Document:

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                                                                    Exhibit 10.1

                      GUARANTY AND LOAN PURCHASE AGREEMENT

                  GUARANTY AND LOAN PURCHASE AGREEMENT, dated as of May 1, 2001
(as amended, restated, modified and/or supplemented from time to time, this
"Guaranty"), made by each of the undersigned guarantors (each a "Guarantor" and,
together with any entity that becomes a guarantor hereunder pursuant to Section
13(c) or (d) hereof, the "Guarantors"). Except as otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement (as defined
below) shall be used herein as therein defined. In addition, capitalized terms
used in Sections 12, 13, and 14 of this Guaranty shall, except to the extent
that such terms are otherwise defined herein or in the Credit Agreement, have
the respective meanings set forth in the Harrah's Loan Agreement (as defined in
Section 14 hereof).

                              W I T N E S S E T H :
                              - - - - - - - - - -

                  WHEREAS, Tribal Casino Gaming Enterprise (the "Borrower"),
various lenders from time to time party thereto (the "Banks"), and Bankers Trust
Company, as Administrative Agent (together with any successor administrative
agent, the "Administrative Agent"), have entered into a Credit Agreement, dated
as of May 1, 2001, providing for the making of Loans to the Borrower as
contemplated therein (as used herein, the term "Credit Agreement" means the
Credit Agreement described above in this paragraph, as the same may be amended,
restated, modified, extended, renewed, replaced or supplemented from time to
time, and including any agreement extending the maturity of, or restructuring
all or any portion of, the Indebtedness under such agreement or any successor
agreement) (the Banks and the Administrative Agent are herein called the "Bank
Creditors");

                  WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements with one or more
Banks or any affiliate thereof (each such Bank or affiliate, even if the
respective Bank subsequently ceases to be a Bank under the Credit Agreement for
any reason, together with such Bank's or affiliate's successors and assigns, if
any, collectively, the "Other Creditors," and together with the Bank Creditors,
the "Creditors");

                  WHEREAS, the Borrower is an instrumentality of, and is
controlled by, the Eastern Band of Cherokee Indians, a federally recognized
Indian tribe (the "Tribe");

                  WHEREAS, Harrah's NC Casino Company (the "Manager"), the
Borrower (as successor-in-interest to the Tribe) have entered into a Management
Agreement dated as of June 19, 1996 (as amended, restated, modified and/or
supplemented from time to time, the "Management Agreement"), pursuant to which
the Manager will manage the Casino and the Hotel;

                  WHEREAS, the Manager is a wholly-owned Subsidiary of HET and
HOC;

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                  WHEREAS, it is a condition to the making of the Loans to the
Borrower under the Credit Agreement that each Guarantor shall have executed and
delivered to the Administrative Agent this Guaranty; and

                  WHEREAS, each Guarantor will obtain benefits from the
incurrence of the Loans by the Borrower under the Credit Agreement and the
entering into by the Borrower of Interest Rate Protection Agreements and,
accordingly, desires to execute this Guaranty in order to satisfy the conditions
described in the preceding paragraph;

                  NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Creditors and hereby covenants and agrees with each
Creditor as follows:

                  1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees: (i) to the Bank Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the principal of and interest on the Notes issued by, and the Loans made
to, the Borrower under the Credit Agreement and (y) all other obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due), liabilities and indebtedness owing by
the Borrower to the Bank Creditors under the Credit Agreement and each other
Credit Document to which the Borrower is a party (including, without limitation,
indemnities, Fees and interest thereon (including, in each case in respect of
the foregoing obligations, any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
for in the Credit Agreement, whether or not such interest is an allowed claim in
any such proceeding)), whether now existing or hereafter incurred under, arising
out of or in connection with the Credit Agreement and each such other Credit
Document and the due performance and compliance by the Borrower with all of the
terms, conditions and agreements contained in the Credit Documents (all such
principal, interest, liabilities, obligations and indebtedness being herein
collectively called the "Credit Document Obligations"); and (ii) to the Other
Creditors the full and prompt payment when due (whether at the stated maturity,
by acceleration or otherwise) of all obligations (including obligations which,
but for the automatic stay under Section 362(a) of the Bankruptcy Code, would
become due), liabilities and indebtedness (including, in each case in respect of
the foregoing obligations, any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
for in the respective Interest Rate Protection Agreements, whether or not such
interest is an allowed claim in any such proceeding) owing by the Borrower under
each Interest Rate Protection Agreement, whether now in existence or hereafter
arising, and the due performance and compliance by the Borrower with all of the
terms, conditions and agreements contained in such Interest Rate Protection
Agreements (all such obligations and liabilities being herein collectively
called the "Other Obligations" and, together with the Credit Document
Obligations, are herein collectively called the "Guaranteed Obligations"). Each
Guarantor understands, agrees and confirms that the Creditors may enforce this
Guaranty up to the full amount of the Guaranteed Obligations against such
Guarantor without proceeding against any other Guarantor, the Borrower, against
any security for the Guaranteed Obligations, or under any other guaranty
covering all or a portion of the Guaranteed Obligations.

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                  2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations to the Creditors whether or not due or payable by the
Borrower upon the occurrence in respect of the Borrower of any of the events
specified in Section 9.05 of the Credit Agreement, and unconditionally and
irrevocably, jointly and severally, promises to pay such Guaranteed Obligations
to the Creditors, or order, on demand, in lawful money of the United States.
This Guaranty shall constitute a guaranty of payment, and not of collection.

                  3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Guaranteed Obligations
of the Borrower whether executed by such Guarantor, any other Guarantor, any
other guarantor of the Guaranteed Obligations or by any other party, and the
liability of each Guarantor hereunder shall not be affected or impaired by any
circumstance or occurrence whatsoever, including, without limitation: (a) any
direction as to application of payment by the Borrower or by any other party,
(b) any other continuing or other guaranty, undertaking or maximum liability of
a guarantor or of any other party as to the Guaranteed Obligations, (c) any
payment on or in reduction of any such other guaranty or undertaking, (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, (e) any payment made to any Creditor on the indebtedness which any
Creditor repays the Borrower or any trustee or similar person pursuant to court
order in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding, (f)
any action or inaction by the Creditors as contemplated in Section 6 hereof, or
(g) any invalidity, irregularity or unenforceability of all or any part of the
Guaranteed Obligations or of any security therefor.

                  4. The obligations of each Guarantor hereunder are independent
of the obligations of any other Guarantor, any other guarantor of the Guaranteed
Obligations or the Borrower, and a separate action or actions may be brought and
prosecuted against each Guarantor whether or not any action is brought against
any other Guarantor, any such other guarantor or the Borrower and whether or not
any other Guarantor, any such other guarantor of the Borrower or the Borrower be
joined in any such action or actions. Each Guarantor expressly acknowledges and
agrees that any payment by the Borrower or other circumstance which operates to
toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to each Guarantor.

                  5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Creditor against, and any other notice
to, any party liable thereon (including such Guarantor, any other Guarantor or
any other guarantor of the Guaranteed Obligations or the Borrower).

                  6. Any Creditor may at any time and from time to time without
the consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:

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                  (a) change the manner, place or terms of payment of, and/or
         change or extend the time of payment of, renew or alter, any of the
         Guaranteed Obligations (including any increase or decrease in the rate
         of interest thereon), any security therefor, or any liability incurred
         directly or indirectly in respect thereof, and the guaranty herein made
         shall apply to the Guaranteed Obligations as so changed, extended,
         renewed or altered;

                  (b) take and hold security for the payment of all or any part
         of the Guaranteed Obligations and sell, exchange, release, surrender,
         realize upon or otherwise deal with in any manner and in any order any
         property by whomsoever at any time pledged or mortgaged to secure, or
         howsoever securing, the Guaranteed Obligations or any liabilities
         (including any of those hereunder) incurred directly or indirectly in
         respect thereof or hereof, and/or any offset thereagainst;

                  (c) exercise or refrain from exercising any rights against the
         Borrower or others or otherwise act or refrain from acting;

                  (d) release or substitute any one or more endorsers,
         Guarantors, other guarantors, the Borrower or other obligors;

                  (e) settle or compromise any of the Guaranteed Obligations,
         any security therefor or any liability (including any of those
         hereunder) incurred directly or indirectly in respect thereof or
         hereof, and may subordinate the payment of all or any part thereof to
         the payment of any liability (whether due or not) of the Borrower to
         creditors of the Borrower other than the Creditors;

                  (f) apply any sums by whomsoever paid or howsoever realized to
         any liability or liabilities of the Borrower to the Creditors
         regardless of what liabilities of the Borrower remain unpaid;

                  (g) consent to or waive any breach of, or any act, omission or
         default under, any of the Interest Rate Protection Agreements, the
         Credit Documents or any of the instruments or agreements referred to
         therein, or otherwise amend, modify or supplement any of the Interest
         Rate Protection Agreements, the Credit Documents or any of such other
         instruments or agreements; and/or

                  (h) act or fail to act in any manner which may deprive such
         Guarantor of its right to subrogation against the Borrower to recover
         full indemnity for any payments made pursuant to this Guaranty.

                  7. No invalidity, irregularity or unenforceability of all or
any part of the Guaranteed Obligations or of any security therefor shall (nor
shall the Guarantors' failure to acknowledge any Notice of Borrowing) affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full in cash of the
Guaranteed Obligations.

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                  8. This Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies which any Creditor would otherwise have. No notice to or
demand on any Guarantor in any case shall entitle such Guarantor to any other
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Creditor to any other or further action in any
circumstances without notice or demand. It is not necessary for any Creditor to
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.

                  9. (a) Without liming the provisions of clause (b) of this
Section 9, any indebtedness or other liabilities of the Borrower now or
hereafter held by or owing to any Guarantor (whether owing under the Management
Agreement or otherwise (including all such obligations that may be owing under
Sections 8.04(vii) and (viii) of the Credit Agreement) and whether secured or
unsecured) is hereby subordinated to the indebtedness and other liabilities of
the Borrower to the Creditors, and such indebtedness and other liabilities of
the Borrower to any Guarantor, if the Administrative Agent, after an Event of
Default has occurred, so requests, shall be collected, enforced and received by
such Guarantor as trustee for the Creditors and be paid over to the Creditors on
account of the indebtedness and other liabilities of the Borrower to the
Creditors, but without affecting or impairing in any manner the liability of
such Guarantor under the other provisions of this Guaranty. Prior to the
transfer by any Guarantor of any note or negotiable instrument evidencing any
indebtedness or other liabilities of the Borrower to such Guarantor, such
Guarantor shall mark such note or negotiable instrument with a legend that the
same is subject to this subordination. Without limiting the generality of the
foregoing, each Guarantor hereby agrees with the Creditors that it will not
exercise any right of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code or otherwise) until all Guaranteed Obligations have been
irrevocably paid in full in cash.

                  (b) Each Guarantor hereby acknowledges, covenants and agrees,
for itself and its successors and assigns, (i) that the payment of Management
Fees is limited as and to the extent provided in Section 8.03 of the Credit
Agreement, (ii) that all obligations and liabilities (including the payment of
Management Fees) of the Borrower and the Tribe under the Management Agreement
and all other obligations and liabilities of the Borrower to any Guarantor
(collectively, the "Junior Obligations") shall (in each case) be subordinated
and junior in right of payment to the prior payment in full in cash of all
obligations, indebtedness and liabilities of the Borrower and the Tribe in
respect of the Guaranteed Obligations (all such obligations, indebtedness and
liabilities shall be referred to as the "Senior Obligations"), and (iii) that
this subordination is for the benefit of, and shall be enforceable directly by,
the Creditors and that each such Creditor shall be deemed to have acquired such
Senior Obligations in reliance upon the covenants and provisions contained in
this Section 9. Upon any payment or distribution

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of assets of the Borrower or the Tribe of any kind or character, whether in
cash, property or securities, to creditors upon any total or partial
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors or marshaling of assets of the Borrower or the Tribe or in any
bankruptcy, reorganization, insolvency, receivership or other similar proceeding
relating to the Borrower or the Tribe or its respective property, whether
voluntary or involuntary, all Senior Obligations shall first be paid in full in
cash before any payment or distribution of any kind or character is made on
account of any Junior Obligations. In addition, to the extent that any payment
by the Borrower or the Tribe under the Management Agreement or on account of any
other Junior Obligation is prohibited at such time pursuant to the terms of the
Credit Agreement, neither the Borrower nor the Tribe shall be required to make
such payment (and may defer same) until such time as such payment is permitted
to be made pursuant to the terms of the Credit Agreement. In the event that,
notwithstanding the foregoing, any payment shall be received by any Guarantor
(or any affiliate thereof) at a time when such payment is prohibited by this
Section 9 or the Credit Agreement, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the Creditors (pro rata to
such Creditors on the basis of the respective amount of Senior Obligations held
by such holders), as their respective interests may appear.

                  10. (a) Each Guarantor waives any right (except as shall be
required by applicable statute and cannot be waived) to require the Creditors
to: (i) proceed against the Borrower, any other Guarantor, any other guarantor
of the Guaranteed Obligations or any other party; (ii) proceed against or
exhaust any security held from the Borrower, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any
other remedy in the Creditors' power whatsoever. Each Guarantor waives any
defense based on or arising out of any defense of the Borrower, any other
Guarantor, any other guarantor of the Guaranteed Obligations or any other party
other than payment in full of the Guaranteed Obligations, including, without
limitation, any defense based on or arising out of the disability of the
Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations
or any other party, or the unenforceability of the Guaranteed Obligations or any
part thereof from any cause, or the cessation from any cause of the liability of
the Borrower other than payment in full of the Guaranteed Obligations. The
Creditors may, at their election, foreclose on any security held by the
Administrative Agent or the other Creditors by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable law), or exercise
any other right or remedy the Creditors may have against the Borrower or any
other party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Guaranteed
Obligations have been paid in full. Each Guarantor waives any defense arising
out of any such election by the Creditors, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of such Guarantor against the Borrower or any other party or any
security.

                  (b) Each Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional indebtedness. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other

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circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks which such Guarantor assumes and
incurs hereunder, and agrees that the Creditors shall have no duty to advise any
Guarantor of information known to them regarding such circumstances or risks.

                  11. The Creditors agree that this Guaranty may be enforced
only by the action of the Administrative Agent acting upon the instructions of
(x) the Required Banks (or, to the extent required by Section 12.12 of the
Credit Agreement, each Bank) at all times prior to the time at which all Credit
Document Obligations have been paid in full, or (y) the holders of at least a
majority of the outstanding Other Obligations at all times after the time at
which all Credit Document Obligations have been paid in full, and that no other
Creditors shall have any right individually to seek to enforce or to enforce
this Guaranty, it being understood and agreed that such rights and remedies may
be exercised by the Administrative Agent or the holders of at least a majority
of the outstanding Other Obligations, as the case may be, for the benefit of the
Creditors upon the terms of this Guaranty.

                  12. In order to induce the Banks to enter into the Credit
Agreement and to make the Loans as provided therein, and to induce the Other
Creditors to enter into the Interest Rate Protection Agreements, each Guarantor
makes the following representations, warranties and agreements to and for the
benefit of the Creditors, all of which shall survive the execution and delivery
of this Guaranty and the Notes and the making of the Loans, with the occurrence
of the Effective Date and the incurrence of each Loan on or after the Effective
Date being deemed to constitute a representation and warranty that the matters
specified in this Section 12 are true and correct on and as of the Effective
Date and on the date of the Borrowing of each such Loan (it being understood and
agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material respects
only as of such specified date):

                  (a) EXISTENCE AND QUALIFICATION; POWER; COMPLIANCE WITH LAWS.
         Each Guarantor is duly formed, validly existing and in good standing
         under the laws of its jurisdiction of formation. Each Guarantor is duly
         qualified or registered to transact business and is in good standing in
         each other jurisdiction in which the conduct of its business or the
         ownership or operation of its Properties makes such qualification or
         registration necessary, except where the failure so to qualify or
         register and be in good standing would not constitute a Material
         Adverse Effect. Each of the Guarantors has all requisite corporate or
         limited liability company power (as applicable) and authority to
         conduct its respective business, to own and operate its respective
         Properties and to execute and deliver each Credit Document to which it
         is a party and to perform its obligations under each Credit Document to
         which it is a party. Each Guarantor is in compliance with all Laws and
         other legal requirements applicable to its respective business, has
         obtained all authorizations, consents, approvals, orders, licenses and
         permits from, and has accomplished all filings, registrations and
         qualifications with, or obtained exemptions from any of the foregoing
         from, any Governmental Agency that are necessary for the transaction of
         its business, except where the failure so to comply, file, register,
         qualify or obtain exemptions does not constitute a Material Adverse
         Effect.

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                  (b) AUTHORITY, COMPLIANCE WITH OTHER AGREEMENTS AND
         INSTRUMENTS AND GOVERNMENT REGULATIONS. The execution, delivery and
         performance by each Guarantor of each of the Credit Documents to which
         it is a party have been duly authorized by all necessary corporate or
         limited liability company action, as applicable, and do not and will
         not:

                          (i) require any consent or approval not heretofore
                  obtained of any member, director, stockholder, security holder
                  or creditor of such Guarantor;

                         (ii) violate or conflict with any provision of such
                  Guarantor's charter, articles of incorporation, bylaws or
                  certificate of formation or operating agreement, as
                  applicable;

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

                         (iv) violate any Requirement of Law applicable to such
                  Guarantor; or

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

         and no Guarantor nor any Significant Subsidiary thereof is in violation
         of, or default under, any Requirement of Law or Contractual Obligation,
         or any indenture, loan or credit agreement described in Section
         12(b)(v) of this Guaranty, in any respect that constitutes a Material
         Adverse Effect.

                  (c) NO GOVERNMENTAL APPROVALS REQUIRED. Except as previously
         obtained or made, no authorization, consent, approval, order, license
         or permit from, or filing, registration or qualification with, any
         Governmental Agency is or will be required to authorize or permit under
         applicable Laws the execution, delivery and performance by the
         Guarantors of the Credit Documents to which any of them is a party.

                  (d) SIGNIFICANT SUBSIDIARIES. (i) Each Significant Subsidiary
         of HET is duly formed, validly existing and in good standing under the
         Laws of its jurisdiction of organization, is duly qualified to do
         business as a foreign organization and is in good standing as such in
         each jurisdiction in which the conduct of its business or the ownership
         or leasing of its properties makes such qualification necessary (except
         where the failure to be so duly qualified and in good standing does not
         constitute a Material Adverse Effect), and has all requisite power and
         authority to conduct its business and to own and lease its Properties.

                  (ii) Each Significant Subsidiary of HET is in compliance with
         all Laws and other requirements applicable to its business and has
         obtained all authorizations, consents,

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                                                                          Page 9

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

                  (e) FINANCIAL STATEMENTS. The Guarantors have furnished to the
         Banks the audited consolidated financial statements of HET and its
         Subsidiaries for the Fiscal Year ended December 31, 2000. The financial
         statements described above fairly present in all material respects the
         financial condition, results of operations and changes in financial
         position of HET and its Subsidiaries as of such dates and for such
         periods, in conformity with Generally Accepted Accounting Principles,
         consistently applied.

                  (f) NO OTHER LIABILITIES; NO MATERIAL ADVERSE EFFECT. As of
         the Effective Date, HET and its Subsidiaries do not have any material
         liability or material contingent liability not reflected or disclosed
         in the financial statements described in Section 12(e) hereof, other
         than liabilities and contingent liabilities arising in the ordinary
         course of business since the date of such financial statements. Since
         December 31, 2000, no circumstance or event has occurred that
         constitutes a Material Adverse Effect.

                  (g) TITLE TO PROPERTY. HET and its Subsidiaries have valid
         title to the Property reflected in the financial statements described
         in Section 12(e) hereof, other than immaterial items of Property and
         Property subsequently sold or disposed of in the ordinary course of
         business, free and clear of all Liens and Rights of Others, other than
         as permitted by Section 6.4 of the Harrah's Loan Agreement (as
         incorporated herein by reference), and any other matters which do not
         have a Material Adverse Effect.

                  (h) LITIGATION. There are no actions, suits, proceedings or
         investigations pending as to which HET or any of its Subsidiaries has
         been served or has received notice or, to the knowledge of any
         Guarantor, threatened against or affecting HET or any of its
         Subsidiaries or any Property of any of them before any Governmental
         Agency in which there is any reasonable possibility of an adverse
         decision which could materially adversely affect the business,
         consolidated financial position or results of operations of HET and its
         Subsidiaries, taken as a whole, or which in any manner draws into
         question the validity or enforceability of the Credit Documents.

                  (i) BINDING OBLIGATIONS. Each of the Credit Documents will,
         when executed and delivered by each of the Guarantors party thereto,
         constitute the legal, valid and binding obligation of each such
         Guarantor, enforceable against each such Guarantor in accordance with
         its terms, except as enforcement may be limited by Debtor Relief Laws
         or equitable principles relating to the granting of specific
         performance and other equitable remedies as a matter of judicial
         discretion.

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                  (j) NO  DEFAULT. No event has occurred and is continuing that
         is a Guarantor Default or a Guarantor Event of Default.

                  (k) ERISA. (i) With respect to each Pension Plan:

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

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

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

                           (D) neither HET nor any of its Subsidiaries has

                  engaged in any non-exempt "prohibited transaction" (as
                  defined in Section 4975 of the Code) that could reasonably
                  be expected to have a Material Adverse Effect.

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

                  (l) DISCLOSURE. No written statement made by a Senior Officer
         of any Guarantor to any Creditor in connection with this Guaranty or
         any other Credit Document, or in connection with any Loan as of the
         date thereof contained any untrue statement of a material fact or
         omitted a material fact necessary to make the statement made not
         misleading in light of all the circumstances existing at the date the
         statement was made.

                  (m) TAX LIABILITY. HET and its Subsidiaries have filed all tax
         returns which are required to be filed, and have paid, or made
         provision for the payment of, all taxes with respect to the periods,
         Property or transactions covered by said returns, or pursuant to any
         assessment received by HET and its Subsidiaries, except (a) such taxes,
         if any, as are being contested in good faith by appropriate proceedings
         and as to which adequate reserves have been established and maintained
         and (b) immaterial taxes and tax returns so long as no material item or
         portion of Property of HET or any of its Subsidiaries is in jeopardy of
         being seized, levied upon or forfeited.

                  (n) PROJECTIONS. As of the Effective Date, to the best
         knowledge of the Guarantors, the assumptions set forth in the
         projections contained in the Confidential Information Memorandum dated
         March 2001 that was prepared in connection with the Credit Agreement
         (the "Projections") are reasonable and consistent with each other and
         with all facts known to the Guarantors, and the Projections are (a)
         reasonably based on such assumptions and (b) although a range of
         possible different assumptions and estimates might also be reasonable,
         none of the Guarantors are aware of any facts which would lead them to
         believe that the assumptions and estimates on which the Projections

<PAGE>

                                                                         Page 11

         were based are not reasonable, provided that no representation or
         warranty can be given that the projected results will be realized or
         with respect to the ability of HET and its Subsidiaries and the
         Borrower to achieve the projected results and, while the Projections
         are necessarily presented with numerical specificity, the actual
         results achieved during the periods presented may differ from the
         projected results, and such differences may be material.

                  (o) HAZARDOUS MATERIALS. Each Guarantor has reasonably
         concluded that Environmental Laws are unlikely to have a material
         adverse effect on the business, financial position, results of
         operations or prospects of HET and its Subsidiaries, considered as a
         whole.

                  (p) GAMING LAWS. HET and each of its Subsidiaries are in
         compliance in all material  respects with all Gaming Laws that are
         applicable to them and their businesses.

                  (q) SOLVENCY. As of the Effective Date, and giving effect to
         the transactions contemplated to occur on the Effective Date, HET and
         each of its Subsidiaries are Solvent.

                  (r) SUBORDINATED DEBT. The subordination provisions of the
         Subordinated Debt are enforceable against the respective borrower or
         guarantor thereunder, as the case may be, and all obligations of the
         Guarantors hereunder are within the definition of "Senior Debt,"
         "Guarantor Senior Debt" or any equivalent term included in such
         subordination provisions, as the case may be.

                  13. Each Guarantor covenants and agrees that on and after the
Effective Date and until the Total Commitment and each Interest Rate Protection
Agreement has been terminated and the Loans and Notes, together with interest
and all other obligations incurred under the Credit Agreement, the other Credit
Documents and the Interest Rate Protection Agreements, are paid in full:

                  (a) INCORPORATION BY REFERENCE. Each Guarantor will, and will
         cause each of their respective Subsidiaries to, comply with each of the
         covenants and requirements contained in Articles 5 (other than Sections
         5.7(a), 5.8 and 5.9), 6 and 7 of the Harrah's Loan Agreement (as
         defined in Section 14 of this Guaranty), which Articles, together with
         all definitions in the Harrah's Loan Agreement applicable to such
         Articles, are hereby incorporated by reference as if set forth herein
         in their entirety, provided that:

                          (i) all references to "Parent" or "the Parent" therein
                  shall mean and be a reference to "HET" herein;

                         (ii) all references to "Parent and each Borrower" or
                  "Parent and the Borrowers" or "Parent's and Borrowers'"
                  therein shall mean and be a reference to "each Guarantor"
                  herein;

                        (iii) all references to the "Borrower" or "Borrowers" or
                  a "Borrower" therein shall mean and be a reference to "HOC,
                  Marina (as defined in the Harrah's

<PAGE>

                                                                         Page 12

                  Loan Agreement) or such other Subsidiaries of HET that
                  become borrowers under the Harrah's Loan Agreement pursuant
                  to Section 2.10 of the Harrah's Loan Agreement" herein;

                         (iv) all references to "Obligation" or "Obligations"
                  therein  shall  mean and be a  reference  to any "Guaranteed
                  Obligation" or the "Guaranteed Obligations" herein;

                          (v) all references to "this Agreement" therein shall
                  mean and be a reference to "this Guaranty" herein;

                         (vi) all references to an "Advance" therein shall mean
                  and be a reference to a "Loan" under the Credit Agreement;

                        (vii) all references to either the "Commitment" or the
                  "Short Term Commitment" therein shall mean and be a reference
                  to the "Total Commitment" under the Credit Agreement;

                       (viii) all references to a "Creditor" therein shall mean
                  and be a reference to a "Creditor" herein;

                         (ix) all references to the "Administrative Agent"
                  therein shall mean and be a reference to the "Administrative
                  Agent" herein;

                          (x) all references to any "Lender" or the "Lenders"
                  therein shall mean and be a reference to any "Creditor" or the
                  "Creditors" herein;

                         (xi) all references to the "Requisite Lenders" therein
                  shall mean and be a reference to the "Required Banks (or,
                  after the date on which all Credit Document Obligations have
                  been paid in full, the holders of at least a majority of the
                  outstanding Other Obligations)" herein;

                        (xii) all references to a "Default" therein shall mean
                  and be a reference to a "Guarantor Default or Guarantor Event
                  of Default" herein and as defined below;

                       (xiii) the text "or the Credit Documents" shall be
                  inserted immediately after the words "the Loan Documents"
                  appearing in Section 7.1(i) thereof;

                        (xiv) in any event, any merger or consolidation pursuant
                  to Section 6.1(a) or (b) of the Harrah's Loan Agreement (as
                  incorporated herein by reference) involving HOC shall result
                  in HOC being the surviving entity;

                         (xv) the reference to "Sections 6.5 and 6.6" in
                  Sections 6.1(b) and 7.1(c) of the Harrah's Loan Agreement
                  shall mean and be a reference to "Sections 6.5 and 6.6 of the
                  Harrah's Loan Agreement (as incorporated herein by
                  reference)"; and

<PAGE>

                                                                         Page 13

                        (xvi) Section 6.4 of the Harrah's Loan Agreement (as
                  incorporated herein by reference) shall include the following
                  additional clause (l):

                           "(l)  Liens and Negative Pledges under this
                        Guaranty."

                  As used herein, the term "Guarantor Default" shall mean any
event, act or condition which with notice or lapse of time, or both, would
constitute a Guarantor Event of Default.

                  (b) FINANCIAL COVENANTS. Without limiting the provisions of
         clause (a) of this Section 13, HET and HOC will not permit:

                          (i) the Total Debt Ratio (as such term, and the
                  component defined terms thereof, are defined in the Harrah's
                  Loan Agreement) to exceed 4.50:1.00 as of the last day of any
                  Fiscal Quarter; and

                         (ii) the Interest Coverage Ratio (as such term, and the
                  component defined terms thereof, are defined in the Harrah's
                  Loan Agreement) to be less than 3.00:1.00 as of the last day
                  of any Fiscal Quarter.

                  (c) EQUAL AND RATABLE PROVISIONS; ETC. In the event that (i)
         HET or any of its Subsidiaries creates or grants a Lien on any of their
         respective Properties securing any obligations under, or in respect of,
         the Harrah's Loan Agreement (or any successor, replacement or
         substitute credit facility) or the Short Term Loan Agreement (or any
         successor, replacement or substitute credit facility), then the
         Guarantors shall, or shall cause their respective Subsidiaries to,
         concurrently therewith grant to the Administrative Agent for the
         benefit of the Creditors a pari passu Lien covering such Properties and
         securing the obligations under this Guaranty, and (ii) any Subsidiary
         of HET directly or indirectly (including by way of a pledge of an
         intercompany note or other Property), guarantees any obligation of HET
         or any other obligor under, or in respect of, or otherwise becomes a
         borrower under, the Harrah's Loan Agreement (or any successor,
         replacement or substitute credit facility) or the Short Term Loan
         Agreement (or any successor, replacement or substitute credit facility)
         (other than, in the case of preceding clause (ii), any such Subsidiary
         that becomes a borrower under the Harrah's Loan Agreement (or any
         successor, replacement or substitute credit facility) or the Short Term
         Loan Agreement (or any successor, replacement or substitute credit
         facility) but only so long as such Subsidiary is only liable for the
         loans directly incurred by it as opposed to being jointly and severally
         liable for all loans incurred thereunder), then the Guarantors shall
         cause such Subsidiary to concurrently therewith execute and deliver to
         the Administrative Agent a counterpart of this Guaranty pursuant to
         which such Subsidiary shall become a "Guarantor" hereunder.

                  (d) AMENDMENTS AND WAIVERS UNDER THE HARRAH'S LOAN AGREEMENT.
         HET and HOC shall promptly notify the Administrative Agent and each
         other Creditor of any proposed amendment, modification or waiver to the
         Harrah's Loan Agreement and shall deliver with such notice a copy of
         the proposed amendment, modification or waiver.

<PAGE>

                                                                         Page 14

                  14. The existence or the occurrence of one or more of the
following events whatever the reason therefor and under any circumstances
whatsoever shall constitute a "Guarantor Event of Default" under this Guaranty
and the Credit Agreement:

                  (a) Any Guarantor fails to comply with (i) any of the
         covenants contained in Article 6 of the Harrah's Loan Agreement (other
         than the covenant contained in Section 6.3 of the Harrah's Loan
         Agreement) as such covenants are incorporated herein by reference or
         (ii) any of the covenants contained in Section 13(b) or (c) of this
         Guaranty; or

                  (b) Any Guarantor fails to comply with Section 7.1(h) of the
         Harrah's Loan Agreement (as such Section is incorporated herein by
         reference) in any respect that is materially adverse to the interests
         of the Creditors;

                  (c) Any Guarantor fails to perform or observe any other
         covenant or requirement (not specified in clauses (a) or (b) above)
         contained in the Harrah's Loan Agreement as incorporated herein by
         reference on its part to be performed or observed within thirty
         Business Days after the giving of notice by the Administrative Agent on
         behalf of the Required Banks of such Guarantor Default; or

                  (d) Any representation or warranty of any Guarantor made (or
         deemed made) herein, or in any certificate or other writing delivered
         by any Guarantor pursuant hereto proves to have been incorrect when
         made (or deemed made) or reaffirmed; or

                  (e) Any Guarantor or any of their respective Significant
         Subsidiaries (i) fails to pay the principal, or any principal
         installment, of any present or future indebtedness for borrowed money
         in an aggregate of $100,000,000 or more (including without limitation
         the Harrah's Loan Agreement and the Short Term Loan Agreement), or any
         guaranty of present or future indebtedness for borrowed money of
         $100,000,000 or more, on its part to be paid, when due (or within any
         stated grace period), whether at the stated maturity, upon
         acceleration, by reason of required prepayment or otherwise or (ii)
         fails to perform or observe any other term, covenant or agreement on
         its part to be performed or observed, or suffers any event to occur, in
         connection with any present or future indebtedness for borrowed money
         of $100,000,000 or more (including, without limitation, the Harrah's
         Loan Agreement and the Short Term Loan Agreement), or of any guaranty
         of present or future indebtedness for borrowed money of $100,000,000 or
         more, if as a result of such failure or sufferance any holder or
         holders thereof (or an agent or trustee on its or their behalf) has the
         right to declare such indebtedness due before the date on which it
         otherwise would become due; or

                  (f) Any event occurs which gives the holder or holders of any
         Subordinated Debt (or an agent or trustee on its or their behalf) the
         right to declare such indebtedness due before the date on which it
         otherwise would become due, or the right to require the issuer thereof
         to redeem or purchase, or offer to redeem or purchase, all or any
         portion of any Subordinated Debt; or

<PAGE>

                                                                         Page 15

                  (g) A final judgment against any Guarantor or any of their
         respective Significant Subsidiaries is entered for the payment of money
         in excess of $25,000,000 and, absent procurement of a stay of
         execution, such judgment remains unsatisfied for thirty calendar days
         after the date of entry of judgment, or in any event later than five
         days prior to the date of any proposed sale thereunder, or any writ or
         warrant of attachment or execution or similar process is issued or
         levied against all or any material part of the Property of any such
         Person and is not released, vacated or fully bonded within thirty
         calendar days after its issue or levy; or

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

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

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

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

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

                  For purposes of Sections 12, 13 and 14 of this Guaranty, the
term "Harrah's Loan Agreement" shall mean the Harrah's Loan Agreement as defined
in the Credit Agreement but only as such Harrah's Loan Agreement is in effect on
the Effective Date and without giving effect to any amendments, modifications,
supplements or terminations thereof or thereto after the Effective Date
(including, without limitation, any such amendments, modifications or
supplements to the defined terms used therein) unless, and to the extent, the
Required Banks specifically agree that the respective change will be given
effect to for purposes of this Guaranty

<PAGE>

                                                                         Page 16

(although amendments, waivers and modifications thereto will be given effect for
purposes of Sections 13(c), 14(e) and 14(i) of this Guaranty). Notwithstanding
anything to the contrary contained above, for purposes of determining whether
the Harrah's Loan Agreement remains in effect or has been terminated,
amendments, modifications, supplements or terminations thereof shall be given
effect to.

                  15. (a) HET and HOC shall have the option at any time after
the one year anniversary of the Effective Date or at any time following a
Default or an Event of Default to (x) purchase the Loans and Commitments of all
of the Banks, on a joint and several basis, pursuant to the Credit Agreement by
paying the Banks in cash an amount equal to all outstanding principal, interest,
fees and other amounts pursuant to the Credit Agreement and the other Credit
Documents and (y) pay to the Administrative Agent and the Banks in cash any
amounts then owed to them, on a joint and several basis, pursuant to the terms
of this Guaranty so long as at the time of such purchase and payment (i) such
Guarantors shall have assumed all rights and obligations of the Other Creditors
under any outstanding Interest Rate Protection Agreements pursuant to
documentation that is reasonably satisfactory to such Guarantors and such Other
Creditors, (ii) such Guarantors or the Borrower shall have terminated all
outstanding Interest Rate Protection Agreements and shall have paid to the Other
Creditors in cash all amounts owing thereunder or (iii) such Guarantors shall
have obtained the written consent of the Other Creditors (which consent may be
given or withheld in each such Other Creditor's sole discretion) for such
Guarantors to assume all rights and obligations of the Borrower under such
Interest Rate Protection Agreements. Until any repayment and purchase as
described in the immediately preceding sentence is actually effected, the
Guarantors shall be liable to perform all obligations under this Guaranty
strictly in accordance with the terms hereof.

                  (b) Upon the occurrence and during the continuance of any
Event of Default, the Required Banks shall have the right to require HET and HOC
to (x) purchase (and in which case HET and HOC shall purchase) all of the Loans
and Commitments of all of the Banks, on a joint and several basis, pursuant to
the Credit Agreement by paying the Banks within three Business Days of such
demand by the Required Banks in cash an amount equal to all outstanding
principal, interest, fees and other amounts pursuant to the Credit Agreement and
the other Credit Documents and (y) pay to the Administrative Agent and the Banks
in cash any amounts then owed to them, on a joint and several basis, pursuant to
the terms of this Guaranty; provided that if an Event of Default specified in
Section 9.05 of the Credit Agreement or a Guarantor Event of Default specified
in Section 14(h) hereof shall occur, the result which would occur upon the
demand of the Required Banks as specified above in this sentence shall occur
automatically without the demand of the Required Banks and (ii) the amounts
payable by HET and HOC under this Section 15(b) shall be calculated without
giving effect to any reductions to such amounts (except to the extent such
reductions resulted from the payment thereof in cash), whether such reductions
resulted from any event of the type described in Section 9.05 of the Credit
Agreement or otherwise; provided further, that at the time of such purchase and
payment (i) such Guarantors also shall be obligated to (and such Guarantors
shall) assume all rights and obligations of the Other Creditors under any
outstanding Interest Rate Protection Agreements pursuant to documentation that
is reasonably satisfactory to such Guarantors and such Other Creditors, (ii)
such Guarantors or the Borrower shall have terminated all outstanding Interest
Rate Protection Agreements and shall have paid to the Other Creditors all
amounts owing thereunder or (iii) such

<PAGE>

                                                                         Page 17

Guarantors shall have obtained the written consent of the Other Creditors (which
consent may be given or withheld in each such Other Creditor's sole discretion)
for such Guarantors to assume all rights and obligations of the Borrower under
such Interest Rate Protection Agreements. Until any repayment and repurchase
described in the immediately preceding sentences is actually effected, the
Guarantors shall be liable to perform all obligations under this Guaranty
strictly in accordance with the terms hereof.

                  16. The Guarantors hereby jointly and severally agree to pay
all out-of-pocket costs and expenses of the Administrative Agent in connection
with any amendment, waiver or consent relating hereto and of the Administrative
Agent and each of the other Creditors in connection with any enforcement of this
Guaranty or in connection with any refinancing or restructuring of the credit
arrangements of the Guarantors as it relates to the Creditors' claims under this
Guaranty in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings (including in each case, without limitation, the fees and
disbursements of counsel and consultants employed by the Administrative Agent
and, after the occurrence of an Event of Default, counsel for each other
Creditor).

                  17. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.

                  18. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of
each Guarantor directly affected thereby and with the written consent of either
(x) the Required Banks (or to the extent required by Section 12.12 of the Credit
Agreement, with the written consent of each Bank) at all times prior to the time
on which all Credit Document Obligations have been paid in full or (y) the
holders of at least a majority of the outstanding Other Obligations at all times
after the time on which all Credit Document Obligations have been paid in full;
provided that any change, waiver, modification or variance affecting the rights
and benefits of a single Class (as defined below) of Creditors (and not all
Creditors in a like or similar manner) shall also require the written consent of
the Requisite Creditors (as defined below) of such Class of Creditors. For the
purpose of this Guaranty the term "Class" shall mean each class of Creditors,
i.e., whether (x) the Bank Creditors as holders of the Credit Document
Obligations or (y) the Other Creditors as the holders of the Other Obligations.
For the purpose of this Guaranty, the term "Requisite Creditors" of any Class
shall mean (x) with respect to the Credit Document Obligations, the Required
Banks (or to the extent required by Section 12.12 of the Credit Agreement, each
Bank) and (y) with respect to the Other Obligations, the holders of at least a
majority of all obligations outstanding from time to time under the Interest
Rate Protection Agreements.

                  19. Each Guarantor acknowledges that an executed (or
conformed) copy of each of the Credit Documents and the Interest Rate Protection
Agreements has been made available to its principal executive officers and such
officers are familiar with the contents thereof.

                  20. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Secured Creditor Law) and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default
(such term to mean and include any "Event of Default" as defined in the

<PAGE>

                                                                         Page 18

Credit Agreement or any payment default under any Interest Rate Protection
Agreement continuing after any applicable grace period), each Creditor is hereby
authorized at any time or from time to time, without notice to any Guarantor or
to any other Person, any such notice being expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Creditor to or for the credit or
the account of such Guarantor, against and on account of the obligations and
liabilities of such Guarantor to such Creditor under this Guaranty, irrespective
of whether or not such Creditor shall have made any demand hereunder and
although said obligations, liabilities, deposits or claims, or any of them,
shall be contingent or unmatured. Each Creditor acknowledges and agrees that the
provisions of this Section 20 are subject to the sharing provisions set forth in
Section 12.06(b) of the Credit Agreement.

                  21. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guaranty, addressed to such
party at (i) in the case of any Bank Creditor, as provided in the Credit
Agreement, (ii) in the case of any Guarantor, at its address set forth opposite
its signature below and (iii) in the case of any Other Creditor, at such address
as such Other Creditor shall have specified in writing to the Guarantors; or in
any case at such other address as any of the Persons listed above may hereafter
notify the others in writing.

                  22. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
other instrument evidencing any liability of the Borrower, and such Guarantor
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.

                  23. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Guaranty may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New York,
in each case which are located in the City of New York, and, by execution and
delivery of this Guaranty, each Guarantor hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. Each Guarantor hereby further irrevocably waives any
claim that any such courts lack jurisdiction over such Guarantor, and agrees not
to plead or claim, in any legal action or proceeding with respect to this
Guaranty brought in any of the aforesaid courts, that any such court lacks
jurisdiction over such Guarantor. Each Guarantor further irrevocably consents to
the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies

<PAGE>

                                                                         Page 19

thereof by registered or certified mail, postage prepaid, to such Guarantor at
its address set forth opposite its signature below, such service to become
effective 30 days after such mailing. Each Guarantor hereby irrevocably waives
any objection to such service of process and further irrevocably waives and
agrees not to plead or claim in any action or proceeding commenced under this
Guaranty that service of process was in any way invalid or ineffective. Nothing
herein shall affect the right of any of the Creditors to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against each Guarantor in any other jurisdiction.

                  (b) Each Guarantor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Guaranty brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that such action or proceeding brought in any such court has been brought in an
inconvenient forum.

                  (c) EACH GUARANTOR AND EACH CREDITOR (BY ITS ACCEPTANCE OF THE
BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

                  24. It is the desire and intent of each Guarantor and the
Creditors that this Guaranty shall be enforced against each Guarantor to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. If, however, and to the extent
that, the obligations of any Guarantor under this Guaranty shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers), then the amount of the Guaranteed Obligations of such
Guarantor shall be deemed to be reduced and such Guarantor shall pay the maximum
amount of the Guaranteed Obligations which would be permissible under applicable
law.

                  25. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered (including by way of facsimile
transmission) shall be an original, but all of which shall together constitute
one and the same instrument. A set of counterparts executed by all the parties
hereto shall be lodged with the Guarantors and the Administrative Agent.

                  26. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense and on the same basis as payments
are made by the Borrower under Sections 3.03 and 3.04 of the Credit Agreement.

                                    * * *

<PAGE>

                                                                         Page 20

                  IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be executed and delivered as of the date first above written.

ADDRESSES

One Harrah's Court                            HARRAH'S ENTERTAINMENT, INC.
Las Vegas, Nevada  89119-4312
Telephone No.:  (702) 407-6000
Telephone No.:  (702) 407-6284
Attention:  Treasurer                         By______________________________
(with a copy at the                               Name:
same address to the                               Title:
General Counsel)

One Harrah's Court                            HARRAH'S OPERATING COMPANY, INC.
Las Vegas, Nevada  89119-4312
Telephone No.:  (702) 407-6000
Telephone No.: (702) 407-6284
Attention:  Treasurer                         By______________________________
(with a copy at the                               Name:
same address to the                               Title:
General Counsel)

<PAGE>

                                                                         Page 21

One Harrah's Court                            HARRAH'S NC CASINO COMPANY, L.L.C.
Las Vegas, Nevada 89119-4312
Telephone No.: (702) 407-6000
Telephone No.: (702) 407-6284
Attention: Treasurer (with a copy             By _______________________________
at the same address to the                         Name:
General Counsel)                                   Title:

Acknowledged and Agreed to:

BANKERS TRUST COMPANY,
   as Administrative Agent

By________________________________
    Name:
    Title:<PAGE>
                                                                    Exhibit 10.2

                                  PUT AGREEMENT

                  This PUT AGREEMENT (this "AGREEMENT") is made and entered into
as of July 11, 2001 by and among Harrah's Entertainment, Inc., a Delaware
corporation ("HET"), Harrah's Operating Company, Inc., a Delaware corporation
("HOC") and HCAL Corporation, a Nevada corporation ("HCAL"; together with HET
and HOC, the "Purchasers") and Wells Fargo Bank, National Association, as
Administrative Agent for the Lenders party to the Loan Agreement referred to
below (in such capacity, together with its successors in such capacity, the
"ADMINISTRATIVE AGENT"). All capitalized terms not otherwise specifically
defined in the body of this Agreement shall have the meanings given them in
Section 1.1 of the Loan Agreement referred to below and, to the extent not
inconsistent therewith, in the Five Year Loan Agreement, dated as of April 30,
1999, among Harrah's Operating, Marina Associates, a New Jersey general
partnership, Harrah's, the Lenders, Syndication Agent, Documentation Agents and
Co-Documentation Agents named therein, and Bank of America, N.A., formerly known
as Bank of America National Trust and Savings Association, as Administrative
Agent, as amended by that certain Amendment No. 1 to Five Year Loan Agreement,
dated as of April 3, 2000 and that certain Amendment No. 2 to Five Year Loan
Agreement, dated as of April 26, 2001, all attached hereto as Exhibit A and
incorporated herein by reference (as so amended, the "HARRAH'S CREDIT
AGREEMENT"), and the rules of interpretation set forth in Section 1.6 of the
Loan Agreement shall be applicable to this Agreement. Notwithstanding any
contrary rule of interpretation set forth in Section 1.6 of the Loan Agreement,
(i) each reference in this Agreement to the "Harrah's Credit Agreement" shall
mean the Harrah's Credit Agreement without giving effect to (x) any amendment,
supplement or other modification of the Harrah's Credit Agreement entered into
by the parties thereto (regardless of the effective date thereof) other than the
amendments specifically described above, unless Exhibit A to this Agreement is
amended to include such amendment, supplement or other modification by an
instrument in writing signed by the Purchasers and the Administrative Agent
(with the consent of the Lenders as specified in Section 11.2 of the Loan
Agreement) or (y) any termination of the Harrah's Credit Agreement and (ii) the
determination of whether any "Default" or "Event of Default" under the Harrah's
Credit Agreement has occurred (including, without limitation, for purposes of
Section 1.06(a)) shall be made without giving effect to any waivers or consents
granted by the lenders party to the Harrah's Credit Agreement.

                                R E C I T A L S:
                                - - - - - - - -

                  WHEREAS:

                  A. Reference is made to that certain Loan Agreement, dated as
of July 11, 2001, by and among Rincon San Luiseno Band of Mission Indians, a
federally recognized Indian Tribe and Native American sovereign nation doing
business as the Rincon Casino (the "BORROWER"), the lenders named therein
(collectively, the "LENDERS" and individually, a "LENDER"), Commerzbank AG, New
York and Grand Cayman Branches, as Syndication Agent, Credit Lyonnais Los
Angeles Branch, as Documentation Agent and Wells Fargo Bank, National
Association, as Administrative Agent and L/C Issuer (as amended, restated,
supplemented, modified, refinanced, replaced or substituted from time to time,
the "LOAN AGREEMENT").

<PAGE>

                  B. Pursuant to the Loan Agreement and on the terms and subject
to the conditions specified therein, including the condition that this Agreement
be executed and delivered, the Lenders have agreed to establish a senior
unsecured construction loan and reducing revolving credit facility in favor of
the Borrower in the maximum principal amount of $125,000,000.

                  C. As a condition to the obligations of the Lenders under the
Loan Agreement, the Lenders have required that the Purchasers grant the
Administrative Agent, on behalf of the Lenders, a put option to sell, transfer
and assign all of the Administrative Agent's and the Lenders' right, title and
interest in and to the Obligations and the Loan Documents (collectively, the
"TRANSFERRED INTERESTS") to any one or more of the Purchasers and to cause each
of the Purchasers to accept, purchase and pay for the Transferred Interests to
be sold, transferred and assigned to it, and the Purchasers are willing to grant
such put option on the terms and subject to the conditions set forth below.

                  NOW, THEREFORE, to induce the Administrative Agent and the
Lenders to enter into, and to extend credit under, the Loan Agreement and the
other Loan Documents, and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                   ARTICLE I

                                   PUT OPTION

     Section 1.01 GRANT OF PUT OPTION. Each Purchaser does hereby irrevocably
grant to the Administrative Agent, on behalf of the Lenders, the option and
right (the "PUT OPTION") to sell, transfer, and assign the Transferred Interests
to any one or more of the Purchasers and to cause such of the Purchasers to
accept, purchase and pay for the Transferred Interests on the terms and subject
to the conditions set forth herein.

     Section 1.02 PUT OPTION TERM. The term of the Put Option shall commence on
the date of this Agreement and remain in effect until all commitments to lend
under the Loan Agreement have been terminated, the Obligations have been
indefeasibly paid in full in cash and all Letters of Credit have expired.

     Section 1.03 TERMS AND CONDITIONS. Upon the occurrence and at any time
during the continuance of any one or more of the events described in Section
1.06 below (each, a "PUT OPTION EVENT"), the Purchaser or Purchasers designated
by the Administrative Agent shall, upon the written request of the
Administrative Agent (a "PUT OPTION NOTICE"), (a) purchase pro rata from the
Administrative Agent and the Lenders, without recourse and without
representation or warranty, express or implied, on a date specified in such
Purchase Option Notice which shall be not less than 3 nor more than 10 Business
Days following the date of delivery of such Put Option Notice, the Transferred
Interests at a price equal to the Purchase Price (as defined in Section 1.04
below) and (b) cause a financial institution reasonably acceptable to the L/C
Issuer to issue letters of credit to replace or support any outstanding Letters
of Credit issued by the L/C Issuer not later than the Purchase Date (as defined
below). If the Administrative Agent designates more than one Purchaser to
purchase the Transferred Interests, the obligation of the designated Purchasers
to accept and pay for such Transferred Interests shall be joint and several. To

                                       2
<PAGE>

evidence the sale, transfer and assignment of the Transferred Interests to the
designated Purchaser or Purchasers, but not as a condition thereof, as
expeditiously as reasonably practical, the designated Purchaser or Purchasers
and the Administrative Agent and the Lenders shall execute and deliver an
Assignment and Assumption Agreement (the "ASSIGNMENT") in the form of Exhibit B
hereto. In addition, but not as a condition to the obligation of each designated
Purchaser to pay the Purchase Price, each Lender shall execute and deliver to
the Purchasers, as expeditiously as reasonably practical, an endorsement to its
Note (each, an "ENDORSEMENT"), without recourse and without representation or
warranty, express or implied, in the form of Exhibit C hereto, and such
additional assignments of the Loan Documents (together with the Assignment and
Endorsements, the "ASSIGNMENT DOCUMENTATION") as are reasonably necessary to
assign or otherwise transfer the Transferred Interests to the Purchasers. The
inability, by reason of injunction or tribal, judicial or other governmental
action, law or regulation, of the Administrative Agent or any Lender to sell,
transfer or assign the Transferred Interests or to execute and deliver the
Assignment or an Endorsement shall not in any way affect, reduce or defer the
obligation of each designated Purchaser to pay the Purchase Price on the
Purchase Date. The inability of any Lender to physically present its Note shall
not in any way affect, reduce or defer the obligation of each designated
Purchaser to pay the Purchase Price on the Purchase Date.

     Section 1.04 PURCHASE PRICE AND PURCHASE DATE. The purchase price (the
"PURCHASE PRICE") shall be equal to the sum of: (i) the outstanding principal
balance of the Loans on the Purchase Date (as defined below), (ii) all
Unreimbursed Amounts outstanding on the Purchase Date, (iii) all accrued and
unpaid interest thereon as of the Purchase Date and (iv) all fees, advances,
late charges, attorneys' fees and expenses and other amounts owing pursuant to
the Loan Documents as of the Purchase Date. The Purchasers shall pay the
Purchase Price by wire transfer or other immediately available funds available
to the Administrative Agent at the Administrative Agent's Office. Upon receipt
by the Administrative Agent, for the benefit of the Lenders, of the Purchase
Price as aforesaid and a duplicate original of the Assignment duly executed by
the Purchasers, each Lender shall promptly deliver the Assignment Documentation
and the original Loan Documents to the Purchasers (the date upon which the
Administrative Agent receives such funds is herein referred to as the "PURCHASE
DATE").

     Section 1.05 NO WARRANTIES OR RECOURSE. It is expressly understood and
agreed to by the Purchasers that in the event the Administrative Agent, on
behalf of the Lenders, exercises the Put Option, the Administrative Agent and
the Lenders will assign the Transferred Interests, without recourse and without
representation or warranty, express or implied, except that the Administrative
Agent and the Lenders are the legal and beneficial owners of the interests being
assigned by them under the Assignment Documentation and that such interests are
free and clear of any Lien or other adverse claim created by the Administrative
Agent or the Lenders.

     Section 1.06 PUT OPTION EVENTS. The occurrence of any of the following
shall constitute a "Put Option Event":

          (a) The occurrence of any Default or Event of Default under, and as
defined in, the Harrah's Credit Agreement, other than a Default which is cured
within any applicable grace period set forth in the Harrah's Credit Agreement;
or

                                       3
<PAGE>

          (b) The occurrence of any Event of Default under the Loan Agreement;
or

          (c) Any Purchaser fails to perform or observe any other covenant or
agreement contained in this Agreement on its part to be performed or observed
within thirty days after such failure to perform or observe such covenant or
agreement; or

          (d) Any representation or warranty made by any Purchaser in this
Agreement, or in any certificate delivered pursuant to this Agreement, proves to
have been incorrect when made or reaffirmed in any material respect; or

          (e) (i) HET or any of its subsidiaries shall grant a Lien to the
Harrah's Administrative Agent (as defined in Section 4.04(a) below) and/or the
Harrah's Lenders (as defined in Section 4.04(a) below) on the Proposed Harrah's
Group Collateral (as defined in Section 4.04(a) below) and (ii) the consent
described in Section 4.04(a) below shall have not been obtained, either because
it was requested and not timely given or because it was not requested; or

          (f) Section 4.04(b) of this Agreement shall be operative and HET or
HOC shall fail to comply in any respect with said Section 4.04(b).

                                   ARTICLE II

                      ACKNOWLEDGMENTS, WAIVERS AND CONSENTS

     Section 2.01 RIGHTS OF THE ADMINISTRATIVE AGENT AND THE LENDERS. Each
Purchaser acknowledges that the obligations undertaken by it under this
Agreement are absolute, irrevocable and unconditional under any and all
circumstances. In full recognition and in furtherance of the foregoing, each
Purchaser agrees that, without affecting the enforceability or effectiveness of
this Agreement in accordance with its terms and without affecting, limiting,
reducing, discharging or terminating the liability of such Purchaser, or the
rights, remedies, powers and privileges of the Administrative Agent and the
Lenders under this Agreement, the Administrative Agent and the Lenders may, at
any time and from time to time and without notice or demand of any kind or
nature whatsoever:

          (a) amend, supplement, modify, extend, renew, waive, accelerate or
otherwise change the time for payment or performance of, or the terms of, all or
any part of the Obligations (other than increasing the principal amount
thereof);

          (b) amend, supplement, modify, extend, renew, waive or otherwise
change, or enter into or give, any Loan Document or any agreement, security
document, guarantee, approval, consent or other instrument with respect to all
or any part of the Obligations, any Loan Document or any such other instrument
or any term or provision of the foregoing;

          (c) accept or enter into new or additional agreements, security
documents, guarantees (including letters of credit) or other instruments in
addition to, in exchange for or relative to any Loan Document, all or any part
of the Obligations or any collateral now or in the future serving as security
for the Obligations;

                                       4
<PAGE>

          (d) accept or receive (including from any other Purchaser or
guarantor) partial payments or performance on the Obligations (whether as a
result of the exercise of any right, remedy, power or privilege or otherwise);

          (e) accept, receive and hold any additional collateral for all or any
part of the Obligations (including from any other Purchaser or guarantor);

          (f) release, reconvey, terminate, waive, abandon, allow to lapse or
expire, fail to perfect, subordinate, exchange, substitute, transfer, foreclose
upon or enforce any collateral, security documents or guarantees (including any
letter of credit or the obligations of any other Purchaser or guarantor) for or
relative to all or any part of the Obligations;

          (g) apply any collateral or the proceeds of any collateral or
guarantee (including any letter of credit or the obligations of any other
Purchaser or guarantor) to all or any part of the Obligations in such manner and
extent as the Administrative Agent and the Lenders may in their discretion
determine;

          (h) release any Person (including any other Purchaser or guarantor)
from any personal liability with respect to all or any part of the Obligations;

          (i) settle, compromise, release, liquidate or enforce upon such terms
and in such manner as the Administrative Agent and the Lenders may in their
discretion determine or as applicable law may dictate all or any part of the
Obligations or any collateral on or guarantee of (including any letter of credit
issued with respect to) all or any part of the Obligations (including with any
other Purchaser or guarantor);

          (j) consent to the merger or consolidation of, the sale of substantial
assets by, or other restructuring or termination of the existence of the
Borrower or any other Person (including any other Purchaser or guarantor); (k)
proceed against the Borrower, the Purchasers or any guarantor of (including any
issuer of any letter of credit issued with respect to) all or any part of the
Obligations or any collateral provided by any Person and exercise the rights,
remedies, powers and privileges of the Administrative Agent and the Lenders
under the Loan Documents or otherwise in such order and such manner as the
Administrative Agent and the Lenders may in their discretion determine, without
any necessity to proceed upon or against or exhaust any collateral, right,
remedy, power or privilege before proceeding to call upon or otherwise enforce
this Agreement;

          (l) foreclose upon any deed of trust, mortgage or other instrument
creating or granting liens on any interest in real property by judicial or
nonjudicial sale or by deed in lieu of foreclosure, bid any amount or make no
bid in any foreclosure sale or make any other election of remedies with respect
to such liens or exercise any right of set-off;

          (m) obtain the appointment of a receiver with respect to any
collateral for all or any part of the Obligations and apply the proceeds of such
receivership as the Administrative Agent and the Lenders may in their discretion
determine (it being agreed that nothing in this

                                       5
<PAGE>

clause shall be deemed to make the Administrative Agent or any Lender a party in
possession in contemplation of law, except at its option);

          (n) enter into such other transactions or business dealings with the
Borrower, any Subsidiary or Affiliate of the Borrower or any other Purchaser or
guarantor of all or any part of the Obligations as the Administrative Agent and
the Lenders may desire; and

          (o) do all or any combination of the actions set forth in this
Section.

     Section 2.02 WAIVERS. The enforceability and effectiveness of this
Agreement and the liability of any Purchaser, and the rights, remedies, powers
and privileges of the Administrative Agent and the Lenders under this Agreement
shall not be affected, limited, reduced, discharged or terminated, and each
Purchaser hereby expressly waives to the fullest extent permitted by law any
defense now or in the future arising, by reason of:

          (a) the illegality, invalidity or unenforceability of all or any part
of the Obligations, any Loan Document or any agreement, security document,
guarantee or other instrument relative to all or any part of the Obligations;

          (b) any disability or other defense with respect to all or any part of
the Obligations of the Borrower, the Purchasers or any guarantor of all or any
part of the Obligations (including any issuer of any letter of credit),
including the effect of any statute of limitations that may bar the enforcement
of all or any part of the Obligations or the obligations of any such other
purchaser or guarantor;

          (c) any failure of the Borrower to properly authorize, execute or
deliver any Loan Document;

          (d) the illegality, invalidity or unenforceability of any Loan
Document, security or guaranty (including any letter of credit) for all or any
part of the Obligations or the lack of perfection or continuing perfection or
failure of the priority of any lien on any collateral for all or any part of the
Obligations;

          (e) the cessation, for any cause whatsoever, of the liability of the
Borrower, the Purchasers or any guarantor of all or any part of the Obligations;

          (f) any failure of the Administrative Agent or any Lender to marshal
assets in favor of the Borrower or any other Person (including the Purchasers or
any guarantor), to exhaust any collateral for all or any part of the
Obligations, to pursue or exhaust any right, remedy, power or privilege it may
have against the Borrower, any guarantor of all or any part of the Obligations
(including any issuer of any letter of credit) or any other Person or to take
any action whatsoever to mitigate or reduce such or any other Purchasers'
liability under this Agreement, the Administrative Agent and the Lenders being
under no obligation to take any such action notwithstanding the fact that all or
any part of the Obligations may be due and payable and that the Borrower may be
in default of its obligations under any Loan Document;

          (g) any failure of the Administrative Agent or any Lender to give
notice of sale or other disposition of any collateral (including any notice of
any judicial or nonjudicial

                                       6
<PAGE>

foreclosure or sale of any interest in real property serving as collateral for
all or any part of the Obligations) for all or any part of the Obligations to
the Borrower, the Purchasers or any other Person or any defect in, or any
failure by the Borrower, the Purchasers or any other Person to receive, any
notice that may be given in connection with any sale or disposition of any
collateral;

          (h) any failure of the Administrative Agent or any Lender to comply
with applicable laws in connection with the sale or other disposition of any
collateral for all or any part of the Obligations;

          (i) any judicial or nonjudicial foreclosure or sale of, or other
election of remedies with respect to, any interest in real property or other
collateral serving as security for all or any part of the Obligations, even
though such foreclosure, sale or election of remedies may impair the subrogation
rights of the Purchasers or may preclude the Purchasers from obtaining
reimbursement, contribution, indemnification or other recovery from the
Borrower, any other Purchaser, any guarantor or any other Person and even though
the Borrower may not, as a result of such foreclosure, sale or election of
remedies, be liable for any deficiency;

          (j) any benefits the Borrower, the Purchasers or any guarantor may
otherwise derive from Section 580a, 580b, 580d or 726 of the California Code of
Civil Procedure or any comparable provisions of the laws of any other
jurisdiction;

          (k) any act or omission of the Administrative Agent or any Lender or
any other Person that directly or indirectly results in or aids the discharge or
release of the Borrower, the Purchasers or any guarantor of all or any part of
the Obligations or any security or guarantee (including any letter of credit)
for all or any part of the Obligations by operation of law or otherwise;

          (l) any law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other respects more burdensome
than that of the principal or which reduces a surety's or guarantor's obligation
in proportion to the principal obligation;

          (m) any setoff, counterclaim or other claim which the Borrower, any
Purchaser or any guarantor has or alleges to have with respect to all or any
part of the Obligations;

          (n) any failure of the Administrative Agent or any Lender to file or
enforce a claim in any bankruptcy or other proceeding with respect to any
Person;

          (o) the election by the Administrative Agent or any Lender in any
bankruptcy proceeding of any Person of the application or nonapplication of
Section 1111(b)(2) of Title 11 of the United States Code (the "BANKRUPTCY
CODE");

          (p) any extension of credit or the grant of any Lien under Section 364
of the Bankruptcy Code;

          (q) any use of cash collateral under Section 363 of the Bankruptcy
Code;

          (r) any agreement or stipulation with respect to the provision of
adequate protection in any bankruptcy proceeding of any Person;

                                       7
<PAGE>

          (s) the avoidance of any Lien in favor of the Administrative Agent or
any Lender for any reason;

          (t) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by or
against any Person, including any discharge of, or bar or stay against
collecting, all or any part of the Obligations (or any interest on all or any
part of the Obligations) in or as a result of any such proceeding;

          (u) any action taken by the Administrative Agent or any Lender,
whether similar or dissimilar to any of the foregoing, that is authorized by
this Section or otherwise in this Agreement or by any other provision of any
Loan Document or any omission to take any such action;

          (v) any failure of the Administrative Agent, any Lender or any
Purchaser to become or remain licensed by the Tribal Gaming Commission pursuant
to Section 6.4 of the Compact or otherwise, or by any other Governmental Agency
that holds or exercises licensing or permit authority over gambling, gaming or
casino activities conducted by the Borrower;

          (w) any limitation, cancellation, revocation, termination,
conditioning, modification, suspension or restriction of or on any license or
permit issued by the Tribal Gaming Commission or other Governmental Agency to
the Administrative Agent, any Lender or any Purchaser;

          (x) the illegality, invalidity or unenforceability of any agreement on
the part of the Borrower to arbitrate disputes arising out of the Loan Documents
or of any waiver by the Borrower of its sovereign immunity;

          (y) the failure of any court, whether Federal, state or tribal, to
have jurisdiction over a dispute arising out of the Loan Documents;

          (z) the failure of the Administrative Agent, any Lender or any
Purchaser to have an effective remedy against the Borrower with respect to any
default by the Borrower in the performance of its obligations under the Loan
Documents;

          (aa) the fair market value of the Loans and other Obligations under
the Loan Agreement being less than the Purchase Price on the Purchase Date;

          (bb) any assignment by the Borrower of the Loan Documents and the
assets of the Permanent Casino to an instrumentality of the Borrower or to a
corporation wholly-owned by the Borrower pursuant to Section 11.8(a) of the Loan
Agreement; and

          (cc) any other circumstance whatsoever, whether similar or dissimilar
to any of the foregoing, that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, including by reason of California
Civil Code Sections 2787 to 2855, inclusive, and California Code of Civil
Procedure Sections 580a, 580b, 580d or 726, and all successor sections and any
future judicial decisions or legislation or of any comparable provisions of the
laws of any other jurisdiction.

                                       8
<PAGE>

     Section 2.03  SETOFFS, ETC.

          (a) Each payment made by any Purchaser hereunder or under any other
Loan Document shall be made, without setoff, counterclaim or deduction of any
kind, to the Administrative Agent, at the Administrative Agent's Office, in
immediately available funds not later than 11:00 a.m., San Francisco, California
local time, on the day of payment.

          (b) Each payment of any amount payable by any Purchaser under this
Agreement or any other Loan Document shall be made free and clear of, and
without reduction by reason of, any taxes, assessments, duties, levies, imposts,
deductions, charges or withholdings of any nature imposed by any Governmental
Agency, central bank or comparable authority, excluding taxes imposed on or
measured by the overall net income of any Lender or of its LIBOR Lending Office
(all such non-excluded taxes, assessments, duties, levies, imposts, deductions,
charges or withholdings being hereinafter referred to as "TAXES"). To the extent
that any Purchaser is obligated by applicable Laws to make any deduction or
withholding on account of Taxes from any amount payable to the Administrative
Agent or any Lender under this Agreement or any other Loan Document, such
Purchaser shall (i) make such deduction or withholding and pay the same to the
relevant Governmental Agency, central bank or comparable authority and (ii) pay
such additional amount to the Administrative Agent or such Lender, as the case
may be, as is necessary to result in the Administrative Agent's or such Lender's
receiving a net after-tax amount equal to the amount to which the Administrative
Agent or such Lender would have been entitled under this Agreement absent such
deduction or withholding. Within 30 days after paying any amount to the
Administrative Agent or any Lender from which it is required by law to make any
deduction or withholding, and within 30 days after it is required by law to
remit such deduction or withholding to any relevant Governmental Agency, central
bank or comparable authority, such Purchaser shall deliver to the Administrative
Agent or such Lender, as the case may be, evidence satisfactory to the
Administrative Agent or such Lender of such deduction, withholding or payment.

          (c) Each Purchaser expressly waives, for the benefit of the
Administrative Agent and the Lenders, all presentments, demands for payment or
performance, notices of nonpayment or nonperformance, protests, notices of
protest, notices of dishonor and all other notices or demands of any kind or
nature whatsoever with respect to the Obligations, and all notices of acceptance
of this Agreement or of the existence, creation, incurring or assumption of new
or additional Indebtedness. Each Purchaser further expressly waives, for the
benefit of the Administrative Agent and the Lenders, the benefit of any and all
statutes of limitation and any and all laws providing for the exemption of
property from execution or for valuation and appraisal upon foreclosure, to the
maximum extent permitted by applicable law.

     Section 2.04 UNDERSTANDING WITH RESPECT TO WAIVERS AND CONSENTS.

          (a) Each Purchaser intends that its rights and obligations shall be
those expressly set forth in this Agreement and that its obligations shall not
be affected, limited, reduced, discharged or terminated by reason of any
principles or provisions of law which conflict with the terms of this Agreement.

                                       9
<PAGE>

          (b) Each Purchaser acknowledges that it benefits from the extensions
of credit made and to be made by the Lenders to the Borrower under the Loan
Agreement and the other Loan Documents.

          (c) Each Purchaser warrants and agrees that each of the waivers and
consents set forth in this Agreement is made voluntarily and unconditionally
after consultation with outside legal counsel and with full knowledge of its
significance and consequences, with the understanding that events giving rise to
any defense or right waived may diminish, destroy or otherwise adversely affect
rights which such or any guarantor otherwise may have against the Borrower, the
Administrative Agent, any Lender or any other Person or against any collateral.
If, notwithstanding the intent of the parties that the terms of this Agreement
shall control in any and all circumstances, any such waivers or consents are
determined to be unenforceable under applicable law, such waivers and consents
shall be effective to the maximum extent permitted by law.

     Section 2.05 FINANCIAL CONDITION OF THE BORROWER. Each Purchaser is fully
aware of the financial condition of the Borrower and is executing and delivering
this Agreement based solely upon such Purchaser's own independent investigation
of all matters pertinent hereto and is not relying in any manner upon any
representation or statement of the Lender. Each Purchaser represents and
warrants to the Administrative Agent and the Lenders that such Purchaser is in a
position to obtain, and each Purchaser hereby assumes full responsibility for
obtaining, any additional information concerning the Borrower's financial
condition and any other matter pertinent hereto as such Purchaser may desire,
and such Purchaser is not relying upon or expecting the Administrative Agent or
any Lender to furnish to such Purchaser any information now or hereafter in the
Administrative Agent's or any Lender's possession concerning the same or any
other matter. By executing this Agreement, each Purchaser knowingly accepts the
full range of risks encompassed within a contract of this type, which risks such
Purchaser acknowledges. None of the Purchasers shall have any right to require
the Administrative Agent or any Lender to obtain or disclose any information
with respect to the Obligations, the financial condition or character of the
Borrower or the Borrower's ability to pay the Obligations, the existence of any
collateral or security for any or all of the Obligations, the existence or
non-existence of any other guaranties of all or any part of the Obligations, any
action or non-action on the part of the Administrative Agent, any Lender, the
Borrower, or any other Person, or any other matter, fact or occurrence
whatsoever.

     Section 2.06 REINSTATEMENT. The obligations of each Purchaser under this
Agreement shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Borrower, any Purchaser, any guarantor
or any other Person or any other application of funds (including the proceeds of
any collateral for all or any part of the Obligations) in respect of all or any
part of the Obligations or the Purchase Price is rescinded or must be otherwise
restored by any holder of such Obligations or recipient of all or a portion of
the Purchase Price, whether as a result of any proceedings in bankruptcy,
reorganization or otherwise and each Purchaser agrees that it will indemnify the
Administrative Agent and each Lender on demand for all costs and expenses
(including fees and expenses of counsel) incurred by the Administrative Agent or
such Lender in connection with such rescission or restoration.

                                       10
<PAGE>

     Section 2.07 ABILITY TO EXERCISE REMEDIES. Each Purchaser acknowledges and
agrees that the giving of a Put Option Notice shall not in any way preclude the
enforcement of any other available remedies by the Administrative Agent or any
Lender under the Loan Documents.

     Section 2.08 SEPARATE ACTION, ETC. The Administrative Agent may bring and
prosecute a separate action or actions against any designated Purchaser whether
or not the Borrower, any other Purchaser, any guarantor or any other Person is
joined in any such action or a separate action or actions are brought against
the Borrower, any other Purchaser, any guarantor or any other Person, or any
collateral for all or any part of the Obligations. The obligations of each
Purchaser under, and the effectiveness of, this Agreement are not conditioned
upon the existence or continuation of any guarantee (including any letter of
credit), or put arrangement with respect to, of all or any part of the
Obligations. By its acceptance hereof, each Lender agrees that this Agreement
may be enforced only by action of the Administrative Agent upon the instructions
of the Requisite Lenders and that no Lender shall have any right individually to
seek to enforce or to enforce this Agreement.

     Section 2.09 REVOCATION. Each Purchaser hereby waives any right it may have
to revoke its obligations hereunder.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

                  In order to induce the Administrative Agent and the Lenders to
enter into the Loan Agreement, each Purchaser represents and warrants to the
Administrative Agent and the Lenders, as of the date hereof, as of the Closing
Date, and as of the date of the making of each Loan and each L/C Credit
Extension that:

     Section 3.01 STATUS. Such Purchaser (i) is a duly organized and validly
existing corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate power and authority to own its property and
assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the ownership, leasing or
operation of its property or the conduct of its business requires such
qualifications except for failures to be so qualified which, individually or in
the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of such Purchaser and its Subsidiaries
taken as a whole.

     Section 3.02 POWER AND AUTHORITY; ENFORCEABILITY. Such Purchaser has the
corporate power and authority to execute, deliver and perform the terms and
provisions of each of the Loan Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of each of such Loan Documents. Such Purchaser has duly executed and
delivered each of the Loan Documents to which it is party, and each of such Loan
Documents constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting

                                       11
<PAGE>

creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law).

     Section 3.03 NO VIOLATION. Neither the execution, delivery or performance
by such Purchaser of the Loan Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, (i) will contravene any provision
of any law, statute, rule or regulation or any order, writ, injunction or decree
of any court or governmental instrumentality, (ii) will conflict with or result
in any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
such Purchaser or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument, to which such Purchaser or any
of its Subsidiaries is a party or by which it or any of its property or assets
is bound or to which it may be subject or (iii) will violate any provision of
the certificate of incorporation or by-laws (or equivalent organizational
documents) of such Purchaser.

     Section 3.04 GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made on or prior to the Closing Date), or
exemption by, any Governmental Agency, is required to authorize, or is required
in connection with, the execution, delivery and performance by the Purchasers of
any Loan Document.

     Section 3.05 FINANCIAL STATEMENTS. The Purchasers have furnished to the
Administrative Agent and the Lenders the audited consolidated financial
statements of HET and its Subsidiaries (as defined in the Harrah's Credit
Agreement) for the fiscal year ended December 31, 2000. The financial statements
described above fairly present in all material respects the financial condition,
results of operations and changes in financial position of HET and its
Subsidiaries as of such dates and for such periods, in conformity with Generally
Accepted Accounting Principles, consistently applied.

     Section 3.06 NO OTHER LIABILITIES; NO MATERIAL ADVERSE EFFECT. As of the
Closing Date, HET and its Subsidiaries (as defined in the Harrah's Credit
Agreement) do not have any material liability or material contingent liability
not reflected or disclosed in the financial statements described in Section
3.05, other than liabilities and contingent liabilities arising in the ordinary
course of business since the date of such financial statements. As of the
Closing Date, no circumstance or event has occurred that could reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of such Purchaser and its Subsidiaries taken as a whole since December 31, 2000.

     Section 3.07 LITIGATION. There are no actions, suits, proceedings or
investigations pending as to which HET or any of its Subsidiaries (as defined in
the Harrah's Credit Agreement) have been served or have received notice or, to
the knowledge of HET and the other Purchasers, threatened against or affecting
HET or any of its Subsidiaries or any Property of any of them before any
Governmental Agency in which there is any reasonable possibility of an adverse
decision which could materially adversely affect the business, consolidated
financial position or results of operations of HET and its Subsidiaries, taken
as a whole, or which in any

                                       12
<PAGE>

manner draws into question the validity or enforceability of the Loan Documents
to which it is a party.

     Section 3.08 NO PUT OPTION EVENT. No event has occurred and is continuing
that is a Put Option Event.

     Section 3.09 ERISA.

          (a) With respect to each Pension Plan (as defined in the Harrah's
Credit Agreement):

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

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

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

                    (iv) neither HET nor any of its Subsidiaries (as defined in
the Harrah's Credit Agreement) has engaged in any non-exempt "prohibited
transaction" (as defined in Section 4975 of the Code (as defined in the Harrah's
Credit Agreement)) that could reasonably be expected to have a Material Adverse
Effect.

          (b) Neither HET nor any of its Subsidiaries has incurred or expects to
incur any withdrawal liability to any Multiemployer Plan (as defined in the
Harrah's Credit Agreement) that could reasonably be expected to have a Material
Adverse Effect.

     Section 3.10 TAX LIABILITY. HET and its Subsidiaries (as defined in the
Harrah's Credit Agreement) have filed all tax returns which are required to be
filed, and have paid, or made provision for the payment of, all taxes with
respect to the periods, Property or transactions covered by said returns, or
pursuant to any assessment received by HET or any of its Subsidiaries, except
(a) such taxes, if any, as are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been established and
maintained and (b) immaterial taxes and tax returns so long as no material item
or portion of Property of HET or any of its Subsidiaries is in jeopardy of being
seized, levied upon or forfeited.

     Section 3.11 DISCLOSURE. No written statement made by a Senior Officer (as
defined in the Harrah's Credit Agreement) of HET or any other Purchaser to the
Administrative Agent or any Lender in connection with this Agreement or the Loan
Agreement, or in connection with any Loan or Letter of Credit as of the date
thereof contained any untrue statement of a material fact or omitted a material
fact necessary to make the statement made not misleading in light of all the
circumstances existing at the date the statement was made.

                                       13
<PAGE>

     Section 3.12 HAZARDOUS MATERIALS. HET and the other Purchasers have
reasonably concluded that Environmental Laws (as defined in the Harrah's Credit
Agreement) are unlikely to have a material adverse effect on the business,
financial position, results of operations or prospects of HET and its
Subsidiaries (as defined in the Harrah's Credit Agreement), considered as a
whole.

                                   ARTICLE IV

                                    COVENANTS

                   So long as this Agreement is in effect and until all of the
Obligations have been indefeasibly paid in full in cash and all commitments to
lend under the Loan Agreement have been terminated, HET and HOC agree as
follows:

     Section 4.01 REPORTING REQUIREMENTS. HET and HOC shall deliver to the
Administrative Agent and the Lenders, at HET and HOC's sole expense:

          (a) any and all reports and other information required by Article 7 of
the Harrah's Credit Agreement to be delivered to the lenders thereunder in the
time and manner as provided in the Harrah's Credit Agreement;

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

          (c) promptly upon a Senior Officer becoming aware of any litigation,
governmental investigation or any proceeding, including any litigation or
proceeding by or subject to decision by any Gaming Board pending (i) against HET
or any of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect, (ii) with respect to any material Indebtedness of HET or any of
its Subsidiaries, or (iii) with respect to the Loan Documents, notice of the
existence of the same;

          (d) at the time each compliance certificate provided for in Section
7.2 of the Harrah's Credit Agreement is to be delivered to the lenders
thereunder, a certificate of the chief financial officer, controller or
treasurer of HET to the effect that, to the best of such officer's knowledge, no
Put Option Event has occurred and is continuing or, if any Put Option Event has
occurred and is continuing, specifying the nature and extent thereof, which
certificate shall set forth (x) the calculations required to establish whether
HET and HOC were in compliance with the provisions of Sections 6.5 and 6.6 of
the Harrah's Credit Agreement at the end of such fiscal quarter or year, as the
case may be, and (y) the ratings, if any, assigned by Moody's and S&P to the
Indebtedness of HOC at the end of such fiscal quarter or year, as the case may
be;

          (e) promptly, notice of any increase or decrease in any interest rate
margins or fees payable under the Harrah's Credit Agreement, as such agreement
may be amended, restated, supplemented, modified, refinanced, replaced or
substituted from time to time; and

                                       14
<PAGE>

          (f) such other data and information as from time to time may be
reasonably requested by the Administrative Agent or any Lender (through the
Administrative Agent).

     Section 4.02 FINANCIAL COVENANTS. HET and HOC will comply with Sections 6.5
and 6.6 of the Harrah's Credit Agreement.

     Section 4.03 RESTRICTIONS ON ABILITY TO PERFORM OBLIGATIONS. No Purchaser
will, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any restriction on the ability of such Purchaser to perform its
obligations under this Agreement.

     Section 4.04 SECURITY FOR OBLIGATIONS UNDER HARRAH'S CREDIT AGREEMENT.

          (a) In the event that HET or any of its subsidiaries is required to
grant, or elects to grant, a Lien on any of its assets or property (the
"PROPOSED HARRAH'S GROUP COLLATERAL") to secure all or a substantial portion of
the obligations of the borrowers under the Amended Harrah's Credit Agreement (as
defined in subsection (c) below) or any related document, then HET and HOC agree
to either (i) use commercially reasonable efforts to obtain the consent of the
Administrative Agent (with the written approval of Requisite Lenders) under the
Amended Harrah's Credit Agreement (the "HARRAH'S ADMINISTRATIVE AGENT" and the
"HARRAH'S REQUISITE LENDERS", respectively) to the grant to the Administrative
Agent (for the benefit of itself and the Lenders) of a first priority Lien on
assets or property of HET or any of its Subsidiaries (other than the Proposed
Harrah's Group Collateral) with a fair market value greater than or equal to the
Purchase Price (the "PROPOSED RINCON GROUP COLLATERAL") to secure the
obligations of the Purchasers under this Agreement or (ii) decline to seek such
consent.

          (b) In the event that HET and HOC in fact obtain the consent of the
Harrah's Administrative Agent and the Harrah's Requisite Lenders as contemplated
by Section 4.04(a) above, then and only then, HET shall grant or cause the
applicable subsidiary of HET to grant, on or prior to the date (the "GRANT
DATE") that HET or such subsidiary grants a Lien to the Harrah's Administrative
Agent or the lenders party to the Amended Harrah's Credit Agreement (the
"HARRAH'S LENDERS"), a first priority Lien to the Administrative Agent (for the
benefit of itself and the Lenders) on the Proposed Rincon Group Collateral
pursuant to documentation in form and substance reasonably satisfactory to the
Administrative Agent. In addition, if such Lien is granted to the Administrative
Agent and if requested by the Administrative Agent, HET shall take or cause the
applicable subsidiary of HET to take such other action from time to time as may
be necessary or desirable to create or perfect the Lien of the Administrative
Agent (for the benefit of itself and the Lenders) in and to the Proposed Rincon
Group Collateral on or prior to the Grant Date. The parties hereto acknowledge
and agree that there is no obligation on the part of HET or any of its
subsidiaries to grant a Lien on any of its assets or property to the
Administrative Agent unless and until consent thereto is obtained from the
Harrah's Administrative Agent (with the written approval of the Harrah's
Requisite Lenders).

          (c) For purposes of this Section 4.04, "AMENDED HARRAH'S CREDIT
AGREEMENT" means that certain Five Year Loan Agreement, dated as of April 30,
1999, as amended and in effect on the Closing Date, among HOC, Marina
Associates, a New Jersey general partnership, HET, the Lenders, Syndication
Agent, Documentation Agents and Co-Documentation Agents named therein, and Bank
of America, N.A., formerly known as Bank of America National Trust

                                       15
<PAGE>

and Savings Association, as Administrative Agent, as such agreement may be
further amended, restated, supplemented, modified, refinanced, replaced or
substituted from time to time.

                                   ARTICLE V

                            MISCELLANEOUS PROVISIONS

     Section 5.01 FAILURE TO EXERCISE RIGHTS. No failure or delay of the
Borrower, the Administrative Agent or any Lender in exercising any power or
right hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No notice or demand on the Borrower or any Purchaser in any case
shall entitle the Borrower or any Purchaser to any other or further notice or
demand in similar or other circumstances.

     Section 5.02 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the Purchasers, the Administrative Agent and their
respective successors and assigns. No Purchaser may assign or transfer its
rights or obligations under this Agreement without the prior written consent of
the Administrative Agent (with the further consent of the Lenders as specified
in Section 11.2 of the Loan Agreement). Any attempted assignment or transfer in
violation of this Section 5.02 shall be null and void.

     Section 5.03 AMENDMENTS, ETC. Any provision of this Agreement may be
waived, altered or amended only by an instrument in writing signed by the
Purchasers and the Administrative Agent (with the consent of the Lenders as
specified in Section 11.2 of the Loan Agreement). Any waiver, alteration or
amendment shall be for such period and subject to such conditions as shall be
specified in the written instrument effecting the same and shall be binding upon
the Administrative Agent, the Lenders and the Purchasers, and any such waiver
shall be effective only in the specific instance and for the purpose for which
given.

     Section 5.04 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties to this Agreement may execute this Agreement
by signing any such counterpart. Transmission by telecopier of an executed
counterpart of this Agreement shall be deemed to constitute due and sufficient
delivery of such counterpart.

     Section 5.05 RIGHTS, POWERS AND REMEDIES. No failure or delay by the
Administrative Agent or any Lender in exercising any remedy, right, power or
privilege under this Agreement or any other Loan Document shall operate as a
waiver of such remedy, right, power or privilege, nor shall any single or
partial exercise of such remedy, right, power or privilege preclude any other or
further exercise of such remedy, right, power or privilege or the exercise of
any other remedy, right, power or privilege. The remedies, rights, powers and
privileges provided by this Agreement are, to the extent permitted by law,
cumulative and not exclusive of any remedies, rights, powers or privileges
provided by the other Loan Documents or by law.

     Section 5.06 TIME OF ESSENCE. Time shall be of the essence of this
Agreement.

                                       16
<PAGE>

     Section 5.07 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA. EACH PURCHASER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA AND OF
ANY CALIFORNIA STATE COURT SITTING IN SAN DIEGO COUNTY, CALIFORNIA FOR THE
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PURCHASER IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     Section 5.08 ARBITRATION.

          (a) ARBITRATION. Upon the demand of any party, any Dispute (as defined
in the next sentence) shall be resolved by binding arbitration in accordance
with the terms of this Agreement. A "Dispute" shall mean any action, dispute,
claim or controversy of any kind, whether in contract or tort, statutory or
common law, legal or equitable, now existing or hereafter arising under or in
connection with, or in any way pertaining to, any of the Loan Documents, or any
past, present or future extensions of credit and other activities, transactions
or obligations of any kind related directly or indirectly to any of the Loan
Documents, including without limitation, any of the foregoing arising in
connection with the exercise of any self-help, ancillary or other remedies
pursuant to any of the Loan Documents. Any party may by summary proceedings
bring an action in court to compel arbitration of a Dispute. Any party who fails
or refuses to submit to arbitration following a lawful demand by any other party
shall bear all costs and expenses incurred by such other party in compelling
arbitration of any Dispute.

          (b) GOVERNING RULES. Arbitration proceedings shall be administered by
the American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents. The arbitration shall be conducted at a location in California
selected by the AAA or other administrator. If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control. All statutes of limitation applicable to any Dispute shall
apply to any arbitration proceeding. All discovery activities shall be expressly
limited to matters directly relevant to the Dispute being arbitrated. Judgment
upon any award rendered in an arbitration may be entered in any court having
jurisdiction; provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. Section 91 or any similar applicable state law.

          (c) NO WAIVER; PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain

                                       17
<PAGE>

provisional or ancillary remedies, including without limitation injunctive
relief, sequestration, attachment, garnishment or the appointment of a receiver,
from a court of competent jurisdiction before, after or during the pendency of
any arbitration or other proceeding. The exercise of any such remedy shall not
waive the right of any party to compel arbitration or reference hereunder.

          (d) ARBITRATOR QUALIFICATIONS AND POWERS; AWARDS. Arbitrators must be
active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the State of California, (ii) may grant
any remedy or relief that a court of the State of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Any Dispute in which the amount in controversy is $5,000,000 or less shall
be decided by a single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.

          (e) MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.

          (f) SPECIFIC ENFORCEMENT REPRESENTATION. Each party to this Agreement
severally represents and warrants to the other parties that this Section 5.08 is
specifically enforceable against such party by the other parties.

     Section 5.09 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
EACH PURCHASER HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ACTION,
CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO
THIS AGREEMENT, THE ASSIGNMENT DOCUMENTATION OR ANY OF THE OTHER LOAN DOCUMENTS,
OR IN ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE DEALINGS OF THE
ADMINISTRATIVE AGENT, THE LENDERS AND THE PURCHASERS WITH RESPECT TO THIS
AGREEMENT, THE ASSIGNMENT DOCUMENTATION OR ANY OF THE OTHER LOAN DOCUMENTS, OR
THE TRANSACTIONS RELATED HERETO, IN EACH

                                       18
<PAGE>

CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, EACH PURCHASER HEREBY AGREES THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM,
DEMAND, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT
THE ADMINISTRATIVE AGENT OR ANY LENDER MAY FILE AN ORIGINAL COUNTERPART OF THIS
SECTION WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF
THE PURCHASERS TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     Section 5.10 NOTICES. Unless otherwise specifically provided herein, any
notice or other communication herein required .or permitted to be given shall be
in writing and may be personally served, sent by facsimile, telexed or sent by
courier service or United States mail and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of a facsimile or
telex or five Business Days after deposit in the United States mail (registered
or certified, with postage prepaid and properly addressed). For the purposes
hereof, the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this Section 5.10) shall be as set forth below, or, as
to each party, at such other address as may be designated by such party in a
written notice to all of the other parties:

                                       19
<PAGE>

                  If to the Purchasers:  Harrah's Entertainment, Inc.
                                         Harrah's Operating Company, Inc.
                                         HCAL Corporation
                                         One Harrah's Court
                                         Las Vegas, Nevada 89119-4312
                                         Attention: Treasurer
                                         Facsimile No. (702) 407-6405

                  With a copy to:        General Counsel
                                         Harrah's Entertainment, Inc.
                                         One Harrah's Court
                                         Las Vegas, Nevada 89119-4312
                                         Facsimile No. (702) 407-6284

                  With a copy to:        Tom Evans
                                         Assistant Treasurer
                                         Harrah's Entertainment, Inc.
                                         1023 Cherry Road
                                         Memphis, Tennessee 38117
                                         Facsimile No. (901) 537-3443

                  If to the
                  Administrative
                  Agent:                 Wells Fargo Bank, National Association
                                         5340 Kietzke Lane, Suite 201
                                         Reno, Nevada 89511
                                         Attention: Sue Fuller
                                         Telecopier: (775) 689-6026

     Section 5.11 SEVERABILITY OF PROVISIONS. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

     Section 5.12 EXPENSES, ETC. The Purchasers jointly and severally agree to
pay or to reimburse the Administrative Agent and the Lenders for all reasonable
costs and expenses (including reasonable fees and expenses of counsel) that may
be incurred by the Administrative Agent and the Lenders in any effort to enforce
any of the obligations of the Purchasers under this Agreement, whether or not
any lawsuit is filed, including all such costs and expenses (and reasonable
attorneys' fees and expenses) incurred by the Administrative Agent and the
Lenders in any bankruptcy, reorganization, workout or similar proceeding. All
amounts due under this Agreement not paid when due shall bear interest until
paid at a rate per annum equal to the Default Rate and shall be payable upon
demand.

     Section 5.13 SURVIVAL. All representations and warranties made in this
Agreement or in any certificate or other document delivered pursuant to or in
connection with this Agreement

                                       20
<PAGE>

shall survive the execution and delivery of this Agreement or such certificate
or other document (as the case may be) or any deemed repetition of any such
representation or warranty.

     Section 5.14 ENTIRE AGREEMENT. This Agreement representS the final
agreement AMONG THE PURCHASERS, THE administrative agent AND THE LENDERS and may
not be contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of SUCH parties. There are no unwritten oral agreements BETWEEN OR
AMONG THE PURCHASERS, THE administrative agent AND THE LENDERS.

     Section 5.15 RELEASE AND DISCHARGE OF THE ADMINISTRATIVE AGENT AND THE
LENDERS' DUTIES. In the event the Administrative Agent and the Lenders transfer
their respective right, title and interest in the Transferred Interests to one
or more of the Purchasers pursuant to this Agreement, the Administrative Agent
and the Lenders shall be fully released and discharged from all further duty,
responsibility and liability hereunder and under the Loan Documents
automatically and without further consent or authorization from the Purchasers
or the Borrower.

     Section 5.16 JOINT AND SEVERAL OBLIGATIONS; SUBROGATION, ETC.

          (a) All obligations of the Purchasers hereunder shall be joint and
several.

          (b) Each Purchaser hereby agrees that, until all commitments to lend
under the Loan Agreement have been terminated, the Obligations have been
indefeasibly paid in full in cash and all Letters of Credit have expired, (i)
except as permitted under the Intercreditor Agreement, it shall not exercise any
right, remedy, power or privilege, such as any right of subrogation,
contribution or indemnity or related remedy, power or privilege, arising
(whether by contract or operation of law, including under the Bankruptcy Code)
against the Borrower or any other Purchaser of all or any part of the
Obligations or any collateral securing all or any part of the Obligations by
reason of any payment or other performance pursuant to the provisions of this
Agreement and (ii) if any amount shall be paid to such Purchaser on account of
such rights, remedies, powers or privileges (other than amounts which are
permitted to paid by clause (i) above), it shall hold such amount in trust for
the benefit of, and pay the same over to, the Administrative Agent (for the
benefit of itself and the Lenders) on account of the Obligations. Each Purchaser
understands that the exercise by the Administrative Agent or any Lender of any
right, remedy, power or privilege that it may have under the Loan Documents, any
agreement, security document, guarantee or other instrument relative to all or
any part of the Obligations or otherwise may affect or eliminate such or any
other Purchaser's right of subrogation or similar recovery against the Borrower,
any other Purchaser or any collateral and that such Purchaser may therefore
incur partially or totally nonreimbursable liability under this Agreement.
Nevertheless, each Purchaser hereby authorizes and empowers the Administrative
Agent and the Lenders to exercise, in its or their sole discretion, any
combination of such rights, remedies, powers and privileges.

                                       21
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.

ADMINISTRATIVE AGENT:                      PURCHASERS:

WELLS FARGO BANK, NATIONAL                 HARRAH'S ENTERTAINMENT, INC.,
ASSOCIATION, as Administrative Agent       a Delaware corporation

By:
Name:                                      By:
      ------------------------------           ---------------------------------
Title:                                     Name:    Charles L. Atwood
       -----------------------------
                                           Title:.  Senior Vice President,
                                                    Chief Financial Officer and
                                                    Treasurer

                                            HARRAH'S OPERATING COMPANY,
                                            a Delaware corporation

                                            By:
                                                --------------------------------
                                            Name:    Charles L. Atwood
                                            Title:.  Senior Vice President,
                                                     Chief Financial Officer and
                                                     Treasurer

                                            HCAL CORPORATION,
                                            a Nevada corporation

                                            By:
                                                --------------------------------
                                            Name: Peter J. Weien
                                            Title: Vice President

<PAGE>

                                    EXHIBIT A

                            HARRAH'S CREDIT AGREEMENT

Please see attached.

                                      A-1
<PAGE>

                                    EXHIBIT B

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

                  THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "ASSIGNMENT AND
ASSUMPTION AGREEMENT") is made as of , by and among [Names of Lenders]
(collectively, the "LENDERS"), Wells Fargo Bank, National Association, as
Administrative Agent for the Lenders (in such capacity, the "Administrative
Agent"; together with the Lenders, the "ASSIGNORS"), Harrah's Entertainment,
Inc., a Delaware corporation ("HET"), Harrah's Operating Company, Inc., a
Delaware corporation ("HOC") and HCAL Corporation, a Nevada corporation ("HCAL";
together with HET and HOC, the "ASSIGNEES"). All capitalized terms not otherwise
specifically defined herein shall have the meanings given them in Section 1.1 of
the Loan Agreement referred to below and the rules of interpretation set forth
in Section 1.6 of the Loan Agreement shall be applicable to this Assignment and
Assumption Agreement.

                                R E C I T A L S:
                                ---------------

                  WHEREAS:

                  Reference is made to that certain Loan Agreement (as amended,
restated, supplemented or otherwise modified to the date hereof, the "LOAN
AGREEMENT") by and among the Rincon San Luiseno Band of Mission Indians, a
federally recognized Indian Tribe and Native American sovereign nation doing
business as the Rincon Casino (the "BORROWER") and the Assignors, pursuant to
which the Lenders established a construction loan and reducing revolving credit
facility in favor of the Borrower up to the aggregate principal amount of
$125,000,000 for the uses and purpose described in the Loan Agreement.

                  As of the date hereof, the sum of: (i) the outstanding
principal balance of the Loans, (ii) all accrued and unpaid interest thereon and
(iii) all fees, advances, late charges, attorneys' fees and other amounts owing
to the Assignors under the Loan Documents is [$______________].

                  The Assignees desire to purchase all right, title and interest
of the Assignors in and to the Obligations and the Loan Documents and to assume
all of the obligations and duties of the Assignors under the Loan Documents by
paying to the Administrative Agent, for the benefit of the Lenders, the Purchase
Price (as defined below), at the times and in the manner set forth below.

                  NOW, THEREFORE, in consideration of the foregoing and other
good and valuable considerations hereinafter described, the parties hereto do
agree as follows:

                  1. AGREEMENT TO ASSIGN AND ASSUME THE ASSIGNED LOANS. Each
Assignor hereby agrees to sell and assign to the Assignees all of such
Assignor's right, title and interest in and to the Obligations and the Loan
Documents (the "ASSIGNED RIGHTS") and to delegate to the Assignees all of its
obligations, duties and liabilities under the Loan Documents with respect to the
Assigned Rights, and each Assignee hereby agrees to purchase from the Assignors,
without recourse to the Assignors and without representation or warranty,
express or implied, by the

                                      B-1
<PAGE>

Assignors, all of the Assignors' right, title and interest in the Assigned
Rights and to assume from the Assignors all of their obligations, duties and
liabilities under the Loan Documents with respect to the Assigned Rights.

                  2. ASSUMPTION. On and after the Transfer Date (as defined in
paragraph 3 below), the Assignees will completely and timely perform in
accordance with their terms all of the duties and obligations which by the terms
of the Loan Documents are required to be performed or discharged by it with
respect to the Assigned Rights. It is the intent of the parties hereto that, on
and after the Transfer Date, each Assignor shall relinquish all of its right,
title and interest in the Assigned Rights, and be released from all of its
obligations, duties and liabilities under the Loan Documents with respect to the
Assigned Rights. Each Assignee further agrees to indemnify and hold each
Assignor harmless from any and all liabilities, damages, costs or expenses which
such Assignor may incur by reason of the failure of such Assignee perform any
obligation, duty or liability of such Assignor arising or performable from and
after the Transfer Date at the times and in the manner set forth in the Loan
Documents to the same extent and manner as if such Assignee had been originally
named in the Loan Documents as the holder of such Assignor's interest therein.

                  3. PURCHASE PRICE; TRANSFER DATE. As consideration for the
assignment of the Assigned Rights to the Assignees by the Assignors, the
Assignees shall pay [$__________] (the "PURCHASE PRICE") to the Administrative
Agent, for the account of the Lenders, on the Transfer Date in immediately
available funds. The transfer date (the "TRANSFER DATE") for the assignment of
the Assigned Rights by the Assignors to the Assignees shall be [__________ __,
____]; provided, however, that obligation of the Assignors to assign the
Assigned Rights hereunder is conditioned upon the receipt by the Administrative
Agent, for the account of the Lenders, of the Purchase Price.

                  4. REPRESENTATIONS AND WARRANTIES. Each Assignor represents
and warrants to the Assignees that as of the Transfer Date such Assignor is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any Lien or other adverse claim created
by such Assignor. Except as expressly set forth in the preceding sentence, no
Assignor makes any representations or warranties, express or implied, with
respect to the assignment of the Assigned Rights hereunder.

                  5. FURTHER ASSURANCES. Each of the parties hereby agrees to
execute and deliver all such documents and instruments and to take all such
further actions as the other party may reasonably deem necessary from time to
time to carry out the intent and purpose of this Agreement.

                  6. SUCCESSORS AND ASSIGNS. This Assignment and Assumption
Agreement shall be binding upon and inure to the benefit of the Assignors and
the Assignees and their respective successors and assigns; provided, however,
that no party shall assign its rights hereunder without the prior written
consent of the other party and any purported assignment, absent such consent,
shall be null and void.

                  7. COUNTERPARTS. This Assignment and Assumption Agreement may
be executed in any number of counterparts and all of such counterparts taken
together shall be

                                      B-2
<PAGE>

deemed to constitute one and the same instrument. Transmission by facsimile of
an executed counterpart of this Assignment and Assumption Agreement shall be
deemed to constitute due and sufficient delivery of such counterpart.

                  8. GOVERNING LAW. This Assignment and Assumption Agreement
shall be governed by and construed in accordance with the internal laws of the
State of California.

                                      B-3
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have executed the
foregoing instrument as of the day and year first above written.

                                         ASSIGNORS:

                                         [NAME OF LENDER]

                                         By: ___________________________________
                                         Name: _________________________________
                                         Title: ________________________________

                                         [NAME OF LENDER]

                                         By: ___________________________________
                                         Name: _________________________________
                                         Title: ________________________________

                                         WELLS FARGO BANK, NATIONAL ASSOCIATION,
                                         as Administrative Agent

                                         By: ___________________________________
                                         Name: _________________________________
                                         Title: ________________________________

                                         ASSIGNEES:

                                         HARRAH'S ENTERTAINMENT, INC.

                                         By: ___________________________________
                                         Name: _________________________________
                                         Title: ________________________________

                                         HARRAH'S OPERATING COMPANY, INC.

                                         By: ___________________________________
                                         Name: _________________________________
                                         Title: ________________________________

                                      B-4
<PAGE>

                                         HCAL CORPORATION

                                         By: ___________________________________
                                         Name: _________________________________
                                         Title: ________________________________

                                      B-5
<PAGE>

                                    EXHIBIT C

                  Form of endorsement to be attached to each Note:

                  PAY TO THE ORDER OF [NAME OF DESIGNATED PURCHASER(S)], WITHOUT
                  RECOURSE AND WITHOUT REPRESENTATION OR WARRANTY, EXPRESS OR
                  IMPLIED, ALL RIGHT, TITLE AND INTEREST OF THE UNDERSIGNED IN
                  AND TO THE ATTACHED PROMISSORY NOTE.

                  Dated this                day of                    ,       .
                             ---------------       -------------------  ------

                                         [NAME OF HOLDER OF NOTE]

                                         By: ___________________________________
                                         Name: _________________________________
                                         Title: ________________________________

                                      C-1

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