time, and (iii) the Outstanding Amount of the L/C
Obligations shall not exceed the Letter of Credit Sublimit.  Each Letter of Credit shall be in a form
reasonably acceptable to the relevant Issuing Lender.  Unless all the Lenders otherwise consent in a
writing delivered to the Administrative Agent, no Letter of Credit shall have a
term which extends beyond the day which is five days prior to the Maturity
Date.


 


(c)                                  Each Request for Letter of Credit and
Application for Letter of Credit shall be submitted to the relevant Issuing
Lender, with a copy to the Administrative Agent, not later than 8:00 a.m. at
least five Business Days prior to the date upon which the related Letter of
Credit is proposed to be issued (or such shorter period as may be acceptable to
the relevant Issuing Lender, but in any event providing not less than one
Business Day’s notice to the Administrative Agent).  The Administrative Agent shall promptly
notify the relevant Issuing Lender whether such Request for Letter of Credit,
and the issuance of a Letter of Credit pursuant thereto, conforms to the
requirements of this Agreement.  Upon
issuance, amendment to or extension of a Letter of Credit, the relevant Issuing
Lender shall promptly notify the Administrative Agent, and the Administrative
Agent shall promptly notify the Lenders, of the amount and terms thereof.


 


(d)                                 On the Effective Date, each Lender shall
be deemed to have purchased a pro rata participation in each Existing Letter of
Credit and each Caesars Letter of Credit from the relevant Issuing Lender in an
amount equal to that Lender’s Applicable Percentage times


 


31





















 


the
amount of such Existing Letter of Credit. 
Upon the issuance of each other Letter of Credit, each Lender shall be
deemed to have purchased a pro rata participation in such Letter of Credit from
the relevant Issuing Lender in an amount equal to that Lender’s Applicable
Percentage times the amount of such Letter of Credit.  Without limiting the scope and nature of each
Lender’s participation in any Letter of Credit, to the extent that the relevant
Issuing Lender has not been reimbursed by the Borrower which is the account
party for any Letter of Credit for any payment required to be made by the
relevant Issuing Lender thereunder, each Lender shall, pro rata according to
its Applicable Percentage, reimburse the relevant Issuing Lender through the
Administrative Agent promptly upon demand for the amount of such payment.  The obligation of each Lender to so reimburse
the relevant Issuing Lender shall be absolute and unconditional and shall not
be affected by the occurrence of an Event of Default or any other occurrence or
event.  Any such reimbursement shall not
relieve or otherwise impair the obligation of Borrowers to reimburse the
relevant Issuing Lender for the amount of any payment made by the relevant
Issuing Lender under any Letter of Credit together with interest as hereinafter
provided.


 


(e)                                  Promptly and in any event within one
Business Day following any drawing upon a Letter of Credit, the Issuing Lender
for that Letter of Credit shall provide notice thereof to the Administrative
Agent.  Each Borrower agrees to pay to
the relevant Issuing Lender through the Administrative Agent an amount equal to
any payment made by the relevant Issuing Lender with respect to each Letter of Credit
within one Business Day after demand made by the relevant Issuing Lender
therefor, together with interest on such amount from the date of any payment
made by the relevant Issuing Lender at the rate applicable to Base Rate Loans
for three Business Days and thereafter at the Default Rate.  The principal amount of any such payment
shall be used to reimburse the relevant Issuing Lender for the payment made by
it under the Letter of Credit and, to the extent that the Lenders have not
reimbursed the relevant Issuing Lender pursuant to Section 2.4(d), the
interest amount of any such payment shall be for the account of the relevant
Issuing Lender.  Each Lender that has
reimbursed the relevant Issuing Lender pursuant to Section 2.4(d) for its
Applicable Percentage of any payment made by the relevant Issuing Lender under
a Letter of Credit shall thereupon acquire a pro rata participation, to the
extent of such reimbursement, in the claim of the relevant Issuing Lender
against Borrowers for reimbursement of principal and interest under this Section 2.4(e)
and shall share, in accordance with that pro rata participation, in any
principal payment made by Borrowers with respect to such claim and in any
interest payment made by Borrowers (but only with respect to periods subsequent
to the date such Lender reimbursed the relevant Issuing Lender) with respect to
such claim.


 


(f)                                    Each Borrower may, pursuant to a Request
for Loan, request that Advances be made pursuant to Section 2.1(b) to
provide funds for the payment required by Section 2.4(e) and, for this
purpose, the conditions precedent set forth in Article 8 shall not
apply.  The proceeds of such Advances
shall be paid directly by the Administrative Agent to the relevant Issuing
Lender to reimburse it for the payment made by it under the Letter of Credit.


 


(g)                                 If Borrowers fail to make the payment
required by Section 2.4(e) within the time period therein set forth, in
lieu of the reimbursement to the relevant Issuing Lender under Section 2.4(d)
the relevant Issuing Lender may (but is not required to), without notice to or
the consent of Borrowers, require that the Administrative Agent request that
the Lenders make Advances under the Aggregate Commitments in an aggregate
amount


 


32





















 


equal
to the amount paid by that Issuing Lender with respect to that Letter of Credit
(the “Unreimbursed Amount”) and, for this purpose, the conditions
precedent set forth in Article 8 shall not apply.  The proceeds of such Advances shall be paid
by the Administrative Agent directly to the relevant Issuing Lender to
reimburse it for the payment made by it under the Letter of Credit.


 


(h)                                 The issuance of any supplement,
modification, amendment or extension to or of any Letter of Credit shall be treated
in all respects the same as the issuance of a new Letter of Credit.


 


(i)                                     The obligation of Borrowers to pay to
each Issuing Lender the amount of any payment made by that Issuing Lender under
any Letter of Credit shall be absolute, unconditional, and irrevocable. Without
limiting the foregoing, Borrowers’ obligations shall not be affected by any of
the following circumstances:


 


(i)                                     any
lack of validity or enforceability of the Letter of Credit, this Agreement, or
any other agreement or instrument relating thereto;


 


(ii)                                  any
amendment or waiver of or any consent to departure from the Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;


 


(iii)                               the
existence of any claim, setoff, defense, or other rights which any Borrower may
have at any time against any Issuing Lender or any other Creditor, any
beneficiary of the Letter of Credit (or any persons or entities for whom any
such beneficiary may be acting) or any other Person, whether in connection with
the Letter of Credit, this Agreement, or any other agreement or instrument
relating thereto, or any unrelated transactions;


 


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


 


(v)                                 payment
by the relevant Issuing Lender under the Letter of Credit against presentation
of a draft or any accompanying document which does not strictly comply with the
terms of the Letter of Credit;


 


(vi)                              the
existence, character, quality, quantity, condition, packing, value or delivery
of any Property purported to be represented by documents presented in
connection with any Letter of Credit or any difference between any such
Property and the character, quality, quantity, condition, or value of such
Property as described in such documents;


 


(vii)                           the
time, place, manner, order or contents of shipments or deliveries of Property
as described in documents presented in connection with any Letter of Credit or
the existence, nature and extent of any insurance relative thereto;


 


(viii)                        the
solvency or financial responsibility of any party issuing any documents in
connection with a Letter of Credit;


 


(ix)                                any
failure or delay in notice of shipments or arrival of any Property;


 


33





















 


(x)                                   any
error in the transmission of any message relating to a Letter of Credit not
caused by the relevant Issuing Lender, or any delay or interruption in any such
message;


 


(xi)                                any
consequence arising from acts of God, war, insurrection, civil unrest,
disturbances, labor disputes, emergency conditions or other causes beyond the
control of the relevant Issuing Lender;


 


(xii)                             so
long as the relevant Issuing Lender in good faith determines that the contract
or document appears to comply with the terms of the Letter of Credit, the form,
accuracy, genuineness or legal effect of any contract or document referred to
in any document submitted to the relevant Issuing Lender in connection with a
Letter of Credit; and


 


(xiii)                          where
the relevant Issuing Lender has acted in good faith and observed general
banking usage, any other circumstances whatsoever.


 


(j)                                     Each Issuing Lender shall be entitled to
the protection accorded to the Administrative Agent pursuant to Article 10,
mutatis  mutandis.


 


(k)                                  Unless otherwise expressly agreed by an
Issuing Lender and a Borrower when a Letter of Credit is issued (including any
such agreement applicable to an Existing Letter of Credit), such Letter of
Credit shall provide that (i) the rules of the ISP shall apply to it if it is a
standby Letter of Credit, and (ii) the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce (the “ICC”) at the time of issuance
shall apply to it if it is a commercial Letter of Credit.


 


2.5                                 Swing Lines.


 


(a)                                  From time to time, each Lender which has
agreed with the Borrowers to be designated as a Swing Line Lender agrees to
make Swing Line Advances to the Borrowers in accordance with this Section 2.5.   No Lender will be obligated to agree to be
designated as a Swing Line Lender, provided that Bank of America has
agreed to act as a Swing Line Lender as set forth in the Swing Line Documents
between Bank of America and the Company in effect on the date hereof.


 


(b)                                 Subject to the terms and conditions set
forth herein, each Swing Line Lender agrees, in reliance upon the agreements of
the other Lenders set forth in this Section 2.5, to make Swing Line
Advances in Dollars to any Borrower from time to time from the Effective Date
through the Business Day prior to the Maturity Date in such amounts as that
Borrower may request, provided that:


 


(i)                                     after
giving effect to such Swing Line Advance, the aggregate Swing Line Outstandings
owed to all Swing Line Lenders shall not exceed $150,000,000;


 


(ii)                                  after
giving effect to such Swing Line Advance, the Total Outstandings shall not
exceed the Aggregate Commitments at any time;


 


(iii)                               without
the consent of all of the Lenders, no Swing Line Advance may be made during the
continuation of any Default or Event of Default;


 


34





















 


(iv)                              without
the consent of all of the Lenders, the Total Outstandings of each Borrower
designated as such in accordance with Section 2.9 shall not exceed the
Aggregate Sublimit for that Borrower at any time; and


 


(v)                                 the
relevant Swing Line Lender has not given at least twenty-four hours prior
notice to the Parent that availability under its Swing Line is suspended or
terminated.


 


Borrowers may borrow, repay and reborrow under this Section 2.5.  Unless notified to the contrary by the
relevant Swing Line Lender, borrowings under each Swing Line may be made in
amounts which are integral multiples of $100,000 upon telephonic request by a
Responsible Official of any Borrower made to the relevant Swing Line Lender
(with a copy to the Administrative Agent) not later than 1:00 p.m., Las Vegas
local time, on the Business Day of the requested Swing Line Advance (which
telephonic request shall be promptly confirmed in writing by telecopier).  Promptly after receipt of such a request for
a Swing Line Advance, the Administrative Agent shall provide telephonic
verification to the relevant Swing Line Lender that, after giving effect to
such request, the Total Outstandings shall not exceed the Aggregate Commitments
(and such verification shall be promptly confirmed in writing by
telecopier).  No Swing Line Lender shall
make any Swing Line Advance without receipt of such confirmation.


 


Unless the relevant Swing Line Lender otherwise
agrees, each repayment of a Swing Line Advance shall be in an amount which is
an integral multiple of $100,000.  If a
Borrower instructs a Swing Line Lender to debit any deposit account with that
Swing Line Lender in the amount of any payment with respect to a Swing Line
Advance, or that Swing Line Lender otherwise receives repayment, after
3:00 p.m., Las Vegas local time, on a Business Day, such payment shall be
deemed received on the next Business Day.


 


Each Swing Line Lender shall promptly notify the
Administrative Agent of the Swing Line Outstandings each time there a payment
or other change therein.


 


(c)                                  Swing Line Advances shall bear interest
at the rate agreed to from time to time between the Borrowers and the relevant
Swing Line Lender (or, if not otherwise specified at a fluctuating rate per
annum equal to that applicable from time to time for Base Rate Loans).  Interest shall be payable on such dates, not
more frequent than monthly, as may be specified by each Swing Line Lender and
in any event on the Maturity Date.  The
Swing Line Lenders shall be responsible for submitting invoices to the
Borrowers for such interest.  The
interest payable on Swing Line Advances shall be solely for the account of the
relevant Swing Line Lender unless and until the Lenders fund their
participations therein pursuant to Section 2.5(e) by the making of
Committed Loans hereunder.


 


(d)                                 The Swing Line Advances shall be payable
on demand made by the relevant Swing Line Lender and in any event on the
Maturity Date.


 


(e)                                  Upon the making of a Swing Line Advance,
each Lender shall be deemed to have purchased from the relevant Swing Line
Lender a participation therein in an amount equal to that Lender’s Applicable
Percentage times the amount of the Swing Line Advance.  Upon demand made by any Swing Line Lender,
each Lender shall, according to its Applicable Percentage, promptly provide to
that Swing Line Lender its purchase price therefor in an amount equal to its
participation therein.  The obligation of
each


 


35





















 


Lender
to so provide its purchase price to the Swing Line Lenders shall be absolute
and unconditional (except only demand made by the relevant Swing Line Lender)
and shall not be affected by the occurrence of a Default or Event of Default; provided
that no Lender shall be obligated to purchase its Applicable Percentage of:


 


(i)                                     Swing
Line Advances to the extent that Swing Line Outstandings are in excess of
$150,000,000; and


 


(ii)                                  any
Swing Line Advance made (absent the consent of all of the Lenders) when the
relevant Swing Line Lender has written notice that a Default or Event of
Default has occurred and such Default or Event of Default remains continuing
or, to the extent that the relevant Swing Line Advance is in excess of the
amounts permitted hereby,  that Swing
Line Lender failed to confirm that the amount of that Swing Line Advance was
permitted hereby.


 


Each Lender that has provided a Swing Line Lender with
the purchase price due for its participation in any Swing Line Advance shall
thereupon acquire a pro rata participation, to the extent of such payment, in
the claim of that Swing Line Lender against Borrowers for principal and interest
and shall share, in accordance with that pro rata participation, in any
principal payment made by Borrowers with respect to such claim and in any
interest payment made by Borrowers (but only with respect to periods subsequent
to the date such Lender paid the relevant Swing Line Lender its purchase price)
with respect to such claim.


 


(f)                                    Upon any demand for payment of the Swing
Line Outstandings by any Swing Line Lender, the relevant Borrower shall request
a Loan in an amount sufficient to repay all Swing Line Outstandings (and, for
this purpose, Section 2.1(d) shall not apply).  In each case, the Administrative Agent shall
automatically provide the responsive Advances made by each Lender to the Swing
Line Lenders (which the Swing Line Lenders shall then apply to the Swing Line
Outstandings).  In the event that any
Borrower fails to request a Loan within the time specified by Section 2.2
on any such date, the Administrative Agent may, but shall not be required to,
without notice to or the consent of Borrowers, cause Advances to be made by the
Lenders to that Borrower in amounts which are sufficient to reduce the Swing
Line Outstandings as required above.  The
conditions precedent set forth in Article 8 shall not apply to Advances to
be made by the Lenders pursuant to the three preceding sentences.  The proceeds of such Advances shall be paid
by the Administrative Agent directly to the Swing Line Lenders for application
to the Swing Line Outstandings.


 


2.6                                 Voluntary Increase to the Aggregate
Commitments.


 


(a)                                  Provided that no Default or Event of
Default then exists, Parent and the Borrowers may, upon at least 30 days notice
to the Administrative Agent (which shall promptly provide a copy of such notice
to the Lenders), propose to increase the Aggregate Commitments to an aggregate
amount not to exceed $5,000,000,000 (the amount of any such increase of the
Aggregate Commitments being referred to as the “Increased Commitment”)
by the addition of Commitments from willing Lenders or Eligible Assignees.  No Lender shall be obligated to agree to an
increase in its Commitment.


 


36





















 


(b)                                 In connection with any such proposal,
Parent and the Borrowers may designate either any of the existing Lenders or
Persons which qualify as Eligible Assignees (which may be, but need not be,
existing Lenders) which agree to:


 


(i)                                     in
the case of any such Person that is an existing Lender, increase its
Commitment; and


 


(ii)                                  in the case of any other such Person (an “Additional
Lender”), become a party to this Agreement and assume new Commitments.


 


(c)                                  An increase in the aggregate amount of
the Aggregate Commitments pursuant to this Section 2.6 shall become
effective upon the receipt by the Administrative Agent of an agreement in form
and substance satisfactory to the Administrative Agent signed by the Parent and
the Borrowers, by each Additional Lender and by each other Lender whose
Commitment is to be increased, setting forth the new Commitments of such
Lenders and setting forth the agreement of each Additional Lender to become a
party to this Agreement and to be bound by all the terms and provisions hereof,
together with such evidence of appropriate corporate authorization on the part
of Parent and the Borrowers and the Additional Lenders with respect to the
Increased Commitment as the Administrative Agent may reasonably request.


 


2.7                                 Voluntary Reduction of the Aggregate
Commitments .  Borrowers shall have the right, at any time
and from time to time, without penalty or charge, upon at least three Business
Days prior written notice to the Administrative Agent, voluntarily to reduce or
to terminate, permanently and irrevocably, in aggregate principal amounts in an
integral multiple of $1,000,000 but not less than $10,000,000, all or a portion
of the then undisbursed portion of the Aggregate Commitments, provided that any
such reduction or termination shall be accompanied by payment of all accrued
and unpaid commitment fees with respect to the portion of the Aggregate
Commitments being reduced or terminated. 
The Administrative Agent shall promptly notify the Lenders of any
reduction of the Aggregate Commitments under this Section 2.7.


 


2.8                                 Optional Termination of Aggregate
Commitments.  Following the occurrence of a Change in
Control, the Requisite Lenders may in their sole and absolute discretion elect
to terminate the Aggregate Commitments, during the sixty day period immediately
subsequent to the later of (a) such occurrence and (b) the earlier of:


 


(i)                                     receipt
of Borrowers’ written notice to the Administrative Agent of such occurrence;
and


 


(ii)                                  if
no such notice has been received by the Administrative Agent, the date upon
which the Administrative Agent and the Lenders have actual knowledge of such
Change in Control.


 


If Requisite Lenders
elect to terminate the Aggregate Commitments pursuant to the previous sentence,
the Aggregate Commitments shall be terminated effective on the date which is
sixty days subsequent to the date of written notice from the Administrative
Agent to Borrowers thereof, and:


 


(i)                                     to the extent that there are then any
Obligations outstanding, the same shall be immediately due and payable, and


 


37





















 


(ii)                                  to the extent that any Letters of Credit
are then outstanding, Borrowers shall provide cash collateral for the same.


 


2.9                                 Additional Borrowers. 
From time to time following the Signing Date and when no Default or
Event of Default exists, Parent and Company (and each other Borrower then a
party to this Agreement) may jointly designate one or more additional
Wholly-Owned Subsidiaries as additional co-borrowers under the Aggregate
Commitments in accordance with the provisions of this Section 2.9.  Prior to the effectiveness of any such
designation each such additional Borrower shall have duly authorized, executed
and delivered to the Administrative Agent each of the following:


 


(a)                                  an Election to Become a Borrower, setting
forth the proposed Aggregate Sublimit for that Borrower, together with such
other documents, certificates, resolutions, opinions and other assurances as
the Administrative Agent may reasonably require in connection therewith; and


 


(b)                                 Committed Advance Notes and Swing Line
Documents.


 


Promptly following the submission of the foregoing
documents, the Administrative Agent shall inform the Lenders of the proposed
designation and the proposed Aggregate Sublimit for that Borrower.  Unless the Requisite Lenders have objected in
writing to the proposed designee or Aggregate Sublimit within ten Business Days
following such notice from the Administrative Agent (which objection may be in
the sole discretion of each Lender), the Administrative Agent shall notify the
Borrowers that the appointment is accepted, whereupon the proposed new Borrower
shall be a Borrower for all purposes of this Agreement, with the Aggregate
Sublimit set forth in its Election to Become a Borrower.


 


2.10                           Payment Presumptions by Administrative
Agent.


 


(a)                                  Funding by Lenders. 
Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Committed Loan that such Lender will not make
available to the Administrative Agent such Lender’s share of such Committed
Loan, the Administrative Agent may assume that such Lender has made such share
available on such date in accordance with Section 2.1 and may, in reliance
upon such assumption, make available to the Borrowers a corresponding
amount.  In such event, if a Lender has
not in fact made its share of the applicable Committed Loan available to the
Administrative Agent, then the applicable Lender and the Borrowers severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the Borrowers to but
excluding the date of payment to the Administrative Agent, at:


 


(i)                                     in
the case of a payment to be made by such Lender, the greater of the Federal
Funds Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation; and


 


(ii)                                  in
the case of a payment to be made by the Borrowers, the interest rate applicable
to Base Rate Loans.


 


If the Borrowers and such Lender shall pay such
interest to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the


 


38





















 


Borrowers the amount of such interest paid by the
Borrowers for such period.  If such
Lender pays its share of the applicable Committed Loan to the Administrative
Agent, then the amount so paid shall constitute such Lender’s Committed Loan
included in such Committed Loan.  Any
payment by the Borrowers shall be without prejudice to any claim the Borrowers
may have against a Lender that shall have failed to make such payment to the
Administrative Agent.


 


(b)                                 Payments by Borrower. 
Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Lender hereunder that the
Borrowers will not make such payment, the Administrative Agent may assume that
the Borrowers have made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to the Lenders or the Issuing
Lender, as the case may be, the amount due. 
In such event, if the Borrowers have not in fact made such payment, then
each of the Lenders or the Issuing Lender, as the case may be, severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or the Issuing Lender, in immediately available
funds with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.


 


(c)                                  A notice of the Administrative Agent to
any Lender or any Borrower with respect to any amount owing under this Section 2.10
shall be conclusive, absent manifest error.


 


2.11                           Sharing of Payments by Lenders. 
If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of the Committed Loans made by it, or the participations in L/C Obligations or
in Swing Line Advances held by it resulting in such Lender’s receiving payment
of a proportion of the aggregate amount of such Committed Loans or
participations and accrued interest thereon greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall:


 


(a)                                  notify the Administrative Agent of such
fact; and


 


(b)                                 purchase (for cash at face value)
participations in the Committed Loans and subparticipations in L/C Obligations
and Swing Line Advances of the other Lenders, or make such other adjustments as
shall be equitable, so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Committed Loans and other amounts owing
them;


 


provided that:


 


(i)                                     if
any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and


 


(ii)                                  the
provisions of this Section 2.11 shall not be construed to apply to:


 


39





















 


(A)                              any payment made by the Borrowers
pursuant to and in accordance with the express terms of this Agreement; or


 


(B)                                any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Committed Loans
or subparticipations in L/C Obligations or Swing Line Advances to any assignee
or participant, other than to the Borrowers or any Subsidiary thereof (as to
which the provisions of this Section 2.11 shall apply).


 


Each Loan Party consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Loan
Party in the amount of such participation.


 


40





















 


ARTICLE 3

PAYMENTS AND FEES


 


3.1                                 Principal and Interest.


 


(a)                                  Interest shall be payable on the
outstanding daily unpaid principal amount of each Advance from the date thereof
until payment in full is made and shall accrue and be payable at the rates set
forth or provided for herein before and after default, before and after
maturity, before and after judgment, and before and after the commencement of
any proceeding under any Debtor Relief Law, with interest on overdue interest
to bear interest at the Default Rate to the fullest extent permitted by
applicable Laws.


 


(b)                                 Interest accrued on each Base Rate Loan
on each Quarterly Payment Date, and on the date of any prepayment of the
Committed Advance Notes pursuant to Section 3.1(f), shall be due and
payable on that day.  Except as
otherwise provided in Section 3.9, the unpaid principal amount of any Base
Rate Loan shall bear interest at a fluctuating rate per annum equal to the Base
Rate plus the Base Rate Margin. 
Each change in the interest rate under this Section 3.1(b) due to a
change in the Base Rate shall take effect simultaneously with the corresponding
change in the Base Rate.


 


(c)                                  Interest accrued on each Eurodollar Rate
Loan having a Interest Period of three months or less shall be due and payable
on the last day of the related Interest Period. 
Interest accrued on each other Eurodollar Rate Loan shall be due and
payable on the date which is three months after the date such Eurodollar Rate
Loan was made (and, in the event that all of the Lenders have approved a
Interest Period of longer than 6 months, every three months thereafter through
the last day of the Interest Period) and on the last day of the related
Interest Period.  Except as
otherwise provided in Sections 3.1(d) and 3.9, the unpaid principal amount
of any Eurodollar Rate Loan shall bear interest at a rate per annum equal to
the Eurodollar Rate for that Eurodollar Rate Loan plus the Eurodollar
Margin.


 


(d)                                 During the existence of a Default or
Event of Default, the Requisite Lenders may determine that any or all then
outstanding Eurodollar Rate Loans shall be converted to Base Rate Loans.  Such conversion shall be effective upon
notice to Borrowers from the Requisite Lenders (or from the Administrative
Agent on behalf of the Requisite Lenders) and shall continue so long as such
Default or Event of Default continues to exist.


 


(e)                                  If not sooner paid, the principal
Indebtedness evidenced by the Committed Advance Notes shall be payable as
follows:


 


(i)                                     the
principal amount of each Eurodollar Rate Loan shall be payable on the last day
of the Interest Period for such Loan;


 


(ii)                                  the
amount, if any, by which the Total Outstandings at any time exceed the
Aggregate Commitments shall be payable immediately, and shall be applied to the
ratable payment of the Committed Advance Notes; and


 


(iii)                               the
principal Indebtedness evidenced by the Committed Advance Notes shall in any
event be payable on the Maturity Date.


 


41





















 


(f)                                    The Committed Advance Notes may, at any
time and from time to time, voluntarily be paid or prepaid in whole or in part
without premium or penalty, except that with respect to any voluntary
prepayment under this Section 3.1(f):


 


(i)                                     any
partial prepayment shall be in an integral multiple of $1,000,000 but not less
than $5,000,000;


 


(ii)                                  the
Administrative Agent shall have received written notice of any prepayment, by
10:00 a.m. Las Vegas local time, one Business Day, in the case of a Base
Rate Loan, and three Business Days, in the case of a Eurodollar Rate Loan,
before the date of prepayment, which notice shall identify the date and amount
of the prepayment and the Loan(s) being prepaid;


 


(iii)                               each
prepayment of principal shall be accompanied by payment of interest accrued to
the date of payment on the amount of principal paid; and


 


(iv)                              any
payment or prepayment of all or any part of any Eurodollar Rate Loan on a day
other than the last day of the applicable Interest Period shall be subject to Section 3.8(d).


 


(g)                                 If for any reason the Total Outstandings
at any time exceed the Aggregate Commitments then in effect, the Borrowers
shall immediately prepay Loans and/or Cash Collateralize the L/C Obligations in
an aggregate amount equal to such excess; provided, however, that
the Borrowers shall not be required to Cash Collateralize the L/C Obligations
pursuant to this Section 3.1(g) unless after the prepayment in full of the
Loans the Total Outstandings exceed the Aggregate Commitments then in effect.


 


3.2                                 Arrangement Fee. 
On the Effective Date, Parent and the Company shall pay to each Lead
Arranger an arrangement fee in the amount heretofore agreed upon by letter
agreement among Parent, the Company and each such Lead Arranger.  Such arrangement fees are for the services of
the Lead Arrangers in arranging the credit facilities under this Agreement and
are fully earned when paid.  These
arrangement fees are earned as of the date hereof and are nonrefundable.


 


3.3                                 Upfront Fees; Working Fees.


 


(a)                                  On the Effective Date, the Company will
pay to the Administrative Agent, for the respective account of each Lender
which is a party to the Existing Credit Agreement on the Signing Date, or its
assigns, a working fee of 0.020% times the amount of its Commitment under the
Existing Credit Agreement (but only to the extent that its Commitment hereunder
on the Signing Date is equal to its Commitment under the Existing Credit
Agreement or in a greater amount).


 


(b)                                 On the Effective Date, the Company shall
pay to the Administrative Agent, for the respective accounts of each Lender, an
upfront fee in respect of the amount by which its Commitment under this
Agreement as of the Signing Date exceeds any Commitment of that Lender under
the Existing Credit Agreement (as in effect on the Signing Date).


 


(c)                                  Each Lender has been advised by the Lead
Arrangers of the amounts payable to that Lender pursuant to Sections 3.3(a) and
3.3(b).  Such fees are fully earned when
paid and are non-refundable.


 


42





















 


3.4                                 Facility Fees. 
On the last day of each Pricing Period, Borrowers shall pay to the
Administrative Agent, for the respective accounts of the Lenders, pro rata
according to their Applicable Percentage, a facility fee equal to:


 


(a)                                  the Facility Fee Rate per annum for that
Pricing Period; times


 


(b)                                 the actual daily amount by of the
Aggregate Commitments (whether drawn or undrawn) during that Pricing Period.


 


3.5                                 Letter of Credit Fees.


 


(a)                                  Concurrently with the issuance of each
Letter of Credit, Borrowers shall pay a letter of credit issuance fee to the
relevant Issuing Lender, for the sole account of that Issuing Lender, in an
amount set forth in an agreement between the Parent, the Borrowers, and the
relevant Issuing Lender.  Each such
letter of credit issuance fee is nonrefundable.


 


(b)                                 On each Quarterly Payment Date and on the
Maturity Date, Borrowers shall also pay to the Administrative Agent in arrears,
for the ratable account of the Lenders in accordance with their Applicable
Percentage, letter of credit fees in an amount equal to the Letter of Credit
Fee per annum times the actual daily amount of L/C Obligations of all Letters
of Credit for the period from the Effective Date or the most recent Quarterly
Payment Date.  For purposes of computing
the daily amount available to be drawn under any Letter of Credit, the amount
of such Letter of Credit shall be determined in accordance with Section 1.7.


 


3.6                                 Agency Fees. 
Borrowers shall pay to the Administrative Agent an agency fee in such
amounts and at such times as heretofore agreed upon by letter agreement among
Parent, the Borrowers and the Administrative Agent.  The agency fee is for the services to be
performed by the Administrative Agent in acting as Administrative Agent and is
fully earned on the date paid.  The
agency fee paid to the Administrative Agent is solely for its own account and
is nonrefundable.


 


3.7                                 Increased Commitment Costs. 
If any Lender shall determine that the introduction after the Signing
Date of any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change therein or any change in the interpretation or
administration thereof by any central bank or other Governmental Agency charged
with the interpretation or administration thereof, or compliance by such Lender
(or its Eurodollar Lending Office) or any corporation controlling the Lender,
with any request, guidelines or directive regarding capital adequacy (whether
or not having the force of law) of any such central bank or other authority,
affects or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender and
(taking into consideration such Lender’s or such corporation’s policies with
respect to capital adequacy and such Lender’s desired return on capital)
determines that the amount of such capital is increased, or the rate of return
on capital is reduced, as a consequence of its obligations under this
Agreement, then such Lender shall promptly give notice to the Borrowers and the
Administrative Agent of such determination. 
Thereafter, the Borrowers shall pay to such Lender, within five Business
Days following written demand therefor (setting forth the additional amounts
owed to such Lender and the basis of the calculation thereof in reasonable
detail), additional amounts sufficient to compensate such Lender in light of
such circumstances, to the extent reasonably allocable to such obligations
under this Agreement.  Each Lender shall
afford treatment to Borrowers under this Section 3.7 which is
substantially similar to that which such Lender affords to its other similarly
situated customers.


 


43





















 


3.8                                 Eurodollar Costs and Related Matters.


 


(a)                                  If, after the date hereof, the existence
or occurrence of any Special Eurodollar Circumstance shall:


 


(i)                                     subject any Lender or its Eurodollar
Lending Office to any tax, duty or other charge or cost with respect to any
Eurodollar Rate Advance, any of its Committed Advance Notes evidencing
Eurodollar Rate Loans or its obligation to make Eurodollar Rate Advances, or
shall change the basis of taxation of payments to any Lender of the principal
of or interest on any Eurodollar Rate Advance or any other amounts due under
this Agreement in respect of any Eurodollar Rate Advance, any of its Committed
Advance Notes evidencing Eurodollar Rate Loans or its obligation to make
Eurodollar Rate Advances, excluding, with respect to each Creditor, and
any Affiliate or Eurodollar Lending Office thereof, (A) taxes imposed on or
measured in whole or in part by its net income or capital and franchise taxes
imposed on it, (B) any withholding taxes or other taxes based on net income
(other than withholding taxes and taxes based on net income resulting from or
attributable to any change in any law, rule or regulation or any change in the
interpretation or administration of any law, rule or regulation by any
Governmental Agency) or (C) any withholding taxes or other taxes based on net
income for any period with respect to which it has failed to provide Borrowers
with the appropriate form or forms required by Section 11.21, to the
extent such forms are then required by applicable Laws;


 


(ii)                                  impose, modify or deem applicable any
reserve not applicable or deemed applicable on the date hereof (including,
without limitation, any reserve imposed by the Board of Governors of the
Federal Reserve System, but excluding the Eurodollar Reserve Percentage taken
into account in calculating the Eurodollar Rate), special deposit, capital or
similar requirements against assets of, deposits with or for the account of, or
credit extended by, any Lender or its Eurodollar Lending Office; or


 


(iii)                               impose
on any Lender or its Eurodollar Lending Office or the Designated Eurodollar
Market any other condition materially affecting any Eurodollar Rate Advance,
any of its Committed Advance Notes evidencing Eurodollar Rate Loans, its
obligation to make Eurodollar Rate Advances or this Agreement, or shall
otherwise materially affect any of the same;


 


and the result of any of
the foregoing, as determined by such Lender, increases the cost to such Lender
or its Eurodollar Lending Office of making or maintaining any Eurodollar Rate
Advance or in respect of any Eurodollar Rate Advance, any of its Committed
Advance Notes evidencing Eurodollar Rate Loans or its obligation to make
Eurodollar Rate Advances or reduces the amount of any sum received or
receivable by such Lender or its Eurodollar Lending Office with respect to any
Eurodollar Rate Advance, any of its Committed Advance Notes evidencing
Eurodollar Rate Loans or its obligation to make Eurodollar Rate Advances
(assuming such Lender’s Eurodollar Lending Office had funded 100% of its
Eurodollar Rate Advance in the Designated Eurodollar Market), then, provided
that such Lender makes demand upon Borrowers (with a copy to the
Administrative Agent) within 90 days following the date upon which it becomes
aware of any such event or circumstance, Borrowers shall within five Business
Days pay to such Lender such additional amount or amounts as will compensate such
Lender for such


 


44





















 


increased cost or
reduction (determined as though such Lender’s Eurodollar Lending Office had
funded 100% of its Eurodollar Rate Advance in the Designated Eurodollar
Market).  Each of the Borrowers hereby
jointly and severally (but as between Borrowers, ratably) indemnifies each
Lender against, and agrees to hold each Lender harmless from and reimburse such
Lender within five Business Days after demand for (without duplication) all costs,
expenses, claims, penalties, liabilities, losses, legal fees and damages
incurred or sustained by each Lender in connection with this Agreement, or any
of the rights, obligations or transactions provided for or contemplated herein,
as a result of the existence or occurrence of any Special Eurodollar
Circumstance.  A statement of any Lender
claiming compensation under this clause and setting forth the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error.  Each Lender agrees to
endeavor promptly to notify Borrowers of any event of which it has actual
knowledge, occurring after the Signing Date, which will entitle such Lender to
compensation pursuant to this Section 3.8 and agrees to designate a
different Eurodollar Lending Office if such designation will avoid the need for
or reduce the amount of such compensation and will not, in the judgment of such
Lender, otherwise be materially disadvantageous to such Lender.  If any Lender claims compensation under this Section 3.8,
Borrowers may at any time, upon at least four Eurodollar Business Days’ prior
notice to the Administrative Agent and such Lender and upon payment in full of
the amounts provided for in this Section 3.8 through the date of such
payment plus any prepayment fee required by Section 3.8(d), pay in full
the affected Eurodollar Rate Advances of such Lender or request that such
Eurodollar Rate Advances be converted to Base Rate Advances.  To the extent that any Lender which receives
any payment from Borrowers under this Section 3.8 later receives any funds
which are identifiable as a reimbursement or rebate of such amount from any
other Person, such Lender shall promptly refund such amount to Borrowers.


 


(b)                                 If the existence or occurrence of any Special
Eurodollar Circumstance shall, in the opinion of any Lender, make it unlawful,
impossible or impracticable for such Lender or its Eurodollar Lending Office to
make, maintain or fund its portion of any Eurodollar Rate Loan, or materially
restrict the authority of such Lender to purchase or sell, or to take deposits
of, Dollars in the Designated Eurodollar Market, or to determine or charge
interest rates based upon the Eurodollar Rate, and such Lender shall so notify
the Administrative Agent, then such Lender’s obligation to make Eurodollar Rate
Advances shall be suspended for the duration of such illegality, impossibility
or impracticability and the Administrative Agent forthwith shall give notice
thereof to the other Lenders and Borrowers. 
Upon receipt of such notice, the outstanding principal amount of such
Lender’s Eurodollar Rate Advances, together with accrued interest thereon,
automatically shall be converted to Base Rate Advances on either (i) the last
day of the Interest Period(s) applicable to such Eurodollar Rate Advances if
such Lender may lawfully continue to maintain and fund such Eurodollar Rate
Advances to such day(s) or (ii) immediately if such Lender may not lawfully
continue to fund and maintain such Eurodollar Rate Advances to such day(s),
provided that in such event the conversion shall not be subject to payment of a
prepayment fee under Section 3.8(d). 
Each Lender agrees to endeavor promptly to notify Borrowers of any event
of which it has actual knowledge, occurring after the Signing Date, which will
cause that Lender to notify the Administrative Agent under this Section 3.8(b),
and agrees to designate a different Eurodollar Lending Office if such
designation will avoid the need for such notice and will not, in the judgment
of such Lender, otherwise be disadvantageous to such Lender.  In the event that any Lender is unable, for
the reasons set forth above, to make, maintain or fund its portion of any
Eurodollar Rate Loan, such Lender shall fund such amount as a


 


45





















 


Base
Rate Advance for the same period of time, and such amount shall be treated in
all respects as a Base Rate Advance.  Any
Lender whose obligation to make Eurodollar Rate Advances has been suspended
under this Section 3.8(b) shall promptly notify the Administrative Agent
and Borrowers of the cessation of the Special Eurodollar Circumstance which
gave rise to such suspension.


 


(c)                                  If, with respect to any proposed
Eurodollar Rate Loan:


 


(i)                                     the
Administrative Agent reasonably determines that, by reason of circumstances
affecting the Designated Eurodollar Market generally that are beyond the
reasonable control of the Lenders, deposits in Dollars (in the applicable
amounts) are not being offered to any Lender in the Designated Eurodollar
Market for the applicable Interest Period; or


 


(ii)                                  the
Requisite Lenders advise the Administrative Agent that the Eurodollar Rate as
determined by the Administrative Agent:


 


(A)                              does not represent the effective pricing
to such Lenders for deposits in Dollars in the Designated Eurodollar Market in
the relevant amount for the applicable Interest Period; or


 


(B)                                will not adequately and fairly reflect
the cost to such Lenders of making the applicable Eurodollar Rate Advances;


 


then the Administrative Agent forthwith shall give
notice thereof to Borrowers and the Lenders, whereupon until the Administrative
Agent notifies Borrowers that the circumstances giving rise to such suspension
no longer exist, the obligation of the Lenders to make any future Eurodollar
Rate Advances shall be suspended.  If at
the time of such notice there is then pending a Request for Loan that specifies
a Eurodollar Rate Loan, such Request for Loan shall be deemed to specify a Base
Rate Loan.


 


(d)                                 Upon payment or prepayment of any
Eurodollar Rate Advance, (other  than as the result of a
conversion required under Section 3.1(d) or 3.8(b)), on a day other than
the last day in the applicable Interest Period (whether voluntarily,
involuntarily, by reason of acceleration, or otherwise), or upon the failure of
any Borrower (for a reason other than the failure of a Lender to make an
Advance) to borrow on the date or in the amount specified for a Eurodollar Rate
Loan in any Request for Loan, Borrowers shall pay to the appropriate Lender within
five Business Days after demand a prepayment fee or failure to borrow fee, as
the case may be, (determined as though 100% of the Eurodollar Rate Advance had
been funded in the Designated Eurodollar Market) equal to the sum of:


 


(i)                  principal amount of the Eurodollar Rate
Advance prepaid or not borrowed, as the case may be, times the quotient
of:


 


(A)                              the number of days between the date of
prepayment or failure to borrow, as applicable, and the last day in the
applicable Interest Period; divided by


 


(B)                                360, times the applicable Interest
Differential (provided that the product of the foregoing formula must be a
positive number); plus


 


46





















 


(C)                                all out-of-pocket expenses incurred by
the Lender reasonably attributable to such payment, prepayment or failure to
borrow.


 


Each Lender’s
determination of the amount of any prepayment fee payable under this Section 3.8(d)
shall be conclusive in the absence of manifest error.


 


3.9                                 Default Rate. 
If any installment of principal or interest or any fee or cost or other
amount payable under any Loan Document to any Creditor is not paid when due,
then such overdue Obligations shall thereafter bear interest at a fluctuating
interest rate per annum at all times equal to the sum of the Base Rate plus the
Base Rate Margin plus 2%, to the fullest extent permitted by applicable
Laws.  In addition, if any Event of
Default has occurred and remains continuing, then at the option of the
Requisite Lenders, all of the Obligations shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the sum of the Base
Rate plus the Base Rate Margin plus 2%, to the fullest extent permitted by
applicable Laws.   Accrued and unpaid
interest on past due amounts (including, without limitation, interest on past
due interest) shall be compounded monthly, on the last day of each calendar
month, to the fullest extent permitted by applicable Laws.


 


3.10                           Computation of Interest and Fees. 
Computation of interest on Base Rate Loans calculated with reference to
the prime rate shall be calculated on the basis of a year of 365 or 366 days,
as the case may be, and the actual number of days elapsed; computation of
interest on Base Rate Loans calculated by reference to the Federal Funds Rate,
and on Eurodollar Rate Loans and all fees under this Agreement shall be
calculated on the basis of a year of 360 days and the actual number of days
elapsed.  Each Borrower acknowledges that
such latter calculation method will result in a higher yield to the Lenders
than a method based on a year of 365 or 366 days.  Interest shall accrue on each Loan for the
day on which the Loan is made; interest shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid.  Any Loan that is repaid on the same day on
which it is made shall bear interest for one day.


 


3.11                           Non-Business Days. 
Subject to clause (b) of the definition of “Interest Period,” if any
payment to be made by Borrowers or any other Party under any Loan Document
shall come due on a day other than a Business Day, payment shall instead be
considered due on the next succeeding Business Day and the extension of time
shall be reflected in computing interest and fees.


 


3.12                           Manner and Treatment of Payments.


 


(a)                                  Each payment hereunder (except
payments with respect to Swing Line Obligations and payments pursuant to
Sections 3.7, 3.8, and 11.3) or on the Committed Advance Notes or under
any other Loan Document shall be made without setoff, counterclaim, recoupment
or other deduction of any kind to the Administrative Agent, at the
Administrative Agent’s Office, for the account of each of the Lenders or the
Administrative Agent, as the case may be, in immediately available funds not
later than 11:00 a.m., Las Vegas local time, on the day of payment (which
must be a Business Day), other  than payments with respect to
Swing Line Advances, which must be received by 3:00 p.m., Las Vegas local
time, on the day of payment (which must be a Business Day).  All payments received after these deadlines
shall be deemed received on the next succeeding Business Day.  The amount of all payments received by the
Administrative Agent for the account of each Lender shall be immediately paid
by the Administrative Agent to the applicable Lender in immediately available
funds and, if such payment was received by the Administrative Agent by
11:00 a.m., Las Vegas local time, on a Business Day and not so made
available to the account of a Lender on that Business Day, the Administrative Agent
shall


 


47





















 


reimburse
that Lender for the cost to such Lender of funding the amount of such payment
at the Federal Funds Rate.  All payments
shall be made in lawful money of the United States of America.


 


(b)                                 Each payment or prepayment on account of
any Committed Loan shall be applied pro rata according to the outstanding
Committed Advances made by each Lender comprising such Committed Loan.


 


(c)                                  Each Lender shall use its best efforts to
keep a record of Advances made by it and payments received by it with respect
to each of its Committed Advance Notes and such record shall, as against
Borrowers, be presumptive evidence absent manifest error of the amounts
owing.  Notwithstanding the foregoing
sentence, no Lender shall be liable to any Party for any failure to keep such a
record.


 


(d)                                 Each payment of any amount payable by
Borrowers or any other Party under this Agreement or any other Loan Document
shall be made free and clear of, and without reduction by reason of, any taxes,
assessments or other charges imposed by any Governmental Agency, central bank
or comparable authority, excluding, in the case of each Creditor, and
any Affiliate or Eurodollar Lending Office thereof, (i) taxes imposed on or
measured in whole or in part by its net income or capital and franchise taxes
imposed on it, (ii) any withholding taxes or other taxes based on net income
(other than withholding taxes and taxes based on net income resulting from or
attributable to any change in any law, rule or regulation or any change in the
interpretation or administration of any law, rule or regulation by any
Governmental Agency) or (iii) any withholding taxes or other taxes based on net
income for any period with respect to which it has failed to provide Borrowers
with the appropriate form or forms required by Section 11.21, to the
extent such forms are then required by applicable Laws, (all such non-excluded
taxes, assessments or other charges being hereinafter referred to as “Taxes”).  To the extent that Parent or any Borrower is
obligated by applicable Laws to make any deduction or withholding on account of
Taxes from any amount payable to any Lender under this Agreement, Parent or
that Borrower shall (i) make such deduction or withholding and pay the same to
the relevant Governmental Agency and (ii) pay such additional amount to that
Lender as is necessary to result in that Lender’s receiving a net after-Tax
amount equal to the amount to which that Lender would have been entitled under
this Agreement absent such deduction or withholding.  If and when receipt of such payment results
in an excess payment or credit to that Lender on account of such Taxes, that
Lender shall promptly refund such excess to Parent or the appropriate Borrower.


 


3.13                           Funding Sources. 
Nothing in this Agreement shall be deemed to obligate any Lender to
obtain the funds for any Loan or Advance in any particular place or manner or
to constitute a representation by any Lender that it has obtained or will
obtain the funds for any Loan or Advance in any particular place or manner.


 


3.14                           Failure to Charge Not Subsequent Waiver. 
Any decision by the Creditors not to require payment of any interest
(including interest arising under Section 3.9), fee, cost or other amount
payable under any Loan Document, or to calculate any amount payable by a
particular method, on any occasion shall in no way limit or be deemed a waiver
of the Creditor’s right to require full payment of any interest (including
interest arising under Section 3.9), fee, cost or other amount payable
under any Loan Document on any other or subsequent occasion.


 


48





















 


3.15                           Fee Determination Detail. 
Each Creditor shall provide reasonable detail to Parent and the
Borrowers regarding the manner in which the amount of any payment to that
Creditor under Article 3 has been determined, concurrently with demand for
such payment.


 


3.16                           Survivability. 
All of the Parent’s and the Borrowers’ obligations under
Sections 3.7 and 3.8 shall survive for ninety days following the date on
which the Commitments are terminated and all Loans hereunder are fully paid.


 


49










 













 


ARTICLE 4

REPRESENTATIONS AND WARRANTIES


 


Parent and each Borrower represents and warrants to
the Creditors, as of the Signing Date, as of the Effective Date, and as of the
date of the making of each Advance and the Issuance of each Letter of Credit
that:


 


4.1                                 Existence
and Qualification; Power; Compliance With Laws.  Parent and each of the Borrowers are duly
formed, validly existing and in good standing under the Laws of its
jurisdiction of formation.  Parent and
each of the Borrowers are duly qualified or registered to transact business and
is in good standing in each other jurisdiction in which the conduct of its
business or the ownership or leasing of its Properties makes such qualification
or registration necessary, except where the failure so to qualify or register
and to be in good standing would not constitute a Material Adverse Effect.  Parent and each of the Borrowers have all
requisite corporate or partnership power (as applicable) and authority to
conduct their respective business, to own and lease their respective Properties
and to execute and deliver each Loan Document to which it is a Party and to
perform its Obligations.  All outstanding
shares of capital stock of Parent and each of the Borrowers are duly
authorized, validly issued, fully paid, and non-assessable and no holder
thereof has any enforceable right of rescission under any applicable state or
federal securities Laws.  Parent and each
of the Borrowers are in compliance with all Laws and other legal requirements
applicable to their respective business, have obtained all authorizations,
consents, approvals, orders, licenses and permits from, and have accomplished
all filings, registrations and qualifications with, or obtained exemptions from
any of the foregoing from, any Governmental Agency that are necessary for the
transaction of their business, except where the failure so to comply, file,
register, qualify or obtain exemptions does not constitute a Material Adverse
Effect.


 


4.2                                 Authority;
Compliance With Other Agreements and Instruments and Government Regulations.  The execution, delivery and performance by
Parent and each Borrower of the Loan Documents to which it is a Party have been
duly authorized by all necessary corporate or partnership action, as
applicable, and do not and will not:


 


(a)                                  Require any consent or approval not
heretofore obtained of any partner, director, stockholder, security holder or
creditor of such Party;


 


(b)                                 Violate or conflict with any provision of
such Party’s charter, articles of incorporation or bylaws, as applicable;


 


(c)                                  Result in or require the creation or
imposition of any Lien or Right of Others upon or with respect to any Property
now owned or leased or hereafter acquired by such Party;


 


(d)                                 Violate any Requirement of Law applicable
to such Party, subject to obtaining the authorizations from, or filings with,
the Governmental Authorities described in Schedule 4.3;


 


(e)                                  Result in a breach by such Party of or
constitute a default by such Party under, or cause or permit the acceleration
of any obligation owed under, any indenture or loan or credit agreement or any
other Contractual Obligation to which such Party is a party or by which such
Party or any of its Property is bound or affected;


 


50





















 


and neither Parent,
Borrowers nor any of their Significant Subsidiaries is in violation of, or
default under, any Requirement of Law or Contractual Obligation, or any
indenture, loan or credit agreement described in Section 4.2(e), in any
respect that constitutes a Material Adverse Effect.


 


The execution, delivery
and performance by Parent and the Company of the Caesars Merger Agreement and
the consummation of the Caesars Merger and related transactions have been duly
authorized by all necessary corporate or other organizational action of Parent,
the Company and their respective Subsidiaries as of the Effective Date, and at
the Effective Date, will not:


 


(a)                                  Require
any material consent or approval not heretofore obtained of any partner,
director, stockholder, security holder or creditor of such Party;


 


(b)                                 Violate
or conflict with any provision of such Party’s charter, articles of
incorporation or bylaws, as applicable;


 


(c)                                  Result
in or require the creation or imposition of any Lien or Right of Others upon or
with respect to any Property now owned or leased or hereafter acquired by such
Party, in each case to the extent that such Lien or Right of Others is
prohibited by this Agreement;


 


(d)                                 Violate
any Requirement of Law applicable to such Party, subject to obtaining the
authorizations from, or filings with, the Governmental Authorities described in
Schedule 4.3; or


 


(e)                                  Result
in a breach by such Party of or constitute a default by such Party under, or
cause or permit the acceleration of any obligation owed under, any material
indenture or loan or credit agreement or any other Contractual Obligation to
which such Party is a party or by which such Party or any of its Property is
bound or affected.


 


4.3                                 No
Governmental Approvals Required. 
Except as set forth in Schedule 4.3 or previously obtained or made,
no authorization, consent, approval, order, license or permit from, or filing,
registration or qualification with, any Governmental Agency is or will be
required to authorize or permit under applicable Laws (a) the execution,
delivery and performance by Parent or the Borrowers of the Loan Documents to
which any of them is a Party, or (b) the execution, delivery and performance of
the Caesars Merger Agreement or the consummation of the Caesars Merger and the
related transactions contemplated therein. 
All authorizations from, or filings with, any Governmental Agency
described in Schedule 4.3 will be accomplished as of the Effective Date or
such other date as is specified in Schedule 4.3.


 


4.4                                 Significant
Subsidiaries.


 


(a)                                  As of the Signing Date there are no
outstanding options, warrants or other rights to purchase capital stock of any
Significant Subsidiary of the Parent, and all shares or equity interests in
such Significant Subsidiaries are duly authorized, validly issued, fully paid,
non-assessable, and were issued in compliance with all applicable state and
federal securities and other Laws, and are free and clear of all Liens and
Rights of Others, except for Permitted Encumbrances and Permitted Rights
of Others.


 


(b)                                 Each Significant Subsidiary of Parent is
duly formed, validly existing and in good standing under the Laws of its
jurisdiction of organization, is duly qualified to do business as a foreign
organization and is in good standing as such in each jurisdiction in which the
conduct of its business or the ownership or leasing of its properties makes
such qualification necessary (except where the failure to be so duly
qualified and in good


 


51





















 


standing
does not constitute a Material Adverse Effect), and has all requisite power and
authority to conduct its business and to own and lease its Properties.


 


(c)                                  Each Significant Subsidiary of Parent is
in compliance with all Laws and other requirements applicable to its business
and has obtained all authorizations, consents, approvals, orders, licenses, and
permits from, and each such Significant Subsidiary has accomplished all
filings, registrations, and qualifications with, or obtained exemptions from
any of the foregoing from, any Governmental Agency that are necessary for the
transaction of its business, except where the failure to be in such
compliance, obtain such authorizations, consents, approvals, orders, licenses,
and permits, accomplish such filings, registrations, and qualifications, or
obtain such exemptions, does not constitute a Material Adverse Effect.


 


4.5                                 Financial
Statements.  Parent and Borrowers
have furnished to the Lenders the audited consolidated financial statements of
Parent and its Subsidiaries for the Fiscal Year ended December 31,
2003.  The financial statements described
above fairly present in all material respects the financial condition, results
of operations and changes in financial position of Parent and its Subsidiaries
as of such dates and for such periods, in conformity with Generally Accepted
Accounting Principles, consistently applied.


 


4.6                                 No
Other Liabilities; No Material Adverse Effect.  As of the Signing Date, Parent and its
Subsidiaries do not have any material liability or material contingent
liability not reflected or disclosed in the financial statements described in Section 4.5,
other than liabilities and contingent liabilities arising in the ordinary
course of business since the date of such financial statements.  As of the Signing Date, no circumstance or
event has occurred that constitutes a Material Adverse Effect since December 31,
2003.  As of the Effective Date, (a) no
circumstance or event has occurred that constitutes a Material Adverse Effect
since the Signing Date, and (b) there has been no “Company Material Adverse
Effect” (as defined in the Caesars Merger Agreement) in respect of Caesars and
its Subsidiaries or other event, in each case which would entitle Parent and
the Company to refuse to consummate the Caesars Merger pursuant to Sections
7.01 or 7.02 of the Caesars Merger Agreement as in effect on the date of this
Agreement.


 


4.7                                 Title
to Property.  As of the Signing Date,
Parent and its Subsidiaries have valid title to the Property reflected in the
financial statements described in Section 4.5, other than immaterial items
of Property and Property subsequently sold or disposed of in the ordinary
course of business, free and clear of all Liens and Rights of Others, other
than Liens or Rights of Others described in Schedule 4.7, as permitted by Section 6.4,
and any other matters which do not have a Material Adverse Effect.


 


4.8                                 Litigation.  There are no actions, suits, proceedings or
investigations pending as to which Parent or any of its Subsidiaries have been
served or have received notice or, to the knowledge of Parent and the
Borrowers, threatened against or affecting Parent or any of its Subsidiaries or
any Property of any of them before any Governmental Agency in which there is
any reasonable possibility of an adverse decision which could materially
adversely affect the business, consolidated financial position or results of
operations of Parent and its Subsidiaries, taken as a whole, or which in any
manner draws into question the validity or enforceability of the Loan Documents.  As of the Signing Date and as of the
Effective Date, there is no temporary restraining order, preliminary or
permanent injunction or other order of any court of competent jurisdiction or
other legal restraint or prohibition preventing the consummation of the Caesars
Merger which is in effect.


 


52





















 


4.9                                 Binding
Obligations.  Each of the Loan
Documents will, when executed and delivered by Parent and the Borrowers party
thereto, constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms, except as
enforcement may be limited by Debtor Relief Laws or equitable principles
relating to the granting of specific performance and other equitable remedies
as a matter of judicial discretion.


 


4.10                           No
Default.  No event has occurred and
is continuing that is a Default or Event of Default.


 


4.11                           ERISA.


 


(a)                                  With respect to each Pension Plan:


 


(i)                                     such
Pension Plan complies in all material respects with ERISA and any other
applicable Laws to the extent that noncompliance could reasonably be expected
to have a Material Adverse Effect;


 


(ii)                                  such
Pension Plan has not incurred any “accumulated funding deficiency” (as defined
in Section 302 of ERISA) that could reasonably be expected to have a
Material Adverse Effect;


 


(iii)                               no “reportable
event” (as defined in Section 4043 of ERISA) has occurred that could
reasonably be expected to have a Material Adverse Effect; and


 


(iv)                              neither
Parent nor any of its Subsidiaries has engaged in any non-exempt “prohibited
transaction” (as defined in Section 4975 of the Code) that could
reasonably be expected to have a Material Adverse Effect.


 


(b)                                 Neither Parent nor any of its
Subsidiaries has incurred or expects to incur any withdrawal liability to any
Multiemployer Plan that could reasonably be expected to have a Material Adverse
Effect.


 


4.12                           Regulations T,
U and X; Investment Company Act.  No
part of the proceeds of any Loan hereunder will be used to purchase or carry, or
to extend credit to others for the purpose of purchasing or carrying, any
Margin Stock in any manner which is a violation of Regulations T, U or
X.  Neither Parent nor any of its
Subsidiaries is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.


 


4.13                           Disclosure.  No written statement made by a Senior Officer
of Parent or any Borrower to any Creditor in connection with this Agreement,
including without limitation the statements made in the Confidential Offering
Memorandum, or in connection with any Loan, Advance or Letter of Credit as of
the date thereof contained any untrue statement of a material fact or omitted a
material fact necessary to make the statement made not misleading in light of
all the circumstances existing at the date the statement was made.


 


4.14                           Tax
Liability.  Parent and its
Subsidiaries have filed all tax returns which are required to be filed, and
have paid, or made provision for the payment of, all taxes with respect to the
periods, Property or transactions covered by said returns, or pursuant to any
assessment received by Parent or any of its Subsidiaries, except


 


(a)                                  such taxes, if any, as are being
contested in good faith by appropriate proceedings and as to which adequate
reserves have been established and maintained and


 


53





















 


(b)                                 immaterial taxes and tax returns so long
as no material item or portion of Property of Parent or any of its Subsidiaries
is in jeopardy of being seized, levied upon or forfeited.


 


4.15                           Projections.  As of the Signing Date, to the best knowledge
of Parent and the Borrowers, the assumptions set forth in the Projections are
reasonable and consistent with each other and with all facts known to Parent
and the Borrowers, and the Projections are:


 


(a)                                  reasonably based on such assumptions; and


 


(b)                                 although a range of possible different
assumptions and estimates might also be reasonable, neither Parent nor the
Borrowers are aware of any facts which would lead them to believe that the
assumptions and estimates on which the Projections were based are not
reasonable; provided that no representation or warranty can be given that the
projected results will be realized or with respect to the ability of Parent and
its Subsidiaries to achieve the projected results and, while the Projections
are necessarily presented with numerical specificity, the actual results
achieved during the periods presented may differ from the projected results,
and such differences may be material.


 


4.16                           Hazardous
Materials.  Parent and the Borrowers
have reasonably concluded that Hazardous Materials Laws are unlikely to have a
material adverse effect on the business, financial position, results of
operations or prospects of the Parent and its Subsidiaries, considered as a
whole.


 


4.17                           Gaming
Laws.  Parent and each of its
Subsidiaries are in compliance in all material respects with all Gaming Laws
that are applicable to them and their businesses.


 


4.18                           The
Caesars Merger; Solvency. 
Immediately following the making of the initial Advances on the
Effective Date, the Caesars Merger shall occur pursuant to the Caesars Merger
Agreement and in material compliance with all applicable Laws.  As of the Effective Date, and giving effect
to the Caesars Merger and the other transactions contemplated to occur on the
Effective Date, Parent, Borrower, Caesars and each of their respective
Subsidiaries are Solvent.


 


54





















 


ARTICLE 5
AFFIRMATIVE
COVENANTS


 


So long as any Advance remains unpaid, or any other
Obligation remains unpaid or unperformed, or any portion of the Commitments
remains in force, Parent and each Borrower shall, and shall cause each of their
respective Subsidiaries to, unless the Administrative Agent (with the written
approval of the Requisite Lenders) otherwise consents:


 


5.1                                 Preservation
of Existence.  Preserve and maintain
their respective existences in the jurisdiction of their formation and all
material authorizations, rights, franchises, privileges, consents, approvals,
orders, licenses, permits, or registrations from any Governmental Agency that
are necessary for the transaction of their respective business, except where
the failure to so preserve and maintain the existence of any Subsidiary and
such authorizations would not constitute a Material Adverse Effect and except
that the Caesars Mergers and any other mergers permitted by Section 6.1
shall not constitute a violation of this covenant; and qualify and remain
qualified to transact business in each jurisdiction in which such qualification
is necessary in view of their respective business or the ownership or leasing
of their respective Properties except where the failure to so qualify or remain
qualified would not constitute a Material Adverse Effect.


 


5.2                                 Maintenance
of Properties.  Maintain, preserve
and protect all of their respective depreciable Properties in good order and
condition, subject to wear and tear in the ordinary course of business, and not
permit any waste of their respective Properties, except where the failure to
maintain, preserve and protect a particular item of depreciable Property would
not have a Material Adverse Effect.


 


5.3                                 Maintenance
of Insurance.  Maintain liability,
casualty and other insurance (subject to customary deductibles and retentions)
with financially sound and responsible insurance companies in such amounts and
against such risks as is carried by responsible companies engaged in similar
businesses and owning similar assets in the general areas in which Parent and
its Subsidiaries operate, and will furnish to the Administrative Agent upon
request information in reasonable detail as to the insurance so carried.  Notwithstanding the foregoing, Parent and its
Subsidiaries may self-insure with respect to such risks with respect to which
companies of established reputation engaged in the same general line of
business in the same general area usually self-insure.


 


5.4                                 Compliance
With Laws.  Comply within the time
period, if any, given for such compliance by the relevant Governmental Agency
or Authorities with enforcement authority, with all Laws and Requirements of
Law, including without limitation Hazardous Materials Laws, ERISA and all
Gaming Laws, except that Parent and its Subsidiaries need not comply with a
Requirement of Law then being contested by any of them in good faith by
appropriate proceedings, except where the failure to so comply may not
reasonably be expected to have a Material Adverse Effect.


 


5.5                                 Inspection
Rights.  Upon reasonable notice, at
any time during regular business hours and as often as requested (but not so as
to materially interfere with the business of the Parent or any of its
Subsidiaries), permit the Administrative Agent or any Lender, or any authorized
employee, agent or representative thereof, to examine, audit and make copies
and abstracts from the records and books of account of, and to visit and
inspect the Properties of, the Parent and its Subsidiaries and to discuss the
affairs, finances and accounts of the Parent and its Subsidiaries with any of
their officers, key employees or accountants and, upon request, furnish
promptly to the Administrative Agent or any Lender true copies of all financial
information made available to the senior management of the Parent.


 


55





















 


5.6                                 Keeping
of Records and Books of Account. 
Keep adequate records and books of account reflecting all financial
transactions in conformity with Generally Accepted Accounting Principles,
consistently applied, and in material conformity with all applicable
requirements of any Governmental Agency having regulatory jurisdiction over
Parent or any of its Subsidiaries.


 


5.7                                 Use
of Proceeds.  Use the proceeds of
Loans on the Effective Date:


 


(a)                                  to renew the outstanding principal
balance of the Loans under the Existing Credit Agreement;


 


(b)                                 to repay in full the obligations under
the Caesars Credit Agreement (other than any Caesars Letters of Credit
designated pursuant to Section 8.1(a)(xi));


 


(c)                                  to finance a portion of the cash
consideration payable pursuant to the Caesars Merger Agreement;


 


(d)                                 pay fees and expenses associated with the
Caesars Merger Agreement, this Agreement and the transactions contemplated
thereby; and


 


on
the Effective Date and thereafter for working capital and general corporate
purposes of Parent and its Subsidiaries including without limitation capital
expenditures, share repurchases, commercial paper backup and acquisitions of
equity securities or assets of other Persons, in each case to the extent not
prohibited by the Loan Documents.


 


56





















 


ARTICLE 6

NEGATIVE COVENANTS


 


So long as any Advance remains unpaid, or any other
Obligation remains unpaid or unperformed, or any portion of the Commitments
remains in force, Parent and each Borrower shall not, and shall not permit any
of their respective Subsidiaries to, unless the Administrative Agent (with the
written approval of the Requisite Lenders) otherwise consents:


 


6.1                                 Consolidations,
Mergers and Sales of Assets.  Merge
or consolidate with or into any Person, or sell lease or otherwise transfer all
or any substantial part of the assets of Parent and its Subsidiaries, taken as
a whole, to any Person, except:


 


(a)                                  the Caesars Merger;


 


(b)                                 mergers and consolidations of a Subsidiary
of a Borrower into that Borrower or a Subsidiary thereof (with that Borrower or
the Subsidiary as the surviving entity) or of Subsidiaries of the Borrowers
with each other;


 


(c)                                  a merger or consolidation of a Borrower
or any Subsidiary thereof with any other Person, provided that:


 


(i)                                     either:


 


(A)                              the Borrower or the Subsidiary is the
surviving entity; or


 


(B)                                the surviving entity is a corporation
organized under the Laws of a State of the United States of America and, as of
the date of such merger or consolidation, expressly assumes, by an instrument
satisfactory in form and substance to the Requisite Lenders, the Obligations of
the relevant Borrower or the Subsidiary, as the case may be;


 


(ii)                                  giving
effect thereto, no Default or Event of Default exists or would result
therefrom; and


 


(iii)                               giving
pro forma effect thereto, Borrowers are in compliance with the covenants set
forth in Sections 6.5 and 6.6.


 


6.2                                 Hostile
Tender Offers.  Make any offer to
purchase or acquire, or consummate a purchase or acquisition of, 5% or more of
the capital stock of any corporation or other equity securities of any business
entity if the board of directors or management of such corporation or business
entity has notified Parent or any of its Subsidiaries in writing that it
opposes such offer or purchase and such notice has not been withdrawn or
superseded.


 


6.3                                 Change
in Nature of Business.  Make any
material change in the nature of the business of Parent and its Subsidiaries,
taken as a whole, or acquire more than 49% of the capital stock or other equity
securities of any Person which is engaged in a line of business other than the
lines of business reasonably related to or incidental to the business engaged
in by Parent and its Subsidiaries, provided that neither the Caesars
Merger nor any other transaction contemplated by the public filings of Parent
and the Company with the Commission as of the date of the Signing Date shall be
deemed to violate this covenant.


 


57





















 


6.4                                 Liens,
Negative Pledges, Sale Leasebacks and Rights of Others.  Create, incur, assume or suffer to exist any
Lien, Negative Pledge or Right of Others of any nature upon or with respect to
any of their respective Properties, whether now owned or hereafter acquired, or
enter into any Sale and Leaseback with respect to any such Properties except:


 


(a)                                  Permitted Encumbrances and Permitted
Rights of Others;


 


(b)                                 Liens and Negative Pledges under the Loan
Documents;


 


(c)                                  other existing Liens, Negative Pledges
and Rights of Others existing on the Signing Date and disclosed in Schedule 4.7
(or not required to be disclosed therein under Section 4.7) and any
renewals or extensions thereof; provided that the obligations secured or
benefited thereby are not increased;


 


(d)                                 Liens, Negative Pledges and Rights of
Others existing on the Signing Date in respect of the assets of Caesars and its
Subsidiaries and not created in contemplation of the Caesars Merger or this
Agreement;


 


(e)                                  Until the date which is ninety days
following the Signing Date, any Lien, Negative Pledge or Right of Others on
shares of any equity security or any warrant or option to purchase an equity
security or any security which is convertible into an equity security issued by
any Subsidiary of Parent that holds, directly or indirectly through a holding
company or otherwise, a license to conduct gaming under any Gaming Law, and in
the proceeds thereof; provided that this clause shall apply only so long
as the Gaming Laws of the relevant jurisdiction provide that the creation of
any restriction on the disposition of any of such securities shall not be
effective and, if such Gaming Laws at any time cease to so provide, then this
clause shall be of no further effect; and provided  further that
if at any time Parent or any of its Subsidiaries creates or suffers to exist a
Lien or Negative Pledge covering such securities in favor of the holder of any
other Indebtedness, it will (subject to any approval required under such Gaming
Laws) concurrently grant a pari-passu Lien or Negative Pledge likewise covering
such securities in favor of the Administrative Agent for the benefit of the
Lenders;


 


(f)                                    Liens on Property acquired or constructed
by Parent or any of its Subsidiaries (other than the Property of Caesars and
its Subsidiaries acquired pursuant to the Caesars Merger), and in the proceeds
thereof, that:


 


(i)                                     were
in existence at the time of the acquisition or construction of such Property or
were created at or within 90 days after such acquisition or construction; and


 


(ii)                                  secure
(in the case of Liens not in existence at the time of acquisition of the
Property) only the unpaid portion of the acquisition or construction price for
such Property, or monies borrowed that were used to pay such acquisition or
construction price;


 


(g)                                 Liens securing Indebtedness (including
Capital Lease Obligations) that replaces or refinances Indebtedness secured by
Liens permitted under clause (f); provided that such Liens cover
only the same Property as the Liens securing the Indebtedness replaced or
refinanced;


 


58





















 


(h)                                 Liens, Negative Pledges and Rights of
Others held by joint venture partners and any assignees thereof, and lenders
thereto and any assignees thereof, with respect to the interests of Parent and
its Subsidiaries in:


 


(i)                                     that
joint venture and the proceeds thereof; or


 


(ii)                                  the
capital stock or other equity ownership interests held by any Joint Venture
Holding Company in that joint venture and the proceeds thereof, provided,
in each case, that such Liens, Negative Pledges and Rights of Others shall
secure and relate only the obligations of such joint venture or Contingent
Obligations permitted by Section 6.7(g);


 


(i)                                     Liens, Negative Pledges and Rights of
Others in favor of counterparties to agreements, and assignees thereof, entered
into by Parent and its Subsidiaries in the ordinary course of business on the
interests of Parent and its Subsidiaries under such agreements and the proceeds
thereof, provided that such Liens, Negative Pledges and Rights of Others shall
secure and relate only to restrictions on transfer of the rights of Parent and
its Subsidiaries to the holders thereof under the relevant agreement;


 


(j)                                     Liens on Cash securing only Defeased
Debt; and


 


(k)                                  Liens not otherwise permitted by the
foregoing clauses of this Section 6.4 encumbering assets of the Parent and
its Subsidiaries having an aggregate fair market value which is not in excess
of 10% of Net Tangible Assets at any time.


 


6.5                                 Total
Debt Ratio.  Permit the Total Debt
Ratio as of the last day of any Fiscal Quarter to exceed (a) 5.00:1.00 for any
Fiscal Quarter through the Fiscal Quarter which is the fourth full
Fiscal Quarter following the Effective Date or (b) 4.50:1.00 as of the last day
of any subsequent Fiscal Quarter.


 


6.6                                 Interest
Coverage Ratio.  Permit the Interest
Coverage Ratio to be less than 3.00:1.00 as of the last day of any Fiscal
Quarter.


 


6.7                                 Subsidiary
Indebtedness.  Permit any Subsidiary
of Parent which is not a Borrower hereunder to create, assume, incur or suffer
to exist any Indebtedness or Contingent Obligations with respect to
Indebtedness other than:


 


(a)                                  Defeased Debt;


 


(b)                                 secured Indebtedness (including Capital
Lease Obligations) and Contingent Obligations which are permitted by
Sections 6.4(f) or 6.4(g);


 


(c)                                  unsecured Indebtedness and Contingent
Obligations which were created, assumed or incurred by such Subsidiary prior to
its acquisition by Parent and its Subsidiaries (and not in anticipation of such
acquisition) but not any refinancings, renewals or extensions thereof;


 


(d)                                 letters of credit, surety bonds and other
similar forms of credit enhancement for such Subsidiaries incurred in the
ordinary course of their business;


 


59





















 


(e)                                  Intercompany Debt, provided such
Indebtedness is not subject to any Lien (other than Liens in favor of the
Administrative Agent and the Lenders);


 


(f)                                    Contingent Obligations of Management
Companies consisting of guarantees of Indebtedness of Persons which are the
counterparties to any management agreement, development agreement or other
similar instruments to which such Management Companies are also party, provided
that:


 


(i)                                     the
assets of each Management Company issuing any such guarantees shall not exceed
1.0% of Net Tangible Assets at any time; and


 


(ii)                                  the
aggregate amount of assets of all Management Companies issuing guarantees
permitted by this Section 6.7(f) shall not exceed 5% of Net Tangible
Assets at any time;


 


(g)                                 Contingent Obligations of Joint Venture
Holding Companies consisting of guarantees of Indebtedness of Persons in which
such Joint Venture Holding Companies own equity securities; provided  that
the other Persons owning such equity securities have also ratably guaranteed
such Indebtedness; and


 


(h)                                 other Indebtedness in an aggregate amount
not to exceed $50,000,000 at any time outstanding.


 


60





















 


ARTICLE 7

INFORMATION AND REPORTING REQUIREMENTS


 


7.1                                 Financial
and Business Information.  So long as
any Advance remains unpaid, or any other Obligation remains unpaid or
unperformed, or any portion of the Aggregate Commitments remains in force,
Parent and the Borrowers shall, unless the Administrative Agent (with the
written approval of the Requisite Lenders) otherwise consents, deliver to the
Administrative Agent and the Lenders, at Parent’s and Borrowers’ sole expense:


 


(a)                                  As soon as practicable, and in any event
within 45 days after the end of each Fiscal Quarter (other than the fourth
Fiscal Quarter in any Fiscal Year), the consolidated balance sheet of Parent
and its Subsidiaries as at the end of such Fiscal Quarter and the consolidated
statement of operations for each Fiscal Quarter, and its statement of cash
flows for the portion of the Fiscal Year ended with such Fiscal Quarter and as
at and for the portion of the Fiscal Year ended with such Fiscal Quarter, all
in reasonable detail.  Such financial
statements shall be certified by a Senior Officer of Parent as fairly
presenting the financial condition, results of operations and cash flows of
Parent and its Subsidiaries in accordance with Generally Accepted Accounting
Principles (other than footnote disclosures), consistently applied, as at such
date and for such periods, subject only to normal year-end accruals and audit
adjustments;


 


(b)                                 As soon as practicable, and in any event
prior to the penultimate Business Day of February in each Fiscal Year, a
Certificate of a Responsible Official setting forth the Total Debt Ratio as of
the last day of the fourth Fiscal Quarter of the preceding year, and providing
reasonable detail as to the calculation thereof, which calculations shall be
based on the preliminary unaudited financial statements of Parent and its
Subsidiaries for such Fiscal Quarter;


 


(c)                                  As soon as practicable, and in any event
within 120 days after the end of each Fiscal Year, the consolidated balance
sheet of Parent and its Subsidiaries as at the end of such Fiscal Year and the
consolidated statements of operations, shareholders’ equity and cash flows, in
each case of Parent and its Subsidiaries for such Fiscal Year as at and for the
Fiscal Year, all in reasonable detail. 
Such financial statements shall be prepared in accordance with Generally
Accepted Accounting Principles, consistently applied, and such consolidated
balance sheet and consolidated statements shall be accompanied by a report and
opinion of independent public accountants of recognized standing selected by
Parent and reasonably satisfactory to the Requisite Lenders, which report and opinion
shall be prepared in accordance with generally accepted auditing standards as
at such date, and shall not be subject to any qualifications or
exceptions.  Such accountants’ report and
opinion shall be accompanied by a certificate stating that, in making the
examination pursuant to generally accepted auditing standards necessary for the
certification of such financial statements and such report, such accountants
have obtained no knowledge of any Default or, if, in the opinion of such
accountants, any such Default shall exist, stating the nature and status of
such Default, and stating that such accountants have reviewed Parent’s and
Borrowers’ financial calculations as at the end of such Fiscal Year (which
shall accompany such certificate) under Section 6.5 and 6.6, have read
such Sections (including the definitions of all defined terms used therein) and
that nothing has come to the attention of such accountants in the course of
such examination that would cause them to believe that the same were not calculated
by Parent and the Borrowers in the manner prescribed by this Agreement;


 


61





















 


(d)                                 As soon as practicable, and in any event
within 90 days after the commencement of each Fiscal Year, a budget and projection
by Fiscal Quarter for that Fiscal Year and by Fiscal Year for the next four
succeeding Fiscal Years, including for the first such Fiscal Year,
projected quarterly consolidated balance sheets, statement of operations and
statements of cash flow and, for the remaining four Fiscal Years, projected
annual consolidated condensed balance sheets and statements of operations and
cash flow, of Parent and its Subsidiaries, all in reasonable detail;


 


(e)                                  Promptly after the same are available,
copies of each annual report, proxy or financial statement or other report or
communication sent to the shareholders of Parent, and copies of all annual,
regular, periodic and special reports and registration statements which Parent
may file or be required to file with the Securities and Exchange Commission
under Sections 13 or 15(d) of the Securities Exchange Act of 1934 and not
otherwise required to be delivered to the Lenders pursuant to other provisions
of this Section 7.1;


 


(f)                                    Promptly after the same are available,
copies of the Nevada “Regulation 6.090 Report” and “6-A Report” and
copies of any written communication to Parent or any of its Subsidiaries from
any Gaming Board advising it of a violation of or non-compliance with, any
Gaming Law by Parent or any of its Subsidiaries;


 


(g)                                 Promptly after request by any Creditor,
copies of any other report or other document that was filed by Parent or any of
its Subsidiaries with any Governmental Agency;


 


(h)                                 As soon as practicable, and in any event
within three Business Days after a Senior Officer becomes aware of the
existence of any condition or event which constitutes a Default, telephonic
notice specifying the nature and period of existence thereof, and, no more than
three Business Days after such telephonic notice, written notice again
specifying the nature and period of existence thereof and specifying what
action Parent or any of its Subsidiaries are taking or propose to take with
respect thereto;


 


(i)                                     Promptly upon a Senior Officer becoming
aware of any litigation, governmental investigation or any proceeding
(including any litigation or proceeding by or subject to decision by any Gaming
Board) pending:


 


(i)                                     against
Parent or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect;


 


(ii)                                  with
respect to any material Indebtedness of Parent or any of its Subsidiaries; or


 


(iii)                               with
respect to the Loan Documents, notice of the existence of the same;


 


(j)                                     Promptly after the Borrowers have
notified the Administrative Agent of any intention by the Borrowers to treat
the Loans and/or Letters of Credit as being a “reportable transaction” (within
the meaning of Treasury Regulation Section 1.6011-4) a duly completed copy
of IRS Form 8886 or any successor form; and


 


(k)                                  Such other data and information as from
time to time may be reasonably requested by any Creditor through the
Administrative Agent.


 


7.2                                 Compliance
Certificates.  So long as any Advance
remains unpaid, or any other Obligation remains unpaid or unperformed, or any
portion of the Commitments remains outstanding, Parent


 


62





















 


and Borrowers shall
deliver to the Administrative Agent and the Lenders, at Parent’s and Borrowers’
sole expense, concurrently with the financial statements required pursuant to
Sections 7.1(a) and 7.1(c), a Compliance Certificate signed on Parent’s
and Borrowers’ behalf by a Senior Officer.


 


7.3                                 Borrower
Materials.  Parent and each of the
Borrowers hereby acknowledges that (a) the Administrative Agent and/or the Lead
Arrangers will make available to the Lenders and the Issuing Lenders materials
and/or information provided by or on behalf of the Parent and the Borrowers
hereunder (collectively, “Borrower Materials”) by posting the Borrower
Materials on IntraLinks or another similar electronic system (the “Platform”)
and (b) certain of the Lenders may be “public-side” Lenders (i.e. Lenders that
do not wish to receive material non-public information with respect to the
Parent, the Borrowers or their securities) (each a “Public Lender”).  Parent and each of the Borrowers hereby
agrees that (w) all Borrower Materials that are to be made available to Public
Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum,
shall mean that the word “PUBLIC” shall appear prominently on the first page
thereof:; (x) by marking Borrower Materials “PUBLIC,” Parent and each Borrower
shall be deemed to have authorized the Administrative Agent, the Arranger, the
Issuing Lenders and the Lenders to treat such Borrower Materials as either
publicly available information or not material information (although it may be
sensitive and proprietary) with respect to the Parent, the Borrowers or their
securities for purposes of United States Federal and state securities laws; (v)
all Borrower Materials marked “PUBLIC” are permitted to be made available
through a portion of the Platform designated “Public Investor,” and (z) the
Administrative Agent and the Arranger shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Investor.”


 


63





















 


ARTICLE 8

CONDITIONS


 


8.1                                 Initial Advances, Etc.  The
obligation of each Lender to make the initial Advance to be made by it, the
obligation of the Swing Line Lenders to make Swing Line Advances and the
obligation of the relevant Issuing Lenders to issue the initial Letters of
Credit, are each subject to the following conditions precedent, each of which shall
be satisfied prior to the making of the initial Advances (unless all of the
Lenders, in their sole and absolute discretion, shall agree otherwise):


 


(a)                                  The Administrative Agent shall have
received all of the following, each of which shall be originals unless
otherwise specified, each properly executed by a Responsible Official of each
party thereto, each dated as of the Effective Date and each in form and
substance satisfactory to the Administrative Agent:


 


(i)                                     at
least one executed counterpart of this Agreement, together with arrangements
satisfactory to the Administrative Agent for additional executed counterparts,
sufficient in number for distribution to the Lenders, Parent and the Company;


 


(ii)                                  Committed
Advance Notes executed by the Company in favor of each Lender, each in a
principal amount equal to that Lender’s Applicable Percentage;


 


(iii)                               the
Swing Line Documents with Bank of America and any other Swing Line Lenders then
designated by the Company;


 


(iv)                              the
Parent Guaranty executed by Parent;


 


(v)                                 with
respect to the Parent and the Company, such documentation as the Administrative
Agent may require to establish the due organization, valid existence and good
standing of Parent and the Company, its authority to execute, deliver and
perform any Loan Documents to which it is a Party, the identity, authority and
capacity of each Responsible Official thereof authorized to act on its behalf, including
certified copies of articles of incorporation and amendments thereto, bylaws
and amendments thereto, certificates of good standing, certificates of
corporate resolutions, incumbency certificates and Certificates of Responsible
Officials;


 


(vi)                              the
Opinions of Counsel;


 


(vii)                           such
assurances as the Administrative Agent deems appropriate that the relevant Gaming
Boards have approved the transactions contemplated by the Loan Documents
(including the consummation of the Caesars Merger Agreement) to the extent that
such approval is required by applicable Gaming Laws or as otherwise permitted
under Schedule 4.3;


 


(viii)                        Indicative
Debt Ratings shall have been issued in respect of the Company (after giving
effect to the Caesars Merger and the other transactions contemplated by the
Caesars Merger Agreement to occur on the Effective Date) by Moody’s and
S&P;


 


(ix)                                a Certificate
of a Responsible Official signed on Parent’s and the Company’s behalf by a
Senior Officer setting forth (A) the combined pro forma Total Debt


 


64





















 


Ratio
of the Company and Caesars, after giving pro forma effect to the Caesars
Merger and the incurrence of all indebtedness required to consummate the
Caesars Merger as of the Effective Date, or (B) the then effective Indicative
Debt Rating as of the Effective Date (which ever then governs the applicable
Pricing Level);


 


(x)                                   Parent
and the Company shall have delivered, or shall concurrently issue, any writings
required by the Administrative Agent to designate the Obligations as “Designated
Senior Indebtedness” or “Designated Senior Debt” under the indentures governing
any Subordinated Debt then outstanding (including any Assumed Caesars
Subordinated Debt);


 


(xi)                                a
pay-off letter agreement with Bank of America terminating the Caesars Credit
Agreement, contingent upon and effective concurrently with the making of the
initial Loans hereunder, provided that any letters of credit issued
thereunder by Lenders party to this Agreement which have agreed to be Issuing
Lenders hereunder may be continued as Letters of Credit hereunder at the
request of the Borrowers by a writing delivered to the Administrative Agent
prior to the Effective Date designating such letters as “Caesars Letters of
Credit” under this Agreement;


 


(xii)                             a
Certificate of a Responsible Official signed on Parent’s and the Company’s
behalf by a Senior Officer attaching any amendments following the Signing Date
to the Caesars Merger Agreement (each of which shall be reasonably acceptable
to the Administrative Agent);


 


(xiii)                          a
Certificate of a Responsible Official signed on Parent’s and the Company’s behalf
by a Senior Officer certifying that the conditions specified in Sections 8.1(f)
and 8.1(g) have been satisfied; and


 


(xiv)                         such
other assurances, certificates, documents, consents or opinions as the
Administrative Agent reasonably may require.


 


(b)                                 The Administrative Agent shall be
satisfied that the Caesars Merger is in a position to occur immediately
following the making of the initial Loans hereunder.


 


(c)                                  The fees payable pursuant to
Sections 3.2, 3.3 and 3.6 shall have been paid.


 


(d)                                 The reasonable costs and expenses of the
Administrative Agent and the Lead Arrangers in connection with the preparation
of the Loan Documents payable pursuant to Section 11.3, and invoiced to
the Parent prior to the Effective Date, shall have been paid.


 


(e)                                  All breakage costs associated with the
termination of “Eurodollar Rate Loans” under the Existing Credit Agreement
shall have been paid.


 


(f)                                    The representations and warranties of
Parent and the Company contained in Article 4 shall be true and correct.


 


(g)                                 Parent, the Company and any other Parties
shall be in compliance with all the terms and provisions of the Loan Documents,
and after giving effect to the initial Advance no Default or Event of Default
shall have occurred and be continuing.


 


65





















 


(h)                                 Each of the conditions precedent set
forth in this Section 8.1 shall have been completed no later than August 15,
2005.


 


Without limiting the
generality of the provisions of Section 10.4, for purposes of determining
compliance with the conditions specified in this Section 8.1, each Lender
that has signed this Agreement shall be deemed to have consented to, approved
or accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to a
Lender unless the Administrative Agent shall have received notice from such
Lender prior to the proposed Effective Date specifying its objection thereto.


 


8.2                                 Any Increasing Advance, Etc.  The
obligation of each Lender to make any Committed Advance which would increase
the aggregate principal amount of the outstanding Committed Advances, the
obligation of the relevant Issuing Lender to issue each Letter of Credit and
the obligation of the Swing Line Lenders to make Swing Line Advances, is
subject to the following conditions precedent:


 


(a)                                  except


 


(i)                                     for
representations and warranties which expressly speak as of a particular date or
are no longer true and correct as a result of a change which is not a violation
of the Loan Documents and


 


(ii)                                  as
disclosed by Parent and Borrowers and approved in writing by the Requisite
Lenders, the representations and warranties contained in Article 4 (other
than Sections 4.4(a), 4.6 (first sentence), and 4.15) shall be true and correct
on and as of the date of the Advance as though made on that date;


 


(b)                                 there shall not be then pending or
threatened any action, suit, proceeding or investigation against or affecting
Parent or any of its Subsidiaries or any Property of any of them before any
Governmental Agency that constitutes a Material Adverse Effect;


 


(c)                                  the Administrative Agent shall, in the
case of a Committed Advance, have timely received a Request for Loan in
compliance with Article 2 (or telephonic or other request for loan
referred to in the second sentence of Section 2.1(b), if applicable) in
compliance with Article 2 (or, in the proper case, a Request for Letter of
Credit and an Application for Letter of Credit); and


 


(d)                                 the Administrative Agent shall have
received, in form and substance satisfactory to the Administrative Agent, such
other assurances, certificates, documents or consents related to the foregoing
as the Administrative Agent or Requisite Lenders reasonably may require.


 


66





















 


ARTICLE 9

EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT


 


9.1                                 Events
of Default.  The existence or
occurrence of any one or more of the following events, whatever the reason
therefor and under any circumstances whatsoever, shall constitute an Event of
Default:


 


(a)                                  Any Borrower:


 


(i)                                     fails
to pay any principal on any Committed Advance Note or any Swing Line Advance,
or any portion thereof, on the date when due; or


 


(ii)                                  fails
to make any payment with respect to any Letter of Credit when required by Section 2.4(e);
or


 


(b)                                 Parent or any Borrower fails to pay any
interest on any of the Committed Advance Notes, or any fees under
Sections 3.4, 3.5 or 3.6, or any portion thereof, within five Business
Days after the date when due; or fails to pay any other fee or amount payable
to the Lenders under any Loan Document, or any portion thereof, within five
Business Days after demand therefor; or


 


(c)                                  Parent or any Borrower fails, immediately
upon notice from the Administrative Agent, to comply with any of the covenants
contained in Article 6; or


 


(d)                                 Parent or any Borrower fails to comply
with Section 7.1(h) in any respect that is materially adverse to the
interests of the Lenders; or


 


(e)                                  Parent, any Borrower or any other Party
fails to perform or observe any other covenant or agreement (not specified in
clauses (a), (b), (c) or (d) above) contained in any Loan Document on its
part to be performed or observed within thirty Business Days after the giving
of notice by the Administrative Agent on behalf of the Requisite Lenders of
such Default; or


 


(f)                                    Any representation or warranty of Parent
or any Borrower made in any Loan Document, or in any certificate or other
writing delivered by Parent or any Borrower pursuant to any Loan Document,
proves to have been incorrect when made or reaffirmed; or


 


(g)                                 Parent or any of its Significant
Subsidiaries:


 


(i)                                     fails
to pay the principal, or any principal installment, of any present or future
indebtedness for borrowed money of $300,000,000 or more, or any guaranty of
present or future indebtedness for borrowed money of $300,000,000 or more, on
its part to be paid, when due (or within any stated grace period), whether at
the stated maturity, upon acceleration, by reason of required prepayment or
otherwise; or


 


(ii)                                  fails
to perform or observe any other term, covenant or agreement on its part to be
performed or observed, or suffers any event to occur, in connection with any
present or future indebtedness for borrowed money of $300,000,000 or more, or
of any guaranty of present or future indebtedness for borrowed money of
$300,000,000 or more, if as a result of such failure or sufferance any holder
or


 


67





















 


holders thereof (or an agent or trustee on its or
their behalf) has the right to declare such indebtedness due before the date on
which it otherwise would become due; or


 


(h)                                 Any event occurs which gives the holder
or holders of any Subordinated Debt in an aggregate principal amount which is
$300,000,000 or more (or an agent or trustee on its or their behalf) the right
to declare such indebtedness due before the date on which it otherwise would
become due, or the right to require the issuer thereof to redeem or purchase,
or offer to redeem or purchase, all or any portion of any Subordinated Debt
prior to its scheduled maturity; or


 


(i)                                     Any Loan Document, at any time after its
execution and delivery and for any reason other than the agreement of the
Lenders or satisfaction in full of all the Obligations ceases to be in full
force and effect or is declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any respect which, in any such event in
the reasonable opinion of the Requisite Lenders, is materially adverse to the
interests of the Lenders; or any Party thereto denies in writing that it has
any or further liability or obligation under any Loan Document, or purports in
writing to revoke, terminate or rescind same; or


 


(j)                                     A final judgment against the Parent or
any of its Significant Subsidiaries is entered for the payment of money in
excess of $100,000,000 and, absent procurement of a stay of execution, such
judgment remains unsatisfied for thirty calendar days after the date of entry
of judgment, or in any event later than five days prior to the date of any
proposed sale thereunder; or any writ or warrant of attachment or execution or
similar process is issued or levied against all or any material part of the
Property of any such Person and is not released, vacated or fully bonded within
thirty calendar days after its issue or levy; or


 


(k)                                  The Parent or any of its Significant
Subsidiaries institutes or consents to the institution of any proceeding under
a Debtor Relief Law relating to it or to all or any part of its Property, or is
unable or admits in writing its inability to pay its debts as they mature, or
makes an assignment for the benefit of creditors; or applies for or consents to
the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any part of its Property;
or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of that Person
and the appointment continues undischarged or unstayed for 60 calendar days; or
any proceeding under a Debtor Relief Law relating to any such Person or to all
or any part of its Property is instituted without the consent of that Person
and continues undismissed or unstayed for 60 calendar days; or


 


(l)                                     The occurrence of an Event of Default (as
such term is or may hereafter be specifically defined in any other Loan
Document) under any other Loan Document; or


 


(m)                               Any determination is made by a court of
competent jurisdiction that any Subordinated Debt is not subordinated in
accordance with its terms to the Obligations, provided that for so long
as such determination is effectively stayed during any pending appeal the same
shall not constitute an Event of Default; or


 


(n)                                 Any Pension Plan maintained by the Parent
or any of its Subsidiaries is determined to have a material “accumulated
funding deficiency” as that term is defined in Section 302 of ERISA and
the result is a Material Adverse Effect; or


 


68





















 


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


 


9.2                                 Remedies
Upon Event of Default.  Without
limiting any other rights or remedies of the Creditors provided for elsewhere
in this Agreement, or the Loan Documents, or by applicable Law, or in equity,
or otherwise:


 


(a)                                  Upon the occurrence, and during the
continuance, of any Event of Default other  than an Event of
Default described in Section 9.1(k):


 


(i)                                     the
commitment to make Advances and all other obligations of the Creditors and all
rights of Parent, Borrowers and any other Parties under the Loan Documents
shall be suspended without notice to or demand upon Parent or the Borrowers ,
which are expressly waived by Parent and the Borrowers, except that all
of the Lenders or the Requisite Lenders (as the case may be, in accordance with
Section 11.2) may waive an Event of Default or, without waiving,
determine, upon terms and conditions satisfactory to the Lenders or Requisite
Lenders, as the case may be, to reinstate the Commitments and make further
Advances, which waiver or determination shall apply equally to, and shall be
binding upon, all the Lenders; and


 


(ii)                                  the
Requisite Lenders may request the Administrative Agent to, and the
Administrative Agent thereupon shall, terminate the Commitments, demand that
Borrowers deposit cash collateral for all Letters of Credit in the amount
thereof with the Administrative Agent and/or declare all or any part of the
unpaid principal of all Committed Advance Notes, all interest accrued and
unpaid thereon and all other amounts payable under the Loan Documents to be
forthwith due and payable, whereupon the same shall become and be forthwith due
and payable, without protest, presentment, notice of dishonor, demand or
further notice of any kind, all of which are expressly waived by Parent and the
Borrowers.


 


(b)                                 Upon the occurrence of any Event of
Default described in Section 9.1(k):


 


(i)                                     the
commitment to make Advances and all other obligations of the Creditors and all
rights of Parent, Borrowers and any other Parties under the Loan Documents
shall terminate without notice to or demand upon Parent or Borrowers, which are
expressly waived by Parent and Borrowers, except that all the Lenders
may waive the Event of Default or, without waiving, determine, upon terms and
conditions satisfactory to all the Lenders, to reinstate the Commitments and
make further Advances, which determination shall apply equally to, and shall be
binding upon, all the Lenders; and


 


(ii)                                  the
unpaid principal of all Committed Advance Notes, all interest accrued and
unpaid thereon and all other amounts payable under the Loan Documents shall be
forthwith due and payable, without protest, presentment, notice of dishonor,
demand or further notice of any kind, all of which are expressly waived by
Parent


 


69





















 


and Borrowers, and Borrowers shall be obligated to
Cash Collateralize the L/C Obligations (in an amount equal to the then
Outstanding Amount thereof).


 


(c)                                  Upon the occurrence of any Event of
Default, the Creditors, or any of them, without notice to (except as
expressly provided for in any Loan Document) or demand upon Parent or
Borrowers, which are expressly waived by Borrowers (except as to notices
expressly provided for in any Loan Document), may proceed (but only with the
consent of the Requisite Lenders) to protect, exercise and enforce their rights
and remedies under the Loan Documents against Parent and the Borrowers and any
other Parties and such other rights and remedies as are provided by Law or
equity; provided that, it is agreed as among the Creditors that,
following any Event of Default consisting of a failure of a Borrower to make
any payment hereunder when due (whether at stated maturity, by acceleration or
otherwise), each Creditor may independently pursue its legal remedies under
this Agreement, its Committed Advance Notes and the other Loan Documents
against Parent and such Borrower in respect of any such defaulted payments
without the consent of the other Lenders, the Issuing Lenders or the
Administrative Agent (except to the extent that such payment default has been
cured), upon the earliest of:


 


(i)                                     the
acceleration of the Obligations;


 


(ii)                                  any
bankruptcy or insolvency event of the types described in Section 9.1(k) in
respect of Parent or such Borrower; and


 


(iii)                               45
days following the date of such payment default, provided that no individual
Creditor may, without the consent of the Requisite Lenders, purport to accelerate
the Obligations.


 


(d)                                 The order and manner in which the Lenders’
rights and remedies are to be exercised shall be determined by the Requisite
Lenders in their sole discretion, and all payments received by the Creditors,
shall be applied first to the costs and expenses (including attorneys’ fees and
disbursements and the allocated costs of attorneys employed by the
Administrative Agent) of the Creditors, and thereafter paid pro rata to the
Lenders in the same proportions that the aggregate Obligations owed to each
Lender under the Loan Documents bear to the aggregate Obligations owed under
the Loan Documents to all the Lenders, without priority or preference among the
Lenders.  Regardless of how each Lender
may treat payments for the purpose of its own accounting, for the purpose of
computing the Obligations hereunder and under the Committed Advance Notes,
payments shall be applied first, to the costs and expenses of the
Creditors, as set forth above, second, to the payment of accrued and
unpaid interest due under any Loan Documents to and including the date of such
application (ratably, and without duplication, according to the accrued and
unpaid interest due under each of the Loan Documents), and third, to the
payment of all other amounts (including principal and fees) then owing to the
Creditors under the Loan Documents.  No
application of payments will cure any Event of Default, or prevent
acceleration, or continued acceleration, of amounts payable under the Loan Documents,
or prevent the exercise, or continued exercise, of rights or remedies of the
Lenders hereunder or thereunder or at Law or in equity.


 


70





















 


ARTICLE 10

ADMINISTRATIVE AGENT


 


10.1                           Appointment
and Authority.  Each of the Lenders
and the Issuing Lender hereby irrevocably appoints Bank of America to act on
its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto.  The
provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the Issuing Lender, and neither Parent,
any Borrower nor any other Loan Party shall have rights as a third party
beneficiary of any of such provisions.


 


10.2                           Rights
as a Lender.  The Person serving as
the Administrative Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not the Administrative Agent and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its
individual capacity.  Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with Parent, the Borrowers or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.


 


10.3                           Exculpatory
Provisions.  The Administrative Agent
shall not have any duties or obligations except those expressly set forth
herein and in the other Loan Documents. 
Without limiting the generality of the foregoing, the Administrative
Agent:


 


(a)                                  shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing;


 


(b)                                 shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Administrative Agent is required to exercise as directed in writing by
the Requisite Lenders (or such other number or percentage of the Lenders as
shall be expressly provided for herein or in the other Loan Documents), provided
that the Administrative Agent shall not be required to take any action
that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability or that is contrary to any Loan Document or
applicable law; and


 


(c)                                  shall not, except as expressly set forth
herein and in the other Loan Documents, have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Borrower or any of its Affiliates that is communicated to or obtained by the
Person serving as the Administrative Agent or any of its Affiliates in any
capacity.


 


(d)                                 shall not be liable for any action taken
or not taken by it


 


(i)                                     with
the consent or at the request of the Requisite Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Administrative Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in Sections 9.2 and 11.2) or


 


(ii)                                  in
the absence of its own gross negligence or willful misconduct.


 


71





















 


(e)                                  shall be deemed not to have knowledge of
any Default unless and until notice describing such Default is given to the
Administrative Agent by the Borrower, a Lender or the Issuing Lender.


 


(f)                                    shall not be responsible for or have any
duty to ascertain or inquire into:


 


(i)                                     any statement, warranty or representation
made in or in connection with this Agreement or any other Loan Document;


 


(ii)                                  the contents of any certificate, report
or other document delivered hereunder or thereunder or in connection herewith
or therewith;


 


(iii)                               the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Default;


 


(iv)                              the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document; or


 


(v)                                 the satisfaction of any condition set
forth in Article 8 or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.


 


10.4                           Reliance
by Administrative Agent.  The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent, statement,
instrument, document or other writing (including any electronic message,
Internet or intranet website posting or other distribution) believed by it to
be genuine and to have been signed, sent or otherwise authenticated by the
proper Person.  The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon.  In determining
compliance with any condition hereunder to the making of a Loan, or the
issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the Issuing Lender, the Administrative Agent may
presume that such condition is satisfactory to such Lender or the Issuing
Lender unless the Administrative Agent shall have received notice to the
contrary from such Lender or the Issuing Lender prior to the making of such
Loan or the issuance of such Letter of Credit. 
The Administrative Agent may consult with legal counsel (who may be
counsel for the Borrowers), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.


 


10.5                           Delegation
of Duties.  The Administrative Agent
may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more sub
agents appointed by the Administrative Agent. 
The Administrative Agent and any such sub agent may perform any and all
of its duties and exercise its rights and powers by or through their respective
Related Parties.  The exculpatory
provisions of this Article shall apply to any such sub agent and to the
Related Parties of the Administrative Agent and any such sub agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent.


 


10.6                           Resignation
by Administrative Agent.


 


(a)                                  The Administrative Agent may at any time
give notice of its resignation to the Lenders, the Issuing Lender and the
Borrower.  Upon receipt of any such
notice of resignation, the


 


72





















 


Requisite
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States.  If no such successor shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the Issuing Lender, appoint a successor Administrative Agent
meeting the qualifications set forth above; provided that if the Administrative
Agent shall notify the Borrowers and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and:


 


(i)                                     the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents; and


 


(ii)                                  all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender and
the Issuing Lender directly, until such time as the Requisite Lenders appoint a
successor Administrative Agent as provided for above in this Section 10.6.


 


(b)                                 Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this Section 10.6).  The
fees payable by the Borrowers to a successor Administrative Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
Borrowers and such successor.  After the
retiring Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article shall continue in effect for the
benefit of such retiring Administrative Agent, its sub agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.


 


(c)                                  Any resignation by Bank of America as
Administrative Agent pursuant to this Section 10.6 shall also constitute
its resignation as Issuing Lender and as a Swing Line Lender.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder:


 


(i)                                     such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring Administrative Agent;


 


(ii)                                  the
retiring Administrative Agent shall be discharged from all of their respective
duties and obligations hereunder or under the other Loan Documents; and


 


(iii)                               the
successor Administrative Agent shall issue letters of credit in substitution
for the Letters of Credit, if any, issued by the retiring Administrative Agent
and outstanding at the time of such succession or make other arrangement
satisfactory to the retiring Administrative Agent to effectively assume the
obligations of the retiring Administrative Agent with respect to such Letters
of Credit.


 


73





















 


10.7                           Non-Reliance
on Administrative Agent and Other Lenders. 
Each Lender and the Issuing Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. 
Each Lender and the Issuing Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document
furnished hereunder or thereunder.


 


10.8                           No
Other Duties, Etc.  Anything herein
to the contrary notwithstanding, none of the Lead Arrangers, Syndication Agent,
Co-Documentation Agents or listed on the cover page hereof shall have any
powers, duties or responsibilities under this Agreement or any of the other
Loan Documents, except in its capacity, as applicable, as the Administrative Agent,
a Lender or the Issuing Lender hereunder.


 


10.9                           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 any Loan Party, the Administrative Agent (irrespective of whether
the principal of any Loan or L/C Obligation shall then be due and payable as
herein expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on any Loan Party) shall be
entitled and empowered, by intervention in such proceeding or otherwise:


 


(a)                                  to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans,
L/C Obligations and all other Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of the Lenders, the Issuing Lender and the Administrative Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Lenders, the Issuing Lender and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders,
the Issuing Lender and the Administrative Agent under Sections 3.2, 3.3,
3.4, 3.5, and 3.6) allowed in such judicial proceeding; and


 


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


 


and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender and the
Issuing Lender to make such payments to the Administrative Agent and, in the
event that the Administrative Agent shall consent to the making of such
payments directly to the Lenders and the Issuing Lender, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under
Sections 3.2, 3.3, 3.4, 3.5 and 3.6. 
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender or
the Issuing Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any
Lender in any such proceeding.


 


74





















 


10.10                     No
Obligations of Parent or Borrowers. 
Nothing contained in this Article 10 shall be deemed to impose upon
Parent or Borrowers any obligation in respect of the due and punctual
performance by the Administrative Agent of its obligations to the Lenders under
any provision of this Agreement, and Parent and Borrowers shall have no
liability to any Creditor in respect of any failure by any Creditor to perform
any of its obligations to any other Creditor under this Agreement.


 


75










 













 


ARTICLE 11

MISCELLANEOUS


 


11.1                           Cumulative
Remedies; No Waiver.  The rights,
powers, privileges and remedies of the Creditors provided herein or in any
Committed Advance Note or other Loan Document are cumulative and not exclusive
of any right, power, privilege or remedy provided by Law or equity.  No failure or delay on the part of any
Creditor in exercising any right, power, privilege or remedy may be, or may be
deemed to be, a waiver thereof; nor may any single or partial exercise of any
right, power, privilege or remedy preclude any other or further exercise of the
same or any other right, power, privilege or remedy.  The terms and conditions of Article 8
hereof are inserted for the sole benefit of the Creditors; the same may be
waived in whole or in part, with or without terms or conditions, in respect of
any Loan or Letter of Credit without prejudicing the Creditors rights to assert
them in whole or in part in respect of any other Loan or Letter of Credit.


 


11.2                           Amendments;
Consents.  No amendment, modification,
supplement, extension, termination or waiver of any provision of this Agreement
or any other Loan Document, no approval or consent thereunder, and no consent
to any departure by Parent, Borrowers or any other Party therefrom, may in any
event be effective unless in writing signed by the Requisite Lenders (and, in
the case of any amendment, modification or supplement of or to any Loan
Document to which Parent or any Borrower is a party, signed by Parent and that
Borrower and, in the case of any amendment, modification or supplement to Article 10,
signed by the Administrative Agent), and then only in the specific instance and
for the specific purpose given; provided, however, that without
the approval in writing of all the Lenders, no amendment, modification,
supplement, termination, waiver or consent may be effective:


 


(a)                                  To forgive any principal Obligation,
defer any required payment of any Obligation, reduce the amount or rate of
interest payable on any Loan or Advance without the consent of the affected
Lender, increase the amount of the Commitments (except as set forth in Section 2.6)
or increase the Applicable Percentage of any Lender or decrease the amount of
any letter of credit fee or facility fee payable to any Lender (other than as a
result of exercising rights under Section 11.14), or reduce any other fee
or amount payable to the Creditors under the Loan Documents without the consent
of each affected Creditor or to waive an Event of Default consisting of the
failure of any Borrower to pay when due principal, interest or any facility fee
or letter of credit fee;


 


(b)                                 To postpone any date fixed for any
payment of principal of, prepayment of principal of or any installment of
interest on, any Committed Advance Note or any installment of any facility fee
or letter of credit fee, or to extend the term of the Commitments;


 


(c)                                  To amend the provisions of the definition
of “Requisite Lenders” or this Section 11.2 or to amend or waive Section 6.2;


 


(d)                                 To release or subordinate the Parent
Guaranty;


 


(e)                                  To amend any provision of this Agreement
that expressly requires the consent or approval of all the Lenders;


 


(f)                                    To waive the condition precedent 8.1(h).


 


Any
amendment, modification, supplement, termination, waiver or consent pursuant to
this Section 11.2 shall apply equally to, and shall be binding upon, all
of the Creditors.  If, in


 


76





















 


connection
with any proposed amendment, modification, supplement, termination, waiver or
consent to any of the provisions hereof as contemplated by clauses (a)
through (d), inclusive, of this Section 11.2, the consent of the Requisite
Lenders is obtained, but the consent of one or more of the other Lenders is
required and is not obtained, then the Borrowers shall have the right to
replace such non-consenting Lender with one or more Eligible Assignees in
accordance with Section 11.14(b) if such Eligible Assignee consents to the
proposed amendment, modification, supplement, termination, waiver or consent.


 


11.3                           Costs,
Expenses and Taxes.  The Parent and
Company shall pay the reasonable costs and expenses of the Administrative Agent
and the Lead Arrangers in connection with the negotiation, preparation,
syndication, execution, enforcement, and delivery of the Loan Documents,
including without limitation, the allocated fees and expenses of in-house
counsel, regardless of whether this Agreement ever becomes effective to replace
the Existing Credit Facilities.  The
Borrowers shall pay within two Business Days after demand, accompanied by an
invoice therefor, the reasonable costs and expenses of the Administrative Agent
and the Lead Arrangers in connection with the negotiation, preparation,
syndication, execution and delivery of the Loan Documents and any amendment
thereto or waiver thereof which is requested by Borrowers or is entered into
when any Default or Event of Default exists. 
Following any Event of Default, each Borrower shall pay on demand,
accompanied by an invoice therefor, the reasonable costs and expenses of the Administrative
Agent and each of the other Creditors in connection with the restructuring,
reorganization (including a bankruptcy reorganization) and enforcement or
attempted enforcement of the Loan Documents, and any matter related thereto.  The foregoing costs and expenses shall
include filing fees, recording fees, title insurance fees, appraisal fees,
search fees, and other out-of-pocket expenses and the reasonable fees and
out-of-pocket expenses of any legal counsel (including allocated costs of legal
counsel employed by any Creditor), independent public accountants and other
outside experts retained by any of the Creditors, whether or not such costs and
expenses are incurred or suffered by the Creditors in connection with or during
the course of any bankruptcy or insolvency proceedings of the Parent or any
Subsidiary thereof.  Such costs and
expenses shall also include, in the case of any amendment or waiver of any Loan
Document requested by the Parent or the Borrowers, the administrative costs of
the Administrative Agent reasonably attributable thereto.  Each Borrower shall pay any and all
documentary and other taxes, excluding, in the case of each Creditor and its
Eurodollar Lending Office thereof, (i) taxes imposed on or measured in whole or
in part by its net income or capital and franchise taxes imposed on it, (ii)
any withholding taxes or other taxes based on net income (other than
withholding taxes and taxes based on net income resulting from or attributable
to any change following the Signing Date in any law, rule or regulation or any
change following the Signing Date in the interpretation or administration of
any law, rule or regulation by any Governmental Agency) or (iii) any
withholding taxes or other taxes based on net income for any period with respect
to which it has failed to provide the Parent with the appropriate form or forms
required by Section 11.21, to the extent such forms are then required by
applicable Laws, and all costs, expenses, fees and charges payable or
determined to be payable in connection with the filing or recording of this
Agreement, any other Loan Document or any other instrument or writing to be
delivered hereunder or thereunder, or in connection with any transaction
pursuant hereto or thereto, and shall reimburse, hold harmless and indemnify
the Creditors from and against any and all loss, liability or legal or other
expense with respect to or resulting from any delay in paying or failure to pay
any such tax, cost, expense, fee or charge or that any of them may suffer or incur
by reason of the failure of any Party to perform any of its Obligations.  Any amount payable to the Creditors under
this Section 11.3 shall bear interest from the second Business Day
following the date of demand for payment at the Default Rate.


 


77





















 


11.4                           Obligations
of Lenders Several.  The obligations
of the Lenders hereunder to make Committed Advances, to fund participations in
Letters of Credit and Swing Line Advances are several and not joint.  The failure of any Lender to make any
Committed Loan or to fund any such participation on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Committed Loan or to purchase its participation.


 


11.5                           Survival
of Representations and Warranties. 
All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery
hereof and thereof.  Such representations
and warranties have been or will be relied upon by the Administrative Agent and
each Lender, regardless of any investigation made by the Administrative Agent
or any Lender or on their behalf and notwithstanding that the Administrative
Agent or any Lender may have had notice or knowledge of any Default at the time
of any Credit Extension, and shall continue in full force and effect as long as
any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied
or any Letter of Credit shall remain outstanding.


 


11.6                           Notices;
Effectiveness; Electronic Communication.


 


(a)                                  Notices Generally. 
Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in subsection (b)
below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier as follows, and all notices
and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:


 


(i)                                     if to the Borrower,
the Administrative Agent, Bank of America as Issuing Lender or as a Swing Line
Lender, to the address, telecopier number, electronic mail address or telephone
number specified for such Person on Schedule 11.6; and


 


(ii)                                  if to any other
Lender or Issuing Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.


 


Notices sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices sent by telecopier shall be deemed to have been given when
sent (except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
business day for the recipient).  Notices
delivered through electronic communications to the extent provided in subsection (b)
below, shall be effective as provided in such subsection (b).


 


(b)                                 Electronic Communications. 
Notices and other communications to the Lenders and the Issuing Lender
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by
the Administrative Agent, provided that the foregoing shall not apply to
notices to any Lender or the Issuing Lender pursuant to Article 2 if such
Lender or the Issuing Lender, as applicable, has notified the Administrative
Agent that it is incapable of receiving notices under such Article by
electronic communication.  The Administrative
Agent or any Borrower may, in its discretion, agree to accept notices and other
communications to


 


78





















 


it
hereunder by electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.  Unless the
Administrative Agent otherwise prescribes:


 


(i)                                     notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient,
such notice or communication shall be deemed to have been sent at the opening
of business on the next business day for the recipient; and


 


(ii)                                  notices or
communications posted to an Internet or intranet website shall be deemed received
upon the deemed receipt by the intended recipient at its e-mail address as
described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.


 


(c)                                  Change of Address, Etc. 
Each of the Borrowers, the Administrative Agent, the Issuing Lenders and
the Swing Line Lenders may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the other parties
hereto.  Each other Lender may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to the Borrower, the Administrative Agent, the Issuing
Lenders and the Swing Line Lenders.


 


(d)                                 Reliance by Administrative Agent, Issuing
Lenders and Lenders.  The Administrative Agent, the Issuing
Lenders, the Swing Line Lenders and the Lenders shall be entitled to rely and
act upon any notices (including telephonic Requests for Loans and telephonic
requests for Swing Line Advances) purportedly given by or on behalf of the
Borrowers even if:


 


(i)                                     such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein; or


 


(ii)                                  the terms thereof, as
understood by the recipient, varied from any confirmation thereof.


 


The Borrowers shall indemnify the Administrative
Agent, each Issuing Lender, each Lender and the Related Parties of each of them
from all losses, costs, expenses and liabilities resulting from the reliance by
such Person on each notice purportedly given by or on behalf of the
Borrower.  All telephonic notices to and
other telephonic communications with the Administrative Agent may be recorded
by the Administrative Agent, and each of the parties hereto hereby consents to
such recording.


 


11.7                           Execution
of Loan Documents.  Unless the
Administrative Agent otherwise specifies with respect to any Loan Document:


 


(a)                                  this Agreement and any other Loan
Document may be executed in any number of counterparts and any party hereto or
thereto may execute any counterpart, each of which when executed and delivered
will be deemed to be an original and all of which counterparts of this
Agreement or any other Loan Document, as the case may be, when taken together
will be deemed to be but one and the same instrument; and


 


79





















 


(b)                                 execution of any such counterpart may be
evidenced by a telecopier transmission of the signature of such party.


 


The
execution of this Agreement or any other Loan Document by any party hereto or
thereto will not become effective until counterparts hereof or thereof, as the
case may be, have been executed by all the parties hereto or thereto.


 


11.8                           Successors
and Assigns.


 


(a)                                  Successors and Assigns Generally. 
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that no Borrower and no other Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except:


 


(i)                                     to an Eligible
Assignee in accordance with the provisions of subsection (b) of this Section 11.8;


 


(ii)                                  by way of
participation in accordance with the provisions of subsection (d) of this Section 11.8;


 


(iii)                               by way of pledge or
assignment of a security interest subject to the restrictions of  Section 11.8(f); or


 


(iv)                              to an SPC in accordance
with the provisions of Section 11.8(h).


 


Any other attempted assignment or transfer by any
party hereto shall be null and void. 
Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
Section 11.8(d) and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the Issuing Lender and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.


 


(b)                                 Assignments by Lenders. 
Any Lender may at any time assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans (including for purposes of this Section 11.8(b),
participations in L/C Obligations and in Swing Line Advances) at the time owing
to it); provided  that:


 


(i)                                     except in the case
of an assignment of the entire remaining amount of the assigning Lender’s
Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each


 


80





















 


of the Administrative Agent and, so long as no Event
of Default has occurred and is continuing, the Company otherwise consents (each
such consent not to be unreasonably withheld or delayed); provided,
however, that concurrent assignments to members of an Assignee Group and
concurrent assignments from members of an Assignee Group to a single Eligible
Assignee (or to an Eligible Assignee and members of its Assignee Group) will be
treated as a single assignment for purposes of determining whether such minimum
amount has been met;


 


(ii)                                  each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement with respect to
the Loans or the Commitment assigned, except that this clause (ii) shall
not apply to rights in respect of Swing Line Advances;


 


(iii)                               any assignment of a
Commitment must be approved by the Administrative Agent and the Company, such
approval not to be unreasonably withheld or delayed; and


 


(iv)                              the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee in the amount,
if any required as set forth on Schedule 10.06, and the Eligible Assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.


 


Subject to acceptance and recording thereof by the
Administrative Agent pursuant to Section 11.8(c), from and after the
effective date specified in each Assignment and Assumption, the Eligible
Assignee thereunder shall be a party to this Agreement and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of Sections
3.7, 3.8, 3.12(d) and 11.10 with respect to facts and circumstances occurring prior
to the effective date of such assignment. 
Upon request, the Borrowers (at their expense) shall execute and deliver
a Committed Advance Note to the assignee Lender.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this subsection shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 11.8(d).


 


(c)                                  Register.  The
Administrative Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at the Administrative Agent’s Office  a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitments of, and principal amounts of the Loans and
L/C Obligations owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”).  The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by each of the Borrowers and the Issuing Lender at any reasonable
time and from time to time upon reasonable prior notice.  In addition, at any


 


81





















 


time
that a request for a consent for a material or substantive change to the Loan
Documents is pending, any Lender wishing to consult with other Lenders in
connection therewith may request and receive from the Administrative Agent a
copy of the Register.


 


(d)                                 Participations. 
Any Lender may at any time, without the consent of, or notice to, the
Borrowers or the Administrative Agent, sell participations to any Person (other
than a natural person or the Parent, the Borrowers or any of their Affiliates
or Subsidiaries ) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender’s participations in L/C
Obligations and/or Swing Line Advances) owing to it); provided  that:


 


(i)                                     such Lender’s
obligations under this Agreement shall remain unchanged;


 


(ii)                                  such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations; and


 


(iii)                               the Borrower, the
Administrative Agent, the Lenders and the Issuing Lender shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement.


 


Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any  provision of this
Agreement; provided  that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first proviso to Section 11.2
that affects such Participant.  Subject
to Section 11.8(e), Parent and each Borrower agrees that each Participant
shall be entitled to the benefits of Sections 3.7, 3.8 and 3.12(d) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 11.8(b).  To the
extent permitted by law, each Participant also shall be entitled to the
benefits of Section 11.9 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.11 as though it were a
Lender.


 


(e)                                  Limitations upon Participant Rights. 
A Participant shall not be entitled to receive any greater payment under
Section 3.7, 3.8 or 3.12(d) than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.12(d) unless the Company is notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 11.21 as though it
were a Lender.


 


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


 


82





















 


(g)                                 Electronic Execution of Assignments. 
The words “execution,” “signed,” “signature,” and words of like import
in any Assignment and Assumption shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.


 


(h)                                 Special Purpose Funding Vehicles. 
Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrowers (a “SPC”) the option to provide
all or any part of any Committed Loan that such Granting Lender would otherwise
be obligated to make pursuant to this Agreement; provided  that


 


(i)                                     nothing herein
shall constitute a commitment by any SPC to fund any Committed Loan, and


 


(ii)                                  if an SPC elects not
to exercise such option or otherwise fails to make all or any part of such
Committed Loan, the Granting Lender shall be obligated to make such Committed
Loan pursuant to the terms hereof or, if it fails to do so, to make such
payment to the Administrative Agent as is required under Section 2.10(a).


 


Each party hereto hereby agrees that:


 


(x)                                   neither the grant to any SPC nor the
exercise by any SPC of such option shall increase the costs or expenses or
otherwise increase or change the obligations of the Borrowers under this
Agreement (including its obligations under Sections 3.7 and 3.8),


 


(y)                                 no SPC shall be liable for any indemnity
or similar payment obligation under this Agreement for which a Lender would be
liable, and


 


(z)                                   the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Loan Document, remain the lender of record hereunder.


 


The making of a Committed Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Committed Loan were made by such Granting Lender.  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior debt of any
SPC, it will not institute against, or join any other Person in instituting
against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceeding under the laws of the United States or any State
thereof.  Notwithstanding anything to the
contrary contained herein, any SPC may (1) with notice to, but without prior
consent of the Borrowers and the Administrative Agent and with the payment of a
processing fee of $2,500, assign all or any portion of its right to receive
payment with respect to any Committed Loan to the Granting Lender and (2)
disclose on a confidential basis any non-public information relating to its
funding of Committed


 


83





















 


Loans to any rating agency, commercial paper dealer or
provider of any surety or guarantee or credit or liquidity enhancement to such
SPC.


 


(iii)                               Resignation as
Issuing Lender or Swing Line Lenders after Assignment.  Notwithstanding anything to the contrary
contained herein, if at any time Bank of America assigns all of its Commitment
and Loans pursuant to subsection (b) above, Bank of America shall be
deemed to have concurrently resigned as an Issuing Lender and a Swing Line
Lender.  In the event of any such
resignation as an Issuing Lender or Swing Line Lender, Parent and the Borrowers
shall be entitled to appoint from among the Lenders an additional Issuing
Lender or Swing Line Lender hereunder; provided, however, that no
failure by Parent and the Borrowers to appoint any such successor shall affect
the resignation of Bank of America as an Issuing Lender or as a Swing Line
Lender.  If Bank of America resigns as an
Issuing Lender, it shall retain all the rights and obligations of the Issuing
Lender hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as Issuing Lender and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.4(g)).  If Bank of America resigns as a Swing Line
Lender, it shall retain all the rights of a Swing Line Lender provided for
hereunder with respect to Swing Line Advances made by it and outstanding as of
the effective date of such resignation, including the right to require the
Lenders to make Base Rate Loans or fund risk participations in outstanding
Swing Line Advances pursuant to Section 2.5.


 


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


 


11.9                           Sharing
of Setoffs.  Each Lender severally
agrees that if it, through the exercise of any right of setoff, banker’s lien
or counterclaim against Parent, any Borrower, or otherwise, receives payment of
the Obligations held by it that is ratably more than any other Lender, through
any means, receives in payment of the Obligations held by that Lender, then,
subject to applicable Laws:


 


(a)                                  The Lender exercising the right of
setoff, banker’s lien or counterclaim or otherwise receiving such payment shall
purchase, and shall be deemed to have simultaneously purchased, from the other
Lender a participation in the Obligations held by the other Lender and shall
pay to the other Lender a purchase price in an amount so that the share of the
Obligations held by each Lender after the exercise of the right of setoff,
banker’s lien or counterclaim or receipt of payment shall be in the same
proportion that existed prior to the exercise of the right of setoff, banker’s
lien or counterclaim or receipt of payment; and


 


(b)                                 Such other adjustments and purchases of
participations shall be made from time to time as shall be equitable to ensure
that all of the Lenders share any payment obtained in respect of the
Obligations ratably in accordance with each Lender’s share of the Obligations
immediately prior to, and without taking into account, the payment; provided
that, if all or any portion of a disproportionate payment obtained as a result
of the exercise of the right of setoff, banker’s lien, counterclaim or
otherwise is thereafter recovered from the purchasing Lender by Parent,
Borrowers or any Person claiming


 


84





















 


through
or succeeding to the rights of Parent or Borrowers, the purchase of a
participation shall be rescinded and the purchase price thereof shall be
restored to the extent of the recovery, but without interest.  Each Lender that purchases a participation in
the Obligations pursuant to this Section 11.9 shall from and after the
purchase have the right to give all notices, requests, demands, directions and
other communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.  Parent and each Borrower expressly consents
to the foregoing arrangements and agrees that any Lender holding a participation
in an Obligation so purchased may exercise any and all rights of setoff, banker’s
lien or counterclaim with respect to the participation as fully as if the
Lender were the original owner of the Obligation purchased.


 


11.10                     Indemnity
by Parent and Borrowers.  Parent and
each Borrower jointly and severally (but as between Parent and Borrowers,
ratably) agrees to indemnify, save and hold harmless each of the Creditors and
the Arranger and their Affiliates, directors, officers, agents, attorneys and
employees (collectively the “Indemnitees”) from and against: (a) Any and all
claims, demands, losses, liabilities, damages, reasonable expenses, including,
but not limited to reasonable attorneys’ fees, including the reasonably
allocated cost of internal counsel, and reasonable settlement costs, actions or
causes of action (except a claim, demand, action, or cause of action for any
amount excluded from the definition of “Taxes” in Section 3.12(d)) if the
claim, demand, action or cause of action arises out of or relates to any act or
omission (or alleged act or omission) of Parent, any Borrower, its Affiliates
or any of its officers, directors or shareholders relating to the Commitments,
the use or contemplated use of proceeds of any Loan or Letter of Credit, or the
relationship of Parent, Borrowers and the Creditors under this Agreement; (b)
Any administrative or investigative proceeding by any Governmental Agency
arising out of or related to a claim, demand, action or cause of action
described in clause (a) above; and (c) any Indemnitee that proposes to settle
or compromise any claim or proceeding for which Parent or the Borrowers may be
liable for payment of indemnity hereunder shall give Parent and the Borrowers
written notice of the terms of such proposed settlement or compromise
reasonably in advance of settling or compromising such claim or proceeding and
shall obtain Parent’s and the Borrowers’ prior consent (which shall not be
unreasonably withheld).  In connection
with any claim, demand, action or cause of action covered by this Section 11.10
against more than one Indemnitee, all such Indemnitees shall be represented by
the same legal counsel (which may be a law firm engaged by the Indemnitees or
attorneys employed by an Indemnitee or a combination of the foregoing) selected
by the Indemnitees; provided, that if such legal counsel determines in good
faith that representing all such Indemnitees would or could result in a
conflict of interest under Laws or ethical principles applicable to such legal
counsel or that a defense or counterclaim is available to an Indemnitee that is
not available to all such Indemnitees, then to the extent reasonably necessary
to avoid such a conflict of interest or to permit unqualified assertion of such
a defense or counterclaim, each Indemnitee shall be entitled to separate
representation, with all such legal counsel using reasonable efforts to avoid
unnecessary duplication of effort by counsel for all Indemnitees; and further
provided that the Administrative Agent (as an Indemnitee) shall at all times be
entitled to representation by separate legal counsel (which may be a law firm
or attorneys employed by the Administrative Agent or a combination of the
foregoing).  Any obligation or liability
of the Parent and the Borrowers to any Indemnitee under this Section 11.10
shall survive the expiration or termination of this Agreement and the repayment
of all Loans and the payment and performance of all other Obligations owed to
the Lenders.


 


11.11                     Nonliability
of the Lenders.  Parent and each
Borrower acknowledges and agrees that:


 


85





















 


(a)                                  Any inspections of any Property of Parent
or its Subsidiaries made by or through the Creditors are solely for purposes of
administration of this Agreement and Parent and the Borrowers are not entitled
to rely upon the same (whether or not such inspections are at the expense of
Parent and the Borrowers);


 


(b)                                 By accepting, furnishing or approving
anything required to be observed, performed, fulfilled or given to the
Creditors pursuant to the Loan Documents, none of the Creditors shall be deemed
to have warranted or represented the sufficiency, legality, effectiveness or
legal effect of the same, or of any term, provision or condition thereof, and
such acceptance, furnishing or approval thereof shall not constitute a warranty
or representation to anyone with respect thereto by the Creditors;


 


(c)                                  The relationship among Parent, the
Borrowers and the Creditors is, and shall at all times remain, solely that of
borrowers, guarantors and lenders; none of the Creditors shall under any
circumstance be construed to be partners or joint venturers of Parent,
Borrowers or their Affiliates; none of the Creditors shall under any
circumstance be deemed to be in a relationship of confidence or trust or a
fiduciary relationship with Parent or its Affiliates, or to owe any fiduciary
duty to Parent or its Affiliates; none of the Creditors undertakes or assumes
any responsibility or duty to Parent or its Affiliates to select, review,
inspect, supervise, pass judgment upon or inform Parent or its Affiliates of
any matter in connection with their Property or the operations of Parent or its
Affiliates; Parent and its Affiliates shall rely entirely upon their own
judgment with respect to such matters; and any review, inspection, supervision,
exercise of judgment or supply of information undertaken or assumed by the
Creditors in connection with such matters is solely for the protection of the
Creditors and neither Parent, the Borrowers nor any other Person is entitled to
rely thereon; and


 


(d)                                 The Creditors shall not be responsible or
liable to any Person for any loss, damage, liability or claim of any kind
relating to injury or death to Persons or damage to Property caused by the
actions, inaction or negligence of Parent and/or its Affiliates and Parent and
each Borrower hereby indemnifies and holds the Creditors harmless from any such
loss, damage, liability or claim.


 


11.12                     No
Third Parties Benefited.  This
Agreement is made for the purpose of defining and setting forth certain
obligations, rights and duties of Parent, the Borrowers and the Creditors in
connection with the Loans, Letters of Credit and Swing Line Advances, and is
made for the sole benefit of Parent, the Borrowers, the Creditors, and the
Creditors’ successors and assigns, and, subject to Section 6.1, successors
to Borrowers by permitted merger.  Except
as provided in Sections 11.8 and 11.10, no other Person shall have any
rights of any nature hereunder or by reason hereof.


 


11.13                     Treatment
of Certain Information; Confidentiality. 
Each of the Administrative Agent, the Lenders and the Issuing Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed


 


(a)                                  to its Affiliates and to its and its Affiliates’
respective partners, directors, officers, employees, agents, advisors and
representatives (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential),


 


86





















 


(b)                                 to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners),


 


(c)                                  to the extent required by applicable laws
or regulations or by any subpoena or similar legal process,


 


(d)                                 to any other party hereto,


 


(e)                                  in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder,


 


(f)                                    subject to an agreement containing
provisions substantially the same as those of this Section 11.13, to


 


(i)                                     any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or


 


(ii)                                  any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations,


 


(g)                                 with the consent of the Borrower or


 


(h)                                 to the extent such Information


 


(i)                                     is or becomes
publicly available other than as a result of a breach of this Section 11.13
or


 


(ii)                                  becomes available to
the Administrative Agent, any Lender, any Issuing Lender or any of their
respective Affiliates on a nonconfidential basis from a source other than the
Borrower.


 


For
purposes of this Section 11.13, “Information” means all information
received from the Borrowers or any Subsidiary relating to the Borrowers or any
Subsidiary or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the
Issuing Lender on a nonconfidential basis prior to disclosure by the Borrowers
or any Subsidiary.  Any Person required
to maintain the confidentiality of Information as provided in this Section 11.13
shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of
such Information as such Person would accord to its own confidential
information.


 


11.14                     Removal
of a Lender.  Parent and the
Borrowers shall have the right to remove a Lender as a party to this Agreement
pursuant to this Section 11.14 in the event that such Lender:


 


(a)                                  requests compensation under Section 3.7
or Section 3.8 which has not been requested by all other Lenders, in each
case by written notice to the Administrative Agent and such Lender within 60
days following any such refusal or request; or


 


(b)                                 refuses to consent to certain proposed
changes, waivers, modifications, supplements, terminations, waivers or consents
with respect to this Agreement which have been


 


87





















 


approved
by the Requisite Lenders as provided in Section 11.2, provided that no
Default or Event of Default then exists;


 


(c)                                  is the subject of a Disqualification; or


 


(d)                                 is a Defaulting Lender.


 


If Parent and the
Borrowers are entitled to remove a Lender pursuant to this Section 11.14
either:


 


(i)                                     The Lender being
removed shall within five Business Days after such notice execute and deliver
an Assignment Agreement covering that Lender’s Applicable Percentages in favor
of one or more Eligible Assignees designated by Parent and the Borrowers and
reasonably acceptable to the Administrative Agent, subject to payment of a
purchase price by such Eligible Assignee equal to all principal and accrued
interest, fees and other amounts payable to such Lender under this Agreement
through the date of the Assignment Agreement; or


 


(ii)                                  Parent and the
Borrowers may reduce the applicable Commitment(s) pursuant to Section 2.7
(and, for this purpose, the numerical requirements of such Section shall
not apply) by an amount equal to that Lender’s Applicable Percentage, pay and
provide to such Lender the amount required by clause (a) above and release
such Lender from its Applicable Percentage (subject, however, to the
requirement that all conditions set forth in Section 8.2 are met as of the
date of such reduction and the payment to the other Lenders of appropriate fees
for the assumption of any such  Lender’s
participation in all Letters of Credit and Swing Line Advances then
outstanding), in which case the applicable percentage Applicable Percentages of
the remaining Lenders shall be ratably increased (but without any increase in
the Dollar amount of the Applicable Percentages of such Lenders).


 


11.15                     Further
Assurances.  Parent and its
Subsidiaries shall, at their expense and without expense to the Creditors, do,
execute and deliver such further acts and documents as any Creditor from time
to time reasonably requires for the assuring and confirming unto the Creditors
of the rights hereby created or intended now or hereafter so to be, or for
carrying out the intention or facilitating the performance of the terms of any
Loan Document.


 


11.16                     Integration.  This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on
the subject matter hereof and supersedes all prior agreements, written or oral,
on the subject matter hereof.  In the
event of any conflict between the provisions of this Agreement and those of any
other Loan Document, the provisions of this Agreement shall control and govern;
provided that the inclusion of supplemental rights or remedies in favor of the
Creditors in any other Loan Document shall not be deemed a conflict with this
Agreement.  Each Loan Document was
drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.


 


11.17                     Governing
Law, Jurisdiction, Etc.


 


(a)                                  GOVERNING LAW. 
EXCEPT TO THE EXTENT OTHERWISE PROVIDED THEREIN, EACH LOAN DOCUMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LOCAL
LAWS OF


 


88





















 


CALIFORNIA,
WITHOUT REGARD TO THE CHOICE OF LAWS OR CONFLICTS OF LAWS PRINCIPLES THEREOF.


 


(b)                                 SUBMISSION TO JURISDICTION.  
Any legal action or proceeding with respect to this Agreement or any
other Loan Document may be brought in the courts of the State of California
sitting in Los Angeles or of the United States for the central district of such
state, and by execution and delivery of this Agreement, the Borrowers, the
Administrative Agent and each Lender consents, for itself and in respect of its
property, to the non-exclusive jurisdiction of those courts.  The Borrowers, the Administrative Agent and
each Lender irrevocably waives any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens, which it may
now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of any Loan Document or other document related
thereto.  The Borrowers, the
Administrative Agent and each Lender waives personal service of any summons,
complaint or other process, which may be made by any other means permitted by
the law of such state.


 


11.18                     Severability
of Provisions.  Any provision in any
Loan Document that is held to be inoperative, unenforceable or invalid as to
any party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining
provisions or the operation, enforceability or validity of that provision as to
any other party or in any other jurisdiction, and to this end the provisions of
all Loan Documents are declared to be severable.


 


11.19                     Headings.  Article and Section headings in
this Agreement and the other Loan Documents are included for convenience of
reference only and are not part of this Agreement or the other Loan Documents
for any other purpose.


 


11.20                     Time
of the Essence.  Time is of the
essence of the Loan Documents.


 


11.21                     Foreign
Lenders and Participants.  Each
Lender that is not a “United States person” within the meaning of Section 7701(a)(30)
of the Code shall deliver to Parent and the Administrative Agent, prior to
receipt of any payment subject to withholding under the Code (or upon accepting
an assignment of an interest herein), two duly signed completed copies of
either IRS Form W-8BEN or any successor thereto (relating to such Lender and
entitling it to an exemption from, or reduction of, withholding tax on all
payments to be made to such Lender by Parent and the Borrowers pursuant to this
Agreement) or IRS Form W-8ECI or any successor thereto (relating to all
payments to be made to such Lender by Parent and the Borrowers pursuant to this
Agreement) or such other evidence satisfactory to Parent, the Borrowers and the
Administrative Agent that such Lender is entitled to an exemption from, or
reduction of, U.S. withholding tax, including any exemption pursuant to Section 881(c)
of the Code.  Thereafter and from time to
time, each such Person shall (a) promptly submit to Parent (with a copy to the
Administrative Agent), such additional duly completed and signed copies of one
of such forms (or such successor forms as shall be adopted from time to time by
the relevant United States taxing authorities) as may then be available under
then current United States laws and regulations to avoid, or such evidence as
is satisfactory to Parent and the Borrowers and the Administrative Agent of any
available exemption from, United States withholding taxes in respect of all
payments to be made to such Person by Parent and the Borrowers pursuant to this
Agreement and (b) take such steps as shall not be materially disadvantageous to
it, in the reasonable judgment of such Lender, and as may be reasonably
necessary (including the re-designation of its Eurodollar Lending Office, if
any) to avoid any requirement of applicable laws that Parent or the Borrowers
make any deduction or withholding for taxes from amounts payable to such
Person.


 


89





















 


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


 


11.23                     Nature
of the Borrowers’ Obligations.  The
Company hereby agrees that it shall be liable for all of the Obligations on a
joint and several basis, notwithstanding which of the Borrowers may have
directly received the proceeds of any particular Loan or Advance or the benefit
of a particular Letter of Credit. 
Notwithstanding anything to the contrary set forth herein, the principal
liability of each Borrower hereafter designated under Section 2.9 for
Loans, Swing Line Advances and Letters of Credit shall be limited to Loans and
Letters of Credit made to that Borrower and Letters of Credit issued for the
account of that Borrower under the Aggregate Sublimit of that Borrower.  Each of the Borrowers acknowledges and agrees
that, for purposes of the Loan Documents, Parent and its Subsidiaries constitute
a single integrated financial enterprise and that each receives a benefit from
the availability of credit under this Agreement.  Borrowers each waive all defenses arising
under the Laws of suretyship, to the extent such Laws are applicable, in
connection with their obligations under this Agreement.  Without limiting the foregoing, each Borrower
agrees to the Joint Borrower Provisions set forth in Exhibit I,
incorporated by this reference.


 


11.24                     Designated
Senior Debt.  Parent and each
Borrower hereby irrevocably designate the Obligations and this Agreement as “Designated
Senior Indebtedness” and “Senior Indebtedness” within the meanings given to
those terms in Section 1.1 of the Supplemental Indenture dated December 9,
1998 entered into with respect to the Existing Subordinated Debt among the
Company, Parent and IBJ Schroeder Bank & Trust Company, this Section constituting
a certificate of Parent and the Borrower issued to the Administrative Agent and
the Lenders to that effect.


 


11.25                     Gaming
Regulations.  Each party to this
Agreement hereby acknowledges that the consummation of the transactions
contemplated by the Loan Documents is subject to applicable Gaming Laws (and
Parent and Borrower represent and warrant that all requisite approvals
necessary thereunder to enter into the transactions contemplated hereby have
been duly obtained except as set forth in Schedule 4.3).


 


11.26                     Waiver
of Jury Trial.  EACH PARTY HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). 
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.26.


 


11.27                     USA
Patriot Act Notice.  Each Lender that
is subject to the Act (as hereinafter defined) and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notify the Loan Parties
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required to
obtain, verify and record information that


 


90





















 


identifies
the Loan Parties, which information includes the name and address of the Loan
Parties and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Loan Parties in accordance with the Act.


 


11.28                     Payments
Set Aside.  To the extent that any
payment by or on behalf of a Borrower is made to the Administrative Agent, any
Issuing Lender or any Lender, or the Administrative Agent, any Issuing Lender
or any Lender exercises its right of setoff, and such payment or the proceeds
of such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent, any Issuing Lender or such
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then


 


(a)                                  to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and


 


(b)                                 each Lender and the relevant Issuing
Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share (without duplication) of any amount so recovered from or
repaid by the Administrative Agent, plus interest thereon from the date of such
demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect.


 


The
obligations of the Lenders and the Issuing Lenders under clause (b) of the
preceding sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.


 


11.29                     Purported
Oral Amendments.  PARENT AND EACH
BORROWER EXPRESSLY ACKNOWLEDGE THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
MAY ONLY BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR
SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2.  PARENT AND EACH BORROWER AGREES THAT IT WILL
NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN
STATEMENTS BY ANY REPRESENTATIVE OF ANY OF THE CREDITORS THAT DOES NOT COMPLY
WITH SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR
SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.


 


91





















 


IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first above written.


 


	
   

  	
  HARRAH’S ENTERTAINMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Jonathan S. Halkyard, Vice President and
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARRAH’S OPERATING COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Jonathan S. Halkyard, Vice President and
  Treasurer

  
					



 





















 


	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  



 





















 


	
   

  	
  BANK OF HAWAII

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  THE GOVERNOR AND COMPANY OF THE BANK

  OF IRELAND

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  THE BANK OF NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  THE BANK OF NOVA SCOTIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  BANK OF SCOTLAND

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Amena Nabi

  
	
   

  	
  Title:

  	
  Assistant
  Vice President

  



 





















 


	
   

  	
  BANK OF TAIWAN, NEW YORK AGENCY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  BARCLAYS BANK, PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  BNP PARIBAS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  CHANG HWA COMMERCIAL BANK, LTD.,

  NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  CITICORP USA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  COMERICA WEST INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  COMMERZBANK AG, NEW YORK AND GRAND CAYMAN
  BRANCHES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  DEUTSCHE BANK TRUST COMPANY AMERICAS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  E. SUN COMMERCIAL BANK, LTD., LOS

  ANGELES BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  ERSTE BANK NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  FIRST TENNESSEE BANK NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  HIBERNIA NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  HUA NAN COMMERCIAL BANK, LTD.

  NEW YORK AGENCY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  BAYERISCHE HYPO-UND VEREINSBANK AG,

  NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  MIZUHO CORPORATE BANK, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  OAK BROOK BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  PEOPLES BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  THE ROYAL BANK OF SCOTLAND PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  SUMITOMO MITSUI BANKING CORPORATION, LOS
  ANGELES OFFICE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  SUNTRUST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  TAIPEI BANK, NEW YORK AGENCY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  UFJ BANK LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  UNION BANK OF CALIFORNIA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Clark A. Wood

  
	
   

  	
  Title:

  	
  Vice President

  



 





















 


	
   

  	
  WHITNEY NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 





















 


Schedule 10.06


 


Assignment Fees


 


The Administrative Agent
will charge a processing and recordation fee (an “Assignment Fee”) in
the amount of $2,500 for each assignment; provided, however, that
in the event of two or more concurrent assignments to members of the same
Assignee Group (which may be effected by a suballocation of an assigned amount
among members of such Assignee Group) or two or more concurrent assignments by
members of the same Assignee Group to a single Eligible Assignee (or to an
Eligible Assignee and members of its Assignee Group), the Assignment Fee will
be $2,500 plus the amount set forth below:


 


	
  Transaction

  	
   

  	
  Assignment Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  First four
  concurrent assignments or suballocations to members of an Assignee Group (or
  from members of an Assignee Group, as applicable)

  	
   

  	
  -0

  	
  -

  
	
   

  	
   

  	
   

  	
   

  
	
  Each
  additional concurrent assignment or suballocation to a member of such
  Assignee Group (or from a member of such Assignee Group, as applicable)

  	
   

  	
  $

  	
  500