Document:

Exhibit 4.2

 

AMENDMENT NO. 6 TO FIVE YEAR CREDIT AGREEMENT

 

This Amendment No. 6 to Five Year Credit Agreement
dated as of August 12, 2003 (this “Amendment”) is entered into with
reference to the Five Year Credit Agreement dated as of December 31, 1998
(as amended by Amendment No. 1 dated as of August 31, 1999, Amendment
No. 2 dated as of August 28, 2000, Amendment No. 3 dated
August 23, 2001, Amendment No. 4 dated as of November 5, 2001
and Amendment No. 5 dated as of August 22, 2002, the “Credit
Agreement”), among PARK PLACE ENTERTAINMENT CORPORATION, the Lenders,
Syndication Agent and Documentation Agents referred to therein, and BANK OF
AMERICA, N.A., as Administrative Agent. 
Capitalized terms used in this Amendment and not otherwise defined
herein are used with the meanings set forth for those terms in the Credit
Agreement.

 

The Borrower and the Administrative Agent (acting with
the consent of the Required Lenders pursuant to Section 9.04 of the Credit
Agreement) hereby agree to amend the Credit Agreement as follows:

 

1.             Section 2.23 – Increased
Commitments – Additional Lenders. 
Section 2.23 of the Credit Agreement is hereby amended to read in
full as follows:

 

2.23         Increased
Commitments; Additional Lenders.

 

(a)           Subsequent to July 1, 2003, the
Borrower may, upon at least 30 days notice to the Administrative Agent (or such
shorter prior notice as the Administrative Agent may agree to accept), propose
to increase the aggregate amount of the Commitments to an amount not to exceed
$3,000,000,000 (the amount of any such increase of the Commitments being
referred to as the “Increased Commitments”).

 

(b)           The Borrower may designate any Lender
party to this Agreement (with the consent of such Lender, which may be given or
withheld in its sole discretion) or another Person which qualifies as an
Eligible Assignee (which may be, but need not be, one or more of the existing
Lenders), which at the time agrees to (i) in the case of any such Person that
is an existing Lender, increase its Commitment and (ii) in the case of any
other such Person (an “Additional Lender”), become a party to this Agreement.
The sum of the increases in the Commitments of the existing Lenders pursuant to
this subsection (b) plus the Commitments of the Additional Lenders shall not in
the aggregate exceed the unsubscribed amount of the Increased Commitments.

 

(c)           An increase in the aggregate amount
of the Commitments pursuant to this Section 2.23 shall become effective upon
the receipt by the Administrative Agent of an agreement in form and substance
satisfactory to the Administrative Agent signed by the Borrower, by each
Additional Lender and by each other Lender whose Commitment is to be increased,
setting forth the new Commitments of such Lenders and setting forth the
agreement of each Additional Lender to become a party to this Agreement and to
be bound by all the terms and provisions hereof, together with such evidence of
appropriate corporate authorization on the part of the Borrower with respect to
the Increased Commitments and such opinions of counsel for the Borrower with
respect to the Increased Commitments as the Administrative Agent may reasonably
request.

 

 

2.             Exercise of Commitment Increase
Option.  It is agreed that the
aggregate amount of the Commitments is hereby increased to the principal amount
of $2,317,736,434 concurrently with the effectiveness of this Amendment in
accordance with Section 2.23 of the Agreement, notwithstanding any
technical nonconformity with the procedures set forth in that Section, with the
increased commitment being assumed by the Lenders which are party to the
Joinder and Assumption Agreement described in Section 4 hereof.  In furtherance of the foregoing, the
definition of “Commitment” is hereby amended to read in full as follows:

 

“Commitment”
means, as to each Lender, the commitment of that Lender to make Loans and to
participate in Letters of Credit and Swing Line Loans, in each case as such
amount may be reduced from time to time pursuant to Section 2.12, 2.13 or
2.14, or increased pursuant to Section 2.23.  As of August 12, 2003, the aggregate amount of the
Commitments under this Agreement is $2,317,736,434.

 

3.             Section 5.10 -
Leverage Ratio.  Section 5.10 of the
Credit Agreement is hereby amended to read in full as follows:

 

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

 

4.             Conditions
Precedent.  The effectiveness of
this Amendment shall be conditioned upon the receipt by the Administrative
Agent of :

 

(a)           written
consents hereto executed by the Required Lenders, substantially in the form of
Exhibit A hereto;

 

(b)           a
Joinder and Assumption Agreement with respect to the Credit Agreement executed
by the Borrower, the Administrative Agent, each new Lender becoming a party to
the Credit Agreement concurrently with the effectiveness of this Amendment and
each existing Lender which is increasing its Commitment under the Credit
Agreement, substantially in the form of Exhibit B hereto;

 

(c)           Notes
for each new Lender becoming a party to the Credit Agreement pursuant to the
Joinder and Assumption Agreement in the amounts of their respective
Commitments; and;

 

(d)           a
fee, for the account of each Lender which does not have a commitment under that
certain Multi-Year Credit Agreement dated as of August 23, 2001 with the
Borrower and which has executed a Consent to this Amendment on or prior to
August 12, 2003, in the amount of $1,500.

 

5.             Representations
and Warranties. The Borrower represents and warrants to the Administrative
Agent and the Lenders that, as of the date of this Amendment, (i) no Default or
Event of Default has occurred and remains continuing, and (ii) the
representations and warranties contained in Article IV of the Credit Agreement
and in each other Loan Document (except the representations and warranties set
forth in Section 4.04 and Section 4.05 of the Credit Agreement, in each case as
to any matter which has theretofore been disclosed in writing by the Borrower
to the Lenders) are true and correct as if made on the date hereof.

 

2

 

6.             Confirmation. In all other
respects, the terms of the Credit Agreement and the other Loan Documents are
hereby confirmed.

 

3

 

IN WITNESS
WHEREOF, the Borrower and the Administrative Agent have executed this Amendment
as of the date first written above by their duly authorized representatives.

 

	
   

  	
  PARK PLACE
  ENTERTAINMENT

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,
  as Administrative

  Agent on behalf of the Required Lenders

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Janice Hammond, Vice President

  

 

4

 

[Exhibit A to Amendment]

 

CONSENT OF LENDER

 

This Consent of Lender is delivered by the undersigned
Lender to Bank of America, N.A., as Administrative Agent, with reference to the
Five Year Credit Agreement dated as of December 31, 1998 (as amended by
Amendment No. 1 dated as of August 31, 1999, an Amendment No. 2 dated as of
August 28, 2000, an Amendment No. 3 dated as of August 23, 2001, an
Amendment No. 4 dated as of November 5, 2001 and an Amendment No. 5 dated as of
August 22, 2002, the “Credit Agreement”), among Park Place Entertainment
Corporation, the lenders named therein, and Bank of America, N.A., as Administrative
Agent. Capitalized terms used herein are used with the meanings set forth for
those terms in the Credit Agreement.

 

The undersigned is a party to the Credit Agreement and
hereby consents to the execution and delivery of the proposed Amendment
No. 6 to Five Year Credit Agreement by the Administrative Agent on behalf
of the Lenders party to the Credit Agreement, substantially in the form of the
drafts presented to the undersigned.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [Name of Lender]

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

A-1

 

[Exhibit B to Amendment]

 

JOINDER AND
ASSUMPTION AGREEMENT

 

THIS JOINDER AND ASSUMPTION AGREEMENT (this
“Agreement”), dated as of August 12, 2003 is among Park Place
Entertainment Corporation (the “Borrower”),
                                                   
(the “Increasing Lender”), and Bank of America, N.A., as the Administrative
Agent, pursuant to the Credit Agreement referred to below among the Borrower,
the Lenders referred to therein and Administrative Agent.  Capitalized terms used but not defined in
this Agreement shall have the meanings defined for those terms in the Credit
Agreement.

 

RECITALS

 

A.      Pursuant
the Five Year Credit Agreement dated as of December 31, 1998 among the
Borrower, the Lenders referred to therein, and the Administrative Agent (as
amended by Amendment No. 1 dated as of August 31, 1999, Amendment
No. 2 dated as of August 28, 2000, Amendment No. 3 dated as of
August 23, 2001, Amendment No. 4 dated as of November 5, 2001,
Amendment No. 5 dated as of August 22, 2002 and Amendment No. 6,
as hereinafter defined, the “Credit Agreement”), such Lenders have heretofore
provided a $2,032,000,000 senior credit facility to the Borrower.

 

B.            Pursuant
to Section 2.23 of the Credit Agreement the Borrower has requested that
the aggregate amount of the Lenders’ Commitments be increased from
$2,032,000,000 to $2,317,736,434.

 

C.            Concurrently
herewith, the Credit Agreement is being amended pursuant to an Amendment
No. 6 thereto (the “Amendment No. 6”), and it is intended that the
transactions contemplated herein shall become effective concurrently with the
effectiveness of such Amendment No. 6.

 

D.            The
Increasing Lender has agreed to assume an Increased Commitment under the Credit
Agreement.

 

NOW THEREFORE, the parties hereto agrees as follows:

 

AGREEMENT

 

1.             Effective
Date.  Concurrently with the
effectiveness of the Amendment No. 6, the assumptions and increase in the
Commitments described herein shall be effective (such date being referred to
herein as the “Amendment Date”). The Administrative Agent shall provide prompt
notice of the Amendment Date to the parties hereto.

 

2.             Assumption
by the Increasing Lender.  By
signing this Agreement and under and pursuant to Section 2.23 of the
Credit Agreement, the Increasing Lender agrees that, as of the Amendment Date,
its Commitment shall be increased to
$                    .

 

B-1

 

3.             No
Modifications of Credit Agreement. 
Nothing contained in this Agreement shall be construed to amend or
modify the terms of the Loan Documents other than to effectuate the joinder and
assumptions contemplated herein.

 

4.             Representations
and Warranties of the Increasing Lender. 
The Increasing Lender hereby represents and warrants as follows:

 

(a)           Increasing Lender has duly
authorized, executed and delivered this Agreement and it is legally entitled to
enter into the transactions contemplated herein.

 

(b)           Increasing Lender has obtained all
consents, if any, which are required for the increase in its Commitment
pursuant hereto, including the consent of each Lender or other financial
institution, if any, to which such Increasing Lender has granted a
participation in its Commitment.

 

5.             Fees.  In consideration for the joinder and assumptions
described herein and the Increasing Lender’s agreement to increase its
commitments under that certain First Amended and Restated Multi-Year Credit
Agreement of even date herewith by the amount of its Increased Commitment
hereunder, the Borrower shall pay to the Increasing Lender a fee in the amount
set forth in the term sheet for such First Amended and Restated Multi-Year
Credit Agreement posted on Intralinks by the Joint Lead Arrangers and Joint
Book Managers (as defined in the First Amended and Restated Multi-Year Credit
Agreement).

 

6.             Beneficiaries
of this Agreement.  The Increasing
Lender hereby acknowledges and agrees that this Agreement is for the express
benefit of the Borrower, the Administrative Agent and the other Lenders and
their respective successors and permitted assigns.

 

7.             Governing
Law.  This Agreement and the
transactions contemplated hereunder shall be governed by and construed and
enforced in accordance with the laws of the State of California.

 

B-2

 

IN WITNESS
WHEREOF, each of the undersigned has executed this Agreement as of the date
first above written.

 

	
   

  	
  “Increasing Lender”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

B-3

 

ACKNOWLEDGED AND AGREED TO:

 

	
  BANK OF AMERICA,
  N.A.,

  	
   

  
	
  as
  Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PARK PLACE
  ENTERTAINMENT CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
							

 

B-4Exhibit
4.3

 

SHORT TERM CREDIT
AGREEMENT

 

dated as of

 

August 12, 2003

 

among

 

PARK PLACE ENTERTAINMENT
CORPORATION

 

The Lenders, Syndication
Agent and Co-Documentation Agents Referred to Herein

 

and

 

BANK OF AMERICA, N.A.

as Administrative Agent

 

 

BANC OF AMERICA
SECURITIES LLC.

 

and

 

J.P. MORGAN SECURITIES
INC.

 

Joint Lead Arrangers and
Joint Book Managers

 

 

Table of Contents

 

	
  ARTICLE I

  	
  DEFINITIONS

  
	
   

  	
  1.01

  	
  Definitions

  
	
   

  	
  1.02

  	
  Accounting
  Terms and Determinations

  
	
   

  	
  1.03

  	
  Types of Borrowings

  
	
  ARTICLE II

  	
   

  	
  THE CREDITS

  
	
   

  	
  2.01

  	
  Commitments
  to Lend

  
	
   

  	
  2.02

  	
  Notice of Borrowings

  
	
   

  	
  2.03

  	
  Conversion
  and Continuation of Loans

  
	
   

  	
  2.04

  	
  Notice to Lenders; Funding of Loans

  
	
   

  	
  2.05

  	
  Notes

  
	
   

  	
  2.06

  	
  Interest
  Rates

  
	
   

  	
  2.07

  	
  Upfront Fees

  
	
   

  	
  2.08

  	
  Facility
  Fees

  
	
   

  	
  2.09

  	
  Optional Termination or Reduction of
  Commitments by the Borrower

  
	
   

  	
  2.10

  	
  Optional Termination of Commitments by
  the Lenders

  
	
   

  	
  2.11

  	
  Scheduled Termination of Commitments

  
	
   

  	
  2.12

  	
  Extensions
  of the Termination Date

  
	
   

  	
  2.13

  	
  Optional Prepayments

  
	
   

  	
  2.14

  	
  General
  Provisions as to Payments

  
	
   

  	
  2.15

  	
  Funding Losses

  
	
   

  	
  2.16

  	
  Computation
  of Interest and Fees

  
	
   

  	
  2.17

  	
  Withholding
  Tax Exemption

  
	
   

  	
  2.18

  	
  Regulation D
  Compensation

  
	
  ARTICLE III

  	
  CONDITIONS

  
	
   

  	
  3.01

  	
  Borrowings

  
	
   

  	
  3.02

  	
  Effectiveness

  
	
  ARTICLE IV

  	
  REPRESENTATIONS AND
  WARRANTIES

  
	
   

  	
  4.01

  	
  Corporate Existence and Power

  
	
   

  	
  4.02

  	
  Corporate and Governmental
  Authorization; Contravention

  
	
   

  	
  4.03

  	
  Binding Effect

  

 

i

 

	
   

  	
  4.04

  	
  Financial Information

  
	
   

  	
  4.05

  	
  Litigation

  
	
   

  	
  4.06

  	
  Compliance with
  ERISA

  
	
   

  	
  4.07

  	
  Taxes

  
	
   

  	
  4.08

  	
  Significant
  Subsidiaries

  
	
   

  	
  4.09

  	
  Not an Investment Company

  
	
   

  	
  4.10

  	
  Environmental
  Matters

  
	
   

  	
  4.11

  	
  Full Disclosure

  
	
   

  	
  4.12

  	
  Solvency

  
	
   

  	
  4.13

  	
  Gaming Laws

  
	
   

  	
  4.14

  	
  Tax Shelter Regulations

  
	
  ARTICLE V

  	
  COVENANTS

  
	
   

  	
  5.01

  	
  Information

  
	
   

  	
  5.02

  	
  Maintenance
  of Property; Insurance

  
	
   

  	
  5.03

  	
  Conduct of Business and Maintenance of
  Existence

  
	
   

  	
  5.04

  	
  Compliance with Laws

  
	
   

  	
  5.05

  	
  Inspection of Property, Books and Records

  
	
   

  	
  5.06

  	
  Negative Pledge

  
	
   

  	
  5.07

  	
  Consolidations, Mergers and Sales of
  Assets

  
	
   

  	
  5.08

  	
  Hostile Tender Offers

  
	
   

  	
  5.09

  	
  Use of Proceeds

  
	
   

  	
  5.10

  	
  Leverage Ratio

  
	
   

  	
  5.11

  	
  Interest Coverage Ratio

  
	
  ARTICLE VI

  	
  DEFAULTS

  
	
   

  	
  6.01

  	
  Events of Default

  
	
   

  	
  6.02

  	
  Notice of Default

  
	
  ARTICLE VII

  	
  THE ADMINISTRATIVE AGENT

  
	
   

  	
  7.01

  	
  Appointment
  and Authorization of Administrative Agent

  
	
   

  	
  7.02

  	
  Delegation
  of Duties

  
	
   

  	
  7.03

  	
  Liability
  of Administrative Agent

  
				

 

ii

 

	
   

  	
  7.04

  	
  Reliance
  by Administrative Agent

  
	
   

  	
  7.05

  	
  Notice of
  Default

  
	
   

  	
  7.06

  	
  Credit
  Decision; Disclosure of Information by Administrative Agent

  
	
   

  	
  7.07

  	
  Indemnification
  of Administrative Agent

  
	
   

  	
  7.08

  	
  Administrative
  Agent in its Individual Capacity

  
	
   

  	
  7.09

  	
  Successor
  Administrative Agent

  
	
   

  	
  7.10

  	
  Administrative
  Agent May File Proofs of Claim

  
	
   

  	
  7.11

  	
  Other Agents;
  Arrangers and Managers

  
	
  ARTICLE VIII

  	
  CHANGE IN
  CIRCUMSTANCES

  
	
   

  	
  8.01

  	
  Basis for Determining Interest Rate
  Inadequate or Unfair

  
	
   

  	
  8.02

  	
  Illegality

  
	
   

  	
  8.03

  	
  Increased Cost and Reduced Return

  
	
   

  	
  8.04

  	
  Base Rate Loans Substituted for Affected
  Euro-Dollar Loans

  
	
  ARTICLE IX

  	
  MISCELLANEOUS

  
	
   

  	
  9.01

  	
  Notices

  
	
   

  	
  9.02

  	
  No Waivers

  
	
   

  	
  9.03

  	
  Expenses; Documentary Taxes;
  Indemnification

  
	
   

  	
  9.04

  	
  Amendments; Consents

  
	
   

  	
  9.05

  	
  Successors and Assigns

  
	
   

  	
  9.06

  	
  Collateral

  
	
   

  	
  9.07

  	
  California Law;
  Submission to Jurisdiction

  
	
   

  	
  9.08

  	
  Counterparts; Integration

  
	
   

  	
  9.09

  	
  Several Obligations

  
	
   

  	
  9.10

  	
  Sharing of Set-Offs

  
	
   

  	
  9.11

  	
  WAIVER OF JURY TRIAL

  
	
   

  	
  9.12

  	
  Confidentiality

  
				

 

iii

 

SHORT TERM CREDIT
AGREEMENT

 

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

 

RECITALS

 

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

 

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

 

ARTICLE I

DEFINITIONS

 

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

 

“Administrative Agent” means Bank of America, N.A. in
its capacity as administrative agent for the Lenders hereunder, and its
successors in such capacity.

 

“Administrative Questionnaire” means, with respect to
each Lender, an administrative questionnaire in the form prepared by the
Administrative Agent and submitted to the Administrative Agent (with a copy to
the Borrower) duly completed by such Lender.

 

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

 

“Agent-Related Persons” means the Administrative
Agent, together with its Affiliates (including, in the case of Bank of America
in its capacity as the Administrative Agent, Banc of America Securities LLC),
and the officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.

 

 

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

 

“Applicable Lending Office” means, with respect to any
Lender, (i) in the case of its Base Rate Loans, its Domestic Lending
Office, and (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar
Lending Office.

 

“Approved Fund” has the meaning set forth in
Section 9.05(g).

 

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

 

“Attorney Costs” means and includes all reasonable
fees, expenses and disbursements of any law firm engaged to represent, or other
external counsel to, the Administrative Agent (or, if the context clearly so
requires, any Lender or any Indemnitee) in connection herewith or the
transactions contemplated hereby.

 

“Authorized Officer” means any of the controller, the
treasurer or the chief financial officer of the Borrower.

 

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

 

“Base Rate” means, as of any date of determination,
the rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%)
equal to the higher of (a) the Reference Rate in effect on such
date (calculated on the basis of a year of 365 or 366 days and the actual
number of days elapsed) and (b) the Federal Funds Rate in effect on such
date (calculated on the basis of a year of 360 days and the actual number
of days elapsed) plus 1⁄2 of 1% (50 basis points).

 

“Base Rate Loan” means a Loan made or to be made by a
Lender as a Base Rate Loan in accordance with the applicable Notice of
Borrowing or pursuant to Article VIII.

 

“Base Rate Margin” has the meaning set forth on
Schedule 1.

 

“Benefit Arrangement” means at any time an employee
benefit plan within the meaning of Section 3(3) of ERISA which is not a
Plan or a Multiemployer Plan and which is maintained or otherwise contributed
to by any member of the ERISA Group.

 

“Borrower” means Park Place Entertainment Corporation,
a Delaware corporation, and its successors.

 

“Borrowing” means the aggregation of Loans of one or
more Lenders to be made to the Borrower pursuant to Article II on a single
date and, in the case of Borrowings consisting of Euro-Dollar Loans, for a
single Interest Period.

 

“Change of Control” means the occurrence of a Rating
Decline in connection with any of the following events:  (i) upon any merger or consolidation of
the Borrower with or into any person or any sale, transfer or other conveyance,
whether direct or indirect, of all or substantially all of the assets of the
Borrower, on a consolidated basis, in one transaction or a series of related

 

2

 

transactions, if, immediately
after giving effect to such transaction, any person or group of persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) is or becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of
securities representing a majority of the total voting power of the aggregate
outstanding securities of the transferee or surviving entity normally entitled
to vote in the election of directors, managers, or trustees, as applicable, of
the transferee or surviving entity, (ii) when any person or group of
persons (within the meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) is or becomes the beneficial owner (within the meaning
of Rule 13d-3 promulgated by The Securities and Exchange Commission under said
Act) of securities representing a majority of total voting power of the
aggregate outstanding securities of the Borrower normally entitled to vote in the
election of directors of the Borrower, (iii) when, during any period of 12
consecutive calendar months, individuals who were directors of the Borrower on
the first day of such period (together with any new directors whose election by
the board of directors of the Borrower or whose nomination for election by the
stockholders of the Borrower was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the board of
directors of the Borrower, or (iv) the sale or disposition, whether
directly or indirectly, by the Borrower of all or substantially all of its
assets.

 

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

 

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

 

“Compliance Certificate” means a certificate,
substantially in the form of Exhibit A, properly completed and signed by an
Authorized Officer.

 

“Consolidated Debt” means at any date the Debt of the
Borrower and its Consolidated Subsidiaries, determined on a consolidated basis
as of such date, provided that Consolidated Debt shall exclude any Debt
of the Borrower or a Subsidiary as to which cash and cash equivalents
sufficient to provide for payment in full of such Debt at its scheduled
maturity or at an earlier date at which it shall have been or may be called for
redemption shall have been irrevocably deposited in trust for the benefit of
the holders of such Debt or a representative of such holders, which deposit
shall have resulted in the legal or in-substance defeasance thereof.

 

“Consolidated EBITDA” means, for any period,
Consolidated Net Income for such period before (i) income taxes,
(ii) interest expense, (iii) depreciation and amortization,
(iv) minority interest, (v) extraordinary losses or gains,
(vi) Pre-Opening Expenses, and (vii) nonrecurring non-cash
charges, provided that, in calculating “Consolidated EBITDA”:

 

3

 

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

 

(b)                                 Consolidated
EBITDA shall be adjusted, on a pro forma basis, to include the operating
results of each resort or casino property acquired by the Borrower and its
Consolidated Subsidiaries during the relevant period and to exclude the
operating results of each resort or casino property sold or otherwise disposed
of by the Borrower and its Subsidiaries, or whose operations are discontinued
during the relevant period.

 

“Consolidated Interest Expense” means, for any period,
net interest expense of the Borrower and its Consolidated Subsidiaries for such
period, determined in accordance with generally accepted accounting principles,
provided that in calculating “Consolidated Interest Expense” for any
period, the interest expenses of the Borrower and its Consolidated Subsidiaries
shall be adjusted for any acquisition or disposition of any resort or casino
property acquired or sold or otherwise disposed of by the Borrower and its
Subsidiaries during the relevant period, on a pro forma basis, utilizing a
reasonable methodology which shall be (i) proposed by the Borrower,
(ii) consented to by the Administrative Agent at the time of such
calculation, which consent shall not be unreasonably withheld, and
(iii) not objected to in writing by the Required Lenders within the ten
Domestic Business Days following notice of such methodology.

 

“Consolidated Net Income” means, for any period, the
consolidated net income of the Borrower and its Consolidated Subsidiaries for
such period.

 

“Consolidated Net Tangible Assets” means the total
amount of assets of the Borrower and its Consolidated Subsidiaries, after
deducting therefrom (a) all current liabilities of the Borrower and its
Consolidated Subsidiaries (excluding (i) the current portion of long term
indebtedness, (ii) inter-company liabilities, and (iii) any
liabilities which are by their terms renewable or extendable at the option of
the obligor thereon to a time more than twelve months from the time as of which
the amount thereof is being computed), and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the latest consolidated balance sheet of the
Borrower prepared in accordance with generally accepted accounting principles.

 

“Consolidated Subsidiary” means at any date any
Subsidiary or other entity the accounts of which would be consolidated with
those of the Borrower in its consolidated financial statements as of such date.

 

“Covered Subsidiary” means at any time any Subsidiary
of the Borrower that has consolidated assets in an amount greater than
$5,000,000.

 

“Debt” of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally accepted
accounting principles, (v) all indebtedness or other 

 

4

 

obligations secured by a
contractual Lien on any asset of such Person, whether or not such indebtedness
or other obligations are otherwise an obligation of such Person, and
(vi) all Guarantees made by such Person (including by way of provision of
letters of credit or other contingent obligations) with respect to indebtedness
or other obligations of any other Person which constitute “Debt” of a type or
class described in clauses (i) through (v) of this definition.

 

“Default” means any condition or event which
constitutes an Event of Default or which with the giving of notice or lapse of
time or both would, unless cured or waived, become an Event of Default.

 

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

 

“Domestic Business Day” means any day except a
Saturday, Sunday or other day on which commercial banks in New York City
or Los Angeles are authorized or required by law to close.

 

“Domestic Lending Office” means, as to each Lender,
its office located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Domestic Lending
Office) or such other office as such Lender may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Administrative Agent.

 

“Effective Date” means the date this Agreement becomes
effective in accordance with Section 3.02.

 

“Eligible Assignee” means (a) a Lender; (b) an
Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other
than a natural person) approved by (i) the Administrative Agent and (ii) unless
an Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

“Environmental Laws” means any and all statutes,
regulations, permits, licenses or other governmental restrictions relating to
the environment or to releases of petroleum or petroleum products, chemicals or
toxic or hazardous substances or wastes into the environment.

 

“ERISA” means the Employee Retirement Income Security
Act of 1974, as amended, or any successor statute.

 

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

 

“Euro-Dollar Business Day” means any Domestic Business
Day on which commercial banks are open for international business (including
dealings in Dollar deposits) in London.

 

“Euro-Dollar Lending office” means, as to each Lender,
its office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its

 

5

 

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

 

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

 

“Euro-Dollar Margin” has the meaning set forth on
Schedule 1.

 

“Euro-Dollar Rate” means for any Interest Period with
respect to any Euro-Dollar Loan:

 

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

 

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

 

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

 

“Euro-Dollar Reserve Percentage” means for any day
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System with deposits exceeding five billion Dollars in
respect of “eurocurrency liabilities” (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of any bank to
United States residents).

 

“Event of Default” has the meaning set forth in
Section 6.01.

 

6

 

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

 

“Federal Funds Rate” means, for any day, the rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank on the
Domestic Business Day next succeeding such day; provided that (a) if
such day is not a Domestic Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business Day, and (b) if no
such rate is so published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate (rounded upward, if
necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.

 

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

 

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

 

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

 

“Governmental Agency” means (a) any international,
foreign, federal, state, county or municipal government, or political
subdivision thereof, (b) any governmental or quasi-governmental agency,
authority, board, bureau, commission, department, instrumentality or public
body (including any Gaming Board) or (c) any court or administrative
tribunal of competent jurisdiction.

 

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

 

“Guarantee” by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing any
Debt of any other Person and, without limiting the generality of the foregoing,
any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services,
to take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the
holder of such Debt of the payment thereof or to protect such holder against
loss in respect thereof (in whole or in part), including by way of provision of
letters of credit or other contingent obligations with respect thereto, provided
that the term Guarantee shall not include (x) endorsements for collection
or deposit in the ordinary course of business or (y) performance or
completion guarantees.  The term
“Guarantee” used as a verb has a corresponding meaning.

 

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

 

7

 

“Interest Coverage Ratio” means, as of each date of
determination, the ratio of (a) Consolidated EBITDA for the four fiscal
quarters ending on that date, to (b) Consolidated Interest Expense for the
same period.

 

“Interest Period” means, with respect to each
Euro-Dollar Borrowing, the period commencing on the date of such Borrowing and
ending one week or 1, 2, 3 or 6 months thereafter, as the Borrower may elect in
the applicable Notice of Borrowing or Notice of Conversion/Continuation; provided
that:

 

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

 

(b)                                 any
Interest Period which begins on the last Euro-Dollar Business Day in a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to
clause (a)(iii) below, end on the last Euro-Dollar Business Day in the
calendar month which is the last calendar month which commences in such
Interest Period; and

 

(c)                                  any
Interest Period which would otherwise end after the Termination Date shall end
on the Termination Date, or, if such date is not a Euro-Dollar Business Day,
then on the next preceding Euro-Dollar Business Day.

 

“Internal Revenue Code” means the Internal Revenue
Code of 1986, as amended, or any successor statute.

 

“Investment Grade” means (i) with respect to
S&P, a rating of BBB- or higher, and (ii) with respect to Moody’s, a
rating of Baa3 or higher.

 

“Joint Lead Arrangers and Joint Book Managers” means
Banc of America Securities LLC and J.P. Morgan Securities Inc.  Following the date of this Agreement, the
Joint Lead Arrangers and Joint Book Managers shall have no obligations or
liabilities under the Loan Documents.

 

“Lender” means each lender listed on the signature
pages hereof and each Lender which accepts an assignment pursuant to
Section 9.05, and their respective successors.

 

“Leverage Ratio” means, as of any date of
determination, the ratio of (a) Consolidated Debt on such date to
(b) Consolidated EBITDA for the period of four consecutive fiscal quarters
ending on such date.

 

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

 

8

 

“Lien” means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect
of such asset.  For the purposes of this
Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.

 

“Loan” means a loan made or to be made by a Lender
pursuant to Section 2.01.  A Loan
may be a Base Rate Loan or a Euro-Dollar Loan.

 

“Loan Documents” means this Agreement, the Notes and
each other instrument, document or agreement now or hereafter executed by the
parties in furtherance of this Agreement.

 

“Margin Adjustment” has the meaning set forth in the
Schedule 1.

 

“Material Plan” means at any time a Plan or Plans
having aggregate Unfunded Liabilities in excess of $25,000,000.

 

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

 

“Multiemployer Plan” means at any time an employee
pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to
which any member of the ERISA Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the
ERISA Group during such five year period.

 

“New Project” means each new hotel-casino, casino or
resort project (as opposed to any project which consists of an extension or
redevelopment of an operating hotel, casino or resort) having a development and
construction budget in excess of $25,000,000 which hereafter receives a
certificate of completion or occupancy and all relevant gaming and other
licenses, and in fact commences operations.

 

“Non-Recourse Debt” means Debt in respect of which the
recourse of the holder of such Debt is limited to the assets securing such Debt
and such Debt does not constitute the general obligation of the Borrower or any
Subsidiary.

 

“Notes” means promissory notes of the Borrower,
substantially in the form of Exhibit B hereto, evidencing the obligation of the
Borrower to repay the Loans, and “Note” means any one of such promissory notes
issued hereunder.

 

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

 

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

 

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

 

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

 

9

 

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

 

“Person” means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.

 

“Plan” means at any time an employee pension benefit
plan (other than a Multiemployer Plan) which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the
Internal Revenue Code and either (i) is maintained, or contributed to, by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five years been maintained, or
contributed to, by any Person which was at such time a member of the ERISA
Group for employees of any Person which was at such time a member of the ERISA
Group.

 

“Pre-Opening Expenses” means, with respect to any
fiscal period, the amount of expenses (other  than Consolidated
Interest Expense) incurred with respect to capital projects which are
classified as “pre-opening expenses” on the applicable financial statements of
the Borrower and its Subsidiaries for such period prepared in accordance with
generally accepted accounting principles.

 

“Pricing Certificate” means a Pricing Certificate
substantially in the form of Exhibit C hereto, properly completed and signed by
an Authorized Officer of the Borrower.

 

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

 

“Public Notice” means, without limitation, any filing
or report made in accordance with the requirements of the Securities and
Exchange Commission (or any successor), any press release or public
announcement made by the Borrower or any written notice the Borrower gives to
the Administrative Agent or the Lenders.

 

“Rating Agencies” means S&P and Moody’s.

 

“Rating Decline” means the occurrence on any date on
or within 90 days after the date of the first Public Notice of
(i) the occurrence of an event described in clauses (i)-(iv) of the
definition of “Change of Control” or (ii) the intention by the Borrower to
effect such an event (which 90-day period shall be extended so long as the
rating of the senior debt of the Borrower is under publicly announced
consideration for possible downgrade by any of the Rating Agencies) of a
decrease in the rating of the senior debt of the Borrower by any of the Rating
Agencies to below Investment Grade.

 

“Reference Rate” means the rate of interest publicly
announced from time to time by Bank of America as its “prime rate” or the
similar prime rate or reference rate announced by any successor Administrative
Agent.  Bank of America’s prime rate is
a rate set by Bank of America based upon various factors including Bank of
America’s costs and desired return, general

 

10

 

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

 

“Register” has the meaning set forth in
Section 9.05(c).

 

“Regulation U” means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time to time.

 

“Required Lenders” means at any time Lenders having at
least 51% of the aggregate amount of the Commitments or, if the Commitments
shall have been terminated, holding at least 51% of the sum of the aggregate
unpaid principal amount of the Loans.

 

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

 

“S&P” means Standard & Poor’s, a division
of The McGraw Hill Companies, and its successors.

 

“Significant Subsidiary” means each Subsidiary of the
Borrower at any time having (i) at least 10% of the total consolidated
assets of the Borrower and its Subsidiaries (determined as of the last day of
the most recent fiscal quarter of the Borrower) or (ii) at least 10% of
the consolidated revenues of the Borrower and its Subsidiaries for the fiscal
year of the Borrower then most recently ended.

 

“Solvent” as to any Person shall mean that
(a) the sum of the assets of such Person, both at a fair valuation and at
present fair saleable value, exceeds its liabilities, including its probable
liability in respect of contingent liabilities, (b) such Person will have
sufficient capital with which to conduct its business as presently conducted
and as proposed to be conducted and (c) such Person has not incurred
debts, and does not intend to incur debts, beyond its ability to pay such debts
as they mature.  For purposes of this
definition, “debt” means any liability on a claim, and “claim” means (x) a
right to payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured, or (y) a right to an equitable
remedy for breach of performance if such breach gives rise to a payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or
unsecured.  With respect to any such
contingent liabilities, such liabilities shall be computed at the amount which,
in light of all the facts and circumstances existing at the time, represents
the amount which can reasonably be expected to become an actual or matured
liability.

 

“SPC” has the meaning set forth in
Section 9.05(h).

 

“Subsidiary” means any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Borrower.

 

11

 

“Syndication Agent” means Societe Generale, in its
capacity as syndication agent for the Lenders hereunder.  The capacity of the Syndication Agent is
titular in nature, and the Syndication Agent shall have no obligations or
liabilities under the Loan Documents by reason of acting in such capacity.

 

“Termination Date” means August 10, 2004 or such
later date to which the Revolving Credit Period shall have been extended
pursuant to Section 2.12, or, if such day is not a Euro-Dollar Business
Day, the next preceding Euro-Dollar Business Day.

 

“Unfunded Liabilities” means, with respect to any Plan
at any time, the amount (if any) by which (i) the value of all benefit
liabilities under such Plan, determined on a plan termination basis using the
assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA,
exceeds (ii) the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess represents a potential
liability of a member of the ERISA Group to the PBGC or any other Person under
Title IV of ERISA.

 

1.02                           Accounting
Terms and Determinations.  Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with
generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Borrower’s independent public accountants and disclosed in such financial
statements) with the most recent audited consolidated financial statements of
the Borrower and its Consolidated Subsidiaries delivered to the Lenders; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
wishes to amend any covenant in Article V to eliminate the effect of any
change in generally accepted accounting principles on the operation of such
covenant (or if the Administrative Agent notifies the Borrower that the
Required Lenders wish to amend Article V for such purpose), then the
Borrower’s compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders.

 

1.03                           Types
of Borrowings. 
Borrowings are classified for purposes of this Agreement either by
reference to the pricing of Loans comprising such Borrowing (e.g., a
“Euro-Dollar Borrowing” is a Borrowing comprised of Euro-Dollar Loans) or by
reference to the provisions of Article II under which participation
therein is determined (i.e., a “Borrowing” is a Borrowing under
Section 2.01 in which all Lenders participate in proportion to their
commitments).

 

ARTICLE II

THE CREDITS

 

2.01                           Commitments
to Lend.  During the
Revolving Credit Period each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to lend to the Borrower pursuant to
this Section from time to time amounts such that (a) the aggregate
principal of Loans 

 

12

 

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

 

2.02                           Notice
of Borrowings.  The
Borrower shall give the Administrative Agent notice (a ”Notice of
Borrowing”), substantially in the form of Exhibit D hereto, not later than
8:30 A.M. (California local time) on (y) the date of each Base Rate
Borrowing and (z) the third Euro-Dollar Business Day before each
Euro-Dollar Borrowing, specifying:

 

(a)                                  the
date of such Borrowing, which shall be a Domestic Business Day in the case of a
Base Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing;

 

(b)                                 the
aggregate amount of such Borrowing;

 

(c)                                  whether
the Loans comprising such Borrowing are to be Base Rate Loans or Euro-Dollar
Loans; and

 

(d)                                 in
the case of a Euro-Dollar Borrowing, the duration of the Interest Period
applicable thereto, subject to the provisions of the definition of Interest
Period.

 

Not more than twelve Borrowings which are Euro-Dollar Borrowings having
different Interest Periods shall be outstanding at any time.

 

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

 

The Borrower shall deliver, to the Administrative
Agent, notice of any such conversion or continuation, substantially in the form
of Exhibit D (each a “Notice of Conversion/Continuation”), no later than
8:30 A.M. (California local time) at least one Domestic Business Day in
advance of the proposed conversion date (in the case of a conversion to a Base
Rate Loan) and at least three Euro-Dollar Business Days in advance of the
proposed conversion/ continuation date (in the case of a conversion to, or a
continuation of, a Euro-Dollar Loan).  A
Notice of Conversion/Continuation shall specify (i) the proposed
conversion/continuation date

 

13

 

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

 

2.04                           Notice
to Lenders; Funding of Loans.

 

(a)                                  Upon
receipt of a Notice of Borrowing, the Administrative Agent shall promptly
notify each Lender of the contents thereof and of such Lender’s share (if any)
of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.

 

(b)                                 Not
later than 11:00 A.M. (California local time) on the date of each
Borrowing, if such Borrowing is to be made in Dollars, each Lender
participating therein shall (except as provided in subsection (c) of this
Section) make available its share of such Borrowing in Dollars, in federal or
other funds immediately available to the Administrative Agent at its address
referred to in Section 9.01.  Unless
the Administrative Agent determines that any applicable condition specified in
Article III has not been satisfied, the Administrative Agent will make the
funds so received from the Lenders available to the Borrower at the
Administrative Agent’s aforesaid address or place.

 

(c)                                  If
any Lender makes a new Loan hereunder on a day on which the Borrower is to
repay all or any part of an outstanding Loan from such Lender, such Lender
shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by such Lender to the
Administrative Agent as provided in subsection (b), or remitted by the
Borrower to the Administrative Agent as provided in Section 2.14, as the
case may be.

 

(d)                                 Unless
the Administrative Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available to the
Administrative Agent on the date of such Borrowing in accordance with
subsections (b) and (c) of this Section 2.04 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount.  If and to the extent that such Lender shall not have so made such
share available to the Administrative Agent, such Lender and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, a
rate per annum equal to the higher of the Federal Funds Rate and the interest
rate applicable thereto pursuant to Section 2.06 and (ii) in the case
of such Lender, the Federal Funds Rate. 
If such Lender shall repay to the Administrative Agent such
corresponding

 

14

 

amount, such
amount so repaid shall constitute such Lender’s Loan included in such Borrowing
for purposes of this Agreement.  If the
Borrower pays interest under this subsection (d) at the Federal Funds Rate
and the Federal Funds Rate is higher than the interest rate applicable thereto
pursuant to Section 2.06, the applicable Lender shall pay the Borrower the
difference between such rates.

 

2.05                           Notes.

 

(a)                                  The
Loans of each Lender shall be evidenced by a single Note payable to the order
of such Lender for the account of its Applicable Lending Office in an amount
equal to such Lender’s Commitment.

 

(b)                                 Upon
receipt of each Lender’s Note pursuant to Section 3.02(b), the
Administrative Agent shall forward such Note to such Lender.  Each Lender shall record the date, amount,
type and maturity of each Loan made by it and the date and amount of each
payment of principal made by the Borrower with respect thereto, and may, if
such Lender so elects in connection with any transfer or enforcement of its
Note, endorse on the schedule forming a part thereof appropriate notations
to evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes.  Each
Lender is hereby irrevocably authorized by the Borrower so to endorse its Note
and to attach to and make a part of its Note a continuation of any such schedule as
and when required.

 

2.06                           Interest
Rates.

 

(a)                                  Each
Base Rate Loan shall bear interest on the outstanding principal amount thereof,
for each day from the date such Loan is made until it becomes due, at a rate
per annum equal to the Base Rate for such day plus any applicable Base
Rate Margin.  Such interest shall be
payable on the last Domestic Business Day of each calendar quarter in arrears
and on the Termination Date.  Any overdue
principal of or interest on any Base Rate Loan shall, at the option of the
Required Lenders, bear interest, payable on demand, for each day until paid at
a rate per annum equal to the sum of the Base Rate plus any applicable
Base Rate Margin plus 2% per annum.

 

(b)                                 Each
Euro-Dollar Loan shall bear interest on the outstanding principal amount
thereof, for each day during the Interest Period applicable thereto, at a rate
per annum equal to the sum of (a) the Euro-Dollar Margin for such day plus
(b) the applicable Euro-Dollar Rate for such Interest Period.  Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than three months, at intervals of three months after the first day thereof.

 

(c)                                  Any
overdue principal of or interest on any Euro-Dollar Loan shall, at the option
of the Required Lenders, bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 2% plus the Euro-Dollar Margin for
such day plus the quotient obtained (rounded upwards, if necessary, to the next
higher 1/100 of 1%) by dividing (i) the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of

 

15

 

the respective
rates per annum at which one day (or, if such amount due remains unpaid more
than three Euro-Dollar Business Days, then for such period of time not longer
than 6 months as the Administrative Agent may elect) deposits in Dollars in an
amount approximately equal to such overdue payment due to the Administrative
Agent are offered to the Administrative Agent in the London interbank market
for the applicable period determined as provided above by (ii) 1.00 minus
the Euro-Dollar Reserve Percentage (or, if the circumstances described in
clause (a) or (b) of Section 8.01 shall exist, at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for such
day).

 

(d)                                 The
Administrative Agent shall determine in accordance with the provisions of this
Agreement, each interest rate applicable to the Loans hereunder.  The Administrative Agent shall give prompt
notice to the Borrower and the participating Lenders of each rate of interest
so determined, and its determination thereof shall be conclusive in the absence
of manifest error.

 

2.07                           Upfront
Fees.  On the date upon which
this Agreement is executed, the Borrower shall pay to the Administrative Agent
for the account of each Lender non-refundable upfront fees in the amounts set
forth in the term sheet for this Agreement posted on Intralinks by the Joint
Lead Arrangers and Joint Book Managers.

 

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

 

2.09                           Optional
Termination or Reduction of Commitments by the Borrower.  During the Revolving Credit Period, the
Borrower may, upon at least five Domestic Business Days’ notice to the
Administrative Agent, (i) terminate the Commitments at any time, if no
Loans are outstanding at such time or (ii) ratably and permanently reduce
from time to time by an aggregate amount of $25,000,000 or any larger amount in
multiples of $1,000,000, the aggregate amount of the Commitments in excess of
the aggregate outstanding principal balance of the Loans.

 

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

 

16

 

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

 

2.11                           Scheduled
Termination of Commitments. 
The Commitments shall terminate on the Termination Date and any Loans
then outstanding (together with accrued interest thereon) shall be due and
payable on such date.

 

2.12                           Extensions
of the Termination Date. 
The Termination Date may be extended, in the manner set forth in this
Section, for a period of 364 days after the date on which the Termination
Date would otherwise have occurred.  If
the Borrower wishes to extend the Termination Date, it shall give written
notice to that effect to the Administrative Agent not less than 45 days
nor more than 60 days prior to the then current Termination Date,
whereupon the Administrative Agent shall notify each of the Lenders of such
notice.  Each Lender will respond to
such request, whether affirmatively or negatively, within the period which ends
20 days following the Borrower’s request. 
If a Lender or Lenders respond negatively or fail to timely respond to
such request (each non-responding Lender being conclusively deemed to refuse to
consent to the extension), but such non-extending Lender(s) have Commitment(s)
aggregating less than 33 1/3% of the aggregate amount of the Commitments,
the Borrower shall have the right, with the assistance of the Administrative
Agent, to seek a mutually satisfactory substitute financial institution or
financial institutions (which may be one or more of the Lenders) to assume the
Commitment(s) of such non-extending Lender(s). 
Not later than the third Domestic Business Day prior to the then
effective Termination Date, the Borrower may designate one or more new
financial institutions reasonably acceptable to the Administrative Agent to
assume the Commitments of such non-extending Lenders, whereupon the aggregate
amount of such Commitment(s) shall be assumed by such substitute financial
institution or financial institutions on the then current Termination
Date.  So long as Lenders having
Commitment(s) totaling not less than 66 2/3% of the aggregate amount of the
Commitment(s) shall have responded affirmatively to such a request then,
subject to receipt by the Administrative Agent of counterparts of an Extension
Agreement in substantially the form of Exhibit E duly completed and signed by
the Borrower and each of the affirmatively responding Lenders, the Termination
Date shall be extended, effective on such extension date, for a period of
364 days to the date stated in such Extension Agreement.

 

2.13                           Optional
Prepayments.

 

(a)                                  Subject
in the case of any Euro-Dollar Borrowing to Section 2.15, the Borrower
may, upon at least one Domestic Business Day’s notice to the Administrative
Agent, prepay any Base Rate Borrowing, or upon at least three Euro-Dollar
Business Days’ notice to the Administrative Agent, with respect to any
Euro-Dollar Borrowing, prepay any Euro-Dollar Borrowing, in each case in whole
at any time, or from time to time in part in amounts aggregating $10,000,000 or
any larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment.  Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Lenders included in such
Borrowing.

 

(b)                                 Upon
receipt of a notice of prepayment pursuant to this Section, the Administrative
Agent shall promptly notify each Lender of the contents thereof and of

 

17

 

such Lender’s
ratable share (if any) of such prepayment and such notice shall not thereafter
be revocable by the Borrower.

 

2.14                           General
Provisions as to Payments.

 

(a)                                  The
Borrower shall make each payment of principal of, and interest on, Loans and of
fees hereunder, in Dollars not later than 11:00 A.M. (California local
time) on the date when due, in Federal or other immediately available funds, to
the Administrative Agent at its address referred to in Section 9.01, without
offset or counterclaim.  The
Administrative Agent will promptly distribute to each Lender its ratable share
of each such payment received by the Administrative Agent for the account of
the Lenders, in Dollars and in the type of funds received by the Administrative
Agent.  Whenever any payment of
principal of, or interest on, the Base Rate Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day.  Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day.  If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.

 

(b)                                 Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders hereunder that the Borrower
will not make such payment in full, the Administrative Agent may assume that
the Borrower has made such payment in full to the Administrative Agent on such
date and the Administrative Agent may, in reliance upon such assumption, cause
to be distributed to each Lender on such due date an amount equal to the amount
then due such Lender.  If and to the
extent that the Borrower shall not have so made such payment, each Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Federal Funds Rate.

 

2.15                           Funding
Losses.  If the
Borrower makes any payment of principal with respect to any Euro-Dollar Loan
(pursuant to Article VI or VIII or otherwise) on any day other than the
last day of the Interest Period applicable thereto, or if the Borrower fails to
borrow any Euro-Dollar Loans after notice has been given to any Lender in accordance
with Section 2.04(a), the Borrower shall reimburse each Lender within
15 days after demand for any resulting loss or expense incurred by it (or
by an existing or prospective participant in the related Loan), including
(without limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, but excluding loss of margin for the period after
any such payment or failure to borrow, provided that such Lender shall have
delivered to the Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest
error.

 

18

 

2.16                           Computation
of Interest and Fees. 
Interest based on the Reference Rate and all fees hereunder shall be
computed on the basis of a year of 365 days (or 366 days in a leap
year) and paid for the actual number of days elapsed (including the first day
but excluding the last day).  All other
interest shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding the
last day).

 

2.17                           Withholding
Tax Exemption.  At
least five Domestic Business Days prior to the first date on which interest or
fees are payable hereunder for the account of any Lender, each Lender that is
not incorporated under the laws of the United States of America or a state
thereof agrees that it will deliver to each of the Borrower and the
Administrative Agent two duly completed copies of United States Internal Revenue
Service Form W-8 ECI, certifying in either case that such Lender is entitled to
receive payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes.

 

Each Lender which so delivers a Form W-8 ECI further
undertakes to deliver to each of the Borrower and the Administrative Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
that such Lender is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender advises the Borrower and the Administrative Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.

 

2.18                           Regulation
D Compensation.  Each
Lender may require the Borrower to pay, contemporaneously with each payment of
interest on the Euro-Dollar Loans, additional interest on the related
Euro-Dollar Loan of such Lender at a rate per annum determined by such Lender
up to but not exceeding the excess of (i) (A) the applicable
Euro-Dollar Rate divided by (B) one minus the Euro-Dollar Reserve
Percentage over (ii) the applicable Euro-Dollar Rate.  Any Lender wishing to require payment of
such additional interest (x) shall so notify the Borrower and the Agent,
in which case such additional interest on the Euro-Dollar Loans of such Lender
shall be payable to such Lender at the place indicated in such notice with
respect to each Interest Period commencing at least three Euro-Dollar Business
Days after the giving of such notice and (y) shall notify the Borrower at
least five Euro-Dollar Business Days prior to each date on which interest is
payable on the Euro-Dollar Loans of the amount then due it under this Section.

 

ARTICLE III

CONDITIONS

 

3.01                           Borrowings.  The obligation of any Lender to make a Loan
on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:

 

19

 

(a)                                  receipt
by the Administrative Agent of a Notice of Borrowing as required by
Section 2.02;

 

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

 

(c)                                  immediately
before and after such Borrowing, no Default or Event of Default shall have
occurred and be continuing; and

 

(d)                                 the
representations and warranties of the Borrower contained in this Agreement
(except the representations and warranties set forth in Section 4.04 and
Section 4.05, in each case as to any matter which has theretofore been
disclosed in writing by the Borrower to the Lenders) shall be true on and as of
the date of such Borrowing.

 

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

 

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

 

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

 

(b)                                 receipt
by the Administrative Agent for the account of each Lender of a duly executed
Note dated on or before the Effective Date complying with the provisions of
Section 2.05;

 

(c)                                  receipt
by the Administrative Agent of an opinion of Gibson, Dunn & Crutcher,
LLP, substantially in the form of Exhibit F;

 

(d)                                 receipt
by the Administrative Agent of all documents it may reasonably request relating
to the existence of the Borrower, the corporate authority for and the validity
of this Agreement and the Notes, and any other matters relevant hereto, all in
form and substance satisfactory to the Administrative Agent; and

 

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

 

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

 

20

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants that:

 

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

 

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

 

4.03                           Binding
Effect.  This
Agreement constitutes a valid and binding agreement of the Borrower and the
Notes, when executed and delivered in accordance with this Agreement, will
constitute valid and binding obligations of the Borrower, in each case
enforceable in accordance with their respective terms.

 

4.04                           Financial
Information.  Since
December 31, 2002, there has been no material adverse change in the
business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.

 

4.05                           Litigation.  Except as disclosed in the Borrower’s form
10-K report for the year ended December 31, 2002 or in its 10-Q reports
for the quarter ended March 31, 2003, there is no action, suit or
proceeding pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Subsidiaries before any court
or arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could materially adversely
affect the business, consolidated financial position or consolidated results of
operations of the Borrower and its Consolidated Subsidiaries or which in any
manner draws into question the validity or enforceability of this Agreement or
the Notes.  Without limiting the
generality of the foregoing, with respect to those litigation matters described
above as reported in the Borrower’s aforementioned form 10-K or 10-Q reports,
(a) the disclosure contained therein was accurate as of the date of
thereof, and (b) since such date there has been no material adverse
development.

 

4.06                           Compliance
with ERISA.  Each
member of the ERISA Group has fulfilled its obligations under the minimum
funding standards of ERISA and the Internal Revenue Code with

 

21

 

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

 

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

 

4.08                           Significant
Subsidiaries.  Each of
the Significant Subsidiaries (a) is duly formed, validly existing and in
good standing under the laws of its jurisdiction of formation, (b) has all
corporate or other powers and authority and all material governmental licenses
(including, without limitation, any such license issued by a Gaming Board),
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted and (c) is duly qualified and
in good standing in each jurisdiction where the ownership, leasing and
operation of its property or the conduct of its business requires such
qualification, and the failure to be so qualified would have a material adverse
effect on the Borrower and its Subsidiaries.

 

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

 

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

 

4.11                           Full
Disclosure.  All
information heretofore furnished by the Borrower to the Agents or to any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by the
Borrower to the Administrative Agent or any Lender will be, taken as a whole,
true and accurate in all material respects on the date as of which such
information is stated or certified.  The
Borrower has disclosed to the Lenders in writing or by means of its filings
with the Securities and Exchange Commission any and all facts which materially
and adversely affect or may affect (to the extent the Borrower can now
reasonably foresee), the business, operations or financial position of the
Borrower and its Consolidated Subsidiaries, taken as a whole, or the ability of
the Borrower to perform its obligations under this Agreement.  With respect to any projections or forecasts
provided, such projections or forecasts represent, as of the date thereof,
management’s best 

 

22

 

estimates based on
reasonable assumptions and all available information, but are subject to the
uncertainty inherent in all projections and forecasts.

 

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

 

4.13                           Gaming
Laws.  The Borrower
and its Subsidiaries are in material compliance with all applicable Gaming
Laws.

 

4.14                           Tax
Shelter Regulations.  The Borrower
does not intend to treat the Loans as being a “reportable transaction” (within
the meaning of Treasury Regulation Section 1.6011-4).  In the event the Borrower determines to take
any action inconsistent with such intention, it will promptly notify the
Administrative Agent thereof.  If the
Borrower notifies the Administrative Agent, the Borrower acknowledges that one
or more of the Lenders may treat its Loans as part of a transaction that is
subject to Treasury Regulation Section 301.6112-1, and such Lender or
Lenders, as applicable, will maintain the lists and other records required by
such Treasury Regulation..

 

ARTICLE V

COVENANTS

 

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

 

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

 

(a)                                  as
soon as available and in any event within 90 days after the end of each
fiscal year of the Borrower, the consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income and cash flows for such fiscal year, setting
forth in each case in comparative form the figures as of the end of and for the
previous fiscal year, all reported on in a manner acceptable to the Securities
and Exchange Commission by Deloitte & Touche or other independent public
accountants of nationally recognized standing;

 

(b)                                 as
soon as available and in any event within 60 days after the end of each of
the first three quarters of each fiscal year of the Borrower, the consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of the end
of such quarter and the related consolidated statements of income and cash flows
for such quarter and for the portion of the Borrower’s fiscal year ended at the
end of such quarter, setting forth in the case of such statements of income and
cash flows in comparative form the figures for the corresponding quarter and
the corresponding portion of the Borrower’s previous fiscal year, all certified
(subject to normal year-end adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency by an Authorized
Officer;

 

(c)                                  simultaneously
with the delivery of each set of financial statements referred to in
clauses (a) and (b) above, a Compliance Certificate (i) setting forth
in

 

23

 

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

 

(d)                                 simultaneously
with the delivery of each set of financial statements referred to in
clause (a) above, a statement of the firm of independent public accountants
which reported on such statements (i) whether anything has come to their
attention to cause them to believe that any Default existed on the date of such
statements and (ii) confirming the calculations set forth in the officer’s
certificate delivered simultaneously therewith;

 

(e)                                  as
soon as available and in any event not later than the last day of
February of each year, a completed Pricing Certificate as of
December 31 of the prior year;

 

(f)                                    within
five Domestic Business Days of any officer of the Borrower obtaining knowledge
of any Default, if such Default is then continuing, a certificate of an
Authorized Officer setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;

 

(g)                                 promptly
upon the mailing thereof to the shareholders of the Borrower generally, copies
of all financial statements, reports and proxy statements so mailed;

 

(h)                                 promptly
upon the filing thereof, copies of all registration statements (other than the
exhibits thereto and any registration statements on Form S-8 or its equivalent)
and reports on Forms 10-K, 10-Q and 8-K (or their equivalents) which the
Borrower shall have filed with the Securities and Exchange Commission;

 

(i)                                     if
and when any member of the ERISA Group (i) gives or is required to give
notice to the PBGC of any “reportable event” (as defined in Section 4043
of ERISA) with respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been terminated, a
copy of such notice; (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer, any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such notice
and other information filed with the PBGC; (vi) gives notice of withdrawal
from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any

 

24

 

amendment to any
Plan or Benefit Arrangement which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security, a certificate
of the chief financial officer or the chief accounting officer of the Borrower
setting forth details as to such occurrence and action, if any, which the
Borrower or applicable member of the ERISA Group is required or proposes to
take;

 

(j)                                     forthwith,
notice of any change of which the Borrower becomes aware in the rating by
S&P or Moody’s, of the Borrower’s outstanding senior unsecured long-term
debt securities;

 

(k)                                  promptly
after the Borrower has notified the Administrative Agent of any intention by
the Borrower to treat the Loans as being a “reportable transaction” (within the
meaning of Treasury Regulation Section 1.6011-4) a duly completed copy of
IRS Form 8886 or any successor form; and

 

(l)                                     from
time to time such additional information regarding the financial position or
business of the Borrower and its subsidiaries as the Administrative Agent, at
the request of any Lender, may reasonably request.

 

5.02                           Maintenance
of Property; Insurance.

 

(a)                                  The
Borrower will keep, and will cause each Significant Subsidiary to keep, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted, except where failure to do so would
not have a material adverse effect on the business, financial position, results
of operations or prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.

 

(b)                                 The
Borrower will, and will cause each of its Significant Subsidiaries to, maintain
(either in the name of the Borrower or in such Subsidiary’s own name) with
financially sound and responsible insurance companies, insurance on all their
respective properties in at least such amounts and against at least such risks (and
with such risk retention) as are usually insured against in the same general
area by companies of established repute engaged in the same or a similar
business and will furnish to the Lenders, upon request from the Administrative
Agent, information presented in reasonable detail as to the insurance so
carried.  Notwithstanding the foregoing,
the Borrower may self-insure with respect to such risks with respect to which
companies of established repute engaged in the same or similar business in the
same general area usually self-insure.

 

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

 

25

 

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

 

5.04                           Compliance
with Laws.  The Borrower will
comply, and cause each Significant Subsidiary to comply, in all material
respects with all applicable laws, ordinances, rules, regulations, and
requirements of any Governmental Agency (including, without limitation,
Environmental Laws, Gaming Laws and ERISA and, in each case, the rules and
regulations thereunder) except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.

 

5.05                           Inspection
of Property, Books and Records.  The
Borrower will keep, and will cause each Significant Subsidiary to keep, proper
books of record and account in which full, true and correct entries shall be
made of all dealings and transactions in relation to its business and
activities; and will permit, and will cause each Significant Subsidiary to
permit, representatives of any Lender at such Lender’s expense to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants, all at such reasonable times and as often as
may reasonably be desired.

 

5.06                           Negative
Pledge.  None of the Borrower, any
Covered Subsidiary or any Significant Subsidiary will create or assume any Lien
on any asset now owned or hereafter acquired by it, except:

 

(a)                                  Liens
existing as of the Effective Date;

 

(b)                                 any
Lien existing on any asset of any corporation at the time such corporation becomes
a Subsidiary and not created in contemplation of such event;

 

(c)                                  any
Lien on any asset securing Debt incurred or assumed for the purpose of
financing all or any part of the cost of acquiring or constructing such asset
(it being understood that, for this purpose, the acquisition of a Person is
also an acquisition of the assets of such Person); provided that the
Lien attaches to such asset concurrently with or within 180 days after the
acquisition thereof, or such longer period, not to exceed 12 months, due to the
Borrower’s inability to retain the requisite governmental approvals with
respect to such acquisition; provided  further  that, in the
case of real estate, (i) the Lien attaches within 12 months after the
latest of the acquisition thereof, the completion of construction thereon or
the commencement of full operation thereof and (ii) the Debt so secured
does not exceed the sum of (x) the purchase price of such real estate plus
(y) the costs of such construction;

 

(d)                                 Until
the date which is ninety days following the Effective Date, any Lien on shares
of any equity security or any warrant or option to purchase an equity security
or any security which is convertible into an equity security issued by any
Subsidiary of the

 

26

 

Borrower that
holds, directly or indirectly through a holding company or otherwise, a license
to conduct gaming under any Gaming Law, and in the proceeds thereof; provided
that this clause shall apply only so long as the Gaming Laws of the relevant
jurisdiction provide that the creation of any restriction on the disposition of
any of such securities shall not be effective and, if such Gaming Laws at any
time cease to so provide, then this clause shall be of no further effect; and provided
further that if at any time the Borrower or any of its Subsidiaries
creates or suffers to exist a Lien covering such securities in favor of the
holder of any other Indebtedness, it will (subject to any approval required
under such Gaming Laws) concurrently grant a pari-passu Lien likewise covering
such securities in favor of the Administrative Agent for the benefit of the
Lenders;

 

(e)                                  any
Lien on any asset of any corporation or other business entity existing at the
time such corporation or other business entity is merged or consolidated with
or into the Borrower or a Subsidiary and not created in contemplation of such
event;

 

(f)                                    any
Lien existing on any asset prior to the acquisition thereof by the Borrower or
a Subsidiary and not created in contemplation of such acquisition;

 

(g)                                 any
Lien arising out of the refinancing, extension, renewal or refunding of any
Debt secured by any Lien permitted by any of the foregoing clauses of this
Section, provided that such Debt is not increased (other than to cover
any transaction costs of such refinancing, extension, renewal or refunding) and
is not secured by any additional assets;

 

(h)                                 Liens
securing Debt of a Subsidiary to the Borrower or another Subsidiary; and

 

(i)                                     Liens
not otherwise permitted by the foregoing clauses of this
Section encumbering assets of the Borrower and its Consolidated
Subsidiaries having an aggregate fair market value which is not in excess of
10% of Consolidated Net Tangible Assets (determined, in each case, by reference
to the most recent date for which the Borrower has delivered its financial
statements under Section 5.01(a)).

 

5.07                           Consolidations,
Mergers and Sales of Assets.  The
Borrower and its Subsidiaries will not (i) consolidate or merge with or
into any other Person or (ii) sell, lease or otherwise transfer all or any
substantial part of the assets of the Borrower and its Subsidiaries, taken as a
whole, to any other Person, or (iii) acquire all or substantially all of
the assets of, or more than 49% of the capital stock or other equity securities
of, any Person which is not engaged in the same general lines of business as
the Borrower and its Subsidiaries, if, giving effect to such consolidation,
merger, sale or acquisition, the Borrower is not in pro forma compliance with
the covenants set forth in Sections 5.10 and 5.11; provided that,
notwithstanding the foregoing, the Borrower may merge with another Person only
if (A) the Borrower is the corporation surviving such merger, and
(B) immediately after giving effect to such merger, no Default shall have
occurred and be continuing.

 

5.08                           Hostile
Tender Offers.  The
Borrower and its Subsidiaries will not make any offer to purchase or acquire,
or prosecute, pursue or consummate a purchase or acquisition of, 5% or more of
the capital stock of any corporation or other business entity, if the board of
directors or

 

27

 

other equivalent
governing body of such corporation or business entity has notified the Borrower
or its relevant Subsidiaries that it opposes such offer or purchase and such
notice has not been withdrawn or superseded.

 

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

 

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

 

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

 

ARTICLE VI

DEFAULTS

 

6.01                           Events
of Default.  If one or
more of the following events (“Events of Default”) shall have occurred and be
continuing:

 

(a)                                  the
Borrower shall fail to (i) pay when due any principal of any Loan under
this Agreement, or (ii) pay within five days of the due date thereof any
interest, fees or other amount payable hereunder;

 

(b)                                 the
Borrower shall fail to observe or perform any covenant contained in
Sections 5.06 to 5.11, inclusive;

 

(c)                                  the
Borrower shall fail to observe or perform any covenant or agreement contained
in this Agreement (other than those covered by clause (a) or (b) above)
for 7 days after written notice thereof has been given to the Borrower by
the Administrative Agent, which notice shall be delivered to the Borrower by
the Administrative Agent at the request of any Lender;

 

(d)                                 any
representation, warranty, certification or statement made or deemed made by the
Borrower in this Agreement or in any certificate, financial statement or other
document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);

 

(e)                                  the
Borrower or any Covered Subsidiary or any Significant Subsidiary shall fail to
make any payment in respect of any Debt (other than the Notes and Non-Recourse
Debt) when due or within any applicable grace period and the aggregate
principal amount of such Debt is in excess of $100,000,000;

 

28

 

(f)                                    any
event or condition shall occur which results in the acceleration of the
maturity of any Debt (other than Non-Recourse Debt) in excess of $100,000,000
of the Borrower or any Covered Subsidiary or any Significant Subsidiary or
enables or entitles the holder of such Debt or any Person acting on such
holder’s behalf to accelerate the maturity thereof;

 

(g)                                 the
Borrower or any Significant Subsidiary shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;

 

(h)                                 an
involuntary case or other proceeding shall be commenced against the Borrower or
any Significant Subsidiary seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower or any Significant Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;

 

(i)                                     any
member of the ERISA Group shall fail to pay when due an amount or amounts
aggregating in excess of $5,000,000 which it shall have become liable to pay
under Title IV of ERISA; or notice of intent to terminate a Material Plan
shall be filed under Title IV of ERISA by any member of the ERISA Group,
any plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect
of, or to cause a trustee to be appointed to administer, any Material Plan; or
a condition shall exist by reason of which the PBGC would be entitled to obtain
a decree adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the meaning
of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer
Plans which could cause one or more members of the ERISA Group to incur a
current payment obligation in excess of $25,000,000;

 

(j)                                     a
judgment or order for the payment of money in excess of $25,000,000 shall be
rendered against the Borrower or any Subsidiary and such judgment or order
shall continue unsatisfied and unstayed for a period of 30 days; or

 

(k)                                  the
occurrence of a License Revocation with respect to a license issued to the
Borrower or any of its Subsidiaries by any Gaming Board of the States of
Mississippi, New Jersey or Nevada with respect to gaming operations at any
gaming facility

 

29

 

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

 

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

 

6.02                           Notice
of Default.  The
Administrative Agent shall give notice to the Borrower under
Section 6.01(c) promptly upon being requested to do so by any Lender and
shall thereupon notify all the Lenders thereof.

 

ARTICLE VII

THE ADMINISTRATIVE AGENT

 

7.01                           Appointment
and Authorization of Administrative Agent.  Each Lender hereby irrevocably appoints,
designates and authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary contained elsewhere
herein or in any other Loan Document, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein, nor
shall the Administrative Agent have or be deemed to have any fiduciary
relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.  Without limiting
the generality of the foregoing sentence, the use of the term “agent” herein
and in the other Loan Documents with reference to the Administrative Agent is
not intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship
between independent contracting parties.

 

7.02                           Delegation of Duties.  The Administrative Agent
may execute any of its duties under this Agreement or any other Loan Document
by or through agents, employees or attorneys-in-fact and shall be entitled to
advice of counsel and other consultants or experts concerning all matters
pertaining to such duties.  The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.

 

30

 

7.03                           Liability of Administrative Agent.  No Agent-Related Person shall (a) be liable
to any Lender for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct in connection with its duties expressly set forth herein),
or (b) be responsible in any manner to any Lender or Participant for any
recital, statement, representation or warranty made by the Borrower or any
officer thereof, contained herein or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any
obligation to any Lender or Participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Borrower or any Affiliate thereof.

 

7.04                           Reliance
by Administrative Agent.

 

(a)                                  The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Borrower),
independent accountants and other experts selected by the Administrative
Agent.  The Administrative Agent shall
be fully justified in failing or refusing to take any action under any Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.  The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders (or such greater
number of Lenders as may be expressly required hereby in any instance) and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders.

 

(b)                                 For
purposes of determining compliance with the conditions specified in
Section 3.02, each Lender that has signed this Agreement shall be deemed
to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Effective Date specifying
its objection thereto.

 

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

 

31

 

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

 

7.06                           Credit
Decision; Disclosure of Information by Administrative Agent.  Each Lender acknowledges that neither any
Agent nor any Agent-Related Person has made any representation or warranty to
it, and that no act by the Administrative Agent or any other Agent hereafter
taken, including any consent to and acceptance of any assignment or review of
the affairs of the Borrower or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by any Agent or Agent-Related Person
to any Lender as to any matter, including whether such Agent or Agent-Related
Persons have disclosed material information in their possession.  Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon any Agent or
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries, and all applicable bank
or other regulatory laws relating to the transactions contemplated hereby, and
made its own decision to enter into this Agreement and to extend credit to the
Borrower hereunder.  Each Lender also
represents that it will, independently and without reliance upon any Agent or
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of the Borrower.  Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Administrative
Agent herein, neither the Administrative Agent nor any other Agent shall have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Borrower or any of its
Affiliates which may come into the possession of any Agent or Agent-Related
Person.

 

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

 

32

 

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

 

7.08                           Administrative Agent in its Individual Capacity.  Bank of America and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and its
Affiliates as though Bank of America were not the Administrative Agent
hereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to
such activities, Bank of America or its Affiliates may receive information
regarding the Borrower or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Borrower or such
Affiliate) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them.  With respect to its Loans, Bank of America shall have the same
rights and powers under this Agreement as any other Lender and may exercise
such rights and powers as though it were not the Administrative Agent, and the
terms “Lender” and “Lenders” include Bank of America in its individual
capacity.

 

7.09                           Successor Administrative Agent.  The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Lenders.  If the Administrative Agent resigns under
this Agreement, the Required Lenders shall appoint from among the Lenders a
successor administrative agent for the Lenders, which successor administrative
agent shall be consented to by the Borrower at all times other than during the
existence of an Event of Default (which consent of the Borrower shall not be
unreasonably withheld or delayed).  If
no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. 
Upon the acceptance of its appointment as successor administrative agent
hereunder, the Person acting as such successor administrative agent shall succeed
to all the rights, powers and duties of the retiring Administrative Agent and
the term “Administrative Agent” shall mean such successor administrative agent
and the retiring Administrative Agent’s appointment, powers and duties as
Administrative Agent shall be terminated. 
After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Article VII and
Section 9.03 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.  If no successor administrative agent has
accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above.

 

33

 

7.10                           Administrative Agent May File Proofs of Claim.  In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Borrower , the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise

 

(a)                                  to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent
under Section 9.03) allowed in such judicial proceeding; and

 

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

 

and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is
hereby authorized by each Lender to make such payments to the Administrative
Agent and, in the event that the Administrative Agent shall consent to the
making of such payments directly to the Lenders, to pay to the Administrative
Agent any amount due for the reasonable compensation, expenses, disbursements
and advances of the Administrative Agent and its agents and counsel, and any
other amounts due the Administrative Agent under Section 9.03.

 

Nothing contained herein shall be deemed to authorize
the Administrative Agent to authorize or consent to or accept or adopt on behalf
of any Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any
Lender in any such proceeding.

 

7.11                           Other
Agents; Arrangers and Managers.  None of the Lenders or other Persons identified on the facing
page or signature pages of this Agreement as a “syndication agent,”
“co-documentation agents,” “joint book manager,” or “joint lead arranger” shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than, in the case of such Lenders, those applicable to all
Lenders as such.  Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders or other Persons so identified
in deciding to enter into this Agreement or in taking or not taking action
hereunder.  None of the Lenders or
Agents shall be under any obligation to any other Lender or any Participant to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
Affiliate thereof.  Each Agent and its
Affiliates may make loans to, issue letters of credit for the account

 

34

 

of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and its
Affiliates as though such Agent were not an Agent hereunder and without notice
to or consent of the Lenders.  The
Lenders acknowledge that, pursuant to such activities, such Agent or its
Affiliates may receive information regarding the Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Affiliate) and acknowledge that such Agent shall
be under no obligation to provide such information to them.  With respect to its Loans, such Agent, if
also a Lender hereunder, shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not an Agent, and the terms “Lender” and “Lenders” include such Agent
in its individual capacity.

 

ARTICLE VIII

CHANGE IN CIRCUMSTANCES

 

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

 

(a)                                  the
Administrative Agent is advised by the Required Lenders that deposits in
Dollars and in the required amounts are not being offered to the Lenders in the
relevant market for such Interest Period, or

 

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

 

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

 

8.02                           Illegality.  If, on or after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its Euro-Dollar Lending Office) with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Lender (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Lender shall so notify the Administrative Agent, the
Administrative Agent shall forthwith give notice thereof to the other Lenders
and the Borrower, whereupon until such Lender notifies the Borrower and the 

 

35

 

Administrative Agent that
the circumstances giving rise to such suspension no longer exist, the
obligation of such Lender to make Euro-Dollar Loans shall be suspended.  Before giving any notice to the Administrative
Agent pursuant to this Section, such Lender shall designate a different
Euro-Dollar Lending Office if such designation will avoid the need for giving
such notice and will not, in the sole judgment of such Lender, be otherwise
disadvantageous to such Lender.  If such
Lender shall determine that it may not lawfully continue to maintain and fund
any of its outstanding Euro-Dollar Loans to maturity and shall so specify in
such notice, the Borrower shall immediately prepay in full the then outstanding
principal amount of each such Euro-Dollar Loan, together with accrued interest
thereon.  Concurrently with prepaying
each such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an
equal principal amount from such Lender (on which interest and principal shall
be payable contemporaneously with the related Euro-Dollar Loans of the other
Lenders), and such Lender shall make such a Base Rate Loan.

 

8.03         Increased Cost
and Reduced Return.

 

(a)                                  If
on or after the date hereof, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency:

 

(i)                                     shall
subject any Lender (or its Applicable Lending Office) to any tax, duty or other
charge with respect to its Euro-Dollar Loans, its Note or its obligation to
make Euro-Dollar Loans, or shall change the basis of taxation of payments to
any Lender (or its Applicable Lending Office) of the principal of or interest
on its Euro-Dollar Loans or any other amounts due under this Agreement in
respect of its Euro-Dollar Loans or its obligation to make Euro-Dollar Loans
(except for changes in the rate of tax on the overall net income of such Lender
or its Applicable Lending Office imposed by the jurisdiction in which such
Lender’s principal executive office or Applicable Lending Office is located);
or

 

(ii)                                  shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding, with respect to any Euro-Dollar Loan any such
requirement included in an applicable Euro-Dollar Reserve Percentage), special
deposit, insurance assessment or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender (or its
Applicable Lending Office) or shall impose on any Lender (or its Applicable
Lending Office) or on the United States market for certificates of deposit or
the London interbank market any other condition affecting its Euro-Dollar
Loans, its Note or its obligation to make Euro-Dollar Loans;

 

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

 

36

 

sum received or receivable by such Lender (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Lender to be material, then, within 15 days after
demand by such Lender (with a copy to the Administrative Agent), the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction.

 

(b)                                 If,
after the date hereof, any Lender shall have determined that any applicable
law, rule or regulation regarding capital adequacy (irrespective of the actual
timing of the adoption or implementation thereof and including, without
limitation, any law or regulation adopted pursuant to the July 1988 report
of the Basle Committee on Banking Regulations and Supervisory Practices) or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Lender (or its Parent) as a consequence of
such Lender’s obligations hereunder to a level below that which such Lender (or
its Parent) could have achieved but for such law, regulation, change or
compliance (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from time to
time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender (or its Parent) for such
reduction.

 

(c)                                  Each
Lender will promptly notify the Borrower and the Administrative Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
sole judgment of such Lender, be otherwise disadvantageous to such Lender.  A certificate of any Lender claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error.  In determining such
amount, such Lender may use any reasonable averaging and attribution methods.

 

8.04                           Base
Rate Loans Substituted for Affected Euro-Dollar Loans.  If (i) the obligation of any Lender to
make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or
(ii) any Lender has demanded compensation under Section 8.03(a) and
the Borrower shall, by at least five Euro-Dollar Business Days, prior notice to
such Lender through the Administrative Agent, have elected that the provisions
of this Section shall apply to such Lender, then, unless and until such
Lender notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist:

 

(a)                                  all
Loans which would otherwise be made by such Lender as Euro-Dollar Loans shall
be made instead as Base Rate Loans (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the other
Lenders), and

 

37

 

(b)                                 after
each of its Euro-Dollar Loans has been repaid, all payments of principal which
would otherwise be applied to repay such Euro-Dollar Loans shall be applied to
repay its Base Rate Loans instead.

 

ARTICLE IX

MISCELLANEOUS

 

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

 

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

 

(b)                                 if
to any other Lender, to the address, facsimile number, electronic mail address or
telephone number specified in its Administrative Questionnaire or to such other
address, facsimile number, electronic mail address or telephone number as shall
be designated by such party in a notice to the Borrower and the Administrative
Agent.

 

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

 

(c)                                  Loan
Documents may be transmitted and/or signed by facsimile.  The effectiveness of any such documents and
signatures shall, subject to applicable law, have the same force and effect as manually-signed
originals and shall be binding on all parties hereto.  The Administrative Agent may also require that any such documents
and signatures be confirmed by a manually-signed original thereof; provided, however,
that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.

 

(d)                                 Electronic
mail and Internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as

 

38

 

provided in
Section 5.01, and to distribute Loan Documents for execution by the
parties thereto, and may not be used for any other purpose.

 

(e)                                  The
Administrative Agent and the Lenders shall be entitled to rely and act upon any
notices (including telephonic Notices of Borrowing) purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by
the recipient, varied from any confirmation thereof.  The Borrower shall indemnify each Agent-Related Person and each
Lender from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the
Borrower.  All telephonic notices to and
other communications with the Administrative Agent may be recorded by the Administrative
Agent, and each of the parties hereto hereby consents to such recording..

 

9.02                           No
Waivers.  No failure
or delay by the Administrative Agent or any Lender in exercising any right,
power or privilege hereunder or under any Note shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

 

9.03                           Expenses;
Documentary Taxes; Indemnification.

 

(a)                                  The
Borrower agrees (a) to pay or reimburse the Administrative Agent for all
reasonable costs and expenses incurred in connection with the development,
preparation, negotiation and execution of this Agreement and the other Loan
Documents and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all Attorney Costs,
and (b) to pay or reimburse the Administrative Agent and each Lender for all
reasonable costs and expenses incurred after an Event of Default in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or the other Loan Documents (including all such
costs and expenses incurred after an Event of Default during any “workout” or
restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs.  The foregoing costs and expenses
shall include all search, filing, recording, title insurance and appraisal
charges and fees and taxes related thereto, and other out-of-pocket expenses
incurred by the Administrative Agent and the cost of independent public
accountants and other outside experts retained by the Administrative Agent or
any Lender.  All amounts due under this
Section 9.03(a) shall be payable within ten Business Days after demand
therefor.  The agreements in this
Section shall survive the termination of the Commitments and repayment of
all other Obligations.

 

(b)                                 Whether
or not the transactions contemplated hereby are consummated, the Borrower shall
indemnify and hold harmless each Agent-Related Person, each Lender and their
respective Affiliates, directors, officers, employees, counsel, agents and

 

39

 

attorneys-in-fact
(collectively the “Indemnitees”) from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of
or in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or
instrument delivered in connection with the transactions contemplated thereby
or the consummation of the transactions contemplated thereby, (b) any
Commitment or Loan or the use or proposed use of the proceeds therefrom or (c)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory (including any investigation of, preparation for, or defense of any
pending or threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto (all the foregoing,
collectively, the “Indemnified Liabilities”) provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses or disbursements are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Indemnitee. 
No Indemnitee shall be liable for any damages arising from the use by
others of any information or other materials obtained through IntraLinks or
other similar information transmission systems in connection with this Agreement,
nor shall any Indemnitee have any liability for any indirect or consequential
damages relating to this Agreement or any other Loan Document or arising out of
its activities in connection herewith or therewith (whether before or after the
Effective Date).  All amounts due under
this Section 9.03(b) shall be payable within ten Business Days after
demand therefor.  The agreements in this
Section shall survive the resignation of the Administrative Agent, the
replacement of any Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all the other Obligations.

 

9.04                           Amendments;
Consents.  No amendment or waiver of
any provision of this Agreement or any other Loan Document, and no consent to
any departure by the Borrower therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower, and acknowledged by the
Administrative Agent, and each such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given;
provided, however, that no such amendment, waiver or consent shall:

 

(a)                                  waive
any condition set forth in Section 3.02 without the written consent of
each Lender;

 

(b)                                 extend
or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 6.01) without the written consent of such
Lender;

 

(c)                                  postpone
any date fixed by this Agreement or any other Loan Document for any scheduled
payment of principal, interest, fees or other amounts due to the Lenders (or
any of them) or waive or excuse any such payment or postpone any scheduled

 

40

 

reduction of the
Commitments hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;

 

(d)                                 reduce
the principal of, or the rate of interest specified herein on, any Loan or
(subject to clause (ii) of the second proviso to this Section 9.04) any
fees or other amounts payable hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby;

 

(e)                                  change
Section 9.10 in a manner that would alter the pro rata sharing of payments
required thereby without the written consent of each Lender;

 

(f)                                    amend
Section 2.12 without the written consent of the Borrower, the
Administrative Agent and Lenders holding Commitments aggregating at least 662/3%
of the aggregate amount of the Commitments; or

 

(g)                                 change
any provision of this Section or the definition of “Required Lenders” or
any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender;

 

and, provided  further, that (i) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; (ii)
Section 9.05(h) may not be amended, waived or otherwise modified without
the consent of each Granting Lender all or any part of whose Loans are being
funded by an SPC at the time of such amendment, waiver or other modification;
and (iii) any fee letter may be amended, or rights or privileges thereunder
waived, in a writing executed only by the parties thereto.

 

9.05         Successors
and Assigns.

 

(a)                                  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that the Borrower may not assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation
in accordance with the provisions of subsection (d) of this Section, (iii)
by way of pledge or assignment of a security interest subject to the
restrictions of subsection (f) or (i) of this Section, or (iv) to an SPC
in accordance with the provisions of subsection (h) of this
Section (and any other attempted assignment or transfer by any party hereto
shall be null and void).  Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of
this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason
of this Agreement.  Each Lender
represents that it is not acquiring its Note with a view to

 

41

 

the distribution
thereof within the meaning of the Securities Act of 1933, as amended (subject
to any requirement that disposition of such Note must be within the control of
such Lender).

 

(b)                                 Any
Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and its Loans at the time owing to it); provided
that (i) except in the case of an assignment of the entire remaining amount of
the assigning Lender’s Commitment and Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund (as defined in subsection (g) of this Section) with respect to a
Lender, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) subject to each such assignment, determined as of
the date the Assignment Agreement with respect to such assignment is delivered
to the Administrative Agent or, if “Trade Date” is specified in the Assignment
Agreement, as of the Trade Date, shall not be less than $1,000,000 unless each
of the Administrative Agent and, so long as no Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender’s rights
and obligations under this Agreement with respect to the Loans or the
Commitment assigned; (iii) any assignment must be approved by the
Administrative Agent and, as long as no Default has occurred and is continuing,
the Borrower (each such consent not to be unreasonably withheld or delayed)
unless the Person that is the proposed assignee is itself a Lender (whether or
not the proposed assignee would otherwise qualify as an Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment Agreement, together with a processing and
recordation fee of $3,500.  Subject to
acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified
in each Assignment Agreement, the Eligible Assignee thereunder shall be a party
to this Agreement and, to the extent of the interest assigned by such
Assignment Agreement, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment Agreement, be released from its
obligations under this Agreement (and, in the case of an Assignment Agreement
covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 2.15, 2.18, 8.03 and 9.03 with respect
to facts and circumstances occurring prior to the effective date of such
assignment).  Upon request, the Borrower
(at its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.

 

(c)                                  The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment Agreement delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans owing to, each

 

42

 

Lender pursuant to
the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)                                 Any
Lender may at any time, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to any Person (other than a
natural person, Borrower or any of Borrower’s Affiliates or Subsidiaries)
(each, a “Participant”) in all or a portion of such Lender’s rights
and/or obligations under this Agreement (including all or a portion of its
Commitment and/or Loans); provided that (i) such Lender’s obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any amendment, modification
or waiver of any  provision of this
Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in subsections (c) or
(d) of Section 9.04 that directly affects such Participant.

 

(e)                                  A
Participant shall not be a Lender hereunder for any purpose except, if
the participation agreement so provides, for the purposes of
Sections 2.18, 8.03 and 9.03 but only to the extent that the cost of such
benefits to the Borrower does not exceed the cost which the Borrower would have
incurred in respect of such Lender absent the participation.

 

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

 

(g)                                 As
used herein, the following terms have the following meanings:

 

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

 

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

 

43

 

(h)                                 Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”) may
grant to a special purpose funding vehicle identified as such in writing from
time to time by the Granting Lender to the Administrative Agent and Borrower
(an “SPC”) the option to provide all or any part of any Loan that such
Granting Lender would otherwise be obligated to make pursuant to this
Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to
exercise such option or otherwise fails to make all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof.  Each party hereto hereby agrees
that (i) neither the grant to any SPC nor the exercise by any SPC of such
option shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrower under this Agreement (including their obligations
under Sections 2.18 and 8.03), (ii) no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement for which a Lender would be liable,
and (iii) the Granting Lender shall for all purposes, including the approval of
any amendment, waiver or other modification of any provision of any Loan
Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made by such Granting Lender.  In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that
is one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any SPC, it will not institute against, or join
any other Person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency, or liquidation proceeding under the laws of the United
States or any State thereof with respect to matters directly related to this
Agreement.  Notwithstanding anything to
the contrary contained herein, any SPC may (i) with notice to, but without
prior consent of the Borrower and the Administrative Agent, assign all or any
portion of its right to receive payment with respect to any Loan to the
Granting Lender and (ii) disclose on a confidential basis any non-public information
relating to its funding of Loans to any rating agency, commercial paper dealer
or provider of any surety or guarantee or credit or liquidity enhancement to
such SPC.

 

(i)                                     Notwithstanding
anything to the contrary contained herein, any Lender that is a Fund may create
a security interest in all or any portion of the Loans owing to it and the
Note, if any, held by it to the trustee for holders of obligations owed, or
securities issued, by such Fund as security for such obligations or securities,
provided that unless and until such trustee actually becomes a Lender in
compliance with the other provisions of this Section 9.05, (i) no such
pledge shall release the pledging Lender from any of its obligations under the
Loan Documents and (ii) such trustee shall not be entitled to exercise any of
the rights of a Lender under the Loan Documents even though such trustee may
have acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise.

 

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

 

44

 

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

 

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

 

9.08                           Counterparts;
Integration.  This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.  This Agreement constitutes
the entire agreement and understanding among the parties hereto and supersedes
any and all prior agreements and understandings, oral or written, relating to
the subject matter hereof.

 

9.09                           Several
Obligations.  The
obligations of the Lenders hereunder are several.  Neither the failure of any Lender to carry out its obligations
hereunder nor the failure of this Agreement to be duly authorized, executed and
delivered by any Lender shall relieve any other Lender of its obligations
hereunder (or affect the rights hereunder of such other Lender).  No Lender shall be responsible for the
obligations of, or any action taken or omitted by, any other Lender hereunder.

 

9.10                           Sharing
of Set-Offs.  Each
Lender agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal and interest due with respect to any Note held by it which
is greater than the proportion received by any other Lender in respect of the
aggregate amount of principal and interest due with respect to any Note held by
such other Lender, the Lender receiving such proportionately greater payment
shall purchase such participations in the Notes held by the other Lenders, and
such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the
Lenders shall be shared by the Lenders pro rata; provided that nothing
in this Section shall impair the right of any Lender to exercise any right
of set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes.  The
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Note, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.

 

9.11                           WAIVER
OF JURY TRIAL.  EACH OF THE
BORROWER, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO

 

45

 

TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

9.12                           Confidentiality.  The Lenders hereby agree to hold any
confidential information that they may receive from Borrower or its
Subsidiaries pursuant to this Agreement in confidence, except for
disclosure:  (a) to their
respective Affiliates and to other parties to this Agreement; (b) to legal
counsel and accountants for any such party; (c) to other professional
advisors to any such party, provided that the recipient has accepted such
information subject to a confidentiality agreement substantially similar to
this paragraph or has notified such professional advisors of the
confidentiality of such information; (d) to regulatory officials having
jurisdiction over that Lender; (e) to any Gaming Board; (f) as
required by law or legal process (provided that the Lender shall endeavor, to
the extent it may do so under applicable law, to give the Borrower reasonable
prior notice thereof to allow the Borrower to seek a protective order) or in
connection with any legal proceeding to which that Lender and the Borrower are
adverse parties; and (g) to another financial institution in connection
with a disposition or proposed disposition to that financial institution of all
or part of that Lender’s interests hereunder or a participation interest in its
Note, provided that the recipient has accepted such information subject to a confidentiality
agreement substantially similar to this Section.  For purposes of the foregoing, “confidential information” shall
mean any information respecting the Borrower or its Subsidiaries reasonably
considered by them to be confidential, other than (i) information
previously filed with any governmental agency and available to the public,
(ii) information previously published in any public medium from a source
other than, directly or indirectly, that Lender, and (iii) information
previously disclosed by the Borrower or its Subsidiaries to any person not
associated therewith without a confidentiality agreement substantially similar
to this Section.  Notwithstanding
anything herein to the contrary, “confidential information” shall not include,
and the Borrower, the Administrative Agent and each Lender (and each authorized
employee, representative, or other authorized person thereof) may disclose to
any and all Persons, without limitation of any kind, the “tax treatment” and
“tax structure” (in each case, within the meaning of Treasury Regulation
Section 1.6011-4) of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower, the Administrative Agent or such Lender relating to
such tax treatment and tax structure; provided that with respect to any
document or similar item that in either case contains information concerning
the tax treatment or tax structure of the transaction as well as other
information, this sentence shall only apply to such portions of the document or
similar item that relate to the tax treatment or tax structure of the Loans and
transactions contemplated hereby. 
Nothing in this Section shall be construed to create or give rise
to any fiduciary duty on the part of any Lender.

 

[Remainder of this page intentionally left blank.]

 

46

 

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

 

	
   

  	
  PARK PLACE
  ENTERTAINMENT CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
  Park Place
  Entertainment Corporation

  
	
   

  	
  3930 Howard
  Hughes Parkway, 4th Floor

  
	
   

  	
  Las Vegas,
  Nevada  89109

  
	
   

  	
  Attn:  Chief Financial Officer

  
	
   

  	
  Telephone:  702/699-5030

  
	
   

  	
  Telecopier:  702/699-5190

  
	
   

  	
   

  
	
   

  	
  With a copy
  to:

  
	
   

  	
  Park Place
  Entertainment Corporation

  
	
   

  	
  3930 Howard
  Hughes Parkway, 4th Floor

  
	
   

  	
  Las Vegas,
  Nevada 89109

  
	
   

  	
  Attn:  Chief Legal Officer

  
	
   

  	
  Telephone:  702/699-5033

  
	
   

  	
  Telecopier:  702/699-5110

  

 

47

 

	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
  Bank of
  America, N.A.

  
	
   

  	
  Gaming and
  Leisure Industries Group

  
	
   

  	
  Portfolio
  Management - CA9-706-17-54

  
	
   

  	
  555 South
  Flower Street, 17th Floor

  
	
   

  	
  Los Angeles,
  California  90071

  
	
   

  	
  Attn:  Janice Hammond, Vice President

  
	
   

  	
  Telecopier:  (213) 345-1213

  
	
   

  	
  Telephone:  (213) 345-1210

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
  Bank of
  America, N.A.

  
	
   

  	
  Gaming and
  Leisure Industries Group

  
	
   

  	
  Portfolio
  Management - CA9-706-17-54

  
	
   

  	
  555 South
  Flower Street, 17th Floor

  
	
   

  	
  Los Angeles,
  California  90071

  
	
   

  	
  Attn:  Matthew J. Koenig, Managing Director

  
	
   

  	
  Telecopier:  (213) 345-1215

  
	
   

  	
  Telephone:  (213) 345-1198

  
	
   

  	
   

  
	
   

  	
  With a copy
  to:

  
	
   

  	
  Bank of
  America, N.A.

  
	
   

  	
  Gaming and
  Leisure Industries Group

  
	
   

  	
  Client
  Management - CA9-706-17-54

  
	
   

  	
  555 South
  Flower Street, 17th Floor

  
	
   

  	
  Los Angeles,
  California  90071

  
	
   

  	
  Attn:  William S. Newby, Managing Director

  
	
   

  	
  Telecopier:  (213) 345-1214

  
	
   

  	
  Telephone:  (213) 345-1194

  
					

 

48

 

Schedule 1 - Pricing Schedule - Short Term
Credit Facility

 

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

 

The “Euro-Dollar Margin,” “Base Rate Margin,” and
“Facility Fee Rate” referred to in the Credit Agreement shall be determined for
any day on the basis of the Status (as defined below) of the Borrower as of
that date, provided, that in the event that the Borrower fails to deliver any
Compliance Certificate or Pricing Certificate on the date when required by
Section 5.01, and it is ultimately determined that the Status of the
Borrower would have been changed on the basis of such delivery, then
(a) the rate at which interest and facility fees accrue under the Credit
Agreement shall be increased in accordance with this Schedule, with retroactive
effect to the first day of the Pricing Period to which such Compliance
Certificate relates, and (b) the Borrower shall, within 10 Business
Days of a request by the Administrative Agent, make such additional payments to
the Lenders through the Administrative Agent as are required to give effect to
such increased interest rates and facility fees in respect of any payments
previously made by the Borrower.  As of
each date of determination, the Euro-Dollar Margin and Facility Fee Rates shall
equal the percentages set forth below under the column corresponding to the
Status that exists on such day, provided that the Euro-Dollar Margin
shall be increased or decreased by the “Margin Adjustment” described below:

 

	
  Status

  	
   

  	
  Level I

  	
   

  	
  Level II

  	
   

  	
  Level III

  	
   

  	
  Level IV

  	
   

  	
  Level V

  	
   

  	
  Level VI

  	
   

  
	
  Facility Fee Rate

  	
   

  	
  0.080

  	
  %

  	
  0.100

  	
  %

  	
  0.125

  	
  %

  	
  0.150

  	
  %

  	
  0.200

  	
  %

  	
  0.250

  	
  %

  
	
  Euro-Dollar Margin

  	
   

  	
  0.520

  	
  %

  	
  0.650

  	
  %

  	
  0.875

  	
  %

  	
  0.975

  	
  %

  	
  1.175

  	
  %

  	
  1.500

  	
  %

  

 

The “Base Rate Margin” shall, as of each date of
determination, be the percentage, not less than 0.000% per annum, which is
equal to the then prevailing Euro-Dollar Margin (after adjustment upwards or
downwards by the Margin Adjustment), minus 1.250%.

 

As of each date of determination, the Status of the
Borrower shall be determined on the basis of:

 

(a)                                  the
Borrower’s Debt Rating as of that date; or

 

(b)                                 the
Leverage Ratio as of the last day of the fiscal quarter of the Borrower ending
immediately prior to the first day of the Pricing Period in which such date of
determination occurs (the “Applicable Leverage Ratio”);

 

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

 

1

 

“Level I Status” exists at any date if, at such date,
either (x) the Debt Rating assigned by S&P is A- or higher or the Debt
Rating assigned by Moody’s is A3 or higher, or (y) the Applicable Leverage
Ratio is less than 1.50:1.

 

“Level II Status” exists at any date if, at such date,
(i) either (x) the Debt Rating assigned by S&P is BBB+ or higher
or the Debt Rating assigned by Moody’s is Baa1 or higher, or (y) the
Applicable Leverage Ratio is less than 2.25:1 and (ii) Level I Status does
not exist.

 

“Level III Status” exists at any date, if, at such
date, (i) either (x) the Debt Rating assigned by S&P is BBB or
higher or the Debt Rating assigned by Moody’s is Baa2 or higher, or
(y) the Applicable Leverage Ratio is less than 3.00:1 and
(ii) neither Level I Status nor Level II Status exists.

 

“Level IV Status” exists at any date, if, at such
date, (i) either (x) the Debt Rating assigned by S&P is BBB- or
higher or the Debt Rating assigned by Moody’s is Baa3 or higher, or
(y) the Applicable Leverage Ratio is less than 3.75:1 and (ii) none
of Level I Status, Level II Status or Level III Status exists.

 

“Level V Status” exists at any date, if, at such date,
(i) either (x) the Debt Rating assigned by S&P is BB+ or higher
or the Debt Rating assigned by Moody’s is Ba1 or higher or (y) the
Applicable Leverage Ratio is less than 4.25:1 and (ii) none of Level I
Status, Level II Status, Level III Status or Level IV Status exists.

 

“Level VI Status” exists at any date if, at such date,
no such other Status exists.

 

For purposes of this Schedule, the following terms
have the following meanings, subject to the final two paragraphs of this
Schedule:

 

“Margin Adjustment” means, (a) as of any date of
determination when the Applicable Leverage Ratio is in excess of 3.50:1 but
equal to or less than 4.00:1, an incremental interest margin of 0.075% per
annum to be added to the Euro-Dollar Margin in determining the rate applicable
to Euro Dollar Loans, (b) as of any date of determination when the Applicable
Leverage Ratio is in excess of 4.00:1 but equal to or less than 4.75:1, an
incremental interest margin of 0.150% per annum to be added to the Euro-Dollar
Margin in determining the rate applicable to Euro-Dollar Loans, (c) as of
any date of determination when the Applicable Leverage Ratio is in excess of
4.75:1, an incremental interest margin of 0.225% per annum to be added to the
Euro-Dollar Margin in determining the rate applicable to Euro-Dollar Loans, and
(d) as of any date of determination when the Applicable Leverage Ratio is
less than 2.00:1, a deduction of 0.075% per annum to be subtracted from the
Euro-Dollar Margin in determining the rate applicable to Euro-Dollar Loans.

 

“Debt Rating” means, as of any date of determination,
the rating assigned by the Rating Agencies to the senior unsecured long-term
debt securities of the Borrower without third-party credit enhancement (and any
rating assigned to any other debt security of the Borrower shall be
disregarded) as of the close of business on such date, provided that
(a) if such securities receive a split-rating and the rating differential
is one level, the higher of the two ratings will apply (e.g. A-/Baa1 results in
Level I Status), and (b) if the Borrower is split-rated and the ratings

 

2

 

differential is more than
one level, the average of the two ratings (or the higher of any two
intermediate ratings) shall be used (e.g., A-/Baa2 results in Level II
Status, as does A-/Baa3).

 

3

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