Document:

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                                                                     EXHIBIT 4.2

                                                                  EXECUTION COPY

                        HARRAH'S OPERATING COMPANY, INC.

                                  $500,000,000

                          7.125% Senior Notes due 2007

                          REGISTRATION RIGHTS AGREEMENT

                                                              New York, New York
                                                                   June 14, 2001

Salomon Smith Barney Inc.
Commerzbank Capital Markets Corp.
         As Representatives of the Initial Purchasers

c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

                  Harrah's Operating Company, Inc., a corporation organized
under the laws of Delaware (the "Company"), proposes to issue and sell to
certain purchasers (the "Initial Purchasers"), upon the terms set forth in a
purchase agreement dated as of June 7, 2001 (the "Purchase Agreement"), its
7.125% Senior Notes due 2007 relating to the initial placement of the Notes (the
"Initial Placement"), which Notes are to be guaranteed by Harrah's
Entertainment, Inc., a corporation organized under the laws of Delaware (the
"Guarantor"). The Notes are to be issued under an indenture (the "Indenture") to
be dated as of June 14, 2001, between the Company, the Guarantor and Firstar
Bank, N.A., as trustee (the "Trustee"). To induce the Initial Purchasers to
enter into the Purchase Agreement and to satisfy a condition of your obligations
thereunder, the Company and the Guarantor agree with you for your benefit and
the benefit of the holders from time to time of the Notes (including the Initial
Purchasers) (each a "Holder" and, together, the "Holders"), as follows:

                  1. DEFINITIONS. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following capitalized defined terms
shall have the following meanings:

                  "Additional Interest" shall have the meaning set forth in
Section 5 hereto.

                  "Affiliate" of any specified Person shall mean any other
Person that, directly or indirectly, is in control of, is controlled by, or is
under common control with, such specified Person. For purposes of this
definition, control of a Person shall mean the power, direct or indirect, to
direct or cause the direction of the management and policies of such Person
whether

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by contract or otherwise; and the terms "controlling" and "controlled" shall
have meanings correlative to the foregoing.

                  "Broker-Dealer" shall mean any broker or dealer registered as
such under the Exchange Act.

                  "Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City.

                  "Commission" shall mean the Securities and Exchange
Commission.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.

                  "Exchange Offer Registration Period" shall mean the one-year
period following the consummation of the Registered Exchange Offer, exclusive of
any period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement.

                  "Exchange Offer Registration Statement" shall mean a
registration statement of the Company on an appropriate form under the
Securities Act with respect to the Registered Exchange Offer, all amendments and
supplements to such registration statement, including post-effective amendments
thereto, in each case including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.

                  "Exchanging Dealer" shall mean any Holder (which may include
any Initial Purchaser) that is a Broker-Dealer and elects to exchange for New
Notes any Notes that it acquired for its own account as a result of
market-making activities or other trading activities (but not directly from the
Company or any Affiliate of the Company) for New Notes.

                  "Holder" shall have the meaning set forth in the preamble
hereto.

                  "Indenture" shall mean the Indenture relating to the Notes,
dated as of June 14, 2001, between the Company, the Guarantor and Firstar Bank,
N.A., as trustee, as the same may be amended from time to time in accordance
with the terms thereof.

                  "Initial Placement" shall have the meaning set forth in the
preamble hereto.

                  "Initial Purchaser" shall have the meaning set forth in the
preamble hereto.

                  "Losses" shall have the meaning set forth in Section 7(d)
hereof.

                  "Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Notes registered under a Registration Statement.

                  "Managing Underwriters" shall mean the investment banker or
investment bankers and manager or managers that shall administer an underwritten
offering.

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                  "New Notes" shall mean debt securities of the Company,
guaranteed by the Guarantor, identical in all material respects to the Notes
(except that the cash interest and interest rate step-up provisions and the
transfer restrictions shall be modified or eliminated, as appropriate) and to be
issued under the Indenture or the New Notes Indenture.

                  "New Notes Indenture" shall mean an indenture between the
Company and the New Notes Trustee, identical in all material respects to the
Indenture (except that the cash interest and interest rate step-up provisions
and the transfer restrictions shall be modified or eliminated, as appropriate).

                  "New Notes Trustee" shall mean a bank or trust company
reasonably satisfactory to the Initial Purchasers, as trustee with respect to
the New Notes under the New Notes Indenture.

                  "Notes" shall have the meaning set forth in the preamble
hereto.

                  "Offering Memorandum" shall have the meaning set forth in the
Purchase Agreement.

                  "Prospectus" shall mean the prospectus included in any
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A under the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Notes or the New Notes covered
by such Registration Statement, and all amendments and supplements thereto and
all material incorporated by reference therein.

                  "Purchase Agreement" shall have the meaning set forth in the
preamble hereto.

                  "Registered Exchange Offer" shall mean the proposed offer of
the Company to issue and deliver to the Holders of the Notes that are not
prohibited by any law or policy of the Commission from participating in such
offer, in exchange for the Notes, a like aggregate principal amount of the New
Notes.

                  "Registration Statement" shall mean any Exchange Offer
Registration Statement or Shelf Registration Statement that covers any of the
Notes or the New Notes pursuant to the provisions of this Agreement, any
amendments and supplements to such registration statement, including
post-effective amendments (in each case including the Prospectus contained
therein), all exhibits thereto and all material incorporated by reference
therein.

                   "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.

                  "Shelf Registration" shall mean a registration effected
pursuant to Section 3 hereof.

                  "Shelf Registration Period" has the meaning set forth in
Section 3(b) hereof.

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                  "Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of Section 3
hereof which covers some or all of the Notes or New Notes, as applicable, on an
appropriate form under Rule 415 under the Securities Act, or any similar rule
that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

                  "Trustee" shall mean the trustee with respect to the Notes
under the Indenture.

                  "underwriter" shall mean any underwriter of Notes in
connection with an offering thereof under a Shelf Registration Statement.

                  2. REGISTERED EXCHANGE OFFER. (a) The Company and the
Guarantor shall prepare and, not later than 90 days following the date of the
original issuance of the Notes (or if such 90th day is not a Business Day, the
next succeeding Business Day), shall file with the Commission the Exchange Offer
Registration Statement with respect to the Registered Exchange Offer. The
Company shall use its best efforts to cause the Exchange Offer Registration
Statement to become effective under the Securities Act within 180 days of the
date of the original issuance of the Notes (or if such 180th day is not a
Business Day, the next succeeding Business Day).

                  (b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantor shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder electing to exchange Notes for New Notes (assuming that such
Holder is not an Affiliate of the Company, acquires the New Notes in the
ordinary course of such Holder's business, has no arrangements with any Person
to participate in the distribution of the New Notes and is not prohibited by any
law or policy of the Commission from participating in the Registered Exchange
Offer) to trade such New Notes from and after their receipt without any
limitations or restrictions under the Securities Act and without material
restrictions under the securities laws of a substantial proportion of the
several states of the United States.

                  (c) In connection with the Registered Exchange Offer, the
Company and the Guarantor shall:

                      (i) mail to each Holder a copy of the Prospectus forming
         part of the Exchange Offer Registration Statement, together with an
         appropriate letter of transmittal and related documents;

                      (ii) keep the Registered Exchange Offer open for not less
         than 20 Business Days and not more than 30 Business Days after the date
         notice thereof is mailed to the Holders (or, in each case, longer if
         required by applicable law) (the "Expiration Date");

                      (iii) use their best efforts to keep the Exchange Offer
         Registration Statement continuously effective under the Securities Act,
         supplemented and amended as

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         required, under the Securities Act to ensure that it is available for
         sales of New Notes by Exchanging Dealers during the Exchange Offer
         Registration Period;

                      (iv) utilize the services of a depositary for the
         Registered Exchange Offer with an address in the Borough of Manhattan
         in New York City, which may be the Trustee, the New Notes Trustee or an
         Affiliate of either of them;

                      (v) permit Holders to withdraw tendered Notes at any time
         prior to the close of business, New York time, on the last Business Day
         on which the Registered Exchange Offer is open;

                      (vi) prior to effectiveness of the Exchange Offer
         Registration Statement, provide a supplemental letter to the Commission
         (A) stating that the Company and the Guarantor, are conducting the
         Registered Exchange Offer in reliance on the position of the Commission
         in EXXON CAPITAL HOLDINGS CORPORATION (pub. avail. May 13, 1988),
         MORGAN STANLEY AND CO., INC. (pub. avail. June 5, 1991); and (B)
         including a representation that the Company and the Guarantor have not
         entered into any arrangement or understanding with any Person to
         distribute the New Notes to be received in the Registered Exchange
         Offer and that, to the best of the Company's and the Guarantor's
         information and belief, each Holder participating in the Registered
         Exchange Offer is acquiring the New Notes in the ordinary course of
         business and has no arrangement or understanding with any Person to
         participate in the distribution of the New Notes; and

                      (vii) comply in all respects with all applicable laws.

                  (d) As soon as practicable after the close of the Registered
Exchange Offer, the Company and the Guarantor shall:

                      (i) accept for exchange all Notes tendered and not validly
         withdrawn pursuant to the Registered Exchange Offer;

                      (ii) deliver to the Trustee for cancellation in accordance
         with Section 4(s) all Notes so accepted for exchange; and

                      (iii) cause the New Notes Trustee promptly to authenticate
         and deliver to each Holder of Notes a principal amount of New Notes
         equal to the principal amount of the Notes of such Holder so accepted
         for exchange.

                  (e) Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Registered Exchange Offer to
participate in a distribution of the New Notes (x) could not under Commission
policy as in effect on the date of this Agreement rely on the position of the
Commission in MORGAN STANLEY AND CO., INC. (pub. avail. June 5, 1991) and EXXON
CAPITAL HOLDINGS CORPORATION (pub. avail. May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993 and similar
no-action letters; and (y) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any secondary
resale transaction and (z) that secondary resale transactions by such Holder
must be covered by an effective registration statement containing the selling
note

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holder information required by Item 507 or 508, as applicable, of Regulation S-K
under the Securities Act if the resales are of New Notes obtained by such Holder
in exchange for Notes acquired by such Holder directly from the Company or one
of its Affiliates. Accordingly, each Holder participating in the Registered
Exchange Offer shall be required to represent to the Company and the Guarantor
that, at the time of the consummation of the Registered Exchange Offer:

                      (i) any New Notes received by such Holder will be acquired
         in the ordinary course of business;

                      (ii) such Holder will have no arrangement or understanding
         with any Person to participate in the distribution of the Notes or the
         New Notes within the meaning of the Securities Act; and

                      (iii) such Holder is not an Affiliate of the Company.

                  (f) If any Initial Purchaser determines that it is not
eligible to participate in the Registered Exchange Offer with respect to the
exchange of Notes constituting any portion of an unsold allotment, at the
request of such Initial Purchaser within 20 days after the consummation of the
Exchange Offer, the Company shall issue and deliver to the Person purchasing
Notes registered under a Shelf Registration Statement as contemplated by Section
3 hereof from such Initial Purchaser, in exchange for such Notes, a like
principal amount of New Notes. The Company and the Guarantor shall use their
best efforts to cause the CUSIP Service Bureau to issue the same CUSIP number
for such New Notes as for New Notes issued pursuant to the Registered Exchange
Offer.

                  3. SHELF REGISTRATION. (a) If (i) due to any change in law or
applicable interpretations thereof by the Commission's staff, the Company
determines upon advice of its outside counsel that it is not permitted to effect
the Registered Exchange Offer as contemplated by Section 2 hereof; or (ii) for
any other reason the Registered Exchange Offer is not consummated within 210
days of the date hereof; or (iii) any Initial Purchaser so requests, within 20
days after the consummation of the Registered Exchange Offer, with respect to
Notes that are not eligible to be exchanged for New Notes in the Registered
Exchange Offer and that are held by it following consummation of the Registered
Exchange Offer; or (iv) any Holder (other than an Initial Purchaser) who
notifies the Company within 20 days after the consummation of the Registered
Exchange Offer that it is not eligible to participate in the Registered Exchange
Offer; or (v) in the case of any Initial Purchaser that participates in the
Registered Exchange Offer, such Initial Purchaser does not receive freely
tradeable New Notes in exchange for Notes constituting any portion of an unsold
allotment (it being understood that (x) the requirement that an Initial
Purchaser deliver a Prospectus containing the information required by Item 507
or 508 of Regulation S-K under the Securities Act in connection with sales of
New Notes acquired in exchange for such Notes shall result in such New Notes
being not "freely tradeable"; and (y) the requirement that an Exchanging Dealer
deliver a Prospectus in connection with sales of New Notes acquired in the
Registered Exchange Offer in exchange for Notes acquired as a result of
market-making activities or other trading activities shall not result in such
New Notes being not "freely tradeable"), the Company and the Guarantor shall
effect a Shelf Registration Statement in accordance with subsection (b) below.

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                  (b) (i) The Company and the Guarantor shall as promptly as
practicable (but in no event more than 30 days after so required or requested
pursuant to this Section 3), file with the Commission and thereafter shall use
its best efforts to cause to be declared effective under the Securities Act a
Shelf Registration Statement relating to the offer and sale of the Notes or the
New Notes, as applicable, by the Holders thereof from time to time in accordance
with the methods of distribution elected by such Holders and set forth in such
Shelf Registration Statement; provided, however, that no Holder (other than an
Initial Purchaser) shall be entitled to have the Notes held by it covered by
such Shelf Registration Statement unless such Holder agrees in writing to be
bound by all of the provisions of this Agreement applicable to such Holder; and
provided further, that with respect to New Notes received by an Initial
Purchaser in exchange for Notes constituting any portion of an unsold allotment,
the Company and the Guarantor may, if permitted by current interpretations by
the Commission's staff, file a post-effective amendment to the Exchange Offer
Registration Statement containing the information required by Item 507 or 508 of
Regulation S-K, as applicable, in satisfaction of its obligations under this
subsection with respect thereto, and any such Exchange Offer Registration
Statement, as so amended, shall be referred to herein as, and governed by the
provisions herein applicable to, a Shelf Registration Statement.

                      (ii) The Company and the Guarantor shall use their best
         efforts to keep the Shelf Registration Statement continuously
         effective, supplemented and amended as required by the Securities Act,
         in order to permit the Prospectus forming part thereof to be usable by
         Holders for a period of two years from the date the Shelf Registration
         Statement is declared effective by the Commission or such shorter
         period that will terminate when all the Notes or New Notes, as
         applicable, covered by the Shelf Registration Statement have been sold
         pursuant to the Shelf Registration Statement (in any such case, such
         period being called the "Shelf Registration Period"). The Company and
         the Guarantor shall be deemed not to have used their best efforts to
         keep the Shelf Registration Statement effective during the requisite
         period if it voluntarily takes any action that would result in Holders
         of Notes covered thereby not being able to offer and sell such Notes
         during that period, unless (A) such action is required by applicable
         law; or (B) such action is taken by the Company and the Guarantor in
         good faith and for valid business reasons (not including avoidance of
         the Company's and the Guarantor's obligations hereunder), including the
         acquisition or divestiture of assets, so long as the Company and the
         Guarantor promptly thereafter comply with the requirements of Section
         4(k) hereof, if applicable.

                      (iii) The Company shall cause the Shelf Registration
         Statement and the related Prospectus and any amendment or supplement
         thereto, as of the effective date of the Shelf Registration Statement
         or such amendment or supplement, (A) to comply in all material respects
         with the applicable requirements of the Securities Act and the rules
         and regulations of the Commission; and (B) not to contain any untrue
         statement of a material fact or omit to state a material fact required
         to be stated therein or necessary in order to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading.

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                  4. ADDITIONAL REGISTRATION PROCEDURES. In connection with any
Shelf Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply.

                  (a) The Company and the Guarantor shall:

                      (i) furnish to you, not less than five Business Days prior
         to the filing thereof with the Commission, a copy of any Exchange Offer
         Registration Statement and any Shelf Registration Statement, and each
         amendment thereof and each amendment or supplement, if any, to the
         Prospectus included therein (including all documents incorporated by
         reference therein after the initial filing) and shall use their best
         efforts to reflect in each such document, when so filed with the
         Commission, such comments as you reasonably propose;

                      (ii) include the information set forth in Annex A hereto
         on the facing page of the Exchange Offer Registration Statement, in
         Annex B hereto in the forepart of the Exchange Offer Registration
         Statement in a section setting forth details of the Exchange Offer, in
         Annex C hereto in the underwriting or plan of distribution section of
         the Prospectus contained in the Exchange Offer Registration Statement,
         and in Annex D hereto in the letter of transmittal delivered pursuant
         to the Registered Exchange Offer;

                      (iii) if requested by an Initial Purchaser, include the
         information required by Item 507 or 508 of Regulation S-K, as
         applicable, in the Prospectus contained in the Exchange Offer
         Registration Statement; and

                      (iv) in the case of a Shelf Registration Statement,
         include the names of the Holders that propose to sell Notes pursuant to
         the Shelf Registration Statement as selling Note holders.

                  (b) The Company and the Guarantor shall ensure that:

                      (i) any Registration Statement and any amendment thereto
         and any Prospectus forming part thereof and any amendment or supplement
         thereto complies in all material respects with the Securities Act and
         the rules and regulations thereunder; and

                      (ii) any Registration Statement and any amendment thereto
         does not, when it becomes effective, contain an untrue statement of a
         material fact or omit to state a material fact required to be stated
         therein or necessary to make the statements therein not misleading.

                  (c) The Company and the Guarantor shall advise you, the
Holders of Notes covered by any Shelf Registration Statement and any Exchanging
Dealer under any Exchange Offer Registration Statement that has provided in
writing to the Company or the Guarantor a telephone or facsimile number and
address for notices, and, if requested by you or any such Holder or Exchanging
Dealer, shall confirm such advice in writing (which notice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the
Prospectus until the Company and the Guarantor shall have remedied the basis for
such suspension):

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                      (i) when a Registration Statement and any amendment
         thereto has been filed with the Commission and when the Registration
         Statement or any post-effective amendment thereto has become effective;

                      (ii) of any request by the Commission for any amendment or
         supplement to the Registration Statement or the Prospectus or for
         additional information;

                      (iii) of the issuance by the Commission of any stop order
         suspending the effectiveness of the Registration Statement or the
         initiation of any proceedings for that purpose;

                      (iv) of the receipt by the Company and the Guarantor of
         any notification with respect to the suspension of the qualification of
         the Notes included therein for sale in any jurisdiction or the
         initiation of any proceeding for such purpose; and

                      (v) of the happening of any event that requires any change
         in the Registration Statement or the Prospectus so that, as of such
         date, the statements therein are not misleading and do not omit to
         state a material fact required to be stated therein or necessary to
         make the statements therein (in the case of the Prospectus, in the
         light of the circumstances under which they were made) not misleading.

                  (d) The Company and the Guarantor shall use their best efforts
to obtain the withdrawal of any order suspending the effectiveness of any
Registration Statement or the qualification of the Notes therein for sale in any
jurisdiction at the earliest possible time.

                  (e) The Company and the Guarantor shall furnish to each Holder
of Notes covered by any Shelf Registration Statement, without charge, at least
one copy of such Shelf Registration Statement and any post-effective amendment
thereto, including all material incorporated therein by reference, and, if the
Holder so requests in writing, all exhibits thereto (including exhibits
incorporated by reference therein).

                  (f) The Company and the Guarantor shall, during the Shelf
Registration Period, deliver to each Holder of Notes covered by any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request. The Company and the Guarantor consent to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Holders of Notes in
connection with the offering and sale of the Notes covered by the Prospectus, or
any amendment or supplement thereto, included in the Shelf Registration
Statement.

                  (g) The Company and the Guarantor shall furnish to each
Exchanging Dealer which so requests, without charge, at least one copy of the
Exchange Offer Registration Statement and any post-effective amendment thereto,
including all material incorporated by reference therein, and, if the Exchanging
Dealer so requests in writing, all exhibits thereto (including exhibits
incorporated by reference therein).

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                  (h) The Company and the Guarantor shall promptly deliver to
each Initial Purchaser, each Exchanging Dealer and each other Person required to
deliver a Prospectus during the Exchange Offer Registration Period, without
charge, as many copies of the Prospectus included in such Exchange Offer
Registration Statement and any amendment or supplement thereto as any such
Person may reasonably request. The Company and the Guarantor consent to the use
of the Prospectus or any amendment or supplement thereto by any Initial
Purchaser, any Exchanging Dealer and any such other Person that may be required
to deliver a Prospectus following the Registered Exchange Offer in connection
with the offering and sale of the New Notes covered by the Prospectus, or any
amendment or supplement thereto, included in the Exchange Offer Registration
Statement.

                  (i) Prior to the Registered Exchange Offer or any other
offering of Notes pursuant to any Registration Statement, the Company and the
Guarantor shall arrange, if necessary, for the qualification of the Notes or the
New Notes for sale under the laws of such jurisdictions as any Holder shall
reasonably request and will maintain such qualification in effect so long as
required; provided that in no event shall the Company and the Guarantor be
obligated to qualify to do business in any jurisdiction where it is not then so
qualified or to take any action that would subject it to service of process in
suits, other than those arising out of the Initial Placement, the Registered
Exchange Offer or any offering pursuant to a Shelf Registration Statement, in
any such jurisdiction where it is not then so subject.

                  (j) The Company and the Guarantor shall cooperate with the
Holders of Notes to facilitate the timely preparation and delivery of
certificates representing New Notes or Notes to be issued or sold pursuant to
any Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may request.

                  (k) Upon the occurrence of any event contemplated by
subsections (c)(ii) through (v) above, the Company and the Guarantor shall
promptly prepare a post-effective amendment to the applicable Registration
Statement or an amendment or supplement to the related Prospectus or file any
other required document so that, as thereafter delivered to Initial Purchasers
of the Notes included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. In such circumstances, the period of effectiveness of
the Exchange Offer Registration Statement provided for in Section 2 and the
Shelf Registration Statement provided for in Section 3(b) shall each be extended
by the number of days from and including the date of the giving of a notice of
suspension pursuant to Section 4(c) to and including the date when the Initial
Purchasers, the Holders of the Notes and any known Exchanging Dealer shall have
received such amended or supplemented Prospectus pursuant to this Section.

                  (l) Not later than the effective date of any Registration
Statement, the Company and the Guarantor shall provide a CUSIP number for the
Notes or the New Notes, as the case may be, registered under such Registration
Statement and provide the Trustee with printed certificates for such Notes or
New Notes, in a form eligible for deposit with The Depository Trust Company.

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                  (m) The Company and the Guarantor shall comply with all
applicable rules and regulations of the Commission and shall make generally
available to its Note holders as soon as practicable after the effective date of
the applicable Registration Statement an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act.

                  (n) The Company and the Guarantor shall cause the Indenture or
the New Notes Indenture, as the case may be, to be qualified under the Trust
Indenture Act in a timely manner.

                  (o) The Company and the Guarantor may require each Holder of
Notes to be sold pursuant to any Shelf Registration Statement to furnish to the
Company and the Guarantor such information regarding the Holder and the
distribution of such Notes or New Notes as the Company and the Guarantor may
from time to time reasonably require for inclusion in such Registration
Statement. The Company and the Guarantor may exclude from such Shelf
Registration Statement the Notes of any Holder that unreasonably fails to
furnish such information within a reasonable time after receiving such request.

                  (p) In the case of any Shelf Registration Statement, the
Company and the Guarantor shall enter into such and take all other appropriate
actions (including if requested an underwriting agreement in customary form) in
order to expedite or facilitate the registration or the disposition of the
Notes, and in connection therewith, if an underwriting agreement is entered
into, cause the same to contain indemnification provisions and procedures no
less favorable than those set forth in Section 7 (or such other provisions and
procedures acceptable to the Majority Holders and the Managing Underwriters, if
any, with respect to all parties to be indemnified pursuant to Section 7).

                  (q) In the case of any Shelf Registration Statement, the
Company and the Guarantor shall:

                      (i) make reasonably available for inspection by the
                  Holders of Notes to be registered thereunder, any underwriter
                  participating in any disposition pursuant to such Registration
                  Statement, and any attorney, accountant or other agent
                  retained by the Holders or any such underwriter, all relevant
                  financial and other records, pertinent corporate documents and
                  properties of the Company and its subsidiaries;

                      (ii) cause the Company's officers, directors and employees
                  to supply all relevant information reasonably requested by the
                  Holders or any such underwriter, attorney, accountant or agent
                  in connection with any such Registration Statement as is
                  customary for similar due diligence examinations; PROVIDED,
                  HOWEVER, that any information that is designated in writing
                  by the Company, in good faith, as confidential at the time
                  of delivery of such information shall be kept confidential
                  by the Holders or any such underwriter, attorney,
                  accountant or agent, unless such disclosure is made in
                  connection with a court proceeding or required by law, or
                  such information becomes available to the public generally
                  or through a third party without an accompanying obligation
                  of confidentiality;

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                      (iii) if requested by any Holder, make such
                  representations and warranties to the Holders of Notes
                  registered thereunder and the underwriters, if any, in form,
                  substance and scope as are customarily made by issuers to
                  underwriters in primary underwritten offerings and covering
                  matters including, but not limited to, those set forth in the
                  Purchase Agreement;

                      (iv) if requested by any Holder, obtain opinions of
                  counsel to the Company and the Guarantor and updates thereof
                  (which counsel and opinions (in form, scope and substance)
                  shall be reasonably satisfactory to the Managing Underwriters,
                  if any) addressed to each selling Holder and the underwriters,
                  if any, covering such matters as were covered in opinions
                  requested in the underwriting agreement filed as an exhibit to
                  the registration statement on the Form S-3 dated December 18,
                  1998 relating to the $500,000,000 7 1/2% Senior Notes due 2009
                  of the Company and such other matters as may be reasonably
                  requested by such Holders and underwriters;

                      (v) if requested by any Holder, obtain "cold comfort"
                  letters and updates thereof from the independent certified
                  public accountants of the Company (and, if necessary, any
                  other independent certified public accountants of any
                  subsidiary of the Company or of any business acquired by the
                  Company for which financial statements and financial data are,
                  or are required to be, included in the Registration
                  Statement), addressed to each selling Holder of Notes
                  registered thereunder and the underwriters, if any, in
                  customary form and covering matters of the type customarily
                  covered in "cold comfort" letters in connection with primary
                  underwritten offerings; and

                      (vi) deliver such documents and certificates as may be
                  reasonably requested by the Majority Holders and the Managing
                  Underwriters, if any, including those to evidence compliance
                  with Section 4(k) and with any customary conditions contained
                  in the underwriting agreement or other agreement entered into
                  by the Company.

The actions set forth in clauses (iii), (iv), (v) and (vi) of this Section shall
be performed at (A) the effectiveness of such Registration Statement and each
post-effective amendment thereto; and (B) each closing under any underwriting or
similar agreement as and to the extent required thereunder.

                  (r) In the case of any Exchange Offer Registration Statement,
the Company and the Guarantor shall:

                      (i) make reasonably available for inspection by any
                  Initial Purchaser, and any attorney, accountant or other agent
                  retained by such Initial Purchaser, all relevant financial and
                  other records, pertinent corporate documents and properties of
                  the Company and its subsidiaries;

                      (ii) cause the Company's officers, directors and employees
                  to supply all relevant information reasonably requested by
                  such Initial Purchaser or any such attorney, accountant or
                  agent in connection with any such Registration Statement as is
                  customary for similar due diligence examinations; PROVIDED,
                  HOWEVER, that any

                                       12
<Page>

                  information that is designated in writing by the Company, in
                  good faith, as confidential at the time of delivery of such
                  information shall be kept confidential by such Initial
                  Purchaser or any such attorney, accountant or agent, unless
                  such disclosure is made in connection with a court proceeding
                  or required by law, or such information becomes available to
                  the public generally or through a third party without an
                  accompanying obligation of confidentiality;

                      (iii) if requested by an Initial Purchaser, make such
                  representations and warranties to such Initial Purchaser, in
                  form, substance and scope as are customarily made by issuers
                  to underwriters in primary underwritten offerings and covering
                  matters including, but not limited to, those set forth in the
                  Purchase Agreement;

                      (iv) if requested by an Initial Purchaser, obtain opinions
                  of counsel to the Company and the Guarantor and updates
                  thereof (which counsel and opinions (in form, scope and
                  substance) shall be reasonably satisfactory to such Initial
                  Purchaser and its counsel, addressed to such Initial
                  Purchaser, covering such matters as were covered in opinions
                  requested in the underwriting agreement filed as an exhibit to
                  the registration statement on the Form S-3 dated December 18,
                  1998 relating to the $500,000,000 7 1/2% Senior Notes due 2009
                  of the Company and such other matters as may be reasonably
                  requested by such Initial Purchaser or its counsel;

                      (v) if requested by an Initial Purchaser, obtain "cold
                  comfort" letters and updates thereof from the independent
                  certified public accountants of the Company (and, if
                  necessary, any other independent certified public accountants
                  of any subsidiary of the Company or of any business acquired
                  by the Company for which financial statements and financial
                  data are, or are required to be, included in the Registration
                  Statement), addressed to such Initial Purchaser, in customary
                  form and covering matters of the type customarily covered in
                  "cold comfort" letters in connection with primary underwritten
                  offerings, or if requested by such Initial Purchaser or its
                  counsel in lieu of a "cold comfort" letter, an agreed-upon
                  procedures letter under Statement on Auditing Standards No.
                  35, covering matters requested by such Initial Purchaser or
                  its counsel; and

                      (vi) deliver such documents and certificates as may be
                  reasonably requested by such Initial Purchaser or its counsel,
                  including those to evidence compliance with Section 4(k) and
                  with conditions customarily contained in underwriting
                  agreements.

The foregoing actions set forth in clauses (iii), (iv), (v), and (vi) of this
Section shall be performed at the close of the Registered Exchange Offer and the
effective date of any post-effective amendment to the Exchange Offer
Registration Statement.

                  (s) If a Registered Exchange Offer is to be consummated, upon
delivery of the Notes by Holders to the Company (or to such other Person as
directed by the Company) in exchange for the New Notes, the Company shall mark,
or caused to be marked, on the Notes so exchanged that such Notes are being
canceled in exchange for the New Notes. In no event shall the Notes be marked as
paid or otherwise satisfied.

                                       13
<Page>

                  (t) The Company will use its best efforts (i) if the Notes
have been rated prior to the initial sale of such Notes by one or more
nationally recognized statistical rating agencies, to confirm that a rating
(which need not be the same rating from each such agency) will apply to the
Notes or the New Notes, as the case may be, covered by a Registration Statement;
or (ii) if the Notes were not previously rated, to cause the Notes covered by a
Registration Statement to be rated with at least one nationally recognized
statistical rating agency, if so requested by Majority Holders with respect to
the related Registration Statement or by any Managing Underwriters.

                  (u) In the case of any Shelf Registration Statement, if any
Broker-Dealer shall underwrite any Notes or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution" (within
the meaning of the Rules of Fair Practice and the By-Laws of the National
Association of Securities Dealers, Inc.) thereof, whether as a Holder of such
Notes or as an underwriter, a placement or sales agent or a broker or dealer in
respect thereof, or otherwise, assist such Broker-Dealer in complying with the
requirements of such Rules and By-Laws, including, without limitation, by:

                      (i) if such Rules or By-Laws shall so require, engaging a
                  "qualified independent underwriter" (as defined in such Rules)
                  to participate in the preparation of the Registration
                  Statement, to exercise usual standards of due diligence with
                  respect thereto and, if any portion of the offering
                  contemplated by such Registration Statement is an underwritten
                  offering or is made through a placement or sales agent, to
                  recommend the yield of such Notes;

                      (ii) indemnifying any such qualified independent
                  underwriter to the extent of the indemnification of
                  underwriters provided in Section 7 hereof; and

                      (iii) providing such information to such Broker-Dealer as
                  may be required in order for such Broker-Dealer to comply with
                  the requirements of such Rules.

                  (v) The Company and the Guarantor shall use their best efforts
to take all other steps necessary to effect the registration of the Notes or the
New Notes, as the case may be, covered by a Registration Statement.

                  5. ADDITIONAL INTEREST

                  (a) The parties hereto agree that the Holders of Notes or New
Notes, as the case may be, will suffer damages if the Company and the Guarantor
fail to perform their obligations under Section 2 or 3 hereof and that it would
not be feasible to ascertain the extent of such damages. Accordingly, in the
event that:

                      (i) neither the Exchange Offer Registration Statement nor
                  the Shelf Registration Statement have been filed on or prior
                  to the 90th day following the original issuance of the Notes;

                      (ii) neither the Exchange Offer Registration Statement nor
                  the Shelf Registration Statement have been declared effective
                  on or prior to the 180th day following the original issuance
                  of the Notes;

                                       14
<Page>

                      (iii) neither the Exchange Offer has been completed nor
                  the Shelf Registration Statement has been declared effective
                  on or prior to the 210th day following the original issuance
                  of the Notes; or

                      (iv) either the Exchange Offer Registration Statement or
                  Shelf Registration Statement cease to be effective or usable
                  in connection with the resales of the Notes or New Notes
                  during a period in which it is required to be effective
                  hereunder without being succeeded immediately by any
                  additional Registration Statement or post-effective amendment
                  covering the Notes or the New Notes, as the case may be, which
                  has been filed and declared effective;

(each such event referred to in the foregoing clauses (i) through (iv), a
"Registration Default"), then additional interest ("Additional Interest") will
accrue on the principal amount of the Notes and the New Notes, respectively (in
addition to the stated interest on the Notes and the New Notes), from and
including the date on which any Registration Default first occurs and while any
such Registration Default has occurred and is continuing, to but excluding the
date on which all filings, declarations of effectiveness and consummations, as
the case may be, have been achieved which, if achieved on a timely basis, would
have prevented the occurrence of all of the then existing Registration Defaults.
Additional Interest will accrue at a rate of 0.25% per annum during the 90-day
period immediately following such first occurrence of a Registration Default and
while any such Registration Default has occurred and is continuing, and shall
increase by 0.25% per annum at the end of each subsequent 90-day period up to a
maximum of 0.50% per annum with respect to all Registration Defaults, until the
date on which all of the filings, declarations of effectiveness and
consummations referred to in the preceding sentence have been achieved, on which
date the interest rate on the Notes or the New Notes, respectively, will revert
to the interest rate originally borne by such notes.

                  (b) The Company and the Guarantor shall notify the Trustee
under the Indenture (or the trustee under any New Notes Indenture) immediately
upon the happening of each and every Registration Default. The Company and the
Guarantor shall pay the Additional Interest due on the Notes or New Notes, as
the case may be, by depositing with the Trustee (which shall not be the Company
for these purposes) for the Notes or the New Notes, in trust, for the benefit of
the Holders thereof, prior to 11:00 A.M. on the next interest payment date
specified in the Indenture (or such New Notes Indenture), sums sufficient to pay
the Additional Interest then due. The Additional Interest due shall be payable
on each interest payment date specified by the Indenture (or such New Notes
Indenture) to the record holders entitled to receive the interest payment to be
made on such date.

                  (c) The parties hereto agree that the Additional Interest
provided for in this Section 5 constitutes a reasonable estimate of the damages
that will be suffered by Holders of Notes or New Notes by reason of the
happening of any Registration Default.

                  (d) All of the Company's and the Guarantor's obligations set
forth in this Section 5 shall survive the termination of this Agreement.

                                       15
<Page>

                  6. REGISTRATION EXPENSES. The Company and the Guarantor shall
be jointly and severally responsible to bear all expenses incurred in connection
with the performance of its obligations under Sections 2, 3 and 4 hereof and, in
the event of any Shelf Registration Statement, will reimburse the Holders for
the reasonable fees and disbursements of one firm or counsel designated by the
Majority Holders to act as counsel for the Holders in connection therewith, and,
in the case of any Exchange Offer Registration Statement, will reimburse the
Initial Purchasers for the reasonable fees and disbursements of one firm or
counsel designated as counsel acting in connection therewith.

                  7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and the
Guarantor, jointly and severally, agree to indemnify and hold harmless each
Holder of Notes or New Notes, as the case may be, covered by any Registration
Statement (including each Initial Purchaser and, with respect to any Prospectus
delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer), the
directors, officers, employees and agents of each such Holder and each Person
who controls any such Holder within the meaning of either the Securities Act or
the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Securities Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement as originally filed or in any amendment thereof, or
in any preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
Company and the Guarantor will not be liable in any case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company and the Guarantor by or on behalf of any such Holder
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company and the Guarantor may otherwise have.

                  The Company and the Guarantor, jointly and severally, also
agree to indemnify or contribute as provided in Section 7(d) to Losses of each
underwriter of Notes or New Notes, as the case may be, registered under a Shelf
Registration Statement, their directors, officers, employees or agents and each
Person who controls such underwriter on substantially the same basis as that of
the indemnification of the Initial Purchasers and the selling Holders provided
in this Section 7(a) and shall, if requested by any Holder, enter into an
underwriting agreement reflecting such agreement, as provided in Section 4(p)
hereof.

                  (b) Each Holder of notes covered by a Registration Statement
(including each Initial Purchaser and, with respect to any Prospectus delivery
as contemplated in Section 4(h) hereof, each Exchanging Dealer) severally agrees
to indemnify and hold harmless the Company and the Guarantor, and their
respective directors and officers who signs such Registration Statement and each
Person who controls the Company and the Guarantor within the meaning of either
the Securities Act or the Exchange Act, to the same extent as the foregoing
indemnity

                                       16
<Page>

from the Company and the Guarantor to each such Holder, but only with reference
to written information relating to such Holder furnished to the Company and the
Guarantor by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.

                  (c) Promptly after receipt by an indemnified party under this
Section 7 or notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses; and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying party's expense
to represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); PROVIDED, HOWEVER, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party; (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action; or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.

                  (d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party shall
have a joint and several obligation to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which such indemnified party may be subject in such proportion as
is appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from the
Initial Placement and the Registration Statement which

                                       17
<Page>

resulted in such Losses; PROVIDED, HOWEVER, that in no case shall any Initial
Purchaser or any subsequent Holder of any Note or New Note be responsible, in
the aggregate, for any amount in excess of the purchase discount or commission
applicable to such Note, or in the case of a New Note, applicable to the Note
that was exchangeable into such New Note, as set forth on the cover page of the
Offering Memorandum, nor shall any underwriter be responsible for any amount in
excess of the underwriting discount or commission applicable to the notes
purchased by such underwriter under the Registration Statement which resulted in
such Losses. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the indemnifying party and the indemnified party
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company and the
Guarantor shall be deemed to be equal to the total net proceeds from the Initial
Placement (before deducting expenses) as set forth on the cover page of the
Offering Memorandum. Benefits received by the Initial Purchasers shall be deemed
to be equal to the total purchase discounts and commissions as set forth on the
cover page of the Offering Memorandum, and benefits received by any other
Holders shall be deemed to be equal to the value of receiving Notes or New
Notes, as applicable, registered under the Securities Act. Benefits received by
any underwriter shall be deemed to be equal to the total underwriting discounts
and commissions, as set forth on the cover page of the Prospectus forming a part
of the Registration Statement which resulted in such Losses. Relative fault
shall be determined by reference to, among other things, whether any alleged
untrue statement or omission relates to information provided by the indemnifying
party, on the one hand, or by the indemnified party, on the other hand, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties
agree that it would not be just and equitable if contribution were determined by
pro rata allocation (even if the Holders were treated as one entity for such
purpose) or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each Person who controls a
Holder within the meaning of either the Securities Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each Person who controls the Company
and the Guarantor within the meaning of either the Securities Act or the
Exchange Act, each officer of the Company and the Guarantor who shall have
signed the Registration Statement and each director of the Company and the
Guarantor shall have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this paragraph (d).

                  (e) The provisions of this Section will remain in full force
and effect, regardless of any investigation made by or on behalf of any Holder
or the Company or the Guarantor or any of the officers, directors or controlling
Persons referred to in this Section hereof, and will survive the sale by a
Holder of Notes covered by a Registration Statement.

                  8. UNDERWRITTEN REGISTRATIONS. (a) If any of the Notes or New
Notes, as the case may be, covered by any Shelf Registration Statement are to be
sold in an underwritten offering, the Managing Underwriters shall be selected by
the Majority Holders.

                                       18
<Page>

                  (b) No Person may participate in any underwritten offering
pursuant to any Shelf Registration Statement, unless such Person (i) agrees to
sell such Person's Notes or New Notes, as the case may be, on the basis
reasonably provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements; and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.

                  9. NO INCONSISTENT AGREEMENTS. Neither the Company nor the
Guarantor has, as of the date hereof, entered into, nor shall they, on or after
the date hereof, enter into, any agreement with respect to Notes of the Company
that is inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.

                  10. AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Majority Holders (or, after the consummation of any Registered
Exchange Offer in accordance with Section 2 hereof, of New Notes); PROVIDED
that, with respect to any matter that directly or indirectly affects the rights
of any Initial Purchaser hereunder, the Company shall obtain the written consent
of each such Initial Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective. Notwithstanding the foregoing
(except the foregoing proviso), a waiver or consent to departure from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose Notes or New Notes, as the case may be, are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders may be given by the Majority Holders,
determined on the basis of Notes or New Notes, as the case may be, being sold
rather than registered under such Registration Statement.

                  11. NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier or air courier guaranteeing overnight delivery:

                  (a) if to a Holder, at the most current address given by such
holder to the Company in accordance with the provisions of this Section, which
address initially is, with respect to each Holder, the address of such Holder
maintained by the Registrar under the Indenture, with a copy in like manner to
Salomon Smith Barney;

                  (b) if to you, initially at the respective addresses set forth
in the Purchase Agreement; and

                  (c) if to the Company or the Guarantor, initially at its
address:

                                    Harrah's Entertainment, Inc.
                                    Harrah's Operating Company, Inc.
                                    One Harrah's Court
                                    Las Vegas, Nevada 89119

                                    Attn:            Treasurer
                                    With a copy to:  General Counsel

                                       19
<Page>

                  All such notices and communications shall be deemed to have
been duly given when received.

                  The Initial Purchasers or the Company or the Guarantor by
notice to the other parties may designate additional or different addresses for
subsequent notices or communications.

                  12. SUCCESSORS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including, without the need for an express assignment or any consent by the
Company and the Guarantor thereto, subsequent Holders of Notes and the New
Notes. The Company and the Guarantor hereby agree to extend the benefits of this
Agreement to any Holder of Notes and the New Notes, and any such Holder may
specifically enforce the provisions of this Agreement as if an original party
hereto.

                  13. COUNTERPARTS. This agreement may be in signed
counterparts, each of which shall an original and all of which together shall
constitute one and the same agreement.

                  14. HEADINGS. The headings used herein are for convenience
only and shall not affect the construction hereof.

                  15. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York.

                  16. SEVERABILITY. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.

                  17. NOTES HELD BY THE COMPANY, ETC. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Notes or
New Notes is required hereunder, Notes or New Notes, as applicable, held by the
Company or its Affiliates (other than subsequent Holders of Notes or New Notes
if such subsequent Holders are deemed to be Affiliates solely by reason of their
holdings of such Notes or New Notes) shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage.

                                       20
<Page>

                  If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a building agreement
among the Company, the Guarantor and the several Initial Purchasers.

                                      Very truly yours,

                                      Harrah's Operating Company, Inc.

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

                                      Harrah's Entertainment, Inc.

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

<Page>

The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.

SALOMON SMITH BARNEY INC.
COMMERZBANK CAPITAL MARKETS CORP.
BANC OF AMERICA SECURITIES LLC
FLEET SECURITIES, INC.
WELLS FARGO BROKERAGE SERVICES, LLC
CREDIT SUISSE FIRST BOSTON CORPORATION
DEUTSCHE BANC ALEX. BROWN INC.
SG COWEN SECURITIES CORPORATION
CIBC WORLD MARKETS CORP.
CREDIT LYONNAIS SECURITIES (USA) INC.
SCOTIA CAPITAL (USA) INC.
BEAR STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
JEFFERIES & CO., INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
                     INCORPORATED

By: SALOMON SMITH BARNEY INC.

By: /s/ EVAN LADOUCEUR
    ---------------------------------
     Name:  Evan Ladouceur
     Title: Director

<Page>

                                                                         ANNEX A

                  Each Broker-Dealer that receives New Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
Broker-Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a Broker-Dealer in connection
with resales of New Notes received in exchange for Notes where such Notes were
acquired by such Broker-Dealer as a result of market-making activities or other
trading activities. The Company and the Guarantor have agreed that, starting on
the Expiration Date (as defined herein) and ending on the close of business one
year after the Expiration Date, they will make this Prospectus available to any
Broker-Dealer for use in connection with any such resale. See "Plan of
Distribution."

                                       24
<Page>
                                                                         ANNEX B

                  Each Broker-Dealer that receives New Notes for its own account
in exchange for Notes, where such Notes were acquired by such Broker-Dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Notes. See "Plan of Distribution."

                                       25
<Page>

                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

                  Each Broker-Dealer that receives New Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
Broker-Dealer in connection with resales of New Notes received in exchange for
Notes where such Notes were acquired as a result of market-making activities or
other trading activities. The Company and the Guarantor have agreed that,
starting on the Expiration Date and ending on the close of business one year
after the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any Broker-Dealer for use in connection with any such
resale. In addition, until [ ], 2001, all dealers effecting transactions in the
New Notes may be required to deliver a prospectus.

                  The Company and the Guarantor will not receive any proceeds
from any sale of New Notes by brokers-dealers. New Notes received by
Broker-Dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the New Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Broker-Dealer and/or the purchasers of any such New
Notes. Any Broker-Dealer that resells New Notes that were received by it for its
own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of New Notes and any commissions or concessions received by any such
Persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a Broker-Dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.

                  For a period of one year after the Expiration Date, the
Company and the Guarantor will promptly send additional copies of this
Prospectus and any amendment or supplement to this Prospectus to any
Broker-Dealer that requests such documents in the Letter of Transmittal. The
Company and the Guarantor have agreed to pay all expenses incident to the
Exchange Offer (including the expenses of one counsel for the holder of the
Notes) other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the Notes (including any Broker-Dealers) against
certain liabilities, including liabilities under the Securities Act.

                  [If applicable, add information required by Regulation S-K
Items 507 and/or 508.]

                                       26
<Page>

                                                                         ANNEX D

RIDER A

                  CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
                  ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
                  AMENDMENTS OR SUPPLEMENTS THERETO.

                  Name:    --------------------------------------------

                  Address: --------------------------------------------

                           --------------------------------------------

RIDER B

If the undersigned is not a Broker-Dealer, the undersigned represents that it
acquired the New Notes in the ordinary course of its business, it is not engaged
in, and does not intend to engage in, a distribution of New Notes and it has no
arrangements or understandings with any Person to participate in a distribution
of the New Notes. If the undersigned is a Broker-Dealer that will receive New
Notes for its own account in exchange for Notes, it represents that the Notes to
be exchanged for New Notes were acquired by it as a result of market-making
activities or other trading activities and acknowledges that it will deliver a
prospectus in connection with any resale of such New Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.

                                       27<Page>

                                                                    EXHIBIT 10.1

                                                                  EXECUTION COPY

                                                                         ANNEX I

                        Harrah's Operating Company, Inc.

                           Guaranteed Debt Securities
                       Payment of Principal, Interest and
                         Premium, if any, Guaranteed by
                          Harrah's Entertainment, Inc.

                      PURCHASE AGREEMENT GENERAL PROVISIONS

                                  June 7, 2001

                  The provisions set forth herein are incorporated by reference
in a Purchase Agreement of even date herewith (such agreement, including the
provisions hereof as incorporated therein, the "Purchase Agreement"). The
Purchase Agreement is sometimes referred to herein as "this Agreement." Terms
defined in the Purchase Agreement are used herein as therein defined.

                  1. REPRESENTATIONS AND WARRANTIES. The Company and the
Guarantor, jointly and severally, represent and warrant to and agree with each
of the Initial Purchasers that:

                  (a) The Offering Memorandum does not contain and, as amended
         or supplemented, if applicable, will not contain any untrue statement
         of a material fact or omit to state a material fact necessary to make
         the statements therein, in the light of the circumstances under which
         they were made, not misleading, except that the representations and
         warranties set forth in this paragraph do not apply to statements or
         omissions in the Offering Memorandum based upon information relating to
         any Initial Purchaser furnished to the Company in writing by such
         Initial Purchaser through the Representatives expressly for use
         therein;

                  (b) Each of the Company and the Guarantor has been duly
         incorporated, is validly existing as a corporation in good standing
         under the laws of the jurisdiction of its incorporation, has the
         corporate power and authority to own its property and to conduct its
         business as described in the Offering Memorandum and is duly qualified
         to transact business and is in good standing in each jurisdiction in
         which the conduct of its business or its ownership or leasing of
         property requires such qualification, except to the extent that the
         failure to be so qualified or be in good standing would not have a
         material adverse effect on the Company or the Guarantor and their
         respective subsidiaries, taken as a whole;

                  (c) Each subsidiary of the Company and the Guarantor,
         respectively, has been duly organized, is validly existing as a
         corporation, limited liability company or partnership in good standing
         under the laws of the jurisdiction of its organization, has the

                                       1
<Page>

         power and authority to own its property and to conduct its business as
         described in the Offering Memorandum and is duly qualified to transact
         business and is in good standing in each jurisdiction in which the
         conduct of its business or its ownership or leasing of property
         requires such qualification, except to the extent that the failure to
         be so qualified or be in good standing would not have a material
         adverse effect on the Company or the Guarantor and their respective
         subsidiaries, taken as a whole; all of the issued shares of capital
         stock or other equity interests of each subsidiary of the Company and
         the Guarantor, respectively, have been duly and validly authorized and
         issued, are fully paid and non-assessable. Except as set forth in or as
         incorporated by reference in the Offering Memorandum, all of the shares
         of capital stock or other equity or partnership interests of each
         subsidiary of the Company or the Guarantor which would be considered a
         "significant subsidiary" for purposes of Rule 1-02 under Regulation S-X
         pursuant to the Act (the "Significant Subsidiaries") are owned directly
         or indirectly by the Company or the Guarantor, respectively. Except as
         set forth in or as incorporated by reference in the Offering
         Memorandum, all of the shares of capital stock or other equity or
         partnership interests of subsidiaries of the Company or the Guarantor
         held by the Company or the Guarantor are held free and clear of all
         liens, encumbrances, equities or claims except such liens,
         encumbrances, equities or claims imposed by Gaming Laws, the terms of
         any partnership agreement pertaining to any partnership that is a
         subsidiary of the Company or which would not would not have a material
         adverse effect on the Company or the Guarantor and their respective
         subsidiaries, taken as a whole;

                  (d) This Agreement has been duly authorized, executed and
         delivered by each of the Company and the Guarantor;

                  (e) The Indenture has been, or will be by the Closing Date,
         duly authorized, executed and delivered by each of the Company and the
         Guarantor and, assuming due authorization, execution and delivery
         thereof by the Trustee, is, or will be by the Closing Date, a valid and
         binding agreement of each of the Company and the Guarantor,
         respectively, enforceable in accordance with its terms, subject to
         applicable bankruptcy, insolvency or similar laws affecting creditors'
         rights generally and general principles of equity;

                  (f) The Registration Rights Agreement has been, or will be by
         the Closing Date, duly authorized, executed and delivered by each of
         the Company and the Guarantor and, assuming due authorization,
         execution and delivery thereof by the Representatives, is, or will be
         by the Closing Date, a valid and binding agreement of each of the
         Company and the Guarantor, respectively, enforceable in accordance with
         its terms, subject to applicable bankruptcy, insolvency or similar laws
         affecting creditors' rights generally and general principles of equity;

                  (g) The Securities have been duly authorized and, when
         executed and authenticated in accordance with the provisions of the
         Indenture and delivered to and paid for by the Initial Purchasers in
         accordance with the terms of the Purchase Agreement, (assuming due
         authorization, execution and delivery thereof by the Trustee) will be
         entitled to the benefits of the Indenture, and will be valid and
         binding obligations of the Company and the Guarantor, respectively, in
         each case enforceable in accordance

                                       2
<Page>

         with their respective terms, subject to applicable bankruptcy,
         insolvency or similar laws affecting creditors' rights generally and
         general principles of equity;

                  (h) The execution and delivery by each of the Company and the
         Guarantor of, and the performance by each of the Company and the
         Guarantor of its respective obligations under, this Agreement, the
         Indenture, the Registration Rights Agreement and the Securities will
         not contravene any provision of applicable law or the certificate of
         incorporation or by-laws of the Company or the Guarantor, respectively,
         or any agreement or other instrument binding upon the Company or any of
         its subsidiaries, or the Guarantor or any of its subsidiaries,
         respectively, that is material to the Company or the Guarantor and
         their respective subsidiaries, taken as a whole, or any judgment, order
         or decree of any governmental body, agency or court having jurisdiction
         over the Company or the Guarantor and any of their respective
         subsidiaries, and no consent, approval, authorization, filing with or
         order of, or qualification with, any governmental body or agency is
         required in connection with, and prior to the consummation of, the
         transactions contemplated in, or for the performance by the Company or
         the Guarantor of its respective obligations under, this Agreement, the
         Indenture, the Registration Rights Agreement and the Securities, except
         such as will be obtained under the Act, the Exchange Act, and the Trust
         Indenture Act, or as may be required by the securities or Blue Sky laws
         of the various states and securities laws of any jurisdiction outside
         the United States in connection with the offer and sale of the
         Securities or as may be required pursuant to Gaming Laws;

                  (i) There has not occurred any material adverse change, or any
         development involving a prospective material adverse change, in the
         condition, financial or otherwise, or in the earnings, business or
         operations of the Company or the Guarantor and their respective
         subsidiaries, taken as a whole, from that set forth in the Offering
         Memorandum (exclusive of any amendments or supplements thereto
         subsequent to the Execution Time);

                  (j) To the knowledge of the Company, there are no known legal
         or governmental proceedings pending or threatened to which the Company
         or the Guarantor and any of their respective subsidiaries is a party or
         to which any of the properties of the Company or the Guarantor or any
         of their respective subsidiaries is subject that are not adequately
         disclosed in the Offering Memorandum and which would, individually or
         in the aggregate, have a material adverse effect on the Company or the
         Guarantor and their respective subsidiaries, taken as a whole. Neither
         the Company nor the Guarantor has any reason to believe that any
         governmental agency with authority pursuant to any Gaming Law is
         investigating the Company, the Guarantor or any of their respective
         subsidiaries in any non-routine matter, the results of which would
         materially affect the operations of the Company and the subsidiaries of
         the Company. Due to the highly regulated nature of the business of the
         Company and the subsidiaries of the Company, there are ongoing
         investigations by various governmental agencies with authority pursuant
         to the various Gaming Laws;

                  (k) Neither the Company nor the Guarantor is, and after giving
         effect to the offering and sale of the Securities and the application
         of the proceeds thereof as described

                                       3
<Page>

         in the Offering Memorandum, neither will be, an "investment company" or
         an entity "controlled by an investment company" as such terms are
         defined in the Investment Company Act;

                  (l) The Company and the Guarantor and their respective
         subsidiaries (i) are in compliance with any and all applicable foreign,
         federal, state and local laws and regulations relating to the
         protection of human health and safety, the environment or hazardous or
         toxic substances or wastes, pollutants or contaminants ("Environmental
         Laws"), (ii) have received all permits, licenses or other approvals
         required of them under applicable Environmental Laws to conduct their
         respective businesses and (iii) are in compliance with all terms and
         conditions of any such permit, license or approval, except where such
         noncompliance with Environmental Laws, failure to receive required
         permits, licenses or other approvals or failure to comply with the
         terms and conditions of such permits, licenses or approvals would not,
         individually or in the aggregate, have a material adverse effect on the
         Company or the Guarantor and their respective subsidiaries, taken as a
         whole;

                  (m) There are no costs or liabilities associated with
         Environmental Laws (including, without limitation, any capital or
         operating expenditures required for clean-up, closure of properties or
         compliance with Environmental Laws or any permit, license or approval,
         any related constraints on operating activities and any potential
         liabilities to third parties) which would, individually or in the
         aggregate, have a material adverse effect on the Company or the
         Guarantor and their respective subsidiaries, taken as a whole;

                  (n) Except as disclosed in the Offering Memorandum, each of
         the Company and the Guarantor and their respective subsidiaries has
         sufficient trademarks, trade names, patent rights, copyrights, or
         licenses to conduct their businesses as now conducted in all material
         respects;

                  (o) Except as disclosed in or specifically contemplated by the
         Offering Memorandum, each of the Company and the Guarantor and their
         respective subsidiaries has sufficient licenses, approvals and
         authorizations required pursuant to Gaming Laws to conduct their
         current businesses except such licenses, approvals and authorizations
         required pursuant to Gaming Laws the absence of which, either
         individually or in the aggregate, would not have a material adverse
         effect on the Company or the Guarantor and their respective
         subsidiaries, taken as a whole;

                  (p) Each of the Company's and Guarantor's and their respective
         subsidiaries' controlling persons, key employees, and, to the Company's
         or the Guarantor's knowledge, stockholders, have all necessary permits,
         licenses and other authorizations required by Gaming Laws for the
         Company, the Guarantor and their respective subsidiaries to conduct
         their businesses as now conducted in all material respects; and neither
         the Company nor the Guarantor has any knowledge that any of their
         respective stockholders is unsuitable or may be deemed unsuitable by
         any authorities pursuant to Gaming Laws;

                                       4
<Page>

                  (q) No labor dispute with the employees of the Company or the
         Guarantor or any of their respective subsidiaries exists, or to the
         knowledge of the Company or the Guarantor, respectively, is imminent
         which would, individually or in the aggregate, have a material adverse
         effect on the Company or the Guarantor and their respective
         subsidiaries, taken as a whole;

                  (r) Neither the Company, nor the Guarantor, nor any of their
         respective affiliates, nor any person acting on its or their behalf
         has, directly or indirectly, made offers or sales of any security, or
         solicited offers to buy any security, under circumstances that would
         require the registration of the Securities under the Act;

                  (s) Neither the Company, nor the Guarantor, nor any of their
         respective affiliates, nor any person acting on its or their behalf has
         engaged in any form of general solicitation or general advertising
         (within the meaning of Regulation D) in connection with any offer or
         sale of the Securities in the United States;

                  (t) Assuming the accuracy of the representations and
         warranties and compliance with the agreements of the Initial Purchasers
         made pursuant to Section 3 and each "accredited investor" made pursuant
         to the letter required by Section 3(a)(ii) and except as described in
         the Offering Memorandum under "Description of Notes -- Registration
         Rights," it is not necessary in connection with the offer, sale and
         delivery of the Securities in the manner contemplated by this Agreement
         and the Offering Memorandum to register the Securities under the Act or
         to qualify the Indenture under the Trust Indenture Act;

                  (u) The Securities satisfy the eligibility requirements of
         Rule 144A(d)(3) under the Act;

                  (v) Neither the Company, nor the Guarantor, nor any of their
         respective affiliates, nor any person acting on its or their behalf has
         engaged in any directed selling efforts with respect to the Securities,
         and each of them has complied with the offering restrictions
         requirement of Regulation S. Terms used in this paragraph have the
         meanings given to them by Regulation S;

                  The Company and Guarantor are subject to and in full
         compliance with the reporting requirements of Section 13 or Section
         15(d) of the Exchange Act; and

                  Neither the Company nor the Guarantor has paid or agreed to
         pay to any person any compensation for soliciting another to purchase
         any securities of the Company or Guarantor (except as contemplated by
         this Agreement).

                  2. PAYMENT AND DELIVERY. Except as otherwise provided in this
Section 2, payment for the Securities shall be made to the Company in federal or
other funds immediately available at the time and place set forth in the
Purchase Agreement, upon delivery to the Representatives for the respective
accounts of the several Initial Purchasers of the Securities registered in such
names and in such denominations as the Representatives shall request in writing
not less than one full Business Day prior to the date of delivery, with any
transfer taxes payable in connection with the transfer of the Securities to the
Initial Purchasers duly paid by the

                                       5
<Page>

Company. Delivery of the Securities shall be made through the facilities of the
Depository Trust Company unless the Representatives shall otherwise instruct.

                  3. OFFERING BY INITIAL PURCHASERS. Each Initial Purchaser,
severally and not jointly, represents and warrants to and agrees with the
Company and the Guarantor that:

                  (a) It has not offered or sold, and, until the Securities are
         registered under the Act as described in the Offering Memorandum under
         the caption "Description of Notes -- Registration Rights," will not
         offer or sell, any Securities except (i) to those it reasonably
         believes to be qualified institutional buyers (as defined in Rule 144A
         under the Act) and that, in connection with each such sale, it has
         taken or will take reasonable steps to ensure that the purchaser of
         such Securities is aware that such sale is being made in reliance on
         Rule 144A; or (ii) to other institutional "accredited investors" (as
         defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D) who provide
         to it and to the Company a letter in the form of Exhibit A hereto; or
         (iii) in accordance with the restrictions set forth in Exhibit B
         hereto.

                  (b) Neither it nor any person acting on its behalf has made or
         will make offers or sales of the Securities in the United States by
         means of any form of general solicitation or general advertising
         (within the meaning of Regulation D) in the United States.

                  4. CONDITIONS TO THE INITIAL PURCHASERS' OBLIGATIONS. The
several obligations of the Initial Purchasers are subject to the performance by
the Company and Guarantor of their obligations hereunder and to the following
conditions:

                  (a) Subsequent to the execution and delivery of the Purchase
         Agreement and prior to the Closing Date:

                           (i) there shall not have occurred any downgrading,
                  nor shall any notice have been given of any intended or
                  potential downgrading or of any review for a possible change
                  that does not indicate the direction of the possible change,
                  in the rating accorded any of the Company's or the Guarantor's
                  securities by any "nationally recognized statistical rating
                  organization," as such term is defined for purposes of Rule
                  436(g)(2) under the Act; and

                           (ii) there shall not have occurred any change, or any
                  development involving a prospective change, in the condition,
                  financial or otherwise, or in the earnings, business or
                  operations of the Company or the Guarantor and their
                  respective subsidiaries, taken as a whole, from that set forth
                  in the Offering Memorandum (exclusive of any amendments or
                  supplements thereto subsequent to the Execution Time) that, in
                  the judgment of the Representatives, is material and adverse
                  and that makes it, in the judgment of the Representatives,
                  impracticable to market the Securities on the terms and in the
                  manner contemplated in the Offering Memorandum.

                  (b) The Initial Purchasers shall have received on the Closing
         Date a certificate, dated the Closing Date and signed by an executive
         officer of each of the Company and the Guarantor, to the effect set
         forth in Section 4(a)(i) above and to the

                                       6
<Page>

         effect that the representations and warranties of the Company and the
         Guarantor, respectively, contained in this Agreement are true and
         correct as of the Closing Date and that the Company and the Guarantor,
         respectively, have complied with all of the agreements and satisfied
         all of the conditions on its part to be performed or satisfied
         hereunder on or before the Closing Date. The officer signing and
         delivering such certificate may rely upon the best of his or her
         knowledge as to proceedings threatened.

                  (c) The Initial Purchasers shall have received on the Closing
         Date an opinion of Stephen H. Brammell, Senior Vice President and
         General Counsel of the Company and the Guarantor, dated the Closing
         Date, to the effect that:

                           (i) each of the Company, the Guarantor and the
                  Significant Subsidiaries has been duly organized, is validly
                  existing as a corporation, limited liability company or
                  partnership in good standing under the laws of the
                  jurisdiction of its organization, has the power and authority
                  to own its property and to conduct its business as described
                  in the Offering Memorandum and is duly qualified to transact
                  business and is in good standing in each jurisdiction in which
                  the conduct of its business or its ownership or leasing of
                  property requires such qualification, except to the extent
                  that the failure to be so qualified or be in good standing
                  would not have a material adverse effect on the Company or the
                  Guarantor and their respective subsidiaries, taken as a whole;

                           (ii) after inquiry of the members of the legal
                  departments of the Company and Guarantor, to the best of such
                  counsel's knowledge, (A) there are no legal or governmental
                  proceedings pending or threatened to which the Company or the
                  Guarantor and any of their respective subsidiaries is a party
                  or to which any of the properties of the Company or the
                  Guarantor or any of their respective subsidiaries is subject
                  that are not adequately disclosed in the Offering Memorandum
                  and which would, individually or in the aggregate, have a
                  material adverse effect on the Company or the Guarantor and
                  their respective subsidiaries, taken as a whole, (B) there are
                  no material statutes, regulations, contracts or other
                  documents that are not adequately disclosed in the Offering
                  Memorandum, and (C) there is no non-routine investigation of
                  the Company, the Guarantor or any of their respective
                  subsidiaries, by any governmental agency with authority
                  pursuant to any Gaming Law, the results of which would have a
                  material adverse effect on the Company, the Guarantor or any
                  of their respective subsidiaries;

                           (iii) Each of the Company's, the Guarantor's and
                  their respective subsidiaries' controlling persons, key
                  employees, and, to the best of such counsel's knowledge, their
                  stockholders, have all necessary permits, licenses and other
                  authorizations required by Gaming Laws for the Company, the
                  Guarantor and their respective subsidiaries to conduct their
                  businesses as now conducted except such licenses, approvals
                  and authorizations required pursuant to Gaming Laws the
                  absence of which, either individually or in the aggregate,
                  would not have a material adverse effect on the Company or the
                  Guarantor and their respective subsidiaries, taken as a whole;
                  and to the best of such counsel's knowledge none of the
                  respective stockholders of the Company or the Guarantor

                                       7
<Page>

                  is unsuitable or may be deemed unsuitable by any authorities
                  pursuant to Gaming Laws;

                           (iv) the statements (A) in the Offering Memorandum
                  under the captions "Regulation and Licensing," and "Legal
                  Matters," (B) in "Items 1 and 2-Business and
                  Properties--Governmental Regulation" and "Item 3 - Legal
                  Proceedings" of the Company's annual report on Form 10-K in
                  respect of the year ended December 31, 2000, which is
                  incorporated by reference in the Offering Memorandum, and (C)
                  in Item 2-Management's Discussion and Analysis of Financial
                  Condition and Results of Operations- Debt and Liquidity" of
                  the Company's quarterly report on Form 10-Q in respect of the
                  quarter ended March 31, 2001, which is incorporated by
                  reference in the Offering Memorandum, in each case insofar as
                  such statements constitute summaries of the legal matters,
                  documents or proceedings referred to therein, fairly present
                  the information called for with respect to such legal matters,
                  documents and proceedings and fairly summarize the matters
                  referred to therein;

                           (v) no consent, approval, authorization of, or
                  qualification with any authority pursuant to Gaming Laws is
                  required with respect to the issuance of the Securities or the
                  transactions contemplated by this Agreement and the Indenture
                  prior to such issuance of the Securities or the transactions
                  contemplated by this Agreement, except as has already been
                  obtained; and

                           (vi) the execution and delivery by each of the
                  Company and the Guarantor of, the transactions contemplated
                  in, and the performance by the Company and the Guarantor of
                  its respective obligations under, this Agreement, the
                  Indenture, the Registration Rights Agreement and the
                  Securities will not contravene, to the best of such counsel's
                  knowledge, any agreement or other instrument binding upon the
                  Company or the Guarantor and any of their respective
                  subsidiaries that is material to the Company or the Guarantor
                  and their respective subsidiaries, taken as a whole, or,
                  except for any approvals required from the Indiana Gaming
                  Commission for the Company to perform its obligations under
                  the Registration Rights Agreement, to the best of such
                  counsel's knowledge, any judgment, order or decree of any
                  governmental body, agency or court having jurisdiction over
                  the Company or the Guarantor or any of their respective
                  subsidiaries, including without limitation, pursuant to any
                  Gaming Laws.

                  (d) The Initial Purchasers shall have received on the Closing
         Date an opinion of Latham & Watkins, outside counsel for the Company
         and the Guarantor, dated the Closing Date, to the effect that:

                           (i) this Agreement has been duly authorized, executed
                  and delivered by each of the Company and the Guarantor;

                           (ii) the Indenture has been duly authorized, executed
                  and delivered by each of the Company and the Guarantor and,
                  assuming due authorization,

                                       8
<Page>

                  execution and delivery thereof by the Trustee, is the legally
                  valid and binding agreement of each of the Company and the
                  Guarantor, enforceable against the Company and the Guarantor
                  in accordance with its terms, subject to applicable
                  bankruptcy, insolvency or similar laws affecting creditors'
                  rights generally and general principles of equity;

                           (iii) the Registration Rights Agreement has been duly
                  authorized, executed and delivered by each of the Company and
                  the Guarantor;

                           (iv) the Securities have been duly authorized and,
                  when executed and authenticated in accordance with the terms
                  of the Indenture and delivered to and paid for by the Initial
                  Purchasers in accordance with the terms of this Agreement,
                  assuming due authorization, execution and delivery thereof by
                  the Trustee, will be entitled to the benefits of the
                  Indenture, will conform in all material respects as to legal
                  matters to the descriptions thereof contained in the Offering
                  Memorandum under the heading "Description of Notes" and will
                  be legally valid and binding obligations of the Company and
                  the Guarantor, respectively, enforceable against the Company
                  and the Guarantor in accordance with their respective terms,
                  subject to applicable bankruptcy, insolvency or similar laws
                  affecting creditors' rights generally and general principles
                  of equity;

                           (v) the execution and delivery of this Agreement, the
                  Indenture, the Registration Rights Agreement and the
                  Securities by each of the Company and the Guarantor, the
                  transactions contemplated in, and the performance by each of
                  the Company and the Guarantor on or prior to the date hereof
                  of its respective obligations under, this Agreement, the
                  Indenture, the Registration Rights Agreement and the
                  Securities, will not violate the certificate of incorporation
                  or by-laws of each of the Company or the Guarantor,
                  respectively, the Delaware General Corporation law, or any
                  provision of any applicable federal or New York statute, rule
                  or regulation (other than federal securities laws, which are
                  specifically addressed elsewhere herein, or state securities
                  laws or Gaming Laws), and no consent, approval, authorization
                  or order of, or filing with, any federal or New York or
                  Delaware court or governmental agency or body is required for
                  the transactions contemplated in, or the performance by each
                  of the Company and the Guarantor on or prior to the date
                  hereof of its obligations under, this Agreement, the Indenture
                  and the Securities, except such as may be required under the
                  state securities laws or Blue Sky laws in connection with the
                  offer and sale of the Securities or as may be required by
                  Gaming Laws;

                           (vi) the statements under the heading "Description of
                  Notes" in the Offering Memorandum, insofar as such statements
                  constitute summaries of the legal matters, documents or
                  proceedings referred to therein, fairly present the
                  information called for with respect to such legal matters,
                  documents and proceedings and fairly summarize the matters
                  referred to therein;

                           (vii) assuming the accuracy of the representations
                  and warranties and compliance with the agreements contained
                  herein, the Securities are not required

                                       9
<Page>

                  to be registered under the Act and the Indenture is not
                  required to be qualified under the Trust Indenture Act for the
                  offer and sale by the Initial Purchasers of the Securities in
                  the manner contemplated by this Agreement;

                           (viii) neither the Company nor the Guarantor is, and
                  after giving effect to the offering and sale of the Securities
                  and the application of the proceeds thereof as described in
                  the Offering Memorandum, neither will be, an "investment
                  company" as defined in the Investment Company Act without
                  taking account of any exemption arising out of the number of
                  holders of the Company's securities; and

                           (ix) Such counsel shall also state that, in addition,
                  no facts have come to such counsel's attention that cause such
                  counsel to believe that the Offering Memorandum, as of its
                  date and as of the Closing Date, contained or contains an
                  untrue statement of a material fact or omitted or omits to
                  state a material fact required to be stated therein or
                  necessary to make the statements therein, in the light of the
                  circumstances under which they were made, not misleading, it
                  being understood that such counsel need express no belief with
                  respect to the financial statements and schedules or other
                  financial data included or incorporated by reference in, or
                  omitted from, the Offering Memorandum.

                  With respect to the last paragraph of this Section 4(d),
         Latham & Watkins may state that its opinion and belief are based upon
         its participation in the preparation of the Offering Memorandum and any
         amendments or supplements thereto (but not including documents
         incorporated therein by reference) and review and discussion of the
         contents thereof (including documents incorporated by reference), but
         are without independent check or verification (except to the extent set
         forth in Section 4(d)(vi)).

                  The opinion of Latham & Watkins described in this Section 4(d)
         shall be rendered to the Initial Purchasers at the request of the
         Company and the Guarantor and shall so state therein.

                  (e) The Initial Purchasers shall have received from Cleary,
         Gottlieb, Steen & Hamilton, counsel for the Initial Purchasers, such
         opinion or opinions, dated the Closing Date and addressed to the
         Representatives, with respect to the issuance and sale of the
         Securities, the Indenture, the Registration Rights Agreement, the
         Offering Memorandum (as amended or supplemented at the Closing Date)
         and other related matters as the Representatives may reasonably
         require, and the Company and the Guarantor shall have furnished to such
         counsel such documents as they request for the purpose of enabling them
         to pass upon such matters.

                  (f) At the Closing Date, Arthur Andersen & Co. shall have
         furnished to the Initial Purchasers a letter or letters, dated as of
         the Closing Date, in form and substance satisfactory to the Initial
         Purchasers, confirming that they are independent accountants within the
         meaning of the Act and the Exchange Act and stating in effect that:

                                       10
<Page>

                           (i) in their opinion the audited financial statements
                  and financial statement schedules included or incorporated in
                  the Offering Memorandum (as amended or supplemented at the
                  date of the letter) and reported on by them comply in form in
                  all material respects with the applicable accounting
                  requirements of the Exchange Act and the related published
                  rules and regulations;

                           (ii) on the basis of a reading of the latest
                  unaudited financial statements made available by the Company,
                  the Guarantor and its subsidiaries; carrying out certain
                  specified procedures (but not an examination in accordance
                  with generally accepted auditing standards which would not
                  necessarily reveal matters of significance with respect to the
                  comments set forth in such letter; a reading of the minutes of
                  the meetings of the stockholders, directors and executive,
                  human resources and audit committees of the Company, the
                  Guarantor and its subsidiaries; and inquiries of certain
                  officials of the Company and of the Guarantor who have
                  responsibility for financial and accounting matters of the
                  Company, the Guarantor and its subsidiaries as to transactions
                  and events subsequent to March 31, 2001, nothing came to their
                  attention which caused them to believe that: with respect to
                  the period subsequent to March 31, 2001, there were any
                  changes, at a specified date not more than five Business Days
                  prior to the date of the letter, in the consolidated long-term
                  debt of the Guarantor or capital stock of the Guarantor or
                  decreases in the stockholders' equity of the Guarantor as
                  compared with the amounts shown on the March 31, 2001
                  consolidated balance sheet included or incorporated in the
                  Offering Memorandum (as amended or supplemented at the date of
                  the letter), or for the period from March 31, 2001 to such
                  specified date there were any decreases, as compared with the
                  corresponding period in the preceding year in consolidated
                  total revenues or operating income or income before income
                  taxes or the total or per share amounts of consolidated net
                  income of the Guarantor and its subsidiaries, except in all
                  instances for changes or decreases set forth in such letter,
                  in which case the letter shall be accompanied by an
                  explanation by the Company as to the significance thereof
                  unless said explanation is not deemed necessary by the Initial
                  Purchasers.

                           (iii) the statements and information contained in the
                  letter or letters are of the type ordinarily included in
                  accountants' "comfort letters" to Initial Purchasers with
                  respect to the financial statements and certain financial
                  information contained in or incorporated by reference into the
                  Offering Memorandum.

                  (g) Subsequent to the Execution Time or, if earlier, the dates
         as of which information is given in the Offering Memorandum, there
         shall not have been (i) any change or decrease specified in the letter
         or letters referred to in paragraph (f) of this Section 4 or (ii) any
         change, or any development involving a prospective change, in or
         affecting the business or properties of the Company and the Guarantor
         and its subsidiaries the effect of which, in any case referred to in
         clause (i) or (ii) above, is, in the judgment of the Initial
         Purchasers, so material and adverse as to make it impractical or
         inadvisable to market the Securities as contemplated by the Offering
         Memorandum.

                                       11
<Page>

                  (h) As of the Closing Date the Securities shall be rated not
         lower than BBB- by Standard & Poor's Corporation and Baa3 by Moody's
         Investors Service, Inc.

                  (i) The Securities shall be eligible for clearance and
         settlement through The Depositary Trust Company.

                  (j) Prior to the Closing Date, the Company shall have
         furnished to the Initial Purchasers such further information,
         certificates and documents as the Representatives may reasonably
         request.

                  5. COVENANTS OF THE COMPANY AND THE GUARANTOR. In further
consideration of the agreements of the Initial Purchasers herein contained, each
of the Company and the Guarantor covenants with each Initial Purchaser as
follows that:

                  (a) The Company and the Guarantor shall furnish the
         Representatives, without charge, prior to 10:00 a.m. New York City time
         on the Business Day next succeeding the date of this Agreement and
         during the period mentioned in Section 5(c) below, as many copies of
         the Offering Memorandum, any documents incorporated by reference
         therein and any supplements and amendments thereto as the
         Representatives may reasonably request.

                  (b) The Company and the Guarantor shall not amend or
         supplement the Offering Memorandum without the prior written consent of
         the Representatives, which shall not be unreasonably withheld or
         delayed and the Company and the Guarantor shall not file any document
         under the Exchange Act that is incorporated by reference in the
         Offering Memorandum unless, prior to such proposed filing, they have
         furnished the Representatives with a copy of such document for review
         by the Representatives and the Representatives have not reasonably
         objected to the filing of such document. The Company or the Guarantor,
         as the case may be, shall promptly advise the Representatives when any
         document filed under the Exchange Act that is incorporated by reference
         in the Offering Memorandum shall have been filed with the Commission.

                  (c) If, at any time prior to the completion of the sale of the
         Securities by the Initial Purchasers (as determined by the
         Representatives), any event shall occur or condition exist as a result
         of which it is necessary to amend or supplement the Offering Memorandum
         in order to make the statements therein, in the light of the
         circumstances when the Offering Memorandum is delivered to a purchaser,
         not misleading, or if, in the opinion of counsel for the Initial
         Purchasers, it is necessary to amend or supplement the Offering
         Memorandum to comply with applicable law, forthwith to notify the
         Representatives of such event or condition and prepare and furnish, at
         its own expense, to the Initial Purchasers and such other persons as
         the Initial Purchasers may reasonably request, either amendments or
         supplements to the Offering Memorandum (in such quantities as the
         Initial Purchasers may reasonably request) so that the statements in
         the Offering Memorandum as so amended or supplemented will not, in the
         light of the circumstances when the Offering Memorandum is delivered to
         a purchaser, be misleading or so that the Offering Memorandum, as
         amended or supplemented, will comply with law.

                                       12
<Page>

                  (d) The Company and Guarantor shall endeavor to qualify the
         Securities for offer and sale under the securities or Blue Sky laws of
         such jurisdictions as the Representatives shall reasonably request and
         promptly advise the Initial Purchasers of the receipt by the Company or
         the Guarantor of any notification with respect to the suspension of the
         qualification of the Securities for sale in any jurisdiction or the
         initiation or threatening-of any proceeding for such purpose.

                  (e) The Company and Guarantor shall not, and shall not permit
         any of their Affiliates to, resell any Securities that have been
         acquired by any of them, except, in the case of a Controlled Affiliate,
         until the earlier of (i) the consummation of the Exchange Offer and
         (ii) the declaration of effectiveness of a Shelf Registration Statement
         pursuant to the Registration Rights Agreement.

                  (f) Neither the Company, nor the Guarantor, nor any of their
         respective Affiliates, nor any person acting on behalf of any of the
         foregoing, will, directly or indirectly, make offers or sales of any
         security, or solicit offers to buy any security, under circumstances
         that would require the registration of the Securities under the Act.

                  (g) Neither the Company, nor the Guarantor, nor any of their
         respective Affiliates, nor any person acting on behalf of any of the
         foregoing, will engage in any form of general solicitation or general
         advertising (within the meaning of Regulation D) in connection with any
         offer or sale of the Securities in the United States.

                  (h) So long as any of the Securities are "restricted
         securities" within the meaning of Rule 144(a)(3) under the Act, each of
         the Company and the Guarantor will, during any period in which it is
         not subject to and in compliance with Section 13 or 15(d) of the
         Exchange Act or it is not exempt from such reporting requirements
         pursuant to and in compliance with Rule 12g3-2(b) under the Exchange
         Act, to provide to each holder of such restricted securities and to
         each prospective purchaser (as designated by such holder) of such
         restricted securities, upon the request of such holder or prospective
         purchaser, any information required to be provided by Rule 144A(d)(4)
         under the Act. This covenant is intended to be for the benefit of the
         holders, and the prospective purchasers designated by such holders,
         from time to time of such restricted securities.

                  (i) Neither the Company, nor the Guarantor, nor any of their
         respective Affiliates, nor any person acting on behalf of any of the
         foregoing, will engage in any directed selling efforts with respect to
         the Securities, and each of them will comply with the offering
         restrictions requirement of Regulation S. Terms used in this paragraph
         have the meanings given to them by Regulation S.

                  (j) To cooperate with the Representatives and use its best
         efforts to permit the Securities to be eligible for clearance and
         settlement through The Depository Trust Company.

                  (k) During the period beginning at the Execution Time and
         continuing until the date which is thirty (30) days after the Closing
         Date, not to offer, sell, contract to sell or otherwise dispose of any
         debt securities of the Company or warrants to purchase debt

                                       13
<Page>

         securities of the Company substantially similar to the Securities
         (other than (i) the Securities and (ii) commercial paper issued in the
         ordinary course of business), without the prior written consent of the
         Representatives.

                  (l) Not to take, directly or indirectly, any action designed
         to or which has constituted or which might reasonably be expected to
         cause or result, under the Exchange Act or otherwise, in stabilization
         or manipulation of the price of any security of the Company or the
         Guarantor to facilitate the sale or resale of the Securities.

                  (m) In connection with any disposition of Securities pursuant
         to a transaction made in compliance with paragraph 6 of Exhibit A, the
         Company and the Guarantor will reissue certificates evidencing such
         Securities without the legend referred to in paragraph 5 of Exhibit A
         (provided, in the case of a transaction made in compliance with
         paragraph 6(f) of Exhibit A, that the legal opinion referred to therein
         so permits).

                  (n) Whether or not the transactions contemplated in this
         Agreement are consummated or this Agreement is terminated, to pay or
         cause to be paid all expenses incident to the performance of the
         Company's and the Guarantor's obligations under this Agreement,
         including:

                           (i) the fees, disbursements and expenses of the
                  Company's and Guarantor's counsel and the Company's and
                  Guarantor's accountants in connection with the registration
                  and delivery of the Securities under the Act and all other
                  fees or expenses in connection with the preparation of the
                  Offering Memorandum and amendments and supplements or
                  amendments to either of the foregoing, including all printing
                  costs associated therewith, and the mailing and delivering of
                  copies thereof to the Initial Purchasers and dealers, in the
                  quantities hereinabove specified,

                           (ii) all costs and expenses related to the transfer
                  and delivery of the Securities to the Initial Purchasers,
                  including any transfer or other taxes payable thereon (but
                  excluding any transfer taxes on resale of any of the
                  Securities by the Initial Purchasers),

                           (iii) the cost of printing or producing any Blue Sky
                  or legal investment memorandum in connection with the offer
                  and sale of the Securities under state law and all expenses in
                  connection with the qualification of the Securities for offer
                  and sale under state law as provided in Section 5(d) hereof,
                  including filing fees and the reasonable fees and
                  disbursements of counsel for the Initial Purchasers in
                  connection with such qualification and in connection with the
                  Blue Sky or legal investment memorandum,

                           (iv) the fees and disbursements of the Company's and
                  Guarantor's counsel and accountants and of the Trustee and its
                  counsel,

                           (v) any fees charged by the rating agencies for the
                  rating of the Securities,

                                       14
<Page>

                           (vi) the costs and expenses of the Company and the
                  Guarantor relating to investor presentations on any "road
                  show" undertaken in connection with the marketing of the
                  offering of the Securities, including, without limitation,
                  expenses associated with the production of road show slides
                  and graphics, fees and expenses of any consultants engaged in
                  connection with the road show presentations with the prior
                  approval of the Company, travel and lodging expenses of the
                  representatives and officers of the Company and the Guarantor
                  and any such consultants, and the cost of any aircraft
                  chartered in connection with the road show, and

                           (vii) all other costs and expenses incident to the
                  performance of the obligations of the Company and the
                  Guarantor hereunder for which provision is not otherwise made
                  in this Section. It is understood, however, that except as
                  provided in this Section, Section 6 entitled "Indemnity and
                  Contribution", and the last paragraph of Section 8 below, the
                  Initial Purchasers will pay all of their costs and expenses,
                  including fees and disbursements of their counsel, and any
                  advertising expenses connected with any offers they may make.

                  6.  INDEMNITY AND CONTRIBUTION.

                  (a) The Company and the Guarantor, jointly and severally,
         agree to indemnify and hold harmless each Initial Purchaser and each
         person, if any, who controls any Initial Purchaser within the meaning
         of either Section 15 of the Act or Section 20 of the Exchange Act from
         and against any and all losses, claims, damages and liabilities
         (including, without limitation, any legal or other expenses reasonably
         incurred in connection with defending or investigating any such action
         or claim) caused by any untrue statement or alleged untrue statement of
         a material fact contained in the Offering Memorandum or amendment or
         supplement thereto (if the Company or the Guarantor shall have
         furnished any amendments or supplements thereto), or caused by any
         omission or alleged omission to state therein a material fact required
         to be stated therein or necessary to make the statements therein not
         misleading, except insofar as such losses, claims, damages or
         liabilities are caused by any such untrue statement or omission or
         alleged untrue statement or omission based upon information relating to
         any Initial Purchaser furnished to the Company in writing by such
         Initial Purchaser through the Representatives expressly for use
         therein.

                  (b) Each Initial Purchaser agrees, severally and not jointly,
         to indemnify and hold harmless the Company and the Guarantor, and each
         person, if any, who controls the Company or the Guarantor,
         respectively, within the meaning of either Section 15 of the Act or
         Section 20 of the Exchange Act to the same extent as the foregoing
         indemnity from the Company and the Guarantor to such Initial Purchaser,
         but only with reference to information relating to such Initial
         Purchaser furnished to the Company in writing by such Initial Purchaser
         through the Representatives expressly for use in the Offering
         Memorandum or any amendments or supplements thereto.

                  (c) In case any proceeding (including any governmental
         investigation) shall be instituted involving any person in respect of
         which indemnity may be sought pursuant to

                                       15
<Page>

         either Section 6(a) or 6(b), such person (the "Indemnified Party")
         shall promptly notify the person against whom such indemnity may be
         sought (the "Indemnifying Party") in writing and the indemnifying
         party, upon request of the indemnified party, shall retain counsel
         reasonably satisfactory to the indemnified party to represent the
         indemnified party and any others the indemnifying party may designate
         in such proceeding and shall pay the fees and disbursements of such
         counsel related to such proceeding. In any such proceeding, any
         indemnified party shall have the right to retain its own counsel, but
         the fees and expenses of such counsel shall be at the expense of such
         indemnified party unless (i) the indemnifying party and the indemnified
         party shall have mutually agreed to the retention of such counsel or
         (ii) the named parties to any such proceeding (including any impleaded
         parties) include both the indemnifying party and the indemnified party
         and representation of both parties by the same counsel would be
         inappropriate due to actual or potential differing interests between
         them. It is understood that the indemnifying party shall not, in
         respect of the legal expenses of any indemnified party in connection
         with any proceeding or related proceedings in the same jurisdiction, be
         liable for the fees and expenses of more than one separate firm (in
         addition to any local counsel) for all such indemnified parties and
         that all such fees and expenses shall be reimbursed as they are
         incurred. Such firm shall be designated in writing by the
         Representatives, in the case of parties indemnified pursuant to Section
         6(a) above, and by the Company, in the case of parties indemnified
         pursuant to Section 6(b) above. The indemnifying party shall not be
         liable for any settlement of any proceeding effected without its
         written consent, but if settled with such consent or if there be a
         final judgment for the plaintiff, the indemnifying party agrees to
         indemnify the indemnified party from and against any loss or liability
         by reason of such settlement or judgment. Notwithstanding the foregoing
         sentence, if at any time an indemnified party shall have requested an
         indemnifying party to reimburse the indemnified party for fees and
         expenses of counsel as contemplated by the second and third sentences
         of this paragraph, the indemnifying party agrees that it shall be
         liable for any settlement of any proceeding effected without its
         written consent if (i) such settlement is entered into more than 30
         days after receipt by such indemnifying party of the aforesaid request
         and (ii) such indemnifying party shall not have reimbursed the
         indemnified party in accordance with such request prior to the date of
         such settlement. No indemnifying party shall, without the prior written
         consent of the indemnified party, effect any settlement of any pending
         or threatened proceeding in respect of which any indemnified party is
         or could have been a party and indemnity could have been sought
         hereunder by such indemnified party, unless such settlement includes an
         unconditional release of such indemnified party from all liability on
         claims that are the subject matter of such proceeding.

                  (d) To the extent the indemnification provided for in Section
         6(a) or 6(b) is unavailable to an indemnified party or insufficient in
         respect of any losses, claims, damages or liabilities referred to
         therein, then each indemnifying party under such paragraph, in lieu of
         indemnifying such indemnified party thereunder, shall contribute to the
         amount paid or payable by such indemnified party as a result of such
         losses, claims, damages or liabilities (i) in such proportion as is
         appropriate to reflect the relative benefits received by the Company on
         the one hand and the Initial Purchasers on the other hand from the
         offering of the Securities or (ii) if the allocation provided by clause
         6(d)(i) above is not permitted by applicable law, in such proportion as
         is appropriate to reflect

                                       16
<Page>

         not only the relative benefits referred to in clause 6(d)(i) above but
         also the relative fault of the Company and the Guarantor on the one
         hand and of the Initial Purchasers on the other hand in connection with
         the statements or omissions that resulted in such losses, claims,
         damages or liabilities, as well as any other relevant equitable
         considerations. The relative benefits received by the Company on the
         one hand and the Initial Purchasers on the other hand in connection
         with the offering of the Securities shall be deemed to be in the same
         respective proportions as the net proceeds from the offering of such
         Securities (before deducting expenses) received by the Company and the
         total underwriting discounts and commissions received by the Initial
         Purchasers, in each case as set forth in the table on the cover of the
         Offering Memorandum, bear to the aggregate Public Offering Price of the
         Securities. The relative fault of the Company and the Guarantor on the
         one hand and the Initial Purchasers on the other hand shall be
         determined by reference to, among other things, whether the untrue or
         alleged untrue statement of a material fact or the omission or alleged
         omission to state a material fact relates to information supplied by
         the Company or the Guarantor or by the Initial Purchasers and the
         parties' relative intent, knowledge, access to information and
         opportunity to correct or prevent such statement or omission. The
         Initial Purchasers' respective obligations to contribute pursuant to
         this Section 6 are several in proportion to the respective principal
         amounts of Securities they have purchased hereunder, and not joint.

                  (e) The Company, the Guarantor and the Initial Purchasers
         agree that it would not be just or equitable if contribution pursuant
         to this Section 6 were determined by pro rata allocation (even if the
         Initial Purchasers were treated as one entity for such purpose) or by
         any other method of allocation that does not take account of the
         equitable considerations referred to in Section 6(d). The amount paid
         or payable by an indemnified party as a result of the losses, claims,
         damages and liabilities referred to in the immediately preceding
         paragraph shall be deemed to include, subject to the limitations set
         forth above, any legal or other expenses reasonably incurred by such
         indemnified party in connection with investigating or defending any
         such action or claim. Notwithstanding the provisions of this Section 6,
         no Initial Purchaser shall be required to contribute any amount in
         excess of the amount by which the total price at which the Securities
         underwritten by it and distributed to the public were offered to the
         public exceeds the amount of any damages that such Initial Purchaser
         has otherwise been required to pay by reason of such untrue or alleged
         untrue statement or omission or alleged omission. No person guilty of
         fraudulent misrepresentation (within the meaning of Section 11(f) of
         the Act) shall be entitled to contribution from any person who was not
         guilty of such fraudulent misrepresentation. The remedies provided for
         in this Section 6 are not exclusive and shall not limit any rights or
         remedies which may otherwise be available to any indemnified party at
         law or in equity.

                  (f) The indemnity and contribution provisions contained in
         this Section 6 and the representations, warranties and other statements
         of the Company and the Guarantor contained in this Agreement shall
         remain operative and in full force and effect regardless of (i) any
         termination of this Agreement, (ii) any investigation made by or on
         behalf of any Initial Purchaser or any person controlling any Initial
         Purchaser or the Company or the Guarantor, or their respective officers
         or directors or any person controlling the

                                       17
<Page>

         Company or the Guarantor, respectively, and (iii) acceptance of and
         payment for any of the Securities.

                  7. TERMINATION. This Agreement shall be subject to termination
by notice given by the Representatives to the Company, if (a) after the
execution and delivery of the Purchase Agreement and prior to the Closing Date
(i) trading generally shall have been suspended or materially limited on or by,
as the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company or the Guarantor shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Representatives, is material and adverse and (b) in the case of any of the
events specified in clauses 7(a)(i) through 7(a)(iv), such event, individually
or together with any other such event, makes it, in the judgment of the
Representatives, impracticable to market the Securities on the terms and in the
manner contemplated in the Offering Memorandum.

                  8. DEFAULTING INITIAL PURCHASERS. If, on the Closing Date, any
one or more of the Initial Purchasers shall fail or refuse to purchase
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate amount of Securities which such defaulting Initial Purchaser
or Initial Purchasers agreed but failed or refused to purchase is not more than
one-tenth of the aggregate amount of the Securities to be purchased on such
date, the other Initial Purchasers shall be obligated severally in the
proportions that the amount of Securities set forth opposite their respective
names in the Purchase Agreement bears to the aggregate amount of Securities set
forth opposite the names of all such non-defaulting Initial Purchasers, or in
such other proportions as the Representatives may specify, to purchase the
Securities which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed or refused to purchase on such date; provided that in no event shall
the amount of Securities that any Initial Purchaser has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 8 by an amount
in excess of one-ninth of such amount of Securities without the written consent
of such Initial Purchaser. If, on the Closing Date, any Initial Purchaser or
Initial Purchasers shall fail or refuse to purchase Securities and the aggregate
amount of Securities with respect to which such default occurs is more than
one-tenth of the aggregate amount of Securities to be purchased on such date,
and arrangements satisfactory to the Representatives and the Company for the
purchase of such Securities are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser, the Company or the Guarantor. In any such case
either the Representatives or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Offering Memorandum or in any other documents
or arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.

                  If this Agreement shall be terminated by the Initial
Purchasers, or any of them, because of any failure or refusal on the part of the
Company or the Guarantor to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company or

                                       18
<Page>

the Guarantor shall be unable to perform its obligations under this Agreement,
the Company and the Guarantor will reimburse the Initial Purchasers or such
Initial Purchasers as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Initial Purchasers
in connection with this Agreement or the offering contemplated hereunder.

                  9. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.

                  "Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.

                  "Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.

                  "Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in The City of New York.

                  "Commission" shall mean the Securities and Exchange
Commission.

                  "Controlled Affiliate" means any person or entity that is
directly, or indirectly through one or more intermediaries, controlled by the
Company, the Guarantor, or both.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.

                  "Exchange Offer" shall have the meaning ascribed thereto by
the Registration Rights Agreement.

                  "Execution Time" shall mean, the date and time that this
Agreement is executed and delivered by the parties hereto.

                  "Gaming Laws" means any foreign, federal, state or local law
and the rules and regulations thereunder and any similar laws and regulations
governing any aspect of legalized gambling in any foreign, federal, state or
local jurisdiction in which the Company or the Guarantor or any of their
respective subsidiaries conducts business.

                  "Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.

                  "Regulation D" shall mean Regulation D under the Act.

                  "Regulation S" shall mean Regulation S under the Act.

                  "Shelf Registration Statement" shall have the meaning ascribed
thereto by the Registration Rights Agreement.

                                       19
<Page>

                  "Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission promulgated
thereunder.

                  10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

                  11. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.

                  12. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.

                                       20
<Page>

                        Harrah's Operating Company, Inc.
                          Harrah's Entertainment, Inc.

                                  $500,000,000

                          7.125% Senior Notes due 2007

                               PURCHASE AGREEMENT

                                                              New York, New York
                                                                    June 7, 2001

Salomon Smith Barney Inc.
Commerzbank Capital Markets Corp.
         As Representatives of the Initial Purchasers

c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

                  Harrah's Operating Company, Inc., a Delaware corporation (the
"Company") proposes to issue and sell to the several parties named below (the
"Initial Purchasers"), for whom you (the "Representatives") are acting as
representatives, $500,000,000 principal amount of its 7.125% Senior Notes due
2007, payment of principal, interest and premium, if any, in respect of which
notes are to be guaranteed by Harrah's Entertainment, Inc., a Delaware
corporation (the "Guarantor"; such notes, together with such guarantee, the
"Securities"). The Securities are to be issued under an indenture (the
"Indenture"), to be dated as of June 14, 2001, among the Company, the Guarantor
and Firstar Bank, N.A., as trustee (the "Trustee"). The Securities have the
benefit of a registration rights agreement (the "Registration Rights
Agreement"), dated as of June 14, 2001, among the Company, the Guarantor and the
Initial Purchasers, pursuant to which the Company and the Guarantor have agreed
to register the Securities under the Act, subject to the terms and conditions
therein specified. The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act.

                  In connection with the sale of the Securities, the Company and
the Guarantor have prepared a final offering memorandum, dated June 7, 2001
(including any and all exhibits thereto and any information incorporated by
reference therein, the "Offering Memorandum"). The Offering Memorandum sets
forth certain information concerning the Company, the Guarantor and the
Securities. Unless stated to the contrary, all references herein to the Offering
Memorandum are to the Offering Memorandum at the Execution Time and are not
meant to include any amendment or supplement, or any information incorporated by
reference therein, subsequent to the Execution Time. The Company hereby confirms
that it has authorized the use

                                       1
<Page>

of the Offering Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Securities by the Initial Purchasers.

                  To the extent there are no additional parties listed in the
table below other than you, the term Representatives as used herein shall mean
you as the Initial Purchasers, and the terms Representatives and Initial
Purchasers shall mean either the singular or plural as the context requires. The
use of the neuter in this Agreement shall include the feminine and masculine
wherever appropriate. Certain terms used herein are defined in Section 9 of
Annex I hereto. Unless stated to the contrary, any references herein to the
terms "amend", "amendment" or "supplement" with respect to the Offering
Memorandum shall be deemed to refer to and include any information filed under
the Exchange Act subsequent to the Execution Time which is incorporated by
reference therein.

                  Subject to the terms and conditions, and in reliance upon the
representations and warranties, set forth or incorporated by reference herein,
the Company hereby agrees to sell to the several Initial Purchasers, and each
Initial Purchaser agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Securities set forth below opposite
its name at a purchase price of 98.949% of the principal amount of Securities,
plus accrued interest, if any, from June 14, 2001 to the date of payment and
delivery:

<Table>
<Caption>

                                                                                              PRINCIPAL AMOUNT OF
                                                                                                  SECURITIES
          INITIAL PURCHASERS                                                                    TO BE PURCHASED
          ------------------                                                               --------------------------
<S>                                                                                        <C>
Salomon Smith Barney Inc...............................................                             US$252,500,000.00
Commerzbank Capital Markets Corp.......................................                                147,500,000.00
Banc of America Securities LLC.........................................                                 15,000,000.00
Fleet Securities, Inc. ................................................                                 15,000,000.00
Wells Fargo Brokerage Services, LLC....................................                                 15,000,000.00
Credit Suisse First Boston Corporation.................................                                 10,000,000.00
Deutsche Banc Alex. Brown Inc. ........................................                                 10,000,000.00
SG Cowen Securities Corporation........................................                                 10,000,000.00
CIBC World Markets Corp................................................                                  5,000,000.00
Credit Lyonnais Securities (USA) Inc. .................................                                  5,000,000.00
Scotia Capital (USA) Inc.  ............................................                                  5,000,000.00
Bear, Stearns & Co. Inc................................................                                  2,500,000.00
Goldman, Sachs & Co. ..................................................                                  2,500,000.00
Jefferies & Co., Inc...................................................                                  2,500,000.00
Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated......................................                                  2,500,000.00
                                                                                           --------------------------
         Total.........................................................                             US$500,000,000.00
</Table>

<Page>

                  The Initial Purchasers will pay for the Securities upon
delivery thereof at the offices of Cleary, Gottlieb, Steen & Hamilton, 1 Liberty
Plaza, New York, New York at 10:00 a.m. (New York City time) on June 14, 2001,
or at such other time, not later than 5:00 p.m. (New York City time) on June 14,
2001, as shall be designated by the Representatives. The time and date of such
payment and delivery are hereinafter referred to as the Closing Date.

                  The Securities shall have the terms set forth in the Offering
Memorandum dated June 7, 2001, including the following:

                               TERMS OF SECURITIES

<Table>
<S>                                     <C>
Maturity Date:                          June 1, 2007

Interest Rate:                          7.125%

Optional Redemption:                    Make Whole Call at TSY + 30 basis points

Interest Payment Dates:                 Each June 1 and December 1, commencing
                                        December 1, 2001

Closing Date:                           June 14, 2001
</Table>

                  All provisions contained in the Annex I hereto, entitled
"Purchase Agreement General Provisions," are herein incorporated by reference in
their entirety and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein, except that if
any term defined in such document is otherwise defined herein, the definition
set forth herein shall control.

<Page>

                  If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Company and the Guarantor and the several Initial Purchasers.

                                      Very truly yours,

                                      HARRAH'S OPERATING COMPANY, INC.

                                      By: /s/ STEPHEN H. BRAMMELL
                                         ---------------------------------------
                                           Name:  Stephen H. Brammell
                                           Title: Senior Vice President

                                      HARRAH'S ENTERTAINMENT, INC.

                                      By: /s/ STEPHEN H. BRAMMELL
                                         ---------------------------------------
                                           Name:  Stephen H. Brammell
                                           Title: Senior Vice President

<Page>

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

Salomon Smith Barney Inc.
Commerzbank Capital Markets Corp.

By: Salomon Smith Barney Inc.

By: /s/  EVAN LADOUCEUR
   --------------------------------------------------
         Name:  Evan Ladouceur
         Title: Director

For themselves and the other several Initial
Purchasers named in the foregoing Agreement.

<Page>

                                                                       EXHIBIT A

         NON-DISTRIBUTION LETTER FOR INSTITUTIONAL ACCREDITED INVESTORS

                                                         _____________ ___, 2001

Salomon Smith Barney Inc.
Commerzbank Capital Markets Corp.
         As Representatives of the Initial Purchasers

c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York  10013

Harrah's Entertainment, Inc.
Harrah's Operating Company, Inc.
One Harrah's Court
Las Vegas, Nevada 89119

Re:      Purchase of  $                  principal amount
         of 7.125% Senior Notes Due 2007 (the "Securities")
         OF HARRAH'S OPERATING COMPANY, INC. (THE "COMPANY")(1)

Ladies and Gentlemen:

                  In connection with our purchase of the Securities we confirm
that:

                  1. We understand that the Securities are not being and will
not be registered under the Securities Act of 1933, as amended (the "Act"), and
are being sold to us in a transaction that is exempt from the registration
requirements of the Act.

                  2. We acknowledge that (a) neither the Company, nor the
Guarantor, nor the Initial Purchasers (as defined in the Offering Memorandum
dated June 7, 2001 relating to the Securities (the "Offering Memorandum")) nor
any person acting on behalf of the Company, the Guarantor or the Initial
Purchasers has made any representation to us with respect to the Company, the
Guarantor or the offer or sale of any Securities; and (b) any information we
desire concerning the Company, the Guarantor and the Securities or any other
matter relevant to our decision to purchase the Securities (including a copy of
the Offering Memorandum) is or has been made available to us.

------------------------
1       Each U.S. purchaser, or account for which each U.S. purchaser is acting,
should purchase at least $250,000 of Securities.

                                      A-1
<Page>

                  3. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Securities, and we are (or any account for which we are
purchasing under paragraph 4 below is) an institutional "accredited investor"
(within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Act) able to bear the economic risk of investment in the Securities.

                  4. We are acquiring the Securities for our own account (or for
accounts as to which we exercise sole investment discretion and have authority
to make, and do make, the statements contained in this letter) and not with a
view to any distribution of the Securities, subject, nevertheless, to the
understanding that the disposition of our property will at all times be and
remain within our control.

                  5. We understand that (a) the Securities will be in registered
form only and that any certificates delivered to us in respect of the Securities
will bear a legend substantially to the following effect:

                  "These Securities have not been registered under the
                  Securities Act of 1933. Further offers or sales of these
                  Securities are subject to certain restrictions, as set forth
                  in the Offering Memorandum dated June 7, 2001 relating to
                  these Securities."

                  and (b) the Company and the Guarantor have agreed to reissue
such certificates without the foregoing legend only in the event of a
disposition of the Securities in accordance with the provisions of paragraph 6
below (provided, in the case of a disposition of the Securities in accordance
with paragraph 6(f) below, that the legal opinion referred to in such paragraph
so permits), or at our request at such time as we would be permitted to dispose
of them in accordance with paragraph 6(a) below.

                  6. We agree that in the event that at some future time we wish
to dispose of any of the Securities, we will not do so unless such disposition
is made in accordance with any applicable securities laws of any state of the
United States and:

                  (a) the Securities are sold in compliance with Rule 144(k)
         under the Act; or

                  (b) the Securities are sold in compliance with Rule 144A under
         the Act; or

                  (c) the Securities are sold in compliance with Rule 904 of
         Regulation S under the Act; or

                  (d) the Securities are sold pursuant to an effective
         registration statement under the Act; or

                  (e) the Securities are sold to the Company; or

                                      A-2
<Page>

                  (f) the Securities are disposed of in any other transaction
         that does not require registration under the Act, and we theretofore
         have furnished to the Company or its designee an opinion of counsel
         experienced in securities law matters to such effect or such other
         documentation as the Company or its designee may reasonably request.

                                             Very truly yours,

                                             By
                                                --------------------------------
                                                     (Authorized Officer)

                                      A-3
<Page>

                                                                       EXHIBIT B

                       SELLING RESTRICTIONS FOR OFFERS AND
                         SALES OUTSIDE THE UNITED STATES

                  (1)(a) The Securities have not been and will not be registered
under the Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Act or pursuant to an exemption from the registration requirements
of the Act. Each Initial Purchaser represents and agrees that, except as
otherwise permitted by Section 3(a)(i) or (ii) of the Agreement to which this is
an exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its Affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) or (ii) of the Agreement to which this is
an exhibit), it shall have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Securities from
it during the distribution compliance period a confirmation or notice to
substantially the following effect:

                  "The Securities covered hereby have not been registered under
                  the U.S. Securities Act of 1933 (the "Act") and may not be
                  offered or sold within the United States or to, or for the
                  account or benefit of, U.S. persons (i) as part of their
                  distribution at any time or (ii) otherwise until 40 days after
                  the later of the commencement of the offering and June 14,
                  2001, except in either case in accordance with Regulation S or
                  Rule 144A under the Act. Terms used above have the meanings
                  given to them by Regulation S."

                  (b) Each Initial Purchaser also represents and agrees that it
         has not entered and will not enter into any contractual arrangement
         with any distributor with respect to the distribution of the
         Securities, except with its Affiliates or with the prior written
         consent of the Company.

                  (c) Terms used in this section have the meanings given to them
         by Regulation S.

                  (2) Each Initial Purchaser represents and agrees that (i) it
has not offered or sold and, prior to the date six months after the date of
issuance of the Securities, will not offer or sell any Securities to persons in
the United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or as
agent) for the purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995;
(ii) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986, as amended, of the United Kingdom

                                      B-1
<Page>

with respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom; and (iii) it has only issued or passed
on and will only issue or pass on in the United Kingdom any document received by
it in connection with the issue of the Securities to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996, as amended, or is a person to whom the
document may otherwise lawfully be issued or passed on.

                                      B-2

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