EXHIBIT 10.3(j)


 


EXECUTION COPY


 


SIXTH AMENDED AND RESTATED

CREDIT AGREEMENT,



dated as of October 31, 2005,



among



KERZNER INTERNATIONAL LIMITED,

KERZNER INTERNATIONAL NORTH AMERICA, INC.

and

KERZNER INTERNATIONAL BAHAMAS LIMITED,

as the Borrowers and the Guarantors,



VARIOUS FINANCIAL INSTITUTIONS,

as the Lenders,



JPMORGAN CHASE BANK, N.A.,

as the Administrative Agent,



DEUTSCHE BANK SECURITIES INC. 

as the Syndication Agent,



and

JPMORGAN CHASE BANK, N.A.,

BEAR STEARNS CORPORATE LENDING INC.,

GOLDMAN SACHS CREDIT PARTNERS L.P.

MERRILL LYNCH CAPITAL CORPORATION,

as the Co-Documentation Agents.


 










 


J.P. MORGAN SECURITIES INC.

and

DEUTSCHE BANK SECURITIES INC.

as the Co-Lead Arrangers and

the Joint Book Runners


 





















 


SIXTH AMENDED AND RESTATED

CREDIT AGREEMENT


 


THIS SIXTH AMENDED AND RESTATED CREDIT
AGREEMENT, dated as of October 31, 2005, is among KERZNER INTERNATIONAL
LIMITED, a corporation organized under the laws of the Commonwealth of The
Bahamas (“KIL”), KERZNER INTERNATIONAL NORTH AMERICA, INC., a corporation
organized under the laws of the State of Delaware (“KINA”), KERZNER
INTERNATIONAL BAHAMAS LIMITED, a corporation organized under the laws of the
Commonwealth of The Bahamas (“KIBL”; KIL, KINA and KIBL are each
individually referred to as a “Borrower” and collectively referred to as
the “Borrowers”), the financial institutions as are or may become
parties hereto (collectively referred to as the “Lenders”), JPMORGAN
CHASE BANK, N.A., acting through one or more of its agencies, branches or
affiliates (“JPMCB”), as the administrative agent (in such capacity, the
“Administrative Agent”), DEUTSCHE BANK SECURITIES INC. (“DBSI”),
as syndication agent (in such capacity, the “Syndication Agent”), JPMCB,
BEAR STEARNS CORPORATE LENDING INC., GOLDMAN SACHS CREDIT PARTNERS L.P., and
MERRILL LYNCH CAPITAL CORPORATION, as co-documentation agents (collectively in
such capacities, the “Co-Documentation Agents”), and J.P. MORGAN
SECURITIES INC. and DBSI as the co-lead arrangers and joint bookrunners (the “Co-Lead
Arrangers”).


 


W I T N E S S E T H:


 


WHEREAS, the Borrowers are engaged directly
and through their various Subsidiaries in the business of, among other things,
owning and operating hotel and casino properties and other activities in the
resort and gaming industry;


 


WHEREAS, pursuant to a Fifth Amended and
Restated Revolving Credit Agreement, dated as of July 7, 2004, as amended,
supplemented, amended and restated or otherwise modified prior to the date
hereof, the “Existing Credit Agreement”), among KIBL, KIL, and KINA, the
financial institutions parties thereto, as lenders (collectively, the “Existing
Lenders”), and the agents party thereto, the Existing Lenders made
commitments to make extensions of credit to KIBL, KIL, and KINA;


 


WHEREAS, the Borrowers have requested that
the Existing Credit Agreement be amended and restated in its entirety to become
effective and binding on the Borrowers pursuant to the terms of this Agreement,
and the Lenders (including certain Existing Lenders) have agreed (subject to
the terms of this Agreement) to amend and restate the Existing Credit Agreement
in its entirety to read as set forth in this Agreement, and it has been agreed
by the parties to the Existing Credit Agreement that the commitments which
certain Existing Lenders have agreed to extend to the Borrowers under the
Existing Credit Agreement shall be extended or advanced to the Borrowers upon
the amended and restated terms and conditions contained in this Agreement with
the intent that the terms of this Agreement shall supersede the terms of the
Existing Credit Agreement (which shall hereafter have no further effect upon
the parties thereto, other than for accrued fees and expenses and
indemnification provisions accrued and owing under the terms of the Existing
Credit Agreement on or prior to the date hereof or arising (in the case of an
indemnification) under the terms of the Existing Credit Agreement); provided
that the letters of


 





















 


credit set forth on Schedule III (the “Existing Letters
of Credit”) shall continue as Letters of Credit hereunder;


 


WHEREAS, in connection with amending and
restating the Existing Credit Agreement, the Borrowers desire to obtain, on the
terms and conditions set forth below, Commitments pursuant to which:


 


(a)           Loans
will be made to the Borrowers from time to time prior to the Commitment
Termination Date in a maximum aggregate principal amount, together with all
Letter of Credit Outstandings at any one time outstanding, not to exceed the
then existing Commitment Amount; and


 


(b)           Letters
of Credit will be issued for the account of a Borrower or a Guarantor (and the
Lenders will participate in such Letters of Credit) from time to time prior to
the Commitment Termination Date in a maximum aggregate Stated Amount at any one
time outstanding not to exceed the then existing Letter of Credit Commitment
Amount (provided that the aggregate outstanding principal amount of
Loans and Letter of Credit Outstandings at any time shall not exceed the then
existing Commitment Amount);


 


WHEREAS, subject to the terms of this
Agreement and the other Loan Documents, certain Existing Lenders have agreed to
continue their Commitments under this Agreement and, in addition to certain
Existing Lenders, other financial institutions will, on the Effective Date,
become parties to this Agreement and have agreed to have all of the rights, and
be subject to the obligations (including their respective Commitments as in
effect from time to time), of a Lender;


 


WHEREAS, the Lenders and the Issuer are
willing, on the terms and subject to the conditions hereinafter set forth
(including Article V), to amend and restate the Existing Credit
Agreement in its entirety pursuant to the terms of this Agreement, and on and
subsequent to the Effective Date, the Lenders and the Issuer are willing to extend
such Commitments and make such Loans to the Borrowers and issue (or participate
in) such Letters of Credit for the account of the Borrowers and the Guarantors;
and


 


WHEREAS, pursuant to the terms of this
Agreement, the proceeds of Loans and Letters of Credit will be used for the
general corporate purposes of the Borrowers and the Guarantors, including
working capital, Capital Expenditures, acquisitions and Investments (including
financing a portion of the construction costs of the Atlantis Phase III expansion);


 


NOW, THEREFORE, the parties hereto agree as
follows:


 


ARTICLE I



DEFINITIONS AND ACCOUNTING TERMS


 


SECTION 1.1.  Defined Terms.  The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals, shall,
except where the context otherwise requires, have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):


 


2





















 


“2.375% Convertible Senior Subordinated
Notes” means the 2.375% Convertible Senior Subordinated Notes due 2024
executed and delivered by KIL evidencing the Subordinated Debt issued pursuant
to the 2.375% Senior Subordinated Notes Indenture, as amended, supplemented,
amended and restated or otherwise modified from time to time as permitted under
Section 7.2.13.


 


“2.375% Senior Subordinated Notes
Indenture” means the Indenture, dated as of April 5, 2004, between KIL
(as issuer) and The Bank of New York Trust Company, N.A., as trustee, as
amended, supplemented, amended and restated or otherwise modified from time to
time as permitted under Section 7.2.13.


 


“63⁄4% Senior Subordinated Notes” means
the 63⁄4% Senior Subordinated Notes due 2015 executed and delivered by KIL
evidencing the Subordinated Debt issued pursuant to the 63⁄4% Senior Subordinated
Notes Indenture, as amended, supplemented, amended and restated or otherwise
modified from time to time as permitted under Section 7.2.13.


 


“63⁄4% Senior Subordinated Notes Indenture”
means the Indenture, dated as of September 22, 2005, between KIL (as
issuer) and The Bank of New York Trust Company, N.A., as trustee, as amended,
supplemented, amended and restated or otherwise modified from time to time as
permitted under Section 7.2.13.


 


“8 7/8% Senior Subordinated Notes”
means the 8 7/8% Senior Subordinated Notes due 2011 executed and delivered by
KIL and KINA evidencing the Subordinated Debt issued pursuant to the 8 7/8%
Senior Subordinated Notes Indenture, as amended, supplemented, amended and
restated or otherwise modified from time to time as permitted under Section 7.2.13.


 


“8 7/8% Senior Subordinated Notes
Indenture” means the Indenture, dated as of August 9, 2001, among KIL
and KINA (as issuers), certain Restricted Subsidiaries of KIL from time to time
parties thereto (as guarantors) and The Bank of New York, as trustee, as
amended, supplemented, amended and restated or otherwise modified from time to
time as permitted under Section 7.2.13.


 


“Additional Increasing Lender” is
defined in Section 2.2.3.


 


“Administrative Agent” is defined in
the preamble and includes each other Person as shall have subsequently
been appointed as the successor Administrative Agent pursuant to Section 9.4.


 


“Affected Lender” is defined in Section 4.11.


 


“Affiliate” of any Person means any
other Person which, directly or indirectly, controls, is controlled by or is
under common control with such Person (excluding any trustee under, or any
committee with responsibility for administering, any Plan).  A Person shall be deemed to be “controlled by”
any other Person if such other Person possesses, directly or indirectly, power


 


(a)           to
vote 10% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners; or


 


3





















 


(b)           to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.


 


“Affirmation and Consent” means the
Affirmation and Consent, dated as of the Effective Date, among each Subsidiary
Guarantor and the Administrative Agent substantially in the form of Exhibit G
hereto.


 


“Agents” means, collectively, the
Administrative Agent, the Co-Documentation Agents, the Syndication Agent and
the Co-Lead Arrangers.


 


“Agreement” means, on any date, this
Sixth Amended and Restated Revolving Credit Agreement as originally in effect
on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.


 


“Alternate Base Rate” means, on any
date and with respect to all Base Rate Loans, a fluctuating rate of interest
per annum equal to the higher of


 


(a)           the
rate of interest most recently established by the Administrative Agent at its
Domestic Office as its base rate for Dollar loans; and


 


(b)           the
Federal Funds Rate most recently determined by the Administrative Agent, plus 1⁄2
of 1%.


 


The Alternate Base Rate is not necessarily intended to be the lowest
rate of interest determined by the Administrative Agent in connection with
extensions of credit.  Changes in the
rate of interest on that portion of any Loans maintained as Base Rate Loans
will take effect simultaneously with each change in the Alternate Base Rate.  The Administrative Agent will give notice promptly
to KIL and the Lenders of changes in the Alternate Base Rate.


 


“Applicable Commitment Fee” means the
per annum percentage set forth below opposite the Total Leverage Ratio set
forth in the Compliance Certificate most recently delivered pursuant to this
Agreement:


 


	
  Total Leverage Ratio

  	
   

  	
  Applicable

  Commitment Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  6.0:1

  	
   

  	
  .600

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  5.0:1 but less than or equal to 6.0:1

  	
   

  	
  .500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  4.0:1 but less than or equal to 5.0:1

  	
   

  	
  .375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than or
  equal to 4.0:1

  	
   

  	
  .250

  	
  %

  



 


The Applicable Commitment Fee shall be
effective as of the fifteenth day of each March, June, September and December (or,
if such day is not a Business Day, on the next succeeding Business Day), based
on the Total Leverage Ratio as of the last day of the preceding Fiscal
Quarter.  If KIL shall fail to deliver a
Compliance Certificate within 60 days after the end of the


 


4





















 


first three Fiscal Quarters of any Fiscal Year or a certificate showing
the calculation of the Total Leverage Ratio within 60 days after each Fiscal
Year end, all as required pursuant to clause (c) of Section 7.1.1,
the Applicable Commitment Fee from and including the 61st day after the end of
such Fiscal Quarter or Fiscal Year to but not including the date KIL delivers
to the Administrative Agent a Compliance Certificate shall conclusively equal
..600% per annum.  Notwithstanding the
foregoing, from the Effective Date until adjusted pursuant to the Compliance
Certificate delivered for the Fiscal Quarter ending September 30, 2005,
the Applicable Commitment Fee shall be .250% per annum.  If the calculation of the Total Leverage
Ratio set forth in the Compliance Certificate for any Fiscal Year end shall
differ from the calculation of the Total Leverage Ratio that was included in
the certificate delivered pursuant to clause (c) of Section 7.1.1
for such Fiscal Year end, to the extent necessary, the Applicable Commitment
Fee shall be adjusted as of the date of such Compliance Certificate and a
retroactive adjustment shall be made for the commitment fees accrued and paid
prior to such date.


 


“Applicable Margin” means, on any
date, (i) with respect to any Base Rate Loan, the per annum percentage set
forth below under the column entitled “Applicable Base Rate Margin” and (ii) with
respect to any LIBO Rate Loan, the per annum percentage set forth below under
the column entitled “Applicable LIBO Rate Margin”, in each case opposite the
applicable Total Leverage Ratio below corresponding to the Total Leverage Ratio
indicated in the Compliance Certificate most recently delivered pursuant to
this Agreement.


 


	
  Total Leverage Ratio

  	
   

  	
  Applicable Base

  Rate Margin

  	
   

  	
  Applicable LIBO

  Rate Margin

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  6.0:1

  	
   

  	
  1.00

  	
  %

  	
  2.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  5.5:1 but less than or equal to 6.0:1

  	
   

  	
  0.875

  	
  %

  	
  1.875

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  5.0:1 but less than or equal to 5.5:1

  	
   

  	
  0.750

  	
  %

  	
  1.750

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  4.5:1 but less than or equal to 5.0:1

  	
   

  	
  0.625

  	
  %

  	
  1.625

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  4.0:1 but less than or equal to 4.5:1

  	
   

  	
  0.500

  	
  %

  	
  1.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  3.5:1 but less than or equal to 4.0:1

  	
   

  	
  0.250

  	
  %

  	
  1.250

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  3.0:1 but less than or equal to 3.5:1

  	
   

  	
  0.000

  	
  %

  	
  1.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  2.5:1 but less than or equal to 3.0:1

  	
   

  	
  0.000

  	
  %

  	
  0.875

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than
  2.5:1

  	
   

  	
  0.000

  	
  %

  	
  0.750

  	
  %

  



 


The Applicable Margin shall be effective as
of the fifteenth day of each March, June, September and December (or,
if such day is not a Business Day, on the next succeeding Business Day), based
on the Total Leverage Ratio as of the last day of the preceding Fiscal
Quarter.  If KIL shall fail to deliver a
Compliance Certificate within 60 days after the end of the first three
Fiscal Quarters of any Fiscal Year or a certificate showing the calculation of
the Total Leverage


 


5





















 


Ratio within 60 days after each Fiscal Year end, all as required
pursuant to clause (c) of Section 7.1.1, the Applicable
Margin from and including the 61st day after the end of such Fiscal Quarter to
but not including the date KIL delivers to the Administrative Agent a
Compliance Certificate shall conclusively equal 1.00% per annum for Base Rate
Loans or 2.00% per annum for LIBO Rate Loans. 
Notwithstanding the foregoing, from the Effective Date until adjusted
pursuant to the Compliance Certificate delivered for the Fiscal Quarter ending September 30,
2005, the Applicable Margin shall be 0.000% per annum for Base Rate Loans and
0.750% per annum for LIBO Rate Loans.  If
the calculation of the Total Leverage Ratio set forth in the Compliance
Certificate for any Fiscal Year end shall differ from the calculation of the
Total Leverage Ratio that was included in the certificate delivered pursuant to
clause (c) of Section 7.1.1 for such Fiscal Year
end, to the extent necessary, the Applicable Margin shall be adjusted as of the
date of such Compliance Certificate and a retroactive adjustment shall be made
for the interest accrued and paid prior to such date.


 


“Approved Fund” means any fund with
net assets of at least $100,000,000 that invests (in whole or in part) in
commercial loans, or any other fund that invests (in whole or in part) in
commercial loans and is managed by a Lender, the same investment advisor as
such Lender or by an Affiliate of such Lender or investment advisor.


 


“Asset Sale Offer Amount” has the
meaning set forth in the Existing Indentures as in effect on the Effective
Date.


 


“Assignee Lender” is defined in Section 10.11.1.


 


“Atlantis, Paradise Island” means the
approximately 2,300-room resort and casino located on Paradise Island, The
Bahamas, including the Atlantis Phase III expansion when completed.


 


“Atlantis Phase III” means the
expansion of Atlantis, Paradise Island comprised of an approximately 600-room,
all-suite hotel being built on Paradise Island, The Bahamas.


 


“Authorized Officer” means, relative
to any Borrower, those of its officers whose signatures and incumbency shall
have been certified to the Administrative Agent and the Lenders pursuant to Section 5.1.1
and relative to any other Obligor, those Persons who shall have been authorized
to act on behalf of such Obligor by such Obligor’s board of directors (or
equivalent constituent body) and whose signatures and incumbency shall have
been certified to the Administrative Agent and the Lenders pursuant to Section 5.1.1.


 


“Bahamas Property” means all the real
property, improvements, fixtures and personal property now or hereafter owned
by KIL or any of its Restricted Subsidiaries located on Paradise Island, The
Bahamas.


 


“Base Rate Loan” means a Loan bearing
interest at a fluctuating rate determined by reference to the Alternate Base
Rate.


 


“Borrower” and “Borrowers” are
defined in the preamble.


 


6





















 


“Borrower Effective Date Certificate”
means the certificate executed and delivered by the Borrowers pursuant to Section 5.1.7,
substantially in the form of Exhibit E hereto.


 


“Borrower Security Agreement” means
the Second Amended and Restated Security Agreement, dated as of July 7,
2004, executed and delivered by the Borrowers pursuant to the terms of the
Existing Credit Agreement, a conformed copy of which is attached as Exhibit I
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.


 


“Borrowing” means the Loans of the
same type and, in the case of LIBO Rate Loans, having the same Interest Period
made by all Lenders on the same Business Day and pursuant to the same Borrowing
Request in accordance with Section 2.1.


 


“Borrowing Request” means a loan request
and certificate duly executed by an Authorized Officer of a Borrower,
substantially in the form of Exhibit B-1 hereto.


 


“Business Day” means (i) any day
excluding Saturday, Sunday and any day which is a legal holiday under the laws
of the State of New York or is a day on which banking institutions located in
such state are authorized or required by law or other governmental action to
close, and (ii) with respect to all notices, determinations, fundings and
payments in connection with any LIBO Rate loan, any day that (a) is a
Business Day described in clause (i), and (b) is a day for trading
by and between banks in Dollar deposits in the London interbank market.


 


“Capital Expenditures” means, for any
period, the sum of the aggregate amount of all expenditures (including under
leasing and similar arrangements) of any Person for fixed or capital assets
made during such period which, in accordance with GAAP, would be classified as
capital expenditures, but not including capital expenditures to restore any existing
or hereafter acquired assets to the extent funded from insurance, condemnation
or eminent domain proceeds delivered to KIL or its Restricted Subsidiaries.


 


“Capitalized Lease Liabilities” means
all monetary obligations of any Person under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
material penalty.


 


“Cash Collateralize” means, with
respect to a Letter of Credit, the deposit of immediately available funds into
a cash collateral account maintained with (or on behalf of) the Administrative
Agent on terms satisfactory to the Administrative Agent.


 


“Cash Equivalent Investment” means, at
any time:


 


(a)           any
evidence of Indebtedness, maturing not more than one year after such time,
issued or guaranteed by the United States Government;


 


7





















 


(b)           commercial
paper, maturing not more than nine months from the date of issue, which is
issued by:


 


(i)            a
corporation (other than an Affiliate of any Obligor) organized under the laws
of any state of the United States or of the District of Columbia and rated A-1
by Standard & Poor’s Corporation or P-1 by Moody’s Investors Service, Inc.;
or


 


(ii)           any
Lender (or its holding company);


 


(c)           demand
or time deposits maintained with, or any certificate of deposit or bankers’
acceptance maturing not more than one year after such time which is issued by,
either:


 


(i)            a
commercial banking institution that is a member of the Federal Reserve System
and has a combined capital and surplus and undivided profits of not less than
$500,000,000; or


 


(ii)           any
Lender; or


 


(d)           any
repurchase agreement entered into with any Lender (or other commercial banking
institution of the stature referred to in clause (c)(i)) which:


 


(i)            is
secured by a fully perfected security interest in any obligation of the type
described in any of clauses (a) through (c); and


 


(ii)           has
a market value at the time such repurchase agreement is entered into of not
less than 100% of the repurchase obligation of such Lender (or other commercial
banking institution) thereunder; or


 


(e)           Money
market funds:


 


(i)            at
least 95% of the assets of which constitute cash equivalents of the kind
described in clauses (a) through (d); or


 


(ii)           that
(x) comply with the criteria set forth in SEC Rule 2a-7 under the
Investment Company Act of 1940, as amended, (y) are rated AAA by Standard &
Poor’s Corporation and Aaa by Moody’s Investors Service, Inc., and (z)
have portfolio assets of at least $5,000,000,000.


 


“Casino Licenses” means, collectively,
all licenses that are required to be granted by any applicable federal, state,
local, tribal or other regulatory body, gaming board or other agency that has
jurisdiction over (i) any casino now or hereafter located on Paradise
Island, The Bahamas, and (ii) any other casinos otherwise owned or
operated by the Borrowers or any of their respective Significant Subsidiaries
or Quasi-Restricted Subsidiaries that are singly or in the aggregate of equal
or greater importance to the ongoing operations of the Borrowers and their
respective Significant Subsidiaries or Quasi-Restricted Subsidiaries as those
casinos specified in clause (i).


 


8





















 


“CERCLA” means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended.


 


“CERCLIS” means the Comprehensive
Environmental Response Compensation Liability Information System List.


 


“Change in Control” means:


 


(a)           any
“person” or “group” (as such terms are used in Rule 13d-5 under the
Exchange Act, and Sections 13(d) and 14(d) of the Exchange Act) of
persons (other than the WLG Group) becomes, directly or indirectly, in a single
transaction or in a related series of transactions by way of merger,
consolidation, or other business combination or otherwise, the “beneficial
owner” (as such term is used in Rule 13d-3 of the Exchange Act) of more
than 40% of the outstanding shares of all classes of voting stock of KIL (on a
fully diluted basis); or


 


(b)           during
any period of 24 consecutive months, individuals who at the beginning of such
period constituted the Board of Directors of KIL (together with any new directors
whose election to such Board or whose nomination for election by the
stockholders of KIL was approved by the WLG Group or 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 KIL then in office; or


 


(c)           the
failure of KIL to directly own, free and clear of all Liens (other than Liens
in favor of the Secured Parties) 100% of the issued and outstanding shares of
capital stock of KIBL, on a fully-diluted basis.


 


(d)           the
occurrence of any “Change of Control” (or similar term) under (and as defined
in) any Subordinated Note Indenture.


 


“Co-Lead Arrangers” is defined in the preamble.


 


“Code” means the Internal Revenue Code
of 1986, as amended, reformed or otherwise modified from time to time.


 


“Collateral Documents” means each
Pledge Agreement, each Security Agreement, each Mortgage, each Debenture and
each other agreement delivered by an Obligor which grants to any Secured Party
a security interest in or Lien on any property (real or personal) of such
Obligor.


 


“Commitment” means, as the context may
require, a Lender’s Loan Commitment or the Issuer’s (or a Lender’s) Letter of
Credit Commitment or the Swingline Lender’s Swingline Commitment.


 


“Commitment Amount” means, prior to
the Effective Date, $500,000,000, and from and after the Effective Date,
$650,000,000, as such amount may be reduced from time to time pursuant to Sections
2.2.1, 2.2.2 or 4.11 or increased from time to time pursuant
to Section 2.2.3,


 


9





















 


minus (except for purpose of calculating fees under Section 3.3.1)
the aggregate principal amount of Indebtedness of the Borrowers owing to the
Swingline Lender resulting from outstanding Swingline Loans.


 


“Commitment Termination Date” means
the earliest to occur of:


 


(a)           the
Stated Maturity Date;


 


(b)           the
date on which the Commitment Amount is terminated in full or reduced to zero
pursuant to Section 2.2.1; and


 


(c)           the
date on which any Commitment Termination Event occurs.


 


Upon the occurrence of any event described above, the Commitments shall
terminate automatically and without further action.


 


“Commitment Termination Event” means
the earliest to occur of:


 


(a)           the
occurrence of any Event of Default described in clauses (a) through
(d) of Section 8.1.9; or


 


(b)           the
occurrence and continuance of any other Event of Default and either:


 


(i)            the
declaration of the Loans to be due and payable pursuant to Section 8.3;
or


 


(ii)           in
the absence of such declaration, the giving of notice by the Administrative
Agent, acting at the direction of the Required Lenders, to KIL that the
Commitments have been terminated.


 


“Compliance Certificate” means a
certificate duly completed and executed by an Authorized Officer of KIL,
substantially in the form of Exhibit F hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time,
together with such changes thereto as agreed to between the Administrative
Agent and KIL for the purpose of monitoring KIL’s compliance with the financial
covenants contained in Section 7.2.4.


 


“Consolidated EBITDA” means, for any
period, the sum, without duplication, of the amounts for such period of (i) Net
Income, (ii) Interest Expense (including amortization of financing fees
and tender fees and premiums), (iii) provisions for taxes based on income,
(iv) total depreciation expense, (v) total amortization expense, (vi) other
non-cash items reducing Net Income to the extent the Borrowers at the time of
the incurrence of such non-cash item does not reasonably expect such non-cash
item to occur again within 24 months of the date of the incurrence of such
non-cash item (including for the avoidance of doubt, the impairment charge
incurred with respect to the Reethi Rah resort in June, 2005), (vii) pre-opening
and re-opening expenses and other non-recurring expenses incurred in connection
with any such pre-opening or re-opening to the extent that such expenses are
incurred within 180 days after the last day of the Fiscal Quarter in which such
pre-opening or re-opening occurred, (viii) non-cash expenses attributable
to equity or equity-related incentive grants to directors and employees of KIL
or its


 


10





















 


Subsidiaries as required under GAAP, (ix) up to $5,000,000 in the
aggregate of severance payments incurred during the period from the Effective
Date until the Stated Maturity, and (x) costs incurred and premiums paid in
connection with the tender offer for the 8 7/8% Senior Subordinated Notes, less
amounts included in clause (vi) above increasing Net Income, all of
the foregoing as determined on a consolidated basis for KIL and its Restricted
Subsidiaries in conformity with GAAP; provided, however, that the
Net Income generated by the KIBL Group that will be included in clause (i) will
be calculated as follows:


 


(a)           for
the first Fiscal Quarter following the official opening or re-opening of any
KIBL Group operations shall equal the sum of (x) 50% of actual Net Income
attributable to the KIBL Group for such Fiscal Quarter plus (y) an
amount equal to the remaining 50% of such Net Income attributable the KIBL
Group divided by the Historical Percentage that corresponds to such first
Fiscal Quarter, the result of which is then multiplied by 75%;


 


(b)           for
the first and second Fiscal Quarters following the official opening or
re-opening of any KIBL Group operations shall equal the sum of (x) 50% of
actual Net Income attributable to the KIBL Group for such Fiscal Quarters plus
(y) an amount equal to the remaining 50% of such Net Income attributable to the
KIBL Group for such Fiscal Quarters, divided by the sum of the Historical
Percentages that correspond to such two Fiscal Quarters, the result of which is
then multiplied by 80%; and


 


(c)           for
the first, second and third Fiscal Quarters following the official opening or
re-opening of any KIBL Group operations shall equal the sum of (x) 50% of
actual Net Income attributable to the KIBL Group for such Fiscal Quarters plus
(y) an amount equal to the remaining 50% of such Net Income attributable to the
KIBL Group for such Fiscal Quarters, divided by the sum of the Historical
Percentages that correspond to such three Fiscal Quarters, the result of which
is then multiplied by 85%;


 


provided further, however,
that the Net Income generated by other KIL Restricted Subsidiaries that have
newly-opened or re-opened operations will also be seasonalized on a similar
basis on terms reasonably acceptable to the Administrative Agent.


 


“Contingent Liability” means any
agreement, undertaking or arrangement by which any Person guarantees, endorses
or otherwise becomes or is contingently liable (i) by direct or indirect
agreement, contingent or otherwise, to provide funds for payment, to supply
funds to, or otherwise to invest in, a debtor, (ii) to otherwise assure a
creditor against loss for Indebtedness of any other Person (other than by
endorsements of instruments in the course of collection), or (iii) for the
payment of dividends or other distributions upon the shares of any other
Person.  The amount of any Person’s
obligation under any Contingent Liability shall (subject to any limitation set
forth therein) be deemed to be the outstanding principal amount (or maximum
principal amount) of the debt, obligation or other liability guaranteed
thereby.


 


“Continuation/Conversion Notice” means
a notice of continuation or conversion and certificate duly executed by an Authorized
Officer of a Borrower, substantially in the form of Exhibit C
hereto.


 


11





















 


“Controlled Group” means all members
of a controlled group of corporations and all members of a controlled group of
trades or businesses (whether or not incorporated) under common control which,
together with any Borrower, are treated as a single employer under Section 414(b) or
414(c) of the Code or Section 4001 of ERISA.


 


“Core Assets” means the Ocean Club and
Atlantis, Paradise Island, and the real property upon which the Ocean Club and
Atlantis, Paradise Island are located.


 


“Credit Extension” means, as the
context may require:


 


(a)           the
making of a Loan by a Lender; or


 


(b)           the
issuance of any Letter of Credit, or the extension of any Stated Expiry Date of
any existing Letter of Credit, by the Issuer and participation in such Letter
of Credit by the Lenders pursuant to the terms of this Agreement.


 


“Credit Extension Request” means, as
the context may require, any Borrowing Request or Issuance Request.


 


“Debentures” means the debentures set
forth on Schedule II hereto, executed by each owner of the Bahamas
Property constituting real property, in each case as amended, supplemented,
consolidated, spread, severed, partially released, partially reconveyed,
restated and otherwise modified from time to time.


 


“Debt” means, without duplication, (i) the
aggregate outstanding principal amount of all Indebtedness of KIL and its
Restricted Subsidiaries of the nature referred to in clauses (a), (b),
(c), (e) and (f) of the definition of “Indebtedness”,
plus (ii) all Contingent Liabilities of KIL and its Restricted
Subsidiaries (including the completion guarantee for Atlantis, The Palm) in
respect of any types of the Indebtedness described in clause (i) above
(excluding Contingent Liabilities of KIL and its Restricted Subsidiaries with
an aggregate value of up to $200,000,000); provided, however, with
respect to the joint and several guarantee with Istithmar with respect to
Atlantis, The Palm, the amount of such completion guarantee will only be
considered to be 50% of the amount actually guaranteed, minus (iii) all
cash and all Cash Equivalent Investments of KIL and its Restricted Subsidiaries
(exclusive of restricted cash and restricted Cash Equivalent Investments) at
any time in excess of $25,000,000.


 


“Default” means any Event of Default
or any condition, occurrence or event which, after notice or lapse of time or
both, would constitute an Event of Default.


 


“Defaulting Lender” means:


 


(a)           any
Lender that fails in its obligation to fund any Loan pursuant to Section 2.1
or participate in any Letter of Credit Outstandings pursuant to the terms of
this Agreement and such failure continues for three consecutive Business Days; provided
that the refusal of a Lender to make a Loan because it reasonably asserts in
writing that a Borrower has failed to satisfy a condition precedent to
borrowing contained in Article V shall not result in such Lender
becoming a “Defaulting Lender”;


 


12





















 


(b)           any
Lender as to which any event of the type described in Section 8.1.9
occurs (with all references in such Section to “KIL” or “such Person”
instead being to such Lender);


 


(c)           any
Lender as to which any governmental authority (including the Office of Thrift
Supervision, the Federal Deposit Insurance Company, the Office of the
Comptroller of Currency or the Federal Reserve Board) directly or indirectly
seizes, takes possession of or undertakes, authorizes, or orders similar action
with respect to, or authorizes, or orders the liquidation, dissolution, winding
up, sale, transfer or other disposition of, or takes steps or institutes
proceedings or otherwise proceeds to liquidate, dissolve, wind up, sell,
transfer or otherwise dispose of, such Lender or all or any part of such Lender’s
property or appoints or authorizes or orders the appointment of a receiver,
liquidator, sequestrator, trustee, custodian, conservator or other officer or
entity having similar powers over such Lender or over all or any part of such
Lender’s property.


 


“Disbursement” is defined in Section 2.6.2.


 


“Disbursement Date” is defined in Section 2.6.2.


 


“Disclosure Schedule” means the
Disclosure Schedule attached hereto as Schedule I as it may be
amended, supplemented or otherwise modified from time to time by KIL with the
written consent of the Required Lenders.


 


“Disposition” (or similar words such
as “Dispose”, and any derivation thereof) is defined in Section 7.2.11.


 


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


 


“Dollar Equivalent” means, on any date
of determination, the equivalent in Dollars of any Foreign Currency, determined
by using the quoted spot rate at which the Administrative Agent’s principal
office in New York, New York offers to exchange Dollars for such Foreign
Currency at the opening of business on such date.


 


“Domestic Office” means, relative to
any Lender, the office of such Lender (or any successor or assign of such
Lender) within the United States as currently on file with the Administrative
Agent or designated in the Lender Assignment Agreement or as may be designated
from time to time by notice from such Lender, as the case may be, to KIL and
the Administrative Agent.


 


“Effective Date” means the date this
Agreement becomes effective pursuant to Section 10.8.


 


“Eligible Assignee” means (A) any
of the following entities: (i) a commercial bank organized under the laws
of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States or
any state thereof; (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof (provided that (x) such
bank is acting through a branch or agency located in the United


 


13





















 


States or (y) such bank is organized under the laws of a country that
is a member of the Organization for Economic Cooperation and Development or a
political subdivision of such country); and (iv) any other entity which is
an “accredited investor” (as defined in Regulation D under the Securities Act)
which extends credit or buys loans as one of its businesses including insurance
companies, mutual funds and lease financing companies or (B) a Lender, an
Affiliate of a Lender or an Approved Fund; or (C) any other Person (other
than a natural Person) approved by (1) the Administrative Agent, (2) the
Issuer, and (3) unless an Event of Default has occurred and is continuing,
Borrower (each such approval not to be unreasonably withheld or delayed); provided
that no Affiliate of Borrower shall be an Eligible Assignee.


 


“Environmental Laws” means all
applicable federal, state or local statutes, laws, ordinances, codes, rules,
regulations and guidelines (including consent decrees and administrative
orders) relating to public health and safety and protection of the environment.


 


“ERISA” means the Employee Retirement
Income Security Act of 1974, as amended, and any successor statute of similar
import, together with the regulations thereunder, in each case as in effect
from time to time.  References to
sections of ERISA also refer to any successor sections.


 


“Euro” means the single currency of
Participating Member States of the European Union.


 


“Event of Default” is defined in Section 8.1.


 


“Exchange Act” means the Securities
and Exchange Act of 1934, as amended.


 


“Existing Credit Agreement” is defined
in the second recital.


 


“Existing Indentures” means the 2.375%
Senior Subordinated Notes Indenture and the 63⁄4% Senior Subordinated Notes
Indenture.


 


“Existing Lenders” is defined in the second
recital.


 


“Existing Letters of Credit” is
defined in the third recital.


 


“Existing Subordinated Notes” means (a) the
63⁄4% Senior Subordinated Notes and (b) the 2.375% Senior Subordinated
Convertible Notes.


 


“Federal Funds Rate” means, for any
period, a fluctuating interest rate per annum equal for each day during such
period to:


 


(a)           the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York; or


 


(b)           if
such rate is not so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by the


 


14





















 


Administrative Agent from three federal funds
brokers of recognized standing selected by it.


 


“Fee Letters” means, collectively, the
confidential fee letter agreements by and among the Borrowers (or any one of
them) and any Lender that is a counterparty thereto.


 


“Fiscal Quarter” means any quarter,
ending on March 31, June 30, September 30 or December 31 of
a Fiscal Year.


 


“Fiscal Year” means any period of
twelve consecutive calendar months ending on December 31; references to a
Fiscal Year with a number corresponding to any calendar year (e.g. the “2005
Fiscal Year”) refer to the Fiscal Year ending on the December 31
occurring during such calendar year.


 


“Foreign Currency” means Euros, Pounds
Sterling and any additional currency, other than Dollars, that is freely
transferable, convertible into Dollars and approved by the Administrative Agent
and the Issuer (which approval shall not be unreasonably withheld or delayed).


 


“Foreign Currency Letter of Credit”
means any Letter of Credit denominated in a Foreign Currency.


 


“Foreign Currency Letter of Credit
Commitment Amount” means, on any date occurring before the Singapore
Development Date, a maximum aggregate amount of $60,000,000 (or, if less, the
then existing Commitment Amount) and at all times thereafter, a maximum
aggregate amount of $80,000,000 (or, if less, the then existing Commitment
Amount).


 


“Foreign Currency Letter of Credit
Outstandings” means any Letter of Credit Outstandings in respect of Foreign
Currency Letters of Credit.


 


“Foreign Pledge Agreement” means any
supplemental pledge agreement governed by the laws of a jurisdiction other than
a State of the United States executed and delivered by KIL or any of its
Restricted Subsidiaries pursuant to the terms of this Agreement, in form and
substance reasonably satisfactory to the Administrative Agent, as may be
necessary under the laws of organization or incorporation of a Restricted
Subsidiary or Person in which an equity or similar interest is to be pledged to
the Administrative Agent pursuant to the terms of Section 7.1.7, to
further protect or perfect the Lien on and security interest in any collateral
being pledged pursuant to a Pledge Agreement.


 


“F.R.S. Board” means the Board of
Governors of the Federal Reserve System or any successor thereto.


 


“Funding Date” is defined in Section 2.3.1.


 


“GAAP” is defined in Section 1.4.


 


“Governmental Authority” means the
Commonwealth of The Bahamas, the United States, any state, local or municipal
entity located within the foregoing, and (in each case), any


 


15





















 


political subdivision thereof and any agency, department, commission,
board, bureau or instrumentality of any of the foregoing or any
quasi-governmental authority, now existing or hereafter created, having
jurisdiction over the Bahamas Property, any Obligor or any Lender Party.


 


“Guarantor” means each Significant Subsidiary
and each other Subsidiary of KIL (including Kerzner International Timeshare
Limited) that is a guarantor of Subordinated Debt.


 


“Guaranty” means the Second Amended
and Restated Subsidiary Guaranty, dated as of July 7, 2004, executed and
delivered by an Authorized Officer of each Guarantor, a conformed copy of which
is attached as Exhibit O hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.


 


“Guaranty Supplement” means each
Guaranty Supplement executed and delivered by an Authorized Officer of a
Guarantor pursuant to this Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.


 


“Hazardous Material” means:


 


(a)           any
“hazardous substance”, as defined by CERCLA;


 


(b)           any
“hazardous waste”, as defined by the Resource Conservation and Recovery Act, as
amended;


 


(c)           any
petroleum product; or


 


(d)           any
pollutant or contaminant or hazardous, dangerous or toxic chemical, material or
substance within the meaning of any other applicable federal, state or local
law, regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or material,
all as amended or hereafter amended.


 


“Hedging Obligations” means, with
respect to any Person, all liabilities of such Person under currency exchange
agreements, interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements, and all other similar agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.


 


“herein”, “hereof”, “hereto”,
“hereunder” and similar terms contained in this Agreement or any other
Loan Document refer to this Agreement or such other Loan Document, as the case
may be, as a whole and not to any particular Section, paragraph or provision of
this Agreement or such other Loan Document.


 


“Historical Percentage” means, for any
particular Fiscal Quarter, the amount set forth opposite such Fiscal Quarter:


 


16





















 


	
  first Fiscal
  Quarter of a Fiscal Year

  	
   

  	
  0.35

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  second
  Fiscal Quarter of a Fiscal Year

  	
   

  	
  0.26

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  third Fiscal
  Quarter of a Fiscal Year

  	
   

  	
  0.19

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  fourth
  Fiscal Quarter of a Fiscal Year

  	
   

  	
  0.20

  	
   

  



 


“Impermissible Qualification” means,
relative to the opinion or certification of any independent public accountant
as to any financial statement of any Obligor, any qualification or exception to
such opinion or certification:


 


(a)           which
is of a “going concern” or similar nature;


 


(b)           which
relates to the limited scope of examination of matters relevant to such
financial statement; or


 


(c)           which
relates to the treatment or classification of any item in such financial
statement and which, as a condition to its removal, would require an adjustment
to such item the effect of which would be to cause a Default under Section 7.2.4.


 


“including” means including without
limiting the generality of any description preceding such term.


 


“Increasing Lender” is defined in Section 2.2.3.


 


“Indebtedness” of any Person means,
without duplication:


 


(a)           all
obligations of such Person for borrowed money (excluding trade accounts payable
in the ordinary course of business which are not overdue for a period of more
than 90 days or, if overdue for more than 90 days, as to which a dispute exists
and adequate reserves in conformity with GAAP have been established on the
books of such Person) and all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;


 


(b)           all
reimbursement obligations, contingent or otherwise, relative to the face amount
of all letters of credit (including the Letters of Credit), whether or not
drawn, and banker’s acceptances issued for the account of such Person;


 


(c)           all
obligations of such Person as lessee under leases which have been or should be,
in accordance with GAAP, recorded as Capitalized Lease Liabilities (but
excluding operating leases);


 


(d)           net
Hedging Obligations of such Person;


 


17





















 


(e)           all
preferred stock that must by its terms be redeemed prior to the Stated Maturity
Date;


 


(f)            whether
or not so included as liabilities in accordance with GAAP, all obligations of
such Person to pay the deferred purchase price of property or services
(excluding trade accounts payable in the ordinary course of business which are
not overdue for a period of more than 90 days or, if overdue for more than 90
days, as to which a dispute exists and adequate reserves in conformity with
GAAP have been established on the books of such Person), and indebtedness
(excluding prepaid interest thereon) secured by a Lien on property owned or
being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse;


 


(g)           all
Contingent Liabilities of such Person in respect of any of the foregoing.


 


For all purposes of this Agreement, the Indebtedness of any Person
shall include, without duplication, the Indebtedness of any partnership or
joint venture in which such Person is both (i) a general partner or a
joint venturer and (ii) automatically liable for the obligations of such
partnership or joint venture.


 


“Indemnified Liabilities” is defined
in Section 10.4.


 


“Indemnified Parties” is defined in Section 10.4.


 


“Instruments” means any contract,
agreement, indenture, mortgage, financing statement, document or writing
(whether by formal agreement, letter or otherwise) under which any obligation
is evidenced, assumed or undertaken, or any Lien (or right or interest therein)
is granted or perfected.


 


“Interest Coverage Ratio” means, as of
the last day of any Fiscal Quarter, the ratio computed for the period
consisting of such Fiscal Quarter and each of the three immediately preceding
Fiscal Quarters of:


 


(a)           Consolidated
EBITDA for all such Fiscal Quarters; and


 


(b)           the
sum for all such Fiscal Quarters of Interest Expense.


 


“Interest Expense” means, for any
period, the consolidated interest expense (as defined under GAAP) of KIL and
its Restricted Subsidiaries for such period (which, for the avoidance of doubt,
includes that portion attributable to Capitalized Lease Liabilities in
accordance with GAAP and capitalized interest), exclusive of any amortization
of fees and expenses during such period.


 


“Interest Period” means, relative to
any LIBO Rate Loans, the period beginning on (and including) the date on which
such LIBO Rate Loan is made or continued as, or converted into, a LIBO Rate
Loan pursuant to Section 2.3.1 or 2.4 and shall end on (but
exclude) the day which numerically corresponds to such date one, two, three or
six months (or a period of nine or twelve


 


18





















 


months as may be requested by the Borrowers with the consent of each
Lender making such Loan) thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), as a Borrower may
select in its relevant notice (if a Borrower does not so select then such
Borrower shall be deemed to have selected one month) pursuant to Section 2.3
or 2.4; provided, however, that:


 


(a)           the
Borrowers shall not be permitted to select Interest Periods to be in effect at
any one time which have expiration dates occurring on more than twenty
different dates;


 


(b)           if
such Interest Period would otherwise end on a day which is not a Business Day,
such Interest Period shall end on the next following Business Day (unless such
next following Business Day is the first Business Day of a calendar month, in
which case such Interest Period shall end on the Business Day next preceding
such numerically corresponding day);


 


(c)           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) shall, subject to clause (e) below, end on the last Business Day of
the calendar month at the end of such Interest Period;


 


(d)           no
Interest period with respect to any portion of the Loans shall extend beyond
the date on which a permanent reduction of the Commitment Amount is scheduled
to occur unless the sum of (a) the aggregate principal amount of Loans
that are Base Rate Loans plus (b) the aggregate principal amount of Loans
that are LIBO Rate Loans with Interest Period expiring on or before such date
plus (c) the excess of the Commitment Amount then in effect over the
aggregate principal amount of Loans then outstanding equals or exceeds the
permanent reduction of the Commitment Amount that is scheduled to occur on such
date; and


 


(e)           no
Interest Period may end later than the Stated Maturity Date.


 


“Investment” means, relative to any
Person:


 


(a)           any
loan or advance made by such Person to any other Person (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business);


 


(b)           any
Contingent Liability of such Person or letter of credit issued for the account
of such Person, in either case, with respect to any monetary liability of any
other Person; and


 


(c)           any
purchase or acquisition of any stock, obligations or securities of, or any
other equity interest in, or any capital contribution to, any other Person.


 


The amount of any Investment shall be the original principal or capital
amount thereof less all returns of principal or equity thereon (and without
adjustment by reason of the financial


 


19





















 


condition of such other Person) and shall, if made by the transfer or
exchange of property other than cash, be deemed to have been made in an
original principal or capital amount equal to the fair market value of such
property.


 


“Issuance Request” means a Letter of
Credit request and certificate duly executed by an Authorized Officer of a
Borrower, substantially in the form of Exhibit B-2 hereto.


 


“Issuer” means JPMCB (including with
respect to the Existing Letters of Credit), in its capacity as the issuer of
the Letters of Credit, or another Lender, as requested from time to time by a
Borrower with the consent of the Administrative Agent, such consent not to be
unreasonably withheld or delayed.


 


“JPMCB” is defined in the preamble.


 


“KIBL” is defined in the preamble.


 


“KIBL Group” means, collectively KIBL
and each of its Restricted Subsidiaries existing on the Effective Date, and
Kerzner International Resorts, Inc., a Florida corporation and each of its
Restricted Subsidiaries existing on the Effective Date.


 


“KIBL Pledge Agreement” means the
Second Amended and Restated Pledge Agreement, dated as of July 7, 2004,
executed and delivered by KIBL pursuant to the terms of the Existing Credit
Agreement, a conformed copy of which is attached as Exhibit K
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.


 


“KIL” is defined in the preamble.


 


“KIL Pledge Agreement” means the
Second Amended and Restated Pledge Agreement, dated as of July 7, 2004,
executed and delivered by KIL pursuant to the terms of the Existing Credit
Agreement, a conformed copy of which is attached as Exhibit L
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.


 


“KINA” is defined in the preamble.


 


“KINA Pledge Agreement” means the
Second Amended and Restated Pledge Agreement, dated as of July 7, 2004,
executed and delivered by KINA pursuant to the terms of the Existing Credit
Agreement, a conformed copy of which is attached as Exhibit M
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.


 


“Legal Requirements” with respect to
any Person or property, means all laws, statutes, codes, acts, ordinances,
permits, licenses, authorizations, directions and requirements of all
Governmental Authorities, departments, commissions, boards, courts,
authorities, agencies, officials and officers, and any material deed
restrictions or other requirements of record, applicable to such Person or such
property, or any portion thereof or interest therein or any use or condition of
such property or any portion thereof or interest therein (including those
relating to zoning, planning, subdivision, building, safety, health, use,
environmental quality and other similar matters).


 


20





















 


“Lender Assignment Agreement” means a
Lender Assignment Agreement, substantially in the form of Exhibit D
hereto.


 


“Lender Parties” means, collectively,
each Agent, the Issuer, the Swingline Lender and each Lender (and including,
for purposes of the Rate Protection Agreements, any Affiliate of any Lender
that is a counterparty to such Rate Protection Agreement), and their respective
successors, transferees and assigns.


 


“Lenders” is defined in the preamble.


 


“Letter of Credit” is defined in Section 2.1.3.


 


“Letter of Credit Commitment” means as
to the Issuer, the Issuer’s obligation to issue Letters of Credit pursuant to Section 2.1.3
and, with respect to each Lender, the obligations of such Lender to participate
in such Letters of Credit pursuant to Section 2.6.1.


 


“Letter of Credit Commitment Amount”
means, on any date occurring before the Singapore Development Date, a maximum
aggregate amount of $75,000,000 (or, if less, the then existing Commitment
Amount) and at all times thereafter, a maximum aggregate amount of $150,000,000
(or, if less, the then existing Commitment Amount).


 


“Letter of Credit Outstandings” means,
on any date, an amount equal to the sum of:


 


(a)           the
then aggregate amount which is undrawn and available under all issued and
outstanding Letters of Credit (after converting the aggregate Stated Amounts of
all Foreign Currency Letters of Credit to the Dollar Equivalents thereof);


 


plus


 


(b)           the
then aggregate amount of all unpaid and outstanding Reimbursement Obligations
(after converting the aggregate Reimbursement Obligations with respect to
Disbursements made in a Foreign Currency to the Dollar Equivalents thereof) in
respect of such Letters of Credit.


 


“LIBO Rate” means, relative to any
Interest Period for LIBO Rate Loans, the rate of interest equal to (a) the
rate of interest that appears on page 3750 of the Dow Jones Telerate
Screen as at or about 11:00 a.m. (New York Time) two Business Days prior
to the beginning of such Interest Period or (b) if such a rate does not
appear on page 3750 of the Dow Jones Telerate screen, the average (rounded
upwards, if necessary, to the nearest 1/100 of 1%) of the rates per annum at
which Dollar deposits in immediately available funds are offered to the
Administrative Agent in the interbank market as at or about 11:00 a.m.
(New York time) two Business Days prior to the beginning of such Interest
Period and for a period approximately equal to such Interest Period.


 


“LIBO Rate Loan” means a Loan bearing
interest, at all times during an Interest Period applicable to such Loan, at a
fixed rate of interest determined by reference to the LIBO Rate (Reserve
Adjusted).


 


21





















 


“LIBO Rate (Reserve Adjusted)” means,
relative to any Loan to be made, continued or maintained as, or converted into,
a LIBO Rate Loan for any Interest Period, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined pursuant to the
following formula:


 


	
  LIBO Rate

  	
  =

  	
  LIBO Rate

  
	
  (Reserve
  Adjusted)

  	
   

  	
  1.00 - LIBOR
  Reserve Percentage

  



 


The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Administrative Agent on the basis of the LIBOR
Reserve Percentage in effect on, and the applicable rates furnished to and
received by the Administrative Agent, two Business Days before the first day of
such Interest Period.


 


“LIBOR Office” means, relative to any
Lender, the office of such Lender as currently on file with the Administrative
Agent or designated in the Lender Assignment Agreement or such other office of
a Lender as designated from time to time by notice from such Lender to KIL and
the Administrative Agent, whether or not outside the United States, which shall
be making or maintaining LIBO Rate Loans of such Lender hereunder.


 


“LIBOR Reserve Percentage” means,
relative to any Interest Period for LIBO Rate Loans, the reserve percentage
(expressed as a decimal) equal to the maximum aggregate reserve requirements
(including all basic, emergency, supplemental, marginal and other reserves and
taking into account any transitional adjustments or other scheduled changes in
reserve requirements) specified under regulations issued from time to time by
the F.R.S. Board and then applicable to assets or liabilities consisting of and
including “Eurocurrency Liabilities”, as currently defined in Regulation D of
the F.R.S. Board, having a term approximately equal or comparable to such
Interest Period.


 


“Lien” means any security interest,
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or otherwise) or charge against or interest in property to
secure payment of a debt or performance of an obligation.


 


“Loan” means, as the context may
require, the Loans referred to in Section 2.1.1 and the Swingline
Loans referred to in Section 2.1.2, relative to such Lender, and of
any type made hereunder.


 


“Loan Commitment” means, relative to
any Lender, such Lender’s obligation to make Loans pursuant to Section 2.1.1.


 


“Loan Document” means this Agreement,
the Notes, the Letters of Credit, each Collateral Document, the Affirmation and
Consent, each Guaranty, each Borrowing Request, each Issuance Request, each Fee
Letter, each Rate Protection Agreement and each other agreement, document or
instrument delivered in connection herewith or therewith.


 


“Material Adverse Effect” means any
material adverse effect on (i) the business, operations, properties or
condition (financial or otherwise) of KIL and its Restricted Subsidiaries taken
as a whole, (ii) the ability of an Obligor to consummate the transactions
contemplated


 


22





















 


hereby to occur on the Effective Date, (iii) the ability of an
Obligor to perform its obligations under this Agreement and the other Loan Documents
or (iv) the rights and remedies, taken as a whole, of the Administrative
Agent and the Lenders under this Agreement and the other Loan Documents.


 


“Mortgage” means each mortgage, deed
of trust or agreement executed and delivered by a Borrower or any other Obligor
in favor of the Administrative Agent for the benefit of the Secured Parties
pursuant to the requirements of this Agreement or the Existing Credit
Agreement, in each case as amended, supplemented, amended and restated or
otherwise modified.


 


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


 


“Net Equity Proceeds” means with
respect to the sale or issuance by KIL to any Person of any stock or other
equity interests, warrants or options or the exercise of any such warrants or
options in respect thereof, the excess of:


 


(a)           the
gross proceeds received by KIL from such sale, issuance or exercise;


 


over


 


(b)           the
sum of (i) all underwriting, broker and out-of-pocket fees and expenses
paid by KIL to other than an Affiliate of KIL; and (ii) all taxes actually
paid or estimated by KIL to be payable in cash within the next 12 months in
connection with such sale, exercise or issuance; provided that, if the
amount of any estimated taxes pursuant to clause  (ii) materially
exceeds the amount of taxes actually required to be paid in cash in respect of
such sale, exercise or issuance, the aggregate amount of such excess shall then
constitute Net Equity Proceeds.


 


“Net Income” means, for any period,
the aggregate of all amounts (exclusive of extraordinary gains and
extraordinary losses (it being understood that all income or loss attributable
to the development, sale or other Disposition of residential lots, homes,
time-shares or condominiums on Paradise Island or from the development, sale or
other Disposition of other real property (excluding in all cases sales or other
Dispositions of Core Assets) shall be included in the calculation of Net
Income)) which, in accordance with GAAP, would be included as net income on the
most recently available consolidated financial statements of KIL for such
period; provided that Net Income shall not include the net income (or
loss) of any Person, in which KIL or any of its Subsidiaries has an interest
that is not a Restricted Subsidiary, except that the amount of any dividends or
distributions actually paid in cash to KIL or any of its Restricted
Subsidiaries during such period shall be included in Net Income (even if the
amount of such cash dividends or distributions received exceed KIL’s allocated
portion of such Person’s earnings under GAAP).


 


“Note” means a promissory note of a
Borrower payable to any Lender, substantially in the form of Exhibit A-1
hereto (as such promissory note may be amended, endorsed or otherwise modified
from time to time), evidencing the aggregate Indebtedness of such Borrower to
such Lender resulting from outstanding Loans, and also means all other
promissory notes accepted


 


23





















 


from time to time in substitution therefor or renewal thereof.  The term “Note” shall include the Swingline
Note.


 


“Obligations” means all present or
future obligations (monetary or otherwise, absolute or contingent) of the
Borrowers and each other Obligor arising under or in connection with this
Agreement and each other Loan Document.


 


“Obligor” means the Borrowers, the
Guarantors or any other Restricted Subsidiaries of KIL obligated under any Loan
Document.


 


“Ocean Club” means the Ocean Club
located on Paradise Island, The Bahamas.


 


“Omnibus Termination Agreement” means
the Amended and Restated Omnibus Termination Agreement, dated January 1,
2001, among KIL and the other parties thereto, as amended, supplemented,
amended and restated or otherwise modified from time to time as permitted under
Section 7.2.12.


 


“Ordinary Shares” means the ordinary
shares of common stock of KIL, par value $0.001 per share.


 


“Organic Document” means, as
applicable and relative to any Obligor, its certificate of incorporation, its
by-laws, its articles of incorporation, its memorandum of association, its certificate
of partnership, its partnership agreement, and all shareholder agreements,
voting trusts and similar arrangements applicable to any of its authorized
shares of capital stock.


 


“Participant” is defined in Section 10.11.1.


 


“Participating Member State” means
each state so described in any legislative measures of the European Council for
the introduction of, changeover to or operation of a single or unified European
currency (whether known as the euro or otherwise), being in part the
implementation of the third stage of economic and monetary union as
contemplated in the Treaty of Rome of March 25, 1957, as amended by the
Single European Act 1986 and the Maastricht Treaty (which was signed at
Maastricht on February 7, 1992, and came into force on November 1,
1993), as amended from time to time.


 


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


 


“Pension Plan” means a “pension plan”,
as such term is defined in section 3(2) of ERISA, which is subject to
Title IV of ERISA (other than a multiemployer plan as defined in section 4001(a)(3) of
ERISA), and to which any Borrower or any corporation, trade or business that
is, along with any Borrower, a member of a Controlled Group, has liability or
any potential liability by reason of having been a substantial employer within
the meaning of section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under section 4069
of ERISA.


 


“Percentage” means, relative to any
Lender, the applicable percentage set forth opposite its name on Schedule IV
hereto under the “Commitment” column (which Percentages give effect


 


24





















 


to the inclusion of a Lender on the Effective Date that was not an
Existing Lender), as such percentage may be adjusted from time to time pursuant
to (a) Section 2.2.3, (b) Lender Assignment Agreement(s)
executed by such Lender and its Assignee Lender(s) and delivered pursuant to Section 10.11.1
or (c) Section 4.11.


 


“Permitted Encumbrances” means the
exceptions to title (i) to the Bahamas Property that are listed in Schedule B
of the title insurance policy issued as of August 12, 1997 by the Title
Insurer of such property, and (ii) that are permitted by Section 7.2.3.


 


“Person” means any natural person,
corporation, partnership, firm, association, trust, government, governmental
agency or any other entity, whether acting in an individual, fiduciary or other
capacity.


 


“Plan” means any Pension Plan or
Welfare Plan.


 


“Plans and Specifications” means the
detailed plans and specifications, and related construction budget, relating to
the Atlantis Phase III.


 


“Pledge Agreement” means, as the
context may require, the KIL Pledge Agreement, the KIBL Pledge Agreement, the
KINA Pledge Agreement and the Subsidiary Pledge Agreement.


 


“Pounds Sterling” means the lawful
currency of the United Kingdom of Great Britain and Northern Ireland.


 


“Quarterly Payment Date” means the
last day of each February, May, August, and November or, if any such day
is not a Business Day, the next succeeding Business Day.


 


“Quasi-Restricted Subsidiary” means
any Restricted Subsidiary of KIL that is designated by a resolution of the
Board of Directors of KIL as a Quasi-Restricted Subsidiary and (a) has no
Indebtedness for borrowed money (or Contingent Liabilities for borrowed money)
other than intercompany Indebtedness and (b) is not otherwise permitted to
guarantee the Obligations pursuant to, or in conformity with, a requirement of
any Governmental Authority (which includes any conditionality for the awarding
of a gaming license) or an arms-length contract.  The Board of Directors of KIL may at any time
designate a Quasi-Restricted Subsidiary to no longer be a Quasi-Restricted
Subsidiary at which time, if such former Quasi-Restricted Subsidiary is a
Significant Subsidiary it will promptly comply with Section 7.1.7.


 


“Rate Protection Agreement” means,
collectively, any interest rate or currency swap, cap, collar, forward, futures
contract or similar agreement entered into by KIL or any of its Restricted
Subsidiaries under which the counterparty to such agreement is (or at the time
such Rate Protection Agreement was entered into, was) a Lender or an Affiliate
of a Lender.


 


“Register” is defined in Section 2.9.


 


“Reimbursement Obligation” is defined
in Section 2.6.3.


 


“Release” means a “release”, as such
term is defined in CERCLA.


 


25





















 


“Relinquishment Agreement” means the
Relinquishment Agreement, dated February 7, 1998, between the Mohegan
Tribal Gaming Authority and TCA, as amended, supplemented, amended and restated
or otherwise modified from time to time as permitted under Section 7.2.12.


 


“Required Lenders” means, at any time,
Lenders holding more than 50% of the then aggregate outstanding principal
amount of all Loans, Letters of Credit Outstandings and the unfunded portion of
the Commitments.


 


“Reset Date” is defined in Section 2.7.


 


“Resource Conservation and Recovery Act”
means the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901,
et seq., as in effect from time to time.


 


“Restricted Payment” means, with
respect to KIL and the Restricted Subsidiaries:


 


(a)           the
declaration, payment or making of any dividend or distribution (in cash,
property or obligations) on any shares of any class of capital stock (now or
hereafter outstanding) of KIL or on any warrants, options or other rights with
respect to any shares of any class of capital stock (now or hereafter outstanding)
of KIL (other than dividends or distributions payable in its common stock or
warrants to purchase its common stock or split-ups or reclassifications of its
stock into additional or other shares of its common stock); or


 


(b)           the
application by KIL or any Restricted Subsidiary of any of its funds, property
or assets to the purchase, redemption, sinking fund or other retirement of, or
the purchase or making by any Restricted Subsidiary of any deposit in respect
of, or the redemption by such Restricted Subsidiary of, any shares of any class
of capital stock (now or hereafter outstanding) of KIL, or any warrants,
options or other rights with respect to any shares of any class of capital
stock (now or hereafter outstanding) of KIL; provided, however,
that the exercise of options, warrants or similar instruments on a cashless
basis by way of partial redemptions of the newly-issued shares (or other
structures with substantially the same economic effect) shall not be included
as Restricted Payments hereunder.


 


“Restricted Subsidiary” means each
Subsidiary of KIL that is not an Unrestricted Subsidiary.


 


“S&P” means Standard &
Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc.


 


“SEC” means the Securities and
Exchange Commission.


 


“Secured Parties” means, collectively,
(i) the Lender Parties and (ii) each Person that is a counterparty to
one or more Rate Protection Agreements.


 


“Security Agreement” means, as the
context may require, the Borrower Security Agreement or the Subsidiary Security
Agreement.


 


26





















 


“Section 4.6(c) Certificate”
is defined in clause (c) of Section 4.6.


 


“Senior Funded Debt” means, with
respect to KIL and its Restricted Subsidiaries as of any time, Debt outstanding
at such time less the amount of Subordinated Debt then outstanding.


 


“Senior Leverage Ratio” means, as of
the last day of any Fiscal Quarter, the ratio of (a) Senior Funded Debt
outstanding as of the last day of such Fiscal Quarter to (b) Consolidated
EBITDA for the four Fiscal Quarter period then ended; provided, that in
calculating Consolidated EBITDA for such period, any acquisitions or
Dispositions (in each case, in excess of $5,000,000) during such period shall
have been deemed to have occurred on the first day of such four Fiscal Quarter
period.


 


“Significant Subsidiary” means, at any
date of determination, Kerzner International Development Limited and any
Restricted Subsidiary of KIL (other than KIBL and KINA) that, together with its
Restricted Subsidiaries, (i) for the most recent Fiscal Quarter of KIL
accounted for (or, in the case of any Restricted Subsidiary that is acquired
following the Effective Date, would have accounted for) more than 5% of the
Consolidated EBITDA of KIL and its Restricted Subsidiaries during such Fiscal
Quarter or (ii) as of the end of the most recent Fiscal Quarter of KIL was
the owner of (or, in the case of any Restricted Subsidiary that is acquired
following the Effective Date, would have been the owner of) more than 5% of the
consolidated assets of KIL and its Restricted Subsidiaries at the end of such
Fiscal Quarter, all as set forth on the most recently available consolidated
financial statements of KIL for such Fiscal Quarter; provided, however,
that notwithstanding the foregoing, in no event shall (A) One &
Only (Indian Ocean) Management Limited, (B) any Quasi-Restricted
Subsidiary nor (C) any other Person that is required to be consolidated
with any Borrower or any Subsidiary thereof solely as a result of the
application of FIN 46R, be deemed to be a Significant Subsidiary.


 


“Singapore Development Date” means the
date on which the Administrative Agent receives a notice from KIL certifying
that the Borrowers or their Affiliates have been (a) awarded a gaming
license in Singapore or (b) been notified by the applicable Governmental
Authority that such Borrower or Affiliate is required to provide financial
support (whether in the form of a letter of credit or otherwise) with respect
to any award (or potential award) of such a gaming license.


 


“Solvency Certificate” means the
solvency certificate substantially in the form of Exhibit H
attached hereto.


 


“Stated Amount” of each Letter of
Credit means the total amount available to be drawn under such Letter of Credit
upon the issuance thereof.


 


“Stated Expiry Date” is defined in Section 2.6.


 


“Stated Maturity Date” means December 31,
2010.


 


“Subordinated Debt” means,
collectively, (i) the Indebtedness evidenced by the Existing Subordinated
Notes and all other unsecured subordinated Indebtedness and unsecured senior
subordinated Indebtedness of KIL or a Restricted Subsidiary that is outstanding
on the date


 


27





















 


hereof and (ii) all unsecured subordinated Indebtedness and
unsecured senior subordinated Indebtedness of KIL or a Restricted Subsidiary
incurred under the terms of any Subordinated Note Indenture and evidenced by
Subordinated Notes and which matures on a date that is at least one year after
the Stated Maturity Date.


 


“Subordinated Debt Issuer” means KINA,
KIL and (if and when applicable), each other Guarantor that may after the date
hereof incur or issue any Subordinated Debt.


 


“Subordinated Note Indenture” means,
collectively, (i) the Existing Indentures and (ii) each other
Indenture, note purchase agreement or other agreement evidencing the terms or
agreements relating to Subordinated Debt, if any, to be executed and delivered
by KIL or a wholly-owned Restricted Subsidiary in connection with the
incurrence by KIL or a wholly-owned Restricted Subsidiary of Subordinated Debt
containing covenants and events of default relating to such Subordinated Debt
which are no more restrictive in any material respect on KIL or such
wholly-owned Restricted Subsidiary, as the case may be, than the comparable
provisions of the Existing Indentures and containing subordination provisions
relating to such Subordinated Debt which are no less favorable in any material
respect to the Lenders than those contained in the Existing Indentures, as each
such Subordinated Note Indenture may be amended, supplemented, amended and
restated or otherwise modified in accordance with the terms of Section 7.2.13.


 


“Subordinated Noteholder” means, at
any time, any holder of a Subordinated Note.


 


“Subordinated Notes” means, collectively,
(i) the Existing Subordinated Notes and (ii) any other subordinated
notes, if any, issued pursuant to a Subordinated Note Indenture, as such
Subordinated Notes may be amended, supplemented or otherwise modified from time
to time in accordance with Section 7.2.13.


 


“Subordination Agreement” means a
Subordination Agreement executed and delivered to the Administrative Agent
pursuant to clause (b) of Section 7.2.2 by a Borrower
and any Restricted Subsidiary of KIL that makes a loan to a Borrower, in a form
reasonably satisfactory to the Administrative Agent.


 


“Subordination Provisions” is defined
in Section 8.1.15.


 


“Subsidiary” means, with respect to
any Person, any corporation, partnership or other entity (whether now or
hereafter acquired or existing) of which more than 50% of the outstanding
capital stock, partnership interests or similar interests having ordinary
voting power (irrespective of whether at the time capital stock or interests of
any other class or classes of such corporation shall or might have voting power
upon the occurrence of any contingency) is at the time directly or indirectly
owned by such Person, by such Person and one or more other Subsidiaries of such
Person, or by one or more other Subsidiaries of such Person.


 


“Subsidiary Pledge Agreement” means
the Second Amended and Restated Subsidiary Pledge Agreement, dated as of July 7,
2004, executed and delivered by each Significant Subsidiary of KIL pursuant to
the terms of the Existing Credit Agreement, a conformed copy of


 


28





















 


which is attached as Exhibit M hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.


 


“Subsidiary Security Agreement” means
the Second Amended and Restated Security Agreement, dated as of July 7,
2004, executed and delivered by each Significant Subsidiary of KIL pursuant to
the terms of the Existing Credit Agreement, a conformed copy of which is
attached as Exhibit J hereto, as amended, supplemented, amended and
restated or otherwise modified from time to time.


 


“Swingline Commitment” is defined in Section 2.1.2.


 


“Swingline Lender” means JPMCB, and
its successors and assigns.


 


“Swingline Note” means a promissory
note of the Borrowers payable to the Swingline Lender in the form of Exhibit A-2
hereto (as such promissory note may be amended, endorsed or otherwise modified
from time to time), evidencing the aggregate Indebtedness of the Borrowers to
the Swingline Lender resulting from outstanding Swingline Loans, and also means
all other promissory notes accepted from time to time in substitution therefor
or renewal thereof.


 


“Swingline Loan” means each Loan made
by the Swingline Lender pursuant to the Swingline Commitment.


 


“Swingline Loan Commitment Amount”
means, on any date, $30,000,000, as such amount may be reduced from time to
time pursuant to Section 2.2.


 


“Syndication Agent” is defined in the preamble.


 


“Taxes” is defined in Section 4.6.


 


“TCA” means Trading Cove Associates, a
Connecticut general partnership.


 


“Term Loan Commitment” is defined in clause
(a) of Section 2.2.3.


 


“Title Insurer” means any Person that
issues a title insurance policy on any real property on which a Mortgage or a
Debenture is placed.


 


“Total Leverage Ratio” means, as of
the last day of any Fiscal Quarter, the ratio of (a) Debt outstanding on
the last day of such Fiscal Quarter to (b) Consolidated EBITDA for
the four Fiscal Quarter period then ended; provided, that in calculating
Consolidated EBITDA for such period, any acquisitions or Dispositions (in each
case, in excess of $5,000,000) during such period shall have been deemed to
have occurred on the first day of such four Fiscal Quarter period.


 


“type” means, relative to any Loan,
the portion thereof, if any, being maintained as a Base Rate Loan or a LIBO
Rate Loan.


 


“United States” or “U.S.” means
the United States of America, its fifty States and the District of Columbia.


 


29





















 


“Unrestricted Subsidiary” means any
Subsidiary of KIL that is designated by a resolution of the Board of Directors
of KIL as an Unrestricted Subsidiary and any of its Subsidiaries.  The Board of Directors of KIL may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of KIL of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if no
Default would be in existence immediately following such designation as a
result thereof.


 


“Welfare Plan” means a “welfare plan”,
as such term is defined in section 3(1) of ERISA.


 


“wholly owned” means, with respect to
any Subsidiary, any Restricted Subsidiary all of the outstanding Capital
Securities of which (other than any director’s qualifying shares or investments
by foreign nationals mandated by applicable laws) are owned directly or
indirectly by KIL.


 


“WLG Group” means World Leisure Group
Limited, a British Virgin Islands corporation, and its Affiliates.


 


SECTION 1.2.  Use of Defined Terms.  Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Disclosure Schedule and in each
Note, Borrowing Request, Issuance Request, Continuation/Conversion Notice, Loan
Document, notice and other communication delivered from time to time in
connection with this Agreement or any other Loan Document.


 


SECTION 1.3.  Cross-References.  Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other
Loan Document, as the case may be, and, unless otherwise specified, references
in any Article, Section or definition to any clause are references to such
clause of such Article, Section or definition.


 


SECTION 1.4.  Accounting and Financial Determinations.  Unless otherwise specified, all accounting
terms used herein or in any other Loan Document shall be interpreted, all
accounting determinations and computations hereunder or thereunder (including
under Section 7.2.4) shall be made, and all financial statements
required to be delivered hereunder or thereunder shall be prepared in
accordance with, those U.S. generally accepted accounting principles (“GAAP”)
applied in the preparation of the financial statements referred to in Section 6.5.  If any preparation in the financial
statements referred to in Section 6.5 or Section 7.1.1
hereafter occasioned by the promulgation of rules, regulations, pronouncements
and opinions by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) result in a change in any results, amounts,
calculations, ratios, standards or terms found in this Agreement from those
which would be derived or be applicable absent such changes, KIL may reflect
such changes in the financial statements required to be delivered pursuant to Section 7.1.1,
but calculations of financial covenants shall be made without giving effect to
any such changes.  Upon the request of
KIL or any Lender the parties hereto agree to enter into negotiations in order
to amend the financial covenants and other terms of this Agreement if there
occur any changes in GAAP that have a material effect on the financial
statements of the KIL, so as to equitably


 


30





















 


reflect such changes with the desired result that the criteria for
evaluating KIL’s financial condition and such other terms shall be the same in
all material respects after such changes as if the changes had not been
made.  Notwithstanding anything herein to
the contrary, the Borrowers’ accounting determinations, calculations and
computations hereunder (including under Section 7.2.4) shall be
made without giving effect to Financial Accounting Standards Board (FASB)
Interpretation No. (FIN) 46R (“Consolidation of Variable Interest Entities”),
which is an Interpretation of Accounting Research Bulletin No. 51.


 


ARTICLE II



COMMITMENTS, BORROWING PROCEDURES, 

NOTES AND LETTERS OF CREDIT


 


SECTION 2.1.  Amendment and Restatement; Commitments.  The Borrowers (subject to the terms of this
Agreement) and the Lenders (including certain Existing Lenders), the
Administrative Agent, the Swingline Lender and the Issuer hereby agree that the
Existing Credit Agreement is hereby amended and restated in its entirety to
become effective and binding on the Borrowers and the Lenders (including
certain Existing Lenders), the Administrative Agent and the Issuer pursuant to
the terms of this Agreement, and the Existing Credit Agreement is hereby
amended and restated in its entirety to read as set forth in this Agreement;
and the commitments which certain Existing Lenders have agreed to extend to the
Borrowers under the Existing Credit Agreement shall be extended or advanced to
the Borrowers upon the amended and restated terms and conditions contained in
this Agreement with the intent that the terms of this Agreement shall supersede
the terms of the Existing Credit Agreement (which shall hereafter have no
further effect upon the parties thereto, other than for accrued fees and
expenses, and indemnification provisions, accrued and owing under the terms of
the Existing Credit Agreement, on or prior to the date hereof or arising (in
the case of an indemnification) under the terms of the Existing Credit
Agreement); provided that the Existing Letters of Credit shall continue
unamended and in full force and effect as Letters of Credit hereunder.  In furtherance of the foregoing, on the terms
and subject to the conditions of this Agreement (including Article V):


 


(a)           each
Lender severally agrees to make Loans pursuant to the Commitments described in Section 2.1.1;
and


 


(b)           the
Issuer agrees that it will issue Letters of Credit pursuant to Section 2.1.3,
and each Lender severally agrees that it will participate in such Letters of
Credit in accordance with Section 2.6.1.


 


SECTION 2.1.1.  Commitment of Each Lender.  From time to time on any Business Day
occurring prior to the Commitment Termination Date, each Lender will, subject
to the terms of this Agreement, make Loans to a Borrower equal to such Lender’s
Percentage of the aggregate amount of the Borrowing requested by such Borrower
to be made on such day.  The commitment
of each Lender described in this Section 2.1.1 is herein referred
to as its “Commitment”.  On the
terms and subject to the conditions hereof, the Borrowers may from time to time
borrow, prepay and reborrow Loans.


 


31





















 


SECTION 2.1.2.  Swingline Loan Commitment.  From time to time on any Business Day
occurring before the Commitment Termination Date, the Swingline Lender will
make Swingline Loans to the Borrowers equal to the amount of Swingline Loans
requested by the Borrowers to be made on such day.  The commitment of the Swingline Lender
described in this Section 2.1.2 is herein referred to as its “Swingline
Commitment.”  On the terms and subject
to the conditions hereof, the Borrowers may from time to time borrow, repay and
reborrow Swingline Loans.


 


SECTION 2.1.3.  Letter of Credit Commitment.  From time to time on any Business Day
occurring prior to the Commitment Termination Date, the Issuer will, subject to
the terms of this Agreement:


 


(a)           issue
one or more letters of credit (a “Letter of Credit”) for the account of
a Borrower or a Guarantor in the Stated Amount requested by KIL on such day; or


 


(b)           extend
the Stated Expiry Date of an existing Letter of Credit previously issued
hereunder (or under the Existing Credit Agreement) to a date not later than the
earlier of (x) the Commitment Termination Date and (y) one year from
the date of such extension.


 


SECTION 2.1.4.  Lenders Not Permitted or Required to Make
Loans.  No Lender shall be permitted
or required to make any Loan if, after giving effect thereto, such Lender’s
Percentage of all Loans and Letter of Credit Outstandings would exceed such
Lender’s Percentage of the Commitment Amount or if the aggregate outstanding
principal amount of all Loans and Letter of Credit Outstandings of all Lenders
would exceed the Commitment Amount.  The
Swingline Lender shall not be permitted or required to make any Swingline Loan
if, after giving effect thereto, (i) the aggregate outstanding principal
amount of all Swingline Loans would exceed the Swingline Loan Commitment
Amount, or (ii) the aggregate outstanding principal amount of all
Swingline Loans and all other Loans together with the Letter of Credit Outstandings
of all Lenders would exceed the Commitment Amount.


 


SECTION 2.1.5.  Issuer Not Permitted or Required to Issue
Letters of Credit.  The Issuer shall
not be permitted or required to issue any Letter of Credit if, after giving
effect thereto:


 


(a)           the
aggregate amount of all Letter of Credit Outstandings would exceed the Letter
of Credit Commitment Amount; or


 


(b)           the
sum of the aggregate amount of all Letter of Credit Outstandings plus the
aggregate principal amount of all Loans then outstanding would exceed the
Commitment Amount then in effect.


 


SECTION 2.2.  Reduction/Increase
of Commitment Amount.  The Commitment
Amount is subject to (i) reduction from time to time pursuant to Sections 2.2.1
and 2.2.2 and (ii) increase from time to time pursuant to Section 2.2.3.


 


SECTION 2.2.1.  Optional Reduction.  KIL may, from time to time on any Business
Day, voluntarily reduce the Commitment Amount and such voluntary Commitment
reductions shall be binding on all Borrowers; provided, however,
that all such reductions shall require at least three


 


32





















 


Business Days’ prior notice to the Administrative Agent and be
permanent, and any partial reduction of the Commitment Amount shall be in a
minimum amount of $1,000,000 and in an integral multiple of $1,000,000.  All voluntary reductions of the Commitment
Amount below $30,000,000 shall also reduce the Swingline Loan Commitment.


 


SECTION 2.2.2.  Mandatory Reduction.  The Commitment Amount shall be automatically
and permanently reduced on the date that is 300 days following the occurrence
of an Asset Sale by the amount of the Net Cash Proceeds (as such terms are
defined in the Existing Indentures), if any, that would be required to be
applied as the Asset Sale Offer Amount under the terms of the Existing
Indentures.  All reductions of the
Commitment Amount below $30,000,000 shall also reduce the Swingline Loan
Commitment.


 


SECTION 2.2.3.  Optional Increase.  (a)  Provided that no Default then
exists, the Borrowers may on any Business Day prior to the Commitment
Termination Date, request from time to time in writing that the then effective
Commitment Amount be increased or one or more term loan commitments (a “Term
Loan Commitment”) be created in an aggregate principal amount not to exceed
$250,000,000.  Any request under this Section to
increase the Commitment Amount or create a Term Loan Commitment shall be
submitted by the Borrowers to the Administrative Agent, specify the proposed
effective date (which date shall be not less than 5 days after the date of such
request) and specify the amount of such increase (which shall be in integral
multiples of $1,000,000).  No Lender
shall have any obligation, express or implied, to offer to increase its
Commitment or offer a Term Loan Commitment. 
Only the consent of the Administrative Agent (which consent shall not be
unreasonably withheld or delayed) and those Lenders agreeing to increase their
Commitments (the “Increasing Lenders”) shall be required for an increase
in the Commitment Amount pursuant to this Section.


 


(b)           The
Borrowers may accept some or all of the offered amounts from the then-current
Lenders or designate new lenders which qualify as Eligible Assignees and are
reasonably acceptable to the Administrative Agent and, in the case of an
increase in the Commitment Amount, the Issuer, as additional Lenders hereunder
(each, an “Additional Increasing Lender”), which Additional Increasing
Lenders may assume all or a portion of the increase in the applicable
Commitment Amount or Term Loan Commitment. 
The Administrative Agent and KIL shall have discretion to adjust the
allocation of the increased Commitment Amount or Term Loan Commitment among
Increasing Lenders and Additional Increasing Lenders.  Each Additional Increasing Lender shall
become an additional party hereto as an Additional Increasing Lender
concurrently with the effectiveness of the proposed increase in the applicable
Commitment Amount or Term Loan Commitment upon its execution of an instrument
of joinder to this Agreement which is in form and substance reasonably
acceptable to the Administrative Agent and which, in any event, contains the
representations, warranties, indemnities and other protections afforded herein
to the Administrative Agent and the other Lenders.


 


(c)           Subject
to the foregoing, any increase requested by KIL shall be effective as of the
date proposed by KIL and shall be in the principal amount equal to (i) the
amount which Increasing Lenders are willing to assume as increases to the
amount of their Commitments plus (ii) the amount offered by any
Additional Increasing Lenders.  Upon the
effectiveness of any such increase, if requested by the applicable Lender, the
Borrowers shall issue replacement Notes to each Increasing Lender and new Notes
to each Additional Increasing Lender, and the


 


33





















 


applicable Percentages of each Lender will be adjusted to give effect
to the increase in the applicable Commitment Amount.  To the extent that the adjustment of Percentages
results in loss or expenses to any Lender as a result of the prepayment of any
LIBO Rate Loan on a date other than the scheduled last day of the Interest
Period applicable thereto, the Borrowers shall be responsible for such loss or
expenses pursuant to Section 4.4.


 


(d)           If
and to the extent that any Lenders and/or other lenders agree, in their sole
discretion, to provide any Term Loan Commitment, the Administrative Agent is
hereby authorized, without obtaining any further consents of the Lenders, to enter
into any amendments or supplements (including an amendment and restatement of
the Agreement) with the Borrowers to this and any other Loan Document to the
extent necessary to implement the creation of a Term Loan Commitment and make
term loans hereunder and the Borrowers shall execute and deliver any additional
Notes, other amendments or modifications to any Loan Document, and any other
certificates, consents or legal opinions as the Administrative Agent may
reasonably request and to the extent necessary to implement the same; provided
that the Term Loans will (i) otherwise be subject to the terms and
conditions of this Agreement, (ii) be treated as pari passu Obligations
under the Loan Documents securing the obligations and (iii) mature on or
after Stated Maturity Date.


 


SECTION 2.3.  Borrowing Procedure.


 


SECTION 2.3.1.  Revolving Loans.  By delivering a Borrowing Request to the
Administrative Agent on or before 1:00 p.m., New York time, on a
Business Day, a Borrower may from time to time irrevocably request, on not less
than one, in the case of Base Rate Loans, or three, in the case of LIBO Rate
Loans, nor (in either case), more than five Business Days’ notice, that a
Borrowing be made in a minimum amount of $1,000,000 and an integral multiple of
$1,000,000, or in the unused amount of the Commitments.  On the terms and subject to the conditions of
this Agreement, each Borrowing shall be comprised of the type of Loans, and
shall be made on the Business Day, specified in such Borrowing Request (the “Funding
Date”).  On or before 11:00 a.m.,
New York time, on such Funding Date, each Lender shall deposit with the
Administrative Agent same day funds in an amount equal to such Lender’s
Percentage of the requested Borrowing. 
Such deposit will be made to an account which the Administrative Agent
shall specify from time to time by notice to the Lenders.  Unless the Administrative Agent shall have
been notified by any Lender prior to the Funding Date for any Loans that such
Lender does not intend to make available to the Administrative Agent the amount
of such Lender’s Loan requested on such Funding Date, the Administrative Agent
may assume that such Lender has made such amount available to the
Administrative Agent on such Funding Date and the Administrative Agent may, in
its sole discretion, but shall not be obligated to, make available to the
Borrowers a corresponding amount on such Funding Date.  If such corresponding amount is not in fact
made available to Administrative Agent by such Lender, Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from such Funding Date
until the date such amount is paid to Administrative Agent, at the customary
rate set by Administrative Agent for the correction of errors among banks for
three Business Days and thereafter at the Alternate Base Rate.  If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent’s demand
therefore, the Administrative Agent shall promptly notify the Borrowers and the


 


34





















 


Borrowers shall within five Business Days of receipt of such notice pay
such corresponding amount to the Administrative Agent together with interest
thereon, for each day from such Funding Date until the date such amount is paid
to Administrative Agent, at the rate payable under this Agreement for Base Rate
Loans.  Nothing in this Section shall
be deemed to relieve any Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that the Borrowers may have against any
Lender as a result of any default by such Lender hereunder.  No Lender’s obligation to make any Loan shall
be affected by any other Lender’s failure to make any Loan.


 


SECTION 2.3.2.  Swingline Loans.  By delivering a telephonic notice to the
Swingline Lender (which notice shall promptly be confirmed by telecopy to the
Swingline Lender and to the Administrative Agent) on or before 1:00 p.m.,
New York time, on a Business Day, a Borrower may from time to time
irrevocably request that a Borrowing of Swingline Loans be made by 3:00 p.m.,
New York time, on the same day such Borrowing is requested, in a minimum
amount of $1,000,000 and in $1,000,000 integral multiples thereof, or in the
unused amount of the Swingline Loan Commitment Amount.  On the terms and subject to the conditions of
this Agreement, each such Borrowing shall be comprised of Base Rate Loans,
shall bear interest at the rate equal to the sum of the Federal Funds Rate from
time to time in effect plus the Applicable Margin for LIBO Rate Loans, and
shall be made on the same day such Borrowing is requested (if requested on or
before 1:00 p.m., New York time) or on the next Business Day (if requested
after 1:00 p.m., New York time). 
The Swingline Lender shall make funds in an amount equal to the
requested Borrowing available to the Borrowers to the accounts the Borrowers
shall have specified in the applicable Borrowing Request.


 


SECTION 2.4.  Continuation and Conversion Elections.  By delivering a Continuation/Conversion
Notice to the Administrative Agent on or before 1:00 p.m., New York
time, on a Business Day, a Borrower may from time to time irrevocably elect, on
not less than five nor more than three Business Days’ notice that all, or any
portion in an aggregate minimum amount of $1,000,000 and an integral multiple
of $1,000,000, of any Loans made to it be, in the case of Base Rate Loans,
converted into LIBO Rate Loans or, in the case of LIBO Rate Loans, be converted
into a Base Rate Loan or continued as a LIBO Rate Loan (in the absence of
delivery of a Continuation/Conversion Notice with respect to any LIBO Rate Loan
at least three Business Days before the last day of the then current Interest
Period with respect thereto, such LIBO Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan); provided, however,
that (i) each such conversion or continuation shall be made pro rata among
the applicable outstanding Loans of all Lenders, and (ii) no portion of
the outstanding principal amount of any Loans may be continued as, or be
converted into, LIBO Rate Loans when any Event of Default has occurred and is
continuing if the Required Lenders so elect.


 


SECTION 2.5.  Funding.  Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have
been made and to be held by such Lender, and the obligation of the Borrowers,
to repay such LIBO Rate Loan shall nevertheless be to such Lender for the
account of such foreign branch, Affiliate or international banking
facility.  In addition, each Borrower and
each Lender


 


35





















 


hereby consents and agrees that, for purposes of any determination to
be made for purposes of Section 4.1, 4.2, 4.3 or 4.4,
it shall be conclusively assumed that each Lender elected to fund all LIBO Rate
Loans by purchasing Dollar deposits in its LIBOR Office’s interbank eurodollar
market.


 


SECTION 2.6.  Letter of Credit Issuance Procedures.  By delivering to the Administrative Agent an
Issuance Request on or before 1:00 p.m., New York City time, on a
Business Day, KIL may, from time to time irrevocably request, on not less than
three Business Days’ notice, in the case of an initial issuance of a Letter of
Credit, and not less than three Business Days’ notice prior to the existing
Stated Expiry Date (or, if a Letter of Credit has an automatic extension
provision, at least three Business Days’ notice prior to the date that such
Letter of Credit will, by its terms, be extended or, if earlier, the date on
which a notice from the Issuer is required to be delivered to the beneficiary
of the Letter of Credit informing the beneficiary that the Letter of Credit
will not be extended) in the case of a request for the extension of the Stated
Expiry Date of a Letter of Credit, that the Issuer issue, or extend the Stated
Expiry Date of, as the case may be, a Letter of Credit in Dollars or a Foreign
Currency (provided, that the Dollar Equivalent of the aggregate amount
of Foreign Currency Letters of Credit shall not exceed the Foreign Currency
Letter of Credit Commitment Amount) in such form as may be requested by KIL and
approved by the Issuer, solely for the purposes described in Section 7.1.8.  Each Letter of Credit shall by its terms be
stated to expire on a date (its “Stated Expiry Date”) no later than the
earlier to occur of (i) 10 days prior to the Stated Maturity Date or (ii) one
year from the date of its issuance.  The
Issuer will make available to the beneficiary thereof the original of each
Letter of Credit which it issues hereunder.


 


SECTION 2.6.1.  Other Lenders’ Participation.  Upon the issuance of each Letter of Credit
issued by the Issuer pursuant hereto, and without further action, each Lender
shall be deemed to have irrevocably purchased, to the extent of its Percentage,
a participation interest in such Letter of Credit (including the Contingent
Liability and any Reimbursement Obligation with respect thereto), and such
Lender shall, to the extent of its Percentage, be responsible for reimbursing
promptly (and in any event within three Business Days following the
Disbursement Date) the Issuer for Reimbursement Obligations arising under the
Letter of Credit issued by the Issuer which have not been reimbursed by the
Borrowers in accordance with Section 2.6.3.  In addition, such Lender shall, to the extent
of its Percentage, be entitled to receive (i) a ratable portion of the
Letter of Credit fees payable pursuant to Section 3.3.2 with
respect to each Letter of Credit (other than the issuance fees payable to the
Issuer with respect to such Letter of Credit pursuant to the last sentence of Section 3.3.2)
and (ii) from the date that such Lender has reimbursed the Issuer in
accordance with the first sentence of this Section, (A) the interest
payable pursuant to Section 2.6.2 and, if applicable, (B) the
interest payable pursuant to Section 3.2.2 with respect to any
Reimbursement Obligation not paid when due. 
To the extent that any Lender has reimbursed the Issuer for a
Disbursement as required by this Section, such Lender shall be entitled to
receive its ratable portion of any amounts subsequently received (from a
Borrower or otherwise) in respect of such Disbursement.


 


SECTION 2.6.2.  Disbursements.  The Issuer will notify KIL and the Administrative
Agent promptly of the presentment for payment of any Letter of Credit issued by
the Issuer, together with notice of the date (the “Disbursement Date”)
such payment shall be made (each


 


36





















 


such payment, a “Disbursement”). 
Subject to the terms and provisions of such Letter of Credit and this
Agreement, the Issuer shall make such Disbursement to the beneficiary (or its
designee) of such Letter of Credit. 
Prior to 5:00 p.m., New York City time, on the Disbursement
Date, the Borrowers will (or any one of them) reimburse the Administrative
Agent, for the account of the Issuer, for all amounts which the Issuer has
disbursed under such Letter of Credit (in the currency in which such
Disbursement was made), together with interest thereon (in the currency in
which such Disbursement was made) at a rate per annum equal to the rate then in
effect for Base Rate Loans (with the then Applicable Margin for Loans accruing
on such amount) for the period from the Disbursement Date through the date of
such reimbursement.  Without limiting in
any way the foregoing and notwithstanding anything to the contrary contained
herein or in any separate application for any Letter of Credit, each Borrower
hereby acknowledges and agrees that it shall be jointly and severally obligated
to reimburse the Issuer upon each Disbursement of a Letter of Credit (including
Letters of Credit issued for the account of the other Borrowers or a
Guarantor), and each Borrower shall be deemed to be the obligor for purposes of
each such Letter of Credit issued hereunder (whether the account party on such
Letter of Credit is such Borrower or a Guarantor).


 


SECTION 2.6.3.  Reimbursement.  The obligation (a “Reimbursement
Obligation”) of each Borrower under Section 2.6.2 to reimburse
the Issuer with respect to each Disbursement (including interest thereon), and,
upon the failure of the Borrowers to reimburse the Issuer, each Lender’s
obligation under Section 2.6.1 to reimburse the Issuer, shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which any Borrower, any Obligor
or such Lender, as the case may be, may have or have had against the Issuer or
any such Lender, including any defense based upon the failure of any
Disbursement to conform to the terms of the applicable Letter of Credit (if, in
the Issuer’s good faith opinion, such Disbursement is determined to be
appropriate) or any non-application or misapplication by the beneficiary of the
proceeds of such Letter of Credit; provided, however, that after
paying in full its Reimbursement Obligation hereunder, nothing herein shall
adversely affect the right of any Borrower or such Lender, as the case may be,
to commence any proceeding against the Issuer for any wrongful Disbursement
made by the Issuer under a Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on the part of the Issuer.


 


SECTION 2.6.4.  Deemed Disbursements.  Upon the occurrence and during the
continuation of any Event of Default of the type described in Section 8.1.9
or, with notice from the Administrative Agent (at the request of the Required
Lenders), upon the occurrence and during the continuation of any other Event of
Default:


 


(a)           an
amount equal to that portion of all Letter of Credit Outstandings attributable
to the then aggregate amount which is undrawn and available under all Letters
of Credit issued and outstanding hereunder shall, without demand upon or notice
to any Borrower, be deemed to have been paid or disbursed, in the applicable
currency or currencies, by the Issuer under such Letters of Credit
(notwithstanding that such amount may not in fact have been so paid or
disbursed); and


 


(b)           upon
notification by the Administrative Agent to the Borrowers of their obligations
under this Section, the Borrowers shall be immediately obligated to reimburse


 


37





















 


the Issuer for the amount, and in the
currency, deemed to have been so paid or disbursed by the Issuer.


 


Any amounts so payable by the Borrowers pursuant to this Section shall
be deposited in cash in an interest bearing account with the Administrative
Agent and held as collateral security pursuant to a cash collateral agreement
in form and substance reasonably satisfactory to the Administrative Agent for
the Obligations in connection with the Letters of Credit issued by the
Issuer.  At such time when the Defaults
or Events of Default giving rise to the deemed disbursements hereunder shall
have been cured or waived, the Administrative Agent shall return to KIL all
amounts then on deposit with the Administrative Agent pursuant to this Section which
have not been applied to the partial satisfaction of such Obligations.


 


SECTION 2.6.5.  Nature of Reimbursement Obligations.  Each Borrower, each other Obligor and, to the
extent set forth in Section 2.6.1, each Lender shall assume all
risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof.  The Issuer shall
not be (except to the extent of its own gross negligence or willful misconduct)
responsible for:


 


(a)           the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
Letter of Credit or any document submitted by any party in connection with the
application for and issuance of a Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged;


 


(b)           the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or the proceeds thereof
in whole or in part, which may prove to be invalid or ineffective for any reason;


 


(c)           the
failure of the beneficiary of a Letter of Credit to comply fully with
conditions required in order to demand payment under a Letter of Credit;


 


(d)           errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise; or


 


(e)           any
loss or delay in the transmission or otherwise of any document or draft
required in order to make a Disbursement under a Letter of Credit.


 


None of the foregoing shall affect, impair or prevent the vesting of
any of the rights or powers granted to the Issuer or any Lender.  In furtherance and extension and not in
limitation or derogation of any of the foregoing, any action taken or omitted
to be taken by the Issuer in connection with such Letter of Credit in good
faith (and not constituting gross negligence or willful misconduct) shall be
binding upon each Borrower and each other Obligor and each such Lender, and
shall not put the Issuer under any resulting liability to any Borrower, any
Obligor or any such Lender, as the case may be.


 


SECTION 2.6.6.  Dollar Equivalent Determinations.  For purposes of determining the amount of
Foreign Currency Letter of Credit Outstandings and for purposes of calculating
fees payable under Section 3.3.2 with respect to Foreign Currency
Letter of Credit Outstandings, the


 


38





















 


principal amount of such Foreign Currency Letter of Credit Outstandings
shall be deemed to be, as of any date of determination, the Dollar Equivalent
thereof at such date.  The initial Dollar
Equivalent of any Foreign Currency Letter of Credit shall be determined by the
Administrative Agent and/or the Issuer, as the case may be, on the date of
issuance thereof.  If a Disbursement is
made by the Issuer under any Foreign Currency Letter of Credit, the Dollar
Equivalent of such Disbursement shall be determined by the Issuer on the
Disbursement Date related thereto, and the Issuer shall notify the
Administrative Agent and the applicable Borrower promptly of such Dollar
Equivalent.


 


SECTION 2.7.  Currency Fluctuation, etc.  Not later than 12:00 p.m., New York
time, on each Quarterly Payment Date, the Administrative Agent shall determine
the Dollar Equivalent as of such Quarterly Payment Date with respect to each
Foreign Currency for which there are at such time outstanding Foreign Currency
Letters of Credit or in respect thereof (after giving effect to any Loans to be
made or repaid or Letters of Credit to be issued or Reimbursement Obligations
to be repaid on such date).  The
Administrative Agent shall promptly notify the Borrowers of the Dollar
Equivalent so determined and such Dollar Equivalent shall become effective on
the first Business Day immediately following the relevant Quarterly Payment
Date (a “Reset Date”) and shall remain effective until the next
succeeding Reset Date (provided that the Administrative Agent’s failure
to notify the Borrowers shall not affect the effectiveness of such
determination).


 


SECTION 2.8.  Notes. 
Each Borrower agrees that, upon the request to the Administrative Agent
by any Lender, each such Borrower will execute and deliver to such Lender a
Note payable to the order of such Lender in a maximum principal amount equal to
the amount of Credit Extensions that can be made to a particular Borrower,
which shall, in the aggregate, equal such Lender’s Percentage of the original
Commitment Amount.  Each Borrower hereby
irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender’s Note (or on any continuation of
such grid), which notations, if made, shall evidence, inter  alia,
the date of, the outstanding principal of, and the interest rate and Interest
Period applicable to the Loans evidenced thereby.  Such notations shall be conclusive and
binding on the Borrowers absent manifest error; provided, however,
that the failure of any Lender to make any such notations shall not limit or
otherwise affect any Obligations of any Borrower or any other Obligor.


 


SECTION 2.9.  Register.  Each Borrower hereby designates the
Administrative Agent to serve as such Borrower’s agent, solely for the purpose
of this Section 2.9, to maintain a register (the “Register”)
on which the Administrative Agent will record each Lender’s Commitment, each
Lender’s Percentage, the Loans made by each Lender and each repayment in
respect of the principal amount of the Loans of each Lender and annexed to
which the Administrative Agent shall retain a copy of each Assignment and
Assumption Agreement delivered to the Administrative Agent pursuant to Section 10.11.1.  Failure to make any recordation, or any error
in such recordation, shall not affect any Borrower’s obligation in respect of
such Loans.  The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent and the Lenders shall treat each Person in whose name a
Loan (and, as provided in Section 2.8, the Note evidencing such
Loan, if any) is registered as the owner thereof


 


39


















 


for all purposes of this Agreement, notwithstanding notice or any
provision herein to the contrary.


 


ARTICLE III



REPAYMENTS, PREPAYMENTS, INTEREST AND FEES


 


SECTION 3.1.  Repayments and Prepayments.  Each Borrower shall repay in full the unpaid
principal amount of its Loans upon the Stated Maturity Date.


 


SECTION 3.1.1.  Payment Terms.  Prior thereto, the Borrowers may (or shall,
as applicable) make the repayments and prepayments set forth below.


 


(a)           Each
Borrower may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of any of
its Loans, and such Borrower may select whether such prepayment shall be
allocated to the Base Rate Loans, LIBO Rate Loans or both (and the amounts so
allocated to each); provided, however, that:


 


(i)            any
such prepayment shall be made first to Base Rate Loans before application to
LIBO Rate Loans if such prepayment would minimize the amount of any payments
required to be made to the Borrowers pursuant to Section 4.4;


 


(ii)           all
such voluntary prepayments shall require at least one Business Day’s prior
written notice to the Administrative Agent (unless, in the case of prepayment
of any Swingline Loan, notice shall have been given by 1:00 p.m., New York
time and payment shall be received by 1:00 p.m. New York time, in which
event one Business Day’s notice shall not be required);


 


(iii)          all
such voluntary partial prepayments shall be in an aggregate minimum amount of
$1,000,000 and an integral multiple of $1,000,000.


 


(b)           The
Borrowers shall, on each date when any reduction in the Commitment Amount shall
become effective, including pursuant to Section 2.2, make a
mandatory prepayment of the Loans made to it, and if required Cash
Collateralize Letter of Credit Outstandings, equal to the excess, if any, of
the aggregate outstanding principal amount of all Loans and Letter of Credit
Outstandings over the Commitment Amount as so reduced and, as so reduced,
applicable to such Borrower.


 


(c)           The
Borrowers shall, immediately upon any acceleration of the Stated Maturity Date
of any Loans pursuant to Section 8.2 or Section 8.3,
repay all of their Loans, unless, pursuant to Section 8.3, only a
portion of all Loans is so accelerated.


 


(d)           The
Borrowers shall, on each Quarterly Payment Date, Cash Collateralize Foreign
Currency Letters of Credit in an amount equal to the excess, if any, of the
Dollar Equivalent of all Foreign Currency Letter of Credit Outstandings over
105% of the Foreign Currency Letter of Credit Commitment Amount.


 


40





















 


Each prepayment of any Loans made pursuant to this Section shall
be without premium or penalty, except as may be required by Section 4.4.  No voluntary prepayment of principal of any
Loans shall cause a reduction in the Commitment Amount.


 


SECTION 3.1.2.  Special Swingline Loan Provisions.  (a)  All Swingline Loans shall be
payable with accrued interest thereon solely to the Swingline Lender for its
own account and shall otherwise be subject to all the terms and conditions
applicable to the Loans (unless otherwise specifically set forth herein).  Upon the earlier to occur of (i) seven
Business Days after the making of any Swingline Loan, or (ii) the Stated
Maturity Date, the Borrowers shall repay all of such Swingline Loans in cash by
1:00 p.m., New York time, in an amount at least equal to the aggregate
outstanding principal amount of all Swingline Loans together with all accrued
interest thereon, and shall apply the proceeds of any Borrowing to repay in its
entirety the aggregate outstanding principal amount of all Swingline Loans
together with accrued interest thereon to the date of such repayment.


 


(a)           In
the event that any portion of any Swingline Loan is not repaid when due, the
Administrative Agent shall promptly, and in no event later than 5:00 p.m.,
New York time, two Business Days after payment was due, notify each Lender in
writing of the unreimbursed amount of such Swingline Loan and of such Lender’s
Percentage of such unreimbursed amount.  Each
of the Lenders shall make a Loan in an amount equal to such Lender’s Percentage
of the unreimbursed amount of such Swingline Loan, together with accrued unpaid
interest thereon (to the extent that there is availability under the Loan
Commitment), and pay the proceeds thereof, in immediately available funds,
directly to the Swingline Lender, not later than 1:00 p.m., New York time,
on the next Business Day after the date such Lender is notified by the
Administrative Agent.  Loans made by the
Lenders to repay unreimbursed Swingline Loans pursuant to this subsection shall
constitute Loans hereunder, initially shall be Base Rate Loans and shall be
subject to all of the provisions of this Agreement concerning Loans, except
that such Loans shall be made upon demand by the Administrative Agent as set
forth above rather than upon notice by the Borrowers, and shall be made,
notwithstanding anything in this Agreement to the contrary, without regard to
satisfaction of conditions precedent to the making of Loans set forth in Article V
of this Agreement; provided, however, that no Lender shall be
obligated to make such Loans if, prior to the date of the Borrowing of the
Swingline Loan to be refunded, the Swingline Lender had received written notice
from the Administrative Agent or any Lender of the existence and continuance of
an Event of Default.  Each Lender’s
obligation to make Loans in the amount of its Percentage of any unreimbursed
Swingline Loan pursuant hereto is several, and not joint or joint and
several.  The failure of any Lender to
perform its obligation to make a Loan in the amount of such Lender’s Percentage
of any unreimbursed Swingline Loan will not relieve any other Lender of its
obligation hereunder to make a Loan in the amount of such other Lender’s Percentage
of such unreimbursed Swingline Loan.  Any
Lender may, but shall have no obligation to any Person to, assume all or any
portion of any non-performing Lender’s obligation to make a Loan in the amount
of such Lender’s Percentage of such unreimbursed Swingline Loan.  The Borrowers agree to accept the Loans
hereinabove provided, whether or not such Loans could have been made pursuant
to the terms of Section 5.2 hereof or any other Section of
this Agreement.


 


41





















 


(b)           In
the event, for whatever reason, the Administrative Agent determines that the
Lenders are not able to, or that it could be disadvantageous for the Lenders
to, advance their respective Percentage of Loans for the purpose of refunding
Swingline Loans as required hereunder, then each of the Lenders absolutely and
unconditionally agrees to purchase and take from the Swingline Lender on demand
an undivided participation interest in Swingline Loans outstanding in an amount
equal to their respective Percentage of such Swingline Loans.


 


SECTION 3.2.  Interest Provisions.  Interest on the outstanding principal amount
of Loans shall accrue and be payable in accordance with this Section 3.2.


 


SECTION 3.2.1.  Rates. 
Pursuant to an appropriately delivered Borrowing Request or
Continuation/Conversion Notice, a Borrower may elect that Loans comprising a
Borrowing accrue interest at a rate per annum:


 


(a)           on
that portion maintained from time to time as a Base Rate Loan, equal to the sum
of the Alternate Base Rate from time to time in effect plus the Applicable
Margin;


 


(b)           on
that portion maintained as a LIBO Rate Loan, during each Interest Period
applicable thereto, equal to the sum of the LIBO Rate (Reserve Adjusted) for
such Interest Period plus the Applicable Margin;


 


(c)           on
that portion maintained as a Swingline Loan, equal to the sum of the Federal
Funds Rate from time to time in effect plus the Applicable Margin for LIBO Rate
Loans.


 


All LIBO Rate Loans shall bear interest from and including the first day
of the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBO Rate
Loan.


 


SECTION 3.2.2.  Post-Maturity Rates.  After the date any principal amount of any
Loan is due and payable (whether on the Stated Maturity Date, upon acceleration
or otherwise), or after any other monetary Obligation of a Borrower shall have
become due and payable, such Borrower shall pay, but only to the extent
permitted by law, interest (after as well as before judgment) on such amounts
at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin
for Base Rate Loans plus a margin of 2%.


 


SECTION 3.2.3.  Payment Dates.  Interest accrued on each Loan shall be
payable in arrears, without duplication:


 


(a)           on
the Stated Maturity Date therefor;


 


(b)           with
respect to a Loan, on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan;


 


(c)           with
respect to Base Rate Loans, on the last Business Day of each Fiscal Quarter
occurring after the date of the initial Borrowing hereunder;


 


42





















 


(d)           with
respect to LIBO Rate Loans, the last day of each applicable Interest Period
(and, if such Interest Period shall exceed three months, on each third month
anniversary of such Interest Period); and


 


(e)           on
that portion of any Loans the maturity of which is accelerated pursuant to Section 8.2
or Section 8.3, immediately upon such acceleration.


 


Interest accrued on Loans or other monetary Obligations arising under
this Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.


 


SECTION 3.3.  Fees. 
KIL agrees to pay the fees set forth in this Section 3.3.  All such fees shall be non-refundable.


 


SECTION 3.3.1.  Commitment Fee.  KIL agrees to pay to the Administrative Agent
for the account of each Lender for the period (including any portion thereof
when its Commitment is suspended by reason of any Borrower’s inability to
satisfy any condition of Article V) commencing on the Effective
Date and continuing through the Commitment Termination Date, a commitment fee
at the rate of the Applicable Commitment Fee per annum, in each case on such
Lender’s Percentage of the average daily unused portion of the Commitment
Amount (net of Letter of Credit Outstandings. 
Such commitment fees shall be payable by KIL, in arrears on each
Quarterly Payment Date, commencing with the first such day following the
Effective Date, and on the Commitment Termination Date.


 


SECTION 3.3.2.  Letter of Credit Fee.  KIL agrees to pay to the Administrative
Agent, for the pro  rata account of the Issuer and each other
Lender, a Letter of Credit fee, in Dollars, in an amount equal to the then
Applicable Margin for LIBO Rate Loans, multiplied by the average daily undrawn
Stated Amount (or the Dollar Equivalent thereof with respect to Foreign
Currency Letters of Credit) of all Letters of Credit outstanding during the
applicable period, with such fees being payable quarterly in arrears on each
Quarterly Payment Date.  KIL further
agrees to pay to the Issuer a fronting fee in the amount as set forth in the
Fee Letter, dated as of September 15, 2005, between the Borrowers, the
Administrative Agent, DBSI and Deutsche Bank Trust Company Americas, payable
quarterly in arrears on each Quarterly Payment Date and customary
administrative fees with respect to issuance, amendment, renewal or extension
of any Letter of Credit or processing of drawings thereunder (as delivered to
the Borrowers in writing).


 


SECTION 3.3.3.  Other Fees.  The Borrowers agree to pay to each Lender for
its own account upfront fees in such amounts and on such dates as the Borrowers
and such Lender have otherwise agreed to.


 


SECTION 3.4.  Guaranty Provisions.  Each Borrower hereby jointly and severally
irrevocably guarantees the payment of all Obligations as set forth in this Section 3.4.


 


SECTION 3.4.1.  Guaranty.  Each Borrower hereby absolutely,
unconditionally and irrevocably jointly and severally:


 


43





















 


(a)           guarantees
the full and punctual payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise, of all Obligations
of the other Borrowers and each other Obligor, whether for principal, interest,
fees, expenses or otherwise (including all such amounts which would become due
but for the operation of the automatic stay under Section 362(a) of
the United States Bankruptcy Code, 11 U.S.C. § 362(a), and the operation
of Sections 502(b) and 506(b) of the United States Bankruptcy Code,
11 U.S.C. § 502(b) and § 506(b)); and


 


(b)           indemnifies
and holds harmless each Lender Party and each holder of a Note for any and all
costs and expenses (including reasonable attorneys’ fees and expenses) incurred
by such Lender Party or such holder, as the case may be, in enforcing any
rights under Section 3.4;


 


provided that in the
case of the guaranty of a Borrower of the Obligations of other than its direct
or indirect Subsidiaries, such guaranty shall be limited to the maximum amount
that can be guaranteed without rendering such guaranty unenforceable under
fraudulent conveyance or similar laws.  This guaranty and the provisions of this Section 3.4
constitutes a guaranty of payment when due and not of collection, and each
Borrower specifically agrees that it shall not be necessary or required that
any Lender Party exercise any right, assert any claim or demand or enforce any
remedy whatsoever against the Borrowers or any other Obligor (or any other
Person) before or as a condition to the obligations of such Borrower
hereunder.  Each Borrower acknowledges
and agrees that it shall be jointly and severally liable for the Obligations
arising under Letters of Credit issued for Subsidiaries of KIL, notwithstanding
that such Borrower is not the account party of any particular Letter of Credit.


 


SECTION 3.4.2.  Acceleration of Guaranty.  Each Borrower agrees that following the
acceleration of the Obligations pursuant to Section 8.2 or 8.3
such Borrower will pay to the Administrative Agent for the account of the
Lender Parties forthwith the full amount which would be payable hereunder by
such Borrower.


 


SECTION 3.4.3.  Guaranty Absolute, etc.  Section 3.4 shall in all respects
be a continuing, absolute, unconditional and irrevocable guaranty of payment,
and shall remain in full force and effect until all Obligations of the
Borrowers and each other Obligor have been paid in full, all obligations of
each Borrower hereunder shall have been paid in full and all Commitments shall
have terminated.  Each Borrower
guarantees that the Obligations of the other Borrowers and each other Obligor
will be paid strictly in accordance with the terms of this Agreement and each
other Loan Document under which they arise, regardless of any law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of any Lender Party with respect thereto.  The liability of each Borrower under Section 3.4
shall be absolute, unconditional and irrevocable irrespective of:


 


(a)           any
lack of validity, legality or enforceability of this Agreement or any other
Loan Document;


 


(b)           the
failure of any Lender Party:


 


44





















 


(i)            to
assert any claim or demand or to enforce any right or remedy against any other
Borrower, any other Obligor or any other Person (including any other guarantor)
under Section 3.4 of this Agreement, any other Loan Document or
otherwise; or


 


(ii)           to
exercise any right or remedy against any other guarantor of, or collateral
securing, any Obligations of any other Borrower or any other Obligor;


 


(c)           any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations of the other Borrowers or any other Obligor, or any
other extension, compromise or renewal of any Obligation of any other Borrower
or any other Obligor;


 


(d)           any
reduction, limitation, impairment or termination of the Obligations of any
other Borrower or any other Obligor for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to (and each Borrower hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, the
Obligations of any other Borrower, any other Obligor or otherwise;


 


(e)           any
amendment to, rescission, waiver, or other modification of, or any consent to
departure from, any of the terms of this Agreement or any other Loan Document;


 


(f)            any
addition, exchange, release, surrender or non-perfection of any collateral, or
any amendment to or waiver or release or addition of, or consent to departure
from, any other guaranty, held by any Lender Party or any holder of any Note
securing any of the Obligations of any other Borrower or any other Obligor; or


 


(g)           any
other circumstance which might otherwise constitute a defense available to, or
a legal or equitable discharge of, any other Borrower, any other Obligor, any
surety or any guarantor.


 


SECTION 3.4.4.  Reinstatement, etc.  Each Borrower agrees that Section 3.4
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Obligations is rescinded
or must otherwise be restored by any Lender Party or any holder of any Note,
upon the insolvency, bankruptcy or reorganization of any other Borrower, any
other Obligor or otherwise, all as though such payment had not been made.


 


SECTION 3.4.5.  Waiver, etc.  Each Borrower hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of any other Borrower or any other Obligor and Section 3.4
and any requirement that any Lender Party or any holder of any Note protect,
secure, perfect or insure any security interest or Lien, or any property
subject thereto, or exhaust any right or take any action against any other
Borrower, any other


 


45





















 


Obligor or any other Person (including any other guarantor) or entity
or any collateral securing the Obligations of any other Borrower or any other
Obligor, as the case may be.


 


SECTION 3.4.6.  Postponement of Subrogation, etc.  No Borrower will exercise any
rights which it may acquire by way of rights of subrogation under Section 3.4,
by any payment made hereunder or otherwise, until the prior payment, in full
and in cash, of all Obligations of the Borrowers and each other Obligor.  Any amount paid to any Borrower on account of
any such subrogation rights prior to the payment in full of all Obligations of
the Borrowers and each other Obligor shall be held by the Borrower in question
for the benefit of the Lender Parties and shall immediately be paid to the
Administrative Agent and credited and applied against the Obligations of the
Borrowers and each other Obligor, whether matured or unmatured, in accordance
with the terms hereof; provided, however, that if (a) any
Borrower has made payment to the Lender Parties and each holder of a Note of
all or any part of the Obligations of any other Borrower or any other Obligor,
and (b) all Obligations have been paid in full and all Commitments have
been permanently terminated, each Lender Party agrees that, at such Borrower’s
request, the Administrative Agent, on behalf of the Lender Parties, will
execute and deliver to such Borrower appropriate documents (without recourse
and without representation or warranty) necessary to evidence the transfer by
subrogation to such Borrower of an interest in the Obligations of such other
Borrower and each other Obligor resulting from such payment by the Borrower
paying any such amount.  In furtherance
of the foregoing, for so long as any Obligations or Commitments remain
outstanding, each Borrower shall refrain from taking any action or commencing
any proceeding against the other Borrowers or any other Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in the respect of payments made under the
provisions of Section 3.4 to any Lender Party.


 


ARTICLE IV



CERTAIN LIBO RATE AND OTHER PROVISIONS


 


SECTION 4.1.  LIBO Rate Lending Unlawful.  If any Lender shall determine (which
determination shall, so long as such Lender shall then be taking the same
action with respect to all other similar loans it may have outstanding to other
borrowers, upon notice thereof to the Borrowers and the Lenders, be conclusive
and binding on the Borrowers) that the introduction of or any change in or in
the interpretation of any law makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for such Lender to make,
continue or maintain any Loan as, or to convert any Loan into, a LIBO Rate
Loan, the obligations of all Lenders to make, continue, maintain or convert any
such Loans shall, upon notice of such determination to the Borrowers and
Administrative Agent, forthwith be suspended until such Lender shall notify the
Administrative Agent that the circumstances causing such suspension no longer
exist, and all LIBO Rate Loans shall automatically convert into Base Rate Loans
at the end of the then current Interest Periods with respect thereto or sooner,
if required by such law or assertion. 
Any Lender affected by such event or condition shall use its commercially
reasonable efforts (including to change its applicable lending office with
respect to some or all of its LIBO Rate Loans) to avoid the effect of such
event or condition, so long as such Lender will not be


 


46





















 


materially disadvantaged and such change is not inconsistent with such
Lender’s internal policies.


 


SECTION 4.2.  Deposits Unavailable.  If the Administrative Agent shall have
determined that (a) dollar deposits in the relevant amount and for the
relevant Interest Period are not available to JPMCB in its relevant market, or (b) by
reason of circumstances affecting JPMCB’s relevant market, adequate means do
not exist for ascertaining the interest rate applicable hereunder to LIBO Rate
Loans, then, so long as the Administrative Agent shall then be taking the same
action with respect to all other similar loans it may have outstanding to other
borrowers, upon notice from the Administrative Agent to the Borrowers and the
Lenders, the obligations of all Lenders under Section 2.3 and Section 2.4
to make or continue any Loans as, or to convert any Loans into, LIBO Rate Loans
shall forthwith be suspended until the Administrative Agent shall notify the
Borrowers and the Lenders that the circumstances causing such suspension no
longer exist.


 


SECTION 4.3.  Increased LIBO Rate Loan Costs, etc.  Provided that each Lender requesting
reimbursement under this Section 4.3 is then taking the same action
with respect to all other similar loans it has outstanding to other borrowers
of a class similar to the Borrowers (including as to the aggregate amount of
credit extensions made to such other borrowers), the Borrowers agree to
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans caused by the imposition of any reserve requirements
(including all basic, emergency, supplemental, marginal and other reserves and
taking into account any transitional adjustments or other scheduled changes in
reserve requirements) required by any central bank, regulator or other
governmental authority (including the Bank of England) having authority over
any Lender, in each case to the extent not already specifically addressed by
the provisions of the definition of “LIBOR Reserve Percentage”, except as to
any increased cost or reduced amount that results from the imposition of Taxes
(liability for which is determined pursuant to Section 4.6).  The Lender requesting reimbursement under
this Section shall promptly notify the Administrative Agent and KIL in
writing of the occurrence of any such event, such notice to state, in
reasonable detail, the reasons therefor and the additional amount required
fully to compensate such Lender for such increased cost or reduced amount.  Such additional amounts shall be payable by
the Borrowers directly to such Lender within ten days of its receipt of such
notice, and such notice shall, in the absence of manifest error, be conclusive
and binding on the Borrowers; provided, however, that the
Borrowers shall have no obligation to make any payment to any Lender under this
Section 4.3 unless KIL receives notice of such increased costs or
reduced amounts within six months after they are incurred or realized.  Any Lender claiming any amounts payable
pursuant to this Section shall use its commercially reasonable efforts
(including to change its applicable lending office with respect to some or all
of its LIBO Rate Loans) in order to avoid the need for or reduce the amount of
any such additional amounts that would thereafter accrue, so long as such
Lender will not be materially disadvantaged and such change is not inconsistent
with such Lender’s internal policies.


 


47





















 


SECTION 4.4.  Funding Losses.  In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of,


 


(a)           any
conversion or repayment or prepayment of the principal amount of any LIBO Rate
Loans on a date other than the scheduled last day of the Interest Period
applicable thereto, whether pursuant to Section 3.1 or otherwise,
including all such loss or expense arising as a result of the provisions of Section 4.11;


 


(b)           the
Borrowers’ failure to borrow any LIBO Rate Loans in accordance with the
Borrowing Request therefor; or


 


(c)           any
Loans not being continued as, or converted into, LIBO Rate Loans in accordance
with the Continuation/Conversion Notice therefor due to the Borrowers’ action
or inaction,


 


then, upon the written notice of such Lender to KIL (with a copy to the
Administrative Agent), the Borrowers shall, within ten days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or
expense.  Such written notice (which
shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrowers.


 


SECTION 4.5.  Increased Capital Costs.  If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other
governmental authority after the Effective Date affects or would affect the
amount of capital required or expected to be maintained by any Lender or any
Person controlling such Lender, and such Lender determines (in its sole and
absolute discretion) that the rate of return on its or such controlling Person’s
capital as a consequence of its Commitment or the Loans made, or the Letters of
Credit issued or participated in, by such Lender is reduced to a level below
that which such Lender or such controlling Person could have achieved but for
the occurrence of any such circumstance, then, in any such case so long as such
Lender shall then be taking the same action with respect to all other similar
loans it may have outstanding to other borrowers, within ten Business Days
following notice by such Lender to the Borrowers, the Borrowers shall pay
directly to such Lender additional amounts sufficient to compensate such Lender
or such controlling Person for such reduction in rate of return; provided,
however, that the Borrowers shall have no obligation to make any payment
to any Lender under this Section 4.5 unless the Borrowers receive
notice of such reduction in rate of return within six months after the reduced
rate of return is realized.  A statement
of such Lender as to any such additional amount or amounts (including
calculations thereof in reasonable detail) shall, in the absence of manifest
error, be conclusive and binding on the Borrowers.  In determining such amount, such Lender may
use any reasonable method of averaging and attribution that it (in its sole and
absolute discretion) shall deem applicable. 
Any Lender claiming any amounts payable pursuant to this Section shall
use its commercially reasonable efforts (including to change its applicable
lending office with respect to some or all of its LIBO Rate Loans) to avoid or
materially reduce


 


48





















 


any amounts which the Borrowers are obligated to pay pursuant to this Section 4.5,
so long as such Lender will not be materially disadvantaged and such change is
not inconsistent with such Lender’s internal policies.


 


SECTION 4.6.  Taxes. 
(a)  All payments by KIL, each other Borrower or any other
Guarantor of principal of, and interest on, the Loans and all other amounts
payable hereunder shall be made free and clear of and without deduction for any
present or future income, excise, stamp or franchise taxes and other taxes,
fees, duties, withholdings or other charges of any nature whatsoever imposed by
any taxing authority, but excluding franchise taxes and taxes imposed on or
measured by any Lender’s net income, net profits or receipts (such non-excluded
items being called “Taxes”).  In
the event that any withholding or deduction from any payment to be made by KIL,
each other Borrower or any other Guarantor hereunder is required in respect of
any Taxes pursuant to any applicable law, rule or regulation, then KIL,
such Guarantor or such Borrower (as applicable) will:


 


(i)            pay
directly to the relevant authority the full amount required to be so withheld
or deducted;


 


(ii)           promptly
forward to the Administrative Agent an official receipt or other documentation
reasonably satisfactory to the Administrative Agent evidencing such payment to
such authority; and


 


(iii)          pay
to the Administrative Agent for the account of the Lenders such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Lender will equal the full amount such Lender would have
received had no such withholding or deduction been required.


 


Moreover, if any Taxes are directly asserted against the Administrative
Agent or any Lender with respect to any payment received by the Administrative
Agent or such Lender hereunder, the Administrative Agent or such Lender may pay
such Taxes and each of KIL, each other Borrower and each other Guarantor will
(without duplication) promptly pay such additional amounts (including any
penalties, interest or expenses) as is necessary in order that the net amount
received by such person after the payment of such Taxes (including any Taxes on
such additional amount) shall equal the amount such person would have received
had such Taxes not been asserted provided, however, that KIL,
each other Borrower or Guarantor shall not be required to pay such additional
amounts to the Administrative Agent or any Lender in respect of U.S. federal
withholding taxes if such Administrative Agent or Lender fails to comply with
the requirements of Section 4.6(c), unless (I) any such failure to deliver
a form or forms or a Section 4.6(c) Certificate or the failure of
such form or forms or Section 4.6(c) Certificate to establish a
complete exemption from U.S. federal withholding tax or inaccuracy or untruth
contained therein resulted from a change in any applicable statute, treaty,
regulation or other applicable law or any interpretation of any of the
foregoing occurring after the date hereof, which change rendered such Lender no
longer legally entitled to deliver such form or forms or Section 4.6(c) Certificate
or otherwise ineligible for a complete exemption from U.S. federal withholding
tax, or rendered the information or certifications made in such form or forms
or Section 4.6(c) Certificate untrue or inaccurate in a material
respect, (II) a redesignation of the Lender’s lending office was made at the
request of the Borrowers or (III) the obligation to pay any additional amounts
or indemnify


 


49





















 


any such Lender pursuant to this clause (a) is with respect
to an Assignee Lender that becomes an Assignee Lender as a result of an
assignment made at the request of the Borrowers.


 


(b)           If
either KIL, any other Borrower or any other Guarantor fails to pay any Taxes
when due to the appropriate taxing authority or fails to remit to the
Administrative Agent, for the account of the respective Lenders, the required
receipts or other required documentary evidence, KIL, each other Guarantor and
each other Borrower shall jointly and severally indemnify the Lenders for any
incremental Taxes, interest or penalties that may become payable by any Lender
as a result of any such failure.  For
purposes of this Section 4.6, a distribution hereunder by the
Administrative Agent or any Lender to or for the account of any Lender shall be
deemed a payment by KIL, such Guarantor and such Borrower.


 


(c)           Each
Lender that is not organized under the laws of the United States or a State
thereof shall, not later than the first payment of interest or other amounts
hereunder to such Lender, deliver to each Borrower and the Administrative Agent
two duly completed and executed copies of (i) Internal Revenue Service Form E-8ECI
(or any successor form), (ii) W-8BEN (or any successor form) or (iii) Form W-8BEN
(or any successor form) and a certificate substantially in the form of Exhibit P
(a “Section 4.6(c) Certificate”), as applicable, in each case
establishing a complete exemption”) from U.S. Federal withholding tax on
payments of interest hereunder; provided, however, that in the
case of a Lender that is not legally entitled to deliver such documentation as
of the date of the first payment of interest or other amounts hereunder to such
Lender, such Lender shall deliver written notice of its inability to provide
such documentation on such date and no such Lender shall be obligated to
deliver such documentation earlier than the date of the first payment of
interest or other amounts hereunder next following the date as of which such
Lender becomes legally entitled to deliver such documentation. Each such Lender
shall further deliver two duly completed copies of such documentation prior to
the expiration of the most recently delivered documentation (provided such
Lender remains legally entitled to deliver such documentation) or when a change
in circumstances (other than a change in law) renders such previous
documentation obsolete or inaccurate in any material respect.  By the delivery of such documentation, such
Lender shall be deemed to have represented that it is entitled to receive
payments of interest hereunder without the imposition of U.S. Federal
withholding tax.


 


(d)           In
addition, any Lender claiming any indemnity payment or additional amount
payable pursuant to this Section shall use commercially reasonable efforts
to file any certificate or document reasonably requested by KIL or to change
the jurisdiction of its applicable lending office if the making of such a
filing or change would avoid the need for or reduce the amount of any such
indemnity payment or additional amount which may thereafter accrue and such
filing or change is not, in the sole determination of such Lender, inconsistent
with that Lender’s internal policies.


 


In the event that any Lender or the Administrative Agent receives a
refund in respect of Taxes as to which it has been paid additional amounts or
indemnified by the Borrowers pursuant to clause (a) and such Lender
or the Administrative Agent, as applicable, determines in its sole, good faith
judgment that such refund is attributable to such additional amounts or
indemnification, then such Lender or Administrative Agent shall promptly notify
the Administrative Agent and the Borrowers and shall within 30 Business Days remit
to the Borrowers an amount as such Lender


 


50





















 


or Administrative Agent determines to be the proportion of the refunded
amount as will leave it, after such remittance, in no better or worse position
than it would have been if the Taxes had not been imposed and the corresponding
additional amounts or indemnification payment not been made.  Neither the Lenders nor the Administrative
Agent shall be obligated to disclose information regarding its tax affairs or
computations to the Borrowers in connection with this clause (e) or
any other provision of this Section 4.6.


 


SECTION 4.7.  Payments, Computations, etc.  (a) Unless otherwise expressly provided,
all payments by KIL, each other Borrower and each other Guarantor pursuant to
this Agreement or any other Loan Document shall be made by KIL, such Guarantor
and such Borrower (without duplication) to the Administrative Agent for the pro
rata account of the Lenders entitled to receive such payment.  All such payments required to be made to the
Administrative Agent shall be made, without setoff, recoupment, deduction,
counterclaim or other defense, not later than 1:00 p.m., New York
time, on the date due, in same day or immediately available funds, to such
account as the Administrative Agent shall specify from time to time by notice
to the Borrowers.  Funds received after
that time shall be deemed to have been received by the Administrative Agent on
the next succeeding Business Day and such extension of time shall be included
in computing interest and fees, if any, in connection with such extension.  The Administrative Agent shall promptly remit
in same day funds to each Lender its share, if any, of such payments received
by the Administrative Agent for the account of such Lender.  All interest and fees shall be computed on
the basis of the actual number of days (including the first day but excluding
the last day) occurring during the period for which such interest or fee is
payable over a year comprised of 360 days (or, in the case of interest on
a Base Rate Loan, 365 days or, if appropriate, 366 days).  Whenever any payment to be made shall
otherwise be due on a day which is not a Business Day, such payment shall
(except as otherwise required by clause (b) or (c) of
the definition of the term “Interest Period”) be made on the next succeeding
Business Day and such extension of time shall be included in computing interest
and fees, if any, in connection with such payment.


 


(b)           Except
as otherwise set forth herein, all amounts received as a result of the exercise
of remedies under the Loan Documents (including from the proceeds of collateral
securing the Obligations) or under applicable law shall be applied upon receipt
to the Obligations as follows: (i) first, to the payment of all
Obligations owing to the Administrative Agent, in its capacity as the
Administrative Agent (including the reasonable fees and expenses of counsel to
the Administrative Agent), (ii) second, after payment in full in cash of
the amounts specified in clause (b)(i), to the ratable payment of all
interest (including interest accruing after the commencement of a proceeding in
bankruptcy, insolvency or similar law, whether or not permitted as a claim
under such law) and fees owing under the Loan Documents, and all costs and
expenses owing to the Secured Parties pursuant to the terms of the Loan
Documents, until paid in full in cash, (iii) third, after payment in full
in cash of the amounts specified in clauses (b)(i) and (b)(ii),
to the ratable payment of the principal amount of the Loans then outstanding,
the aggregate Reimbursement Obligations then owing, the cash collateralization
of all Letter of Credit Outstandings and credit exposure owing to Secured
Parties under Rate Protection Agreements, (iv) fourth, after payment in
full in cash of the amounts specified in clauses (b)(i) through (b)(iii),
to the ratable payment of all other Obligations owing to the Secured Parties,
and (v) fifth, after payment in full in cash of the amounts specified in clauses
(b)(i) through (b)(iv),


 


51





















 


and following the Commitment Termination Date, to each applicable
Obligor or any other Person lawfully entitled to receive such surplus. For
purposes of clause (b)(iii), the “credit exposure” at any time of any
Secured Party with respect to a Rate Protection Agreement to which such Secured
Party is a party shall be determined at such time in accordance with the
customary methods of calculating credit exposure under similar arrangements by
the counterparty to such arrangements, taking into account potential interest
rate (or, if applicable, currency) movements and the respective termination
provisions and notional principal amount and term of such Rate Protection
Agreement.


 


SECTION 4.8.  Sharing of Payments.  If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan or Reimbursement Obligation (other than
pursuant to the terms of Sections 4.3, 4.4, 4.5 and 4.6)
in excess of its pro  rata share of payments then or therewith
obtained by all Lenders, such Lender shall purchase from the other Lenders such
participations in Credit Extensions made by them as shall be necessary to cause
such purchasing Lender to share the excess payment or other recovery ratably
with each of them; provided, however, that if all or any portion
of the excess payment or other recovery is thereafter recovered from such
purchasing Lender, the purchase shall be rescinded and each Lender which has
sold a participation to the purchasing Lender shall repay to the purchasing
Lender the purchase price to the ratable extent of such recovery together with
an amount equal to such selling Lender’s ratable share (according to the
proportion of (a)  the amount of such selling Lender’s required repayment
to the purchasing Lender to (b)  the total amount so recovered from
the purchasing Lender), of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered.  Each of KIL, each other Borrower and each
other Guarantor agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section may, to the fullest extent
permitted by law, exercise all its rights of payment (including pursuant to Section 4.9)
with respect to such participation as fully as if such Lender were the direct
creditor of KIL, such Borrower or such Guarantor in the amount of such
participation.  If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section to share in the benefits of any recovery on such
secured claim.


 


SECTION 4.9.  Setoff.  Each Lender shall, upon the occurrence of any
Event of Default described in clauses (a) through (d) of
Section 8.1.9 or, with the consent of the Required Lenders, upon
the occurrence of any other Event of Default, have the right to appropriate and
apply to the payment of the Obligations owing to it (whether or not then due),
and (as security for such Obligations) each of KIL, each other Borrower and
each other Guarantor hereby grants to each Lender a continuing security
interest in, any and all balances, credits, deposits, accounts or money of each
of KIL, such Guarantor and such Borrower then or thereafter maintained with
such Lender; provided, however, that any such appropriation and
application shall be subject to the provisions of Section 4.8.  Each Lender agrees promptly to notify KIL,
such Guarantor or such Borrower and the Administrative Agent after any such
setoff and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
setoff and application.  The rights of
each Lender under this Section are in addition to other


 


52





















 


rights and remedies (including other rights of setoff under applicable
law or otherwise) which such Lender may have.


 


SECTION 4.10.  Defaulting Lender.  (a) Upon any Lender becoming a
Defaulting Lender, (i) the Administrative Agent shall endeavor to promptly
notify each other Lender of the amount owed or potentially owed, as the case
may be, by such Defaulting Lender and (ii) the Commitment Amount shall be
reduced by an amount equal to the unutilized portion of such Defaulting Lender’s
Percentage thereof then in effect (the “Unutilized Portion”); provided,
however, that, with the prior written consent of the Administrative
Agent, KIL may request a non-defaulting Lender to, whereupon such
non-defaulting Lender may (in its sole discretion and without the consent of
any other Lender), by promptly notifying KIL and the Administrative Agent,
increase its Commitment in an amount equal to the Unutilized Portion, in which
case, upon receipt by KIL and the Administrative Agent of such notice,
(x) the Commitment of such non-defaulting Lender shall be so increased and
(y) the amount of the Commitment Amount then in effect shall be equal to
the amount of the Commitment Amount in effect immediately prior to the time
such Defaulting Lender became a Defaulting Lender and (iii) the Percentage
of such Defaulting Lender shall be reduced to zero.


 


(b)           No
Defaulting Lender shall be entitled to receive any fees accrued on and after
the date such Lender became a Defaulting Lender.


 


(c)           Notwithstanding
anything contained herein to the contrary, no Defaulting Lender shall be
entitled to receive any payments hereunder on account of any Loans or Notes
until all amounts that are due and payable with respect to any Loans as to
which such Defaulting Lender is not a Lender or a participant shall have been
paid in full.


 


(d)           Nothing
in this Section shall be deemed to release any Defaulting Lender from
fulfilling its obligations under this Agreement or otherwise or to prejudice
the rights which KIL, the Borrowers or any other Lender or the Administrative
Agent may have against any such Defaulting Lender.


 


SECTION 4.11.  Replacement Lender.  In the event that (a) KIL, any other
Borrower or any other Guarantor becomes obligated to pay any additional
material amounts to any Lender pursuant to Section 4.3 or 4.5
(which amounts are not due or payable to all Lenders generally under such
Sections) or such Lender is not able to make LIBO Rate Loans pursuant to Section 4.1,
as a result of any event or condition described in any of such Sections, or any
Lender is subject to a withholding tax for which it seeks a gross up pursuant
to Section 4.6  or (b) any
Lender fails to consent to an election, consent, amendment, waiver or other
modification to this Agreement or other Loan Document requiring more Lenders than
the Required Lender’s consent and such election, consent, amendment, waiver or
other modification is otherwise consented to by Lenders holding more than 70%
of the then aggregate outstanding principal amount of all Loans, Letters of
Credit Outstandings and the unfunded portion of the Commitments without giving
effect to the Loans, Letter of Credit Outstandings and Commitments attributable
to such non-consenting Lender (any such Lender so qualifying under clause (a) or
(b), an “Affected Lender”), then, unless such Affected Lender has
removed or cured the conditions creating the cause of such obligation to pay
such additional amounts or agrees (in the case of Taxes) not to require any
Obligor to pay such gross up amount under Section 4.6, in the case
of clause (a) or


 


53





















 


otherwise consents, in the case of clause (b), KIL may designate
one or more Eligible Assignees (and such Affected Lender agrees to be replaced
by such Eligible Assignees upon and in accordance with the terms set forth in
this Section) reasonably acceptable to the Administrative Agent and Issuer
(such Eligible Assignee or Eligible Assignees, upon becoming a lender or
lenders, each called a “Replacement Lender”) to have assigned to it
pursuant to Section 10.11.1, and to purchase, such Affected Lender’s
rights and obligations with respect to its entire Loans and Commitment
hereunder, without recourse to or warranty by, or expense to, such Affected
Lender for a purchase price equal to the outstanding principal amount payable
to such Affected Lender with respect to its Loans hereunder, plus any accrued
and unpaid interest and accrued and unpaid fees in respect of such Affected
Lender’s Loans and Commitment owing to such Affected Lender; provided that
the Borrowers may not request the assignment of more than 30% of the Revolving
Loan Commitment Amount as a result of the failure to consent to an amendment,
consent, wavier or other modification to the Credit Agreement.  KIL agrees that, so long as the Borrowers are
not then obligated to pay any gross up for Taxes under a Loan Document to the
Administrative Agent, it will first designate the Administrative Agent as the
Replacement Lender in the case of an Affected Lender that has required the
Borrowers (or any Obligor) to pay any gross up for Taxes under a Loan Document
and the Administrative Agent shall have the right (but be under no obligation)
to have assigned to it an equal amount of the Loans and Commitments (and
corresponding rights and obligations) of the Affected Lender being
replaced.  In the event KIL is unable to
find a Replacement Lender, KIL may, with the consent of the Required Lenders,
pay the Affected Lender and amount equal to the outstanding principal amount of
its Loans, plus any accrued and unpaid interest and accrued and unpaid fees in
respect of such Lender’s Loans and Commitment owing to such Affected Lender and
the Commitment Amount shall be irrevocably and automatically reduced by the
amount of such Affected Lender’s Commitment; provided that the Revolving
Loan Commitment Amount may not be reduced below $455,000,000 as a result of the
removal of such Lender or Lenders.  Upon
any assignment and purchase by the Replacement Lender and payment of all other
amounts owing to the Affected Lender being replaced hereunder (including under Section 4.6),
and the payment to the Administrative Agent of the processing fee due to it
under Section 10.11.1 or the repayment by KIL of such Affected
Lender’s Loans and subsequent reduction of the Commitment Amount pursuant to
the preceding sentence, such Affected Lender shall no longer be a party hereto
or have any rights or obligations hereunder, and the Replacement Lender shall
succeed to the rights and obligations of such Affected Lender with respect to
its Loans and Commitment hereunder; provided that the rights of such
Affected Lender pursuant to Sections 4.3, 4.4, 4.5, 4.6,
10.3 and 10.4, and the rights and obligations of the Affected
Lender pursuant to Article IX and Sections 10.3 and 10.4,
shall survive any assignment described in this Section.  Each Lender hereby grants to the
Administrative Agent an irrevocable power of attorney (which power is coupled
with an interest) to execute and deliver, on behalf of such Lender as assignor,
any assignment agreement necessary to effectuate any assignment of such Lender’s
interests hereunder in the circumstances contemplated by this Section.


 


54





















 


ARTICLE V



CONDITIONS TO EFFECTIVENESS


 


SECTION 5.1.  Effectiveness.  The effectiveness of this Agreement shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 5.1.


 


SECTION 5.1.1.  Resolutions, etc.  The Administrative Agent shall have received
from each Borrower (i) a copy of a good standing certificate, dated a date
reasonably close to the Effective Date, for each such Person and (ii) a
certificate, dated the date hereof, of its Secretary or Assistant Secretary as
to:


 


(a)           resolutions
of its Board of Directors then in full force and effect authorizing the
execution, delivery and performance of this Agreement and each other Loan
Document to be executed by it;


 


(b)           the
incumbency and signatures of those of its officers authorized to act with
respect to this Agreement and each other Loan Document executed by it; and


 


(c)           upon
which certificate each Lender Party may conclusively rely until it shall have
received a further certificate of the Secretary or Assistant Secretary of such
Borrower canceling or amending such prior certificate.


 


SECTION 5.1.2.  Delivery of this Agreement, Notes.  The Administrative Agent shall have received
(x) duly executed counterparts of this Agreement delivered by each Borrower and
each Lender and (y) for the account of each Lender requesting Notes pursuant to
Section 2.8, its Notes duly executed and delivered by each
Borrower.


 


SECTION 5.1.3.  Debentures.  The Administrative Agent shall have received (a) counterparts
of the Debentures, amended and modified as required to reflect the provisions
of this Agreement (as reasonably determined by the Administrative Agent), each
duly executed by an Authorized Officer of the owner of the property covered
thereby, (b) evidence of the completion (or satisfactory arrangements for
the completion) of all recordings and filings of the Debentures as may be
necessary or, in the reasonable opinion of the Administrative Agent, desirable
effectively to create a valid first mortgage Lien (or, in the case of personal
property, floating charge Lien) against the properties purported to be covered
thereby in the full amount of the aggregate principal amount of all Credit
Extensions which may at any time be outstanding, subject only to the Permitted
Encumbrances, and (c) such other approvals, opinions or documents as the
Administrative Agent may reasonably request with respect to the Debentures.


 


SECTION 5.1.4.  Exchange Approval.  The Administrative Agent shall have received
a copy of a letter from The Central Bank of The Bahamas to KIBL, KIL and the
other Guarantors organized under the laws of the Commonwealth of The Bahamas,
in a form and substance reasonably satisfactory to the Administrative Agent,
confirming that it is aware of this Agreement and the Pledge Agreements and
undertaking to make available to KIBL, KIL and such Guarantors such foreign
exchange as may be necessary to enable KIBL, KIL and such Guarantors to fulfill
their payment obligations under this Agreement in Dollars and to pledge the
collateral under the Pledge Agreements and Debentures.


 


55





















 


SECTION 5.1.5.  Endorsement to Title Insurance Policies.  The Administrative Agent shall have received
an endorsement (known as CLTA Form 110.5), dated on or about the date
hereof, duly issued by the Title Insurer which issued the mortgagee’s title
insurance policies on the Debentures, confirming coverage under the mortgagee’s
title insurance policy on the Debentures and insuring that the Debentures
constitute valid first Liens against the properties purported to be covered
thereby, free and clear of all defects and encumbrances other than the
Permitted Encumbrances.  In lieu of such
endorsement, the Borrowers may provide a new mortgagee’s title insurance policy
on the Debentures in form and substance, and in amounts, reasonably
satisfactory to the Administrative Agent and its counsel, providing comparable
coverage (up to a $650,000,000 limit, which limit shall increase accordingly if
the Commitment Amount is increased at any time and from time to time pursuant to
Section 2.2.3) to the existing mortgagee’s title insurance
policy.  All premiums, title examination,
surveys, departmental violations, judgment and Uniform Commercial Code search
charges (as applicable) and other charges and fees shall have been paid in full
or provided for in a manner reasonably satisfactory to the applicable Title
Insurer and the Administrative Agent, and the Administrative Agent shall have
received satisfactory evidence of such payment or provision.


 


SECTION 5.1.6.  Opinions of Counsel.  The Administrative Agent shall have received
opinions, dated the date hereof and addressed to the Administrative Agent and
all Lenders, from each of:


 


(a)           White &
Case LLP, special counsel to the Obligors, in form and substance reasonably
satisfactory to the Administrative Agent;


 


(b)           Richard
Levine, General Counsel to KIL and counsel to the other Obligors, in form and
substance reasonably satisfactory to the Administrative Agent; and


 


(c)           Giselle
Pyfrom, Bahamian counsel to certain Obligors, in form and substance reasonably
satisfactory to the Administrative Agent.


 


SECTION 5.1.7.  Effective Date Certificate.  The Administrative Agent shall have received,
with counterparts for each Lender, the Borrower Effective Date Certificate,
dated the date hereof, duly executed and delivered by an Authorized Officer of
each Borrower, in which certificate each Borrower shall, among other things,
agree and acknowledge that the statements made therein shall be deemed to be
true and correct representations and warranties of such Person in all material
respects, made as of such date, and, at the time such certificate is delivered
on the date hereof, such statements shall in fact be true and correct in all
material respects.  All documents and
agreements required to be appended to the Borrower Effective Date Certificate
shall be in form and substance reasonably satisfactory to the Administrative
Agent.


 


SECTION 5.1.8.  Fees and Expenses.  The Lenders and the Administrative Agent
shall have received all fees and expenses required to be paid by KIL and its
Restricted Subsidiaries on or before the Effective Date.


 


SECTION 5.1.9.  Affirmation and Consent.  Each Obligor (other than a Borrower) shall
have duly authorized, executed, acknowledged and delivered to the
Administrative Agent the Affirmation and Consent, dated as of the Effective
Date.


 


56





















 


SECTION 5.1.10.  Solvency Certificate.  The Administrative Agent shall have received
executed counterparts of a Solvency Certificate, dated as of the date hereof,
duly executed and delivered by an Authorized Officer of each Borrower.


 


SECTION 5.1.11.  No Material Adverse Change.  Since December 31, 2004, there shall
have been no Material Adverse Effect.


 


SECTION 5.1.12.  Insurance Certificates.  The Administrative Agent shall have received (a) a
certificate, reasonably satisfactory to the Administrative Agent, from the
Borrowers’ insurance broker(s), dated as of (or a date reasonably near) the
Effective Date relating to each insurance policy required to be maintained
pursuant to Section 7.1.4, identifying underwriters, types of
insurance and insurance limits of each such insurance policy and stating that
such insurance policy is in full force and effect and that all premiums then
due thereon have been paid and (b) certified copies of all policies
evidencing such insurance (or a binder, commitment or certificates in form
reasonably satisfactory to the Administrative Agent signed by the insurer or a
broker authorized to bind the insurer) naming the Administrative Agent (in the
case of liability policies) as joint loss payee on behalf of the Secured
Parties.


 


SECTION 5.2.  All Credit Extensions.  The obligation of each Lender to fund any
Loan or the Issuer to issue any Letter of Credit on the occasion of any Credit
Extension shall be subject to the satisfaction of each of the conditions
precedent set forth in Sections 5.2.1, 5.2.2 and 5.2.3.


 


SECTION 5.2.1.  Compliance with Warranties, No Default,
etc.  Both before and after giving
effect to any Credit Extension (but, if any Default of the nature referred to
in Section 8.1.5 shall have occurred with respect to any other
Indebtedness, without giving effect to the application, directly or indirectly,
of the proceeds thereof) the following statements shall be true and correct:


 


(a)           the
representations and warranties set forth in Article VI and in the
other Loan Documents shall be true and correct in all material respects with
the same effect as if then made (unless stated to relate solely to an earlier date,
in which case such representations and warranties shall be true and correct in
all material respects as of such earlier date); and


 


(b)           no
Default shall have then occurred and be continuing.


 


SECTION 5.2.2.  Credit Extension Request.  Except with respect to Borrowings of
Swingline Loans, the Administrative Agent shall have received a Borrowing
Request if Loans are being requested, or an Issuance Request if a Letter of
Credit is being requested or extended. 
Each delivery of a Borrowing Request or Issuance Request (or telephonic
request for Borrowing of a Swingline Loan) and the acceptance by the applicable
Borrower of the proceeds of such Credit Extension shall constitute a
representation and warranty by the relevant Borrower that on the date of such Credit
Extension (both immediately before and after giving effect to such Credit
Extension and the application of the proceeds thereof) the statements made in Section 5.2.1
are true and correct in all material respects.


 


57





















 


SECTION 5.2.3.  Payment of Debenture Taxes.  In the event the aggregate principal amount
and Stated Amount of Credit Extensions outstanding after giving effect to any
proposed Credit Extension hereunder will be in excess of the amount set forth
in the column below entitled “Aggregate Outstandings”, the Borrowers will,
unless otherwise agreed by the Administrative Agent in its sole discretion,
provide (a) evidence reasonably satisfactory to the Administrative Agent
prior to such Borrowing that the Borrowers have paid an amount of taxes
necessary to make the Debentures creating and/or perfecting the Liens on any
assets securing the Obligations valid and enforceable up to the amount of
Obligations set forth in the column below entitled “Stamp Tax Amount”, (b) reasonably
satisfactory Lien searches or search reports covering the assets located in The
Bahamas showing that there are no new Liens on such assets since the Effective
Date that would be senior to the Obligations and (c) evidence reasonably
satisfactory to the Administrative Agent that the title insurance policies
cover Obligations equal to set forth in the column below entitled “Stamp Tax
Amount”:


 




	
  Aggregate Outstandings

  	
   

  	
  Stamp Tax Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  360,000,000

  	
   

  	
  $

  	
  425,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  410,000,000

  	
   

  	
  $

  	
  465,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  450,000,000

  	
   

  	
  $

  	
  500,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  485,000,000

  	
   

  	
  $

  	
  550,000,00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  535,000,000

  	
   

  	
  $

  	
  600,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  585,000,000

  	
   

  	
  $

  	
  650,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  635,000,000

  	
   

  	
  $

  	
  700,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  685,000,000

  	
   

  	
  $

  	
  750,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  735,000,000

  	
   

  	
  $

  	
  800,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  785,000,000

  	
   

  	
  $

  	
  850,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  835,000,000

  	
   

  	
  $

  	
  900,000,000

  	
   

  






 


SECTION 5.2.4.  Satisfactory Legal Form.  All documents executed or submitted pursuant
to Section 5.2 by or on behalf of KIL or any of its Restricted
Subsidiaries or any other Obligors shall be reasonably satisfactory in form and
substance to the Administrative Agent and its counsel.


 


58





















 


ARTICLE VI



REPRESENTATIONS AND WARRANTIES


 


In order to induce the Lenders, the Issuer
and the Administrative Agent to enter into this Agreement and to make Credit
Extensions hereunder, each of the Borrowers represents and warrants unto the
Administrative Agent, the Issuer and each Lender as set forth in this Article VI.


 


SECTION 6.1.  Organization, etc.  Each of KIL and the Obligors is a corporation
or partnership validly organized and existing and in good standing under the
laws of the State or jurisdiction of its incorporation or organization, is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the nature of its business requires such qualification
(except where the failure to so qualify would not reasonably be expected to
have a Material Adverse Effect), and has full power and organizational
authority and holds all requisite material governmental licenses, permits and
other approvals to enter into and perform its Obligations under this Agreement
and each other Loan Document to which it is a party and to own and hold under
lease its property and to conduct its business substantially as currently
conducted by it.


 


SECTION 6.2.  Due
Authorization, Non-Contravention, etc. 
The execution, delivery and performance by each of the Borrowers
of this Agreement and each other Loan Document executed or to be executed by
it, and the execution, delivery and performance by each other Obligor of each
Loan Document executed or to be executed by it are within such Borrower’s and
each such other Person’s corporate or partnership powers (as applicable), have
been duly authorized by all necessary corporate or partnership action (as
applicable), and do not:


 


(a)           contravene
such Borrower’s or other Person’s Organic Documents;


 


(b)           contravene
any contractual restriction, law or governmental regulation or court decree or
order binding on or affecting any Borrower or any such other Person, which
contravention would reasonably be expected to have a Material Adverse Effect;
or


 


(c)           result
in, or require the creation or imposition of, any Lien on any of any Borrower’s
or any such other Person’s properties, other than pursuant to a Loan Document.


 


SECTION 6.3.  Government Approval, Regulation, etc.  Except for those that have been duly obtained
or made and are in full force and effect, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body or other Person is required for the due execution, delivery or
performance by the Borrowers or any other Obligor of this Agreement or any
other Loan Document to which it is a party. 
Neither KIL nor any of its Restricted Subsidiaries is an “investment
company” within the meaning of the Investment Company Act of 1940, as amended,
or a “holding company”, or a “subsidiary company” of a “holding company”, or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company”, within the meaning of the Public Utility Holding Company Act of 1935,
as amended.


 


SECTION 6.4.  Validity, etc.  This Agreement constitutes, and each other
Loan Document executed by a Borrower will, on the due execution and delivery
thereof, constitute, the legal, valid and binding obligations of such Borrower
enforceable in accordance with their


 


59





















 


respective terms; and each Loan Document executed pursuant hereto by
each other Obligor will, on the due execution and delivery thereof by such
Obligor, be the legal, valid and binding obligation of such Obligor enforceable
in accordance with its terms; except, in any case above, as such enforceability
may be limited by the effect of any applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws affecting
creditors’ rights generally and to equitable principles (including concepts of
materiality, reasonableness, good faith, fair dealing, and unconscionability),
regardless of whether considered in a proceeding in equity or at law.


 


SECTION 6.5.  Financial Information.  The consolidated balance sheet of KIL and its
Subsidiaries as at December 31, 2004, and the related consolidated
statements of earnings and cash flow of KIL and its Subsidiaries, have been
prepared in accordance with GAAP consistently applied, and present fairly the
consolidated financial condition of the consolidated Persons covered thereby as
at the dates thereof and the results of their operations for the periods then
ended.


 


SECTION 6.6.  No Material Adverse Change.  Since December 31, 2004, there has been
no material adverse change in the financial condition, operations, assets,
business or properties of KIL and its Restricted Subsidiaries, taken as a
whole.


 


SECTION 6.7.  Litigation, Labor Controversies, etc.  Except as disclosed in Item 6.7 of the
Disclosure Schedule:


 


(a)           no
labor controversy, litigation, arbitration or governmental investigation or
proceeding is pending or, to the knowledge of any Borrower, threatened, against
KIL or any of its Subsidiaries which would reasonably be expected to have a
Material Adverse Effect; and


 


(b)           no
development has occurred in any labor controversy, litigation, arbitration or
governmental investigation or proceeding disclosed pursuant to clause (a) which
would reasonably be expected to have a Material Adverse Effect.


 


SECTION 6.8.  Subsidiaries.  KIL does not have any Subsidiaries, except
those Subsidiaries:


 


(a)           which
are identified in Item 6.8(a) (“Existing Subsidiaries”) of
the Disclosure Schedule; or


 


(b)           which
are permitted to have been acquired in accordance with Section 7.2.5
or 7.2.10.


 


Significant Subsidiaries as of the Effective Date are identified with
an asterisk on Item 6.8(a) of the Disclosure Schedule.  Each Significant Subsidiary as well as each
Borrower that has executed a Pledge Agreement or a supplement to a Pledge
Agreement is listed on Item 6.8(b) of the Disclosure Schedule.


 


SECTION 6.9.  Ownership of Properties.  The Borrowers and each of their respective
Significant Subsidiaries and Quasi-Restricted Subsidiaries owns good and valid
title to all of its


 


60





















 


material properties and assets, real and personal, tangible and
intangible, of any nature whatsoever (including patents, trademarks, trade
names, service marks and copyrights), free and clear of all Liens, charges or
claims (including infringement claims with respect to patents, trademarks,
copyrights and the like) except (a) as permitted pursuant to Section 7.2.3
or (b) where the failure to do so could not reasonably be expected to have
a Material Adverse Effect.


 


SECTION 6.10.  Taxes. 
The Borrowers and each of their respective Significant Subsidiaries and
Quasi-Restricted Subsidiaries has filed all material tax returns and reports
required by law to have been filed by it and has paid or will pay when due all
material taxes and governmental charges thereby shown to be owing, except any
such taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books except, where the failure to do so could
not reasonably be expected to have a Material Adverse Effect.


 


SECTION 6.11.  Pension and Welfare Plans.  Except as could not reasonably be expected to
have a Material Adverse Effect, (a) during the twelve-consecutive-month period
prior to the date of the execution and delivery of this Agreement, and since
such date and prior to the date of any Credit Extension hereunder, no steps
have been taken to terminate any Pension Plan, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under section 302(f) of ERISA, (b) no condition exists or event
or transaction has occurred with respect to any Pension Plan which might result
in the incurrence by KIL or any member of its Controlled Group of any
liability, fine or penalty or (c) neither KIL nor any member of its
Controlled Group has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.


 


SECTION 6.12.  Environmental Warranties.  Except as set forth in Item 6.12 (“Environmental
Matters”) of the Disclosure Schedule:


 


(a)           all
facilities and property (including underlying groundwater) owned or leased by
KIL or any of its Subsidiaries have been, and continue to be, owned or leased
by KIL and its Subsidiaries in compliance with all Environmental Laws except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect;


 


(b)           there
are no pending and, to the knowledge of any Borrower, (i) there are no
threatened and (ii) have been no past,


 


(i)            claims,
complaints, notices or requests for information received by KIL or any of its
Subsidiaries with respect to any alleged violation of any Environmental Law
that if proven true could reasonably be expected to have a Material Adverse
Effect; or


 


(ii)           complaints,
notices or inquiries to KIL or any of its Subsidiaries regarding potential
liability under any Environmental Law that if proven true could reasonably be
expected to have a Material Adverse Effect;


 


61





















 


(c)           there
have been no Releases of Hazardous Materials at, on or under any property now
or, to the knowledge of any Borrower, previously owned or leased by KIL or any
of its Subsidiaries that, singly or in the aggregate, have, or would reasonably
be expected to have, a material adverse effect on the financial condition,
results of operations, business or properties of KIL and its Subsidiaries, taken
as a whole;


 


(d)           KIL
and its Subsidiaries have been issued and are in compliance with all
permits, certificates, approvals, licenses and other authorizations relating to
environmental matters which are necessary for their businesses except where the
failure to so comply could not reasonably be expected to have a Material
Adverse Effect;


 


(e)           no
property now or previously owned or leased by KIL or any of its Subsidiaries is
listed or proposed for listing (with respect to owned property only) on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar
list of sites requiring investigation or clean-up except where the failure to
so comply could not reasonably be expected to have a Material Adverse Effect;


 


(f)            there
are no underground storage tanks, active or abandoned, including petroleum
storage tanks, on or under any property now or, to the knowledge of any
Borrower, previously owned or leased by KIL or any of its Subsidiaries that,
singly or in the aggregate, have, or would reasonably be expected to have, a
material adverse effect on the financial condition, results of operations,
business or properties of KIL and its Subsidiaries, taken as a whole;


 


(g)           neither
KIL nor any Subsidiary of KIL has directly transported or directly arranged for
the transportation of any Hazardous Material to any location which is listed or
proposed for listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar state list or which is the subject of federal, state
or local enforcement actions or other investigations which would reasonably be
expected to lead to claims against KIL or such Subsidiary thereof for any
remedial work, damage to natural resources or personal injury, including claims
under CERCLA except in each case where such claims could not reasonably be
expected to have a Material Adverse Effect;


 


(h)           to
the knowledge of the Borrowers, there are no polychlorinated biphenyls or
friable asbestos present at any property now or previously owned or leased by
KIL or any Subsidiary of KIL that, singly or in the aggregate, have, or would
reasonably be expected to have, a material adverse effect on the financial
condition, results of operations, business or properties of KIL and its
Subsidiaries, taken as a whole; and


 


(i)            to
the knowledge of the Borrowers, no conditions exist at, on or under any
property now or previously owned or leased by KIL or any of its Subsidiaries
which, with the passage of time, or the giving of notice or both, would
reasonably be expected to give rise to any liability under any Environmental
Law that could reasonably be expected to have a Material Adverse Effect.


 


SECTION 6.13.  Regulations U and X.  None of the Borrowers is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of


 


62





















 


any Credit Extensions will be used, directly or indirectly, for a
purpose which violates, or would be inconsistent with, F.R.S. Board
Regulation U or X.  Margin stock
constitutes less than 25% of those assets of any Borrower, which are subject to
any limitation on sale, pledge, or other restrictions hereunder.  Terms for which meanings are provided in
F.R.S. Board Regulation U or X or any regulations substituted therefor, as
from time to time in effect, are used in this Section with such meanings.


 


SECTION 6.14.  Accuracy of Information.


 


(a)           All
factual information furnished by or on behalf of KIL or its Subsidiaries in
writing to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby and all
other such factual information hereafter furnished by or on behalf of KIL or
its Subsidiaries to the Administrative Agent or any Lender pursuant to the
terms of this Agreement will, when taken as a whole, be true and accurate in
all material respects on the date as of which such information is dated or
certified and as of the Effective Date, and such information is not, or shall
not be, as the case may be, incomplete by omitting to state any material fact
necessary to make such information, when taken as a whole, not misleading; provided
that any projections and pro forma financial information shall be excluded for
the purposes of this clause (a).


 


(b)           Any
projections and/or pro forma financial information contained in any of the
information and data furnished by or on behalf of KIL or its Subsidiaries in
writing to the Administrative Agent hereunder were based on good faith
estimates and assumptions believed by such Persons to be reasonable at the time
made, it being recognized by the Administrative Agent and the Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results.


 


SECTION 6.15.  Protection under Security Instruments.  The Debentures, together with the financing
statements (if any) filed with respect thereto, constitutes a valid, first
mortgage lien on, and (where applicable), a valid perfected floating lien on
and security interest in, the property subject thereto, subject only to
Permitted Encumbrances.


 


SECTION 6.16.  Insurance.  KIL or its Restricted Subsidiaries have
obtained or caused to be obtained insurance coverage covering the Bahamas
Property which meets in all material respects the requirements of this
Agreement, and such coverage is in full force and effect.


 


SECTION 6.17.  Seniority of Obligations, etc.  The Subordination Provisions of the
Subordinated Notes and contained in each Subordinated Note Indenture will be
enforceable against the holders of the Subordinated Notes by the holder of any “Senior
Indebtedness”, “Senior Debt” or similar term referring to the Obligations, as
applicable in such Subordinated Note Indenture, which has not effectively
waived the benefits thereof.  All
monetary Obligations, including those to pay principal of and interest
(including post-petition interest, whether or not permitted as a claim under
applicable law) on the Loans and Reimbursement Obligations, and fees and
expenses in connection therewith, constitute (or will constitute) “Senior
Indebtedness”, “Senior Debt” or similar term referring to the Obligations, as
applicable in such Subordinated


 


63





















 


Note Indenture, and all such Obligations are (or will be) entitled to
the benefits of the subordination created by such Subordinated Note
Indenture.  KIL and each of its
Restricted Subsidiaries acknowledges that each Lender Party is entering into
this Agreement, and is extending its Commitments, in reliance upon the
Subordination Provisions of (or to be contained in) each Subordinated Note
Indenture, the Subordinated Notes and this Section.


 


ARTICLE VII



COVENANTS


 


SECTION 7.1.  Affirmative
Covenants.  Each of the
Borrowers agrees with the Administrative Agent, the Issuer and each Lender
that, until all Commitments have terminated and all Obligations have been paid
and performed in full, each of the Borrowers will perform the obligations set
forth in this Section 7.1.


 


SECTION 7.1.1.  Financial Information, Reports, Notices,
etc.  KIL will furnish,
or will cause to be furnished, to each Lender, the Issuer and the
Administrative Agent copies of the following financial statements, reports,
notices and information:


 


(a)           as
soon as available and in any event within the earliest of (i) 60 days
after the end of each of the first three Fiscal Quarters of each Fiscal Year of
KIL, (ii) if KIL is a public reporting company at such time, such earlier
date as the SEC requires the filing of such information and (iii) such
date that KIL is required to deliver such information to the holders of any
Subordinated Notes, consolidated balance sheets of KIL and its Subsidiaries and
the KIBL Group (as applicable) as of the end of such Fiscal Quarter and
consolidated statements of earnings and cash flow of KIL and its Subsidiaries
and the KIBL Group (as applicable), in each case for such Fiscal Quarter and
for the period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter, certified by the chief financial
Authorized Officer of KIL;


 


(b)           as
soon as available and in any event within the earliest of (i) 105 days
after the end of each Fiscal Year of KIL, (ii) if KIL is a public
reporting company at such time, such earlier date as the SEC requires the
filing of such information, and (iii) such date that KIL is required to
deliver such information to the holders of any Subordinated Notes, a copy of
the annual audit report for such Fiscal Year for KIL and its Subsidiaries,
including therein a consolidated balance sheet of KIL and its Subsidiaries as
of the end of such Fiscal Year and consolidated statements of earnings and cash
flow of KIL and its Subsidiaries for such Fiscal Year, in each case certified
(without any Impermissible Qualification) by (i) Deloitte &
Touche LLP, (ii) any nationally recognized public accountant or (iii) other
independent public accountant acceptable to the Required Lenders, together with
a certificate from such accountant containing a computation of, and showing
compliance with, each of the financial ratios and restrictions contained in Section 7.2.4;


 


(c)           commencing
with the period ending September 30, 2005, (A) as soon as available
and in any event within the time periods set forth above in clauses (a) and
(b) for the relevant Fiscal Quarter, a Compliance Certificate,
executed by the chief financial


 


64





















 


Authorized Officer of KIL, (i) showing
compliance with the financial covenants set forth in Section 7.2.4,
(ii) showing the amount of Capital Expenditures that were made during such
Fiscal Quarter, and (iii) certifying as to the absence of any Default and (B) within
60 days after the end of each Fiscal Year of KIL, a certificate in
substantially the form of Exhibit G from the chief financial
Authorized Officer of KIL showing the calculation (estimated in good faith,
subject to adjustment upon delivery of the Compliance Certificate for such
Fiscal Year end within 105 days after the end of such Fiscal Year) of the Total
Leverage Ratio as of such Fiscal Year end;


 


(d)           as
soon as possible and in any event within five days after an executive officer
of KIL knows of the occurrence of a Default, a statement of the chief financial
Authorized Officer of KIL setting forth details of such Default and the action
which KIL has taken and proposes to take with respect thereto;


 


(e)           as
soon as possible and in any event within five days after an executive officer
of KIL knows of (x) the occurrence of any adverse development with respect
to any litigation, action, proceeding, or labor controversy described in Section 6.7
or (y) the commencement of any labor controversy, litigation, action,
proceeding of the type described in Section 6.7, notice thereof and
copies of all documentation relating thereto;


 


(f)            promptly
after the sending or filing thereof, copies of all reports which KIL sends to
any of its securityholders, and all reports and registration statements which
KIL or any of its Restricted Subsidiaries files with the Securities and
Exchange Commission or any national securities exchange;


 


(g)           immediately
upon becoming aware of the institution of any steps by any Borrower or any
other Person to terminate any Pension Plan, or the failure to make a required
contribution to any Pension Plan if such failure is sufficient to give rise to
a Lien under section 302(f) of ERISA, or the taking of any action
with respect to a Pension Plan which could result in the requirement that any
Borrower furnish a bond or other security to the PBGC or such Pension Plan, or
the occurrence of any event with respect to any Pension Plan which could result
in the incurrence by any Borrower of any liability, fine or penalty, or any increase
in the contingent liability of any Borrower with respect to any post-retirement
Welfare Plan benefit, that, in each case in this clause could reasonably be
expected to have a Material Adverse Effect, notice thereof and copies of all
documentation relating thereto;


 


(h)           promptly
following any amendment, waiver or other modification made to the
Relinquishment Agreement or the Omnibus Termination Agreement, or delivery of
any notice of default or termination of the Relinquishment Agreement or the
Omnibus Termination Agreement, a copy of such amendment, waiver, modification
or notice;


 


(i)            to
the extent not duplicative of the Borrowers’ obligations under this Agreement
or any Loan Document, promptly following the delivery or receipt, as the case
may be, of any written notice or communication required to be delivered to the
trustee (or paying agent, as the case may be) pursuant to, and in accordance
with the


 


65





















 


terms of, any Subordinated Note Indenture or any
of the Subordinated Notes, a copy of such notice or communication;


 


(j)            within
30 days of the Effective Date, the Administrative Agent shall have received
evidence reasonably satisfactory to it that, based on the Borrowers’
projections, an amount equal to at least (i) 50%, during each of the first
two years from the Effective Date and (ii) 40% during the third year from
the Effective Date, of the Borrowers’ aggregate principal amount of funded
Indebtedness for borrowed money is projected to be accruing interest at a fixed
rate of interest for such periods (whether by entering into interest rate swap,
cap, collar or similar arrangements and including such Indebtedness of the
Borrowers accruing interest at a fixed rate by its terms and the Rate Protection
Agreements outstanding on the Effective Date); and


 


(k)           within
a reasonable period, such other information respecting the condition or
operations, financial or otherwise, of KIL or any of its Restricted
Subsidiaries as the Issuer or any Lender through the Administrative Agent may
from time to time reasonably request in writing.


 


SECTION 7.1.2.  Compliance with Laws, etc.  Each Borrower will, and will cause each of
their respective Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, except where the failure to do
so could not reasonably be expected to have a Material Adverse Effect, such
compliance to include:


 


(a)           in
the case of the Borrowers and their respective Significant Subsidiaries and
Quasi-Restricted Subsidiaries, the maintenance and preservation of its
corporate existence (except as otherwise permitted by this Agreement) and
qualification as a foreign corporation; and


 


(b)           the
payment, before the same becomes delinquent, of all material taxes, assessments
and governmental charges imposed upon it or upon its property except to the
extent being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set aside
on its books.


 


SECTION 7.1.3.  Maintenance of Properties.  Each Borrower will, and will cause each of
their respective Significant Subsidiaries and Quasi-Restricted Subsidiaries to,
maintain, preserve, protect and keep its properties in reasonably good repair,
working order and condition (ordinary wear and tear excepted and taking into
account any construction on such properties relating to Atlantis Phase III),
and make necessary and proper repairs, renewals and replacements so that its
business carried on in connection therewith may be properly conducted at all
times unless (x) the failure to do so could not reasonably be expected to have
a Material Adverse Effect or (y) KIL determines in good faith that the
continued maintenance of any of their respective properties (other than the
Core Assets) is no longer economically desirable.


 


SECTION 7.1.4.  Insurance.  Each Borrower will, and will cause each of
their respective Significant Subsidiaries and Quasi-Restricted Subsidiaries to,
maintain or cause to be maintained with responsible insurance companies
insurance with respect to its properties and business against such casualties
and contingencies and of such types and in such amounts as is customary


 


66





















 


in the case of similar businesses, including “all risks” insurance
without exclusion for the perils of hurricane or terrorism on the Bahamas
Property and on the buildings, inventory, furnishings, fittings and equipment
situated thereon or in transit thereto, in an amount not less than $150,000,000
with a deductible of not more than $15,000,000 per occurrence for the first two
(not exceeding in all events $30,000,000). 
Each Borrower will, upon request of the Administrative Agent, furnish to
the Lender Parties at reasonable intervals a certificate of an Authorized
Officer of KIL setting forth the nature and extent of all insurance maintained
by the Borrowers and their respective Significant Subsidiaries and
Quasi-Restricted Subsidiaries in accordance with this Section.  For so long as the Bahamas Property and the
buildings situated thereon are subject to a Lien in favor of the Administrative
Agent for the benefit of the Secured Parties, KIBL will, and will cause its
Restricted Subsidiaries to, note the Administrative Agent’s interest as joint
loss payee with KIBL (or such Restricted Subsidiary) on behalf of the Secured
Parties (to the extent of their interest) on all insurance policies relating to
the Bahamas Property and on the buildings situated thereon.  The Borrowers’ will promptly notify the
Administrative Agent of any change in coverage, including any calculation of or
reduction in coverage amounts on the Bahamas Property.


 


SECTION 7.1.5.  Books and Records.  Each Borrower will, and will cause each of
their respective Significant Subsidiaries and Quasi-Restricted Subsidiaries to,
keep books and records which accurately reflect in all material respects all of
their respective business affairs and transactions and permit the
Administrative Agent, the Issuer and each Lender or any of their respective
representatives, at reasonable times and intervals during normal business
hours, and upon reasonable prior notice, to visit all of its offices, to
discuss its financial matters with its officers and independent public
accountant (and each Borrower hereby authorizes such independent public
accountant to discuss its and such Subsidiaries’ financial matters with each
Lender or its representatives so long as no Event of Default has occurred and
is continuing, a representative of any Borrower or such Subsidiary is present
during such discussion unless (i) such Borrower or such Subsidiary waives
the right to be present or (ii) an Event of Default has occurred and is
continuing) and to examine any of its books or other corporate records; provided
that the Administrative Agent, the Issuer, the Lenders and their respective
representatives shall comply with the confidentiality obligations set forth in Section 10.16
and that they shall not disrupt the personnel and operations of the Borrowers
and their Subsidiaries.  Following the
occurrence of an Event of Default, KIL shall pay any reasonable documented fees
of such independent public accountant incurred in connection with the
Administrative Agent’s, the Issuer’s or any Lender’s exercise of its rights
pursuant to this Section.


 


SECTION 7.1.6.  Environmental Covenant.  Each Borrower will, and will cause each of
their respective Subsidiaries to,


 


(a)           use
and operate all of its facilities and properties in compliance with all
Environmental Laws, keep all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmental matters in effect
and remain in compliance therewith, and handle all Hazardous Materials in
compliance with all applicable Environmental Laws except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect;


 


67





















 


(b)           immediately
notify the Administrative Agent and provide copies upon receipt of all written
claims, complaints, notices or inquiries relating to compliance with
Environmental Laws except where the content of such claims, complaints, notices
or inquiries could not reasonably be expected to have a Material Adverse
Effect; and


 


(c)           provide
such information and certifications which the Administrative Agent may
reasonably request in writing from time to time to evidence compliance with
this Section 7.1.6.


 


SECTION 7.1.7.  Future Investments in Significant
Subsidiaries.  To the extent
permitted by this Agreement,


 


(a)           upon
any Borrower or any Guarantor directly or indirectly acquiring additional
capital stock of or other equity interests in any Person that constituted a
Pledged Share Issuer (as defined in a Pledge Agreement);


 


(b)           upon
KIL or any Restricted Subsidiary of KIL directly or indirectly acquiring or
otherwise having a Significant Subsidiary (including if a non-Significant
Subsidiary becomes a Significant Subsidiary) following the Effective Date; or


 


(c)           upon
KIL or any of its Restricted Subsidiaries directly or indirectly making an
Investment in a Person;


 


KIL shall notify the Administrative Agent of such acquisition, and
shall cause any Significant Subsidiary acquired or designated after the
Effective Date to execute and deliver a Security Agreement and, if such Person
owns any real property with a fair market value in excess of $10,000,000, a
Mortgage (or, if applicable, a supplement to an existing Mortgage), and any
other instruments, documents or filings reasonably requested by the
Administrative Agent to perfect its security interest in the collateral
described in such Security Agreement and such Mortgage, and KIL and each other
Obligor shall, pursuant to a Pledge Agreement (as supplemented, if necessary,
by a Foreign Pledge Agreement), pledge to the Administrative Agent, for its
benefit and that of the Secured Parties, (i) in the case of clauses (a) and
(b) above, all of the additional or outstanding capital stock or
equity interests so acquired within 60 days of acquisition or (ii) in the
case of clause (c) above, the promissory note, duly endorsed
in favor of the Administrative Agent (if such Investment is by way of a loan or
advance) or the capital stock, equity or other ownership interest in a
Significant Subsidiary (if such Investment is in the form of other than a loan
or advance), in each case made or issued by each Borrower and each Significant
Subsidiary that is in the chain of ownership in connection with such
Investment, and, in the case of clauses (a), (b) and (if
applicable) (c) above, also deliver to the Administrative Agent
undated stock powers for such certificates, executed in blank (or, if any such
shares of capital stock or equity interests are uncertificated, confirmation
and evidence reasonably satisfactory to the Administrative Agent that the
security interest in such uncertificated securities or equity interests has
been transferred to and perfected by the Administrative Agent, for the benefit
of the Issuer and the Lenders, in accordance with Article 8 and Article 9
of the U.C.C. or any other analogous local law which may be applicable), and to
the extent any Restricted Subsidiary designated as a Significant Subsidiary is
not already a party to a Guaranty, such Significant Subsidiary shall execute
and deliver to the Administrative Agent a Guaranty Supplement together with, if


 


68





















 


requested by the Administrative Agent, such opinions of legal counsel
for the Obligors from counsel reasonably satisfactory to the Administrative
Agent relating thereto, which legal opinions shall be in form and substance
reasonably satisfactory to the Administrative Agent.  Without limiting the foregoing requirements,
KIL agrees that it will cause each Restricted Subsidiary that is required to
deliver a guaranty of any Subordinated Debt to also execute and deliver a
Guaranty Supplement to the Administrative Agent prior to or contemporaneously
delivering a guaranty of Subordinated Debt.


 


SECTION 7.1.8.  Use of Proceeds.  The Borrowers shall apply the proceeds of
each Credit Extension in accordance with the seventh recital.  The Borrowers hereby agree that no proceeds
of any Credit Extension will be used to make an Investment or other acquisition
of all or any portion of the capital stock or other equity interest in any Person
if such Investment or acquisition is formally opposed (and such opposition has
not been revoked or otherwise nullified) in writing by the board of directors
(or equivalent managerial body) of such Person prior to the expenditure of any
funds in connection therewith.


 


SECTION 7.1.9.  Priority of Lenders’ Liens.  Each Borrower will, and will cause their
Restricted Subsidiaries to, do all things requested by the Administrative Agent
that are reasonably necessary to ensure that at all times the claims of the
Secured Parties against the Obligors under this Agreement and the other Loan
Documents that provide for Collateral Documents are prior to and superior to
the claims of all other creditors, except as expressly permitted in this
Agreement.


 


SECTION 7.1.10.  Access to Property.  Each Borrower shall permit the Administrative
Agent and its agents, consultants, employees and representatives access to
inspect its material properties upon giving reasonable prior written notice.


 


SECTION 7.1.11.  Other Amounts.  KIL shall maintain deposits in an
interest-bearing collateral account with the Administrative Agent in an amount
reasonably requested from time to time by, and on terms and conditions
satisfactory to, the Administrative Agent sufficient to pay any duties that may
become due with respect to the Loan Documents, which amount may be applied by
the Administrative Agent to the payment of such duties at any time after the
occurrence and during the continuance of an Event of Default.


 


SECTION 7.2.  Negative Covenants.  Each of the Borrowers agrees with the
Administrative Agent, the Issuer and each Lender that, until all Commitments
have terminated and all Obligations have been paid and performed in full, each
of the Borrowers will perform the obligations set forth in this Section 7.2.


 


SECTION 7.2.1.  Business Activities.  KIL will not, and will not permit any of its
Restricted Subsidiaries to, engage in any business activity, except those
described in the first recital, the development and sale of time sharing
and resort home properties, and (in each case), such activities as may be
incidental or related thereto and reasonable extensions thereof.


 


SECTION 7.2.2.  Indebtedness.  KIL will not, and will not permit any of its
Restricted Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:


 


69





















 


(a)           Indebtedness
of the Borrowers and the Guarantors in respect of the Credit Extensions and
other Obligations;


 


(b)           unsecured
Indebtedness of a Borrower owing to a Restricted Subsidiary of KIL (including
another Borrower), but only if such Borrower and such Restricted Subsidiary
have executed and delivered to the Administrative Agent a Subordination
Agreement and such Indebtedness shall be evidenced by a note (which shall,
unless the Administrative Agent shall otherwise agree, be substantially in the
form of Exhibit A to a Pledge Agreement and shall, pursuant to a Pledge
Agreement, be pledged to the Administrative Agent for its benefit and that of
the Secured Parties);


 


(c)           Indebtedness
which is identified in Item 7.2.2(c) of the Disclosure Schedule (including
all refinancing of such Indebtedness and commitments related thereto (together
with interest thereon and call, consent and/or tender premiums and costs) so
long as it matures on the same date or later than the original Indebtedness) (“Ongoing
Indebtedness”);


 


(d)           Indebtedness
which is incurred by KIL or any of its Restricted Subsidiaries to finance the
acquisition of any assets permitted to be acquired pursuant to Section 7.2.7
(including all refinancings of such Indebtedness);


 


(e)           unsecured
Indebtedness incurred in the ordinary course of business (including open accounts
extended by suppliers on normal trade terms in connection with purchases of
goods and services, but excluding Indebtedness of the types set forth in clauses
(a), (b) and (c) of the definition of Indebtedness
or Contingent Liabilities in respect of such types of Indebtedness);


 


(f)            Indebtedness
in respect of Capitalized Lease Liabilities to the extent permitted in Section 7.2.7
(including all refinancings of such Indebtedness);


 


(g)           Indebtedness
of Guarantors (other than a Borrower) owing to a Borrower; provided that
such Indebtedness shall not result in such Borrower being treated as a conduit
entity within the meaning of U.S. Treasury regulations section 1.881-3(a)(2)(ii)(B)(2)(iii) and
which shall be evidenced by a note (which shall, unless the Administrative
Agent shall otherwise agree, be in the form of Exhibit A to the applicable
Borrower Pledge Agreement and shall, pursuant to a Borrower Pledge Agreement,
be pledged to the Administrative Agent for its benefit and that of the Secured
Parties);


 


(h)           Indebtedness
of a Guarantor (other than a Borrower) owing to another Guarantor (other than a
Borrower); provided that such Indebtedness shall not result in such
Guarantor being treated as a conduit entity within the meaning of U.S. Treasury
regulations section 1.881-3(a)(2)(ii)(B)(2)(iii) and which shall be
evidenced by a note (which shall, unless the Administrative Agent shall
otherwise agree, be in the form of Exhibit A to the Subsidiary Pledge
Agreement) and shall, pursuant to a Subsidiary Pledge Agreement, be pledged to
the Administrative Agent for its benefit and that of the Secured Parties;


 


70





















 


(i)            unsecured
Subordinated Debt of KIL or any Guarantor;


 


(j)            Indebtedness
of a Restricted Subsidiary (other than a Guarantor) owing to another Restricted
Subsidiary that is not a Guarantor;


 


(k)           Indebtedness
of KIL or its Restricted Subsidiaries in the form of Contingent Liabilities of
the obligations of third parties;


 


(l)            Indebtedness
of KIL or its Restricted Subsidiaries in the form of Contingent Liabilities of
the obligations of any Restricted Subsidiary or any other Person (including a
joint venture) in which KIL /or its Affiliates has at least a 33.0% equity
interest or which is developed, managed or controlled by KIL and/or its
Affiliates;


 


(m)          other
unsecured senior Indebtedness of KIL or any Guarantor, so long as both
immediately before and immediately after the incurrence of such Indebtedness,
no Default has occurred and is continuing or would result therefrom; and


 


(n)           other
Indebtedness of KIL or any Guarantor in an aggregate amount at any time
outstanding not to exceed $10,000,000;


 


provided, however,
that no Indebtedness otherwise permitted by clause (d) or clauses
(f) through (and including) (n) shall be permitted if, either
before or after giving effect to the incurrence of such Indebtedness
(calculated as if such Indebtedness were incurred on the last day of the most
recent Fiscal Quarter end preceding the incurrence of such Indebtedness and
including all Indebtedness incurred since such date), any Default under Section 7.2.4
or any other Event of Default has occurred and is then continuing or, on a pro
forma basis, would result therefrom.


 


SECTION 7.2.3.  Liens. 
KIL will not, and will not permit any of its Restricted Subsidiaries to,
create, incur, assume or suffer to exist any Lien upon any of its property,
revenues or assets, whether now owned or hereafter acquired, except:


 


(a)           Liens
securing payment of the Obligations granted pursuant to any Loan Document and
Permitted Encumbrances;


 


(b)           Liens
to secure payment of Indebtedness of the type permitted and described in clause
(c) of Section 7.2.2;


 


(c)           Liens
granted to secure payment of Indebtedness of the type permitted and described
in clauses (d) or (f) of Section 7.2.2 and
covering only those assets acquired with the proceeds of such Indebtedness;


 


(d)           Liens
for taxes, assessments or other governmental charges or levies not at the time
delinquent for more than 60 days or thereafter payable without penalty or being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books;


 


(e)           Liens
of carriers, warehousemen, mechanics, materialmen and landlords, and other
similar Liens arising in the ordinary course of business for sums not overdue


 


71





















 


for more than 60 days or being diligently
contested in good faith by appropriate proceedings and for which adequate reserves
in accordance with GAAP shall have been set aside on its books;


 


(f)            Liens
incurred in the ordinary course of business in connection with workmen’s
compensation, unemployment insurance or other forms of governmental insurance
or benefits, or to secure performance of tenders, statutory obligations, leases
and contracts (other than for borrowed money) entered into in the ordinary
course of business or to secure obligations on surety or appeal bonds;


 


(g)           judgment
Liens (x) in existence less than 60 days after the entry thereof (y) with
respect to which execution has been stayed or (z) the payment of which is
covered in full (subject to a customary deductible) by insurance maintained
with responsible insurance companies;


 


(h)           Liens
granted by KIL or any of its Restricted Subsidiaries granted to any holder of
Indebtedness of KIL or such Restricted Subsidiary other than Subordinated
Noteholders (or trustees or representatives of Subordinated Noteholders) to
secure Indebtedness other than Subordinated Debt, consisting of a security
interest in cash, Cash Equivalent Investments and/or marketable securities to
secure obligations of KIL or such Restricted Subsidiaries which are incurred
pursuant to clause (k) of Section 7.2.2; provided
that, the Secured Parties hereby agree that (x) the Lien in such cash, Cash
Equivalent Investments and/or marketable securities created by the Loan
Documents shall be automatically subordinated to any Lien permitted under this
clause in respect of the Indebtedness incurred under clause (k) of Section 7.2.2
and (y) they shall have no Lien on, prior to the Effective Date, a deposit of
$125,000,000 and, on and after the Effective Date, a deposit of $200,000,000,
in each case, cash, Cash Equivalent Investments and/or marketable securities
deposited by KIL or such Restricted Subsidiary to secure KIL or such Restricted
Subsidiary’s obligations to contribute equity capital under a certain joint
venture agreement with respect to the Atlantis, The Palm resort development in
Dubai, U.A.E.;


 


(i)            Liens
on deposits or similar payments made in connection with Investments permitted
by Section 7.2.5 or the acquisition of assets permitted by the
terms of this Agreement; provided that the maximum aggregate amount of
such deposits or similar payments shall not exceed $20,000,000;


 


(j)            Liens
incurred in connection with the extension, renewal or refinancing of
Indebtedness secured by the Liens described in clauses (b), (c) or (i) above;
provided that any extension, renewal or replacement Lien shall (i) be
limited to the property covered by the existing Lien and (ii) secure
Indebtedness which is no greater in amount and have material terms no less
favorable to the Lenders than the Indebtedness secured by the existing Lien;
and


 


(k)           Liens
securing Indebtedness permitted to be incurred pursuant to clause (n) of
Section 7.2.2.


 


72





















 


SECTION 7.2.4.  Financial Condition.  KIL will not permit:


 


(a)           the
Interest Coverage Ratio as of the last day of any Fiscal Quarter ending on or
about a date set forth below to be less than 2.50:1.


 


(b)           the
Total Leverage Ratio as of the last day of any Fiscal Quarter ending on a date
set forth below to be greater than the ratio set forth opposite such date:


 


	
  Fiscal Quarter Ending

  	
   

  	
  Total Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or prior to December 31, 2005

  	
   

  	
  6.50:1

  	
   

  
	
  January 1, 2006 through March 31,
  2007

  	
   

  	
  6.75:1

  	
   

  
	
  April 1, 2007 through June 30,
  2007

  	
   

  	
  6.50:1

  	
   

  
	
  July 1, 2007 through September 30,
  2007

  	
   

  	
  6.25:1

  	
   

  
	
  October 1, 2007 through December 31,
  2007

  	
   

  	
  6.00:1

  	
   

  
	
  January 1, 2008 through December 31,
  2008

  	
   

  	
  5.50:1

  	
   

  
	
  January 1, 2009 through December 31,
  2009

  	
   

  	
  5.25:1

  	
   

  
	
  January 1, 2010 and thereafter

  	
   

  	
  5.00:1

  	
   

  



 


(c)           the
Senior Leverage Ratio as of the last day of any Fiscal Quarter ending on a date
set forth below to be greater than the ratio set forth opposite such date:


 


	
  Fiscal Quarter Ending

  	
   

  	
  Senior Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or prior
  to June 30, 2007

  	
   

  	
  3.50:1

  	
   

  
	
  July 1,
  2007 through December 31, 2007

  	
   

  	
  3.25:1

  	
   

  
	
  January 1,
  2008 and thereafter

  	
   

  	
  3.00:1

  	
   

  



 


SECTION 7.2.5.  Investments.  KIL will not, and will not permit any of its
Restricted Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except (without duplication):


 


(a)           Investments
identified in Item 7.2.5(a) (“Ongoing Investments”) of the
Disclosure Schedule;


 


(b)           Cash
Equivalent Investments;


 


(c)           Investments
permitted as Indebtedness pursuant to clauses (b), (c), (g),
(h), (i), (j), (k), (l) and (m) of Section 7.2.2;


 


(d)           in
the ordinary course of business, Investments by KIL in the Guarantors, or by
any Guarantor in any other Guarantor, by way of contributions to or purchases
of capital to the extent that all capital stock of other equity interests
evidencing such Investments are pledged to the Administrative Agent for the
benefit of the Secured Parties pursuant to Section 7.1.7;


 


(e)           Investments
in a venture (or in a Person engaged in a venture) of the type permitted by Section 7.2.1,
whether or not such Investment is in a Subsidiary of KIL, or,


 


73





















 


after giving effect to such Investment, the
Person in which such Investment is made becomes a Subsidiary of KIL, so long as
the Total Leverage Ratio as of the last day of the most recent Fiscal Quarter
end was less than 4.5:1 calculated as if such Investment was made on such date
and including all Indebtedness incurred since such date;


 


(f)            subject
to Section 7.2.1, Investments in an aggregate amount not to exceed
$400,000,000 plus the sum of (i) 100% of Net Equity Proceeds (if any)
received by KIL from and after July 7, 2004, plus (ii) 50% of
Net Income of KIL and its Restricted Subsidiaries for each of the full Fiscal
Quarters occurring from and after January 1, 2004 (without deduction for
losses);


 


(g)           Investments
existing on June 30, 2005 and identified in Item 7.2.5(g) of
the Disclosure Schedule;


 


(h)           Investments
in Atlantis, The Palm in an aggregate amount not to exceed $125,000,000; and


 


(i)            Investments
in Resort Co. and SAMAZ, the joint venture entities established for the Magazan
resort casino project in Morocco, or their successor entities, up to an
aggregate amount not to exceed $55,000,000;


 


provided, however, that:


 


(j)            any
Investment which when made complies with the requirements of the definition of
the term “Cash Equivalent Investment” may continue to be held notwithstanding
that such Investment if made thereafter would not comply with such
requirements; and


 


(k)           no
Investment otherwise permitted by clauses (e), (f), (h),
or (i) shall be permitted to be made if, immediately before or
after giving effect thereto, any Default of the type set forth in clauses (a) through
(d) of Section 8.1.9 or any other Event of Default
shall have occurred and be continuing or would result therefrom.


 


SECTION 7.2.6.  Restricted Payments, etc.  KIL will not, and will not permit any of its
Restricted Subsidiaries to,


 


(a)           declare
or make a Restricted Payment or make any deposit for any Restricted Payment; provided
that notwithstanding the foregoing, KIL shall be permitted to declare or make
Restricted Payments, so long as both before and after giving effect to such
Restricted Payment, no Default has occurred and is continuing or would result
therefrom:


 


(i)            in
an unlimited amount if (x) as of the last day of the most recent Fiscal Quarter
end, the Total Leverage Ratio was less than 4.5:1, and (y) KIL shall have
delivered a Compliance Certificate to the Administrative Agent certifying to
that effect and evidencing, on a pro forma basis after giving effect to such
Restricted Payment, compliance with each of the covenants set forth in


 


74





















 


Section 7.2.4
and after giving effect to such Restricted Payment, the Total Leverage Ratio,
on a pro forma basis, remains less than 4.5:1; or


 


(ii)           when
aggregated with the amount used to prepay, purchase, redeem or defease
Subordinated Debt under clause (b)(ii)(B), in an aggregate amount up to
$75,000,000 per Fiscal Year (except in Fiscal Year 2006 during which such
amount shall be up to $100,000,000), when aggregated with the amount of
Subordinated Notes prepaid, purchased, redeemed or defeased under clause
(b)(ii), if the requirements of clause (a)(i) above are not
met.


 


(b)           (i) 
make any payment or prepayment of principal of, or interest on, any
Subordinated Notes (A) on any day other than, in the case of interest
only, the stated scheduled date for such payment of interest set forth in the
applicable Subordinated Notes or in the applicable Subordinated Note Indenture,
or (B) which would violate the terms of the Subordination Provisions of
such Subordinated Note Indenture; or (ii) redeem, purchase or defease any
Subordinated Notes; provided, that notwithstanding the foregoing, KIL
shall be permitted to prepay, purchase, redeem or defease Subordinated Notes,
so long as both before and after giving effect thereto, no Default has occurred
and is continuing or would result therefrom,


 


(A) in an
unlimited amount if (x) as of the last day of the most recent Fiscal Quarter
end, the Total Leverage Ratio was less than 4.5:1, and (y) KIL shall have
delivered a Compliance Certificate to the Administrative Agent certifying to
that effect and evidencing, on a pro forma basis after giving effect to
thereto, compliance with each of the covenants set forth in Section 7.2.4
and after giving effect to thereto, the Total Leverage Ratio, on a pro
forma basis, remains less than 4.5:1;


 


(B)  the
principal amount so paid, prepaid, purchased, redeemed or defeased which does
not meet the requirements of clauses (b)(A)(x)-(z), when aggregated with
the amount of Restricted Payments paid under clause (a)(ii), does not
exceed $75,000,000 in the aggregate during any Fiscal Year (except in Fiscal
Year 2006 during which such amount shall not exceed $100,000,000); or


 


(C)  such
Subordinated Notes are being prepaid, purchased, redeemed or defeased with the
proceeds of new Subordinated Notes otherwise permitted hereunder to be issued;


 


(c)           make
any deposit for any of the foregoing purposes in excess of the amounts
permitted by clause (a) or (b).


 


provided, however,
that to the extent the amount of all Restricted Payments under clause (a) and
all payments and prepayments of principal of, and interest on, any Subordinated
Notes under clause (b) actually made during any Fiscal Year
are less than $75,000,000 in the aggregate during such Fiscal Year (or less
than $100,000,000 in the aggregate during Fiscal Year 2006), then such unused
amount may be carried forward to (but only to) the next succeeding Fiscal Year
(any such amount to be certified by KIL to the Administrative Agent in the
Compliance


 


75





















 


Certificate delivered for the last Fiscal Quarter of such Fiscal Year,
and any such amount carried forward to a succeeding Fiscal Year shall be deemed
to be used prior to KIL and its Restricted Subsidiaries using the $75,000,000
base amount for such succeeding Fiscal Year (or the $100,000,000 base amount
for Fiscal Year 2006)).


 


SECTION 7.2.7.  Capital Expenditures, etc.  KIL will not, and will not permit any of its
Restricted Subsidiaries to, make or commit to make Capital Expenditures in
connection with the maintenance or restoration of existing assets or to acquire
fixed assets to replace other fixed assets no longer useful in the business of
KIL and its Restricted Subsidiaries which in any Fiscal Year aggregate in
excess of (i) $50,000,000 prior to the official opening of the Atlantis
Phase III expansion and (ii) $75,000,000 thereafter; provided, however,
that to the extent the amount of Capital Expenditures permitted to be made in
any Fiscal Year without giving effect to this proviso exceeds the aggregate
amount of Capital Expenditures actually made during such Fiscal Year, such
excess amount may be carried forward to (but only to) the next succeeding
Fiscal Year (any such amount to be certified by KIL to the Administrative Agent
in the Compliance Certificate delivered for the last Fiscal Quarter of such
Fiscal Year, and any such amount carried forward to a succeeding Fiscal Year
shall be deemed to be used prior to KIL and its Restricted Subsidiaries using
the $50,000,000 or $75,000,000 base amount, as applicable, for such succeeding
Fiscal Year, without giving effect to such carry-forward).  The Lenders acknowledge and agree that,
except as to the limitations set forth above, KIL and its Restricted
Subsidiaries shall be permitted to make other Capital Expenditures.


 


SECTION 7.2.8.  Transactions with Affiliates.  KIL will not, and will not permit any of its
Restricted Subsidiaries to, enter into, or cause, suffer or permit to exist any
arrangement or contract with any of its other Affiliates unless such
arrangement or contract is fair and equitable to KIL or such Restricted
Subsidiary and is an arrangement or contract of the kind which would be entered
into by a prudent Person in the position of KIL or such Restricted Subsidiary
with a Person which is not one of its Affiliates.


 


SECTION 7.2.9.  Restrictive Agreements, etc.  The Borrowers will not, and will not permit
any of their respective Significant Subsidiaries or Quasi-Restricted
Subsidiaries to, enter into any agreement (excluding (i) this Agreement
and any other Loan Document, (ii) in the case of clause (a)(i) below,
any agreement governing any Indebtedness permitted by clause (d) or
(f) of Section 7.2.2 as to the assets financed with the
proceeds of such Indebtedness and (iii) in the case of clause (a) below,
as required under applicable laws binding on KINA and its Restricted
Subsidiaries) prohibiting:


 


(a)           the
(i) creation or assumption of any Lien upon its properties, revenues or
assets, whether now owned or hereafter acquired, or (ii) ability of KIL or
any other Obligor to amend or otherwise modify this Agreement or any other Loan
Document; or


 


(b)           the
ability of the Borrowers or any of their respective Significant Subsidiaries or
Quasi-Restricted Subsidiaries to make any payments, directly or indirectly, to
any Borrower by way of dividends, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges, expenses and accruals
or other returns on Investments, or the ability of any Borrower or any such


 


76





















 


Significant Subsidiary or Quasi-Restricted
Subsidiary to make any payment, directly or indirectly, to any Borrower.


 


SECTION 7.2.10.  Consolidation, Merger, etc.  The Borrowers will not, and will not permit
any of their respective Restricted Subsidiaries to, liquidate or dissolve,
consolidate with, or merge into or with, any other Person, or purchase or
otherwise acquire all of the capital stock or all or substantially all of the
assets of any Person (or of any division or line of business thereof) except:


 


(a)           any
wholly-owned Subsidiary that is a Guarantor may liquidate or dissolve
voluntarily into, and may merge with and into, KIL or any other wholly-owned
Subsidiary that is a Guarantor, and the assets or stock of any wholly-owned
Subsidiary that is a Guarantor may be purchased or otherwise acquired by KIL or
any other wholly-owned Subsidiary that is a Guarantor;


 


(b)           so
long as no Default of the type set forth in clauses (a) through (d) of
Section 8.1.9 or any other Event of Default has occurred and is
continuing or would occur as a result of, and after giving effect thereto, KIL
or any of its Restricted Subsidiaries may purchase all or substantially all of
the assets (or of any division or line of business thereof) or all of the
capital stock of any Person if permitted (without duplication) by Section 7.2.7
to be made as a Capital Expenditure or if permitted as an Investment pursuant
to clause (e) or (f) of Section 7.2.5; and


 


(c)           any
Restricted Subsidiary that is not a Guarantor, a Borrower, a Significant
Subsidiary or a Quasi-Restricted Subsidiary may liquidate or dissolve
voluntarily into, and may merge with and into, any other Restricted Subsidiary,
a Guarantor or any other Person.


 


SECTION 7.2.11.  Asset Dispositions, etc.  KIL will not, and will not permit any of its
Restricted Subsidiaries to sell, transfer, lease, contribute or otherwise
convey, or grant options, warrants or other rights (collectively referred to as
a “Disposition”), with respect to, any assets of KIL or any Restricted
Subsidiary (including accounts receivable and capital stock of Restricted
Subsidiaries) to any Person, unless: (a) such Disposition is of all or
substantially all of the Core Assets (or of any interest therein, including the
ownership interest in the Person holding title to such Core Asset or any real
property upon which any Core Asset is situated) and the prior written consent
of all Lenders (which may be granted or withheld in their sole discretion)
shall have been obtained; (b) such Disposition is of the Relinquishment
Agreement or the Omnibus Termination Agreement (or any interest therein,
including the ownership interest in the Person(s) holding title to the
Relinquishment Agreement or the Omnibus Termination Agreement) and the prior
written consent of the Required Lenders (which may be granted or withheld in
their sole discretion) shall have been obtained (and in the event of such a Disposition,
all representations, covenants and other provisions in this Agreement which
relate to the agreements so disposed of will be deemed to be removed from this
Agreement and the other Loan Documents); (c) such Disposition is of any
real property contiguous to Core Assets (or of any interest therein, including
the ownership interest in the Person holding title to such real property or any
real property upon which Core Assets are situated) and the terms of such
Disposition do not contain any restrictions, agreements or covenants that will
interfere in any material adverse respect with


 


77





















 


access to or the operations of any Core Assets; (d) such
Disposition is not a disposition described in clauses (a) through (c) above;
and (e) in the case of any Disposition (including those described in the
preceding clauses (a) through (d)), the Net Cash Proceeds
(as such term is defined in the Existing Indentures) thereof are applied in
conformity with the provisions of the Existing Indentures and, to the extent
applicable, Section 2.2.2. 
So long as no Event of Default shall then be continuing, upon a
Disposition permitted by this Section, (i) the Lien in favor of the
Secured Parties upon the assets so sold, transferred, leased, contributed or
conveyed shall automatically terminate and be released, and (ii) if the
assets so sold, transferred, leased, contributed or conveyed are shares of
capital stock of a Restricted Subsidiary, then the Guaranty and Security
Agreement, if any, executed by such Restricted Subsidiary shall automatically
terminate and the obligations of, and the Lien in favor of the Secured Parties
upon the assets of, such Restricted Subsidiary shall automatically terminate
and be released and the Restricted Subsidiary shall have no further obligations
thereunder, and in each case the Administrative Agent and the Lenders shall
execute, acknowledge, and deliver such acts, assurances, amendments to the
Guaranty and Security Agreement, and such other instruments and documents
necessary to give effect to the foregoing.


 


SECTION 7.2.12.  Modification of Certain Agreements.  KIL will not, and will not permit any of its
Restricted Subsidiaries to, agree to or, in the case of the Relinquishment
Agreement, vote in favor of, any material amendment or other modification to
the Relinquishment Agreement, the Omnibus Termination Agreement, or (to the
extent not restricted by law) permit the Relinquishment Agreement or the
Omnibus Termination Agreement to be amended if the result thereof would have a
material adverse effect on the Lenders; it being acknowledged and agreed by the
parties hereto that any amendment or other modification which would have the
effect of (i) reducing any fees paid to KIL or any Restricted Subsidiary
under the Relinquishment Agreement, (ii) shortening the term of the
Relinquishment Agreement or (iii) allowing the fees or other amounts
payable under the Relinquishment Agreement to be paid to any Person or Persons
other than TCA, KIL or a Guarantor, shall, in each case, be deemed to have a
material adverse effect on the Lenders.


 


SECTION 7.2.13.  Modification of Subordinated Debt
Documents.  Without the prior written
consent of the Required Lenders, KIL will not, and will not permit any of its
Restricted Subsidiaries to, consent to any amendment, supplement or other
modification of any of the terms or provisions contained in, or applicable to,
any Subordinated Debt (including any Subordinated Note Indenture or any of the
Subordinated Notes), or any guarantees delivered in connection with any
Subordinated Debt (collectively, the “Restricted Agreements”), or make
any payment in order to obtain an amendment thereof or change thereto, if the
effect of such amendment, supplement, modification or change is to (i) increase
the principal amount of, or increase the interest rate on, or add or increase
any fee with respect to such Subordinated Debt or any such Restricted
Agreement, advance any dates upon which payments of principal or interest are
due thereon or change any of the covenants with respect thereto in a manner
which is more restrictive to KIL or any of its Restricted Subsidiaries or (ii) change
any event of default or condition to an event of default with respect thereto,
change the redemption, prepayment or defeasance provisions thereof or change
the Subordination Provisions thereof.


 


78





















 


SECTION 7.2.14.  Assets/Revenues in Other than Significant
Subsidiaries and Guarantors.  KIL
will not permit more than (a) (i) 15%, at all times prior to the
creation of any Quasi-Restricted Subsidiaries and (ii) 20%, at all times
following the creation of any Quasi-Restricted Subsidiaries, in each case, of
the consolidated revenues of KIL and its Subsidiaries during any Fiscal Quarter
or (b) (i) 15%, at all times prior to the creation of any
Quasi-Restricted Subsidiaries and (ii) 20%, at all times following the
creation of any Quasi-Restricted Subsidiaries, in each case, of the
consolidated assets of KIL and its Subsidiaries at the end of any Fiscal
Quarter, to be generated or owned by other than the Borrowers, Significant
Subsidiaries or other Guarantors.


 


ARTICLE VIII



EVENTS OF DEFAULT


 


SECTION 8.1.  Events of Default.  Each of the following events or occurrences
described in this Section 8.1 shall constitute an “Event of
Default”.


 


SECTION 8.1.1.  Non-Payment of Obligations.  Any Borrower shall default (i) in the
payment or prepayment when due of any principal on any Credit Extension or
repayment of any Reimbursement Obligation, or (ii) in the payment when due
of any interest on any Credit Extension or any commitment fee (and such default
shall continue unremedied for a period of three Business Days), or (iii) in
the payment of any other Obligation (and such default shall continue unremedied
for a period of 15 days following the submission of an invoice to the
relevant Borrower and KIL in respect of such other Obligation).


 


SECTION 8.1.2.  Breach of Warranty.  The representations and warranties of KIL or
any other Obligor made or deemed to be made hereunder or in any other Loan
Document executed by it or any other writing or certificate furnished by or on
behalf of any Obligor to the Administrative Agent, the Issuer or any Lender for
the purposes of or in connection with this Agreement or any such other Loan
Document (including any certificates delivered pursuant to Article V)
is or shall be incorrect when made in any material respect.


 


SECTION 8.1.3.  Non-Performance of Certain Covenants and
Obligations.  Any Borrower shall default
in the due performance and observance of any of its obligations under Sections 7.1.1,
7.1.4, 7.1.6, 7.1.7 or 7.2.


 


SECTION 8.1.4.  Non-Performance of Other Covenants and
Obligations.  Any Obligor shall
default in the due performance and observance of any other agreement contained
herein or in any other Loan Document executed by it, and such default shall
continue unremedied for a period of 30 days after notice thereof shall have
been given to the relevant Obligor and KIL by the Administrative Agent.


 


SECTION 8.1.5.  Default on Other Indebtedness.  A default shall occur in the payment when due
(subject to any applicable grace period), whether by acceleration or otherwise,
of any Indebtedness (other than Indebtedness described in Section 8.1.1)
of any Borrower or any Significant Subsidiary having a principal amount,
individually or in the aggregate, in excess of $40,000,000, or a default shall
occur in the performance or observance of any obligation or


 


79


















 


condition with respect to such Indebtedness of any Borrower or any
Significant Subsidiary which results in the acceleration of the maturity of any
such Indebtedness or such default shall continue unremedied for any applicable
period of time sufficient to permit the holder or holders of such Indebtedness
of any Borrower or any Significant Subsidiary, or any trustee or agent for such
holders, to cause such Indebtedness to become due and payable prior to its
expressed maturity.


 


SECTION 8.1.6.  Judgments.  Any judgment or order for the payment of
money individually or in the aggregate in excess of $40,000,000 (exclusive of
any amounts fully covered by insurance (other than self-insurance) and less
any applicable deductible and as to which the insurer has not disputed its
responsibility to cover such judgment or order) shall be rendered against the
Borrowers, any Significant Subsidiary or any Quasi-Restricted Subsidiary and
such judgment or order shall not have been vacated or discharged or stayed or
bonded pending appeal within 60 days after the entry thereof or
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order.


 


SECTION 8.1.7.  Pension Plans.  Any of the following events shall occur with
respect to any Pension Plan:


 


(a)           the
institution of any steps by any Borrower, any member of their respective
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, such Borrower or any such member could be required
to make a contribution to such Pension Plan, or would reasonably expect to
incur a liability or obligation to such Pension Plan, that would be secured
under existing law or otherwise prior to or pari passu with the Secured
Parties, in an amount in excess of $40,000,000; or


 


(b)           a
contribution failure occurs with respect to any Pension Plan sufficient to give
rise to a Lien under section 302(f) of ERISA for an amount in excess
of $40,000,000.


 


SECTION 8.1.8.  Change in Control.  Any Change in Control shall occur.


 


SECTION 8.1.9.  Bankruptcy, Insolvency, etc.  Any Borrower or any of their respective
Significant Subsidiaries or Quasi-Restricted Subsidiaries or any Obligor shall:


 


(a)           become
insolvent or generally fail to pay, or admit in writing its inability or
unwillingness to pay, debts as they become due;


 


(b)           apply
for, consent to, or acquiesce in, the appointment of a trustee, receiver,
sequestrator or other custodian for such Person or any property of any thereof,
or make a general assignment for the benefit of creditors;


 


(c)           in
the absence of such application, consent or acquiescence, permit or suffer to
exist the appointment of a trustee, receiver, sequestrator or other custodian
for such Person, and such trustee, receiver, sequestrator or other custodian
shall not be discharged within 60 days, provided that each such Person hereby
expressly authorizes the Administrative Agent, the Issuer and each Lender to
appear in any court conducting


 


80





















 


any relevant proceeding during such 60-day
period to preserve, protect and defend their rights under the Loan Documents;


 


(d)           permit
or suffer to exist the commencement of any bankruptcy, reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution, winding up or liquidation proceeding, in respect of any
such Person, and, if any such case or proceeding is not commenced by such
Person, such case or proceeding shall be consented to or acquiesced in by such
Person or shall result in the entry of an order for relief or shall remain for
60 days undismissed, provided that each such Person hereby expressly
authorizes the Administrative Agent, the Issuer and each Lender to appear in
any court conducting any such case or proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents; or


 


(e)           take
any action authorizing or effecting any of the foregoing.


 


SECTION 8.1.10.  Impairment of Security, etc.  Any Loan Document, or any Lien granted
thereunder, shall (except in accordance with its terms), in whole or in any
material part, terminate, cease to be effective in any material respect or
cease to be the legally valid, binding and enforceable obligation of any
Obligor party thereto in any material respect; KIL or any other Obligor or any
other party shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or any Lien securing
any Obligation shall, in whole or in any material part, cease to be a perfected
first priority Lien, subject only to those exceptions expressly permitted by
such Loan Document.


 


SECTION 8.1.11.  Amendments to, or Termination of, Certain
Agreements.  Subject to Section 7.2.11(b),
the Relinquishment Agreement or the Omnibus Termination Agreement shall, in
whole or in part, be amended, supplemented, modified, terminated, cease to be
effective or cease to be the legally valid, binding and enforceable obligation
in any material respect of any party thereto, in each case if the effect of
such amendment, supplement, modification, termination or other action, has a
Material Adverse Effect.


 


SECTION 8.1.12.  Loss of Bahamian Approvals.  The approval of the Exchange Control of The
Central Bank of the Commonwealth of The Bahamas with respect to this Agreement
or the Notes delivered by KIBL or KIL, and the undertaking to make available to
KIBL or KIL and the other Obligors such foreign exchange as may be necessary to
enable KIBL or KIL and the other Obligors to fulfill their payment obligations
in Dollars, ceases to be in full force and effect and KIBL or KIL shall fail to
renew the same within 120 days or alternative arrangements shall not have been
made by KIBL or KIL for payment of the Obligations in Dollars.


 


SECTION 8.1.13.  Loss or Revocation of Casino License.  Any Casino License (or the aggregated number
of licenses in the case of clause (ii) of the definition of “Casino
Licenses”) is revoked, suspended, rescinded, denied or not renewed when
required in accordance with its terms and as a result the casino or casinos
governed thereby are not able to operate for a period of 30 or more days.


 


81





















 


SECTION 8.1.14.  Loss of Property; Change in Management.  KIBL or any Obligor that is a Significant
Subsidiary or any material part of the revenues or assets of KIBL, such
Obligors or the Bahamas Property (as the case may be) is seized, nationalized,
expropriated or compulsorily purchased or any applicable authority resolves to
make an order for such seizure, nationalization, expropriation or compulsory
purchase (and, in the case of an Obligor that is a Significant Subsidiary, such
order shall not have been vacated, discharged, stayed or bonded pending appeal
within 30 Business Days from the date of issuance thereof) or the management of
KIBL or such Obligor is wholly or partially displaced or its authority in the
conduct of its business is wholly or partially curtailed and in each case such
action would reasonably be expected to have a Material Adverse Effect.


 


SECTION 8.1.15.  Failure of Subordination.  The subordination provisions relating to any
Subordinated Note Indenture or contained in any Subordinated Notes (the “Subordination
Provisions”) shall fail to be enforceable by the Lender Parties (which have
not effectively waived the benefits thereof) in accordance with the terms
thereof, or the principal or interest on any Loan, Reimbursement Obligation or
other monetary Obligations shall fail to constitute Senior Indebtedness, “Senior
Debt” or the same (or any other similar) term used to define the monetary
Obligations; or any Subordinated Debt Issuer (or guarantor of any Subordinated
Debt) shall, directly or indirectly, disavow or contest in any manner (i) the
effectiveness, validity or enforceability of any of the Subordination
Provisions, or (ii) that any of such Subordination Provisions exist for
the benefit of the Lender Parties.


 


SECTION 8.2.  Action if Bankruptcy.  If any Event of Default described in clauses
(a) through (d) of Section 8.1.9 shall occur,
the Commitments (if not theretofore terminated) shall automatically terminate
and the outstanding principal amount of all outstanding Loans and all other
Obligations shall automatically be and become immediately due and payable,
without notice or demand.


 


SECTION 8.3.  Action if Other Event of Default.  If any Event of Default (other than any Event
of Default described in clauses (a) through (d) of Section 8.1.9)
shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrowers declare all or any portion of the
outstanding principal amount of the Loans and other Obligations to be due and
payable and/or the Commitments (if not theretofore terminated) to be
terminated, whereupon the full unpaid amount of such Loans and other
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or, as the case may be, the Commitments shall terminate.


 


ARTICLE IX



AGENTS


 


SECTION 9.1.  Actions.  Each Lender and the Issuer hereby
appoint JPMCB as its Administrative Agent under and for purposes of this
Agreement and each other Loan Document. 
Each Lender and the Issuer authorize the Administrative Agent to act on
behalf of the Issuer or Lender under this Agreement and each other Loan
Document as Administrative Agent and, in the absence of other written
instructions from the Required Lenders received from time to time


 


82





















 


by the Administrative Agent (with respect to which the Administrative
Agent agrees that it will comply, except as otherwise provided in this Section or
as otherwise advised by counsel), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of such Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto.  Each Lender and the
Issuer hereby indemnify (which indemnity shall survive any termination of this
Agreement) the Administrative Agent according to such Lender’s Percentage, from
and against any and all liabilities, obligations, losses, damages, claims,
costs or expenses of any kind or nature whatsoever which may at any time be
imposed on, incurred by, or asserted against, the Administrative Agent in any
way relating to or arising out of this Agreement and any other Loan Document,
including reasonable attorneys’ fees, and as to which the Administrative Agent
is not reimbursed by an Obligor; provided, however, that no
Lender or Issuer shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, claims, costs or expenses which are
determined by a court of competent jurisdiction in a final proceeding to have
resulted solely from the Administrative Agent’s gross negligence or willful
misconduct.  The Administrative Agent
shall not be required to take, or omit to take, any action hereunder, under the
Notes or under any other Loan Document, or to prosecute or defend any suit in
respect of this Agreement or any other Loan Document, unless it is indemnified
hereunder to its satisfaction.  If any
indemnity in favor of the Administrative Agent shall be or become, in the
Administrative Agent’s determination, inadequate, the Administrative Agent may
call for additional indemnification from the Lenders and cease to do the acts
indemnified against hereunder until such additional indemnity is given.


 


SECTION 9.2.  Funding Reliance, etc.  Unless the Administrative Agent shall have
been notified by telephone, confirmed in writing, by any Lender by 5:00 p.m.,
New York time, on the day prior to a Borrowing that such Lender will not
make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent
and, in reliance upon such assumption, make available to the applicable
Borrower a corresponding amount.  If and
to the extent that such Lender shall not have made such amount available to the
Administrative Agent, such Lender severally and each Borrower jointly and
severally agree to repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Administrative Agent made such amount available to the applicable Borrower
to the date such amount is repaid to the Administrative Agent, at the interest
rate applicable at the time to Loans comprising such Borrowing.


 


SECTION 9.3.  Exculpation.  Neither the Administrative Agent nor any of
its directors, officers, employees or agents shall be liable to any Secured
Party for any action taken or omitted to be taken by it under this Agreement or
any other Loan Document, or in connection herewith or therewith, except for its
own willful misconduct or gross negligence, nor responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan Document, nor for
the creation, perfection or priority of any Liens purported to be created by
any of the Loan Documents, or the validity, genuineness, enforceability,
existence, value or sufficiency of any collateral security, nor to make any
inquiry respecting the performance by any Obligor of its obligations hereunder
or under any other Loan Document.  Any
such inquiry which may be made by the Administrative


 


83





















 


Agent shall not obligate it to make any further inquiry or to take any
action.  The Administrative Agent shall
be entitled to rely upon advice of counsel concerning legal matters and upon
any notice, consent, certificate, statement or writing which the Administrative
Agent believes to be genuine and to have been presented by a proper Person.


 


SECTION 9.4.  Successor.  The Administrative Agent may resign as such
at any time upon at least 60 days’ prior notice to KIL and all Lenders.  If the Administrative Agent at any time shall
resign, the Required Lenders may appoint another Lender as a successor
Administrative Agent which, with the prior written consent of KIL, not to be
unreasonably withheld or delayed, shall thereupon become the Administrative Agent
hereunder.  If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent’s giving notice of resignation, then the retiring Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative Agent,
which shall be one of the Lenders or a commercial banking institution organized
under the laws of the U.S. (or any State thereof) or a U.S. branch or agency of
a commercial banking institution, and having a combined capital and surplus of
at least $500,000,000.  Upon the
acceptance of any appointment as Administrative Agent hereunder, such successor
Administrative Agent shall be entitled to receive from the retiring Administrative
Agent such documents of transfer and assignment as such successor
Administrative Agent may reasonably request, and shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement.  After any retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, the provisions of (i) this
Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Agreement and (ii) Section 10.3 and Section 10.4
shall continue to inure to its benefit.


 


SECTION 9.5.  Loans by Administrative Agent.  The Administrative Agent shall have the same
rights and powers with respect to (x) the Credit Extensions made by either
of them or any of their respective Affiliates, and (y) the Notes held by
either of them or any of their respective Affiliates as any other Lender and
may exercise the same as if it were not the Administrative Agent.  The Administrative Agent and their respective
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with any Borrower or any Subsidiary or Affiliate of KIL as if
such Agent were not the Administrative Agent hereunder, including being a
counterparty to a Rate Protection Agreement.


 


SECTION 9.6.  Credit Decisions.  Each Lender acknowledges that it has,
independently of each Agent and each other Lender, and based on such Lender’s
review of the financial information of the Borrowers, this Agreement, the other
Loan Documents and such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to extend its
Commitment.  Each Lender also
acknowledges that it will, independently of each Agent and each other Lender,
and based on such other documents, information and investigations as it shall
deem appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any other Loan Document.


 


84





















 


SECTION 9.7.  Copies, etc.  The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to such Agent by any Borrower pursuant to the terms of this Agreement
unless concurrently delivered to the Lenders by a Borrower.  The Administrative Agent will distribute to
each Lender each document or instrument received for its account and copies of
all other communications received by the Administrative Agent from each
Borrower for distribution to the Lenders by such Agent in accordance with the
terms of this Agreement.


 


SECTION 9.8.  Administrative Agent Independent Rights.  Each of the parties hereto hereby agrees that
(i) the Administrative Agent will be a joint and several creditor of each
and every Obligation of each Borrower and the Obligors under the Credit
Agreement and each other Loan Document, (ii) subject to the provisions
hereof, the Administrative Agent shall have its own independent right to demand
performance by a Borrower and each other Obligor of the Obligations under this
Agreement and each other Loan Document and (iii) any payments made
directly to the Administrative Agent in respect of the Obligations shall have
been deemed to have been made by such Borrower or such other Obligor for the
benefit of the Lender Parties.


 


SECTION 9.9.  The Syndication Agent, the
Co-Documentation Agents and the Co-Lead Arrangers.  Notwithstanding anything else to the contrary
contained in this Agreement or any other Loan Document, none of the Syndication
Agent, the Co-Documentation Agents or the Co-Lead Arrangers, in such
capacities, shall have any rights, duties or responsibilities under this
Agreement or any other Loan Document, or any fiduciary relationship with any
Secured Party, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any Loan
Document or otherwise exist against any Syndication Agent, Co-Documentation
Agent or Co-Lead Arranger.


 


ARTICLE X



MISCELLANEOUS PROVISIONS


 


SECTION 10.1.  Waivers,
Amendments, etc.  The
provisions of this Agreement and of each other Loan Document (other than the
Fee Letters or a Rate Protection Agreement) may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrowers and the Required Lenders (except as permitted in
accordance with clause d of Section 2.2.3); provided,
however, that no such amendment, modification or waiver which would:


 


(a)           modify
any requirement hereunder that any particular action be taken by all the
Lenders shall be effective unless consented to by each Lender;


 


(b)           modify
this Section 10.1, decrease the percentage contained in the
definition of “Required Lenders”, release (i) all or substantially all
collateral security or (ii) all or substantially all of the Guarantors
from their obligations under the Guarantees or under Section 3.4,
except as otherwise specifically provided in any Loan Document, or extend the
Commitment Termination Date shall be made without the consent of each Lender
(it being agreed that no consent need be obtained in the case of the release of
collateral in accordance with Section 7.2.11);


 


85





















 


(c)           increase
the aggregate amount of Credit Extensions required to be made by or
participated in by a Lender, reduce any fees described in Article III
payable to a Lender, extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on any Loan (or
reduce the principal amount of or rate of interest on any Loan (other than the
rate of interest on any amounts past due under Section 3.2.2) of a
Lender shall be made without the consent of such adversely affected Lender;


 


(d)           increase
the Stated Amount of any Letter of Credit unless consented to by the Issuer of
such Letter of Credit;


 


(e)           modify
Section 3.1.2 without the consent of the Swingline Lender;


 


(f)            affect
adversely the interests, rights or obligations of any Agent in its capacity as
an Agent or the Issuer in its capacity as the Issuer shall be made without
consent of such Agent or the Issuer or the Swingline Lender in its capacity as
Swingline Lender, as the case may be; or


 


(g)           waive
payment defaults shall be made without the consent of each Lender.


 


No failure or delay on the part of any Lender Party in exercising any
power or right under this Agreement or any other Loan Document shall operate as
a waiver thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof or the exercise of any
other power or right.  No notice to or
demand on any Borrower or any other Obligor in any case shall entitle it to any
notice or demand in similar or other circumstances.  No waiver or approval by any Lender under
this Agreement or any other Loan Document shall, except as may be otherwise
stated in such waiver or approval, be applicable to subsequent
transactions.  No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.


 


SECTION 10.2.  Notices.  All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party
at its address or facsimile number set forth below its signature hereto or set
forth in the Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other
parties.  Any notice, if mailed and
properly addressed with postage prepaid or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received; any notice, if
transmitted by facsimile, shall be deemed given when received.  Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communications pursuant
to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices pursuant to Article II unless
otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Borrowers
may, in their discretion, agree to accept notices and other communications to
it hereunder by electronic communications pursuant to procedures approved by
such Person in writing; provided that approval of such procedures may be
limited to particular notices or communications.


 


86





















 


SECTION 10.3.  Payment of Costs and Expenses.  The Borrowers jointly and severally agree to
pay on demand all expenses of the Administrative Agent (including reasonable
out-of-pocket expenses incurred by the Administrative Agent in connection with
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent and of local counsel, if any, who may be retained by counsel to the
Administrative Agent) in connection with:


 


(a)           the
negotiation, preparation, execution and delivery of this Agreement and of each
other Loan Document, including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to this Agreement or any
other Loan Document as may from time to time hereafter be required, whether or
not the transactions contemplated hereby are consummated;


 


(b)           the
filing, recording, refiling or rerecording of any Collateral Document and/or
any Uniform Commercial Code financing statements relating thereto and all
amendments, supplements and modifications to any thereof and any and all other
documents or instruments of further assurance required to be filed or recorded
or refiled or rerecorded by the terms hereof or of any Collateral Document or
any other Loan Document; and


 


(c)           the
preparation and review of the form of any document or instrument relevant to
this Agreement or any other Loan Document.


 


The Borrowers further jointly and severally agree to pay, and to save
the Administrative Agent, the Issuer and the Lenders harmless from all
liability for, any stamp or other taxes which may be payable in connection with
the execution or delivery of this Agreement, the Credit Extensions hereunder,
or the issuance of the Notes or any other Loan Documents.  The Borrowers also jointly and severally
agree to reimburse the Administrative Agent, the Issuer and each Lender upon demand
for all reasonable out-of-pocket expenses (including attorneys’ fees and legal
expenses) incurred by the Administrative Agent, the Issuer or such Lender in
connection with (x) the negotiation of any restructuring or “work-out”,
whether or not consummated, of any Obligations and (y) the enforcement of
any Obligations.


 


SECTION 10.4.  Indemnification.  In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitment,
the Borrowers hereby jointly and severally indemnify, exonerate and hold each
of the Administrative Agent, the Swingline Lender, the Issuer, the Co-Lead
Arrangers, the Syndication Agent, the Co-Documentation Agent and each Lender
and each of their respective officers, directors, employees and agents
(collectively, the “Indemnified Parties”) free and harmless from and
against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable attorneys’
fees and disbursements (collectively, the “Indemnified Liabilities”),
incurred by the Indemnified Parties or any of them as a result of, or arising
out of, or relating to:


 


(a)           any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Credit Extension;


 


87





















 


(b)           the
entering into and performance of this Agreement and any other Loan Document by
any of the Indemnified Parties, so long as the same shall not have constituted
a breach thereof by such Indemnified Party (including any action brought by or
on behalf of any Borrower as the result of any determination by the Required
Lenders pursuant to Article V not to fund any Credit Extension);


 


(c)           any
investigation, litigation or proceeding related to any acquisition or proposed
acquisition by KIL or any of its Subsidiaries of all or any portion of the
stock or assets of any Person, whether or not such Agent, the Issuer or such
Lender is party thereto;


 


(d)           any
investigation, litigation or proceeding related to any environmental cleanup,
audit, compliance or other matter relating to the protection of the environment
or the Release by KIL or any of its Subsidiaries of any Hazardous Material; or


 


(e)           the
presence on or under, or the escape, seepage, leakage, spillage, discharge,
emission, discharging or releases from, any real property owned or operated by
KIL or any Subsidiary thereof of any Hazardous Material (including any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or arising
under any Environmental Law), regardless of whether caused by, or within the
control of, KIL or such Subsidiary,


 


except for any such Indemnified Liabilities arising for the account of
a particular Indemnified Party by reason of the relevant Indemnified Party’s
gross negligence or willful misconduct. 
If and to the extent that the foregoing undertaking may be unenforceable
for any reason, the Borrowers jointly and severally hereby agree to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.  To the extent permitted by applicable law,
the Borrowers shall not assert, and hereby waive, any claim against any
Indemnified Party, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, any Loan or Letter of Credit or
the use of the proceeds thereof.


 


SECTION 10.5.  Survival.  The obligations of the Borrowers under Sections
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and
the obligations of the Lenders under Section 9.1, shall in each
case survive any termination of this Agreement, the payment in full of all
Obligations and the termination of all Commitments.  The representations and warranties made by
each Obligor in this Agreement and in each other Loan Document shall survive
the execution and delivery of this Agreement and each such other Loan Document.


 


SECTION 10.6.  Severability.  Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall,
as to such provision and such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.


 


88





















 


SECTION 10.7.  Headings.  The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.


 


SECTION 10.8.  Execution
in Counterparts, Effectiveness, etc. 
This Agreement may be executed by the parties hereto in several counterparts,
each of which shall be deemed to be an original and all of which shall
constitute together but one and the same agreement.  This Agreement shall become effective when (i) counterparts
hereof executed on behalf of the Borrowers, the Issuer, the Administrative
Agent and each Lender (or notice thereof satisfactory to the Administrative
Agent) shall have been received by the Administrative Agent and notice thereof
shall have been given by the Administrative Agent to KIL and each Lender, (ii) the
conditions precedent set forth in Section 5.1 shall have been
satisfied or waived in full, and (iii) the Administrative Agent (or, in
the case of amounts payable under the Fee Letters, the applicable Lender) shall
have received for its own account, or for the account of such Lender, as the
case may be, all fees, costs and expenses due and payable pursuant to Sections
3.3 and 10.3, if then invoiced.


 


SECTION 10.9.  Governing Law; Entire Agreement.  THIS AGREEMENT, THE NOTES AND EACH OTHER LOAN
DOCUMENT (OTHER THAN THE FOREIGN PLEDGE AGREEMENTS, THE MORTGAGES AND THE
DEBENTURES) SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK.  This Agreement and the other Loan Documents
(including the Fee Letters) constitute the entire understanding among the
parties hereto with respect to the subject matter hereof and thereof and
supersede any prior agreements, written or oral, with respect thereto.  In the event of any conflict between the
terms and conditions of this Agreement and the terms and conditions of any
Debentures or the Mortgages the terms and conditions of this Agreement shall
prevail.


 


SECTION 10.10.  Successors and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:


 


(a)           neither
any Borrower nor any other Obligor may assign or transfer its rights or
obligations hereunder without the prior written consent of all Lenders; and


 


(b)           the
rights of sale, assignment and transfer of the Lenders are subject to Section 10.11.


 


SECTION 10.11.  Sale and Transfer of Loans and Note;
Participations in Loans and Note. 
Each Lender may assign, or sell participations in, its Loans, Letters of
Credit participations and Commitment to one or more other Persons in accordance
with this Section 10.11.


 


SECTION 10.11.1.  Assignments.  (a)  Each Commitment, Loan, Letter of
Credit or participation therein, or other Obligation may (i) be assigned
in any amount to another Lender or to an Affiliate or Approved Fund of the
assigning Lender or another Lender with the giving of


 


89





















 


notice to the Borrowers and the Administrative Agent or (ii) be
assigned in an aggregate amount of not less than $5,000,000 (or such lesser
amount as shall constitute the aggregate amount of the Commitments, Loans,
Letters of Credit and participations therein, and other Obligations of the
assigning Lender) to any other Eligible Assignee (treating any two or more
Approved Funds with the same investment advisor as a single Eligible Assignee)
(each such assignee in clauses (i) and (ii) being an “Assignee
Lender”) with the giving of notice to the Borrowers and with the consent of
the Borrowers (unless an Event of Default has occurred and is continuing), the
Issuer (other than an assignment of a Term Loan Commitment) and the
Administrative Agent (which consent of the Borrowers, the Issuer and the
Administrative Agent shall not be unreasonably withheld or delayed), provided
that, in the case of any assignment to an Affiliate or Approved Fund of the
assigning Lender, the Borrowers and Guarantors shall not be required to pay any
amount under Section 4.3, 4.4, 4.5 or 4.6 that
is greater than the amount which it would have been required to pay had no
assignment to an Affiliate or Approved Fund been made.  To the extent of any such assignment in
accordance with either clause (i) or (ii) above,
the assigning Lender shall be relieved of its obligations with respect to its
Commitments, Loans, Letters of Credit or participations therein, or other
Obligations or the portion thereof so assigned. 
The parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, a
Lender Assignment Agreement, together with a processing and recordation fee of
$3,500 (provided that (i) no such processing and recordation fee
shall be payable if the Assignee Lender is an Affiliate of the assignor or a
Person under common management with the assignor, and (ii) only one such
fee shall be required in connection with a simultaneous assignment to a group
of Approved Funds with the same investment advisor) and such forms (including
an administrative questionnaire if the Assignee Lender was not previously a
Lender), certificates or other evidence, if any, with respect to United States
federal income tax withholding matters as the Assignee Lender under such Lender
Assignment Agreement may be required to deliver to the Borrowers and the Administrative
Agent pursuant to Section 4.6 (with a copy of such forms,
certificates or other evidence delivered to the Borrowers).  Upon such execution, delivery, acceptance and
recordation, from and after the effective date specified in such Lender Assignment
Agreement, (y) the Assignee Lender thereunder shall be a party hereto and,
to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder, and (z) the assigning Lender thereunder
shall, to the extent that rights and obligations hereunder have been assigned
by it pursuant to such Lender Assignment Agreement, relinquish its rights
(other than any rights which expressly survive the termination of this
Agreement) and be released from its obligations under this Agreement (and, in
the case of a Lender Assignment Agreement covering all or the remaining portion
of an assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto; provided that, anything
contained in any of the Loan Documents to the contrary notwithstanding, if such
Lender is the Issuer with respect to any outstanding Letters of Credit such
Lender shall continue to have all rights and obligations of the Issuer with
respect to such Letters of Credit until the cancellation or expiration of such
Letters of Credit and the reimbursement of any amounts drawn thereunder).  The Commitments hereunder shall be modified
to reflect the Commitment of such Assignee Lender and any remaining Commitment
of such assigning Lender and the assigning Lender shall, upon the effectiveness
of such assignment or as promptly thereafter as practicable, surrender its
applicable Notes, if any, to Administrative Agent for cancellation, and
thereupon new Notes shall, if so requested by the Assignee Lender and/or the
assigning Lender, be issued to the


 


90





















 


Assignee Lender and/or the assigning Lender, to reflect the new Commitments
and/or outstanding Loans of the Assignee Lender and/or the assigning
Lender.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 10.11.1(a) 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 10.11.2.


 


(b)           Upon
its receipt of a Lender Assignment Agreement executed by an assigning Lender
and an Assignee Lender representing that it is an Eligible Assignee, together
with the processing and recordation fee (if so required) referred to in Section 10.11.1(a) and
any forms, certificates or other evidence with respect to United States federal
income tax withholding matters that such Assignee Lender may be required to
deliver to the Administrative Agent pursuant to Section 4.6, the
Administrative Agent shall, if the Administrative Agent (and if necessary, the
Borrower) has consented to the assignment evidenced thereby (in each case to
the extent such consent is required pursuant to Section 10.11.1(a)),
(a) accept such Lender Assignment Agreement by executing a counterpart
thereof as provided therein (which acceptance shall evidence any required
consent of the Administrative Agent to such assignment), (b) record the
information contained therein in the Register, and (c) give prompt notice
thereof to the Borrowers.  The
Administrative Agent shall maintain a copy of each Lender Assignment Agreement
delivered to and accepted by it as provided in this Section 10.11.1(b).


 


(c)           If
the consent of the Borrowers to an assignment or to an Eligible Assignee is
required hereunder (including a consent to an assignment which does not meet
the minimum assignment thresholds specified in Section 10.11.1(a)),
the Borrowers shall be deemed to have given their consent ten Business Days
after the date notice thereof has been delivered by the assigning Lender
(through the Administrative Agent) unless such consent is expressly refused by
the Borrowers prior to such fifth Business Day.


 


(d)           Notwithstanding
anything to the contrary set forth above, any Lender may (without requesting
the consent of any Borrower or the Administrative Agent) pledge its Loans to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank.


 


SECTION 10.11.2.  Participations.  Any Lender may at any time sell to one or
more commercial banks or other financial institutions (each of such commercial
banks and other financial institutions being herein called a “Participant”)
participating interests in any of the Loans, Loan Commitment, Letter of Credit
Commitment and Letter of Credit Outstandings participated in by it, or other
interests of such Lender hereunder; provided, however, that:


 


(a)           no
participation contemplated in this Section 10.11 shall relieve such
Lender from its Commitment or its other obligations hereunder or under any
other Loan Document;


 


(b)           such
Lender shall remain solely responsible for the performance of its Commitment
and such other obligations;


 


91





















 


(c)           each
Obligor and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement and each of the other Loan Documents;


 


(d)           no
Participant, unless such Participant is an Affiliate of such Lender, or is
itself a Lender, shall be entitled to require such Lender to take or refrain
from taking any action hereunder or under any other Loan Document, and no
Lender shall take or refrain from taking any action hereunder or under any
other Loan Document upon the instruction or in accordance with the direction of
any Participant except that such Lender may agree with any Participant that
such Lender will not, without such Participant’s consent, take any actions of
the type described in clause (b) or (c) of Section 10.1;
and


 


(e)           no
Obligor shall be required to pay any amount under Section 4.3, 4.4,
4.5, or 4.6 that is greater than the amount which it would have been
required to pay had no participating interest been sold.


 


(f)            Each
Lender that sells a participating interest in any Loan, Commitment or other
interest to a Participant shall, as agent of the Borrowers solely for the
purpose of this Section 10.11.2, record in book entries maintained by such
Lender the name and the amount of the participating interest of each
Participant entitled to receive payments in respect of such participating
interests.


 


Each Obligor acknowledges and agrees that each Participant, for
purposes of Sections 4.3, 4.4, 4.5, 4.6, 4.8,
4.9, 10.3 and 10.4, shall be considered a Lender.


 


SECTION 10.12.  Other Transactions.  Nothing contained herein shall preclude any
Agent, the Issuer or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with KIL or any of its Affiliates in which KIL or such Affiliate is not
restricted hereby from engaging with any other Person.


 


SECTION 10.13.  Forum Selection and Consent to Jurisdiction.  ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF ANY AGENT, THE ISSUER, THE LENDERS, OR THE OBLIGORS SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK,
COUNTY OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK, COUNTY OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.  EACH


 


92





















 


BORROWER HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEMS (THE “PROCESS
AGENT”), WITH AN OFFICE ON THE DATE HEREOF AT 111 EIGHTH AVENUE, 13th
FLOOR, NEW YORK, NEW YORK 10011, UNITED STATES, AS ITS AGENT TO
RECEIVE, ON SUCH PERSON’S BEHALF AND ON BEHALF OF SUCH PERSON’S PROPERTY,
SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE
SERVED IN ANY SUCH ACTION OR PROCEEDING. 
SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH
PROCESS TO SUCH PERSON IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT’S
ABOVE ADDRESS, AND EACH BORROWER HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE
PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF.  AS AN ALTERNATIVE METHOD OF SERVICE, EACH
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.  EACH BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT THAT SUCH BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM
ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, EACH BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.


 


SECTION 10.14.  Waiver of Jury Trial.  EACH AGENT, THE ISSUER, THE LENDERS, EACH
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF THE AGENTS, THE ISSUER, THE LENDERS OR THE
BORROWERS.  EACH BORROWER ACKNOWLEDGES
AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS
A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS, THE
ISSUER, AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN
DOCUMENT.


 


SECTION 10.15.  Judgment Currency.  The Obligations of each Borrower and each
other Obligor in respect of any sum due to any Lender or the Administrative
Agent hereunder, under the Notes or under or in respect of any other Loan
Document shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than the currency in which such sum was originally
denominated (the “Original Currency”), be discharged only to the extent
that on the Business Day following receipt by such Lender or the Administrative
Agent of any sum


 


93





















 


adjudged to be so due in the Judgment Currency, such Lender or the
Administrative Agent, in accordance with normal banking procedures, purchases
the Original Currency with the Judgment Currency.  If the amount of Original Currency so
purchased is less than the sum originally due to such Lender or the
Administrative Agent, each Borrower agrees as a separate obligation and
notwithstanding any such judgment, to indemnify each Lender and the
Administrative Agent, as the case may be, against such loss, and if the amount
of Original Currency so purchased exceeds the sum originally due to such Lender
and the Administrative Agent, as the case may be, each Lender and the
Administrative Agent agree to remit any excess to the applicable Obligor.  If, for the purpose of obtaining judgment in
any court, it is necessary to convert a sum due under any Loan Document in
another currency into Dollars or into a Foreign Currency, as the case may be, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which, in accordance with
normal banking procedures, the applicable Secured Party could purchase such
other currency with Dollars or with such Foreign Currency, as the case may be,
in New York City, at the close of business on the Business Day immediately
preceding the day on which final judgment is given, together with any premiums
and costs of exchange payable in connection with such purchase.


 


SECTION 10.16.  Confidentiality.  Each of the Lenders and the Agents shall keep
confidential all non-public information obtained pursuant to the requirements
of or in connection with this Agreement which has been identified as such by
KIL in accordance with their customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices.  Subject to Sections
10.11.1 and 10.11.2, such Lenders and Agents may make disclosure (i) to
prospective Assignee Lenders or Participants in connection with the
contemplated assignment or participation of all or any part of their Loans and
Commitment so long as any such information so disclosed is identified as
confidential and such prospective Assignee Lender or Participant is instructed
to maintain the confidentiality thereof, (ii) to their examiners,
Subsidiaries, outside auditors, counsel and other professional advisors in
connection with this Agreement and (iii) as required or requested by any
governmental authority or representative thereof or pursuant to legal process; provided
that, unless specifically prohibited by applicable law or court order, each
Lender or Agent, as the case may be, shall endeavor to notify KIL of any
request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further,
that in no event shall any Lender be obligated or required to return any
materials furnished by any Obligor.


 


SECTION 10.17.  Schedules.  The information set forth in the Schedules
(including the Disclosure Schedule) to this Agreement is qualified in its
entirety by reference to the specific provisions of this Agreement and is not
intended to constitute, and shall not be construed as constituting,
representations or warranties of the party to which such Schedules relate
except as and to the extent provided in this Agreement.  Inclusion of information in the Schedules
shall not be construed as an admission that such information is material for
purposes of the specific provisions of this Agreement to which such information
relates.  Information included in the
Schedules that is not required to be so included under the specific provisions
of this Agreement shall be deemed to be included for information purposes only
and information of a similar nature need not be included elsewhere, at the
discretion of the party providing such information.  Any


 


94





















 


information disclosed by a party in any Schedule shall be deemed
to be disclosed in all the Schedules of such party and for all purposes under
this Agreement to the extent the specific provisions of this Agreement require
such disclosure.


 


SECTION 10.18.  Replacement
of Lenders.  Each Lender or the
ultimate parent company thereof may be rated by S&P, Moody’s or Thompson’s
Bank Watch (or InsuranceWatch Ratings Service, in the case of Lenders that are
insurance companies (or Best’s Insurance Reports, if such insurance company is
not rated by InsuranceWatch Ratings Service)). 
If a proposed Assignee Lender or its ultimate parent entity is not so
rated, then the Borrowers may withhold their consent to any assignment to such
Assignee Lender pursuant to Section 10.11.1.  In the event that S&P, Moody’s or
Thompson’s BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders
that are insurance companies (or Best’s Insurance Reports, if such insurance
company is not rated by InsuranceWatch Ratings Service)) shall downgrade the
long-term certificate of deposit rating or long-term senior unsecured debt
rating of any rated Lender or its ultimate parent company, and the resulting
rating shall be below BBB-, Baa3 or C (or BB, in the case of Lender that is an
insurance company (or B, in the case of an insurance company not rated by
InsuranceWatch Ratings Service)), then the Issuer and KIL shall have the right,
but not the obligation, upon notice to such Lender and the Administrative
Agent, to replace such Lender with an Assignee Lender in accordance with and
subject to the restrictions contained in Section 10.11.1, and such
Lender hereby agrees to transfer and assign without recourse (in accordance
with and subject to the restrictions contained in Section 10.11.1)
all its interests, rights and obligations in respect of its Commitments,
outstanding Loans and participating interest in Letter of Credit Outstanding
under this Agreement to such Assignee Lender; provided, however,
that (i) no such assignment shall conflict with any law, rule and
regulation or order of any governmental authority, (ii) such Assignee
Lender shall pay to such Lender in immediately available funds on the date of
such assignment the principal of and interest and fees (if any) accrued to the
date of payment on the Loans made, and Letters of Credit participated in, by
such Lender hereunder and all other amounts accrued for such Lender’s account
or owed to it hereunder and (iii) KIL and the Issuer agree that the
certificate of deposit rating and long-term senior unsecured debt rating of
each Lender or the ultimate parent company thereof that is a signatory to this
Agreement on the Effective Date (or, if no such rating is available, the “individual”
rating by IBCA Limited (and, if neither rating is available for such original
Lender, then such rating of the parent holding company of such Lender)) is
acceptable, and following the Effective Date such Lender shall be subject to
this Section only if the applicable rating is downgraded below that in
effect on the Effective Date.


 


SECTION 10.19.  Effect of
Amendment and Restatement of the Existing Credit Agreement.  On the Effective Date, the Existing Credit
Agreement shall be amended and restated in its entirety.  The parties hereto acknowledge and agree that
(a) this Agreement and the other Loan Documents, whether executed and
delivered in connection herewith or otherwise, do not constitute a novation,
payment and reborrowing, or termination of the “Obligations” (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement as in effect
prior to the Effective Date and which remain outstanding, (b) such “Obligations”
are in all respects continuing (as amended and restated hereby and which are
hereinafter subject to the terms herein) and (c) the Liens and security
interests as granted under the applicable Loan Documents securing payment of
such “Obligations” are in all respects continuing and in full force and effect


 


95





















 


(as assigned to the Administrative Agent for the benefit of the Secured
Parties pursuant to this Agreement and the other Loan Documents).


 


SECTION 10.20.  USA
PATRIOT Act Notice.  Each Lender and
the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrowers that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that
identifies the Borrowers, which information includes the name and address of
each Borrower and other information that will allow such Lender or the
Administrative Agent as applicable, to identify the Borrowers in accordance
with the Patriot Act.


 


96





















 


IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.


 


	
   

  	
  KERZNER INTERNATIONAL BAHAMAS

  LIMITED

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R.
  Allison

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John R. Allison

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President – Finance

  	
   

  
	
   

  	
   

  	
   

  	
  and Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Executive Offices

  	
   

  
	
   

  	
   

  	
   

  	
  Coral Towers

  	
   

  
	
   

  	
   

  	
   

  	
  Paradise Island,

  	
   

  
	
   

  	
   

  	
   

  	
  The Bahamas

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.: (242) 363-2767

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attention: John R. Allison, Richard Levine
  and

  Giselle Pyfrom

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  KERZNER INTERNATIONAL LIMITED

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R.
  Allison

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John R. Allison

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President – Finance

  	
   

  
	
   

  	
   

  	
   

  	
  and Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Executive Offices

  	
   

  
	
   

  	
   

  	
   

  	
  Coral Towers

  	
   

  
	
   

  	
   

  	
   

  	
  Paradise Island,

  	
   

  
	
   

  	
   

  	
   

  	
  The Bahamas

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.: (242) 363-2767

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attention: John R. Allison, Richard Levine
  and

  Giselle Pyfrom

  	
   

  



 


97





















 


	
   

  	
  KERZNER INTERNATIONAL NORTH

  AMERICA, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R.
  Allison

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John R. Allison

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President – Finance

  	
   

  
	
   

  	
   

  	
   

  	
  and Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Executive Offices

  	
   

  
	
   

  	
   

  	
   

  	
  1000 South Pine Island Road

  	
   

  
	
   

  	
   

  	
   

  	
  Suite 800

  	
   

  
	
   

  	
   

  	
   

  	
  Plantation, Fl 33324-3907

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Facsimile No.:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  John R. Allison

  	
   

  



 


98





















 


	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  	
   

  
	
   

  	
  as the Administrative Agent, a
  Co-Documentation

  Agent and as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald
  S. Shokrian

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Donald S. Shokrian

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  	
   

  



 


99





















 


	
   

  	
  DEUTSCHE BANK SECURITIES INC.,

  	
   

  
	
   

  	
  as the Syndication Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ A. Drew
  Goldman

  	
   

  
	
   

  	
   

  	
  Name:

  	
  A. Drew Goldman

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard
  Gaullin

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard Gaullin

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS,

  	
   

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven
  P. Lapham

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Steven P. Lapham

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Kay
  Coyle

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mary Kay Coyle

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  	
   

  



 


100





















 


	
   

  	
  BEAR STEARNS CORPORATE LENDING INC.,

  	
   

  
	
   

  	
  as a Co-Documentation Agent and as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith C.
  Barnish

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Keith C. Barnish

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  	
   

  



 


101





















 


	
   

  	
  GOLDMAN SACHS CREDIT PARTNERS L.P.,

  	
   

  
	
   

  	
  as a Co-Documentation Agent and as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walter
  A. Jackson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Walter A. Jackson

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  	
   

  



 


102





















 


	
   

  	
  MERRILL LYNCH CAPITAL CORPORATION,

  	
   

  
	
   

  	
  as a Co-Documentation Agent and as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  E. O’Brien

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael E. O’Brien

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  



 


103





















 


	
   

  	
  LENDERS:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CIBC, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dean J.
  Decker

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dean J. Decker

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Director CIBC World

  	
   

  
	
   

  	
   

  	
   

  	
  Markets Corp., AS AGENT

  	
   

  



 


104





















 


	
   

  	
  HSBC BANK USA, NA

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan
  Vitulich

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Alan Vitulich

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  



 


105





















 


	
   

  	
  EXPORT DEVELOPMENT CANADA

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James
  Babbitt

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James Babbitt

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Financial Services Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David
  Gauthier

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Gauthier

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Financial Services Manager

  	
   

  



 


106





















 


	
   

  	
  BARCLAYS BANK PLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Allison
  McGuigan

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Allison McGuigan

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Associate Director

  	
   

  



 


107





















 


	
   

  	
  WACHOVIA BANK, NA

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andy L.
  Welicky

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Andy L. Welicky

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  



 


108





















 


	
   

  	
  WELLS FARGO BANK, N.A.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald
  Schubert

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Donald Schubert

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  



 


109





















 


	
   

  	
  THE ROYAL BANK OF SCOTLAND PLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David
  Apps

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Apps

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  	
   

  



 


110





















 


	
   

  	
  CITY NATIONAL BANK OF FLORIDA

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Amelia
  C. Rodriguez

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Amelia C. Rodriguez

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  



 


111





















 


	
   

  	
  THE CIT
  GROUP/EQUIPMENT FINANCING,

  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven
  K. Reedy

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Steven K. Reedy

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  



 


112





















 


	
   

  	
  BANK OF SCOTLAND

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen
  Welch

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Karen Welch

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  



 


113





















 


	
   

  	
  SCOTIABANK (BAHAMAS) LTD.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Minna
  Israel

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Minna Israel

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  	
   

  



 


114





















 


	
   

  	
  CALYON NEW YORK BRANCH

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ F. Frank
  Herrera

  	
   

  
	
   

  	
   

  	
  Name:

  	
  F. Frank Herrera

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gill
  Realon

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gill Realon

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  



 


115





















 


	
   

  	
  ABU DHABI COMMERCIAL BANK

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Seumas
  Gallacher

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Seumas Gallacher

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Head, Corporate Banking Group

  	
   

  



 


116





















 


TABLE OF
CONTENTS


 


	
  ARTICLE I

  	
  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
  Defined
  Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.2.

  	
  Use of Defined Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.3.

  	
  Cross-References

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.4.

  	
  Accounting and Financial Determinations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  COMMITMENTS, BORROWING PROCEDURES, NOTES
  AND LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
  Amendment and Restatement; Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.2.

  	
  Reduction/Increase of Commitment Amount

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.3.

  	
  Borrowing Procedure

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.4.

  	
  Continuation and Conversion Elections

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.5.

  	
  Funding

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.6.

  	
  Letter of Credit Issuance Procedures

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.7.

  	
  Currency Fluctuation, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.8.

  	
  Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.9.

  	
  Register

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
  Repayments and Prepayments

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.2.

  	
  Interest Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.3.

  	
  Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.4.

  	
  Guaranty Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  CERTAIN LIBO RATE AND OTHER PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  LIBO Rate Lending Unlawful

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.2.

  	
  Deposits Unavailable

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.3.

  	
  Increased LIBO Rate Loan Costs, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.4.

  	
  Funding
  Losses

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.5.

  	
  Increased Capital Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.6.

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.7.

  	
  Payments, Computations, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.8.

  	
  Sharing of Payments

  	
   

  
				



 





















 


	
  Section 4.9.

  	
  Setoff

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.10.

  	
  Defaulting
  Lender

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.11.

  	
  Replacement Lender

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  CONDITIONS TO EFFECTIVENESS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Effectiveness

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.2.

  	
  All Credit Extensions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
  Organization,
  etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.2.

  	
  Due Authorization, Non-Contravention, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.3.

  	
  Government Approval, Regulation, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.4.

  	
  Validity, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.5.

  	
  Financial Information

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.6.

  	
  No Material Adverse Change

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.7.

  	
  Litigation, Labor Controversies, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.8.

  	
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.9.

  	
  Ownership of Properties

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.10.

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.11.

  	
  Pension and Welfare Plans

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.12.

  	
  Environmental Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.13.

  	
  Regulations U and X

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.14.

  	
  Accuracy of Information

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.15.

  	
  Protection under Security Instruments

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.16.

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.17.

  	
  Seniority of Obligations, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Affirmative Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.2.

  	
  Negative Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Events
  of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.2.

  	
  Action if Bankruptcy

  	
   

  
				



 


ii





















 


	
  Section 8.3.

  	
  Action if Other Event of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  AGENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
  Actions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.2.

  	
  Funding Reliance, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.3.

  	
  Exculpation

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.4.

  	
  Successor

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.5.

  	
  Loans by Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.6.

  	
  Credit
  Decisions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.7.

  	
  Copies,
  etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.8.

  	
  Administrative Agent Independent Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.9.

  	
  The Syndication Agent, the Co-Documentation
  Agents and the Co-Lead Arrangers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  MISCELLANEOUS PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
  Waivers, Amendments, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.2.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.3.

  	
  Payment of Costs and Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.4.

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.5.

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.6.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.7.

  	
  Headings

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.8.

  	
  Execution in Counterparts, Effectiveness,
  etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.9.

  	
  Governing Law; Entire Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.10.

  	
  Successors and Assigns

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.11.

  	
  Sale and Transfer of Loans and Note;
  Participations in Loans and Note

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.12.

  	
  Other Transactions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.13.

  	
  Forum Selection and Consent to Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.14.

  	
  Waiver of Jury Trial

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.15.

  	
  Judgment
  Currency

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.16.

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.17.

  	
  Schedules

  	
   

  
				



 


iii





















 


	
  Section 10.18.

  	
  Replacement of Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.19.

  	
  Effect of Amendment and Restatement of the
  Existing Credit Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.20.

  	
  USA PATRIOT Act Notice

  	
   

  



 


	
  SCHEDULE I

  	
  -

  	
   

  	
  Disclosure Schedule

  	
   

  
	
  SCHEDULE II

  	
  -

  	
   

  	
  Debentures

  	
   

  
	
  SCHEDULE III

  	
  -

  	
   

  	
  Existing Letters of Credit

  	
   

  
	
  SCHEDULE IV

  	
  -

  	
   

  	
  Commitments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A-1

  	
  -

  	
   

  	
  Form of Note

  	
   

  
	
  EXHIBIT A-2

  	
  -

  	
   

  	
  Form of Swingline Note

  	
   

  
	
  EXHIBIT B-1

  	
  -

  	
   

  	
  Form of Borrowing Request

  	
   

  
	
  EXHIBIT B-2

  	
  -

  	
   

  	
  Form of Issuance Request

  	
   

  
	
  EXHIBIT C

  	
  -

  	
   

  	
  Form of Continuation/Conversion Notice

  	
   

  
	
  EXHIBIT D

  	
  -

  	
   

  	
  Form of Lender Assignment Agreement

  	
   

  
	
  EXHIBIT E

  	
  -

  	
   

  	
  Form of Borrower Effective Date
  Certificate

  	
   

  
	
  EXHIBIT F

  	
  -

  	
   

  	
  Form of Compliance Certificate

  	
   

  
	
  EXHIBIT G

  	
  -

  	
   

  	
  Form of Affirmation and Consent

  	
   

  
	
  EXHIBIT H

  	
  -

  	
   

  	
  Form of Solvency Certificate

  	
   

  
	
  EXHIBIT I

  	
  -

  	
   

  	
  Conformed Copy of Borrower Security Agreement

  	
   

  
	
  EXHIBIT J

  	
  -

  	
   

  	
  Conformed Copy of Subsidiary Security
  Agreement

  	
   

  
	
  EXHIBIT K

  	
  -

  	
   

  	
  Conformed Copy of KIBL Pledge Agreement

  	
   

  
	
  EXHIBIT L

  	
  -

  	
   

  	
  Conformed Copy of KIL Pledge Agreement

  	
   

  
	
  EXHIBIT M

  	
  -

  	
   

  	
  Conformed Copy of KINA Pledge Agreement

  	
   

  
	
  EXHIBIT N

  	
  -

  	
   

  	
  Conformed Copy of Subsidiary Pledge
  Agreement

  	
   

  
	
  EXHIBIT O

  	
  -

  	
   

  	
  Conformed Copy of Guaranty

  	
   

  
	
  EXHIBIT P

  	
  -

  	
   

  	
  Form of Section 4.6(c) Certificate

  	
   

  



 


iv